Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant (x) Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
(x) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material pursuant to Section 240.14a-11(c) or Section
240.14a-12
Bontex, Inc.
(Name of Registrant as Specified in its Charter)
David A. Dugan, Corporate Secretary
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
N/A
Payment of Filing Fee (Check the appropriate box):
(x) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
( ) Fee paid previously with preliminary materials
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
BONTEX (R)
1998
Notice of Annual Stockholders Meeting
and
Proxy Statement
Thursday, October 22, 1998
at 10:30 a.m. local time
Lexington, Virginia
<PAGE>
Dear Shareholder:
You are cordially invited to attend the Annual Shareholders Meeting to be held
at 10:30 a.m., Eastern Daylight-Saving Time, on Thursday, October 22, 1998, at
the Best Western Inn at Hunt Ridge, Lexington, Virginia. The accompanying Notice
of Annual Meeting and Proxy Statement contains detailed information as to the
formal business to be transacted at the meeting.
The Board urges you to vote "FOR" all proposals on the enclosed proxy card.
Regardless of whether you plan to attend the meeting, it is important that your
shares be voted. Accordingly, please complete, sign, and date the proxy card
attached and return it in the enclosed postage-paid envelope. Please note,
however, that if your shares are held of record by a broker, bank, or other
nominees and you wish to vote at the meeting, you must obtain from the record
holder a proxy issued in your name.
Thank you for your interest.
Sincerely,
James C. Kostelni
Chairman of the Board and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL STOCKHOLDERS MEETING
September 23, 1998
BONTEX, INC.
Notice is hereby given that the Annual Meeting of Stockholders of Bontex,
Inc. will be held at the Best Western Inn at Hunt Ridge, Willow Springs Drive,
Lexington, Virginia, on October 22, 1998 at 10:30 a.m., Eastern Daylight-Saving
Time, for the following purposes:
1. To elect three Class B directors to serve until the annual meeting of
stockholders in 2001,
2. To approve a plan to grant stock options to certain executive
officers, and
3. The transaction of such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on September 14, 1998,
are entitled to vote at this meeting.
You are urged to fill in, date and sign the accompanying proxy and to mail
the same as promptly as possible. If you sign and return your proxy without
specifying your choices, it will be understood that you wish to have your shares
voted in accordance with the directors' recommendations. Should you decide to
attend the meeting and vote in person, you may withdraw your proxy.
Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete statement regarding the matters proposed to be acted upon at
the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Charles W. J. Kostelni
Corporate Secretary
<PAGE>
BONTEX, INC.
A VIRGINIA CORPORATION
PROXY STATEMENT
1998 ANNUAL MEETING OF STOCKHOLDERS
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
and on behalf of the Board of Directors of Bontex, Inc. (the "Company") of
proxies in the accompanying form to be used at the Annual Meeting of the
Stockholders of the Company to be held on October 22, 1998, at 10:30 a.m.,
Eastern Daylight-Saving Time, at the Best Western Inn at Hunt Ridge, Willow
Springs Drive, Lexington, Virginia 24450, and at any adjournments thereof. The
approximate date on which this Proxy Statement and the accompanying form of
proxy are first being sent or given to stockholders is September 25, 1998.
A copy of the Company's Annual Report to Stockholders, including financial
statements for the fiscal year ended June 30, 1998, reported upon by KPMG Peat
Marwick LLP, is being mailed concurrently with this Proxy Statement, but should
not be considered proxy solicitation material.
Any person signing and mailing the enclosed form of proxy may revoke the
proxy at any time prior to the actual voting thereof by attending the Annual
Meeting and voting in person, by submitting a signed proxy bearing a later date,
or by giving prior written notice of revocation of the proxy to the Corporate
Secretary of the Company, One Bontex Drive, Buena Vista, Virginia 24416-1500.
All properly executed proxies delivered pursuant to this solicitation will be
voted at the Annual Meeting in the manner specified therein. If no specification
is made, the proxy will be voted FOR the election of all of the Class B
directors and FOR the adoption of the plan to grant stock options to three of
the Company's executive officers (the "Proposed Plan").
VOTING SECURITIES
The close of business on September 14, 1998, has been fixed as the record
date for the determination of stockholders of the Company entitled to notice of
and to vote at the Annual Meeting of Stockholders. There were 1,572,824 shares
of Company common stock outstanding as of the foregoing record date, and each
such share is entitled to one vote.
The holders of shares entitled to cast a majority of the votes at the
Annual Meeting constitute a quorum. If a share is represented for any purpose at
the Annual Meeting, it is deemed to be present for purposes of establishing a
quorum. Abstentions and broker non-votes (i.e., shares registered in the names
of brokers or other "street name" nominees for which proxies are voted for some
but not all matters) will be included in determining the number of shares
represented at the Annual Meeting. Directors will be elected by a plurality of
the votes cast in person or by proxy at the Annual Meeting. Approval of the
Proposed Plan requires the affirmative vote, at a meeting at which a quorum is
present, of a majority of the votes cast by the shares that are entitled to
vote. Votes that are withheld and broker non-votes will not be included in
determining the number of votes cast.
The Company will appoint one or more inspectors of election to act at the
Annual Meeting and to make a written report thereof. Prior to the meeting, the
inspectors will sign an oath to perform their duties in an impartial manner and
according to the best of their ability. The inspectors will ascertain the number
of shares outstanding and the voting power of each, determine the shares
represented at the meeting and the validity of proxies and ballots, count all
votes and ballots, and perform certain other duties as required by law.
As a matter of policy, proxies, ballots and voting tabulations that
identify individual stockholders are kept private by the Company. Such documents
are available for examination only by the inspectors of election and
<PAGE>
certain personnel associated with processing proxy cards and tabulating votes.
The vote of any stockholder is not disclosed except as may be necessary to meet
legal requirements.
STOCK HOLDINGS OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth as of August 28, 1998, certain information
regarding the only known beneficial holders of more than five percent of the
outstanding common stock of the Company and the beneficial ownership of the
common stock of the Company by each director and nominee, by each named
executive officer and by all directors and executive officers as a group. Unless
otherwise noted in the footnotes to the table, the named persons have sole
voting and investment power with respect to all outstanding shares of common
stock shown as beneficially owned by them.
<TABLE>
<CAPTION>
Shares Beneficially
Name of Beneficial Owner Owned Percent of Class
- ------------------------ ------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
First Union National Bank 843,082 (1) 53.61
303 Broad Street
Red Bank, New Jersey 07701
Mrs. Dolores Kostelni 695,207 (2) 44.20
Route 4, Box 251
Turtle Brooke Lane
Lexington, Virginia 24450
Mrs. Patricia S. Tischio 675,607 (3)(9) 42.96
901 Foxboro Drive
Norwalk, Connecticut 06851
Estate of Marie G. Surmonte 675,507 (4) 42.95
c/o First Union National Bank
303 Broad Street
Red Bank, New Jersey 07701
Hugo N. Surmonte Residuary Trust 95,400 (5) 6.07
c/o First Union National Bank
303 Broad Street
Red Bank, New Jersey 07701
William J. Binnie 3,244 (6) *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
Michael J. Breton 1,900 *
Bontex S.A.
rue Slar
4801 Stembert, Belgium
2
<PAGE>
William B. D'Surney 850 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
David A. Dugan 160 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
Charles W. J. Kostelni 11,134 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
James C. Kostelni 81,940 (7)(9) 5.21
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
Jeffrey C. Kostelni 21,826 (8) 1.40
Bontex S.A.
rue Slar
4801 Stembert, Belgium
Frank B. Mayorshi 600 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
Larry E. Morris 4,000 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
Joseph F. Raffetto 5,582 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
Robert J. Weeks 8,121 *
Bontex, Inc.
One Bontex Drive
Buena Vista, Virginia 24416-1500
All Directors and
Executive Officers
as a Group (12 persons) 814,964 51.82
</TABLE>
3
<PAGE>
(1) Includes 95,400 shares held as co-trustee for the Hugo N. Surmonte
Residuary Trust, 72,715 shares held as trustee of the Hugo N. Surmonte
Marital Trust, and 675,507 shares held as a co-executor of the Estate of
Marie G. Surmonte. The Bank has shared voting and dispositive power with
respect to these shares.
(2) Includes 19,700 shares owned by Mrs. Kostelni with sole voting and
dispositive power and an aggregate of 675,507 shares of which Mrs.
Kostelni has shared voting and dispositive power as a co-executor of the
Estate of Marie G. Surmonte. Excludes 57,590 shares owned by Mrs.
Kostelni's spouse, Mr. James C. Kostelni, and 2,653 shares owned by Mrs.
Kostelni's adult son, James H. Kostelni.
(3) Includes 100 shares owned by Mrs. Tischio with sole voting and dispositive
power, an aggregate of 675,507 shares of which Mrs. Tischio has shared
voting and dispositive power as a co-executor of the Estate of Marie G.
Surmonte, and excludes 2,750 shares owned by Mrs. Tischio's adult
daughter, as to which Mrs. Tischio disclaims beneficial ownership.
(4) Dolores Kostelni, Patricia S. Tischio and First Union National Bank are
co-executors of the Estate and have shared voting and dispositive power
with respect to these shares.
(5) Dolores Kostelni and Patricia S. Tischio are beneficiaries of the Trust.
Mrs. Kostelni and Mrs. Tischio and the Bank have shared voting and
dispositive power with respect to these shares.
(6) Includes 726 shares held by Mr. Binnie's spouse as Trustee for their sons.
(7) Includes 19,700 shares owned by Mr. James C. Kostelni's spouse, Dolores
Kostelni. Does not include 2,653 owned by Mr. James C. Kostelni's adult
son, James H. Kostelni, as to which Mr. James C. Kostelni disclaims
beneficial ownership, and 675,507 shares held in the Estate of Marie G.
Surmonte, of which Mr. James C. Kostelni's spouse, Dolores Kostelni, is a
co-executor with shared voting and dispositive power.
(8) Includes 1,000 shares owned by Mr. Jeffrey C. Kostelni's spouse.
(9) Mr. James C. Kostelni's spouse, Dolores Kostelni, and Mrs. Patricia S.
Tischio are co-executors and share voting and dispositive power with First
Union National Bank of 675,507 shares held by the Estate of Mrs. Marie G.
Surmonte.
* Represents less than 1% of the outstanding shares of Company common stock.
ELECTION OF DIRECTORS
PROPOSAL NO. 1
The Company's Board of Directors is divided into three classes (A, B and C)
with staggered three-year terms. The current term of office of the Class B
directors expires at the 1998 Annual Meeting of Stockholders. The terms of the
Class C and Class A directors will expire in 1999 and 2000, respectively.
There are three Class B directors, Jeffrey C. Kostelni, Joseph F. Raffetto
and Patricia S. Tischio, each of whom has been nominated for reelection by the
Board of Directors.
It is the intention of the persons named as proxies, unless instructed
otherwise, to vote for the election of each of the three nominees set forth
below. Each nominee has agreed to serve if elected. If any nominee shall
unexpectedly be unable to serve, the shares represented by all valid proxies
will be voted for the remaining nominees and such other person or persons as may
be designated by the Board. At this time, the Board knows of no reason why any
nominee might be unable to serve. Class B nominees will serve for a three-year
term until the 2001 Annual Meeting and until their successors are elected and
qualified.
The present principal occupation or employment and employment during the
past five years and all positions or offices, if any, held with the Company are
set forth opposite the name of each director and nominee. All nominees are
members of the present Board of Directors.
4
<PAGE>
<TABLE>
<CAPTION>
NOMINEES
CLASS B DIRECTORS
(Serving Until 2001 Annual Meeting)
Year in Which First
Name and Age Elected as Director Principal Occupation
- ------------ ------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Patricia S. Tischio 1995 Assistant Corporate Secretary (1994-97)
Age 59 and Corporate Office Manager (since 1989)
of the Company. Mrs. Tischio has a
Bachelor of Arts Degree in English.
Jeffrey C. Kostelni 1995 Chief Financial Officer and Treasurer
Age 32 (since 1994), General Sales Manager of
Bontex S.A., a subsidiary of the Company in
Belgium (since 1995) and Assistant
Controller (1993-94) of the Company. Mr.
Kostelni has a Bachelor of Science Degree
in Accountancy and is a Certified Public
Accountant.
Joseph F. Raffetto 1984 Physician (retired).
Age 89
DIRECTORS CONTINUING IN OFFICE
CLASS C DIRECTORS
(Serving Until 1999 Annual Meeting)
William J. Binnie 1977 Retired engineering consultant since 1996;
Age 73 prior thereto, President, W. J. Binnie &
Associates, Whispering Pines, North
Carolina. Mr. Binnie has a Bachelor of
Science Degree in Civil Engineering.
Michael J. Breton 1990 Corporate Director of International
Age 58 of the Company (since 1993) and General
Manager of Bontex S.A., a subsidiary of the
Company (since 1987); prior thereto,
Director of European Operations
(1987-1993). Mr. Breton has a Bachelor of
Science Degree in Paper Technology.
Frank B. Mayorshi 1993 Private investor since 1991; prior thereto
Age 62 Partner, KPMG Peat Marwick LLP,
Roanoke, Virginia. Mr. Mayorshi has a
Bachelor of Science Degree in Business
Administration.
5
<PAGE>
CLASS A DIRECTORS
(Serving Until 2000 Annual Meeting)
Year in Which First
Name and Age Elected as Director Principal Occupation
- ------------ ------------------- --------------------
James C. Kostelni 1965 Chairman of the Board, President, and
Age 63 Chief Executive Officer of the Company
(since 1994), President and Chief Operating
Officer (since 1971). Mr. Kostelni has a
Bachelor of Science Degree in Business
Administration.
Robert J. Weeks 1983 Private investor since 1993; prior thereto,
Age 64 Vice-President, Dun & Bradstreet Corp.,
Bethlehem, Pennsylvania. Mr. Weeks has a
Bachelor of Science Degree in Business
Administration.
Larry E. Morris 1993 Technical Sales Director (since 1998) of
Age 52 the Company; prior thereto, Technical
Director (1983-98), Sales
Director (1993-98) and
Manufacturing Director of the
Company (1983-1993).
William B. D'Surney 1995 Private investor since 1994; prior thereto,
Age 69 Senior Vice-President, Alexander &
Alexander, Richmond, Virginia. Mr.
D'Surney has a Bachelor of Science Degree
in Business Administration.
</TABLE>
No director or nominee is a director of any other company with a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934. Mr. Jeffrey C. Kostelni is the son of Mr. James C. Kostelni. Mrs. Patricia
S. Tischio is the sister-in-law of Mr. James C. Kostelni and the aunt of Mr.
Jeffrey C. Kostelni.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held six meetings during fiscal 1998. All directors
attended 100% of the total number of meetings of the Board and the committees of
the Board on which they served.
A director's fee of $1,500 per meeting attended is paid to all non-employee
directors. In addition, non-employee directors who are members of the Executive,
Audit and/or Compensation Committees receive a fee of $500 per committee meeting
attended. All directors are reimbursed for their actual travel expenses for
attending Board and committee meetings.
The Board of Directors annually elects four standing committees: the
Executive Committee, the Audit Committee, the Compensation Committee and the
Nominating Committee.
The Executive Committee of the Board of Directors, which is composed of
Messrs. James C. Kostelni (Chairman), Weeks, Mayorshi and Binnie, is empowered
to exercise all authority of the Board of Directors, except with respect to
matters reserved for the Board by Virginia law. This committee met six times
during fiscal 1998.
6
<PAGE>
The Audit Committee of the Board of Directors, which consists of Messrs.
Mayorshi (Chairman), Binnie and Weeks, oversees the financial reporting process
and the Company's internal controls. This committee met four times during fiscal
1998.
The Compensation Committee of the Board of Directors, which consists of
Messrs. Weeks (Chairman), Binnie and Mayorshi, meets as necessary to consider
and make recommendations to the Board of Directors concerning compensation of
executive officers and employees of the Company. This committee met four times
during fiscal 1998.
The Nominating Committee of the Board of Directors, which consists of
Messrs. James C. Kostelni (Chairman), Mayorshi and Weeks, considers and
recommends to the Board, candidates for election as directors of the Company.
The Nominating Committee will not consider nominees recommended by stockholders.
This committee met one time during fiscal 1998.
EXECUTIVE STOCK OPTIONS
PROPOSAL NO. 2
At its meeting on August 27, 1998, the Board of Directors of the Company
adopted, subject to stockholder approval, a plan (the "Proposed Plan"), pursuant
to which certain executive officers of the Company (the "Executives") would be
granted stock options for an aggregate of 120,000 shares of Company common
stock, at an exercise price of $4.50 per share, as follows: James C. Kostelni,
80,000 shares; Jeffrey C. Kostelni, 20,000 shares; and Charles W. J. Kostelni,
20,000 shares.
The Proposed Plan was adopted by the Board of Directors in consideration of
the Executives' voluntary agreements to cancel unexercised options earlier
granted to them as part of their respective executive compensation agreements.
In the case of James Kostelni, the canceled option was granted on January 22,
1997 and entitled him to purchase, over a ten-year period, up to 80,000 shares
of Company common stock, at a price of $4.50 per share, which was the fair
market value of the common stock on the date of grant. In the case of each of
Jeffrey Kostelni and Charles Kostelni, the canceled option was granted on
November 21, 1997 and entitled him to purchase, over a ten-year period, up to
20,000 shares of Company common stock, at a price of $5.63 per share, which was
the fair market value of the common stock on the date of grant. The Executives
agreed to cancel their previously granted options in order to expedite the
Company's application to transfer its common stock listing from The Nasdaq Stock
Market to The Nasdaq SmallCap Market.
If the Proposed Plan is approved by the stockholders, the Executives will
be issued new options, as set forth below.
<TABLE>
<CAPTION>
Executive Stock Options
- -----------------------
Number of
Shares
Underlying
Name and Position Dollar Value ($) (1) Exercise Price ($) (2) Grant
- ----------------- -------------------- ---------------------- ----------
<S> <C> <C> <C>
James C. Kostelni 240,000 360,000 80,000
President & CEO
Executive Group 120,000 180,000 40,000
Non-Executive Group 0 0 0
Non-Executive Officer Group 0 0 0
</TABLE>
7
<PAGE>
- ------------------------------------
(1) Based on the closing price ($3.00 per share) of the Company's common stock
on the Nasdaq SmallCap Market on September 16, 1998.
(2) The exercise price of each option under the Proposed Plan would be $4.50
per share, which was the fair market value of the Company's common stock
on January 22, 1997, the date of grant of the earliest canceled option.
The options granted under the Proposed Plan would be exercisable only
during a period which begins on the date of stockholder approval and ends on the
ten-year anniversary of such date. The options may be exercised during the
ten-year period, either at once or from time to time in blocks of not less than
100 shares. The foregoing notwithstanding, any unexercised options held by an
Executive would expire thirty days after the termination of the Executive's
employment for any reason, except death. In the event of the Executive's death,
any options held by him which were exercisable at the time of death may be
exercised by the person designated in the Executive's will or by the proper
legal representative of the Executive within one year following the Executive's
death, but in no event later than the expiration date of the option. Any option
that is not exercisable at the time of the Executive's termination of employment
for any reason, including death, would expire on the date that the Executive's
employment terminates. No stock options would be transferable by the Executive
other than by will or the laws of descent and distribution. Options may be
exercised during the lifetime of the Executive only by him or his guardian or
legal representative. The number of option shares can be adjusted from time to
time by the Company's Board of Directors to prevent dilution of the Executives'
rights caused by stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, reorganizations,
liquidations and similar matters.
The options will not meet the terms of Section 422A of the Internal Revenue
Code and therefore will result in taxable income to the Executive at the time of
exercise to the extent of the difference between the exercise price and the fair
market value of the stock at the time of exercise. The Company will be entitled
to a federal income tax deduction upon the transfer of stock to the Executive
pursuant to an exercise of an option, if certain federal income tax withholding
requirements are met. The amount of the deduction will equal the amount of
compensation income recognized by the Executive.
The Board of Directors of the Company may amend or terminate the Proposed
Plan but cannot, without approval of the stockholders: (i) increase the maximum
number of shares for which options may be granted under the Proposed Plan
(except as permitted by the antidilution provisions); (ii) permit the granting
of options at less than 100% of fair market value at the time of grant; or (iii)
change the Executives to whom options are issued.
The Proposed Plan will become effective upon its approval by the
stockholders of the Company. The Proposed Plan is designed to provide the
Executives with the opportunity to acquire an equity interest in the Company and
thereby benefit from appreciation in the value of Company common stock. It is
believed that the options will provide an incentive for the Executives to use
their best efforts and superior performances to promote the best interests of
the Company for the benefit of all stockholders.
If a quorum is established, approval of the Proposed Plan requires the
affirmative vote of a majority of the votes cast by the shares that are entitled
to vote at the meeting.
Your Board of Directors recommends a vote FOR Proposal No. 2.
8
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information regarding the individual
compensation earned by the Chief Executive Officer and the six other most highly
compensated executives for services in all capacities to the Company and its
subsidiaries for the fiscal years ended June 30, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Annual Compensation
-------------------------------------------------------------------------------
Name and Other Annual All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) (2) Compensation ($) (3)
- ------------------ ---- ---------- --------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
James C. Kostelni 1998 242,795 44,664(1) 59,188 65,891
Chairman of the 1997 221,180 48,110 101,397 58,316
Board of 1996 221,180 - 99,820 66,007
Directors,
President and
Chief Executive
Officer
Michael J. Breton 1998 129,226 10,781(1) 18,135 7,829
Corporate 1997 158,821 - 18,912 7,910
Director of 1996 167,868 - 15,603 7,238
International
Operations,
Bontex, S.A.
Tarcisio Pasquali 1998 179,925 20,200(1) 17,100 -
General Manager 1997 164,706 10,000 16,790 -
Bontex, S.r.l. 1996 129,181 20,000 15,812 -
Jeffrey C. Kostelni 1998 121,856 24,333(1) 3,446 3,843
Treasurer and Chief 1997 98,964 8,537 2,646 1,494
Financial Officer 1996 95,007 - 2,846 434
Charles W. J. Kostelni 1998 108,625 23,099(1) 1,923 2,933
Corporate Controller, 1997 88,083 15,208 - 1,039
General Manager and 1996 72,500 - -
Corporate Secretary
Harmonson H. Floyd, Jr. 1998 110,000 14,080(1) - 1,100
Director of 1997 106,250 40,244 - 458
Manufacturing 1996 105,000 - - -
and Chief Engineer
(terminated June 1998)
Larry E. Morris 1998 105,280 13,576(1) 3,351 3,485
Technical Sales 1997 113,256 23,144 3,351 2,458
Director 1996 100,740 - 3,351 2,070
</TABLE>
9
<PAGE>
(1) Performance-based bonuses awarded by the Compensation Committee and paid
in 1998 for 1997 performance.
(2) Except as otherwise indicated in the table, the named executives did not
receive perquisites or other personal benefits in excess of the lesser of
$50,000 or 10% of the total of his salary and bonus reported in the table.
All amounts represent automobile allowances or long-term disability
insurance premium payments, except the amount for Mr. James Kostelni,
which in 1998 includes $1,110 automobile allowance, $52,356 "gross-up"
payment for reimbursement of taxes received pursuant to the Supplemental
Executive Compensation Agreement (discussed below) and $5,722 long-term
disability insurance premium payment.
(3) Amounts disclosed in this column for 1998 include: (i) payment by the
Company of premiums for whole life insurance on behalf of Mr. James
Kostelni in the amount of $6,375, (ii) annuity having a value of $59,516,
transferred to Mr. James Kostelni pursuant to the Supplemental Executive
Compensation Plan, (iii) Company contributions on behalf of the named
executive officers under the Bontex Inc. Retirement Plan as follows: Mr.
James Kostelni $0, Mr. Breton $0, Mr. Pasquali $0, Mr. Jeffrey Kostelni
$2,731, Mr. Charles Kostelni $1,910, Mr. Floyd $0, and Mr. Morris $2,432,
(iv) Bontex S.A.'s contribution under the Bontex, S.A. Pension Plan on
behalf of Mr. Breton, $7,829, and (v) Company contributions on behalf of
the named executive officers under the Bontex Inc. Executive Benefit
Deferred Compensation Agreement as follows: Mr. James Kostelni $0, Mr.
Breton $0, Mr. Pasquali $0, Mr. Jeffrey Kostelni $1,112, Mr. Charles
Kostelni $1,023, Mr. Floyd $1,100 and Mr. Morris $1,053.
Retirement Plans
Bontex, Inc. Retirement Income Plan
The Company has in effect a defined benefit retirement plan ("Plan").
Estimated annual benefits payable at normal retirement age 65 under the Plan to
persons in specified remuneration and years of service classifications are set
forth below. The following table contains no benefits attributable to
supplemental benefit plans as there are no such plans.
<TABLE>
<CAPTION>
Final Average Years of Service
Earnings 15 20 25 30 35
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000 $ 35,556 $ 47,408 $ 59,260 $ 71,112 $ 71,112
150,000 43,056 57,408 71,760 86,112 86,112
175,000 43,056 57,408 71,760 86,112 86,112
200,000 43,056 57,408 71,760 86,112 86,112
225,000 43,056 57,408 71,760 86,112 86,112
250,000 43,056 57,408 71,760 86,112 86,112
300,000 43,056 57,408 71,760 86,112 86,112
400,000 43,056 57,408 71,760 86,112 86,112
450,000 43,056 57,408 71,760 86,112 86,112
500,000 43,056 57,408 71,760 86,112 86,112
</TABLE>
The benefits in the Table are computed as a straight-life annuity payable
annually and are derived from both employer and employee contributions. The
benefits are not subject to any deduction for Social Security or other offset
amounts.
The compensation covered by the Plan includes all amounts received for
personal services rendered in the course of employment for the Company to the
extent those amounts are includable in gross income, except for distributions
from deferred compensation plans or other amounts that receive special tax
treatment. Compensation for purposes of the Plan may not exceed statutory
limits. The limit for the 1998 and 1997 plan years was $160,000,
10
<PAGE>
which may be increased by the Internal Revenue Service in the future to reflect
cost of living increases. The benefit formula equals the sum of (A) 1.5% of
Final Average Earnings up to Social Security Covered Compensation, and (B) 2.0%
of Final Average Earnings in excess of Social Security Covered Compensation,
multiplied by credited years of service up to a maximum of 30 years.
Social Security Covered Compensation means the average of the taxable wage
bases for the 35 calendar years ending with the last day of the calendar year in
which a participant attains his Social Security retirement age. Final Average
Earnings is generally the average earnings for the five highest consecutive
years of compensation during the ten years immediately preceding retirement.
It is estimated that at age 65, for Plan purposes, Messrs. James C.
Kostelni, Jeffrey C. Kostelni, Charles Kostelni and Morris will have 41, 38, 34
and 28 years of credited service, respectively. Mr. Breton and Pasquali do not
participate in the Plan.
Bontex, S.A. Pension Plan
The Company's subsidiary, Bontex, S.A., maintains a pension plan ("Pension
Plan") for certain of its employees. Mr. Breton is the only Pension Plan
participant included in the Compensation Table. The Pension Plan generally
provides a monthly retirement benefit beginning at normal retirement age 65
until the participant's death based on years of service and the average of the
last five years' annual salary. Provisions are also made for monthly payments to
a surviving spouse and children. Estimated annual benefits payable upon
retirement under the Pension Plan to persons in specified remuneration and years
of service classifications are set forth below. No benefits from a supplemental
benefit plan are included as no such plan exists.
<TABLE>
<CAPTION>
Final Average Years of Service
Earnings 15 20 25 30 35
------------- --------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000 $ 15,591 $ 20,789 $ 25,987 $ 31,184 $ 36,381
150,000 19,822 26,429 33,036 39,643 46,251
175,000 24,052 32,068 40,086 48,103 56,120
200,000 28,281 37,708 47,135 56,163 65,990
225,000 32,511 43,347 54,186 65,023 75,860
250,000 36,741 48,988 61,235 73,482 85,729
300,000 45,201 52,431 75,335 90,401 105,469
400,000 62,119 82,827 103,533 124,241 144,947
450,000 70,580 94,107 117,634 141,159 164,687
500,000 79,040 105,386 131,733 158,079 184,426
</TABLE>
It is estimated that at age 65 Mr. Breton will have 18 years of credited
service. Although compensation for Pension Plan purposes is the average of the
most recent five years' annual salary, only $89,326 of the amount shown for Mr.
Breton in the Compensation Table qualifies as compensation under the Pension
Plan for 1998. The Pension Plan defines the benefit in terms of Belgian francs,
and the above amounts were calculated using the exchange rate in effect on June
30, 1998. The benefits listed in the Pension Plan table are computed as a
straight-life annuity payable annually and are not subject to any deduction for
Social Security or other offset amounts.
Bontex, Inc. Executive Benefit Deferred Compensation Agreement
The Company adopted a tax deferred compensation benefit plan for certain
executives during fiscal year 1997. The plan allows the employee to defer up to
four percent of his compensation with a Company match of up to one percent of
compensation. The Company's contribution funds life insurance policies on each
executive, with the Company as owner and beneficiary.
11
<PAGE>
Retirement Compensation Agreements
Supplemental Executive Compensation Agreement
On May 26, 1994, the Company and Mr. James C. Kostelni (hereafter in this
section, Mr. Kostelni) entered into a Supplemental Executive Compensation
Agreement which is intended to supplement Mr. Kostelni's retirement benefits to
make up for any loss of benefits under the Bontex, Inc. Retirement Income Plan
resulting from the application of certain limitations imposed by amendments to
Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, under the
Revenue Reconciliation Act of 1993. Under the Supplemental Executive
Compensation Agreement, the Company has agreed, during Mr. Kostelni's life, to
purchase for Mr. Kostelni, upon execution of the Agreement and thereafter on May
1 of each year through May 1, 2000 an annuity contract which provides for the
payment of at least $458.33 per month to Mr. Kostelni, such payments to begin
upon Mr. Kostelni's reaching age sixty-five and to end upon Mr. Kostelni's death
or the ten-year anniversary date of the first annuity payment, whichever is
later. In order to replace the survivorship benefits which Mr. Kostelni's
spouse, but for the tax changes, would receive upon his death, the Company also
has agreed to pay to Mr. Kostelni, upon execution of the Agreement and
thereafter on May 1 of each year through May 1, 1997, a cash payment in the
amount of $26,000. It is intended that such cash payment will be used by Mr.
Kostelni to purchase life insurance which will then provide the survivor
benefit. Additionally, the Supplemental Executive Compensation Agreement also
provides that the Company shall, upon execution of the Agreement and thereafter
on May 1 of each year through May 1, 2000, make a cash "gross-up" payment equal
to the amount of any federal, state and local income taxes paid by Mr. Kostelni
on the benefits received under the Agreement. The value of the annuity, the cash
payment and the "gross-up" payment for fiscal 1998 are included in the Summary
Compensation Table above.
Under the Supplemental Executive Compensation Agreement, the Company shall,
upon a change in control, (i) purchase and transfer to Mr. Kostelni all
remaining annuities to be purchased pursuant to the Agreement; (ii) pay to Mr.
Kostelni all bonus amounts still owing pursuant to the Agreement; and (iii) pay
to Mr. Kostelni the applicable "gross-up" payment computed in accordance with
the Agreement. If Mr. Kostelni dies during the term of the Supplemental
Executive Compensation Agreement, or if Mr. Kostelni's employment with the
Company is terminated, either voluntarily or pursuant to the terms of the
Executive Compensation Agreement (discussed below), the Agreement shall
terminate, and Mr. Kostelni shall be entitled to no further payments or benefits
under the Agreement, except those which have accrued as of the date of his death
or termination.
A change in control under the Supplemental Executive Compensation Agreement
shall be deemed to have occurred in the event that (i) any person or group
becomes a beneficial owner of 20% or more of the combined voting power of the
Company's voting securities; (ii) the members of the Company's Board of
Directors on the date of the Agreement cease for any reason to constitute at
least a majority of the Board; (iii) all or substantially all of the assets of
the Company are sold, transferred or conveyed by any means, including, but not
limited to, direct purchase or merger, if the transferee is not controlled by
the Company; or (iv) the Company is merged or consolidated with another entity
and as a result of such merger or consolidation less than 75% of the outstanding
voting securities of the surviving or resulting entity shall be owned in the
aggregate by the former stockholders of the Company. No change of control shall
be deemed to have occurred for purposes of the Agreement by virtue of the
acquisition, directly or indirectly, of 20% or more of the combined voting power
of the Company's voting securities by Mr. Kostelni or a group including Mr.
Kostelni, by a subsidiary or certain other affiliates of the Company, or by the
heirs, successors or assigns of Hugo N. Surmonte.
Employment Agreement
On January 22, 1997, the Company and Mr. James C. Kostelni (hereafter in
this section, Mr. Kostelni) entered into an Executive Compensation Agreement
providing for the employment of Mr. Kostelni as President and Chief Executive
Officer of the Company until May 15, 2005. This Agreement supersedes in its
entirety the Executive Compensation Agreement dated June 29,1989, by and between
the Company (as successor to Georgia
12
<PAGE>
Bonded Fibers, Inc.) and Mr. Kostelni. Under the Agreement, Mr. Kostelni is to
receive a minimum annual salary of $222,000, which shall be adjusted annually by
the Compensation Committee of the Board of Directors, along with certain
benefits, including such bonuses as are approved by the Board of Directors, an
automobile allowance and all fringe benefits offered to Company employees.
The Agreement may be terminated by the Company only for cause, provided,
however, that the Company may not terminate the Agreement on (i) the sale by the
Company of substantially all of its assets to a single purchaser or to a group
of associated purchasers; (ii) the sale, exchange or other disposition, in one
transaction, of more than 50% of the outstanding shares of Company common stock;
(iii) a decision by the Company to terminate its business and liquidate its
assets; or (iv) the merger or consolidation of the Company in a transaction in
which the stockholders of the Company receive less than 50% of the outstanding
voting shares of the new or continuing corporation. Under the Agreement, "cause"
is deemed to include only Mr. Kostelni's (i) conviction of a felony; (ii)
material breach of the Agreement which remains uncured sixty days after notice
by the Company of such breach; or (iii) dishonesty directly related to the
performance of his duties.
The Agreement also may be terminated by the Company if Mr. Kostelni becomes
disabled for a period of more than twelve consecutive months, and shall be
terminated if Mr. Kostelni dies during the term of the Agreement. In the event
of termination of the Agreement as a result of Mr. Kostelni's death or
disability, the Company shall, within forty-five days after such termination,
pay to Mr. Kostelni or his estate, as the case may be, an amount equal to
six-months compensation or the balance due under the Agreement, whichever is
less. Additionally, in the event of Mr. Kostelni's death during the term of the
Agreement, the Company shall, within sixty days after the date of death, pay a
survivor's benefit of $5,000 to his widow or other survivor.
The Agreement also granted Mr. Kostelni a stock option to purchase 80,000
shares of the Company's common stock, at an exercise price of $4.50 per share,
which was the fair market value of the stock on the date of grant (January 22,
1997). The option was exercisable from the date of grant and had a minimum term
of ten years. On July 1, 1998, Mr. Kostelni voluntarily agreed to cancel the
unexercised option in order to expedite the Company's application to transfer
its common stock listing to The Nasdaq SmallCap Market. The Board has agreed,
subject to stockholder approval, to issue Mr. Kostelni a new option, exercisable
from the date of such stockholder approval, on the same terms and conditions as
the canceled option. (See Proposal No. 2 above).
Related Party Litigation
On March 17, 1998, a Complaint was filed in the Superior Court of New
Jersey, Law Division, Essex County, by Patricia Surmonte Tischio, a director of
the Company, against the Company, James C. Kostelni, the President and Chief
Executive Officer of the Company, and Mr. Kostelni's spouse. Both Mrs. Tischio
and Mrs. Kostelni are daughters of the Company's founder and serve as
co-executors and co-trustees of, and are designated beneficiaries under, an
estate and certain trusts which, in the aggregate, beneficially own
approximately 43 percent of the Company's outstanding common stock.
Mrs. Tischio's Complaint sets out various counts relating to the
defendants' alleged breach of and/or interference with an alleged contract
relating to Mr. Tischio's employment with the Company and seeks unspecified
damages and declaratory and other relief. Management believes that Mrs.
Tischio's claims are without merit and intends to vigorously defend the lawsuit.
Mrs. Tischio also has notified the Company's Board of Directors that she
expects to take part in separate litigation in the near future to enforce her
separate rights as a Company stockholder. Mrs. Tischio has complained to the
Board of Directors of mismanagement and misconduct on the part of Mr. Kostelni
and certain other Company officers and directors. In response to these
allegations, the Company formed a special committee of independent directors,
which engaged independent counsel, to investigate Mrs. Tischio's allegations.
Following its investigation,
13
<PAGE>
the special committee issued a written report to the Board finding Mrs.
Tischio's allegations to be materially unfounded.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of Bontex, Inc. is responsible for recommending
to the Board of Directors the compensation policies applicable to all employees,
including the Company's executive officers. The Company's compensation policies
are based on the fundamental premise that the achievements of the Company result
from the coordinated efforts of all employees working toward common objectives.
Compensation Philosophy and Objectives
The Company seeks to attract, motivate and retain the best possible
executive and other employee talent by providing competitive, performance-based
compensation programs that tie compensation to the Company's business objectives
and performance. The overall objective of this strategy is to align the
financial interests of the executive and other employees with those of the
stockholders by linking a substantial component of its executives' compensation
directly to Company performance.
The Committee recommends to the Board of Directors the compensation
policies that govern both the compensation opportunities available, as well as
the actual amounts paid, to Company officers. These policies are designed to
provide competitive levels of compensation that link incentive awards to the
Company's annual operating plan.
The Company's incentive bonus plans for executives and other employees are
designed to recognize individual and group performance. Target compensation
levels are intended to be competitive with those at other progressive companies.
During fiscal 1994, the Compensation Committee met with an outside
consultant to review the compensation of the Company's executive officers. Based
on both survey results and the review with the consultant, the Committee has
concluded that the total compensation paid to the Company's executives is market
competitive, but relatively low with respect to its peer companies.
Elements of the Fiscal 1998 Executive Compensation Program.
The Committee believes the interests of the stockholders will be best
served if the executive compensation program links a substantial component of
the cash compensation earned by executives to increases in stockholder value.
The current program therefore includes the following two principal components:
base salary and annual cash bonuses.
Base Salary
Base salaries for all executive officers, including the Chief Executive
Officer, are established by reference to defined salary ranges which have been
assigned to each position based upon salary opportunities provided by the
Company's competitors. Increases to individual base salaries are awarded based
on the officer's responsibilities, an evaluation of past and current
performance, seniority and experience, the Company's overall operating results,
position in range, the overall level of salary adjustments among the Company's
peers and current and projected economic conditions. Base salary is also a
reflection of the value of the job in the Company's operations.
14
<PAGE>
Annual Incentive Plan
The Company's annual incentive bonus plan directly links the Company's
performance to executive officer compensation by providing for higher variable
pay when the Company's performance is above defined targets and denying
competitive variable pay when Company performance is below targets. The plan,
which is designed to reward the accomplishment of overall corporate objectives
and reflect the Company's priority of maximum earnings, establishes a bonus pool
from which Company employees, including executive officers, may receive an
annual cash bonus. In fiscal 1998, the maximum amount at 100 percent of target
of the cash bonus available to each executive under the plan was a percentage of
the executive's fiscal year earnings, as determined by the Committee based on
information provided by the Company's compensation consultants and the
Committee's assessment of the executive's position and responsibilities at the
Company. Maximum executive bonuses available at 100 percent of target under the
plan for fiscal 1998 ranged from $77,413 to $2,680. Bonuses were not available
to executive officers under the plan in fiscal 1998 unless and until the
Company's net income after taxes exceeded $500,000. This $500,000 threshold was
subjectively established by the Committee based on the Company's prior bonus
arrangements.
The amount of the maximum cash bonus received by an executive under the
plan depends upon the extent to which the Company meets or exceeds the target
levels established for each of six operating goals - environment, safety,
production efficiency, customer service, product quality and inventory turns and
overtime. These target levels are established each year by the Committee, with
the advice of management, based on the Company's past results, anticipated
improvements in efficiency and productivity, and current market conditions. The
target levels for the six operating goals as a percent of the 1998 bonus pool,
were weighted as follows: environment 10%, safety 10%, production efficiency
37%, customer service 8% and product quality 27% and overtime 8%. In fiscal
1998, the Company did not meet the $500,000 net income threshold, and no bonus
payments were made.
1997-98 Senior Management Incentive Plan
The purpose of the 1997-98 Senior Management Incentive Plan was to provide
additional incentives to executive officers to realize goals and to maximize
stockholder value by having a significant percentage of total direct
compensation derived from incentive awards. This strategy is intended to
motivate officers to maximize Company performance and to align officer and
stockholder interests more closely by linking incentive compensation directly to
increases in stockholder value.
Under this plan, executive officers were eligible to earn an annual bonus
equal to a percentage of their 1998 current base salary if the Company's net
sales and operating profits for fiscal 1998 exceeded specified amounts and
executives obtained individual objectives. The level of bonus payments available
to executives under the plan was determined as follows: 10% of current base
salary if the Company's net sales and operating profit exceed $47,300,000 and
$2,829,271, respectively, and 10% if executives reach individual objectives. The
percentages and targets established under the plan were determined by the
Committee, subject to approval of the Board of Directors, based on current year
financial results and projected financial results for the new plan year. The
Company's net sales and operating profit objectives were not met for fiscal year
1998, and no bonus payments were made.
Chief Executive Officer (CEO) Compensation
The 1998 compensation paid to Mr. James C. Kostelni, the Company's Chief
Executive Officer, was recommended by the Compensation Committee based on its
review of independently produced CEO compensation surveys and consideration of
compensation paid by companies of similar size with global responsibilities in
comparable industries. The Compensation Committee recommended the CEO's
compensation to the Board of Directors after considering that Mr. James C.
Kostelni's on-going efforts to develop the Company's specifications sales
business, his progress in restructuring the Company and reducing costs, his
overall past and present
15
<PAGE>
performance and contributions to the Company, and the relationship of the CEO's
compensation to that of other key executives.
Compensation Committee:
Robert J. Weeks, Chairman
Frank B. Mayorshi
William J. Binnie
STOCK PERFORMANCE
The following graph compares the yearly percentage change and the
cumulative total stockholder returns on the Company's common stock with the
cumulative return on the NASDAQ Market Index and the MG Paper Products Peer
Group Index for the five-year period commencing on June 30, 1993 and ending on
June 30, 1998. These comparisons assume the investment of $100 of the Company's
common stock and in each of the indices on June 30, 1993 and the reinvestment of
dividends.
Comparison of 5-Year Cumulative Total Return
Among Bontex, Inc.
NASDAQ Market Index and MG Paper Products Group Index
(PERFORMANCE GRAPH APPEARS HERE.)
Comparison of 5 Year Cumulative Total Return
of Company, Industry Index and Broad Market
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BONTEX, INC. $ 100 $ 111.11 $ 72.22 $ 80.56 $ 108.33 $ 63.89
MG PAPER PRODUCTS INDEX 100 107.39 144.95 153.28 194.64 187.97
NASDAQ MARKET INDEX 100 109.66 128.61 161.89 195.02 258.52
</TABLE>
The peer group comprises the largest companies domestically traded on the
NASDAQ market which operate in the Company's industry, paper products. None of
these companies compete directly with Bontex, Inc. The returns of each company
have been weighted according to their respective stock market capitalization for
purposes of arriving at a peer group average.
16
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and any persons who own more than ten percent
of the Company's common stock, to file reports of ownership and changes in
ownership of Company common stock with the Securities and Exchange Commission.
Based on its review of the copies of such Forms furnished to it with respect to
fiscal 1998 and written representations from certain reporting persons that no
other reports are required, the Company believes that during fiscal 1998 all
required Section 16(a) reports were timely filed.
INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP audited the Company's consolidated
financial statements as of and for the year ended June 30, 1998 and has been
reappointed by the Board of Directors as independent auditors for the year ended
June 30, 1999. A representative of KPMG Peat Marwick LLP is expected to attend
the meeting with the opportunity to make a statement and/or respond to
appropriate questions from stockholders at the meeting.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's proxy statement
for the 1999 Annual Meeting, stockholder proposals must be received by the
Corporate Secretary of Bontex, Inc., One Bontex Drive, Buena Vista, Virginia
24416-1500, no later than May 26, 1999. Stockholder proposals intended to be
presented at the 1999 Annual Meeting by means other than inclusion in the
Company's proxy statement must be received by the Corporate Secretary no later
than August 11, 1999.
OTHER MATTERS
The Board knows of no matters which may properly come before the Annual
Meeting other than the matters referred to in this Proxy Statement. If, however,
any matters properly come before the meeting, it is the intention of the persons
named in the accompanying proxy to vote such proxy in accordance with their best
judgment thereon.
BY THE ORDER OF THE BOARD OF DIRECTORS
Charles W. J. Kostelni
Corporate Secretary
September 23, 1998
The Company's Annual Report on Form 10-K, excluding exhibits, is available
without charge to any stockholder of record requesting the same. Written
requests should be addressed to the attention of the Corporate Controller,
Bontex, Inc., One Bontex Drive, Buena Vista, Virginia 24416-1500.
17
<PAGE>
[x] PLEASE MARK VOTES
AS IN THIS EXAMPLE
BONTEX, INC.
REVOCABLE PROXY
Proxy Solicited on Behalf of the Board of Directors of the Company for
Annual Meeting October 22, 1998
The undersigned hereby constitutes and appoints David A. Dugan and William
B. D'Surney, or either of them, his true and lawful agents and proxies, with
full power of substitution in each, to represent the undersigned and to vote as
designated below, all the shares of Common Stock held of record by the
undersigned on September 14, 1998, at the Annual Meeting of Stockholders of
Bontex, Inc. to be held at the Best Western Inn at Hunt Ridge, Willow Springs
Drive, Lexington, Virginia, on Tuesday, October 22, 1998 at 10:30 A.M., Eastern
Daylight Saving Time, and at any adjournments thereof.
The undersigned acknowledges receipt of the Proxy Statement dated September 23,
1998.
This proxy must be signed Date
exactly as name appears hereon. -------------
- ---------------------------------- -----------------------------------------
Stockholder sign above Co-holder (if any) sign above
With- For All
For hold Except
1. ELECTION OF DIRECTORS [ ] [ ] [ ]
Nominees: Three Class B directors for a three year term, Jeffrey C.
Kostelni, Joseph F. Raffetto and Patricia S. Tischio.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- ---------------------------------------------------------------------------
2. Approval of plan to grant stock options to certain executive officers as
described in the Proxy Statement dated September 23, 1998.
For Against Abstain
[ ] [ ] [ ]
3. In their discretion, upon other matters as may properly come before the
meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposals 1 and 2. This proxy is revocable at any time prior to the
exercise hereof.
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
BONTEX, INC.
When shares are held by joint tenants, both should sign. Executors,
administrators, trustees, etc. should give full title as such. If executed on
behalf of a corporation, please sign full corporate name by duly authorized
officer.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
