<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
AMERICAN BUSINESS PRODUCTS, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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> 2
(LOGO)
AMERICAN BUSINESS PRODUCTS, INC.
POST OFFICE BOX 105684 ATLANTA, GEORGIA 30348
(404) 953-8300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1995
NOTICE HEREBY IS GIVEN that the 1995 Annual Meeting of Shareholders of
American Business Products, Inc. (the "Company") will be held at The Cobb
Galleria Centre, Two Galleria Parkway, Atlanta, Georgia, on Wednesday, April 26,
1995, at 11:00 a.m., Atlanta time, for the purpose of considering and voting
upon:
1. A proposal to elect four directors of the Company.
2. A proposal to amend the American Business Products, Inc. 1991 Stock
Option Plan to permit awards of restricted stock, to change the name of the
plan and to increase the number of shares of Common Stock of the Company
authorized for issuance under the plan.
3. A proposal to ratify the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the fiscal year ending December 31,
1995.
4. Such other business as properly may come before the Annual Meeting
or any adjournments thereof. The Board of Directors is not aware of any
other business to be presented to a vote of the shareholders at the Annual
Meeting.
Information relating to the above matters is set forth in the attached
Proxy Statement. Shareholders of record at the close of business on March 7,
1995 are entitled to receive notice of and to vote at the Annual Meeting and any
adjournments thereof.
By Order of the Board of Directors.
Dawn M. Gray
----------------
DAWN M. GRAY
Secretary
Atlanta, Georgia
March 20, 1995
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN PROMPTLY COMPLETE, EXECUTE AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. THE
PROMPT RETURN OF PROXY CARDS WILL SAVE YOUR COMPANY THE EXPENSE OF FURTHER PROXY
SOLICITATION.
<PAGE> 3
AMERICAN BUSINESS PRODUCTS, INC.
2100 RIVEREDGE PARKWAY
SUITE 1200
ATLANTA, GEORGIA 30328
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 1995
This Proxy Statement is furnished to the shareholders of American Business
Products, Inc. (the "Company") in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the 1995 Annual Meeting of
Shareholders (the "Annual Meeting") and at any adjournments thereof. The Annual
Meeting will be held on Wednesday, April 26, 1995, at The Cobb Galleria Centre,
Two Galleria Parkway, Atlanta, Georgia, at 11:00 a.m., Atlanta time.
The approximate date on which this Proxy Statement and the enclosed form(s)
of proxy card are first being sent or given to shareholders is March 20, 1995.
VOTING
GENERAL
The securities that can be voted at the Annual Meeting consist of Common
Stock of the Company, $2.00 par value per share, with each share entitling its
owner to one vote on each matter submitted to the shareholders. The record date
for determining the holders of Common Stock who are entitled to notice of and to
vote at the Annual Meeting is March 7, 1995. On the record date, 10,662,801
shares of Common Stock were outstanding and eligible to be voted at the Annual
Meeting.
QUORUM AND VOTE REQUIRED
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock of the Company is necessary to constitute a quorum at the
Annual Meeting. In counting the votes to determine whether a quorum exists at
the Annual Meeting, the proposal receiving the greatest number of all votes
"for" or "against" and abstentions (including instructions to withhold authority
to vote) will be used.
In voting with regard to the proposal to elect directors (Proposal 1),
shareholders may vote in favor of all nominees, withhold their votes as to all
nominees or withhold their votes as to specific nominees. The vote required to
approve Proposal 1 is governed by Georgia law and is a plurality of the votes
cast by the holders of shares entitled to vote, provided a quorum is present. As
a result, in accordance with Georgia law, votes that are withheld will not be
counted and will have no effect.
In voting with regard to the proposal to amend the 1991 Stock Option Plan
(Proposal 2), shareholders may vote in favor of the proposal or against the
proposal or may abstain from voting. The vote required to approve Proposal 2 is
governed by federal law and is the affirmative vote of the holders of a majority
of the shares represented at the Annual Meeting and entitled to vote, provided a
quorum is present. In accordance with federal law, abstentions are considered in
determining the number of votes required to obtain a majority of the outstanding
shares and will have the same legal effect as a vote against such proposal.
<PAGE> 4
In voting with regard to the proposal to ratify the appointment of
independent auditors (Proposal 3), shareholders may vote in favor of the
proposal or against the proposal or may abstain from voting. The vote required
to approve Proposal 3 is governed by Georgia law, and the votes cast favoring
such proposal must exceed the votes cast opposing such proposal, provided a
quorum is present. As a result, in accordance with Georgia law, abstentions will
not be counted and will have no effect.
Under the rules of the New York Stock Exchange and the American Stock
Exchange (the "Exchanges") that govern most domestic stock brokerage firms,
member brokerage firms that hold shares in street name for beneficial owners
may, to the extent that such beneficial owners do not furnish voting
instructions with respect to any or all proposals submitted for shareholder
action, vote in their discretion upon proposals which are considered
"discretionary" proposals under the rules of the Exchanges. Member brokerage
firms that have received no instructions from their clients as to
"non-discretionary" proposals do not have discretion to vote on these proposals.
Such "broker non-votes" will not be considered in determining whether a quorum
exists at the Annual Meeting and will not be considered as votes cast in
determining the outcome of any proposal.
PROXIES
Proxy cards are being transmitted with this Proxy Statement to all holders
of Common Stock of the Company. Separate proxy cards are being transmitted to
all employees who have shares of Common Stock allocated to their accounts under
the Company's Stock Bonus Plan. All properly executed proxy cards delivered by
shareholders to the Company in time to be voted at the Annual Meeting and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. IF NO SPECIFIC INSTRUCTIONS ARE GIVEN WITH REGARD TO THE MATTERS TO BE
VOTED UPON, THE SHARES REPRESENTED BY A SIGNED AND DATED PROXY CARD WILL BE
VOTED "FOR" EACH OF THE PROPOSALS LISTED ON THE PROXY CARD AND DESCRIBED HEREIN.
If any other matters properly may come before the Annual Meeting, the persons
named as proxies will vote upon such matters according to their judgment.
Any shareholder delivering a proxy has the power to revoke it at any time
before it is voted by giving written notice to the Secretary of the Company, by
executing and delivering to the Secretary a proxy card bearing a later date or
by voting in person at the Annual Meeting; provided, however, that under the
rules of the Exchanges, any beneficial owner of the Company's Common Stock whose
shares are held in street name by a member brokerage firm may revoke his proxy
and vote his shares in person at the Annual Meeting only in accordance with
applicable rules and procedures of the Exchanges; and provided further, that
proxy cards delivered by employees voting shares allocated to their accounts
under the Company's Stock Bonus Plan are revocable only by giving written notice
to, or by executing and delivering a later dated proxy card to, the Trustees of
the Stock Bonus Plan. Pursuant to the terms of the Stock Bonus Plan, employees
owning shares of Common Stock allocated to their accounts under the Stock Bonus
Plan may vote such shares only by delivering a duly executed and dated proxy
card to the Trustees and may not vote such shares in person at the Annual
Meeting.
In addition to soliciting proxies though the mail, the Company may solicit
proxies through its directors, officers and employees in person and by
telephone, facsimile or telegraph. All expenses incurred in connection with the
solicitation of proxies will be borne by the Company, including the charges and
expenses of brokerage firms, nominees, custodians, fiduciaries and others for
forwarding solicitation materials to beneficial owners of Common Stock.
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<PAGE> 5
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of December 31, 1994
regarding the ownership of the Company's Common Stock by each person known to
the Company to be the beneficial owner of more than 5% of the Company's Common
Stock, by each executive officer named in the Summary Compensation Table herein
and by all directors and executive officers of the Company as a group, based on
data furnished to the Company by such persons.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED
NAME (PERCENT OF CLASS)(1)
------------------------------------------------------- ---------------------
<S> <C>
Curtis Investment Company, LP 2,710,811(2)
Lonnie C. Bird (25.4%)
T. R. Carmody 36,418(3)
R. W. Gundeck 3,487(3)
W. C. Downer 17,118(3)
R. A. LeFeber 11,180(3)
B. Rogers 18,093(3)
All directors and executive officers 330,063(4)
of the Company as a group (15 persons) (3.1%)
</TABLE>
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(1) The stock ownership information shown above and in "Proposal 1 -- Election
of Directors -- Information Regarding Nominees and Directors" is based upon
information furnished to the Company by the named persons. Beneficial
ownership as reported in this Proxy Statement has been determined in
accordance with regulations of the Securities and Exchange Commission (the
"Commission") and includes shares of Common Stock of the Company which may
be acquired within 60 days upon the exercise of outstanding stock options.
The named persons have sole voting and investment power with regard to the
shares shown as owned by such persons except as otherwise indicated.
(2) The shares shown include 88,660 shares owned by Lonnie C. Bird; 92 shares
allocated to the account of Ms. Bird under the Company's Stock Bonus Plan;
68,914 shares that Ms. Bird votes as trustee of certain family trusts or as
custodian for certain minor family members and as to which she disclaims
any beneficial ownership; 1,500 shares which Ms. Bird votes as Chairperson
of the Arcadia Wildlife Preserve and as to which she disclaims any
beneficial ownership; 27,795 shares owned by the Residuary Trust Under the
Will of Richard B. Curtis for which Ms. Bird shares voting and investment
power with Richard B. Curtis, Jr. and Trust Company Bank and as to which
she disclaims any beneficial ownership; 14,062 shares owned by the Henry
Curtis Family Trust of 1990 for which Ms. Bird shares voting and investment
power; and 2,509,788 shares owned by Curtis Investment Company, LP ("CIC"),
a limited partnership of which Ms. Bird is the managing partner. As
managing partner, Ms. Bird has sole voting and investment power for all of
the shares owned by CIC, although Ms. Bird's proportionate interest in CIC
is less than 10%. Ms. Bird is the sister of Henry Curtis VII, a current
director of the Company. The address of CIC and Ms. Bird is 2100 RiverEdge
Parkway, Suite 1200, Atlanta, Georgia 30328.
(3) The percentage of shares beneficially owned represents less than one percent
of the outstanding Common Stock of the Company. With regard to the
beneficial ownership of shares of Common Stock by Mr. Carmody and Mr.
Gundeck, see Note (+) on page 7 hereof; with regard to Mr. Downer, the
shares shown include 8,709 shares owned jointly with his wife, 4,332 shares
which Mr. Downer may acquire upon the exercise of stock options and 4,077
shares allocated to his account under the Company's Stock
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<PAGE> 6
Bonus Plan; with regard to Mr. LeFeber, the shares shown include 3,375
shares owned jointly with his wife, 4,347 shares which Mr. LeFeber may
acquire upon the exercise of stock options and 3,458 shares allocated to
his account under the Company's Stock Bonus Plan; and with regard to Mr.
Rogers, the shares shown include 11,883 shares owned jointly with his wife,
3,000 shares which Mr. Rogers may acquire upon the exercise of stock
options and 3,210 shares allocated to his account under the Company's Stock
Bonus Plan.
(4) The shares shown include 24,654 shares which may be acquired by certain
directors and executive officers pursuant to the exercise of stock options;
1,574 shares owned by the spouses of certain directors as to which the
respective directors disclaim beneficial ownership; 49,672 shares owned
jointly by certain directors and executive officers with their spouses;
53,006 shares voted by a director as trustee and as to which he disclaims
any beneficial ownership; 14,062 shares owned by the Henry Curtis Family
Trust of 1990 for which a director shares voting and investment power;
26,034 shares allocated to the accounts of the directors and executive
officers under the Company's Stock Bonus Plan; and 2,075 shares held by Mr.
Schmalzried, a current director whose term of office as a director of the
Company will not continue after the Annual Meeting.
PROPOSAL 1 -- ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company provide that the Board of Directors of the
Company shall consist of not less than three nor more than fifteen persons and
that the number of directors shall be determined from time to time by the Board
of Directors. The Board of Directors has set the number of directors of the
Company at twelve. The Articles of Incorporation of the Company provide that the
Board of Directors of the Company shall be divided into three classes as nearly
equal in number as possible. The term of office of one of the classes of
directors expires each year, and a new class of directors is elected each year
by the shareholders for a term of three years and until their successors are
elected and qualified.
The Board of Directors has nominated Thomas R. Carmody, Robert W. Gundeck,
Hollis L. Harris and W. Stell Huie to stand for election as directors at the
Annual Meeting. Messrs. Carmody, Gundeck, Harris and Huie presently are members
of the Board of Directors whose terms are scheduled to expire at the Annual
Meeting. Each nominee has consented to serve as a director if elected. If
re-elected by the shareholders, Messrs. Carmody, Gundeck, Harris and Huie will
serve a three year term which will expire at the time of the 1998 Annual Meeting
of Shareholders.
If any of the nominees should become unavailable to serve for any reason
(which is not anticipated), the Board of Directors, in its discretion, may
designate a substitute nominee or nominees (in which case the persons named as
proxies on the enclosed proxy card will vote all valid proxy cards for the
election of such substitute nominee or nominees), allow the vacancy or vacancies
to remain open until the Board locates a suitable candidate or candidates or by
resolution reduce the authorized number of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO ELECT THOMAS R. CARMODY, ROBERT W. GUNDECK, HOLLIS L. HARRIS AND
W. STELL HUIE AS DIRECTORS OF THE COMPANY TO HOLD OFFICE UNTIL THE 1998 ANNUAL
MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
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INFORMATION REGARDING NOMINEES AND DIRECTORS
Set forth below is certain information as of December 31, 1994 regarding
the four nominees for director, all current directors whose terms of office will
continue after the Annual Meeting, Mr. Schmalzried, a director whose term of
office will not continue after the Annual Meeting, and Mr. McClelland, an
individual appointed to serve the remaining unexpired portion of the term of Mr.
Schmalzried.
PERSONS NOMINATED TO SERVE AS DIRECTORS UNTIL THE 1998 ANNUAL MEETING
THOMAS R. CARMODY has been Chairman of the Board of Directors of the
Company since April 1994 and Chief Executive Officer of the Company since 1988.
He previously served as President of the Company from 1985 until April 1994, as
Executive Vice President of the Company from 1982 until 1985 and as Chief
Operating Officer of the Company from 1982 until 1988. Mr. Carmody has been
employed by the Company or Curtis 1000 Inc., a wholly-owned subsidiary of the
Company, since 1955 and has been a director of the Company since 1983. Mr.
Carmody is 61. He beneficially owns 36,418 shares of the Common Stock of the
Company.*+
ROBERT W. GUNDECK has been President of the Company since April 1994 and
Chief Operating Officer of the Company since 1993. He previously served as
Executive Vice President of the Company from 1993 until April 1994 and as Vice
President -- Corporate Development of the Company from 1990 until 1993. From
1988 until 1990 Mr. Gundeck was Director of Acquisitions and Corporate
Development of the Company. Mr. Gundeck has been a director of the Company since
1993. Mr. Gundeck is 51. He beneficially owns 3,487 shares of Common Stock of
the Company.*+
HOLLIS L. HARRIS has been Chairman, President and Chief Executive Officer
of Air Canada since 1993 and Chairman of the Board and Chief Executive Officer
of Air Eagle Holdings, Inc., an aviation consulting company, since 1991. He
previously served as Vice Chairman, President and Chief Executive Officer of Air
Canada from February 1992 to December 1992. He was Chairman of the Board,
President and Chief Executive Officer of Continental Airlines, Inc. and
President and Chief Executive Officer of Continental Airlines Holdings, Inc.
from 1990 until 1991. Continental Airlines and Continental Airlines Holdings,
Inc. filed a petition for protection under Chapter 11 of the U.S. Bankruptcy
Code in 1990. Mr. Harris served as President and Chief Operating Officer of
Delta Air Lines, Inc. from 1987 to 1990. Mr. Harris has been a director of the
Company since 1988. He also is a director of Continental Airlines, Inc. Mr.
Harris is 63. He beneficially owns 387 shares of the Common Stock of the
Company.*
W. STELL HUIE has been Senior Counsel to the law firm of Long, Aldridge &
Norman, general counsel to the Company, since January 1995. He previously was a
Senior Partner in Long, Aldridge & Norman from 1984 until January 1995. He has
been a practicing attorney since 1953. Mr. Huie has been a director of the
Company since 1968. Mr. Huie is 64. He beneficially owns 14,438 shares of the
Common Stock of the Company.*+
DIRECTORS TO SERVE UNTIL THE 1997 ANNUAL MEETING
F. DUANE ACKERMAN has been Vice Chairman and Chief Operating Officer of
BellSouth Corporation since January 1995. He previously served as President and
Chief Executive Officer of BellSouth Telecommunications, Inc. from 1992 until
1994. From 1991 until 1992 he served as President and Chief Operating Officer of
BellSouth Telecommunications, Inc. and from March 1991 until November 1991 he
served as its Vice Chairman and Group President. Mr. Ackerman previously served
as Vice Chairman --
5
<PAGE> 8
Finance & Administration of BellSouth Corporation from 1989 until 1991. Mr.
Ackerman has been a director of the Company since 1993. Mr. Ackerman is a
director of BellSouth Corporation, Wachovia Bank of Georgia, N.A. and American
Heritage Life Insurance Corporation. Mr. Ackerman is 52. He beneficially owns
400 shares of the Common Stock of the Company.*
JOHN E. ADERHOLD was Chairman and Chief Executive Officer of the Rayloc
division of Genuine Parts Company, which re-manufactures and sells automobile
parts, from 1989 until his retirement in 1992. Mr. Aderhold has been a director
of the Company since 1988. He also is a director of Aaron Rents, Inc., The
Actava Group Inc., Winter Companies, Bankhead Enterprises, Inc., Technology
Park, Inc. and Georgia World Congress Center and is Chairman of the Board of
Lanier Bank & Trust Company. Mr. Aderhold is 69. He beneficially owns 3,338
shares of the Common Stock of the Company.*
THOMAS F. KELLER, Ph.D. has been Dean of the Fuqua School of Business at
Duke University and R.J. Reynolds Professor of Business Administration at Duke
University since 1974. Dr. Keller is a director of Ladd Furniture, Inc., Nations
Funds, Inc., Hatteras Income Securities, Inc., Cambridge Series Trust, Monk-
Austin, Inc., Mebane Packaging Group, Unisphere Southeast, Inc., Welbilt Corp.
and Wendy's International, Inc. Dr. Keller is 63. He beneficially owns 500
shares of the Common Stock of the Company.*
REX A. MCCLELLAND has been Senior Vice President -- Corporate Services of
Delta Airlines, Inc. ("Delta") and has been President of DAL Moscow, Inc., a
wholly owned subsidiary of Delta, since 1993. He previously served as Senior
Vice President -- Administrative Services of Delta from 1992 until 1993. He was
Senior Vice President -- Operations of Delta from 1987 until 1992. Mr.
McClelland has been appointed as a member of the Board of Directors of the
Company, effective as of the date of the Annual Meeting, to serve for the
remaining unexpired portion of the term of Marvin E. Schmalzried, who, having
attained the age of 70, is retiring as a director at the Annual Meeting as
required by the retirement policy of the Board of Directors. Mr. McClelland also
is a director of WorldSpan, Delta's customer reservations system service
provider, TransQuest Information Solutions, a travel and transportation
technology venture jointly owned by Delta and American Telephone & Telegraph
Co., and Delta-Aeroflot Travel Enterprises, which is jointly owned by Delta and
Aeroflot. Mr. McClelland is 58. He beneficially owns 200 shares of the Common
Stock of the Company.*
MARVIN E. SCHMALZRIED has been Executive Vice President and a director of
Strategics, Inc., a marketing company, since 1993. He previously served as
Senior Vice President and Chief Financial Officer of View-Master Ideal Group,
Inc., a toy manufacturer, from 1987 until 1990. Mr. Schmalzried has been a
director of the Company since 1982. He also is a director of Intercity
Management Corp., an oil and gas production company. Mr. Schmalzried is 70. He
beneficially owns 2,075 shares of the Common Stock of the Company. In compliance
with Company retirement policies, Mr. Schmalzried's term of office as a director
of the Company will not continue after the Annual Meeting.*
DIRECTORS TO SERVE UNTIL THE 1996 ANNUAL MEETING
W. J. BIGGERS served as Chairman of the Board of the Company from 1983
until 1994, as President of the Company from 1973 to 1985 and as Chief Executive
Officer of the Company from 1973 to 1988. Mr. Biggers retired as an officer of
the Company in 1991 after having served with the Company or its predecessors
since 1961. Mr. Biggers has been a director of the Company since 1968. Mr.
Biggers is 67. He beneficially owns 61,047 shares of the Common Stock of the
Company.*+
HENRY CURTIS VII has been Vice President of Administration and Sales
Support of Curtis 1000 Inc. since 1992. He previously served as Director of
Administration and Sales Support of Curtis 1000 Inc. from 1990 to 1992. Mr.
Curtis served as Director of Employee Benefits of the Company from 1983 to 1990
and has
6
<PAGE> 9
held various positions with the Company and its wholly-owned subsidiaries,
Curtis 1000 Inc. and Vanier Graphics Corporation, since 1971. He has been a
director of the Company since 1989. Mr. Curtis is 46. He beneficially owns
154,668 shares (1.5%) of the Common Stock of the Company.+
HERBERT J. DICKSON has been a management consultant since 1993. He
previously served as Chairman of the Board of Fortune Financial Services, Inc.,
a finance company, from 1987 to 1993. Mr. Dickson has been a director of the
Company since 1973. He also is a director of Blount, Inc. and Martin Industries,
Inc. Mr. Dickson is 69. He beneficially owns 4,839 shares of the Common Stock of
the Company.*
G. HAROLD NORTHROP has been Vice Chairman of the Board of Trustees of the
Ida Cason Callaway Foundation, a non-profit foundation (the "Foundation"), since
1992 and Chairman of the Executive Committee of the Board of Trustees of the
Foundation since 1991. He also has served as a Trustee of the Foundation and a
director of Callaway Gardens Resort, Inc., which operates Callaway Gardens, a
resort and convention center, since 1972. Mr. Northrop was President and Chief
Executive Officer of the Foundation from 1972 until 1991 and was President and
Chief Executive Officer of Callaway Gardens Resort, Inc. from 1972 until 1990.
Mr. Northrop has been a director of the Company since 1986. He also is a
director of Trust Company Bank of Columbus, Georgia and John H. Harland Company.
Mr. Northrop is 59. He beneficially owns 2,075 shares of the Common Stock of the
Company.*
- - ---------------
* Less than one percent.
+ With regard to Mr. Biggers, the shares shown include 3,000 shares which Mr.
Biggers may acquire upon the exercise of stock options, 9,810 shares allocated
to his account under the Company's Stock Bonus Plan and 787 shares owned by
Mr. Biggers' wife as to which he disclaims any beneficial ownership; with
regard to Mr. Carmody, the shares shown include 25,705 shares owned jointly
with his wife, 6,375 shares which Mr. Carmody may acquire upon the exercise of
stock options and 4,338 shares allocated to his account under the Company's
Stock Bonus Plan; with regard to Mr. Curtis VII, the shares shown include 400
shares which Mr. Curtis may acquire upon the exercise of stock options, 854
shares allocated to Mr. Curtis' account under the Company's Stock Bonus Plan,
53,006 shares voted by him as trustee and as to which he disclaims any
beneficial ownership and 14,062 shares for which he shares voting and
investment power; with regard to Mr. Gundeck, the shares shown include 3,200
shares which Mr. Gundeck may acquire upon the exercise of stock options and
287 shares allocated to his account under the Company's Stock Bonus Plan; and
with regard to Mr. Huie, the shares shown include 787 shares owned by Mr.
Huie's wife as to which he disclaims any beneficial ownership.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the full
Board and through committees of the Board, consisting of an Executive Committee,
a Compensation and Nominating Committee and an Audit Committee. During the
fiscal year ended December 31, 1994, the Board of Directors held five meetings,
the Executive Committee held two meetings, the Compensation and Nominating
Committee held four meetings and the Audit Committee held two meetings.
Attendance at meetings of the Board and its committees as a whole averaged 98%.
Each director attended 75% or more of the aggregate of all meetings of the Board
of Directors and all committees of the Board of Directors on which he served
during such fiscal year.
The Executive Committee is composed of Messrs. Biggers (Chairman), Carmody,
Curtis and Gundeck. This committee, during intervals between meetings of the
Board, may exercise the powers of the Board of Directors except with regard to a
limited number of matters which include amending the Articles of
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<PAGE> 10
Incorporation or Bylaws of the Company, filling vacancies on the Board of
Directors or any of its committees, approving or proposing to the shareholders
action that is required to be approved by the shareholders, or approving a plan
of merger that does not require shareholder approval. All actions of the
Executive Committee are submitted for review and ratification by the full Board
of Directors.
The Compensation and Nominating Committee is composed of Messrs. Aderhold
(Chairman), Ackerman, Harris and Northrop. This committee reviews the
performance of all of the Company's executive officers, recommends to the Board
the amount and form of all compensation of executive officers of the Company and
recommends to the Board nominees for election to the Board of Directors. The
Compensation and Nominating Committee will consider nominees for director
recommended by shareholders if submitted to the Company in accordance with the
procedures set forth in Article III, Section 2 of the Bylaws of the Company. See
"Shareholder Proposals For 1996 Annual Meeting."
The Audit Committee is composed of Messrs. Dickson (Chairman), Huie, Keller
and Schmalzried. This committee is responsible for the review and evaluation of
the Company's internal controls and accounting procedures and for the review of
audit reports with the Company's independent auditors. In addition, this
committee makes recommendations to the Board of Directors concerning the
appointment of independent auditors.
DIRECTOR COMPENSATION
Non-employee directors receive a quarterly retainer fee of $3,500 plus
$1,000 for each meeting of the Board of Directors attended. Non-employee
directors who are members of the Executive Committee, the Compensation and
Nominating Committee or the Audit Committee receive $500 per meeting if in
attendance, and non-employee Chairmen of these committees receive an additional
fee of $500 per committee meeting if in attendance. Effective April 1, 1995,
non-employee directors will receive a quarterly retainer fee of $3,750 plus
$1,100 for each meeting of the Board of Directors attended and $750 for
attendance at a committee meeting. Non-employee Chairmen of such committees will
continue to receive an additional fee of $500 per committee meeting if in
attendance. Directors who are salaried employees of the Company or any of its
subsidiaries do not receive fees for their services as directors.
DEFERRED COMPENSATION PLAN FOR DIRECTORS. The Company maintains the
Deferred Compensation Plan for Directors in which all directors of the Company
are eligible to participate. If a director elects to participate, all fees
otherwise payable to him for service on the Board of Directors will be deferred.
At the election of each participant, amounts deferred under the plan prior to
April 1, 1994, are treated as if invested under either a "cash deferral program"
or a "phantom stock program." Under the cash deferral program, the deferred fees
are credited with deemed interest at a rate determined from time to time by a
committee appointed by the Board of Directors of the Company. Under the phantom
stock program, the deferred fees are treated as if applied to purchase shares of
Common Stock of the Company. A bookkeeping account is set up for the participant
which is credited with a number of "stock units" equal to the number of shares
of Common Stock that could have been purchased with the fees at the time of
deferral. The number of stock units credited to the participant is adjusted
periodically to account for dividends, stock splits and other events affecting
the number of outstanding shares, as if the stock units were actual shares of
Common Stock. All amounts deferred under the plan on or after April 1, 1994 are
invested under the cash deferral program.
Generally, a participant will receive payment of his benefit under the plan
in quarterly installments over five years, in cash, beginning after he attains
age 70 or, if later, after he retires or otherwise leaves the Board of Directors
of the Company. The amount of each cash payment is determined, in the case of
the cash deferral
8
<PAGE> 11
program, by the amount of fees deferred plus the interest accrued thereon or, in
the case of the phantom stock program, by the number of stock units credited to
the participant's account and the market value per share of the Company's Common
Stock. If a participant dies before receiving full payment of his benefit under
the plan, the remaining amount will be paid in a lump sum, in cash, to his
beneficiary.
None of the executive officers named in the Summary Compensation Table who
also are directors of the Company receive fees for services as a director and
therefore no amounts have been deferred for these individuals under the plan.
Amounts deferred and accrued pursuant to the plan for all current directors who
are not executive officers as a group totaled $109,625 for the 1994 fiscal year
of the Company.
DEFERRED COMPENSATION INVESTMENT PLAN (DIRECTORS). The Deferred
Compensation Investment Plan (Directors) covers certain directors of the Company
designated by the Board of Directors of the Company. Under the plan, each
participant elects to defer, on a one-time basis, a specified amount of his fees
for services as a director to be invested in the plan. The Company expects, but
is not required, to invest the deferred funds in life insurance contracts. The
maximum annual amount of benefit payable to a fully vested participant is
specified in the participant's joiner agreement with the Company but may be
reduced due to certain adverse changes in federal income tax provisions. A
participant's vested benefit will never fall below the amount of the deferral,
plus interest compounded at an annual rate of 12%.
A participant is fully vested in the amount of his benefit (i) if he
remains on the Board to age 60, (ii) if prior to retirement he suffers total and
permanent disability or dies, or (iii) upon a change in control of the Company.
Upon retirement or other termination of service after attaining age 60, a
participant (or his beneficiary if he dies) generally will receive fixed monthly
payments, beginning at the later of age 70 or retirement, for a period of ten
years. If a participant dies before retirement, the participant's beneficiary
will receive equal monthly installments of the participant's benefit over a ten
year period. If a participant dies after payments commence, his benefit will be
payable to his beneficiary for the remainder of the ten year payment period. If
a participant terminates his service on the Board prior to attaining age 60 for
reasons other than death or disability or commits suicide within two years after
becoming a participant, he or his beneficiary will receive a lump-sum payment of
the amount of compensation he has deferred, plus interest compounded at an
annual rate of 12%.
No amounts were paid under the plan for any of the current directors during
the 1994 fiscal year of the Company.
1993 DIRECTORS STOCK INCENTIVE PLAN. The 1993 Directors Stock Incentive
Plan (the "1993 Plan") provides for the granting of Stock Rights (as defined
below) to directors who are not otherwise compensated employees of the Company
or its subsidiaries. Nine directors currently are eligible to participate in the
1993 Plan. The 1993 Plan is administered by those members of the Executive
Committee of the Company who are not eligible to participate in the 1993 Plan
(the "Committee"). The Committee has full authority to, among other things,
determine the terms and provisions of the instruments by which grants of
nonqualified stock options ("Options") and awards of restricted stock
("Restricted Stock") (collectively, "Stock Rights") are evidenced.
The 1993 Plan provides that the Committee may grant Stock Rights with
respect to a maximum of 150,000 shares of Common Stock. Shares underlying any
Option granted under the 1993 Plan that expires or terminates without having
been fully exercised may be added to the Common Stock otherwise available for
grants of Stock Rights under the 1993 Plan.
An eligible director may elect to receive an Option to purchase Common
Stock of the Company in lieu of all or a portion of his director's retainer fee.
The option price of each share of Common Stock underlying an
9
<PAGE> 12
Option is one-half of the fair market value of a share of Common Stock on the
date the Option is granted. The term of any Option granted under the 1993 Plan
commences on the date the Option is granted and expires three months following
the tenth anniversary of the date the Option is granted. Generally, no Option
may be exercised for at least 12 months after the date of grant. Upon a change
of control of the Company, however, all Options become immediately exercisable
for the full number of shares. Upon exercise of an Option, payment must be made
in full in cash or in shares of Common Stock already owned by the director or in
a combination of cash and shares. Payment must equal the option price of the
shares subject to the Option being exercised multiplied by the number of shares
being purchased. Options granted under the 1993 Plan are not assignable except
at death.
Eligible directors under the 1993 Plan will receive an award or awards of
Restricted Stock which will provide the recipient with immediate rights of
ownership in the shares of Common Stock underlying the award. Awards are subject
to conditions and restrictions as specified by the Committee. Each eligible
director will receive Restricted Stock as follows: (i) upon an eligible
director's initial election to the Board, an individual receives 200 shares of
Restricted Stock; (ii) as of the date of the annual shareholders meeting which
follows an employee director's (i.e., an ineligible director) retirement as an
employee of the Company and continuance in his role as a director (therefore
becoming an eligible director), an individual receives 200 shares of Restricted
Stock; and (iii) upon beginning any term as a director of the Company, an
individual receives 100 shares of Restricted Stock; provided, that upon the
beginning date of his eighth three-year term, an individual receives 200 shares
of Restricted Stock. No director will receive more than 1,000 shares of
Restricted Stock. Generally, a recipient of Restricted Stock will become vested
and will obtain a nonforfeitable interest in the Restricted Stock three years
after the date of grant. Recipients of awards of Restricted Stock will have the
right to vote the shares of Restricted Stock and to receive all dividends or
other distributions paid or made with respect to the Restricted Stock; however,
recipients shall not have the right to transfer, sell or assign the Restricted
Stock until the lapse of the restrictions.
The 1993 Plan became effective as of October 1, 1993 and will terminate
upon action of the Board of Directors; provided, however, that no such
termination will affect the rights of the Optionees who have outstanding Stock
Rights without the consent of such Optionees.
During the fiscal year ended December 31, 1994, the Committee granted
Options to purchase 1,273 shares of Common Stock at an option price of $11.00
per share to each of the following directors of the Company: Messrs. Ackerman,
Aderhold, Dickson, Huie, Keller and Northrop. During the fiscal year ended
December 31, 1994, the Committee awarded 200 shares of Restricted Stock to each
of the following directors of the Company: Messrs. Ackerman, Aderhold, Biggers,
Dickson, Harris, Huie, Keller, Northrop and Schmalzried.
10
<PAGE> 13
EXECUTIVE COMPENSATION
GENERAL
Table 1 summarizes by various categories, for the fiscal years ended
December 31, 1994, 1993 and 1992, the total compensation earned by (i) the Chief
Executive Officer of the Company, (ii) each of the other executive officers of
the Company who were serving as executive officers at December 31, 1994 and
whose salary and bonus for the fiscal year ended December 31, 1994 exceeded
$100,000, and (iii) one executive officer for whom disclosure would have been
provided but for the fact that such individual was not serving as an executive
officer of the Company at December 31, 1994 (collectively referred to as the
"named executive officers"). For information regarding the various factors
considered by the Compensation and Nominating Committee in recommending the
compensation of the Chief Executive Officer of the Company and, generally, the
other executive officers of the Company, see "Compensation and Nominating
Committee Report" below.
TABLE 1: SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
---------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) ($)(2) (#) ($)(3)
- - ------------------- ---- ---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
T. R. Carmody 1994 385,000 231,000 19,069 8,000 12,499
Chairman and 1993 350,000 70,000 -- 4,000 17,902
Chief Executive 1992 320,000 128,000 -- 4,000 17,854
Officer
R. W. Gundeck 1994 237,500 122,500 8,100 4,000 12,705
President and 1993 175,000 38,000 -- 2,000 16,899
Chief Operating 1992 140,000 42,000 -- 1,200 14,765
Officer
W. C. Downer 1994 157,000 58,875 1,944 1,707 10,715
Vice President -- 1993 148,000 24,000 -- 1,200 13,177
Finance 1992 139,000 34,800 -- 1,200 14,648
R. A. LeFeber 1994 121,000 43,125 -- 1,000 9,193
Vice President -- 1993 109,000 15,000 -- 1,000 9,953
Administration 1992 103,000 25,800 -- 1,000 11,068
B. Rogers(3) 1994 113,000 42,375 -- 1,000 8,988
Vice President -- 1993 107,000 14,700 -- 1,000 9,735
Information 1992 100,500 25,100 -- 1,000 10,709
Systems
</TABLE>
- - ---------------
(1) Reflects cash bonus awards earned during the respective fiscal years for the
achievement of performance criteria pursuant to the Annual Management
Incentive Bonus Plan. (See "Compensation and Nominating Committee
Report -- Executive Officer Compensation.")
11
<PAGE> 14
(2) Reflects cash payments made in lieu of Company contributions to the
Company's Profit Sharing Plan. All Other Compensation earned during fiscal
1994 includes the following: (i) Company contributions to both the
Company's Profit Sharing Plan and the Company's Stock Bonus Plan: Mr.
Carmody -- $9,375; Mr. Gundeck -- $9,375; Mr. Downer -- $9,375; Mr.
LeFeber -- $8,125; and Mr. Rogers -- $7,981; (ii) premiums paid by the
Company for life insurance policies, any proceeds of which are payable to
the respective beneficiaries designated by the named executive officers:
Mr. Carmody -- $3,124; Mr. Downer -- $1,340; Mr. LeFeber -- $1,068; and Mr.
Rogers -- $1,007; and (iii) Company contributions to the American Business
Products, Inc. Executive Retirement Plan: Mr. Gundeck -- $3,330.
(3) Mr. Rogers resigned as Vice President -- Information Systems effective
November 15, 1994. (See "Executive Compensation -- Supplemental Retirement
Income Plan" and "Executive Compensation -- Deferred Compensation
Investment Plan (Executives).")
OPTION GRANTS
Table 2 sets forth information regarding the number and terms of stock
options granted to the named executive officers during the fiscal year ended
December 31, 1994. Included in such information, in accordance with the rules
and regulations of the Commission, is the potential realizable value of each
option granted, calculated using the 5% and 10% option pricing model.
TABLE 2: OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- - -------------------------------------------------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION FOR
NUMBER OF GRANTED TO EXERCISE OR OPTION TERM
SECURITIES UNDERLYING EMPLOYEES IN BASE PRICE -------------------
NAME OPTIONS GRANTED(#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- - -------------- --------------------- ------------ ----------- --------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
T. R. Carmody 8,000 19.55 19.75 6/8/04 99,520 251,200
R. W. Gundeck 4,000 9.77 19.75 6/8/04 49,760 125,600
W. C. Downer 1,200 2.93 19.75 6/8/04 14,928 37,680
507 1.23 24.88 6/26/00 7,945 20,057
R. A. LeFeber 1,000 2.44 19.75 6/8/04 12,440 31,400
B. Rogers 1,000 2.44 19.75 6/8/04 12,440 31,400
</TABLE>
- - ---------------
(1) The indicated number of options were granted to the named executive officers
on June 8, 1994 pursuant to the American Business Products, Inc. 1991 Stock
Option Plan. Such options vest in increments, with 25% of the shares
covered thereby becoming exercisable on the first anniversary of the date
of grant, an additional 25% of the option shares becoming exercisable on
each successive anniversary date, and full vesting occurring on the fourth
anniversary date. In addition, a reload option for 507 shares was granted
to Mr. Downer on March 21, 1994 pursuant to the American Business Products,
Inc. 1981 Stock Option Plan and is fully exercisable.
The exercise price of an option may be paid in cash, by delivery of already
owned shares of Common Stock of the Company or by a combination thereof,
subject to certain conditions. To the extent that the exercise price of an
option is paid with shares of Common Stock of the Company, a reload option
may be granted to the optionee. A reload option is an option granted for
the same number of shares as is exchanged in payment of the exercise price
and is subject to all of the same terms and conditions as the original
option except for the exercise price which is determined on the basis of
the fair market value of
12
<PAGE> 15
the Common Stock of the Company on the date the reload option is granted.
One or more successive reload options may be granted to an optionee who
pays for the exercise of a reload option with shares of Common Stock of the
Company. Pursuant to the terms of the plans, the Committee retains
discretion, subject to plan limits, to modify the terms of outstanding
options and to reprice options.
The options were granted for a term of 10 years, subject to earlier
termination upon occurrence of certain events related to termination of
employment or change of control of the Company.
OPTION EXERCISES
Table 3 sets forth the number of shares of Common Stock acquired upon the
exercise of options by the named executive officers during the fiscal year ended
December 31, 1994, including the aggregate value of gains on the date of
exercise. The table also sets forth (i) the number of shares covered by
unexercised options (both exercisable and unexercisable) as of December 31, 1994
and (ii) the respective values of "in-the-money" options, which represents the
positive spread between the exercise price of existing options and the fair
market value of the Company's Common Stock at December 31, 1994.
TABLE 3: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
EXERCISES DURING YEAR FISCAL YEAR-END
-------------------------------- ---------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
YEAR END(#) FISCAL YEAR END($)(1)
SHARES ACQUIRED VALUE ----------------------------- -----------------------------
NAME ON EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. R. Carmody 3,750 15,813 6,375 14,125 18,563 26,188
R. W. Gundeck 0 -- 3,200 6,400 12,220 11,650
W. C. Downer 810 7,526 4,332 3,000 14,832 4,650
R. A. LeFeber 0 -- 4,347 2,550 30,526 4,150
B. Rogers 0 -- 3,000 2,550 13,038 4,150
</TABLE>
- - ---------------
(1) Certain exercisable and unexercisable options held by the named executive
officers were not "in-the-money" at December 31, 1994.
Set forth below is information regarding the Company's executive
compensation plans under which the named executive officers have vested rights
to receive future compensation but received no payments in 1994. Such amounts
therefore are not included in the Summary Compensation Table.
SUPPLEMENTAL RETIREMENT INCOME PLAN
The Supplemental Retirement Income Plan covers certain key executives of
the Company and its subsidiaries who are designated by the Board of Directors of
the Company. Upon retirement, a vested participant generally will receive fixed
monthly cash payments for life, with guaranteed payments to the participant or
his beneficiary for a minimum of 15 years. Annual payments generally are equal
to 50% of the highest annual compensation (base salary plus bonus) paid to the
participant during the last three years in which the participant received his
annual salary prior to reaching age 62, but amounts payable under the plan are
subject to dollar limits set by the Board for each participant. Similar death
benefits and disability benefits
13
<PAGE> 16
(with specified reductions) are payable beginning on the date of death or
disability, respectively, if the participant dies prior to age 62 or becomes
disabled. A participant is fully vested once (i) he attains age 62; (ii) the sum
of his age and years of service equals or exceeds 75 years and he has attained
at least age 60 while employed by the Company or any of its subsidiaries; (iii)
if prior to retirement he dies or suffers total and permanent disability; (iv)
if his employment is involuntarily terminated for a reason other than cause; or
(v) upon a change in control of the Company. A participant whose employment is
voluntarily terminated between the ages of 55 and 60 is partially vested if the
sum of his age and years of service exceeds 75. A participant terminated
involuntarily for a reason other than for cause is treated as if he remains
employed until his retirement (age 60 or 62, at the participant's election). Mr.
Carmody is vested in benefits of $150,000 per year under the plan, and Mr.
Rogers is vested in benefits of $50,000 per year under the plan.
DEFERRED COMPENSATION INVESTMENT PLAN (EXECUTIVES)
The Deferred Compensation Investment Plan (Executives) covers certain key
executives of the Company and its subsidiaries as designated by the Board of
Directors of the Company. Under the plan, each participant elected to defer a
specified amount of his 1985 annual compensation to be invested in the plan. The
Company has invested the deferred funds in life insurance contracts. Under the
plan, the Company may change its investments at any time. The maximum annual
amount of benefit payable to a fully vested participant is specified in the
participant's joiner agreement with the Company but may be reduced due to
certain adverse changes in federal income tax provisions. A participant's vested
benefit will never fall below the amount of the deferral, plus interest
compounded at an annual rate of 12% (accrued to age 62).
A participant is fully vested in the amount of his benefit (i) once he
attains age 60 while actively employed by the Company or any of its
subsidiaries; (ii) if prior to retirement, once he suffers total and permanent
disability or dies; or (iii) upon a change in control of the Company. If a
participant dies before actual retirement, the participant's beneficiary will
receive equal monthly installments of the participant's benefit over a 15 year
period. If a participant dies after payments commence, his benefit will be
payable to his beneficiary for the remainder of the 15 year payment period. A
participant may elect to receive his vested benefit as early as age 60 but such
benefit will be actuarially reduced for each month that payments begin before
age 62. If a participant voluntarily terminates his employment between ages 55
and 60 for reasons other than death or disability, he will receive a lump-sum
distribution equal to the amount of compensation he has deferred, plus interest
accrued at the annual compound rate of 15%. If a participant commits suicide
within two years after becoming a participant, goes into competition with the
Company or voluntarily terminates his employment before attaining age 55, he
will receive a lump-sum distribution equal to the amount of his deferral, plus
interest accrued at the annual compound rate of 12%. A participant whose
employment is involuntarily terminated for a reason other than cause will be
100% vested in his benefit, which will be payable at age 60 or 62 as if he
retired or, at his election, in a single lump-sum payment with interest accrued
at the annual compound rate of 15%.
Mr. Carmody is vested in benefits of $55,800 per year under the plan, and
Mr. Rogers is vested in benefits of $32,400 per year under the plan.
COMPENSATION AND NOMINATING COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report by the Compensation and Nominating Committee (the "Committee")
of the Board of Directors discusses the Committee's compensation objectives and
policies applicable to the Company's executive officers. The report specifically
reviews the Committee's guidelines in establishing the compensation of the
Company's Chief Executive Officer as reported in the Summary Compensation Table
and generally with respect to all executive officers. The Committee is composed
entirely of independent, non-employee directors.
14
<PAGE> 17
EXECUTIVE OFFICER COMPENSATION
The Company's compensation programs for its executive officers are intended
to create a direct relationship between the level of compensation paid to
executives and the Company's current and long-term level of performance. The
Committee believes that this relationship is best implemented by providing a
compensation package consisting of separate components, all of which are
designed to enhance the Company's overall performance. These components are base
salary, short-term incentive compensation and long-term incentive compensation.
BASE SALARIES. In setting base salaries for the executive officers, the
Committee considers survey-derived data concerning compensation paid by other
bonus-paying companies that are similar in size to the Company and that
manufacture nondurable goods. While some of the companies identified in the
stock performance graph peer group index are included in these surveys, the
Committee believes its competitors for executive talent are found outside of
this group. As a matter of policy, base salaries are targeted at the 50th
percentile of comparable companies. These targeted base salary levels provide
the Committee a reference of competitive pay while allowing the Committee to
approve base salaries slightly above or below the survey-derived pay on the
basis of individual experience, performance and responsibilities. Performance is
determined by the Chief Executive Officers' evaluation of how well each
executive officer has fulfilled his or her responsibilities, taking into account
actual performance as compared to the financial goals established for the
Company. The Committee annually reviews the survey methodology and approves the
targeted base salary levels for the executive officers. These pay levels are
then used by the Chief Executive Officer in recommending base salaries for those
executives reporting directly to him. These recommendations are considered by
the Committee as it sets the base salaries for the executive officers.
SHORT-TERM INCENTIVE COMPENSATION. Under the Company's Annual Management
Incentive Bonus Plan (the "Bonus Plan"), the Company's executive officers and
other key employees have the opportunity to earn annual performance bonuses. A
threshold return of 9% on shareholders' equity must be achieved before any
bonuses are earned regardless of individual or business unit performance.
The bonuses paid for 1994 were based on the following factors: Company
sales revenues of $563,133,497; income before special charge of $19,527,865; and
attainment of predetermined individual goals. These financial measures accounted
for approximately 80% of an executive's bonus, and the achievement of individual
goals accounted for the remainder.
The annual performance goals for the Company and each executive officer are
recommended at the beginning of the fiscal year by the Chief Executive Officer
and approved by the Committee. If performance goals are met or exceeded, the
President could earn from 15% to 50% of base salary. The other executives
reporting to the Chief Executive Officer could earn from 12.5% to 37.5% of base
salary. Actual awards to the President and other officers in 1994 averaged 42.9%
of base salary and are reflected in "Executive Compensation -- Table 1: Summary
Compensation Table."
LONG-TERM INCENTIVE COMPENSATION. The Company's long-term incentive
compensation plan is based on the Company's 1981 Stock Option Plan and the 1991
Stock Option Plan. These plans promote ownership of the Company's Common Stock
which, in turn, provide a common interest between the shareholders of the
Company and executive officers of the Company. In establishing a long-term
incentive compensation plan, the Committee concluded that target incentive
compensation opportunities (in the form of stock option grants) should be
established and that compensation paid under such stock option plan should be
directly linked to the performance of the Company (as reflected by increases in
the price of its Common Stock) and the contribution of the individual thereto.
15
<PAGE> 18
Options, usually granted annually, have an exercise price equal to the fair
market value of the shares on the date of grant and, to encourage a long-term
perspective, have an exercise period of ten years. The number of options granted
to executive officers is based on a review of grant levels at comparable
companies by the Committee, which is charged with administering the option
plans. Stock options granted to the named executive officers during the fiscal
year ended December 31, 1994 and year-end option values are reflected in
"Executive Compensation -- Table 2: Option Grants in Last Fiscal Year" and
"Executive Compensation -- Table 3: Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year-End Option Values."
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of the Company's Chief Executive Officer is consistent
with the compensation philosophy of the Company and is targeted at the 50th
percentile of comparable companies. In determining the size of the base salary
component of Mr. Carmody's compensation, the Committee considers competitive
industry pay practices, the Company's performance and Mr. Carmody's contribution
to that performance. On the basis of the marketplace review and Mr. Carmody's
performance in 1994, the Committee approved a base salary increase for him of
10% for fiscal 1994, thereby increasing his base salary to $385,000.
In addition to his base salary, Mr. Carmody is eligible to receive annual
incentive compensation pursuant to the Bonus Plan. Annual goals for Mr. Carmody
are established by the Committee at the beginning of each fiscal year and are
based on the same factors as are bonuses for all other executive officers. The
annual bonus award has a significant effect on Mr. Carmody's total annual
compensation. In fiscal 1994, the Company achieved record sales and earnings
that far exceeded the goals set at the beginning of the fiscal year.
Accordingly, for fiscal 1994, Mr. Carmody received a cash bonus award equal to
60% of his base salary. (See "Executive Compensation -- Table 1 -- Summary
Compensation Table.") Mr. Carmody's annual bonus award reflects the Company's
excellent results in fiscal 1994 under Mr. Carmody's strong leadership.
Mr. Carmody also is entitled to receive long-term incentive compensation
pursuant to the 1981 Stock Option Plan and the 1991 Stock Option Plan. The
Committee, in its sole discretion, determines the amount of any award to be
granted to Mr. Carmody. For fiscal 1994, Mr. Carmody was granted an incentive
stock option pursuant to the 1991 Stock Option Plan to purchase 8,000 shares of
Common Stock of the Company, representing a fair market value on the date of
grant equal to approximately 41% of his base salary. (See "Executive
Compensation -- Table 1 -- Summary Compensation Table" and "Executive
Compensation -- Table 2 -- Option Grants in Last Fiscal Year.")
The Committee believes the total compensation program for Mr. Carmody is
competitive with that provided by comparable companies, is commensurate with the
responsibilities of his office and reflects his personal contributions to the
Company's performance.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993 IMPLICATIONS FOR EXECUTIVE
COMPENSATION
It is the responsibility of the Committee to address the issues raised by
the recent change in the tax laws which made certain non-performance-based
compensation in excess of $1,000,000 to executives of public companies
nondeductible to these companies beginning in 1994. In this regard, the
Committee must determine whether any actions with respect to this new limit
should be taken by the Company. Given the Company's current level of executive
compensation, it is not now necessary to consider this issue. The Committee will
continue to monitor this situation and will take appropriate action if it is
warranted in the future.
Compensation and Nominating Committee: John E. Aderhold (Chairman), F. Duane
Ackerman, Hollis L. Harris and G. Harold Northrop.
16
<PAGE> 19
STOCK PERFORMANCE GRAPH
The following line graph compares the cumulative total shareholder return
on the Common Stock of the Company with the cumulative total return of companies
in the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index")
and in a peer group index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE S&P 500 INDEX AND A PEER GROUP INDEX
<TABLE>
<CAPTION>
AMERICAN
BUSINESS
MEASUREMENT PERIOD PRODUCTS, S&P 500
(FISCAL YEAR COVERED) INC. INDEX PEER GROUP
<S> <C> <C> <C>
12/31/89 100 100 100
12/31/90 96 97 76
12/31/91 204 126 89
12/31/92 213 136 89
12/31/93 198 150 113
12/31/94 183 152 112
</TABLE>
Assumes $100 invested on December 31, 1989 in the Company's Common Stock, the
S&P 500 Index, and the peer group index and also assumes dividend reinvestment.
The peer group index is composed of the following companies: Duplex Products
Inc., Ennis Business Forms, Inc., Moore Corporation Limited, New England
Business Service, Inc., The Reynolds and Reynolds Company, The Standard Register
Company and Wallace Computer Services, Inc.
17
<PAGE> 20
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 and regulations of the
Commission thereunder require the Company's executive officers and directors and
persons who own more than ten percent of the Company's Common Stock, as well as
certain affiliates of such persons, to file initial reports of ownership and
changes in ownership with the Commission and the Exchange. Executive officers,
directors and persons owning more than ten percent of the Company's Common Stock
are required by Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on its review of the copies of such
forms received by it and written representations that no other reports were
required for those persons, the Company believes that, during the fiscal year
ended December 31, 1994, all filing requirements applicable to its executive
officers, directors, and owners of more than ten percent of the Company's Common
Stock were complied with.
PROPOSAL 2 -- AMENDMENT OF 1991 STOCK OPTION PLAN
BACKGROUND
In 1991, the shareholders of the Company approved the 1991 Stock Option
Plan (the "1991 SOP") pursuant to which the Company may grant stock options
intended either to qualify as "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"IRC"), or not to qualify as ISOs ("Non-ISOs") and stock appreciation rights
("SARs") to key employees of the Company and its subsidiaries. ISOs and Non-ISOs
are hereinafter referred to as "Options."
The Board of Directors believes that the 1991 SOP is a key element of the
Company's executive compensation program because stock-based compensation
promotes the identity of long-term interests between the Company's key employees
and its shareholders. In addition, stock-based compensation aids the Company in
attracting and retaining key employees and in stimulating the efforts of such
employees for the success of the Company and its subsidiaries.
In general, the purpose of the proposed amendments to the 1991 SOP is to
permit the grant of restricted stock awards to key employees who have either
exhibited extraordinary performance during any period or who have met certain
pre-established long-term performance goals. The Board of Directors therefore
has approved, subject to the approval of the shareholders, an amendment to the
1991 SOP to permit awards of restricted stock, to change the name of the plan
and to increase the number of shares of Common Stock of the Company authorized
for issuance under the 1991 SOP.
A description of the terms of the existing 1991 SOP and the proposed
amendments to the 1991 SOP is set forth below. These descriptions do not purport
to be complete and are subject to, and qualified in their entirety by reference
to, the text of the 1991 SOP and the proposed amendments thereto. A complete
copy of the proposed amendments is set forth in Exhibit A to this Proxy
Statement.
1991 STOCK OPTION PLAN
Subject to the anti-dilution provisions of the 1991 SOP, the 1991 SOP
provides that the Committee may grant Options and SARs (collectively, "Stock
Rights") with respect to a maximum aggregate of 450,000 shares of Common Stock,
less any shares issued by the Company to pay for SARs exercised by participants.
Key employees of the Company and its subsidiaries, including officers and
directors who are otherwise employees, are eligible for consideration for the
granting of Stock Rights by the Compensation and
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Nominating Committee of the Board of Directors of the Company (the "Committee"),
which administers the 1991 SOP. Approximately 100 persons currently are eligible
to participate in the 1991 SOP.
Options granted under the 1991 SOP represent rights to purchase shares of
Common Stock of the Company within a fixed period of time and at a specified
price per share (the "option price"). No consideration is paid by an optionee to
the Company for the grant of an Option. The option price of each share of Common
Stock subject to an Option will be determined by the Committee. However, the
option price may not be less than 100% (110% for shares subject to an ISO
granted to an optionee who owns more than 10% of the total combined voting power
of all classes of stock of the Company or one of its subsidiaries) of the fair
market value of the Common Stock at the time the Option is granted. The closing
sale price of the Company's Common Stock on the New York Stock Exchange was $24
per share on March 10, 1995.
Each Option granted under the 1991 SOP may be exercised on such dates,
during such periods and for such number of shares as determined by the
Committee. The term of any Option will be determined by the Committee, but the
term may not exceed ten years from the date of grant (or five years in the case
of ISOs granted to optionees who own more than 10% of the total combined voting
power of all classes of outstanding stock of the Company or one of its
subsidiaries). Generally, no Option may be exercised for at least 12 months
after the date of grant.
Options are exercisable in increments of 25% per year (cumulative),
beginning after one full year of continued employment with the Company or a
subsidiary following the grant of the Option. Upon the exercise of an Option,
payment of the option price must be made in full in cash or in shares of Common
Stock already owned by the optionee or in a combination of cash and shares.
In the discretion of the Committee, any Option may be accompanied by rights
to a reload Option. A reload Option may be granted to an optionee who pays for
exercise of all or part of an Option with shares of Common Stock and represents
an additional option to acquire the same number of shares of Common Stock as is
used by the optionee to pay for the original Option. A reload Option is subject
to all of the same terms and conditions as the original Option, except that the
option price for the reload shares will be the fair market value per share of
the Common Stock at the time the reload Option is granted.
The Committee may grant SARs in tandem with the grant of any Option under
the 1991 SOP. SARs entitle the holder to receive, upon the surrender of the
related Option (or portion thereof), an amount equal to the excess of the fair
market value of the shares of Common Stock subject to such Option (or portion
thereof) over the option price of such shares. SARs may be exercised with
respect to a maximum of 25% of the exercisable Option shares. SARs relating to
an ISO must be granted concurrently with the grant of the ISO. No SARs may
terminate later than the termination of the underlying Option.
Upon the termination of an optionee's employment with the Company and its
subsidiaries for any reason other than retirement, disability or death, any
Option held by an optionee generally will terminate as of the date of
termination of employment. If the optionee terminates employment due to a change
of control of the Company, the Option shall terminate three months following the
date of such termination of employment. If an optionee acquires shares of Common
Stock by exercising his Options and his employment terminates within one year
after such exercise for any reason other than death, disability or retirement,
the Company may require the optionee to sell such shares back to the Company at
the option price paid by the optionee.
If an optionee retires from employment with the Company (including its
subsidiaries) under the terms of a qualified retirement plan of the Company, any
Option held by such optionee generally will remain exercisable for the balance
of the term of the Option, but any ISO which remains unexercised three months
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after the optionee's retirement date will convert to a Non-ISO for the remainder
of its term for tax treatment purposes. If an optionee's employment terminates
due to disability, any Option held by such optionee generally must be exercised
within the earlier to occur of the expiration date of the Option or one year
following the date of such retirement. The optionee may exercise the Option only
to the extent that the Option was exercisable on the date of the optionee's
retirement unless the Committee, in its sole discretion, accelerates the vesting
of the Option.
If an optionee dies while in the employ of the Company (including its
subsidiaries) or within three months after the date of his termination of
employment due to retirement or termination due to disability, any Option
granted to him may be exercised by his personal representatives, heirs or
legatees on or before the earlier to occur of the expiration date of the Option
or one year following the date of his death, to the extent that the Option would
have been exercisable by the optionee at such time.
In the event of a change of control of the Company, all Stock Rights become
immediately exercisable for the full number of shares, the resale of stock
requirement will not apply to exercises thereafter, and the term of each Option
will be extended for three months following the optionee's termination of
employment for reasons other than death, disability or retirement (providing
such extension will not cause an ISO to exceed its maximum legal term).
1991 STOCK OPTION PLAN AMENDMENTS
The Board of Directors proposes to amend the 1991 SOP to provide a method
of rewarding certain key employees for extraordinary performance or attainment
of pre-established long-term performance goals. The amendment will permit the
Committee to grant restricted stock awards to key employees who have either
exhibited extraordinary performance during any period or who have attained
certain objective, long-term performance goals that have been pre-established by
the Committee and communicated to the applicable key employees before the
performance period has begun. Long-term performance generally will be measured
over periods of not less than three years. The Committee may, at its discretion,
appoint a subcommittee consisting only of outside directors of the Company to
establish the long-term performance goals and award restricted stock upon
attainment of those goals. The Committee (or its appointed subcommittee) will
have sole discretion to determine the restrictions, if any, that will apply to
the awarded stock. It is anticipated that stock awards for long-term performance
will not have any substantial restrictions.
In light of the provisions described above, the Board of Directors proposes
to change the name of the 1991 SOP to the "American Business Products, Inc.
Stock Incentive Plan" to more accurately reflect the purposes of the 1991 SOP,
including the grants of options as incentives for short-term performance and the
awards of restricted stock as incentives for long-term performance.
As a result of the addition of the restricted stock feature to the 1991
SOP, the Board of Directors also proposes to increase the number of shares of
Common Stock authorized for issuance under the 1991 SOP by 500,000 shares. As of
March 7, 1995, options to purchase 135,175 shares of Common Stock were
outstanding under the 1991 SOP. The Board of Directors believes that this
increase in the number of shares of Common Stock authorized for issuance under
the 1991 SOP will enable the Company to continue to attract and retain key
employees of the Company and its subsidiaries and provide sufficient shares for
grants under the 1991 SOP in the foreseeable future.
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FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the consequences under the IRC in
effect on the date hereof of the receipt or exercise of Stock Rights and awards
of restricted stock under the 1991 SOP. This summary is not intended to be
exhaustive.
INCENTIVE STOCK OPTIONS. An option holder has no tax consequences upon
issuance or, generally, upon exercise of an ISO. An option holder will recognize
income when he sells or exchanges the shares acquired upon exercise of an ISO.
This income will be taxed at the applicable capital gains rate if the sale or
exchange occurs after the expiration of the requisite holding periods.
Generally, the requisite holding periods expire two years after the date of
grant of the ISO and one year after the date of acquisition of the Common Stock
pursuant to the exercise of the ISO.
If an option holder disposes of the Common Stock acquired pursuant to
exercise of an ISO before the expiration of the requisite holding periods, the
option holder will recognize compensation income in an amount equal to the
difference between the option price and the lesser of (i) the fair market value
of the shares on the date of exercise and (ii) the price at which the shares are
sold. This amount will be taxed at ordinary income rates. If the sale price of
the shares is greater than the fair market value on the date of exercise, the
difference will be recognized as gain by the option holder and taxed at the
applicable capital gains rate. If the sale price of the shares is less than the
option price, the option holder will recognize a capital loss equal to the
excess of the option price over the sale price.
The use of shares acquired upon exercise of an ISO to pay the option price
of another option will be considered a disposition of the shares. If the
disposition occurs before the expiration of the requisite holding periods, the
option holder will have the same tax consequences as described above. If the
option holder transfers any such shares after holding them for the requisite
holding periods or transfers shares acquired pursuant to exercise of a Non-ISO
or on the open market, he generally will not recognize any income upon the
exercise. Whether or not the transferred shares were acquired pursuant to an ISO
and regardless of how long the option holder has held such shares, the basis of
the new shares received pursuant to the exercise will be computed in two steps.
In the first step, a number of new shares equal to the number of shares tendered
(in payment of the option's exercise) is considered exchanged under IRC sec.1036
and the rulings thereunder; these new shares receive the same holding period and
the same basis the option holder had in the tendered shares, if any, plus the
amount included in income from the deemed sale of the tendered shares and the
amount of cash or other nonstock consideration paid for the new shares, if any.
In the second step, the number of new shares received by the option holder in
excess of the tendered shares receives a basis of zero, and the option holder's
holding period with respect to such shares commences upon exercise.
An option holder may have tax consequences upon exercise of an ISO if the
aggregate fair market value of shares of the Common Stock subject to ISOs which
first become exercisable by an option holder in any one calendar year exceeds
$100,000. If this occurs, the excess shares will be treated as though they are
subject to a Non-ISO instead of an ISO.
Finally, except to the extent that an option holder has recognized income
with respect to the exercise of an ISO, the amount by which the fair market
value of a share of the Common Stock at the time of exercise of the ISO exceeds
the option price will be included in determining an option holder's alternative
minimum taxable income and may cause the option holder to incur an alternative
minimum tax liability in the year of exercise.
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There will be no tax consequences to the Company upon issuance or,
generally, upon exercise of an ISO. However, to the extent that an option holder
recognizes ordinary income upon exercise, the Company generally will have a
deduction in the same amount.
NONQUALIFIED STOCK OPTIONS. Neither the Company nor the option holder has
income tax consequences from the issuance of Non-ISOs. Generally, in the tax
year when an option holder exercises Non-ISOs, the option holder recognizes
ordinary income in the amount by which the fair market value of the shares at
the time of exercise exceeds the option price for such shares. The Company
generally will have a deduction in the same amount as the ordinary income
recognized by the option holder in the Company's tax year in which or with which
the option holder's tax year (of exercise) ends.
If an option holder exercises a Non-ISO by paying the option price with
previously acquired Common Stock, the option holder will recognize income
(relative to the new shares he is receiving) in two steps. In the first step, a
number of new shares equivalent to the number of shares tendered (in payment of
the Non-ISO exercised) is considered to have been exchanged in accordance with
IRC sec.1036 and the rulings thereunder, and no gain or loss is recognized. In
the second step, with respect to the number of new shares acquired in excess of
the number of shares tendered, the option holder will recognize income on those
new shares equal to their fair market value less any nonstock consideration
tendered. The new shares equal to the number of the older shares tendered will
receive the same basis the option holder had in the older shares and the option
holder's holding period with respect to the tendered older shares will apply to
those new shares. The excess new shares received will have a basis equal to the
amount of income recognized by the option holder by exercise, increased by any
nonstock consideration tendered.
STOCK APPRECIATION RIGHTS. At the time an SAR is granted, an option holder
will recognize no taxable income, and there are no tax consequences to the
Company. The option holder will recognize taxable income at the time the SAR is
exercised in an amount equal to the amount of cash and the fair market value of
the shares of the Common Stock received upon such exercise. The income
recognized on exercise of an SAR will be taxable at ordinary income tax rates.
The Company generally will be entitled to a deduction with respect to the
exercise of an SAR in an amount equal to the amount of ordinary income
recognized by the option holder upon such exercise.
RESTRICTED STOCK. A holder of restricted stock will recognize income upon
its receipt, but generally only to the extent that it is not subject to a
substantial risk of forfeiture. If the restricted stock is subject to
restrictions that lapse in increments over a period of time, so that the holder
becomes vested in a portion of the shares as the restrictions lapse, the holder
will recognize income in any tax year only with respect to the shares that
become nonforfeitable during that year. The income recognized will be equal to
the fair market value of those shares, determined as of the time that the
restrictions on those shares lapse. That income generally will be taxable at
ordinary income tax rates. The Company generally will be entitled to a deduction
in an amount equal to the amount of ordinary income recognized by the holder of
the restricted stock.
A holder of restricted stock may elect instead to recognize ordinary income
for the taxable year in which he receives an award of restricted stock in an
amount equal to the fair market value of all shares of restricted stock awarded
to him (even if the shares are subject to forfeiture). That income will be
taxable at ordinary income tax rates. At the time of disposition of the shares,
a holder who has made such an election will recognize gain in an amount equal to
the difference between the sales price and the fair market value of the shares
at the time of the award. Such gain will be taxable at the applicable capital
gains rate. Any such election must be made within 30 days after the transfer of
the restricted stock to the holder. The Company will
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be entitled to a deduction in an amount equal to the amount of ordinary income
recognized by the holder at the time of his election.
LIMITATION ON COMPANY DEDUCTIONS. No federal income tax deduction is
allowed for compensation paid to a "covered employee" in any taxable year of the
Company beginning on or after January 1, 1994, to the extent that such
compensation exceeds $1,000,000. For this purpose, "covered employees" are
generally the chief executive officer of the Company and the four highest
compensated officers of the Company whose annual salary and bonus exceeds
$100,000, and the term "compensation" generally includes amounts includable in
gross income as a result of the exercise of stock options, or the receipt of
restricted stock. This deduction limitation does not apply to compensation that
is: (i) commission-based compensation, (ii) performance-based compensation,
(iii) compensation which would not be includable in an employee's gross income,
and (iv) compensation payable under a written binding contract in existence on
February 17, 1993, and not materially modified thereafter.
Proposed regulations indicate that compensation attributable to a stock
option will generally satisfy the limitation exception for performance-based
compensation if the grant or award is made by a "compensation committee" (a
committee composed of "outside" directors), the plan under which the option or
right is granted states the maximum number of shares with respect to which
options or rights may be granted during a specified period to any employee, and,
under the terms of the option or right, the amount of compensation the employee
could receive is based solely on an increase in the value of the stock after the
date of the grant or award. Stock options granted under the 1991 SOP may
possibly satisfy these requirements, depending upon the specific terms,
provisions, restrictions and limitations of such options.
OPTIONS GRANTED UNDER THE 1991 STOCK OPTION PLAN
Options were first granted under the 1991 SOP on June 5, 1991. Between that
date and December 31, 1994, Options to purchase shares of Common Stock were
granted to the named executive officers, all current executive officers as a
group and to all employees (including all current officers who are not executive
officers) as a group as follows: Mr. Carmody -- 20,500 shares; Mr.
Gundeck -- 8,400 shares; Mr. Downer -- 4,800 shares; Mr. LeFeber -- 4,200
shares; Mr. Rogers -- 4,200 shares; all current executive officers as a group (1
person) -- 2,950 shares; and all employees as a group -- 90,500 shares. All of
such options were granted at the fair market value of the Company's Common Stock
on the date of grant.
No awards of restricted stock have been made under the 1991 SOP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO AMEND THE 1991 STOCK OPTION PLAN.
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PROPOSAL 3 -- RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Deloitte & Touche LLP to
continue as independent auditors of the Company for the fiscal year ending
December 31, 1995 and has directed that such appointment be submitted to the
shareholders of the Company for ratification at the Annual Meeting. Deloitte &
Touche LLP (or its predecessor) has served as independent auditors of the
Company since 1969 and is considered by management of the Company to be well
qualified. If the shareholders do not ratify the appointment of Deloitte &
Touche LLP, the Board of Directors will reconsider the appointment.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting. They will have an opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1995.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Shareholder proposals and director nominations intended to be presented at
the 1996 Annual Meeting of Shareholders of the Company must be submitted to the
Company in accordance with the procedures set forth in Article II, Section 1 and
Article III, Section 2, respectively, of the Bylaws of the Company. The effect
of these provisions is that shareholders must submit such proposals and
nominations in writing to the Company on or before November 20, 1995 in order
for such matters to be included in the Company's proxy materials for, and voted
upon at, the 1996 Annual Meeting. All such proposals and nominations should be
submitted on or before such date by certified mail, return receipt requested, to
the Secretary of the Company at 2100 RiverEdge Parkway, Suite 1200, Atlanta,
Georgia 30328 (P. O. Box 105684, Atlanta, Georgia 30348).
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OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the Company knows of no matters other than those
referred to in the accompanying Notice of Annual Meeting of Shareholders which
properly may come before the Annual Meeting. However, if any other matter should
be presented properly for consideration and voting at the Annual Meeting or any
adjournments thereof, it is the intention of the persons named as proxies on the
enclosed proxy card(s) to vote the shares represented by all valid proxy cards
in accordance with their judgment of what is in the best interests of the
Company.
By Order of the Board of Directors.
Dawn M. Gray
-------------------
DAWN M. GRAY
Secretary
Atlanta, Georgia
March 20, 1995
---------------------
The Company's 1994 Annual Report, which includes audited financial
statements, has been mailed to shareholders of the Company with these proxy
materials. The Annual Report does not form any part of the material for the
solicitation of proxies.
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<PAGE> 29
EXHIBIT A
SECOND AMENDMENT
TO THE
AMERICAN BUSINESS PRODUCTS, INC. 1991 STOCK OPTION PLAN
This Second Amendment to the American Business Products, Inc.
1991 Stock Option Plan (the "Plan") is made and entered into this day of
, 1995, by American Business Products, Inc. (the "Company").
WHEREAS, at its meeting on February 8, 1995, the Board of
Directors of the Company (the "Board") determined to amend to Plan: (i) to
change the name of the Plan to the "American Business Products, Inc. 1991 Stock
Incentive Plan"; (ii) to permit the Committee to grant restricted stock awards
to certain key employees who have exhibited extraordinary performance or who
have met certain long-term performance goals which have been established by the
Committee before the performance period begins; and (iii) to increase the number
of shares reserved for issuance under the Plan by 500,000 shares; and
WHEREAS, the Board authorized the registration and listing of the
additional shares reserved for issuance under the Plan; and
WHEREAS, Section 10 of the Plan provides that the Company may
amend the Plan upon Board approval;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. The name of the Plan is hereby changed to the "American
Business Products, Inc. 1991 Stock Incentive Plan."
2. Section 3 of the Plan is hereby amended by changing the
number "300,000" to "950,000."
3. A new Section 6A is hereby inserted in the Plan, following
Section 6 and before Section 7 of the Plan, to read as follows:
"6A. Restricted Stock.
Restricted Stock may be awarded to key employees from time
to time and at such times as may be authorized by the Committee. At its
discretion, the Committee may appoint a subcommittee composed only of
outside directors of the Company to administer the awards of
Restricted Stock. The Committee (or its appointed subcommittee) shall
have the sole discretion to award Restricted Stock to a key employee
either (i) as recognition of extraordinary performance on the
Company's behalf, or (ii) as recognition for attainment of specified,
objective, long-term performance goals.
The Committee (or its appointed subcommittee) may
establish, in writing, certain objective, long-term performance goals
for specified key employees, and upon attainment of
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those goals, may grant Restricted Stock (in an amount stated in the
preestablished goals) to reward those key employees for their long-term
performance. Long-term goals will be considered for performance periods of not
less than three years. The Committee shall establish the objective, long-term
performance goals and communicate such goals to the applicable key employees
prior to the beginning of the performance period to be measured. As soon as
practicable after the end of the performance period, the Committee shall
ascertain whether such specified goals were met and, if so, shall certify in
writing by approved minutes of its meeting that the performance goals were met,
and shall then make an award of the prespecified number of shares of Restricted
Stock to the key employee. The Committee may not increase the number of shares
of Restricted Stock to be granted upon the attainment of the preestablished
long-term performance goals; however, the Committee may, in its discretion,
decrease or eliminate the award of Restricted Stock upon the attainment of the
goals.
An award of Restricted Stock shall provide a key employee with immediate
rights of ownership in the shares of Common Stock underlying the award, but such
shares shall be subject to such restrictions as the Committee shall specify and
shall be subject to forfeiture by the key employee until the earlier of (i) the
time such restrictions lapse or are satisfied, or (ii) the time such shares are
forfeited. In its authorization of an award of Restricted Stock hereunder, the
Committee shall specify the name of the key employee, the number of shares of
Restricted Stock to be awarded and the restrictions to which such Restricted
Stock shall be subject. The Committee then shall prepare a written agreement,
executed and dated by the Company, evidencing such terms of the award (the
"Restriction Agreement"). The Committee shall present such Restriction Agreement
to the key employee. The failure of the key employee to execute the Restriction
Agreement within 30 days after the date of the receipt of same shall render the
Restriction Agreement and the underlying award of Restricted Stock null and void
ab initio. Restriction Agreements and the Restricted Stock awarded thereby shall
comply with and be subject to the following terms and conditions:
(a) Key Employee and Number of Shares. Each Restriction
Agreement shall state the name of the key employee and the total number
of shares of the Common Stock to which it pertains.
(b) Restrictions on Stock. The vesting of complete
ownership rights in any Restricted Stock awarded pursuant to this
Section shall be subject to such terms and conditions as the Committee
may determine in its sole discretion; provided, no key employee shall
be required to pay any consideration in the form of cash or other
property as a condition to acquiring the Restricted Stock. A key
employee shall vest and obtain a nonforfeitable interest in the
Restricted Stock as of the date that the last of such terms and
conditions is satisfied; provided, if such terms and conditions are not
satisfied by the deadline, if any, designated by the Committee and
specified in the Restriction Agreement, the portion of Restricted Stock
still subject to such terms and conditions shall be forfeited and
returned to the Company. The Committee, in its sole discretion, may
provide for the lapse of the terms and conditions to which Restricted
Stock is subject in installments, and may
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provide for different terms and conditions and/or a different restriction
period with respect to each award, or any portion of an award, of
Restricted Stock.
(c) Delivery of Restricted Stock.
(i) The Company shall make delivery of the shares of
Restricted Stock within a reasonable period of time after execution
of a Restriction Agreement; provided, if any law or regulation
requires the Company to take any action (including, but not limited
to, the filing of a registration statement under the 1933 Act and
causing such registration statement to become effective) with
respect to such shares before the issuance thereof, then the date
of delivery of such shares shall be extended for the period
necessary to take such action.
(ii) Unless the certificates representing shares of the
Restricted Stock are deposited with a custodian pursuant to
Paragraph (iii) of this subsection, if applicable, each such
certificate shall bear the following legend (in addition to
any other restrictive legends required pursuant to Section 9):
"The transferability of this certificate and the shares of
stock represented hereby are subject to the restrictions,
terms and conditions (including forfeiture and restrictions
against transfer) contained in the American Business
Products, Inc. 1991 Stock Incentive Plan and a Restriction
Agreement, dated , 19 , between and American
Business Products, Inc. The Plan and Restriction Agreement
are on file in the office of the Secretary of American
Business Products, Inc."
Such legend shall be removed from any certificate evidencing such
shares Restricted Stock as of the date that such shares become
nonforfeitable.
(iii) As an alternative to delivering a stock certificate to
the key employee pursuant to paragraph (ii) of this subsection, any
certificate evidencing Restricted Stock may be deposited by the
Company with a custodian to be designated by the Committee. The
Company shall cause the custodian to issue to the key employee a
receipt for any Restricted Stock deposited with it in accordance
with this subsection. Such custodian shall
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hold the deposited certificates and deliver the same to the key
employee in whose name the shares of Restricted Stock evidenced
thereby are registered only after such shares become
nonforfeitable.
(iv) A key employee shall pay in cash (or have withheld from
his or her compensation) an amount equal to the amount, if any,
which the Company is required at any time to withhold under the
income tax withholding provisions of the Code and of the income
tax laws of the state of the key employee's residence.
(d) Termination of Employment. Except as otherwise
determined by the Committee and set forth in a Restriction Agreement,
in the event that the employment of a key employee to whom Restricted
Stock has been granted is terminated for any reason (including a
termination by the Company whether or not for good cause and a
termination by reason of the death, disability or retirement of the
key employee) before satisfaction of the terms and conditions to which
the Restricted Stock is subject, all shares of Restricted Stock still
subject to restriction shall be forfeited and shall be reacquired by
the Company.
(e) Transfer. No shares of Restricted Stock shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of
while such shares are still subject to restriction, except that,
subject to Section 6A(d), such Restricted Stock may be bequeathed by
will or transferred by operation of the laws of descent and
distribution.
(f) Waiver of Restrictions. If the Committee determines
that, in cases of death, disability, retirement, or other
circumstances determined by the Committee, a waiver of any or all
remaining restrictions with respect to a key employee's Restricted
Stock would be desirable, it may elect in its sole discretion to
waive such remaining restrictions.
(g) Rights as a Shareholder. Upon delivery of Restricted
Stock to the key employee (or the custodian, if any), the key employee
shall, except as set forth in Section 6A(e), have all of the rights of
a shareholder with respect to the Restricted Stock, including the
right to vote the shares of Restricted Stock and receive all dividends
or other distributions paid or made with respect to the Restricted
Stock. Until such delivery, the key employee shall have no rights as
a shareholder."
4. The effective date of this Second Amendment to the Plan
shall be February 8, 1995.
5. Except as specifically set forth herein, the terms of the
Plan shall remain in full force and effect.
A-4
<PAGE> 33
IN WITNESS WHEREOF, the Company has caused this Second Amendment
to the Plan to be executed by its duly authorized officer as of the date first
above written.
AMERICAN BUSINESS PRODUCTS, INC.
BY:
---------------------------------------
Title:
---------------------------------------
A-5
<PAGE> 34
APPENDIX A
REVOCABLE PROXY AMERICAN BUSINESS PRODUCTS, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE 1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints W. J. Biggers and Henry Curtis VII, and each
of them, proxies, with full powers of substitution, to act for and in the name
of the undersigned to vote all shares of Common Stock of American Business
Products, Inc. (the "Company") which the undersigned is entitled to vote at the
1995 Annual Meeting of Shareholders, to be held at The Cobb Galleria Centre, Two
Galleria Parkway, Atlanta, Georgia, on Wednesday, April 26, 1995, at 11:00 a.m.,
Atlanta time, and at any and all adjournments thereof, as indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. The election as directors of the four nominees listed below to serve until
the 1998 Annual Meeting of Shareholders and until their respective successors
are elected and qualified.
<TABLE>
<S> <C> <C> <C>
/ / FOR ALL nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below). all nominees listed below.
</TABLE>
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
THOMAS R. CARMODY, ROBERT W. GUNDECK, HOLLIS L. HARRIS AND W. STELL HUIE
2. Amendment of the American Business Products, Inc. 1991 Stock Option Plan to
permit awards of restricted stock, to change the name of the plan and to
increase the number of shares of Common Stock of the Company authorized for
issuance under the plan.
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the 1995 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any adjournments
thereof.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
(Continued, and to be signed and dated on the reverse side)
(Continued from the other side)
THIS PROXY CARD WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY CARD WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED ON THE REVERSE
SIDE OF THIS PROXY CARD. If any other business is properly presented at the
Annual Meeting, this proxy card will be voted by the proxies in their best
judgment. At the present time, the Board of Directors knows of no other business
to be presented to a vote of the shareholders at the Annual Meeting.
If the undersigned elects to withdraw this proxy card on or before the time
of the Annual Meeting or any adjournments thereof by notifying the Secretary of
the Company in writing at or prior to the Annual Meeting of the decision of the
undersigned to withdraw this proxy card, then the power of said proxies shall be
deemed terminated and of no further force and effect. The undersigned may
withdraw this proxy card in the manner described above, or by submitting a duly
executed and later dated proxy card to the Secretary, or by appearing and voting
in person at the Annual Meeting all shares of Common Stock of the Company owned
by the undersigned as of the record date (March 7, 1995).
Please mark, date and sign
exactly as your name appears on
this proxy card. When shares
are held jointly, both holders
should sign. When signing as
attorney, executor,
administrator, trustee,
custodian or guardian, please
give your full title. If the
holder is a corporation or
partnership, the full corporate
or partnership name should be
signed by a duly authorized
officer.
Date:
,1995
--------------------------
-------------------------------
Signature
-------------------------------
Signature, if shares held
jointly
<PAGE> 35
APPENDIX B
REVOCABLE PROXY AMERICAN BUSINESS PRODUCTS, INC.
STOCK BONUS TRUST
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE 1995 ANNUAL MEETING OF
SHAREHOLDERS
PURSUANT TO THE TERMS OF THE AMERICAN BUSINESS PRODUCTS, INC. STOCK BONUS
PLAN (THE "PLAN"), THE SHARES OF COMMON STOCK TO WHICH THIS PROXY CARD RELATES
MAY NOT BE VOTED IN PERSON AT THE ANNUAL MEETING.
The undersigned hereby appoints Thomas R. Carmody, Henry Curtis VII and
Robert W. Gundeck (as the Trustees of the American Business Products, Inc. Stock
Bonus Trust), and each of them, proxies, with full powers of substitution, to
act for and in the name of the undersigned to vote all shares of Common Stock of
American Business Products, Inc. (the "Company") allocated to the undersigned's
account pursuant to the Plan which the undersigned is entitled to vote in
connection with the 1995 Annual Meeting of Shareholders to be held on Wednesday,
April 26, 1995, at 11:00 a.m., Atlanta time, and at any and all adjournments
thereof, as indicated below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. The election as directors of the four nominees listed below to serve until
the 1998 Annual Meeting of Shareholders and until their respective successors
are elected and qualified.
<TABLE>
<S> <C> <C> <C>
/ / FOR ALL nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below). all nominees listed below.
</TABLE>
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
THOMAS R. CARMODY, ROBERT W. GUNDECK, HOLLIS L. HARRIS AND W. STELL HUIE
2. Amendment of the American Business Products, Inc. 1991 Stock Option Plan to
permit awards of restricted stock, to change the name of the plan and to
increase the number of shares of Common Stock of the Company authorized for
issuance under the plan.
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of the appointment of Deloitte & Touche LLP as independent
auditors of the Company for the 1995 fiscal year.
/ / FOR / / AGAINST / / ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Annual Meeting and any adjournments
thereof.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
(Continued, and to be signed and dated on the reverse side)
(Continued from the other side)
THIS PROXY CARD WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY CARD WILL BE VOTED "FOR" EACH OF THE PROPOSALS LISTED ON THE REVERSE
SIDE OF THIS PROXY CARD. If any other business is properly presented at the
Annual Meeting, this proxy card will be voted by the proxies in their best
judgment. At the present time, the Board of Directors knows of no other business
to be presented to a vote of the shareholders at the Annual Meeting.
If the undersigned elects to withdraw this proxy card on or before the time
of the Annual Meeting or any adjournments thereof and notifies the Trustees at
or prior to the Annual Meeting of the decision of the undersigned to withdraw
this proxy card, then the power of said proxies shall be deemed terminated and
of no further force and effect. The undersigned may withdraw this proxy card in
the manner described above or by submitting to the Trustees a duly executed and
later dated proxy card.
Please mark, date and sign
exactly as your name appears on
this proxy card. When shares
are held jointly, both holders
should sign. When signing as
attorney, executor,
administrator, trustee,
custodian or guardian, please
give your full title. If the
holder is a corporation or
partnership, the full corporate
or partnership name should be
signed by a duly authorized
officer.
Date:
,1995
--------------------------
-------------------------------
Signature
-------------------------------
Signature, if shares held
jointly
