SEALRIGHT CO., INC.
7101 College Boulevard
Suite 1400
Overland Park, Kansas 66210
Notice of Annual Meeting of Stockholders
To Be Held May 14, 1996
TO ALL STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of
Stockholders (the "Annual Meeting") of Sealright Co., Inc. will
be held the 14th day of May, 1996, 9:00 a.m., at the Seattle I
Room, Doubletree Hotel, 10100 College Boulevard, Overland Park,
Kansas, for the following purposes:
(1) To elect the members of the Board of Directors for
the ensuing year or until their successors are duly
elected and qualified;
(2) To approve the appointment of KPMG Peat Marwick LLP as
independent public accountants; and
(3) To transact such other business as may properly come
before the Annual Meeting or any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on
March 20, 1996 as the record date for the determination of the
stockholders entitled to notice of, and to vote at, the Annual
Meeting or any adjournments or postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Charles F. Marcy
President & CEO
Date: March 29, 1996
Important - Your Proxy is Enclosed
You are urged to sign, date and mail your Proxy even
though you may plan to attend the Annual Meeting. No postage is
required if mailed in the United States. If you attend the
Annual Meeting, you may vote by Proxy or you may withdraw your
Proxy and vote in person. By returning your Proxy promptly, a
quorum will be assured at the Annual Meeting, which will prevent
costly follow-up and delays.
<PAGE>
SEALRIGHT CO., INC.
7101 College Boulevard
Suite 1400
Overland Park, Kansas 66210
Annual Meeting of Stockholders
To Be Held May 14, 1996
PROXY STATEMENT
The accompanying Proxy is solicited by the Board of
Directors of Sealright Co., Inc., a Delaware corporation (the
"Company"), for use at its Annual Meeting of Stockholders (the
"Annual Meeting") to be held on Tuesday, May 14, 1996, 9:00 a.m.,
at the Seattle I Room, Doubletree Hotel, 10100 College Boulevard,
Overland Park, Kansas, and any adjournments or postponements
thereof. Shares represented by duly executed Proxies received
prior to the Annual Meeting will be voted at the Annual Meeting.
If a stockholder specifies a choice on the form of Proxy with
respect to any proposal set forth therein, the shares will be
voted in accordance with such directions made therein with
respect to the proposals described in this Proxy Statement. Any
person giving a Proxy has the power to revoke it at any time
before it is exercised by giving written notice to the Secretary
of the Company at any time prior to its use.
The Company will bear all the costs of solicitation of
Proxies. In addition to the use of the mails, Proxies may be
solicited by personal contact or telephone by officers or
representatives of the Company, and the Company may reimburse
brokers or other persons holding stock in their names or in the
names of nominees for their expenses in sending proxy soliciting
material to beneficial owners. This Proxy Statement and the
accompanying form of Proxy are first being mailed or given to
stockholders on or about March 29, 1996.
Only stockholders of record at the close of business on
March 20, 1996 will be entitled to notice of, and to vote at, the
Annual Meeting. On the record date, the Company had 11,071,991
shares of common stock issued and outstanding and entitled to
vote. Each outstanding share of common stock is entitled to one
vote on each matter brought to a vote. The affirmative vote of a
plurality of the shares of common stock voting is required for
the election of each nominee for director. The affirmative vote
of a majority of the issued and outstanding shares of common
stock is required for approval of the appointment of the
independent public accountants.
Management does not know of any matters, other than those
referred to in the accompanying Notice of Annual Meeting of
Stockholders, which are to come before the Annual Meeting. If
any other matters are properly presented to the Annual Meeting
for action, it is intended that the persons named in the
accompanying form of Proxy, or their substitutes, will vote in
accordance with their judgment of the best interests of the
Company on such matters.
<PAGE>
Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth with respect to the Company's
common stock as of March 1, 1996: (i) the only persons known to
be beneficial owners of more than 5% of the Company's common
stock; (ii) shares beneficially owned by all directors and
nominees; (iii) each of the executive officers named in the
Summary Compensation Table set forth herein; and (iv) shares
beneficially owned by all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Number of Shares and
Name and Address Nature of Beneficial Percent
of Beneficial Owner Ownership(1) Of Class
<S> <C> <C>
G. Kenneth Baum 4,155,115(2)(3) 37.5%
120 West 12th Street
Kansas City, Missouri 64105
William D. Thomas 3,812,700(3)(4) 34.4%
120 West 12th Street
Kansas City, Missouri 64105
George K. Baum Group, Inc. 3,412,500(5) 30.8%
120 West 12th Street
Kansas City, Missouri 64105
David L. Babson & Co., Inc. 586,500 5.3%
One Memorial Drive
Cambridge, Massachusetts
02142-1300
Marvin W. Ozley 189,250(6) 1.7%
Frederick O. DeSieghardt 125,200(7) 1.1%
John T. Carper 20,000(8)(9) *
Lawrence D. Boyle 16,000(10) *
Richard F. Anderson 14,500(11) *
Charles F. Marcy 13,500(8)(12) *
Charles A. Sullivan 5,000 *
Robert F. Hagans 4,200(13) *
D. Patrick Curran 1,000 *
Arthur R. Schulze 1,000 *
Directors and Executive 44.7%
Officers as a Group
(17 persons)
* Percentages do not exceed 1% of the issued and outstanding
shares of common stock.
</TABLE>
(1) Calculated in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934. Nature of beneficial
ownership of securities is direct unless indicated
otherwise by footnote. Beneficial ownership as shown in
the table arises from sole voting power and sole
investment power unless otherwise indicated by footnote.
(2) Includes 742,615 shares held indirectly by Mr. Baum as
trustee of a revocable trust established by him.
(3) Includes 3,412,500 shares owned by George K. Baum
Group, Inc. (Group) Mr. Baum and Mr. Thomas are each a
director, officer and stockholder of Group and have
shared voting and investment power over these shares.
(4) Includes 300,000 shares held directly and 100,000 shares
held by his spouse and 200 shares held by his spouse as
custodian for children, in which he disclaims beneficial
ownership.
(5) Excludes shares owned by officers and employees of Group
and its subsidiaries.
(6) Includes 104,500 shares held indirectly by Mr. Ozley as
trustee of a revocable trust established by him; 41,750
shares held by his spouse as trustee of a revocable trust
established by her; 39,000 shares held in trust for the
benefit of Mr. Ozley's children, of which his spouse is
trustee; and options to acquire 2,667 units. Each unit
consists of one share of common stock and one-half share of
restricted stock. These options are currently exercisable.
(7) Such shares held indirectly by Mr. DeSieghardt as trustee
of a revocable trust established by him.
(8) Includes 3,000 shares held by the Sealright Foundation,
Inc., a charitable foundation organized pursuant to Section
501(c)(3) of the Internal Revenue Code by the Company, of
which Mr. Marcy and Mr. Carper are trustees.
(9) Includes 13,000 shares owned by Mr. Carper and 4,000 shares
issuable pursuant to options which are currently
exercisable.
(10) Includes 1,863 shares owned by Mr. Boyle; 432 restricted
shares; 13,000 shares issuable pursuant to options which are
currently exercisable; and options to acquire 470 units.
Each unit consists of one share of common stock and one-half
share of restricted stock.
(11) Includes 1,292 shares owned by Mr. Anderson; 646 restricted
shares; 2,500 shares held jointly with his spouse; 9,000
shares issuable pursuant to options which are currently
exercisable; and options to acquire 708 units. Each unit
consists of one share of common stock and one-half share of
restricted stock.
(12) Includes 9,500 shares held directly by Mr. Marcy and 1,000
shares held jointly with his spouse.
(13) Such shares held indirectly by Mr. Hagans as trustee of
a revocable trust established by him.
Directors
The shares represented by the enclosed Proxy will be voted,
unless otherwise indicated, for the election of the nine nominees
for director named below. The directors elected at the Annual
Meeting will serve for one year or until their successors are
duly elected and qualified. In the unanticipated event that
any nominee for director should become unavailable, the Board of
Directors, at its discretion, may designate a substitute nominee,
in which event such shares will be voted for such substitute
nominee.
<TABLE>
Management recommends a vote for the election of the
nine nominees for director named below.
<CAPTION>
<PAGE>
Name of Nominee Director Principal Occupation for Last
for Director Since Age Five Years and Directorships
<S> <C> <C> <C>
G. Kenneth Baum(1) 1983 65 Chairman of the Board of George
K. Baum Group, Inc., an
investment company in Kansas
City, Missouri, since May 1994.
Chairman of the Board of George
K. Baum & Company, an investment
banking firm, from April 1982
until May 1994. Mr. Baum is also
a director of four other publicly
held companies: H & R Block,
Inc., Unitog Company (Unitog),
Interstate Bakeries Corporation
(Interstate), and American City
Business Journals, Inc.
D. Patrick
Curran(2) 1992 51 Chairman of the Board and
President of Curran Companies, a
manufacturer and supplier of
specialty chemicals, since August
1979. Mr. Curran is also a
director of three other publicly
held companies: Unitog,
Applebee's International, Inc.
and American Safety Razor Co.
Frederick O.
DeSieghardt 1983 71 Retired Vice Chairman of the
Board of the Company from
February 1988 until his
retirement in 1993. Mr.
DeSieghardt has been associated
with the Company since September
1964.
Robert F.
Hagans(1)(2) 1983 69 Retired Chairman of the Board of
Unitog, a publicly held company
engaged in the design,
manufacture and rental of
business and work garments, prior
to his retirement in September
1991. Mr. Hagans is also a
director of Unitog.
<CAPTION>
<PAGE>
Name of Nominee Director Principal Occupation for Last
for Director Since Age Five Years and Directorships
<S> <C> <C> <C>
Charles F. Marcy 1995 45 President and CEO of the Company
since August 1995. President of
the Golden Grain Company (Golden
Grain), a subsidiary of Quaker
Oats, Inc. (Quaker) from April
1993 to August 1995. President
of National Dairy Products Corp.,
a division of Kraft General
Foods, Inc. from January 1991 to
April 1993
Marvin W. Ozley 1986 62 Retired Chairman of the Board,
President and CEO of the Company
from April 1989 to August 1995.
Arthur R. Schulze 1993 65 Retired Vice Chairman of the
Board of General Mills, Inc.
from October 1989 until his
retirement in April 1993. Mr.
Schulze is also a director of
two other publicly held
companies: Tennant & Co. and
Inter-Regional Financial Group,
Inc.
Charles A.
Sullivan 1992 60 Chairman of the Board of
Interstate since May 1991.
President and CEO of Interstate
since March 1989. Mr. Sullivan is
also a director of UMB Bank, n.a.
William D.
Thomas(1)(2) 1983 52 President of George K. Baum
Group, Inc. since May 1994. Vice
Chairman of George K. Baum &
Company from June 1991 until May
1994. Mr. Thomas is also a
director of Unitog.
_________________________
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
The Board of Directors of the Company held eight meetings
and acted by unanimous written consent on one occasion during
1995.
No director standing for election at the Annual Meeting
attended fewer than 75% of the total number of meetings of the
Board of Directors and the committees of the Board on which he
served during 1995.
The Compensation Committee held one meeting during 1995.
The functions performed by the Compensation Committee are the
review of salaries of certain officers and bonuses of executive
officers, the administration of the Incentive Compensation Plan,
the Long-Term Incentive Plan and the Stock Option Plans and the
overall administration of the Company's compensation program.
The Audit Committee held two meetings during 1995. The
functions performed by the Audit Committee are review of
significant financial information of the Company, ascertainment
of the existence of an effective accounting and internal control
system, oversight of the audit function and recommendation of the
appointment of the independent public accountants of the Company.
The Company does not have a standing nominating committee.
Executive Officers
The Company's executive officers, in addition to those
executive officers listed in the foregoing table of director
nominees, and its other key employees are as follows:
<TABLE>
<CAPTION>
Name of Non-Director Principal Occupation for
Executive Officers Age Last Five Years
<S> <C> <C>
Richard F.
Anderson 52 Senior Vice President of the Company
since October 1992. From August
1986 through September 1992 he was
the Executive Vice President and
General Manager of Jaite Packaging,
Inc., a wholly owned subsidiary of
the Company.
Lawrence D. Boyle 53 Senior Vice President of the Company
since November 1993. From May 1989
to November 1993 he was a Vice
President and General Manager.
John T. Carper 44 Vice President of Finance and CFO of
the Company since May 1994. From
July 1989 to May 1994, he was a
partner with KPMG Peat Marwick, LLP,
independent public accountants.
<PAGE>
Name of Non-Director Principal Occupation for
Executive Officers Age Last Five Years
J. Patrick Muldoon 36 Vice President of Marketing and
Strategy of the Company since
January 1996. From July 1995 to
January 1996, he was Director of
Customer Marketing for Golden Grain.
From July 1989 to July 1995, he held
various marketing positions with
Quaker.
Shawn K. Nicholas 32 Director of Customer Service of the
Company since February 1996. From
November 1995 to February 1996, he
was Director of Strategic
Transition. From March 1995 to
November 1995, he was Manager of
Process Improvement. From December
1992 to March 1995, he was the
Facility Project Manager. From
February 1991 to December 1992, he
was a Division Accounting Manager.
John T. Slattery 48 Vice President of Information
Systems and Chief Information
Officer of the Company since
December 1995. From March 1993 to
December 1995, he was Vice President
and Chief Information Officer of
James River Corporation. From
January 1990 to March 1993, he was
Vice President/General Manager of
James River.
A. Lawrence Walton 51 Vice President of Research and
Development of the Company since
February 1996. Mr. Walton was Vice
President, Marketing and Technical
Services of Packaging Industries,
Inc. (P.I.), a wholly owned
subsidiary of the Company, from June
1994 to February 1996. From July
1991 to June 1994, he was Vice
President of Marketing & Sales with
Glenroy, Inc., a flexible packaging
company. From July 1983 to July
1991, he was Vice President, Sales &
Marketing at P. I.
Lou F. Williams 49 Director of Human Resources of the
Company since October 1991. From
April 1986 to October 1991 she was
Manager of Benefits and Insurance.
</TABLE>
Executive Compensation And Other Information Summary
The following table provides certain summary information
concerning compensation paid or accrued by the Company to or on
behalf of the Company's Chief Executive Officer and each of the
four other most highly compensated executive officers of the
Company whose salary and bonus exceeded $100,000 (determined as
of the end of the last year) for the years ended December 31,
1995, 1994 and 1993:
<TABLE>
Summary Compensation Table (Part 1 of 2)
<CAPTION>
Annual Compensation
Name and Other Annual
Principal Salary Bonus Compensation
Position Year ($) ($) ($)
<S> <C> <C> <C> <C>
Charles F. Marcy 1995 114,808 107,535 -
President and 1994 N/A N/A N/A
CEO 1993 N/A N/A N/A
Marvin W. Ozley, 1995 308,292 -0- -
Retired Chairman, 1994 303,868 132,732 -
President & 1993 290,820 -0- -
CEO
Richard F. 1995 205,800 -0- -
Anderson, 1994 197,240 60,326 -
Senior Vice 1993 188,760 -0- -
President
Lawrence D. 1995 188,400 -0- -
Boyle, 1994 181,400 66,974 -
Senior Vice 1993 143,800 -0- -
President
John T. Carper 1995 164,670 12,000 -
Vice President 1994 100,005 27,900 -
Finance and 1993 N/A N/A N/A
CFO
Summary Compensation Table (Part 2 of 2)
<CAPTION>
Long-Term Compensation
Awards Payouts
Restricted Securities
Stock Underlying LTIP All Other
Awards(a) Options(b)Payouts(c) Compensation
Year ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C>
Charles F. Marcy 1995 -0- 100,000 N/A 194,556(1)
President and 1994 N/A N/A N/A N/A
CEO 1993 N/A N/A N/A N/A
Marvin W. 1995 -0- -0- 58,328 12,561(2)
Ozley, 1994 -0- 2,667 -0- 9,147(3)
Retired Chairman, 1993 -0- -0- -0- 7,432(4)
President and
CEO
Richard F. 1995 2,422 -0- 43,750 6,947(5)
Anderson, 1994 -0- 7,000 -0- 5,077(6)
Senior Vice 1993 -0- 2,000 -0- 17,520(7)
President
Lawrence D. 1995 1,620 -0- 29,167 6,678(8)
Boyle, 1994 -0- 11,333 -0- 4,817(9)
Senior Vice 1993 -0- -0- -0- 6,561(10)
President
John T. Carper 1995 -0- -0- N/A 2,450(11)
Vice President 1994 -0- 20,000 N/A -0-
Finance and 1993 N/A N/A N/A N/A
CFO
____________________
</TABLE>
(a) Dividends are paid on restricted stock at the same rate as
to holders of the Registrant's common stock.
(b) Mr. Ozley's 1994 options consist of options to acquire
2,667 Units (Units) pursuant to the Long-Term Incentive
Plan (LTIP). Each Unit consists of one share of common
stock and one-half share of restricted stock. Mr.
Anderson's 1994 options consist of options to acquire
5,000 shares of common stock pursuant to the 1987 Stock
Option Plan (1987 Plan) and an option to acquire 2,000
Units pursuant to the LTIP. Mr. Boyle's 1994 options
consist of options to acquire 10,000 shares of common
stock pursuant to the 1987 Plan and an option to acquire
1,333 Units pursuant to the LTIP.
(c) Mr. Ozley has earned the right to receive cash units upon
exercising options issued to him pursuant to the LTIP but
has not exercised these options. Messrs. Anderson and
Boyle exercised options issued pursuant to the LTIP on
February 28, 1995 and received the cash units indicated in
the "LTIP Payouts" column.
(1) Company's payments for reimbursement of moving expenses
($51,699) and tax protected home equity loss ($142,857).
(2) Company's payment for Long-Term Savings Plan ($3,335),
Deferred Compensation ($7,690) and term life insurance
premiums ($1,536).
(3) Company's payments for Long-Term Savings Plan ($3,764),
Deferred Compensation ($3,847) and term life insurance
premiums ($1,536).
(4) Company's payments for Long-Term Savings Plan ($5,896) and
term life insurance premiums ($1,536).
(5) Company's payments for Long Term Savings Plan ($3,351),
Deferred Compensation ($3,302) and term life insurance
premiums ($294).
(6) Company's payments for Long-Term Savings Plan ($2,910),
Deferred Compensation ($1,873) and term life insurance
premiums ($294).
(7) Company's payments for Long-Term Savings Plan ($4,719),
term life insurance premiums ($294) and reimbursement of
moving expenses ($4,802), as well as a benefit plan
adjustment ($7,705).
(8) Company's payments for Long-Term Savings Plan ($3,322),
Deferred Compensation ($3,062) and term life insurance
premiums ($294).
(9) Company's payments for Long-Term Savings Plan ($3,750),
Deferred Compensation ($785) and term life insurance
premiums ($282).
(10) Company's payments for Long-Term Savings Plan ($3,595),
term life insurance premiums ($294) and reimbursement of
moving expenses ($2,672).
(11) Company's payments for Long Term Savings Plan ($2,450).
<PAGE>
Option Grants, Exercises and Holdings
The following table provides further information concerning
grants of stock options pursuant to the 1995 Stock Option Plan
and pursuant to a special grant made by the Board of Directors
during 1995 to the named executive officers:
<TABLE>
Option Grants In Last Fiscal Year (Part 1 of 2)
Individual Grants (1)
<CAPTION>
Number of
Securities Percent of Total
Underlying Options Granted Exercise or
Options to Employees Base Price Expiration
Name Granted(#) in Fiscal Year ($/Sh) Date
<S> <C> <C> <C> <C>
Charles F. Marcy 100,000(2) 95% 16.00 08/14/05
Option Grants In Last Fiscal Year (Part 2 of 2)
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
for Option Term
0%($) 5%($) 10%($)
<S> <C> <C> <C>
Charles F. Marcy -0- 906,000 2,550,000
</TABLE>
(1) All options were granted on August 14, 1995 with an
exercise price equal to the closing sale price for the
Company's common stock on that date, as reported on the
NASDAQ National Market System. Except in the event of
death, disability or retirement, if any of the named
executive officers ceases to be employed by the Company,
his options shall terminate immediately. Upon a merger or
consolidation in which the Company is not the surviving
corporation, all options outstanding shall be exercisable
immediately prior to such merger or consolidation.
(2) The option vests over five years such that it is
exercisable for 20,000 shares each anniversary date after
the date of grant, until fully vested on August 14, 2000.
The only options exercised by any of the named executive
officers during 1995 were those awarded under the LTIP. The
following table provides information with respect to the named
executive officers concerning options exercised and unexercised
options held as of the end of 1995:
<TABLE>
Option Exercises and Year End Option Values
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal
Shares Fiscal Year-End
Acquired Year-End (#) ($)
on Value
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Charles F. -0- -0- -0-/ N/A/
Marcy 100,000 -0-
Marvin W.
Ozley -0- -0- 2,667/ -0-/
-0- N/A
Richard F.
Anderson 1,292 4,845 9,708/ -0-/
4,000 -0-
Lawrence D.
Boyle 863 3,236 13,470/ -0-/
6,500 -0-
John T.
Carper -0- -0- 4,000/ -0-/
16,000 -0-
</TABLE>
Retirement Income Plan
The retirement benefits pursuant to the Company's pension
plan are generally based on the average annual compensation of
the highest five consecutive years of annual compensation (salary
and bonus, as identified in the Summary Compensation Table,
above) during the previous ten years of credited service. The
following table sets forth the estimated annual retirement
benefits payable (on a straight-life annuity basis) upon normal
retirement to participating employees in the specified
remuneration and years-of-service classifications. Such
retirement benefits are not subject to reduction for Social
Security benefits. The estimated credited years of service for
the named executive officers based on continued service to normal
retirement age would be: Mr. Marcy, 20 years; Mr. Ozley, 35
years; Mr. Anderson, 22 years; Mr. Boyle, 18 years; Mr. Carper,
21 years.
<TABLE>
Pension Plan Table
<CAPTION>
Remuneration
Years of Service
15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000 $18,750 $25,000 $31,250 $37,500 $43,750
$150,000 $22,500 $30,000 $37,500 $45,000 $52,500
$175,000 $26,250 $35,000 $43,750 $52,500 $61,250
$200,000 $30,000 $40,000 $50,000 $60,000 $70,000
$225,000 $33,750 $45,000 $56,250 $67,500 $78,750
$250,000 $37,500 $50,000 $62,500 $75,000 $87,500
$300,000 $45,000 $60,000 $75,000 $90,000 $105,000
$400,000 $60,000 $80,000 $100,000 $120,000 $140,000
$450,000 $67,500 $90,000 $112,500 $135,000 $157,500
$500,000 $75,000 $100,000 $125,000 $150,000 $175,000
</TABLE>
Payment of the specified retirement benefits is contingent
upon continuation of the plans in their present form until the
employee retires and, in the case of those subject to reduction
of benefits under the Internal Revenue Code, selection by the
administrative committee of the Deferred Compensation Plan to
participate in the Company's supplemental executive retirement
provisions under such Deferred Compensation Plan.
<PAGE>
Compensation of Directors
During fiscal year 1995, each non-officer director was paid
an annual director's fee of $12,000 and $500 for each meeting of
the Board of Directors or its committees which he attended. The
Company paid a total of $103,750 in directors' fees in 1995. Mr.
Marcy and Mr. Ozley do not receive any fees for attendance at
meetings.
Compensation Committee Interlocks
The Compensation Committee consists of G. Kenneth Baum,
Robert F. Hagans and William D. Thomas. There are no
Compensation Committee interlocks with other companies.
Contracts
In August, 1995, the Company entered into an employment
agreement with Charles F. Marcy, the Company's President and CEO.
Under the agreement, Mr. Marcy's beginning base salary is
$300,000 with a guaranteed bonus of $57,535 for the year ended
December 31, 1995 and $150,000 for the year ending December 31,
1996. Mr. Marcy received an initial signing bonus of $50,000.
Mr. Marcy also has the right to participate in all benefit
programs that the Company generally makes available to its
executive officers. In addition, Mr. Marcy was granted a ten-
year option to purchase 100,000 shares of common stock at $16.00
per share, the fair market value of the Company's common stock at
the date of grant. The option vests in five equal annual
installments, commencing August 14, 1996, subject to accelerated
vesting in the event of a change of control of the Company during
the five year vesting period.
In June, 1995, the Company entered into a severance
arrangement with Marvin W. Ozley, retired Chairman of the Board,
President and CEO. Under the agreement, Mr. Ozley will receive
$308,292 per year through December 31, 1998 and have the right to
participate in all benefit plans. Mr. Ozley remains on the Board
of Directors.
In May, 1994, the Company entered into an employment
agreement with John T. Carper, the Company's Vice President of
Finance and CFO. Under the agreement, Mr. Carper's beginning
base salary is $160,000. Mr. Carper also has the right to
participate in all benefit programs and incentive compensation
plans that the Company generally makes available to its executive
officers. In addition, Mr. Carper was granted a ten-year option
to purchase 20,000 shares of common stock at $13.75 per share,
the fair market value of the Company's common stock on the date
of grant. The option vests in five equal annual installments,
commencing May 16, 1995, subject to accelerated vesting in the
event of a change of control of the Company during the five year
vesting period.
Compensation Committee Report on Executive Compensation
On an annual basis, the Compensation Committee reviews the
salaries and bonuses of the executive officers and other
employees, administers the 1987 Stock Option Plan (the "1987
Plan"), the 1995 Stock Option Plan (the "1995 Plan"), and
oversees the administration of the Company's compensation
program. The Company has available to it an independent
compensation consultant to aid in focusing and implementing the
Company's compensation policies and objectives.
In accordance with the Securities and Exchange Commission's
rules designed to enhance disclosure of companies' policies
toward executive compensation, the following report is submitted
by the listed committee members in their capacity as the
Board's Compensation Committee. The report addresses the
Company's compensation policy as it related to the executive
officers for fiscal 1995.
General Compensation Policy -- The Compensation Committee of
the Board of Directors was guided by a belief that executive
compensation should reflect the Company's performance (as
evidenced by the earnings before interest and taxes ("EBIT"),
earnings per share ("EPS") and market value of the Company's
common stock), while at the same time considering surrounding
competitive pressures, individual performance (as evidenced by
evaluations) and retention of key executive officers. The
Compensation Committee has not yet adopted a policy with respect
to the $1,000,000 limitation on deductibility of executive
compensation under Section 162(m) of the Internal Revenue Code of
1986, as amended, since current compensation levels fall
significantly below that amount.
Fiscal 1995 Compensation -- To accomplish this compensation
policy in 1995, the Company's executive compensation integrated
(i) annual base salary, and (ii) bonuses under an Incentive
Compensation Plan ("ICP") based on a targeted consolidated EBIT
and EBIT of certain operating groups. During 1995, a new Stock
Option Plan was recommended and approved by the Shareholders.
The compensation policies, as implemented, endeavor to enhance
the profitability of the Company (and, thus, shareholder value)
by tying the financial interests of the management with those of
the Company.
Base Salary -- As a general matter, an executive officer's
base salary is subjectively positioned so as to reflect the
experience and performance of such executive officer and the
performance of the Company. The Compensation Committee initially
determines the amount of base salary based on factors such as
prior level of pay, quality of resume, responsibilities of
position and salary levels of similarly positioned executives in
other companies. As many of the companies in the Company's peer
group (for purposes of the performance graph, below) are much
larger than the Company, the Compensation Committee does not
compare the salaries of the Company's executives exclusively with
those of its peer group. The Committee believes that such a
comparison would result in overstating the appropriate level of
executive compensation.
The Compensation Committee subjectively grants raises to
each executive's base salary based on, in the order of priority:
(i) published surveys of other executive officer median base
salary increases of manufacturing companies (not just the
companies listed in the peer group for purposes of the
performance graph, below), (ii) overall Company performance
(based on EBIT and EPS), and (iii) in some instances, the
executive officer's individual performance (as evidenced by
informal evaluations by other executives and/or the Board). The
surveys referred to in (i) above are produced by a leading
executive compensation publication and reflect the percentage
increases to annual base salary of other manufacturing companies'
executive officers. For 1995, those surveys indicated a median
increase in the annual base salary of approximately 4.5%.
Based on the foregoing, in fiscal 1995, the Compensation
Committee approved base salary increases to certain executive
officers averaging approximately 4.0%, effective twelve months
following their previous increases.
Incentive Compensation Plan -- For its executive officers,
the Company's ICP couples executive cash compensation to the
Company's EBIT or EBIT of certain operating groups. Under the
ICP, each participating officer is assigned a payout percentage
("Payout Percentage") which, when multiplied by his/her base
salary, establishes the amount of his/her annual bonus, assuming
100% of the target level is reached. Subject to a threshold and a
ceiling, attainment of greater than (or less than) such target
level results in an increase (or decrease), in each executive's
bonus.
For 1995, the executive officers did not achieve their
respective target levels. The only ICP bonus payments were made
under the terms of the two employment agreements.
Long-Term Incentive Plan -- Effective in January 1992, the
Company adopted the nonqualified Long-Term Incentive Plan to
establish a relationship among the Company's performance (as
evidenced by a targeted EPS growth rate), long-term executive
retention and executive compensation. Prior to the effective
date, the Compensation Committee identified certain key
executives for participation in the Long-Term Incentive Plan and
set an annual EPS target for each year of a three-year
measurement period. Following such measurement period the
participants received awards of cash performance incentives,
nonqualified stock options and restricted shares, based upon the
Company's actual EPS growth during each year of the three-year
measurement period. On February 8, 1995, awards earned under
this program were paid out. This Plan was not extended beyond
1994.
Stock Option Awards -- The Compensation Committee also
awards stock options to executive officers under the 1987 Plan,
the 1995 Plan, or otherwise. The Committee believes that stock
options are an effective incentive for executives to create value
for stockholders since the value of an option bears a direct
relationship to appreciation in the Company's stock price.
The Compensation Committee subjectively and informally
determines the granting of stock options. In making the
determination, the Committee examines (i) the Company's
performance, as determined by EBIT, EPS and the market price of
its common stock, (ii) the number and exercise price of options
then held by each executive, (iii) the total stock holdings of
the executive officer, (iv) the individual performance of the
executive (as informally evaluated by other executives and/or the
Board), (v) the executive's potential contribution to the
Company, and (vi) the executive's position with the Company. The
Compensation Committee does not separately weigh such criteria,
but rather views the mix of information with respect to each
executive officer.
During 1995, the Compensation Committee granted options
to purchase 105,000 shares of common stock to two executive
officers, at an exercise price equal to the fair market value of
the stock on the date of grant.
President and CEO Compensation -- The Compensation Committee
(exclusive of Mr. Ozley, who was a member of the committee at the
time) decided not to change Mr. Ozley's base annual salary during
1995, nor were any options granted to Mr. Ozley.
On August 14, 1995, Charles F. Marcy was appointed to the
position of President and CEO, with an annual base pay of
$300,000 and an annual bonus of 50% (with prorated 1995 bonus
guaranteed from date of hire). A signing bonus of $50,000 was
issued, along with a guarantee of protection against loss of
equity in the sale of his home for $75,000. Options for 100,000
shares were granted to Mr. Marcy.
Following Mr. Marcy's selection as President and CEO, Mr.
Ozley's employment was continued by the Company under the terms
of a separate agreement (see Employment Contracts).
Summary -- The Compensation Committee believes that the
executive officers of the Company are dedicated to achieving
significant improvements in long-term financial performance and
that the compensation policies and programs contribute to
achieving this senior management focus. The Compensation
Committee believes that the compensation levels during fiscal
1995 adequately reflected the Company's compensation goals and
policies.
An extensive review of the Company's compensation policies
is being undertaken in early 1996. This review will be taken
into consideration in determining future compensation objectives.
The Compensation Committee report is submitted by:
G. Kenneth Baum
Robert F. Hagans
William D. Thomas
<PAGE>
Company Performance
The following graph shows a five-year comparison of
cumulative total returns for the Company, the NASDAQ Composite
and an index of peer companies selected by the Company.
<TABLE>
Comparison Of Five-Year Cumulative Total Return
(Sealright Co., Inc., NASDAQ Composite, and
peer group)
Dollars
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Sealright 100.00 106.78 116.58 82.96 102.26 64.45
Peer Group 100.00 102.60 122.65 123.81 131.00 155.53
NASDAQ 100.00 156.84 181.08 207.79 201.14 281.44
</TABLE>
The total cumulative return on investment (change in the
year-end stock price plus dividends reinvested at the ex-dividend
date) for each of the periods for the Company, the peer group and
the NASDAQ Composite is based on the stock prices at the end of
fiscal year 1990, assuming a $100 investment. The graph compares
the performance of the Company with that of the NASDAQ Composite
and peer companies selected by the Company with the investment
weighted at the beginning of the period based on market
capitalization. During 1995, Ropak Corporation, a company
included in the peer group for 1994 comparison purposes, was
purchased and is no longer a publicly listed security. The
historical performance data for the peer group excludes Ropak.
The peer group consists of the following companies: Bemis
Company, Inc., James River Corporation of Virginia, Kerr Group,
Inc., Liqui-Box, Inc., Shorewood Packaging Corporation and Sonoco
Products Company. The peer group was approved by the
Compensation Committee.
Relationship With Independent Public Accountants
Arthur Andersen LLP ("Arthur Andersen") served as the
auditors of the Company's books and records for the fiscal year
ended December 31, 1995. Representatives of Arthur Andersen are
expected to attend the Annual Meeting and, if present, will be
available to respond to appropriate questions by stockholders and
will have an opportunity to make a statement if they desire.
Pursuant to recommendation made to it by the Audit
Committee, on March 15, 1996 the Board of Directors dismissed
Arthur Andersen and engaged KPMG Peat Marwick LLP ("Peat
Marwick") to serve as the independent public accountants of the
Company's books and records for the fiscal year ending December
31, 1996, such dismissal and engagement to be effective beginning
April 1, 1996. The Audit Committee's recommendation to change
independent public accountants was made on the basis of written
presentations made by several independent public accounting firms
(including Arthur Andersen and Peat Marwick) to the Audit
Committee.
The certifying accountant's report of Arthur Andersen for
each of the fiscal years ended December 31, 1994 and 1995,
respectively, contains no adverse opinion, disclaimer of opinion
or qualifications or modifications as to uncertainty, audit scope
or accounting principles. There were no disagreements with
Arthur Andersen on any matter of accounting principle or
practice, financial statement disclosure, or auditing scope or
procedure for the fiscal years ended December 31, 1994 and 1995,
respectively, or the interim period ending March 31, 1996.
Arthur Andersen has been authorized by the Company to respond
fully to inquiries of Peat Marwick. The Company has not
consulted with Peat Marwick regarding application of accounting
principles prior to their engagement.
The Company provided notice to Arthur Andersen on March 15,
1996 of its dismissal and has requested a response from Arthur
Andersen to the statements made by the Company in accordance with
the requirements of Item 304 of Regulation S-K.
The Board of Directors requests that stockholders of the
Company approve the appointment of Peat Marwick as independent
public accountants of the Company for 1996.
Stockholder Proposals
In the event any stockholder intends to present a proposal
at the Annual Meeting of Stockholders to be held in 1997, such
proposal must be received by the corporate secretary of the
Company, in writing, on or before November 29, 1996, to be
considered for inclusion in the
Company's next Proxy Statement.
Voting Proxies and Other Matters
Proxies will be voted in accordance with the choices
specified on the form of proxy. If no choice is specified,
shares will be voted: (i) "FOR" the nominees listed on the Proxy
and in this Proxy Statement, and (ii) "FOR" approval of the
appointment of KPMG Peat Marwick LLP as independent public
accountants for the Company for 1996.
Management of the Company does not intend to present any
business to the Shareholders at the Annual Meeting except as
indicated herein and presently knows of no other business to be
presented at the Annual Meeting. Should any other business come
before the Annual Meeting, the persons named in the accompanying
form of Proxy will vote the Proxy in accordance with their
judgment of the best interests of the Company on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Charles F. Marcy
Charles F. Marcy,
President and CEO
March 29, 1996
EXHIBIT 1 SEALRIGHT CO., INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 1996
THIS PROXY AND EACH OF THE PROPOSALS ARE SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Charles F. Marcy and John T.
Carper, jointly and individually, as Proxies, each with full
power of substitution, and hereby authorizes them to represent
and to vote, as designated below, all the shares of common stock
of Sealright Co., Inc. which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Stockholders
to be held on May 14, 1996, or any adjournments or postponements
thereof.
1. Election of Directors
( ) FOR ALL NOMINEES LISTED BELOW ( ) WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below). nominees listed
below.
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee strike a line through the nominee's name)
G. KENNETH BAUM, D. PATRICK CURRAN, FREDERICK O.
DESIEGHARDT,
ROBERT F. HAGANS, CHARLES F. MARCY, MARVIN W. OZLEY,
ARTHUR R. SCHULZE, CHARLES A. SULLIVAN, and WILLIAM D. THOMAS.
2. APPROVAL OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR 1996.
( )FOR ( )AGAINST ( )ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Annual
Meeting.
(Please see reverse side)
<PAGE>
SEE REVERSE SIDE FOR MATTERS TO BE VOTED ON.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. NONE OF
THE PROPOSALS ARE RELATED TO OR CONDITIONED ON THE APPROVAL, OF
ANY OTHER PROPOSAL. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.
Please mark, date, sign and return this Proxy card by mail in the
enclosed, postage prepaid envelope.
Dated:_______________________,1996
___________________________________
Signature
___________________________________
Signature
(Please sign exactly as name
appears on stock certificate.
Where stock is registered jointly,
all owners must sign. Corporate
owners should sign full corporate
name by an authorized person.
Executors, administrators,
trustees or guardians should
indicate their status when
signing.)
