<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section14(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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
- --------------------------------------------------------------------------------
(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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
AEP INDUSTRIES INC.
125 PHILLIPS AVENUE
SOUTH HACKENSACK, NJ 07606
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 8, 1997
February 28, 1997
TO THE HOLDERS OF COMMON STOCK OF AEP INDUSTRIES INC.:
Notice is hereby given that the Annual Meeting of Stockholders of AEP
Industries Inc. will be held at the Crowne Plaza Hotel, 650 Terrace Avenue,
Hasbrouck Heights, New Jersey, on Tuesday, April 8, 1997, at 10:00 A.M., local
time, for the following purposes, as more fully described in the accompanying
Proxy Statement:
1. To elect three Class B directors of the Company for the ensuing three
year period (Page 1).
2. To consider and take action upon a proposal by the Board of Directors
to approve the Amendment of the Certificate of Incorporation of the Company
to add an Article containing provisions regarding corporate governance (Page
11).
3. To consider and take action upon a proposal by the Board of Directors
to approve the Amendment to the Certificate of Incorporation of the Company
to increase the number of authorized shares of Common Stock of the Company
from 20,000,000 to 30,000,000 shares (Page 12).
4. To consider and take action upon a proposal to ratify the Board of
Director's selection of Arthur Andersen LLP to serve as the Company's
independent auditors for the fiscal year ending October 31, 1997 (Page 13).
5. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The close of business on February 14, 1997, has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting. A list of stockholders entitled to vote
at the meeting may be examined at the Company's executive office located in
South Hackensack, New Jersey, during the ten-day period preceding the meeting.
You are cordially invited to attend the meeting in person. If you do not
expect to be present, please sign and date the enclosed form of Proxy and return
it by mail in the envelope provided. No postage is required if mailed in the
United States.
By Order of the Board of Directors,
[LOGO]
Lawrence R. Noll
VICE PRESIDENT AND SECRETARY
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN PROMPTLY COMPLETE, EXECUTE
AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
YOU CAN SPARE YOUR COMPANY THE EXPENSE OF FURTHER PROXY SOLICITATION BY
RETURNING YOUR PROXY CARD PROMPTLY.
<PAGE>
AEP INDUSTRIES INC.
125 PHILLIPS AVENUE
SOUTH HACKENSACK, NJ 07606
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 8, 1997
This Proxy Statement is provided in connection with the solicitation of
Proxies on behalf of the Board of Directors of AEP Industries Inc. (the
"Company") for use at the Annual Meeting of Stockholders (the "Meeting") to be
held on April 8, 1997, and at any adjournment or adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Stockholders
(the "Notice"). It will be mailed commencing on or about February 28, 1997, to
the persons entitled to receive the Notice.
Any Proxy may be revoked at any time before it is exercised by personally
appearing at the Meeting and casting a contrary vote or by giving a later dated
Proxy.
At the close of business on February 14, 1997, the record date for holders
entitled to notice and to vote at the Meeting, the Company had outstanding
[7,150,726] shares of Common Stock, $.01 par value ("Common Stock"), each of
which is entitled to one vote with respect to each matter to be voted on at the
Meeting. The Company has no class or series of stock outstanding other than
Common Stock.
At February 14,1997, Borden, Inc. ("Borden") was the owner of 2,412,818
shares of the Company's Common Stock representing [33.7%] of the Company's
outstanding shares. To the Company's knowledge Borden will vote its shares of
Common Stock in favor of each of the proposals to be presented at the Meeting.
At February 14, 1997, J. Brendan Barba, Chairman of the Board, President and
Chief Executive Officer and a Class C Director of the Company and members of his
immediate family, and David J. McFarland, Mr. Barba's uncle, together owned
approximately [25.7%] of the outstanding Common Stock of the Company. To the
Company's knowledge, Mr. Barba and members of his family and Mr. McFarland will
vote their shares of Common Stock in favor of each of the proposals to be
presented at the Meeting.
The Company's executive office is located at 125 Phillips Avenue, South
Hackensack, New Jersey 07606.
ITEM NO. 1.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides that the Company's Board
of Directors shall consist of three classes, each class to be as nearly equal as
possible to one-third of the total number of directors and to be elected to
three year terms. The Company currently has ten directors, three directors,
denominated as Class B Directors, are to be elected at this Meeting. The term of
the Class B Directors expires at the Annual Meeting of Stockholders to be held
on April 8, 1997. The terms of the Class C and Class A Directors will expire at
the Annual Meetings of Stockholders to be held in 1998 and 1999, respectively.
The nominees for election as Class B Directors are William H. Carter, Paul
M. Feeney and Clifton S. Robbins. Each Class B Director will serve for three
years or until a successor shall have been chosen and qualified. It is the
intention of the persons named in the accompanying form of Proxy to vote the
shares of Common Stock represented in favor of the nominees, unless otherwise
instructed in such Proxy. In case a nominee is unable or declines to serve, the
persons named as Proxies reserve the right to vote the shares of Common Stock
represented by such Proxy for another person duly nominated by the Board of
Directors in such nominee's stead. The Board of Directors has no reason to
believe that the named nominees will be unable or will decline to serve.
<PAGE>
The nominees are presently serving as Class B Directors of the Company.
Certain information concerning the nominees for election and the other directors
of the Company is set forth below. Such information was furnished by them to the
Company.
NAMES OF NOMINEES AND CERTAIN BIOGRAPHICAL INFORMATION
<TABLE>
<CAPTION>
NAME AND YEAR
FIRST BECAME A DIRECTOR
OF THE COMPANY AGE PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
- --------------------------- --- ------------------------------------------------------------------------------
<S> <C> <C>
William H. Carter 43 Executive Vice President and Chief Financial Officer of Borden, Inc. since
October 1996 1995; Partner with Price Waterhouse & Co. from 1974 to 1995.
Paul M. Feeney 54 Executive Vice President of the Company since 1988; Vice President and
1989 Treasurer of Witco Corporation (a chemical products corporation) from 1980 to
1988.
Clifton S. Robbins 38 Member of KKR & Co., LLC since 1996; general partner of Kohlberg Kravis
October 1996 Roberts & Co., L.P. in 1995; an executive of Kohlberg Kravis Roberts & Co.
from 1987 to 1994; member of the Boards of Directors of Borden, Inc., Borden
Chemicals & Plastics, IDEX Corporation, Kindercare Learning Centers, Inc.,
Newsquest Capital PLC, Newsquest Media Group, Ltd. and Glenisla Group Ltd.
(U.K.)
DIRECTORS WHOSE TERMS EXPIRE IN 1998
J. Brendan Barba 55 President and Chief Executive Officer of the Company since 1971; Chairman of
1971 the Board of the Company since 1985.
C. Robert Kidder 52 Chairman of the Board and Chief Executive Officer of Borden, Inc. since 1995;
October 1996 Chairman and Chief Executive Officer of Duracell International Inc. from 1991
to 1995; member of the Boards of Directors of Electronic Data Systems
Corporation, and Dean Witter, Discover & Co.
Lawrence R. Noll 48 Vice President, Controller and Secretary of the Company since November 1996;
1993 Vice President-Finance and Secretary of the Company from 1993 to 1996;
Controller of the Company from 1980 to 1993.
Lee C. Stewart 48 Vice President and Treasurer of Union Carbide Corporation since 1996;
December 1996 investment banker with Bear Stearns & Co., Inc. for more than five years prior
thereto.
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Kenneth Avia 54 Executive Vice President of First Data Merchant Services (a merchant credit
1980 card servicing company), since 1993; Divisional Vice President of Automatic
Data Processing, Inc. from 1984 to 1993.
Paul E. Gelbard 66 Of counsel, Bachner, Tally, Polevoy & Misher LLP (attorneys) from January
1991 1997; Partner of the firm from 1974 to 1996.
Scott M. Stuart 37 Member KKR & Co., LLC since 1996; general partner Kohlberg Kravis Roberts &
October 1996 Co., L.P. in 1995; an executive of Kohlberg Kravis Roberts & Co. from 1986 to
1994; member of the Boards of Directors of Borden, Inc., Newsquest Capital
PLC, World Color Press, Inc., Glenisla Group Ltd. (U.K.), KC Cable, KSL Golf
Holdings, Inc., KSL Land Corporation, KSL Recreation Corporation and Newsquest
Media Group, Ltd..
</TABLE>
2
<PAGE>
Messrs. Carter, Kidder, Robbins and Stuart are the designees of Borden
pursuant to the Governance Agreement described below, and Mr. Stewart is the
director designated jointly by Company management and Borden pursuant to the
Governance Agreement.
DIRECTORS COMPENSATION AND BOARD COMMITTEES
During the past fiscal year the Board of Directors of the Company met seven
times. Each of the persons named in the table attended all of the meetings of
the Board of Directors and meetings of any committees of the Board on which such
person served which were held during the time that such person served.
The Company pays each of its outside directors other than employees of
Borden an annual retainer of $20,000 and a fee of $1,000 for attending each
meeting of the Board of Directors of the Company. Each director has the option
to defer payment of director's annual retainer and fees. Interest will accrue on
deferred director fees at the rate of 8% per annum until paid.
The Board of Directors of the Company has a Stock Option Committee whose
members are Messrs. Avia, Gelbard, Kidder, and Stuart. The Stock Option
Committee administers the Company's 1985 and 1995 Stock Option Plans and
determines the persons who are eligible to receive options thereunder, the
number of shares to be subject to each option and the other terms and conditions
under which options under such Plans are granted and made exercisable. The Stock
Option Committee also administers the Company's 1995 Stock Purchase Plan. See
"Employee Benefit Plans" below. The Stock Option Committee met four times during
the fiscal year ended October 31, 1996.
The Board of Directors of the Company has a Compensation Committee whose
members are Messers. Avia, Kidder, and Stuart. The Compensation Committee is
authorized to review and approve remuneration arrangements for senior
management, directors, certain other employees and employee benefit plans in
which officers and employees are eligible to participate. The Compensation
Committee met once during the fiscal year ended October 31, 1996.
The Board of Directors of the Company has an Audit Committee whose members
are Messrs. Avia, Carter and Gelbard. The Audit Committee is authorized to meet
and discuss with representatives of any firm of certified public accountants
retained by the Company the scope of the audit of such firm and question such
representatives with respect thereto, and to meet with and question employees of
the Company with respect to financial matters pertaining to the Company. The
Audit Committee met once during the fiscal year ended October 31, 1996.
The Board of Directors of the Company has a Nominating Committee whose
members are Messrs. Barba, Carter, Feeney and Robbins.
Messrs. Barba, Feeney and Noll are active in the business of the Company on
a day-to-day basis.
The Company's Certificate of Incorporation contains a provision, authorized
by Delaware law, which eliminates the personal liability of a director of the
Company to the Company or to any of its stockholders for monetary damages for a
breach of his fiduciary duty as a director, except in the case where the
director breached his duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Delaware corporate law,
or obtained improper personal benefit. The Company has purchased directors and
officers liability insurance.
3
<PAGE>
INFORMATION CONCERNING CERTAIN STOCKHOLDERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of Common Stock
beneficially owned as of January 31, 1997, by each director of the Company, each
executive officer of the Company named in the Summary Compensation Table in this
Proxy Statement and all directors and executive officers of the Company as a
group. Unless otherwise indicated by footnote, the owner exercises sole voting
and investment power over the shares.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER TITLE OF SECURITIES OWNED CLASS
- --------------------------------------------------- -------------------- ----------------- -------------
<S> <C> <C> <C>
DIRECTORS
Kenneth Avia....................................... Common Stock 80,200(a) 1.1%
J. Brendan Barba................................... Common Stock 1,252,205(b)(c)(d) 17.4%
William H. Carter.................................. Common Stock 0(e) (f)
Paul M. Feeney..................................... Common Stock 38,741(g) (f)
Paul E. Gelbard.................................... Common Stock 1,200(h) (f)
C. Robert Kidder................................... Common Stock 0(i) (f)
Lawrence R. Noll................................... Common Stock 4,537(j) (f)
Clifton S. Robbins................................. Common Stock 2,412,818(k) 33.7%
Lee C. Stewart..................................... Common Stock 0 (f)
Scott M. Stuart.................................... Common Stock 2,412,818(k) 33.7%
EXECUTIVE OFFICERS
John Powers........................................ Common Stock 58,993(l) (n) (f)
Directors and Executive Officers as a Group (11 Common Stock
persons)......................................... 3,848,694(o) 53.4%
</TABLE>
- ------------------------
(a) Includes 200 shares issuable upon the exercise of stock options exercisable
within 60 days held by Mr. Avia. See "Employee Benefit Plans--1995 Stock
Option Plan."
(b) Includes 36,000 shares issuable upon the exercise of stock options
exercisable within 60 days held by Mr. Barba. See "Employee Benefit Plans
-1985 Stock Option Plan" and "Employee Benefit Plans--1995 Stock Option
Plan."
(c) Does not include 91,488 shares owned or issuable upon the exercise of stock
options exercisable within 60 days held by Mr. Barba's two daughters and
their families, as to which Mr. Barba disclaims beneficial ownership.
(d) Does not include 237,500 shares owned by Mr. Barba's wife, as to which Mr.
Barba disclaims beneficial ownership.
(e) Does not include 2,412,818 shares owned by Borden, a corporation of which
Mr. Carter is an executive officer.
(f) Less than 1%.
(g) Includes 6,370 shares issuable upon the exercise of stock options
exercisable within 60 days held by Mr. Feeney. See "Employee Benefit Plans
-1985 Stock Option Plan" and "Employee Benefit Plans--1995 Stock Option
Plan."
(h) Includes 950 shares issuable upon the exercise of stock options exercisable
within 60 days held by Mr. Gelbard. See "Employee Benefit Plans--1985 Stock
Option Plan" and "Employee Benefit Plans--1995 Stock Option Plan."
(i) Does not include 2,412,818 shares owned by Borden, a corporation of which
Mr. Kidder is an executive officer.
(j) Includes 2,500 shares issuable upon the exercise of stock options
exercisable within 60 days held by Mr. Noll. See "Employee Benefit
Plans--1985 Stock Option Plan" and "Employee Benefit Plans--1995 Stock
Option Plan."
(k) Includes 2,412,818 shares owned by Borden as to which Messrs. Robbins and
Stuart may each be deemed to be the beneficial owner, as general partners of
a general partnership deemed to own such shares.
(l) Includes 6,000 shares issuable upon the exercise of stock options
exercisable within 60 days held by Mr. Powers. See "Employee Benefit Plans
-1985 Stock Option Plan" and "Employee Benefit Plans--1995 Stock Option
Plan."
(m) Includes 12,531 shares held jointly by Mr. Powers and his wife and 17,462
shares held by Mr. Powers' wife.
(n) Includes 23,000 shares held by Mr. Powers' wife as trustee for his minor
children.
(o) Includes 52,020 shares issuable upon the exercise of options exercisable
within 60 days.
4
<PAGE>
BENEFICIAL OWNERS OF MORE THAN 5% OF VOTING STOCK
The following table sets forth the holdings of the only persons known to the
Company to beneficially own more than five percent of the Company's voting
securities.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS OF NATURE OF BENEFICIAL
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP PERCENT OF CLASS
- ----------------------------------------- -------------------- ---------------------------- -----------------
<S> <C> <C> <C>
Borden, Inc.............................. Common Stock 2,412,818(a) 33.7%
180 East Broad Street
Columbus, OH 43215
J. Brendan Barba......................... Common Stock 1,252,205(b)(c)(d) 17.4%
125 Phillips Avenue
South Hackensack, NJ 07606
EGS Partners............................. Common Stock 723,656(e) 10.1%
300 Park Avenue
New York, NY 10022
</TABLE>
- ------------------------
(a) Borden is a wholly-owned subsidiary of Borden Holdings, Inc., ("Borden
Holdings") and Borden Holdings is a wholly-owned subsidiary of B.W. Holdings
L.L.C. ("B.W. Holdings"). Whitehill Associates is the managing member of
B.W. Holdings and K.K.R. Associates is the sole general partner of Whitehill
Associates. Therefore, Borden Holdings, B.W. Holdings, Whitehill Associates
and K.K.R. Associates each has the power to direct the voting of shares
owned by Borden and may be deemed to be beneficial owners of such shares.
Messrs. Robbins and Stuart and others are general partners of K.K.R.
Associates and each of such general partners may be deemed to beneficially
own any shares of Common Stock that K.K.R. Associates may beneficially own
or be deemed to beneficially own. The address of the persons who may be
deemed to be beneficial owners of the shares held by Borden is 9 West 57th
Street, New York, NY 10019.
(b) Includes 36,000 shares issuable upon the exercise of stock options
exercisable within 60 days held by Mr. Barba. See "Employee Benefit
Plans--1985 Stock Option Plan" and "Employee Benefit Plans--1995 Stock
Option Plan."
(c) Does not include 91,488 shares owned or issuable upon the exercise of stock
options exercisable within 60 days held by Mr. Barba's two daughters and
their families, as to which Mr. Barba disclaims beneficial ownership.
(d) Does not include 237,500 shares owned by Mr. Barba's wife, as to which Mr.
Barba disclaims beneficial ownership.
(e) Based upon reports on Schedule 13D filed on November 4, 1996, in which EGS
reported that 103,301 shares of Common Stock were owned with sole voting and
dispositive power and 620,355 shares of Common Stock were owned with shared
voting and dispositive power.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the cash compensation
paid by the Company for services rendered during the fiscal year ended October
31, 1996, to the executive officers of the Company whose aggregate compensation
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION --------------------------------
OTHER # OF SHARES # OF SHARES
------------------------ ANNUAL RESTRICTED STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) COMPENSATION (2) STOCK AWARD(S) OPTIONS(3)
- --------------------------------- --------- ----------- ----------- --------------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Brendan Barba................. 1996 $ 350,000 $ 187,000 -0- -0- 130,000
Chairman of the Board, 1995 $ 350,000 $ 150,000 -0- -0- 90,000
President and Chief, Executive 1994 $ 350,000 $ 100,000 -0- -0- -0-
Officer
Paul M. Feeney................... 1996 $ 170,000 $ 85,000 -0- -0- 50,000
Executive Vice President 1995 $ 157,500 $ 67,500 -0- -0- 11,850
1994 $ 157,500 $ 55,000 -0- -0- 7,500
Robert W. Cron (5)............... 1996 $ 168,400 $ 65,000 -0- -0- 2,500
Executive Vice President 1995 $ 168,400 $ 60,000 -0- -0- 8,500
National Accounts 1994 $ 168,400 $ 50,000 -0- -0- 7,500
John Powers...................... 1996 $ 154,800 $ 35,000 -0- -0- 12,500
Executive Vice President Sales 1995 $ 134,500 $ 34,192 -0- -0- 8,000
and Marketing 1994 $ 125,000 $ 21,236 -0- -0- 5,000
Lawrence R. Noll................. 1996 $ 103,000 $ 30,000 -0- -0- 2,500
Vice President, Controller and 1995 $ 99,000 $ 17,500 -0- -0- 3,500
Secretary 1994 $ 93,600 $ 14,000 -0- -0- 5,000
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION(4)
- --------------------------------- -----------------
<S> <C>
J. Brendan Barba................. $ 7,660
Chairman of the Board, $ 2,310
President and Chief, Executive $ 2,310
Officer
Paul M. Feeney................... $ 7,577
Executive Vice President $ 2,310
$ 2,310
Robert W. Cron (5)............... $ 5,221
Executive Vice President $ 1,586
National Accounts $ 1,646
John Powers...................... $ 5,249
Executive Vice President Sales $ 2,310
and Marketing $ 2,153
Lawrence R. Noll................. $ 3,773
Vice President, Controller and $ 1,059
Secretary $ 851
</TABLE>
- ------------------------
(1) See "Compensation Committee Report."
(2) Excludes perquisites and other benefits, unless the aggregate amount of such
compensation is more than the lesser of either $50,000 or 10% of the total
of annual salary and bonus reported for the named executive officer.
(3) Stock options granted were determined by the Stock Option Committee.
(4) 'All Other Compensation" represents the allocation of the Company's
contribution to the AEP Industries Inc. Employee Profit Sharing and 401(k)
Plan and Employee Stock Ownership Plan ("ESOP") for each executive officer
based upon the distribution formula in the Plan.
(5) Ceased serving as an executive officer during the fiscal year.
6
<PAGE>
PERFORMANCE GRAPH
The Company's Commn Stock is traded on the Nasdaq National Market under the
symbol "AEPI". The following performance graph compares the performance of the
Company's Common Stock to the S & P 500 Index and a Peer Group including The
Atlantis Group, Bemis Co., Liqui Box Corp., Tredegar Industries, Inc., and Tyco
International Ltd. The graph assumes that the value of the investment in the
Company's Common Stock and each index was $100 at the close of trading on the
last trading day preceding the first day of the fifth preceding fiscal year in
Company Common Stock, S & P 500 and the Peer Group. The cumulative total return
assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG AEP INDUSTRIES, INC., THE S&P 500 INDEX AND A PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AEP INDUSTRIES, INC. PEER GROUP S&P 500
<S> <C> <C> <C>
10/91 100 100 100
10/92 94 126 110
10/93 160 142 126
10/94 215 153 131
10/95 273 182 166
10/96 585 289 206
</TABLE>
- ------------------------
* $100 invested on 10/31/91 in stock or index - Including reinvestment of
dividends. Fiscal year ended October 31.
EMPLOYEE BENEFIT PLANS
COMBINED PROFIT SHARING AND 401(K) PLAN. The Company maintained a combined
Profit Sharing and 401(k) Plan for its employees in the United States (other
than union employees at the Company's California plant). The Plan became
effective as a profit sharing plan on November 1, 1973, and was amended to
include 401(k) Plan provisions effective January 1, 1993. This amended Plan is
qualified under the Internal Revenue Code of 1986, as amended (the "Code"). An
employee becomes eligible to participate in the Plan on the January 1 or July 1
nearest the date on which the employee completes one year of service
constituting at least 1,000 hours of service and agrees to contribute a minimum
of 2% of his or her annual earnings. The Company made a matching contribution of
25% of the employee's gross contribution which could be up to the lower of 6% of
annual gross compensation or $9,500, the maximum contribution allowed by the
Code for 1996. An employee could contribute up to 15% of his or her annual gross
compensation or $9,500, the maximum contribution allowed by the Code for 1996.
The Plan was
7
<PAGE>
changed, effective January 1, 1996, to the combined 401(k) Savings and Employee
Stock Ownership Plan described below.
401(K) SAVINGS AND EMPLOYEE STOCK OWNERSHIP PLAN
The Company established an Employee Stock Ownership Plan ("ESOP"), effective
January 1, 1996, for all non-bargaining unit employees in the United States and
combined it with the Company's Profit Sharing and 401(k) Plan. The Company will
make a fixed contribution of Company Common Stock to the account of each
employee participant who has completed 1,000 hours of service during the plan
year and is employed on the last day of the plan year. Each such participant
will receive a contribution equal to 1% of that participant's compensation up to
a maximum annual compensation of $150,000. In addition, the Company will match
75% of the employee's 401(k) contributions, up to 4% of annual compensation in
Company Common Stock. The Company may from year to year make discretionary
contributions to the plan.
1985 STOCK OPTION PLAN. In November 1985, the Board of Directors adopted
and the stockholders of the Company approved the Company's 1985 Stock Option
Plan as amended (the "1985 Option Plan"). Under the 1985 Option Plan options to
purchase up to 772,500 shares of Common Stock could be granted to key employees
of the Company or its subsidiaries, including the directors and officers, during
the period ending October 31, 1995. All shares of Common Stock available for
grant under the 1985 Stock Option Plan were granted prior to October 31, 1995,
but its provisions continue as to options issued thereunder which are
outstanding by their terms.
1995 STOCK OPTION PLAN. On April 11, 1995, stockholders of the Company
approved the Company's 1995 Stock Option Plan ("1995 Option Plan") previously
adopted by the Board of Directors, under which the Company has reserved 500,000
shares of Common Stock for the granting of options to key employees of the
Company, including officers, and directors. The 1995 Option Plan became
effective as of January 1, 1995, and will terminate December 31, 2004. The 1995
Option Plan provides for the grant of incentive stock options which may be
exercised over a period of ten years, the issuance of SARS, restricted stock,
and performance shares and the fixed annual grant of nonqualified stock options
to non-employee directors. The options granted to outside directors are
exercisable over ten years from date of grant and in no event can the option
price be lower than the fair market value of the Common Stock at the date of
grant. As of October 31, 1996, 172,000 options were available for grant. The
Stock Option Committee is made up entirely of outside directors, who administer
the 1995 Option Plan and the 1985 Option Plan and will receive a fixed annual
grant of 1,000 options under the 1995 Plan.
The former employees of Borden who remained employees of the Company on
October 11, 1996, are eligible to participate in the Company's employee benefit
plans. Their service time at Borden is taken into account for eligibility and
vesting purposes.
The following table shows as to the Chief Executive Officer and the four
other Executive Officers of the Company listed in the Compensation Table,
information about options granted in the last fiscal year. The Company did not
grant any stock appreciation rights, restricted stock or performance shares.
8
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
INDIVIDUAL GRANTS AT
-------------------------------------------------------------- ASSUMED RATE OF STOCK
% OF TOTAL OPTIONS PRICE APPRECIATION RIGHTS
GRANTED TO EXERCISE OR FOR OPTION TERM
# OF OPTIONS EMPLOYEES IN FISCAL BASE PRICE EXPIRATION --------------------------
NAME GRANTED YEAR ($/SH) DATE 5%($)(A) 10%($)(A)
- ------------------------------ ------------- ------------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
J. Brendan Barba.............. 30,000 0.92 $ 27.42 04/08/01 $ 357,222 $ 1,015,821
10,750 0.33 $ 51.15 10/20/01 $ 238,668 $ 678,804
89,250(b) 2.80 $ 46.50 10/20/01 2,609,991 $ 6,614,230
Paul M. Feeney................ 10,750 0.33 $ 46.50 10/20/06 $ 314,369 $ 796,672
39,250(b) 1.22 $ 46.50 10/20/06 $ 1,147,811 $ 2,908,779
Lawrence R. Noll.............. 2,500 0.08 $ 46.50 10/15/06 $ 73,109 $ 185,273
John Powers................... 5,000 0.15 $ 24.93 04/08/06 $ 78,391 $ 198,660
7,500 0.23 $ 46.50 10/15/06 $ 219,327 $ 555,218
Robert W. Cron (c)............ 2,500 0.08 $ 46.50 10/15/06 $ 73,109 185,273
</TABLE>
- ------------------------
(a) The actual value, if any, an executive may realize will depend on the excess
of the stock price over the exercise price on the date the option is
exercised.
(b) Non-qualified options.
(c) Ceased serving as an executive officer during the fiscal year.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES OCTOBER 31, 1996 (SHARES) OCTOBER 31, 1996(A)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISAABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ----------- ---------- ----------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
J. Brendan Barba.................... 15,000 $ 218,400 18,000 202,000 $ 546,726 $ 2,921,218
Paul M. Feeney...................... 21,000 $ 886,27 5,370 65,480 $ 154,133 $ 504,827
Lawrence R. Noll.................... 1,700 $ 48,859 2,700 8,900 $ 77,751 $ 193,457
John Powers......................... -0- -0- 5,400 23,100 $ 169,158 $ 424,932
Robert W. Cron (b).................. -0- -0- 30,200 15,300 $ 1,172,561 $ 394,764
</TABLE>
- ------------------------
(a) Computed based upon the difference between aggregate fair market value and
aggregate exercise price.
(b) Ceased serving as an executive officer during the fiscal year.
1995 EMPLOYEE STOCK PURCHASE PLAN. On April 11, 1995, the stockholders of
the Company approved the 1995 Employee Stock Purchase Plan ("1995 Purchase
Plan") previously adopted by the Board of Directors, effective July 1, 1995.
Under the 1995 Purchase Plan 300,000 shares of Common Stock are made available
to eligible employees of the Company, including officers, through payroll
deductions over successive six-month offering periods. Participating employees
may authorize the Company to withhold up to 7.5% of their compensation for the
purpose of purchasing shares of Common Stock under the 1995 Purchase Plan.
Employees who have been employed by the Company for less than one year or whose
customary employment is not more than 20 hours per week or five months per year
are not eligible to participate in the 1995 Purchase Plan. The 1995 Purchase
Plan is intended to qualify as an "employee stock purchase plan" within the
meaning of Section 423 of the Code. The purchase price of the Common Stock under
the 1995 Purchase Plan will be 85% of the lower of the last sales price per
share of Common Stock on the Nasdaq National Market on either the first or last
day of each six month offering period.
9
<PAGE>
The former employees of Borden who remained employees of the Company on
October 11, 1996, are eligible to participate in the Plan. Their service time at
Borden is taken into account for eligibility and vesting purposes.
During the fiscal year ended October 31, 1996, Messrs. Feeney and Noll
participated in the 1995 Stock Purchase Plan and purchased 639 and 205 shares,
respectively at an average price of $18.12 per share; also during this period
102 employees participated in the 1995 Purchase Plan and purchased an aggregate
of 15,176 shares of Common Stock at an average price of $18.12 per share. As of
October 31, 1996, a total of 15,176 shares had been sold under the 1995 Purchase
Plan to employees of the Company.
COMPENSATION COMMITTEE REPORT. The Company's Compensation Committee is
composed of Kenneth Avia, an Executive Vice President of an independent
corporation, C. Robert Kidder, Chairman and Chief Executive Officer of Borden,
Inc. and Scott M. Stuart, a member of K.K.R. & Co., LLC. The Compensation
Committee's informal executive compensation philosophy considers a number of
factors, including competitive compensation by like-sized companies in similar
businesses and linking executive compensation to achievement of performance
goals. The Committee has access to national compensation surveys and public
compensation information for executives in manufacturing companies both larger
and smaller than the Company, including direct competitors of the Company. All
of these sources are used by the Committee in reviewing compensation.
Effective October 11, 1996, pursuant to the Company's Purchase Agreement
with Borden, and as a condition of the closing thereunder, the Company entered
into employment agreements with J. Brendan Barba and Paul M. Feeney. The term of
each contract is five years and calls for a base salary of $500,000 and $240,000
for Messrs. Barba and Feeney, respectively. Future increases to each base salary
will be commensurate to the percentage increase of the Consumer Price Index for
all Urban Consumers for the New York-Northeastern New Jersey metropolitan area.
Additional increases to each base salary are at the discretion of the
Compensation Committee. In accordance with the terms of their employment
contracts Messrs. Barba and Feeney received bonuses for the fiscal year ending
October 31, 1996, in the amount of $187,500 and $85,000, respectively. For the
fiscal year ending October 31, 1997, and beyond bonuses will be based upon
performance criteria determined by the Compensation Committee.
In October 1996, the Compensation Committee determined that Messrs. Noll and
Powers salaries be increased to $125,000 and $200,000 respectively for the
fiscal year beginning November 1, 1996.
For fiscal 1996, the Committee reviewed year-end bonuses for Mr. Noll based
on the profitability and financial position of the Company. It was determined
that he would receive a bonus of $30,000. Mr. Powers' fiscal 1996 bonus was
determined by the Committee based on the increase in sales volume and sales
dollars realized by the Company. He was awarded a bonus of $35,000.
The Compensation Committee feels that the Company's compensation adequately
reflects its philosophy and policies and that none of the executive officers of
the Company is overcompensated.
OTHER INFORMATION CONCERNING DIRECTORS, OFFICERS AND STOCKHOLDERS
From November 1979 until March 1996 the Company leased office, warehouse and
manufacturing space in Wood-Ridge, New Jersey, from Barstrom Associates
("Barstrom"), a general partnership in which Mr. J. Brendan Barba, Chairman,
President and a principal stockholder of the Company is an 80% partner. Under
the terms of the lease, the annual rental for the premises was approximately
$168,000 per year for 43,000 square feet. Management believes such rental did
not exceed the rental for comparable space in the area. The lease expired in
1995 and was extended on a month-to-month basis pending the Company's relocation
of these operations to other facilities. The Company vacated this building on
March 31, 1996.
10
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on stock ownership reports on Form
4 provided to the Company, no report under Section 16(a) of the Securities
Exchange Act of 1934 is required.
ITEM NO. 2
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO SUBJECT ITS TERMS
RELATING TO VOTING REQUIREMENTS TO THE TERMS OF THE GOVERNANCE
AGREEMENT BETWEEN BORDEN, INC. AND THE COMPANY
On June 20, 1996, the Company entered into a purchase agreement, amended by
amendment dated October 11, 1996, (collectively, the "Purchase Agreement") with
Borden, pursuant to which the Company, on October 11, 1996, acquired
substantially all of the assets and certain liabilities of the global packaging
division of Borden and certain of its foreign subsidiaries and the stock of
Borden's other foreign subsidiaries engaged in the packaging business (the
"Acquisition"), and Borden received cash and 2,412,818 shares of the Company's
Common Stock, representing 34% of the outstanding shares of the Company. In
connection with the Purchase Agreement, the Company and Borden entered into a
Governance Agreement, dated as of June 20, 1996, as amended by amendment dated
October 11, 1996 (collectively, the "Governance Agreement") with respect to
certain matters relating to the corporate governance of the Company.
The Governance Agreement provides that upon the consummation of the
Acquisition, the size of the Company's Board of Directors will be increased to
ten members and that five members, two of whom shall be independent, shall be
designated by the Company management directors, four members shall be designated
by Borden, and an independent director shall be designated jointly by the
Company management directors and Borden. The Board of Directors, as described
elsewhere in this Proxy Statement, complies with this provision. Borden's right
to designate directors to the Board is subject to reduction in the event that
Borden's shareholdings in the Company are reduced below 25%. In the event that
Borden's shareholdings in the Company fall below 10%, Borden's right to
designate directors terminates, as well as its right to designate an independent
director jointly with Company management directors.
The Governance Agreement also provides that a super-majority of directors
will be required for certain significant actions, including: merger,
consolidation, or sale of all or a substantial part of the business or assets of
the Company; the sale, lease, pledge, grant of security interest in, license,
transfer or other disposal by the Company of all or a substantial part of the
business or assets of the Company; issuances of any debt or stock of the
Company; a reclassification, combination, split, subdivision or redemption,
purchase or other acquisition, of any of the debt or equity securities or other
capital stock of the Company; amendment to the Certificate of Incorporation or
By-Laws of the Company; any change in the size or composition of the Board of
Directors of the Company or committee thereof except in accordance with the
Governance Agreement; the establishment of any committee of the Board of
Directors other than as provided in the Governance Agreement; any significant
change in accounting policies or procedures of the Company unless required under
generally accepted accounting principles; the satisfaction or discharge of any
obligation outside of the ordinary course of business in excess of $5,000,000,
or the outcome of which could be material to the business or assets of the
Company; the commencement or termination of any litigation involving in excess
of $5,000,000; any incurrence of indebtedness or capital expenditures above
certain amounts; the institution by the Company of any shareholder rights plan
or similar plan or device; the employment of certain executive officers of the
Company; the adoption or amendment of any employee benefit plan of the Company;
and certain other matters. The super-majority voting provision requires the
approval of two-thirds of the directors for the specified actions, provided that
so long as Borden's shareholdings of the Company are equal to at least 25%, at
least one of the directors approving the action shall be a director designated
by it.
11
<PAGE>
In addition, the Governance Agreement provides that an Audit Committee,
Nominating Committee, Compensation Committee and Stock Option Committee will be
established and maintained by the Company's Board of Directors at all times that
Borden's shareholdings in the Company equal or exceed 15%. So long as Borden's
shareholdings in the Company equals or exceeds 15%, one-half of the Nominating
Committee will consist of Borden's designees, and the Compensation Committee
will consist of an equal number of directors designated by the management
directors, directors designated by Borden and independent directors. The Stock
Option Committee will consist of an equal number of independent directors and
directors designated by Borden at all times that Borden's shareholdings in the
Company equal or exceed 25%, and in the event that Borden's shareholdings in the
Company are less than 25% but are equal to or exceed 15%, the Stock Option
Committee will consist of two independent directors and one director designated
by Borden.
The Governance Agreement further provides that the Company will submit an
amendment to its Certificate of Incorporation relating to the voting
requirements described above at the first annual meeting of stockholders of the
Company after the closing date, and by this proposed amendment the Company is
complying with the Governance Agreement. The Company's By-Laws relating to the
voting requirements described above have already been amended by the Company's
Board of Directors in order to comply with the Governance Agreement. In December
1996, the Board of Directors approved an amendment to the Company's Certificate
of Incorporation to add a new Article SIXTEENTH, subject to approval by the
stockholders of the Company to comply with the Governance Agreement. A copy of
the proposed Article SIXTEENTH is attached to this Proxy Statement as Annex A.
If this amendment is not approved, the Company will still be required to comply
with the provisions of the Governance Agreement.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO THE CERTIFICATE OF INCORPORATION RELATING TO VOTING REQUIREMENTS
PURSUANT TO THE TERMS OF THE GOVERNANCE AGREEMENT.
ITEM NO. 3
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES
OF COMMON STOCK
In December 1996, the Board of Directors approved an amendment to the first
sentence of Article FOURTH of the Company's Certificate of Incorporation to
increase the number of the Company's authorized shares of Common Stock from
20,000,000 to 30,000,000, subject to approval of stockholders.
As of January 31, 1997, 11,144,805 of the 20,000,000 presently authorized
shares of Common Stock were either outstanding or were reserved for issuance
pursuant to the exercise of options granted under the Company's 1985 Stock
Option Plan and granted and to be granted under the Company's 1995 Stock Option
Plan, and to be purchased under the Company's 1995 Employee Stock Purchase Plan,
including 2,801,000 shares held in treasury for various purposes, including
issuance under the Company's 401(k) Savings and Employee Stock Ownership Plan.
The Board of Directors believes that the Company has an insufficient number of
unissued shares of Common Stock available for future corporate transactions.
The amendment will provide additional shares of Common Stock that could be
issued from time to time by the Board of Directors, without soliciting further
stockholder approval, for various corporate functions, including, but not
limited to, acquisitions of other companies and stock dividends, stock splits
and other distributions. The Company has no present plans, agreements or
understandings for the issuance of any shares of Common Stock. If the proposed
amendment is adopted, the additional shares of Common Stock to be authorized
would thereafter be subject to issuance from time to time by the Board of
Directors without stockholder approval, and without any preemptive purchase
rights by the stockholders, except for certain rights of Borden, a principal
stockholder of the Company. As long as Borden holds at least 20% of the
outstanding shares of the Company, pursuant to the Governance Agreement it has
the right to
12
<PAGE>
subscribe for a pro rata share (based on its percentage of outstanding Common
Stock of the Company) of any new issuances of securities authorized by the Board
except issuances under employee benefit plans, on the same terms as they are
offered and sold to third parties.
The issuance of the shares of Common Stock proposed to be authorized under
the amendment may have a dilutive effect on the equity interests of the
Company's then existing stockholders.
The overall effect of an issuance of additional shares of Common Stock and
the existence of certain provision contained in the Company's Certificate of
Incorporation and By-Laws may be to render more difficult the accomplishment of
any attempted merger, takeover or other change in control affecting the Company
and/or the removal of the Company's incumbent Board of Directors and management.
However, the Board of Directors does not intend to view the increase in Common
Stock as an anti-takeover measure.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES
OF COMMON STOCK.
ITEM NO. 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
In December 1996, the Board of Directors of the Company selected Arthur
Andersen LLP to serve as independent auditors for the Company for the fiscal
year ending October 31, 1997. The Board of Directors considers Arthur Andersen
LLP to be eminently qualified.
A representative of Arthur Andersen LLP will be present at the Meeting, with
an opportunity to make a statement if such representative desires to do so, and
will be available to respond to appropriate questions.
Although it is not required to do so, the Board of Directors is submitting
its selection of the Company's auditors for ratification at the Meeting, in
order to ascertain views of stockholders regarding such selection. If the
selection is not ratified, the Board of Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
SELECTION OF ARTHUR ANDERSEN LLP TO EXAMINE THE FINANCIAL STATEMENTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING OCTOBER 31, 1997.
OTHER MATTERS
The Board of Directors of the Company does not know of any other matters
which may be brought before the Meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
MISCELLANEOUS
If the accompanying form of Proxy is executed and returned, the shares of
Common Stock represented thereby will be voted in accordance with the terms of
Proxy, unless the Proxy is revoked. If no directions are indicated in such
Proxy, the shares represented thereby will be voted FOR the nominees proposed by
the Board of Directors, FOR the amendment to the Certificate of Incorporation to
add a new Article SIXTEENTH, FOR the amendment to the Certificate of
Incorporation to increase the authorized number of shares of Common Stock, and
FOR the ratification of the Board of Directors' selection of Arthur Andersen LLP
as independent auditors for the Company.
All costs relating to the solicitation of Proxies will be borne by the
Company. Proxies may be solicited by officers, directors, and regular employees
of the Company, personally, by mail, by telephone or by fax, and the Company may
pay brokers and other persons holding shares of stock in their names or those of
their nominees for their reasonable expenses in sending soliciting materials to
their principals.
13
<PAGE>
It is important that Proxies be returned promptly. Stockholders who do not
expect to attend the Meeting in person are urged to mark, sign and date the
accompanying form of Proxy and mail it in the enclosed return envelope, which
requires no postage if mailed in the United States, so that their vote can be
recorded.
ANNUAL REPORT ON FORM 10-K.
A copy of the Company's Annual Report on Form 10-K, including the financial
statements and financial statement schedules for the fiscal year ended October
31, 1996, which was filed with the Securities and Exchange Commission, has been
sent without charge to stockholders to whom this Proxy Statement is mailed as
part of the Company's Annual Report to stockholders.
STOCKHOLDER PROPOSALS.
Stockholder proposals intended to be presented at the Annual Meeting of
Stockholders of the Company to be held in 1998 must be received by the Company
by October 24, 1997, in order to be considered for inclusion in the Company's
Proxy Statement relating to such meeting.
By Order of the Board of Directors,
[LOGO]
Lawrence R. Noll
VICE PRESIDENT AND SECRETARY
February 28, 1997
14
<PAGE>
ANNEX A
PROPOSED ARTICLE SIXTEENTH TO THE COMPANY'S CERTIFICATE OF INCORPORATION
SIXTEENTH: The foregoing provisions with respect to the number of directors,
their powers and the votes required shall be subject to the terms of the
Governance Agreement, dated as of June 20, 1996, as amended by Amendment No. 1
thereto, dated October 11, 1996, between Borden, Inc. and AEP Industries Inc.,
as it may be further amended and/or restated from time to time (collectively,
the "Governance Agreement"). Notwithstanding any other provision of this
Certificate of Incorporation, any conflict between (a) any action taken by this
Corporation or the Board of Directors, or any provision of this Certificate of
Incorporation or the By-Laws of this Corporation, as each may be amended and/or
restated from time to time, on the one hand, and (b) the terms of the Governance
Agreement on the other, shall be resolved in favor of the terms of the
Governance Agreement as the terms thereof may be applicable during the time
period therein set forth unless otherwise agreed to in writing by Borden, Inc.
Any amendment or repeal of this Article SIXTEENTH shall require the affirmative
vote of the holders of more than 66 2/3% of the shares of Common Stock voting at
a meeting called for such purpose.
15
<PAGE>
PROXY ANNUAL MEETING OF STOCKHOLDERS -- APRIL 8, 1997
COMMON STOCK
The undersigned, a stockholder of AEP INDUSTRIES INC., does hereby appoint
Paul E. Gelbard and Lawrence R. Noll, or either of them, with full power of
substitution, the undersigned's proxies, to appear and vote all shares of Common
Stock of the Company which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held on Tuesday, April 8, 1997, at 10:00 A.M.,
local time, or at any adjournments thereof, upon such matters as may properly
come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby instructs said proxies or their substitutes to vote
as specified below on each of the following matters in accordance with their
judgment and on any other matters which may properly come before the Meeting.
<TABLE>
<C> <C> <C>
1. Election of FOR all the nominees listed / / WITHHOLD AUTHORITY / /
Class B (EXCEPT AS MARKED TO THE CONTRARY) TO VOTE FOR ALL THE NOMINEES LISTED
Directors BELOW
William H. Carter, Paul M. Feeney and Clifton S. Robbins
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- -----------------------------------------------------------------------------------------
2. Approval of an amendment to the Company's Certificate of Incorporation to add an
Article containing provisions regarding corporate governance.
</TABLE>
FOR / / AGAINST / / ABSTAIN / /
(CONTINUED ON REVERSE SIDE)
<PAGE>
3. Approval of an amendment to the Company's Certificate of Incorporation to
increase the number of the Company's authorized shares of Common Stock from
20,000,000 to 30,000,000
FOR / / AGAINST / / ABSTAIN / /
4. Ratification of appointment of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending October 31, 1997.
FOR / / AGAINST / / ABSTAIN / /
The Board of Directors favors a vote "FOR" each item.
The shares represented by this Proxy will be voted as directed. If no
direction is indicated as to any of Items 1, 2, 3 or 4 the shares will be voted
in favor of the Item(s) for which no direction is indicated.
IMPORTANT: BEFORE RETURNING THIS PROXY, PLEASE SIGN YOUR NAME OR NAMES ON
THE LINE(S) BELOW EXACTLY AS SHOWN THEREON. EXECUTORS, ADMINISTRATORS, TRUSTEES,
GUARDIANS OR CORPORATE OFFICERS SHOULD INDICATE THEIR FULL TITLES WHEN SIGNING.
WHERE SHARES ARE REGISTERED IN THE NAME OF JOINT TENANTS OR TRUSTEES, EACH JOINT
TENANT OR TRUSTEE SHOULD SIGN.
PLEASE MARK, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
DATED _______________________, 1997
____________________________ (L.S.)
____________________________ (L.S.)
Stockholder(s) Sign Here
