<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____)
Filed by the Registrant [ X ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material pursuant to Section 240.14a 11(c) or Section
240.14a-12
Rotonics Manufacturing Inc.
- -------------------------------------------------------------------------------
[Name of Registrant as Specified in its Charter]
Rotonics Manufacturing Inc.
- -------------------------------------------------------------------------------
[Name of person(s) Filing Proxy Statement]
Payment of Filing Fee (Check the appropriate box)
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14A-6(i)(1) or 14a-6(i)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
1. Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3. Per unit price or other underlying value transaction computed pursuant
to Exchange Act Rule 0-11: *
----------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] 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:------------------------------------------------------
NOTES:
<PAGE> 2
PRELIMINARY COPY
ROTONICS MANUFACTURING INC.
_________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 10, 1996
The Annual Meeting of Stockholders of ROTONICS MANUFACTURING INC. (the
"Company") will be held on December 10, 1996 at 9:30 a.m. local time at the
Holiday Inn, Vermont Street and 190th Avenue, Torrance, California 90248, for
the purpose of considering and voting on the following matters:
1. Election of Directors.
2. Approval of an Amended and Restated Certificate of
Incorporation to eliminate the Company's authorized
shares of Preferred Stock.
3. Ratification of the appointment of Arthur Andersen as
the Company's independent auditors for the year
ending June 30, 1997.
4. Such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on October 18,
1996 will be entitled to notice of and to vote at such meeting or any
adjournments or postponements thereof.
By Order of the Board of Directors
E. Paul Tonkovich
Secretary
Gardena, California
October 28, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND
THE MEETING IN PERSON, PLEASE READ
THE ENCLOSED PROXY STATEMENT AND
SIGN AND RETURN THE ENCLOSED PROXY
CARD AS SOON AS POSSIBLE IN THE
ENCLOSED POSTPAID ENVELOPE.
<PAGE> 3
ROTONICS MANUFACTURING INC.
17022 South Figueroa Street
Gardena, California 90248
(310) 538-4932
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Rotonics Manufacturing Inc. (the "Company") of
proxies in the accompanying form, relating to the annual meeting of
stockholders (the "Annual Meeting") to be held December 10, 1996 at 9:30 a.m.
local time at the Holiday Inn, Vermont Street and 190th Avenue, Torrance,
California 90248, or any adjournments thereof. The Proxy Statement and the
enclosed proxy are being mailed to stockholders on or about October 28, 1996.
Only stockholders of record at the close of business on the record
date, October 18, 1996, are entitled to vote at the meeting. On that date
there were outstanding and entitled to vote 14,167,811 shares of Common Stock
($.01 par value) of the Company. Broker non-votes and shares held by persons
abstaining will be counted in determining whether a quorum is present at the
Annual Meeting. Directors are elected by plurality of votes cast. Approval of
the Company's Amended and Restated Certificate of Incorporation to eliminate
the authorized shares of Preferred Stock must be approved by the vote of the
holders of a majority of the outstanding shares of Common Stock and all other
proposals submitted to the stockholders must be approved by the vote of the
holders of a majority of the shares of Common Stock represented in person or by
proxy and entitled to vote at the Annual Meeting. Abstentions are counted as
votes against a proposal, whereas broker non-votes are not counted for purposes
of determining whether a proposal has been approved or not. Holders of shares
of Common Stock are entitled to one vote per share on each matter to come
before the meeting. Stockholders do not have cumulative voting rights.
If the enclosed proxy is properly executed and returned, the shares of
Common Stock represented thereby will be voted at the meeting in accordance
with the stockholder's instructions. If no instructions are given with respect
to any matter, the proxy will be voted for such matter. Any stockholder giving
a proxy for the meeting in the accompanying form may revoke it at any time
prior to its being voted, by filing with the Secretary of the Company at the
Company's principal executive office, 17022 South Figueroa Street, Gardena,
California 90248, an instrument of revocation or a duly executed proxy bearing
a later date, or by attending the meeting and voting in person.
Solicitation of proxies may be made by directors, officers and other
employees of the Company by personal interview, telephone or telegraph. No
additional compensation will be paid for any such services. Costs of
solicitation, including preparation, assembly, printing and mailing of this
proxy statement, the proxy and any other information furnished to the
stockholders, will be borne by the Company. The Company will upon request,
reimburse the reasonable charges and expenses of brokerage houses or other
nominees or fiduciaries for forwarding proxy materials to, and obtaining
authority to execute proxies from, beneficial owners for whose account they
hold shares of Common Stock.
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<PAGE> 4
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL HOLDERS
The following table and the footnotes thereto set forth, as of October
18, 1996, certain information regarding Common Stock of the Company
beneficially owned by each person who is known to the Company to be the
beneficial owner of more than 5% of the Common Stock of the Company, by each
director and by each executive officer named in the Summary Compensation Table,
and by all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
---------------- -------------------- --------
<S> <C> <C>
Sherman McKinniss 5,328,720(2) 37.6
L. John Polite, Jr. 528,628 3.7
Larry DeDonato 118,332(3) *
James E. Evans 1,000 *
David C. Polite 22,222 *
E. Paul Tonkovich 87,555(4) *
Douglas W. Russell 75,664(5) *
All directors and all 6,162,121(2)(3)(4)(5) 43.5
executive officers of
the Company as a group (7 individuals)
Linn Derickson 1,020,437(6) 7.2
</TABLE>
- --------------------
* Less than 1%.
(1) Unless otherwise indicated, shares are held with sole voting and
investment power.
(2) Consisting of: (i) 5,026,720 shares of Common Stock held by Mr.
McKinniss jointly with his spouse; and (ii) 302,000 shares of Common
Stock held by a pension plan for the benefit of Mr. McKinniss. Mr.
McKinniss' address is 17022 South Figueroa Street, Gardena, California
90248.
(3) Consisting of: (i) 108,333 shares of Common Stock held by Mr.
DeDonato jointly with his spouse; (ii) 3,333 shares of Common Stock
held by a pension plan for the benefit of Mr. DeDonato; and (iii)
6,666 shares of Common Stock held by the minor child of Mr. DeDonato.
(4) Consisting of: 87,555 shares of Common Stock held by Mr. Tonkovich as
trustee of a profit sharing trust of which Mr. Tonkovich is a
beneficiary.
(5) Consisting of: (i) 45,664 shares of Common Stock and owned jointly by
Mr. Russell and his spouse; and (ii) 30,000 held by the minor children
of Mr. Russell.
(6) Consisting of 1,020,437 shares of Common Stock held jointly by Mr.
Derickson with his spouse. Mr. Derickson's address is 1305 West Brooks
Street, Ontario, California 91761.
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<PAGE> 5
PROPOSAL 1 -ELECTION OF DIRECTORS
A board of six directors is to be elected to serve until the next
Annual Meeting of Stockholders. Sherman McKinniss, Larry DeDonato, L. John
Polite, Jr., David C. Polite, James E. Evans and E. Paul Tonkovich have been
nominated for election as directors of the Company at the Annual Meeting. All
of the nominees for director currently serve on the Board of Directors.
Messrs. McKinniss, Tonkovich and L. John Polite, Jr. were elected to the Board
of Directors in August 1991 in connection with the merger into the Company of
Rotonics Molding, Inc.-Chicago ("RMIC"). David C. Polite was elected to the
Board at the 1993 Annual Meeting of Stockholders, Larry DeDonato was elected to
the Board at the 1994 Annual Meeting of Stockholders, and James Evans was
elected to the Board at the 1995 Annual Meeting of Stockholders.
It is intended that all proxies submitted in the accompanying form,
unless contrary instructions are given thereon, will be voted for the election
of the six nominees. In case any of the nominees is unavailable for election,
an event which is not now anticipated, the enclosed proxy may be voted for the
election of a substitute nominee or nominees.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
Information regarding each of the six nominees is set forth below.
The descriptions of the business experience of these individuals include all
principal positions held by them from 1990 to the date of this Proxy Statement.
Sherman McKinniss (age 60) has served as President and Chief Executive
Officer of the Company since August 1991 and as Chairman of the Board since
December 1994. Prior to that, Mr. McKinniss had been President, a director and
one of the owners of RMIC. Previously, Mr. McKinniss owned and operated
Rotational Molding, Inc. ("RMI") which he sold to the Company in 1986 and was a
partial owner of Rotational Molding, Inc.-Florida which was merged into RMIC in
1988.
Larry M. DeDonato (age 42) has owned and operated an optometry
practice in central California since before 1989. In addition, Mr. DeDonato
was an assistant professor at the Southern California College of Optometry from
1979 until 1986. Mr. DeDonato is the son-in-law of Mr. McKinniss.
L. John Polite, Jr.(age 75) served as Chairman of the Board and Vice
President of the Company from August 1991 until December 1994. He has been a
director of Peridot Holdings, Inc. and Peridot Chemicals (N.J.), Inc. located
in Wayne, New Jersey since 1987 and was Chairman of the Board of these
companies from 1987 until 1992. Mr. Polite was an owner of RMIC. He was
Chairman of the Board of Essex Chemical Corp. (N.J.) from 1962 to 1988. He
has served as a director of Witco Corp. and Jones Medical since 1988.
David C. Polite (age 41) has been a practicing attorney in the
Portland, Oregon area since the fall of 1991. In December 1988, he cofounded
Seaboard Investors, an investment group, and serves as its Vice President.
Prior to that time, he served as Special Counsel for Corporate Development to
Essex Chemical Corporation from before 1988, and from December 1982 through
June 1986, he served as Staff Attorney for the United States Securities and
Exchange Commission. David C. Polite is the son of L. John Polite, Jr.
James E. Evans(age 67) has served as President of Lancaster Colony
Commercial Products Inc., a subsidiary of Lancaster Colony Corporation since
1978. From 1972 to 1978 Mr. Evans was Director of Corporate Marketing of
Lancaster Colony Corporation and from 1970 to 1972 was Vice-President of
Marketing of Barr, Inc., a subsidiary of Lancaster Colony Corporation. Prior
to this, Mr. Evans was President of Buckeye Plastics Co., a subsidiary of
Buckeye International from 1967 to 1970.
E. Paul Tonkovich (age 58) has served as Secretary of the Company
since August 1991. He has been a practicing attorney since January 1966. He
was legal counsel to RMIC and to Mr. McKinniss and is now legal counsel for the
Company.
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<PAGE> 6
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held five meetings during fiscal year 1996.
Each director attended all of the meetings of the Board of Directors.
The Board has an Audit Committee, comprised in fiscal year 1996 of
Larry DeDonato, L. John Polite, David C. Polite and James E. Evans. The
functions of the Audit Committee are to approve of the engagement of the
Company's independent accountants and to review with them the plan and scope of
their audit for each year, the results of such audit when completed, and their
fees for services performed. During fiscal year 1996, the Audit Committee held
three meetings. Each member of the Audit Committee attended all of those
meetings.
The Board also has a Nominating Committee, comprised in fiscal 1996 of
Mr. McKinniss and L. John Polite. The function of the Nominating Committee is
to nominate candidates for election to the Board of Directors of the Company at
its next annual stockholders meeting. During fiscal year 1996, the Nominating
Committee held one meetings. Each member of the Nominating Committee attended
that meeting. The Nominating Committee will consider nominees recommended by
Stockholders. The names of such nominees should be forwarded to the Secretary
of the Company at the address appearing on the first page of this Proxy
Statement, who will submit such names to the Nominating Committee.
EXECUTIVE OFFICERS
The present executive officers of the Company are Sherman McKinniss,
Chairman of the Board, President and Chief Executive Officer; E. Paul
Tonkovich, Secretary; and Douglas W. Russell, Treasurer, Chief Financial
Officer and Assistant Secretary. Mr. Russell has been employed by the Company
since May 1991. Prior to that he was a Senior Auditor for the accounting firm
of Hallstein & Warner from 1988 until 1991, and was the Assistant Controller of
RMI from September 1985 to September 1987. Mr. Russell is the son-in-law of
Mr. McKinniss.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received in the three
fiscal years ended June 30, 1996, by the Company's Chief Executive Officer, the
only executive officers whose salary and bonus exceeded $100,000 in 1996. Mr.
McKinniss joined the Company in August 1991.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION
NAME AND ------------------------
PRINCIPAL Salary Bonus ALL OTHER
POSITION YEAR ($) ($) COMPENSATION
-------- ---- ----- ----- ------------
<S> <C> <C> <C> <C>
Sherman McKinniss 1996 $329,852 $38,611 $3,858(1)
President and CEO 1995 $300,000 $25,027 $3,354(1)
1994 $244,616 $15,066 $2,902(1)
</TABLE>
- ---------------------------
(1) Consists of the annual premium on a term life insurance policy
covering Mr. McKinniss, as to which he is the named insured and
beneficiary. The Company is obligated to pay this premium pursuant to
Mr. McKinniss' employment agreement.
-4-
<PAGE> 7
OPTIONS/EXECUTIVE OFFICERS
No stock options were exercised by the Company's Chief Executive
Officer in fiscal year 1996, and during the fiscal year no stock options were
granted to the Chief Executive Officer and no options were held by him at
fiscal year end.
REPORT OF THE BOARD/EXECUTIVE COMPENSATION
Executive Officers. The annual compensation of the Company's
executive officers, other than Mr. McKinniss, is recommended by the President
and reviewed and approved by the Board of Directors. The salary
recommendations are based on the President's perspective of the value of that
position at the Company, the executive's individual performance, the Company
performance and compensation for similar positions at other companies within
the industry. The Company believes that compensation of the Company's
executive officers should be sufficient to attract and retain highly qualified
personnel and should also provide meaningful incentives for superior
performance. The Company seeks to reward achievement of long and short-term
performance goals measured by successful development of new products, increases
in sales volumes, meeting or exceeding financial targets established by the
Board of Directors, and other factors. The Company's executive compensation
generally consists of a base salary and a cash bonus. The Board of Directors
may also issue stock options pursuant to the Company's Stock Option Plan as
additional long-term incentive compensation to its key executives. No options
were granted in fiscal 1996. Annual cash bonuses granted to the Company's
executives, other than for Mr. McKinniss and Mr. Russell, are discretionary and
are based on evaluation of job performance and the attainment of various goals.
The Company currently provides no retirement benefits to its executive
officers.
Chief Executive Officer. The Company's Board of Directors meets once
each year, separately from Sherman McKinniss, to discuss compensation
arrangements for Mr. McKinniss, Chairman, President and CEO, and the employment
contract with him (see "Employment Agreements"). The base salary and bonus
paid to Mr. McKinniss is determined within the guidelines of his employment
agreement, which establishes a base salary and a minimum annual increase tied
to the cost of living. The Board of Directors may approve of a base salary in
excess of that required by the contractual cost of living increase based on the
Board's determination of Mr. McKinniss' performance and contribution using a
similar process and philosophy as that employed for other executive officers.
The Board of Directors assess Mr. McKinniss' leadership, performance and
contributions towards achieving the Company's long-term strategic and financial
objectives. There is no specific formula employed between the Company's stated
goals and performance and the Board's determination; instead the Board's
judgment and discretion is used in determining the base salary. The cash bonus
paid to Mr. McKinniss during fiscal 1996 was approved by the Board of Directors
in accordance with the terms outlined in his employment agreement.
The Board of Directors
L. John Polite, Jr.
Sherman McKinniss
David C. Polite
Larry DeDonato
James Evans
E. Paul Tonkovich
COMPENSATION COMMITTEE - INTERLOCKS AND INSIDER PARTICIPATION
As described above, the Company's compensation decisions are made by
the Board of Directors as a whole, based on recommendations made to the Board
by Mr. McKinniss, the Company's Chief Executive Officer, for other executive
officers. Mr. McKinniss does not participate in discussions regarding his own
compensation.
-5-
<PAGE> 8
CERTAIN TRANSACTIONS
In March 1993, the Board of Directors authorized a program allowing
the exchange of outstanding Series A Preferred Stock for shares of Common Stock
based on the $1.00 liquidation value of the Preferred Stock compared with the
fair market value of the Company's Common Stock at the date of exchange. In
accordance with the program, Mr. McKinniss exchanged 1,567,779 shares of
Preferred Stock for shares of Common Stock based on the fair market value of
the Company's Common Stock at the dates of exchange, which ranged from $.6875
to $2.4375. In addition, L. John Polite has exchanged all of his 322,360
shares of Preferred Stock for shares of Common Stock based on the fair market
value of the Company's Common Stock at the date of these exchanges, which was
$0.6875.
In September 1995, the Board of Directors unanimously approved the
exchange of all remaining outstanding Series A Preferred Stock for Common Stock
based on the ratio of one share of Common Stock for every two shares of Series
A Preferred Stock held as of that date. Mr. McKinniss subsequently exchanged
all of his remaining 2,158,950 shares of Preferred Stock for shares of Common
Stock.
During the fiscal year ended June 30, 1996, the Company incurred legal
fees and costs amounting to approximately $83,000 for services performed by E.
Paul Tonkovich Professional Corporation, of which E. Paul Tonkovich, the
Secretary and a director of the Company, is an employee.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment contract with Mr. McKinniss
which expires August 12, 1999. The agreement provides for a minimum annual base
salary of $200,000 and is increased on each anniversary of the agreement
(August 12) by an amount at least equal to the annual percentage increase in
the Consumer Price Index for the Los Angeles-Long Beach area. The Board of
Directors may, in its discretion, increase the base salary by a greater amount.
Effective September 1, 1996, the annual salary for Mr. McKinniss was increased
to $343,720. See "Report of the Board/Executive Compensation". In addition to
Mr. McKinniss's base salary, under the agreement he is to be paid an annual
bonus equal to one percent (1%) of the total operating income of the Company
(before taxes and extraordinary items) earned by the Company for the preceding
fiscal year ending June 30th. The agreement contains certain noncompetition
and nondisclosure covenants. The agreement also allows for termination of
employment by either party voluntarily or for cause as outline in the
agreement. If the Company terminates the employment of Mr. McKinniss for
reasons other than cause, disability or death, Mr. McKinniss will be entitled
to receive termination payments equal to the continuance of his current base
salary for a period of twelve (12) months from termination.
COMPENSATION OF DIRECTORS
During the fiscal year ended June 30, 1996, directors (other than
those who were employees of the Company) were paid $600 for each meeting of the
Board they attended. All members of committees of the Board received $250 for
each meeting which they attended, plus reimbursement for reasonable expenses
incurred unless such meetings occurred on the day of meetings of the full
Board, in which case such committee members received no additional
compensation. The Company incurred directors fees totalling $14,400 in fiscal
year 1996. Directors who are employees of the Company have not been separately
compensated for their services as directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of the outstanding shares of the Company's Common Stock, to file
with the Securities and Exchange Commission and the American Stock Exchange
initial reports of ownership (Form 3) and changes in ownership of such stock
(Forms 4 and 5).
To the Company's knowledge, based solely upon review of the copies of
such reports furnished to it, during fiscal year ended June 30, 1996, all
Section 16(a) filing requirements applicable to its executive officers and
directors were complied with, except Mr. L. John Polite, Jr. filed a late Form
4 report reflecting the disposition of 45,000 shares of Common Stock during
March 1996 and a late Form 4 report reflecting the disposition of 100,000
shares of Common Stock during April 1996.
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<PAGE> 9
PERFORMANCE GRAPH
The following graph shows a comparison of five-year cumulative total
stockholder return among the Company, the Standard & Poor 500 Index and the
Standard & Poor Specialty Chemical Index, assuming $100 invested on June 30,
1991 in each.
PERFORMANCE GRAPH
FOR ROTONICS MANUFACTURING INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
SHAREHOLDER RETURNS
JUNE INDEX RETURNS
COMPANY/INDEX 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
ROTONICS MANUFACTURING INC( RMI 100 128.76 115.30 193.06 237.66 257.86
S&P 500 INDEX 100 113.41 128.87 130.68 164.75 207.59
S&P CHEMICALS - SPECIALLY INDEX 100 112.77 133.46 119.60 153.45 172.82
</TABLE>
PROPOSAL 2 -
APPROVAL OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has approved an Amended and Restated
Certificate of Incorporation to eliminate the 4,250,000 authorized shares of
Preferred Stock and to restate the other provisions of the Company's
Certificate of Incorporation in one document.
The Company is currently authorized to issue 20,000,000 shares of
Common Stock and 4,250,000 shares of Preferred Stock. As of October 18, 1996,
there were 14,167,811 shares of Common Stock issued and outstanding and no
shares of Preferred Stock issued and outstanding.
The principle reason for the elimination of the Preferred Stock is
that there are no longer any outstanding shares. The Preferred Stock
originally was authorized in order to effect the 1991 merger of RMIC into Koala
Technologies Corporation, the predecessor to the Company. Since that time, all
Preferred Shares either have been redeemed or exchanged for shares of Common
Stock. In addition, the elimination of the Preferred Shares will reduce the
dollar amount of the Company's Delaware franchise taxes, the calculation of
which takes into consideration the number of the Company's authorized shares.
-7-
<PAGE> 10
In connection with the elimination of the authorized Preferred Stock,
the Board of Directors approved an Amended and Restated Certificate of
Incorporation so as to restate the other provisions of the Company's
Certificate of Incorporation into one document. As a result of the merger with
RMIC in 1991 and the subsequent merger of other subsidiaries into the Company,
the Company's Certificate of Incorporation has been amended numerous times and
is contained in several documents. The Board of Directors believes it will be
preferable for the Certificate of Incorporation to be contained in one
simplified document containing all provisions. Other than for the elimination
of the Preferred Stock, no other substantive change will be made to the
Company's Certificate of Incorporation.
The elimination of the authorized Preferred Stock would become
effective upon the filing of the Amended and Restated Certificate of
Incorporation with the Delaware Secretary of State. If the elimination of the
Preferred Shares is approved by the stockholders, the Board of Directors
intends to cause the Amended and Restated Certificate of Incorporation to be
filed as soon as practicable after the date of the Annual Meeting. Upon
effectiveness of the proposed amendment, the Company's Amended and Restated
Certificate of Incorporation would read as set forth in Annex A hereto.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
APPROVE THE AMENDMENT AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF
INCORPORATION. THE AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE
OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK IS REQUIRED TO APPROVE THE
AMENDMENT AND RESTATEMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION.
PROPOSAL 3 -
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors recommends to the stockholders the ratification
of the appointment of Arthur Andersen as the Company's independent accountants
for fiscal year 1997. Arthur Andersen acted as the Company's independent
accountants for fiscal year 1996. Representatives of Arthur Andersen are
expected to be present at the Annual Meeting and will have the opportunity to
make statements if they desire to do so. Such representatives are also
expected to be available to respond to appropriate questions.
OTHER MATTERS
As of the time of preparation of this Proxy Statement, the Board of
Directors knew of no matter other than the matters described herein which will
be presented at the meeting. However, if any other matter properly comes
before the meeting or any adjournment thereof, the person or persons voting the
proxies will vote them in accordance with their best judgment.
This Proxy Statement will be accompanied by the Company's Annual
Report for the fiscal year ended June 30, 1996, when it is delivered to
stockholders.
Under the rules of the Securities and Exchange Commission,
stockholders who wish to submit proposals for inclusion in the Proxy Statement
of the Board of Directors for the annual meeting of stockholders to be held in
1997 must submit such proposals so as to be received by the Company at 17022
South Figueroa Street, Gardena, California 90248, on or before June 27, 1997.
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<PAGE> 11
ANNEX A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ROTONICS MANUFACTURING INC.
ARTICLE ONE. Name. The name of the Corporation is "Rotonics
Manufacturing Inc."
ARTICLE TWO. Registered Office. The address of the registered office
of the Corporation in the State of Delaware is 229 South State Street, in the
City of Dover, County of Kent. The name of its registered agent at such
address is United States Corporation Company.
ARTICLE THREE. Purposes. The purpose of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
ARTICLE FOUR. Capital Stock.
A. Authorized Capital. The Corporation is authorized to
issue one (1) class of shares of stock to be designated "Common Stock". The
total number of shares of Common Stock which the Corporation is authorized to
issue is Twenty Million (20,000,000), each share to have a par value of $.01.
Each outstanding share of Common Stock as of this date is to remain as one
share of Common Stock.
ARTICLE FIVE. Limitation of Liability and Indemnification of
Directors.
A. Elimination of Certain Liability of Directors. Each
director of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of such director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation of the State of
Delaware, or (iv) for any transaction from which such director derived any
improper personal benefit. If the General Corporation Law of the State of
Delaware is amended after filing this Certificate of Incorporation with the
Delaware Secretary of State so as to authorize corporate action further
eliminating or limiting the personal liability of directors, then the lability
of each director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
B. Indemnification and Insurance.
(1) Right to Insurance. Each person who was or
is made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation, as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as director,
officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the General Corporation Law of
the State of Delaware, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer,
<PAGE> 12
employee or agent and shall inure to the benefit of his or her heirs, executors
and administrators; provided, however, that, the Corporation shall indemnify
any such person seeking indemnification in connection with a proceeding (or
part thereof) initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. The
right to indemnification conferred in this Section B shall be a contract right
and shall include the right to be paid by the Corporation the expenses incurred
in defending any such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law of the State of Delaware
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation or an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director is not entitled to be indemnified under this Section or otherwise.
The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
(2) Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in this Section B shall not be
exclusive or any other right which any person may have or hereafter acquire
under any statute, provision of this Certificate of Incorporation, Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
(3) Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation, partnership, joint
venture, trust, or other enterprise against any such expense, lability or loss,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
ARTICLE SIX. Management of Business. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors and the directors need not be elected by ballot unless required by
the Bylaws of the Corporation.
ARTICLE SEVEN. Bylaws. In furtherance and not in limitation of the
powers conferred by stature, the Board of Directors and the stockholders of the
Corporation are each expressly authorized to adopt, amend or repeal the Bylaws
of the Corporation.
ARTICLE EIGHT. Amendments. The Corporation reserves the right to
amend and repeal any provision contained in this certificate of Incorporation,
and to take other corporate action to the extent and in the manner now or
hereafter permitted or prescribed by the laws of the State of Delaware. All
rights herein conferred are granted subject to this reservation.
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<PAGE> 13
ROTONICS MANUFACTURING INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 10, 1996.
The undersigned hereby appoints Sherman McKinniss and E. Paul
Tonkovich, or either of them, each with full power of substitution, as the
proxyholder(s) of the undersigned to represent the undersigned and vote all
shares of the capital stock of ROTONICS MANUFACTURING INC. (the "Company")
which the undersigned would be entitled to vote if personally present at the
annual meeting of stockholders of the Company at the Holiday Inn, Vermont
Street and 190th Avenue, Torrance, California 90248 at 9:30 a.m. on December
10, 1996, and at any adjournments or postponements of such meeting, as follows:
1. To elect as directors, to hold office until the next annual
meeting of stockholders and until their successors are
elected, the nominees listed below:
_____ FOR all nominees _____ WITHHOLD AUTHORITY to
listed below vote for all listed
except those nominees.
whose names are
handwritten on
the line below.
Sherman McKinniss, Larry DeDonato, L. John Polite, Jr., David C.
Polite, James E. Evans and E. Paul Tonkovich. To withhold authority
to vote for any of the above nominees, write the nominee's name below:
__________________________________________________
2. To approve of an Amended and Restated Certificate of
Incorporation to eliminate the authorized shares of Preferred
Stock.
______ For ______ Against ______ Abstain
3. To ratify the appointment of Arthur Andersen as the Company's
independent accountants for the fiscal year ending June 30,
1997.
______ For ______ Against ______ Abstain
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<PAGE> 14
4. To transact such other business as properly may come before
the meeting.
The Board recommends that you vote FOR the
above proposals. This proxy, when properly
executed, will be voted in the manner
directed above. WHEN NO CHOICE IS INDICATED,
THIS PROXY WILL BE VOTED FOR THE ABOVE
PROPOSALS. This proxy may be revoked by the
undersigned at any time, prior to the time it
is voted by any of the means described in the
accompanying proxy statement.
________________________________________
________________________________________
Signature(s) of Stockholder(s)
Date and sign exactly as name(s) appear(s) on
this proxy. If signing for estates, trusts,
corporations or other entities, title or
capacity should be stated. If shares are
held jointly, each holder should sign.
Date: _______________, 1996
PLEASE COMPLETE, DATE AND SIGN THIS PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
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