<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
ROTONICS MANUFACTURING INC.
---------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
ROTONICS MANUFACTURING INC.
-----------------
Notice of Annual Meeting of Stockholders
to be held December 4, 2000
The Annual Meeting of Stockholders of ROTONICS MANUFACTURING INC. (the
"Company") will be held on December 4, 2000 at 1:30 p.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. Ratification of the appointment of Arthur Andersen as the Company's
independent auditors for the year ending June 30, 2001.
3. 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 13, 2000
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
/s/ E. PAUL TONKOVICH
----------------------------------
E. Paul Tonkovich
Secretary
Gardena, California
October 25, 2000
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 PREPAID ENVELOPE.
<PAGE>
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 4, 2000 at 1:30 p.m. local time at the
Holiday Inn, Vermont Street and 190th Avenue, Torrance, California 90248, or any
adjournments thereof. This Proxy Statement and the enclosed proxy are being
mailed to stockholders on or about October 25, 2000.
Only stockholders of record at the close of business on the record date,
October 13, 2000, are entitled to vote at the meeting. On that date there were
outstanding and entitled to vote 12,903,187 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 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.
1
<PAGE>
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL HOLDERS
The following table and the footnotes thereto set forth, as of September
30, 2000, 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>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
----------------------- ------------------------ --------
<S> <C> <C>
Sherman McKinniss 5,368,720 (2) 41.6
Marc L. Berman 140,399 (3) 1.1
Larry DeDonato 143,332 (4) 1.1
James E. Evans 26,000 (5) *
David C. Polite 37,222 (6) *
Larry L. Snyder 115,000 (7) *
E. Paul Tonkovich 103,655 (8) *
Robert E. Gawlik 230,000 (9) 1.8
Douglas W. Russell 89,664 (10) *
All directors and all executive officers of 6,253,992 (2)(3) 48.4
the Company as a group (9 individuals) (4)(5)(6)(7)(8)(9)(10)
Linn Derickson 1,020,437 (11) 7.9
</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) 342,000 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) 110,066 shares of Common Stock held by Mr. Berman
jointly with his spouse; (ii) 15,333 shares of Common Stock held by a
pension plan for the benefit of Mr. Berman; and (iii) 15,000 shares of
Common Stock issuable on the exercise of currently exercisable stock
options.
(4) Consisting of: (i) 118,333 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; (iii) 6,666 shares of Common
Stock held by the minor child of Mr. DeDonato; and (iv) 15,000 shares of
Common Stock issuable on the exercise of currently exercisable stock
options.
(5) Consisting of: (i) 11,000 shares of Common Stock held solely by Mr. Evans;
and (ii) 15,000 shares of Common Stock issuable on the exercise of
currently exercisable stock options.
(6) Consisting of: (i) 22,222 shares of Common Stock held solely by Mr. Polite;
and (ii) 15,000 shares of Common Stock issuable on the exercise of
currently exercisable stock options.
(7) Consisting of: (i) 100,000 shares of Common Stock held by Mr. Snyder
jointly with his spouse; and (ii) 15,000 shares of Common Stock issuable on
the exercise of currently exercisable stock options.
(8) Consisting of: (i) 88,555 shares of Common Stock held by Mr. Tonkovich as
trustee of a profit sharing trust of which Mr. Tonkovich is a beneficiary;
and (ii) 15,000 shares of Common Stock issuable on the exercise of
currently exercisable stock options.
(9) Consisting of: (i) 50,000 shares of Common Stock held by a pension plan for
the benefit of Mr. Gawlik; and (ii) 180,000 shares of Common Stock issuable
on the exercise of currently exercisable stock options.
(10) Consisting of: (i) 46,664 shares of Common Stock held by Mr. Russell
jointly with his spouse; (ii) 38,000 shares of Common Stock held by he
minor children of Mr. Russell; and (iii) 5,000 shares of Common Stock
issuable on the exercise of currently exercisable stock options.
(11) Consisting of: 1,020,437 shares of Common Stock held by Mr. Derickson
jointly with his spouse. Mr. Derickson's address is 1305 West rooks Street,
Ontario, California 91761.
2
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
A board of six (6) directors is to be elected to serve until the next
Annual Meeting of Stockholders. Sherman McKinniss, Marc L. Berman, Larry
DeDonato, David C. Polite, Larry L. Snyder 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 and Tonkovich were elected to the Board of Directors in August 1991 in
connection with the merger into the Company of Rotonics Molding, Inc.-Chicago
("RMIC"). Mr. Polite was elected to the Board at the 1993 Annual Meeting of
Stockholders, Mr. DeDonato was elected to the Board at the 1994 Annual Meeting
of Stockholders, Mr. Snyder was elected to the Board at the 1997 Annual Meeting
of Stockholders and Mr. Berman was elected to the Board at the 1999 Annual
Meeting of Stockholders. James E. Evans, who is currently a director, has chosen
not to stand for re-election. The Company would like to thank Mr. Evans for his
service to the Company as a member of the Board.
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 (6) nominees is set forth below. The
descriptions of the business experience of these individuals include all
principal positions held by them from 1995 to the date of this Proxy Statement.
SHERMAN MCKINNISS (age 64) 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 the
Company in 1988.
MARC L. BERMAN (age 55) has been a partner at Berman Cohn LLC, an
investment banking, merger & acquisition firm, since 1993. Mr. Berman is also a
member of the Association of Corporate Growth.
LARRY M. DEDONATO (age 46) 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.
DAVID C. POLITE (age 45) 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.
LARRY L. SNYDER (age 62) has served as Chairman of the Board since 1995 for
Nebraska GPS which provides differential GPS signal for agricultural use. Prior
to that, Mr. Snyder served as President of Snyder Industries Inc., a fiberglass
and rotational molding company, from 1962 until 1991. Mr. Snyder serves as a
Board of Trustee for Nebraska Wesleyan University and is a past President and a
charter member of the Association of Rotational Molders. Mr. Snyder also
operates a substantial precision farming and cattle operation in central
Nebraska.
E. PAUL TONKOVICH (age 62) 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.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held four regularly scheduled meetings and one
special meeting during fiscal year 2000. Each director attended at least 75% of
the meetings of the Board of Directors and each committee on which he served
since their respective appointments, except Mr. Grossman who participated in 40%
of the Board of Directors meetings prior to his resignation from the Board on
January 7, 2000.
The Board has an Audit Committee, comprised in fiscal year 2000 of Larry
DeDonato, David C. Polite, Larry L. Snyder, James E. Evans and Marc L. Berman.
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 2000, the Audit Committee held
two meetings. Each member of the Audit Committee attended all of those meetings
since their respective appointments.
The Board also has a Nominating Committee, comprised in fiscal 2000 of Mr.
McKinniss and Mr. Berman. 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(s). During fiscal year 2000, the Nominating
Committee held one 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.
3
<PAGE>
EXECUTIVE OFFICERS
The present executive officers of the Company are Sherman McKinniss,
Chairman of the Board, President and Chief Executive Officer; Robert E. Gawlik,
Executive Vice President and Chief Operating Officer; E. Paul Tonkovich,
Secretary; and Douglas W. Russell, Treasurer, Chief Financial Officer and
Assistant Secretary. Mr. Gawlik has been employed by the Company since August
1998. Prior to this, he served as General Manager for Bonar Plastic's Oregon
facility from 1991-1998, and as Executive Vice-President of Encore Industries
from 1986-1989, and later as President of Encore Group from 1989-1991. 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, 2000, by the Company's Chief Executive Officer, and each of
the other most highly compensated executive officers of the company, except for
Mr. Gawlik which only reflects two years of compensation since his date of
employment, August 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ANNUAL COMPENSATION AWARDS OPTIONS
--------------------------- ---- ------------------- --------------
OTHER ANNUAL
SALARY BONUS COMPENSATION (1) OPTIONS
---------- ----- ---------------- -------
<S> <C> <C> <C> <C> <C>
Sherman McKinniss
President and CEO 2000 $383,116 $40,465 $8,354 -
1999 $369,324 $19,629 $6,722 -
1998 $365,000 $45,080 $5,434 -
Robert E. Gawlik
Vice President and COO 2000 $165,665 $40,465 $4,900 40,000
1999 $141,533 $ - $ - 100,000
Douglas W. Russell
Treasurer, CFO and Assistant Secretary 2000 $131,080 $22,233 $2,117 -
1999 $126,380 $ 8,243 $ 954 5,000
1998 $124,038 $27,792 $ 954 -
</TABLE>
--------------------
(1) Consists of the annual premium on a term life insurance policy covering the
named executives, as to which they are the named insured and beneficiary.
The Company is obligated to pay these premiums pursuant to the executives'
respective employment agreement.
OPTIONS/EXECUTIVE OFFICERS
The following table shows the options granted to the named executive
officers during fiscal 2000 and the potential realizable value of those grants
(on a pre-tax basis) determined in accordance with SEC rules. The information in
this table shows how much the named executive officers may eventually realize in
future dollars under two hypothetical situations: if the price of the Company's
Common Stock increases 5% or 10% in value per year, compounded over the life of
the options. These amounts represent assumed rates of appreciation, and are not
intended to forecast future appreciation of the Company's Common Stock.
The options described in this table have exercise prices equal to the
current market value of a share of the Company's Common Stock on the date they
were granted. Unless the Company's stock price appreciates and the recipient
continues to be employed until the options vest, the options will have no value.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
% OF TOTAL OPTIONS ASSUMED ANNUAL RATE OF STOCK PRICE
GRANTED TO EXERCISE OR APPRECIATION FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------------
NAME GRANTED (1) FISCAL YEAR $/SH DATE 5% 10%
---------------- ----------- ------------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gawlik 40,000 100% $0.9375 08/03/02 $5,911 $12,413
</TABLE>
----------------
(1) All options were granted at the current market price on the date of grant.
Options vest as follows: 100% on date of grant.
4
<PAGE>
AGGREGATED OPTIONS EXERCISES AND OPTION VALUES TABLE
The following table shows information concerning the exercise of stock
options by each of the named executive officers during fiscal 2000, and the
value of all remaining exercisable and unexercisable options at June 30, 2000,
on a pre-tax basis.
AGGREGATED 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
6/30/00 6/30/00 (1)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gawlik -- $ - 140,000 - $67,500 $ -
Douglas W. Russell -- $ - 5,000 - $ 2,813 $ -
</TABLE>
--------------------
(1) Based on the closing price of the Company's Common Stock as reported on
AMEX on June 30, 2000 of $1.375.
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.
Executive compensation paid to Mr. Gawlik and Mr. Russell, consisting of a base
salary and a cash bonus, is determined under the guidelines of their respective
employment agreements (see "Employment Agreements"). The employment agreements
establish a base salary and a minimum annual increase tied to the cost of
living. The Board of Directors may approve a base salary in excess of that
required by the contractual cost of living increase based on the Board's
determination of Mr. Gawlik's and Mr. Russell's respective performance and
contribution using the same process and philosophy as indicated above. The cash
bonus paid to Messrs. Gawlik and Russell during fiscal 2000 were approved by the
Board of Directors in accordance with the terms outline in his employment
agreement.
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. Annual cash bonuses granted to the Company's executives,
other than for Messrs. McKinniss, Gawlik, and 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 2000 was approved by the Board of Directors
in accordance with the terms outlined in his employment agreement.
THE BOARD OF DIRECTORS
Sherman McKinniss David C. Polite
Larry DeDonato E. Paul Tonkovich
Larry L. Snyder Marc L. Berman
James E. Evans
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>
CERTAIN TRANSACTIONS
During the fiscal year ended June 30, 2000, the Company incurred legal
fees and costs amounting to $138,600 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.
As a result of the Rotocast International, Inc. ("Rotocast") merger in
March 1998, the Company now leases several of its manufacturing facilities from
GSC Industries (former parent company of Rotocast). Mr. Grossman, formerly a
director of the Company, has a controlling ownership interest in GSC Industries.
In fiscal 2000, the Company paid rent on these facilities amounting to $483,500.
Effective April 1, 1999, the Company entered into a consulting
agreement with Mr. Grossman which remained in force until Mr. Grossman ceased
serving as a director of the Company. In recognition of services rendered under
the consulting agreement, the Company compensates Mr. Grossman through the
payments of various personal benefits for life insurance, medical insurance, and
automobile expenses. From July 1, 1999 until Mr. Grossman resigned as a director
on January 7, 2000, the Company paid a total of $7,718 for Mr. Grossman's
services. The Company also paid Mr. Grossman a royalty of $10,867 in fiscal 2000
in connection with the sale of certain products acquired through the Rotocast
merger.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment contract with Mr. McKinniss
which expires August 12, 2002. 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
August 13, 2000, the annual salary for Mr. McKinniss was increased to $388,069.
See "Report of the Board/Executive Compensation". In addition to Mr. McKinniss'
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.
The Company has entered into an employment agreement with Mr. Gawlik
which expires August 3, 2001. The agreement provides for a minimum annual base
salary of $160,000 and is increased on each anniversary of the agreement (August
3) by an amount at least equal to the annual percentage 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 July 31,
2000, the annual salary to Mr. Gawlik was increased to $167,752. See "Report of
the Board/Executive Compensation". In addition to Mr. Gawlik'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, and
was also granted options to acquire 100,000 shares of the Company's Common Stock
effective August 3, 1998 and an additional 40,000 options granted on August 3,
1999 and August 3, 2000, respectively. The agreement contains certain
noncompetition and nondisclosure covenants. The agreement also allows for
termination of employment by either party voluntarily or for cause as outlined
in the agreement. If the Company terminates the employment of Mr. Gawlik for
reasons other than cause, disability or death, Mr. Gawlik will be entitled to
receive as a termination payment, his current salary for a period of twelve (12)
to twenty-four (24) months from termination depending on certain circumstances.
The Company has entered into an employment agreement with Mr. Russell
which expires August 31, 2001. The agreement provides for a minimum annual base
salary of $90,000 and is increased on each anniversary of the agreement
(September 1) by an amount at least equal to the annual percentage 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, 2000, the annual salary to Mr. Russell was increased to $135,000.
See "Report of the Board/Executive Compensation". In addition to Mr. Russell's
base salary, under the agreement he is to be paid an annual bonus equal to
one-half of one percent (.5%) 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 outlined in the agreement. If the
Company terminates the employment of Mr. Russell for reasons other than cause,
disability or death, Mr. Russell will be entitled to receive as a termination
payment, his current salary for a period of twelve (12) months from termination.
COMPENSATION OF DIRECTORS
During the fiscal year ended June 30, 2000, directors (other than those
who were employees of the Company) were paid $1,000 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 totaling $21,000 in fiscal year 2000.
Directors who are employees of the Company have not been separately compensated
for their services as directors.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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, 2000, all
Section 16(a) filing requirements applicable to its executive officers and
directors were complied with.
6
<PAGE>
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 July 1, 1995
in each. (1)
PERFORMANCE GRAPH
FOR ROTONICS MANUFACTURING INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[GRAPH]
<TABLE>
<CAPTION>
JUNE INDEX RETURNS
--------------------------------- ------------------------------------------------------------
COMPANY/INDEX 1995 1996 1997 1998 1999 2000
--------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Rotonics Manufacturing Inc (RMI) 100 117.10 114.77 85.90 89.57 123.16
S&P 500 Index 100 126.00 169.72 220.91 271.18 290.84
S&P Chemicals - Specialty Index 100 112.63 121.21 121.56 151.57 108.96
</TABLE>
(1) Total return assumes reinvestment of dividends.
PROPOSAL 2 - 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 2001. 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, the accompanying proxy contains
discretionary authority on the persons named therein to vote on any other matter
properly brought before the meeting or any adjournment thereof, the person or
persons voting the proxies intend to 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, 2000, when it is delivered to stockholders.
The Company will mail without charge, upon written request, a copy of the
Company's annual report on form 10-K. Requests should be sent to Rotonics
Manufacturing Inc., 17022 S. Figueroa Street, Gardena, California 90248,
Attention: Investor Relations.
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 2001 must
submit such proposals so as to be received by the Company at 17022 South
Figueroa Street, Gardena, California 90248, on or before June 28, 2001. In
addition, if the Company is not notified by September 11, 2001 of a proposal to
be brought before the 2000 Annual Meeting by a stockholder, then proxies held by
management may provide the discretion to vote against such proposal even though
it is not discussed in the proxy statement for such meeting.
7
<PAGE>
ROTONICS MANUFACTURING INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 4, 2000
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 1:30 p.m. on December 4, 2000, 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
listed below, except to vote for all listed
those whose names nominees.
are handwritten on
the line below.
Sherman McKinniss, Larry DeDonato, David C. Polite, E. Paul
Tonkovich, Larry L. Snyder and Marc L. Berman. To withhold
authority to vote for any of the above nominees, write the
nominee's name below:
--------------------------------------------------------------
2. To ratify the appointment of Arthur Andersen as the Company's
independent accountants for the fiscal year ending June 30,
2001.
___ For ___ Against ___ Abstain
3. 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:_______________, 2000
PLEASE COMPLETE, DATE AND SIGN THIS PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
