<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Atlantis Plastics, 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)(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> 2
ATLANTIS PLASTICS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 3, 1997
To the shareholders of
Atlantis Plastics, Inc.
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
Atlantis Plastics, Inc., a Florida corporation (the "Company"), will be held at
9:00 a.m., local time, on Tuesday, June 3, 1997, at the Grand Bay Office Plaza,
2665 South Bayshore Drive, Suite 800, Miami, Florida, for the following
purposes:
(1) To elect eight members to the Company's Board of Directors to
hold office until their terms shall expire or until their
successors are duly elected and qualified;
(2) To vote upon a proposal to approve the Company's 1997 Stock
Option Plan; and
(3) To transact such other business as may properly come before
the meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on April 14,
1997 as the record date for determining those shareholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournments thereof.
Whether or not you expect to be present please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
/s/ PETER W. KLEIN
------------------
Peter W. Klein
Secretary
Miami, Florida
April 25, 1997
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. THOSE SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY
URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE.
SHAREHOLDERS WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING,
REVOKE THEIR PROXY AND VOTE THEIR SHARES IN PERSON.
<PAGE> 3
ANNUAL MEETING OF SHAREHOLDERS
OF
ATLANTIS PLASTICS, INC.
---------------
PROXY STATEMENT
---------------
DATE, TIME AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Atlantis Plastics, Inc., a Florida corporation
(the "Company"), of proxies from the holders of the Company's Class A Common
Stock, par value $0.10 per share (the "Class A Common Stock"), for use at the
1997 Annual Meeting of Shareholders of the Company, to be held on the 3rd day
of June, 1997, or any adjournment(s) thereof (the "Annual Meeting"), pursuant
to the enclosed Notice of Annual Meeting at the time and place indicated
therein. No proxies will be solicited from the holders of the Company's Class B
Common Stock, par value $0.10 per share (the "Class B Common Stock"). The Class
B Common Stock is not registered under Section 12 of the Securities Exchange
Act of 1934. The approximate date this Proxy Statement and the enclosed form of
proxy are first being sent to holders of Class A Common Stock is April 25,
1997. The complete mailing address, including zip code, of the principal
executive offices of the Company is 1870 The Exchange, Suite 200, Atlanta,
Georgia 30339.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Board of Directors of
the Company. The giving of a proxy does not preclude the right to vote in
person should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Secretary
of the Company at the Company's headquarters a written revocation or duly
executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement,
the Notice of Annual Meeting of Shareholders and the enclosed proxy is to be
borne by the Company. In addition to the use of mail, employees of the Company
may solicit proxies personally and by telephone and facsimile. They will
receive no compensation therefor in addition to their regular salaries.
Arrangements will be made with banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies. The Company will reimburse
such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and
vote upon the following matters:
1. The election of eight directors to serve until the next
Annual Meeting of Shareholders or until their successors are
duly elected and qualified;
2. A proposal to approve the Company's 1997 Stock Option Plan;
and
3. Such other business as may properly come before the Annual
Meeting, including any adjournments thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (a) FOR the election of the two nominees for director named below
to be elected by the holders of Class A Common Stock (see "Outstanding Shares
and Voting Rights," below), (b) FOR approval of the Company's 1997 Stock Option
Plan, and (c) by the proxies in their discretion upon any other proposals as
may properly come before the Annual Meeting. In the event a shareholder
specifies a different choice by means of the enclosed proxy, such shareholder's
shares will be voted in accordance with the specification so made.
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 14, 1997
(the "Record Date"), as the record date for determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date there were 4,197,528 shares of Class A Common Stock and 2,861,979
shares of Class B Common Stock (the Class A Common Stock and Class B Common
Stock are collectively referred to as the "Common Stock"), issued and
outstanding, all of which are entitled to be voted at the Annual Meeting.
Holders of Class A Common Stock are entitled to one vote per share on each
matter that is submitted to shareholders for approval, and vote as a separate
class to elect 25 percent of the directors of the Company (rounded up to the
next whole number), which presently equates to two directors. Holders of the
Class B Common Stock are entitled to 10 votes per share on each matter
submitted to shareholders for approval (other than the election of directors,
as to which each share has one vote), and vote as a separate class to elect 75
percent of the directors (rounded down to the next whole number), which
presently equates to six directors. On all matters other than the election of
directors, and except as may be otherwise provided by Florida law or the
Company's Articles of Incorporation or Bylaws, the outstanding shares of Class
A Common Stock and Class B Common Stock vote together as a single class.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of each of the Class A Common Stock and the Class B
Common Stock entitled to vote at the Annual Meeting is necessary to constitute
a quorum. If less than a majority of the outstanding shares of Common Stock are
represented at the Annual Meeting, a majority of the shares so represented may
adjourn the Annual Meeting from time to time without further notice. For
purposes of electing directors at the Annual Meeting, the two nominees
receiving the greatest number of votes of Class A Common Stock voting
separately as a class, and the six other nominees receiving the greatest number
of votes of Class B Common Stock voting separately as a class, shall be elected
as directors. The proposal to approve the Company's 1997 Stock Option Plan will
be approved if a majority of the votes cast by shares of Common Stock on the
matter are voted in favor of the proposal. Any other matter that may be
submitted to a vote of the shareholders will be approved if the number of
shares of Common Stock voted in favor of the matter exceeds the number of
shares of Common Stock voted against the matter, unless the matter is one for
which a greater vote is required by law or the Company's Articles of
Incorporation or Bylaws.
Abstentions are considered as shares present and entitled to vote for
purposes of determining the presence of a quorum and will be counted as votes
cast for purposes of determining the outcome of any matter submitted to the
shareholders for a vote, but are not counted as votes "for" or "against" any
matter. The inspectors of election will treat shares referred to as "broker or
nominee non-votes" (shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and the broker or nominee does not have discretionary voting power on a
particular matter) as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. For purposes of determining the
outcome of any matter as to which the proxies reflect broker or nominee
non-votes, shares represented by such proxies will be treated as not present
and not entitled to vote on that subject matter and therefore will not be
considered by the inspectors of election when counting votes cast on the matter
(even though those shares are considered entitled to vote for quorum purposes
and may be entitled to vote on other matters). Accordingly, broker or nominee
non-votes will not have the same effect as a vote against the election of any
director or against the proposal to approve the Company's 1997 Stock Option
Plan. Abstentions will not have the same effect as a vote against the election
of any director but will have the same effect as a vote against the proposal to
approve the 1997 Stock Option Plan.
2
<PAGE> 5
SECURITY OWNERSHIP
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock as of March 31, 1997 by (a)
each person known to the Company to own beneficially more than five percent of
either class of the Company's outstanding Common Stock, (b) each director
(including nominees) who owns any such shares, (c) each Named Executive Officer
who owns any such shares (see "Executive Compensation and Other
Information--Summary Compensation Table"), and (d) the directors and executive
officers of the Company as a group:
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK COMBINED
BENEFICIALLY OWNED(2)(3) BENEFICIALLY OWNED(2) VOTING POWER
---------------------------- -------------------------- OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES PERCENT SHARES PERCENT VOTING STOCK
- ------------------------------------------ ---------------- ---------- -------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Triad Capital Fund(4)................. 221,353 5.3% 1,333,032 46.6% 41.3%
Trivest of Florida, Ltd.(4)........... 1,279 * 12,499 * *
Cesar L. Alvarez(5)................... 4,000 * -- -- *
Anthony F. Bova(6).................... 180,000 4.1% -- -- *
John A. Geary(7)...................... 6,060 * -- -- *
Phillip T. George, M.D.(8)(9)......... 369,947 8.6% 608,319 21.0% 19.3%
Larry D. Horner(10)................... 4,000 * -- -- *
Charles D. Murphy, III(11)............ 24,862 * 27,562 * *
Earl W. Powell(8)(12)................. 313,763 7.2% 717,834 23.7% 21.6%
Paul Rudovsky(13)..................... 71,000 1.7% -- -- *
Chester B. Vanatta(14)................ 29,567 * 27,562 * *
All directors and executive officers
as a group (11 persons)(15)........ 1,241,331 26.2% 2,722,783 86.7% 78.7%
</TABLE>
- -------------------------
* Less than 1%
(1) Unless otherwise indicated, the address of each of the beneficial
owners identified is 2665 South Bayshore Drive, Suite 800, Miami,
Florida 33133.
(2) Unless otherwise indicated, each person has sole voting and investment
power with respect to all such shares. For purposes of this table, a
person is deemed to have "beneficial ownership" of any shares as of a
given date which the person has the right to acquire within 60 days
after such date. For purposes of computing the outstanding shares held
by each person named above on a given date, any shares which such
person has the right to acquire within 60 days after such date are
deemed to be outstanding, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person.
(3) Although each named person is deemed to be the beneficial owner of
securities that may be acquired within 60 days through the exercise of
exchange or conversion rights, and the Class B Common Stock is
immediately convertible into Class A Common Stock on a one-for-one
basis, the number of shares set forth opposite each shareholder's name
does not include shares of Class A Common Stock issuable upon
conversion of Class B Common Stock.
(4) Triad Capital Fund is an Illinois limited partnership of which Trivest
of Florida, Ltd., a Florida limited partnership ("Trivest of
Florida"), is general partner. The general partner of Trivest of
Florida is Trivest, Inc., a Delaware corporation ("Trivest") that is
owned by Dr. George and Mr. Powell. Blue Sky Partners, a Florida
general partnership whose partners are Dr. George and Mr. Powell
("Blue Sky Partners"), and Dr. George are limited partners of Triad
Capital Fund. In addition, Blue Sky Partners and Messrs. Powell and
George are limited partners of Trivest of Florida.
(5) The number of shares of Class A Common Stock indicated includes 4,000
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's 1987 Stock Option Plan. Mr. Alvarez' address
is 1221 Brickell Avenue, Miami, Florida 33131.
(6) The number of shares of Class A Common Stock indicated includes (i)
35,000 shares directly owned; and (ii) 145,000 shares issuable upon
exercise of presently exercisable options granted pursuant to the
Company's Amended and Restated 1990 Stock Option Plan. Mr. Bova's
address is 1870 The Exchange, Suite 200, Atlanta, Georgia 30339.
(7) The number of shares of Class A Common Stock indicated includes (i) 60
shares directly owned; and (ii) 6,000 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1987
Stock Option Plan. Mr. Geary's address is 57850 Tailwind Court,
Elkhart, Indiana 46517.
(8) Does not include shares indicated as beneficially owned by Triad
Capital Fund or Trivest of Florida. See footnote 4 above.
3
<PAGE> 6
(9) The number of shares of Class A Common Stock indicated includes (i)
235,967 shares directly owned; (ii) 53,130 shares held of record by
Dr. George as custodian for his minor children under the Florida
Uniform Gifts to Minors Act, as to which Dr. George disclaims
beneficial ownership; (iii) 51,250 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1987
Stock Option Plan; and (iv) 24,600 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's
Amended and Restated 1990 Stock Option Plan. The number of shares of
Class B Common Stock indicated includes (i) 553,194 shares directly
owned; and (ii) 55,125 shares issuable upon exercise of presently
exercisable options granted pursuant to the Company's 1987 Stock
Option Plan.
(10) The number of shares of Class A Common Stock indicated includes 4,000
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's Amended and Restated 1990 Stock Option Plan.
Mr. Horner's address is 100 Park Avenue, 28th Floor, New York, New
York 10017.
(11) The number of shares of Class A Common Stock indicated includes (i)
1,102 shares directly owned; (ii) 10,250 shares issuable upon exercise
of presently exercisable options granted pursuant to the Company's
1987 Disinterested Directors Stock Option Plan; and (iii) 13,510
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's Amended and Restated 1990 Stock Option Plan.
The number of shares of Class B Common Stock indicated reflects 27,562
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's 1987 Disinterested Directors Stock Option
Plan. Mr. Murphy's address is 4019 Los Arabis Drive, Lafayette,
California 94549.
(12) Does not include 110 shares of Class A Common Stock beneficially owned
by Mr. Powell's spouse and held by her in an Individual Retirement
Account, as to which Mr. Powell disclaims beneficial ownership. The
number of shares of Class A Common Stock indicated includes (i)
169,663 shares directly owned; (ii) 48,996 shares issuable upon
exercise of presently exercisable options granted pursuant to the
Company's 1987 Stock Option Plan; and (iii) 95,104 shares issuable
upon exercise of presently exercisable options granted pursuant to the
Company's Amended and Restated 1990 Stock Option Plan. The number of
shares of Class B Common Stock indicated includes (i) 552,459 shares
directly owned; and (ii) 165,375 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1987
Stock Option Plan.
(13) The number of shares of Class A Common Stock indicated includes (i)
38,000 shares directly owned; and (ii) 33,000 shares issuable upon
exercise of presently exercisable options granted pursuant to the
Company's 1987 Stock Option Plan. Mr. Rudovsky's address is 1870 The
Exchange, Suite 200, Atlanta, Georgia 30339.
(14) The number of shares of Class A Common Stock indicated includes (i)
5,807 shares directly owned; (ii) 10,250 shares issuable upon exercise
of presently exercisable options granted pursuant to the Company's
1987 Disinterested Directors Stock Option Plan; and (iii) 13,510
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's Amended and Restated 1990 Stock Option Plan.
The number of shares of Class B Common Stock indicated reflects 27,562
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's 1987 Disinterested Directors Stock Option
Plan. Mr. Vanatta's address is 5140 East Mission Hill Drive, Tucson,
Arizona 85718.
(15) Includes shares owned by Triad Capital Fund and Trivest of Florida and
shares beneficially owned by directors and executive officers, as
described in the table and footnotes above, plus the following shares
of Class A Common Stock owned by W. John Buchan, a Vice President of
the Company: (i) 9,000 shares issuable upon exercise of presently
exercisable options granted pursuant to the Company's 1987 Stock
Option Plan; and (ii) 7,500 shares issuable upon exercise of presently
exercisable options granted pursuant to the Company's Amended and
Restated 1990 Stock Option Plan.
4
<PAGE> 7
ELECTION OF DIRECTORS
NOMINEES
The bylaws of the Company provide that the Board of Directors shall
consist of not fewer than two nor more than nine members. The Board of
Directors has fixed at eight the number of directors that will constitute the
Board for the ensuing year. Each director elected at the Annual Meeting will
serve for a term expiring at the 1998 Annual Meeting of Shareholders, expected
to be held in June 1998, or until his successor has been duly elected and
qualified.
Two directors are to be elected at the Annual Meeting by the holders
of Class A Common Stock, voting separately as a class. Messrs. Murphy and
Vanatta have been nominated as the directors to be elected by the holders of
Class A Common Stock and proxies will be voted for such persons absent contrary
instructions. Messrs. Powell, George, Bova, Rudovsky, Horner and Alvarez have
been nominated as the directors to be elected by the holders of Class B Common
Stock voting separately as a class. Each of the nominees for election as a
director of the Company is a current member of the Board of Directors.
The Board of Directors has no reason to believe that any nominee will
refuse to act or be unable to accept election; however, in the event that a
nominee for a directorship to be elected by the holders of Class A Common Stock
is unable to accept election or if any other unforeseen contingencies should
arise, it is intended that proxies will be voted for the remaining nominee and
for such other person as may be designated by the Board of Directors, unless
directed by a proxy to do otherwise.
5
<PAGE> 8
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD WITH THE COMPANY
- --------------------------------------- ------- ------------------------------------------------------------------
<S> <C>
Earl W. Powell..................... 58 Chairman of the Board
Phillip T. George, M.D............. 57 Vice Chairman of the Board and Chairman of the Executive
Committee of the Board of Directors
Anthony F. Bova.................... 51 President, Chief Executive Officer and Director
Paul Rudovsky...................... 52 Executive Vice President - Finance & Administration, Chief
Financial Officer and Director
W. John Buchan..................... 49 Vice President and General Manager, Stretch Film Division
John A. Geary...................... 50 Vice President and General Manager, Profile Extrusion and
Injection Molding Divisions
Joseph D. Piccione................. 35 Vice President and General Manager, Custom and Institutional
Film Division
Charles D. Murphy, III............. 53 Director
Chester B. Vanatta................. 61 Director
Larry D. Horner.................... 62 Director
Cesar L. Alvarez................... 49 Director
</TABLE>
Mr. Powell, a cofounder of the Company, has served as Chairman of the
Board of the Company since its organization. Mr. Powell also served as Chief
Executive Officer of the Company from its organization until February 1995 and
served as President from November 1993 to February 1995. Mr. Powell has served
as Chairman of Biscayne Apparel, Inc., an American Stock Exchange company whose
principal subsidiaries are engaged in the apparel industry ("Biscayne") since
October 1985 and presently serves as President and Chief Executive Officer of
Biscayne. Mr. Powell also serves as (i) President and Chief Executive Officer
of Trivest, Inc., a private investment firm formed by Messrs. Powell and George
in 1981 that specializes in management services and acquisitions, dispositions
and leveraged buyouts ("Trivest"), and (ii) Chairman of the Board of Directors
of WinsLoew Furniture, Inc., a NASDAQ NMS company engaged in the manufacture of
contract seating, casual and ready-to-assemble furniture ("WinsLoew"). From
1971 until 1985, Mr. Powell was a partner with KPMG/Peat Marwick, Certified
Public Accountants ("Peat Marwick"), where his positions included serving as
managing partner of Peat Marwick's Miami office.
Dr. George, a cofounder of the Company, has served as the Vice
Chairman of the Board since the Company's organization and as Chairman of the
Executive Committee of the Board of Directors since February 1990. Dr. George
also serves as a director of Biscayne and a director of WinsLoew, and as
Chairman of the Board of Trivest.
Mr. Bova joined the Company as President, Chief Executive Officer and
a director in February 1995. From June 1991 to October 1994, Mr. Bova served as
the Senior Vice President and General Manager of Packaging Corporation of
America, a manufacturer and distributor of consumer packaging products. From
June 1988 to May 1991, Mr. Bova served as Senior Vice President of Avery
Dennison Corporation, a producer and distributor of labels, identification
systems and office products.
6
<PAGE> 9
Mr. Rudovsky joined the Company in March 1995 and was appointed a
director in November 1995. From October 1992 to August 1993, Mr. Rudovsky
served as an independent consultant to CCC Information Services Group, Inc.
(formerly Infovest Corporation), a provider of information services to the
insurance industry. From October 1985 to March 1992, Mr. Rudovsky was the
President and CEO of Rudd Manufacturing Co., Inc., a clothing manufacturer. Mr.
Rudovsky has been a member of the Corporation of the Massachusetts Institute of
Technology since June 1996.
Mr. Buchan has served as the Vice President and General Manager of the
Company's Stretch Film Division since March 1995. Mr. Buchan joined the Company
in September 1988 and most recently served as the Business Manager for the
Company's Stretch Film Division, with responsibility for its sales and
marketing programs. From June 1980 to August 1988, Mr. Buchan served as the
President of Sunbelt Freight, Inc., a motor freight company.
Mr. Geary has served as the Vice President and General Manager of the
Company's Profile Extrusion Division since March 1995 and the Injection Molding
Division since November 1995, which Divisions constitute the Company's Molded
Products Group. Mr. Geary joined the Company in October 1994 as the President
of the Company's Profile Extrusion Division. From October 1989 to July 1994,
Mr. Geary served as the Vice President and General Manager of the plastics
division of Aeroquip Corporation.
Mr. Piccione joined the Company in January 1996 and was appointed Vice
President and General Manager of the Custom and Institutional Film Division in
August 1996. From April 1993 until December 1995, Mr. Piccione served as
Business Manager of the Searcy Packaging Division of Bruce Corporation. From
July 1986 to July 1992, he was a Product Manager for Mobil Chemical Company.
Mr. Murphy, appointed a director of the Company in October 1987, is a
financial consultant and an Adjunct Professor of finance at the McLaren School
of Business of the University of San Francisco. From June 1981 until December
1989, he was an officer of Sutro & Co. Incorporated, an investment banking and
securities brokerage firm, and served most recently as Executive Vice President
and Director of Corporate Finance for that company.
Mr. Vanatta, appointed a director of the Company in February 1987, is
a business consultant. From 1985 until May 1990, he was an Executive in
Residence and the Paul J. Adam Distinguished Lecturer for the School of
Business at the University of Kansas. Mr. Vanatta was formerly Vice Chairman of
Arthur Young & Company (now Ernst & Young), Certified Public Accountants.
Mr. Horner, appointed a director of the Company in March 1995, has
been the Chairman of the Board of Directors of Pacific USA Holdings Corp., a
merchant banking firm since August 1994 and the Chairman of the Board of
Laidlaw Holdings, Inc. since July 1995. Mr. Horner also serves as Chairman of
the Board and Chief Executive Officer of Asia Pacific Wire & Cable Company Ltd.
From April 1991 until August 1994, he served as a Managing Director of Arnhold
& S. Bleichroeder, Inc. From 1962 until April 1991, Mr. Horner was a partner
with Peat Marwick, where he served as Chairman and Chief Executive Officer from
1984 until his retirement. Mr. Horner also serves as a director of American
General Corporation, Phillips Petroleum Company and Biological & Popular
Culture, Inc.
Mr. Alvarez, appointed a director of the Company in May 1995, has been
a principal shareholder of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., a law firm in Miami, Florida for more than five years and is
presently its Chief Executive Officer and managing shareholder. Mr. Alvarez
also serves as a director of Pediatrix Medical Group, Inc., a provider of
physician management services, FDP Corp., a provider of software for insurance
companies, CompuTrac, Inc., a provider of software for law firms, and Cosmo
Communications Corporation, which is engaged in the consumer electronics
business.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during 1996 and also took
action by written consent. No incumbent director attended fewer than 75 percent
of the aggregate of (i) the number of such meetings, and (ii) the number of
meetings of committees of the Board of Directors held during 1996.
The Board of Directors has established four standing committees: (1)
the Executive Committee, (2) the Audit Committee, (3) the Nominating Committee,
and (4) the Compensation Committee.
7
<PAGE> 10
The Executive Committee has and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Company and administers the Company's 1987 Disinterested
Directors Stock Option Plan. The Executive Committee currently consists of Dr.
George (Chairman), Mr. Powell and Mr. Bova. The Executive Committee took
certain actions by unanimous written consent during 1996.
The duties and responsibilities of the Audit Committee include (a)
recommending to the full Board the appointment of the Company's auditors and
any termination of engagement, (b) reviewing the plan and scope of audits, (c)
reviewing the Company's significant accounting policies and internal controls,
(d) administration of the Company's compliance programs, and (e) having general
responsibility for all related auditing matters. The Audit Committee currently
consists of Messrs. Vanatta (Chairman), Murphy and Horner. The Audit Committee
held one meeting during 1996.
The Nominating Committee considers and recommends to the Board of
Directors a slate of nominees for election as directors of the Company at the
annual meeting of the Company's shareholders and, when vacancies occur,
candidates for election by the Board of Directors. In addition, the Nominating
Committee from time to time evaluates the size and composition of the Board of
Directors and makes recommendations to the Board of Directors with respect
thereto. Although the Nominating Committee does not solicit suggestions for
nominees, the committee will consider nominees recommended by security holders
if such recommendations are accompanied by biographical data and sent to the
Company's Secretary. The Nominating Committee currently consists of Mr. Powell,
Dr. George and Mr. Horner (Chairman). The Nominating Committee took action by
written consent during 1996.
The Compensation Committee is responsible for setting and
administering policies that govern annual compensation of the Company's
executive officers. The Compensation Committee has the exclusive power and
authority to make compensation decisions affecting Mr. Powell, Dr. George, Mr.
Bova and Trivest, and makes recommendations to the Board of Directors on
compensation matters affecting the Company's other executive officers. The
Compensation Committee also administers the Company's 1987 Stock Option Plan,
Amended and Restated 1990 Stock Option Plan and the 1997 Stock Option Plan. The
Compensation Committee currently consists of Messrs. Horner (Chairman), Murphy
and Vanatta. The Compensation Committee held one meeting and took action by
written consent during 1996.
8
<PAGE> 11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries for the fiscal
years ended December 31, 1994, 1995 and 1996 to or on behalf of the Company's
Chief Executive Officer and the four other most highly compensated executive
officers of the Company whose total annual salary and bonus for 1996 was
$100,000 or more (the "Named Executive Officers"):
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION
- --------------------------- ---- -------- --------- ------------
<S> <C> <C> <C> <C>
Earl W. Powell 1996 $450,432 -- --
Chairman of the 1995 436,331 -- --
Board(1) 1994 418,000 -- --
Anthony F. Bova 1996 $307,020 $429,093 --
President & Chief 1995 263,850 -- $126,664(2)
Executive Officer
Paul Rudovsky 1996 $188,693 $198,648
Executive Vice 1995 145,865 -- --
President and Chief
Financial Officer
John A. Geary 1996 $123,327 $ 93,240 --
Vice President 1995 104,520 22,162 --
Joseph D. Piccione 1996 $113,452 $ 72,121(6) $ 39,518(7)
Vice President
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------
AWARDS PAYOUTS
--------- -------
LTIP ALL OTHER
PAYOUTS COMPEN-
NAME AND PRINCIPAL POSITION OPTIONS(#) ($) SATION
- --------------------------- --------- ------- ------------
<S> <C> <C> <C>
Earl W. Powell -- -- $ 6,300(1)
Chairman of the Board (1) -- -- 7,200(1)
25,000 Shares -- 15,000(1)
Anthony F. Bova 25,000 Shares -- $ 4,750(3)
President & Chief 350,000 Shares -- --
Executive Officer
Paul Rudovsky 65,000 Shares -- $ 4,199(3)
Executive Vice 75,000 Shares -- --
President and Chief $ 92,716(4)
Financial Officer
John A. Geary 15,000 Shares -- $ 6,354(5)
Vice President 7,500 Shares -- 11,427(5)
Joseph D. Piccione 15,000 Shares -- --
Vice President
</TABLE>
- -------------------------
(1) Represents Company reimbursements for amounts contributed by Trivest
on behalf of the executive to the TANA Money Purchase Pension Plan and
Trust, a retirement plan that covers certain employees of Trivest.
(2) Includes (i) $53,428 for relocation and temporary living expenses
incurred in connection with the commencement of Mr. Bova's employment
with the Company, (ii) $37,266 to reimburse Mr. Bova for taxes due in
connection with certain of the payments described in the preceding
clause (i), (iii) $35,000 for the purchase of a car, and (iv) $970 for
other perquisites.
(3) Reflects a matching contribution to the Company's 401(k) Plan.
(4) Includes (i) $41,160 for relocation and temporary living expenses
incurred in connection with the commencement of Mr. Rudovsky's
employment with the Company, (ii) $21,138 to reimburse Mr. Rudovsky
for taxes due in connection with certain of the payments described in
the preceding clause (i), (iii) $28,800 for country club initiation
fees, and (iv) $1,618 for other perquisites.
(5) Reflects contributions by Pierce Plastics, Inc. (a subsidiary of the
Company) to its profit sharing plan for 1995 and $2,745 for 1996, and
$3,609 matching contribution to the Company's 401(k) Plan for 1996.
(6) Includes (i) $10,000 signing bonus in connection with the commencement
of Mr. Piccione's employment, and (ii) annual bonus of $62,121.
(7) Includes (i) $27,332 for relocation and temporary living expenses
incurred in connection with the commencement of Mr. Piccione's
employment with the Company, (ii) $10,979 to reimburse Mr. Piccione
for taxes due in connection with certain of the payments described in
the preceding clause (i), and (iii) $1,207 for other perquisites.
9
<PAGE> 12
STOCK OPTION GRANTS
The following table sets forth information concerning the grant of
stock options to the Named Executive Officers in 1996 under the Company's
Amended and Restated 1990 Stock Option Plan and the Company's 1987 Stock Option
Plan. The Company did not grant any stock appreciation rights in 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
OPTIONS ASSUMED ANNUAL RATES OF STOCK PRICE
OPTIONS GRANTED TO EXERCISE APPRECIATION FOR OPTION TERM(2)
GRANTED EMPLOYEES IN OR BASE EXPIRATION -----------------------------------
NAME (#)(1) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Anthony F. Bova 25,000 17.24% 4.75 2/14/06 74,680 189,256
Paul Rudovsky 15,000 10.34% 4.75 2/14/06 44,808 113,553
50,000 34.48% 9.25 12/9/06 362,126 850,580
John A. Geary 15,000 10.34% 4.75 2/14/06 44,808 113,553
Joseph D. Piccione 5,000 3.45% 4.75 2/14/06 14,936 37,851
10,000 6.90% 5.00 7/1/06 31,444 79,687
</TABLE>
- ----------
(1) The options become exercisable for 20% of the shares on the first
anniversary of the date of grant and for the balance in equal annual
installments over the four-year period thereafter, so long as employment
with the Company or one of its subsidiaries continues. To the extent not
already exercisable, the options generally become fully exercisable upon
liquidation or dissolution of the Company, a sale or other disposition of
all or substantially all of the Company's assets, or a merger or
consolidation pursuant to which either (i) the Company does not survive,
or (ii) ownership of more than 49% of the voting power of the Company's
voting stock is transferred. In addition, the Compensation Committee of
the Board of Directors may, in its discretion, accelerate the date on
which any option may be exercised, and may accelerate the vesting of any
shares subject to any option.
(2) Based on assumed annual rates of stock price appreciation from the closing
price of the Company's Class A Common Stock on the date of grant. These
amounts represent assumed rates of appreciation only. Actual gains, if
any, on stock option exercises and Common Stock holdings are dependent on
the future performance of the Class A Common Stock and overall stock
market conditions.
10
<PAGE> 13
(2) STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE
No Named Executive Officer exercised stock options during the fiscal
year ended December 31, 1996. The following table sets forth information, with
respect to the Named Executive Officers, concerning unexercised options held by
them as of the end of such fiscal year:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
-----------------------------------------------------------------------------
NUMBER OF UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED IN-THE-MONEY
DECEMBER 31, 1996(#) OPTIONS AT DECEMBER 31, 1996($)(1)
------------------------------------- ---------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE(2) UNEXERCISABLE
- --------------------------------- ---------------- ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Earl W. Powell.................. 293,950(2) 31,050 1,804,902 138,343
Anthony F. Bova................. 70,000 305,000 146,250 716,250
Paul Rudovsky................... 15,000 175,000 56,250 341,250
John A. Geary................... 1,500 21,000 4,125 95,250
Joseph D. Piccione.............. -0- 15,000 -0- 76,250
</TABLE>
- -------------------------
(1) The closing sales price for the Company's Common Stock as reported by
the American Stock Exchange on December 27, 1996 was $10.00. Value is
calculated by multiplying (a) the positive difference, if any, between
$10.00 and the option exercise price by (b) the number of shares of
Common Stock underlying the option.
(2) Includes options to purchase shares of Class B Common Stock, which are
immediately convertible into Class A Common Stock on a one-for-one
basis. Value of Unexercised In-the-Money Options at December 31, 1996
assumes conversion of shares of Class B Common Stock subject to such
options into shares of Class A Common Stock.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Effective January 1, 1990, the Company entered into an amended and
restated employment agreement with Mr. Powell, expiring December 31, 1997,
pursuant to which Mr. Powell was employed as the Company's Chief Executive
Officer. By mutual agreement of the Company (acting through the Compensation
Committee of the Board of Directors) and Mr. Powell, the employment agreement
was modified effective as of February 1, 1995, to provide that Mr. Powell shall
render services as the Company's Chairman of the Board and, in connection
therewith, is required to devote only so much of his time and efforts as he
reasonably deems necessary for the performance of his duties thereunder. In
1995, Mr. Powell received an annual base salary of $436,331, which is adjusted
annually for cost of living increases. The employment agreement generally
provides that Mr. Powell will continue to receive his salary for the remaining
term of the agreement if his employment is terminated for any reason other than
for cause (as defined), including disability and a termination of the Company's
management agreement with Trivest. See "Certain Transactions--Management
Agreement."
Anthony F. Bova is employed as President and Chief Executive Officer
of the Company pursuant to an employment agreement effective as of February 1,
1995, and Paul Rudovsky is employed as Executive Vice President, Finance and
Administration of the Company pursuant to an employment agreement effective as
of March 6, 1995. Such employment agreements are for a period of five years and
include (in addition to provisions for the base salaries described in the
preceding Summary Compensation Table and certain customary benefits) annual
performance-based cash bonuses tied to incremental percentage increases in the
Company's earnings per share (as adjusted pursuant to the agreements). On April
8, 1996, Mr. Bova's employment agreement and Mr. Rudovsky's employment
agreement were amended to modify the formula for the performance-based bonus
for fiscal 1996 only, which amendments provided for a bonus formula based on
the amount by which Adjusted Earnings Per Share (as defined) for fiscal 1996
exceeded $0.25. See "Compensation Committee Report on Executive Compensation"
below. For 1997, each such employment agreement has been amended to establish
$0.50 Adjusted Earnings Per Share as the "target" earnings which must be
exceeded for the subject officer to receive a bonus under his agreement.
Each of the Named Executive Officers holds options to purchase Common
Stock granted under the Company's 1987 Stock Option Plan and the Company's
Amended and Restated 1990 Stock Option Plan. To the extent not already
exercisable, such options generally become exercisable upon liquidation or
dissolution of the
11
<PAGE> 14
Company, a sale or other disposition of all or substantially all of the
Company's assets, or a merger or consolidation pursuant to which either (i) the
Company does not survive, or (ii) ownership of more than 49% of the voting
power of the Company's voting stock is transferred. Although no options have
yet been granted under the Company's 1997 Stock Option Plan, such options are
likely to be granted with similar vesting terms. In addition, the Compensation
Committee of the Board of Directors has the discretion to grant "limited stock
appreciation rights" with respect to such options granted under the 1987 Stock
Option Plan, pursuant to which, in the event of any tender offer or exchange
offer by a third party for more than 20% of the Company's outstanding Common
Stock, the options will automatically be canceled in return for a cash payment
to the optionee in an amount equal to the difference between the highest price
paid per share by the acquiror in such transaction and the exercise price.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Alvarez served as Chairman of the Compensation Committee from May
1995 through June 11, 1996. Mr. Alvarez is a principal shareholder of
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., a law firm which
serves as the Company's principal outside counsel and which receives customary
fees for legal services.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission, the
Company is required to provide a report explaining the rationale and
considerations that led to fundamental compensation decisions affecting the
Company's executive officers (including the Named Executive Officers) during
the past fiscal year. The report of the Company's Compensation Committee is set
forth below.
Anthony F. Bova was named President and Chief Executive Officer of the
Company in February 1995. In 1995, the Compensation Committee approved the
Company's execution of a five-year employment agreement with Mr. Bova, the
terms of which include a base salary which the Committee believed to be
consistent with industry parameters, customary benefits and annual
performance-based cash bonuses tied to incremental increases in the Company's
earnings per share. The agreement was amended with the Compensation Committee's
approval in 1996 to adjust the cash bonus formula for 1996. See "Employment
Contracts and Termination of Employment Arrangements" above. In addition, upon
execution of such employment agreement, the Compensation Committee approved
grants of stock options to Mr. Bova under the Company's stock option plans. The
per share exercise price for approximately 43% of the aggregate number of
option shares granted to Mr. Bova was set at the fair market value of the
Company's Class A Common Stock on the date of grant, the per share exercise
price for one-half of the remaining option shares was set at $3 above such fair
market value and the per share exercise price for the remaining option shares
was set at $6 above such fair market value. In February 1996, the Compensation
Committee granted to Mr. Bova options to purchase an aggregate of 25,000 shares
of Class A Common Stock at a price equal to the market price on the date of
grant. The Compensation Committee believes that this approach provides
appropriate incentives for continued stock appreciation. Based on the terms of
his employment agreement, Mr. Bova did not receive an incentive bonus for 1995
as a result of the Company's net loss for such year. In February 1996, the
Compensation Committee modified his bonus formula for 1996 as described above
to take into account the fact that the contract term requiring a "percentage"
increase in earnings to trigger a bonus could not properly be applied to
earnings following a "loss year". Pursuant to the amended agreement, Mr. Bova
received a bonus of $429,093 for 1996, based upon the Company's improved 1996
financial performance. In February 1997, the Compensation Committee approved an
amendment to increase the "target" Adjusted Earnings Per Share (as defined)
from $0.25 to $0.50 for fiscal 1997, which target must be exceeded for Mr. Bova
to receive a bonus under his Employment Agreement. See "Employment Contracts
and Termination of Employment Arrangements" above.
The Compensation Committee's general philosophy with respect to the
compensation of the Company's other executive officers has been to recommend
competitive compensation programs designed to attract and retain key executives
critical to the long-term success of the Company and to recognize an
individual's contribution and personal performance. Consistent with such
philosophy, the Compensation Committee has recommended approval of amendments
to Mr. Rudovsky's employment agreement comparable to those established for Mr.
Bova for 1996 and 1997. In addition, the Company maintains stock option plans
which are designed to attract and retain executive officers and other employees
of the Company and its subsidiaries and to reward them for delivering long-term
value to the Company. Pursuant to these plans, in 1996 the Compensation
Committee approved fair market value option grants for each of Messrs.
Rudovsky, Buchan, Geary and Piccione. The Compensation Committee believes that
the number of shares covered by such grants reflects competitive practices for
companies with similar market capitalizations as the Company.
Larry D. Horner
Charles D. Murphy, III
Chester B. Vanatta
12
<PAGE> 15
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
shareholder return on the Company's Class A Common Stock against the cumulative
total return of the Russell 2000 Index and a group consisting of the Company
and four other publicly traded plastics companies selected by the Company
(collectively, the "Peer Group") for the last five fiscal years. A list of the
companies included in the Peer Group follows the graph below.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG BISCAYNE APPAREL, INC.,
RUSSELL 2000 INDEX AND S&P GROUP INDEX
[GRAPH]
<TABLE>
<CAPTION>
=======================================================================================
12/91 12/92 12/93 12/94 12/95 12/96
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Atlantis Plastics, Inc. 100 520.00 613.33 650.98 576.68 1,112.18
- ---------------------------------------------------------------------------------------
Peer Group 100 123.57 125.25 135.72 145.18 223.90
- ---------------------------------------------------------------------------------------
Russell 2000 100 118.41 140.80 138.24 177.56 207.05
=======================================================================================
</TABLE>
Peer Group: AEP Industries, Inc., Atlantis Plastics, Inc., Bemis Co., Blessings
Corp., Spartech Corporation (Portage Industries Corp. is no longer included in
the Peer Group because it was acquired by Spartech Corporation in 1996 and is
no longer publicly traded).
* Assumes $100 invested on 12/31/91 in stock or index, and reinvestment of
dividends.
13
<PAGE> 16
DIRECTOR COMPENSATION
The Company pays each non-employee director an annual retainer of
$14,000, payable quarterly, and a $750 fee for each meeting of the Board
attended. In addition, members of the Audit Committee and the Compensation
Committee receive a fee for attendance at each committee meeting. If the
meeting is held on the same day as a meeting of the Board of Directors, the fee
is $300; if not, the fee is $600. The Company also reimburses all directors for
their expenses in connection with their activities as directors of the Company.
Each of the Company's directors is eligible to receive grants of stock
options under the Company's stock option plans, including the 1997 Stock Option
Plan. No non-employee directors were granted options in 1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers, and persons who
own more than 10 percent of the Company's Class A Common Stock, to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Class A Common Stock. Officers,
directors and greater than 10 percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were
complied with during the fiscal year ending December 31, 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management Agreement. Trivest has rendered consulting, financial and
management services to the Company, including advice and assistance with
respect to acquisitions, divestitures and refinancings, since the Company's
organization. Pursuant to its Management Agreement with the Company expiring
December 31, 1997 (the "Management Agreement"), Trivest has agreed to provide
its corporate finance, strategic planning and other management expertise to the
Company and its subsidiaries and, in connection therewith, to identify suitable
acquisition and investment opportunities in the plastics industry. Trivest has
also agreed that neither it nor any of its affiliates (other than the Company)
will invest in, acquire, manage or otherwise provide services with respect to
any entity principally engaged in the plastics industry (or any other industry
designated by the Company's Board of Directors so long as Trivest has no
management, acquisition or other commitment or interest with respect to such
designated industry), unless specifically approved by the Company's Board,
including a majority of independent directors. Mr. Powell serves as the
President and Chief Executive Officer of Trivest and Dr. George serves as the
Chairman of the Board of Directors of Trivest.
The Management Agreement provides for annual base compensation which
is adjusted annually to reflect cost of living increases, which base
compensation was $497,000 for 1996 and is currently $517,408 for 1997. Pursuant
to the Management Agreement, for each additional business operation acquired by
the Company or its subsidiaries, Trivest's annual base compensation will
generally be increased by the greater of (i) $100,000, or (ii) the sum of 5% of
the projected annual earnings of the acquired business before income taxes and
interest expense ("EBIT") for the fiscal year in which it is acquired up to
$2,000,000 of EBIT, plus 3.5% of EBIT in excess of $2,000,000.
In addition, pursuant to the Management Agreement, for each
acquisition or disposition of any business operation of the Company or its
subsidiaries introduced or negotiated by Trivest, Trivest will generally
receive a fee of up to 3% of the purchase price. However, if the Company
engages another financial adviser to provide services in connection with such
an acquisition or disposition, Trivest's fee may be reduced to an amount
(determined in good faith by the Company's Board of Directors) that reflects
Trivest's relative contribution. No transaction fees were paid to Trivest
during 1996.
Trivest Legal Department. Trivest maintains an internal legal
department which accounts for its time on an hourly basis and bills Trivest and
its affiliates, including the Company, for services rendered at prevailing
rates. In 1996, the Company paid Trivest $74,906 for services rendered by the
Trivest legal department. The Company
14
<PAGE> 17
believes that the fees charged by the Trivest legal department in 1996 were no
less favorable to the Company than fees charged by unaffiliated third parties
for similar services.
Shared Expenses. Since April 1985, the Company has shared office space
with other Miami-based entities affiliated with Trivest. The cost of such
office space, together with the compensation of certain Trivest employees and
certain other general and administrative expenses, are allocated among the
Company and these companies. The Company's share of such allocations is
generally based on an internal analysis of the relative amount of time devoted
to the affairs of the Company and other Trivest affiliates by various
individuals with office space and overhead charges attributable to such persons
being allocated on a proportionate basis. The allocations are reviewed by and
subject to the approval of the Audit Committee of the Company's Board of
Directors. During 1996, the Company paid an aggregate of approximately $299,000
of such shared office space and general and administrative expenses. Management
believes that such charges to the Company for office space and other general
and administrative services were no less favorable to the Company than that
available from unaffiliated third parties.
Repurchase of Stock by WinsLoew Furniture, Inc. In December 1996,
WinsLoew repurchased 933,504 shares of its Common Stock held by the Company.
WinsLoew is controlled by affiliates of Trivest, and Messrs. Powell and George,
directors of the Company, are directors of WinsLoew and Mr. Powell is Chairman
of the Board of WinsLoew. The repurchased shares were initially acquired by the
Company on April 10, 1991 in connection with the Company's sale of certain
furniture operations to a subsidiary of WinsLoew's predecessor. In December
1994, WinsLoew was formed by the merger of such predecessor with another
furniture company affiliated with Trivest. In connection with the merger, the
shares were converted into shares of common stock of WinsLoew. WinsLoew
repurchased these shares from the Company for a purchase price of $10 per
share. The purchase price was determined by negotiation between management of
WinsLoew and management of the Company and was approved by a majority of the
independent directors of the Company, i.e., directors who are neither employees
of the Company nor directors or officers of Trivest, Inc. The sale of the
WinsLoew shares resulted in an after-tax gain to the Company of approximately
$3 million.
Repurchases of Stock by the Company. On January 21, 1997, the Company
purchased 50,000 shares of its Class A Common Stock from J. Bradley Davis, a
former principal shareholder of the Company, at a price of $8.50 per share (the
closing price of Class A Common Stock on January 20, 1997 was $8.75 per share
as reported on the American Stock Exchange). The price was determined by
negotiation between the Company's management and Mr. Davis. In connection with
such transaction, the Company and Mr. Davis agreed to cancel Mr. Davis' option
agreement for 55,125 shares of the Company's Class B Common Stock, which was
granted to Mr. Davis in February 1988 under the Company's 1987 Stock Option
Plan with an exercise price of $3.63 per share. The option agreement was
cancelled in exchange for the Company's payment to Mr. Davis of $268,459 (which
amount represents the aggregate difference between the exercise price for the
shares subject to the option agreement and the $8.50 price paid by the Company
for Mr. Davis' shares).
In January 1997, the Company issued a mandatory conversion notice to
the holder of the 20,000 outstanding shares of the Company's Series A Preferred
Stock ("Preferred Stock"). The Preferred Stock was convertible into 210,244
shares of Class A common stock. After issuing the mandatory conversion notice,
the Company reached an agreement with the Preferred Stock holder to repurchase
all of the common shares resulting from the conversion notice for $2 million
(the original price paid for the Preferred Stock by the holder), and completed
the repurchase in late March, 1997. Prior to this conversion and repurchase,
the Company's Preferred Stock entitled the holder to an annual cumulative
dividend payable in equal semiannual installments of $72,500 on April 15 and
October 15 of each year. The Company was prohibited from paying preferred
dividends during certain periods in 1995 and 1996 because it was unable to meet
the interest coverage ratio requirement relating to its 11% Senior Notes. Since
the Company met the requirement as of September 30, 1996, during October 1996
the Company paid the April 15 and October 15, 1996 Preferred Stock dividend
payments.
15
<PAGE> 18
APPROVAL OF ATLANTIS PLASTICS, INC.
1997 STOCK OPTION PLAN
The following resolution will be considered at the Annual Meeting:
RESOLVED, that the Company's 1997 Stock Option Plan, as
adopted by the Board of Directors of the Company (subject to
shareholder approval) on February 14, 1997, in the form of Appendix A
of the proxy statement for the 1997 Annual Meeting of Shareholders, is
hereby approved.
GENERAL
The Company's Board of Directors adopted the Company's 1997 Stock
Option Plan (the "Plan") on February 14, 1997, subject to the approval of the
Company's shareholders at the 1997 Annual Meeting.
The purpose of the Plan is to provide an additional incentive to
attract and retain qualified competent persons who provide management services
and upon whose efforts and judgment the success of the Company is largely
dependent, through the encouragement of stock ownership in the Company by such
persons. In furtherance of this purpose, the Plan authorizes, among other
things, the discretionary granting of incentive or nonqualified stock options
to purchase shares of the Company's Class A Common Stock to persons selected by
the administrators of the plan from the class of all regular employees of the
Company (including directors and officers who are regular employees),
non-employee directors, and persons who provide consulting or other services to
the Company as independent contractors, which class presently consists of
approximately 1,360 persons. Approximately 50 persons currently hold options
granted under the Company's previously adopted stock option plans. The Plan
also provides for loans to participants to finance the exercise of options and
the payment of taxes in connection therewith, and the use of already owned
shares of Class A Common Stock as payment of the exercise price for options
granted under the Plan.
Upon approval of the plan by the shareholders at the Annual Meeting,
the Company will cease granting any additional stock options under the
Company's existing stock option plans. All subsequent grants of options will be
made under the new Plan or other plans or arrangements that may be implemented
by the Company in the future.
One of the reasons for submitting the Plan for shareholder approval is
to ensure that awards under the Plan will qualify as performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code (the
"Code"). That section, which became law in 1994, generally disallows a tax
deduction for certain compensation over $1 million paid, or otherwise taxable,
to persons named in the Summary Compensation Table and employed by the Company
at the end of the year for which the deduction is claimed. Qualifying
performance-based compensation is not subject to the deduction limit if certain
requirements are met, including shareholder approval in the case of the Plan.
Shareholder approval of the Plan will also satisfy any applicable requirements
of the American Stock Exchange for shareholder approval.
A summary of the Plan is set forth below. The full text of the Plan is
annexed to this Proxy Statement as Appendix A, and the following summary is
qualified in its entirety by reference to Appendix A.
SUMMARY OF PLAN
The Plan limits the total aggregate number of options that any one
person can receive under the Plan to options for 75,000 shares of Class A
Common Stock. The purpose of this limit is to help ensure that the Company's
tax deductions for compensation expense under the Plan are not limited by
Section 162(m) of the Code.
The Plan and the options granted thereunder are designed and intended
to be administered so that the grant of options under the Plan and transactions
thereunder will comply with the requirements for exemption under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Rule 16b-3 exempts certain transactions involving the grant and exercise of
stock options under the Plan by directors, executive officers and principal
shareholders of the Company from the short-swing profit recovery provisions of
Section 16 of the Exchange Act.
The Plan provides that it shall be administered by a committee
consisting of not less than two directors designated by the Board of Directors
(the "Committee"), which directors shall be "outside directors" (i.e., a
16
<PAGE> 19
member of the Board who qualifies as an "outside director" under Section 162(m)
of the Code and the regulations thereunder and as a "non-employee director"
under Rule 16b-3). However, the Plan provides that the Board of Directors may
grant options to directors who are not employees of the Company or its
subsidiaries or to other persons who are eligible to receive grants under the
Plan. The Board has designated its Compensation Committee to administer the
Plan.
Both the Board and the Committee have the power to determine the
persons to be awarded options, the number of shares subject thereto and the
exercise price and other terms thereof. In addition, both the Committee and the
Board have the power and authority to construe and interpret the Plan, and the
acts of the Committee or the Board are final, conclusive and binding upon all
interested parties.
An aggregate of 200,000 shares of Class A Common Stock (subject to
adjustment as described below) are reserved for issuance upon exercise of
options granted under the Plan. The shares acquired upon exercise of options
granted under the Plan will be authorized and issued shares of Class A Common
Stock. The Company's shareholders will not have any preemptive rights to
purchase or subscribe for any Common Stock by reason of the reservation and
issuance of Class A Common Stock under the Plan. If any option granted under
the Plan should expire or terminate for any reason other than having been
exercised in full, the unpurchased shares subject to that option will again be
available for purposes of the Plan.
OPTIONS GRANTED UNDER THE PLAN
No options have been granted under the Plan as of the date of this
Proxy Statement. However, in 1995 the Compensation Committee approved the
granting of options to Paul Rudovsky, the Executive Vice President and Chief
Financial Officer and a director of the Company, for 50,000 shares of Class A
Common Stock with an exercise price equal to $12.25 per share when the market
price first closes at or above $12.25 per share. Such options will become
cumulatively exercisable at the rate of 20% on each anniversary of the date of
grant. If the Plan is approved at the Annual Meeting, the Compensation
Committee plans to grant such option under the Plan when the market price of
Class A Common Stock reaches such level. The closing market price per share of
Class A Common Stock was $6.875 on April 14, 1997, as reported by the American
Stock Exchange.
The Company's management believes that options granted under the Plan
will be awarded primarily to those persons who possess a capacity to contribute
significantly to the successful performance of the Company. Because persons to
whom discretionary grants of options are to be made are to be determined from
time to time by the Committee or the Board in their discretion, it is
impossible at this time to indicate the precise number, name or positions of
persons who will hereafter receive such options or the number of shares for
which options will be granted.
CERTAIN TERMS AND CONDITIONS
All grants of options under the Plan must be evidenced by an Option
Agreement between the Company and the grantee. Such agreement shall contain
such terms and conditions as the Committee (or the Board) shall prescribe,
consistent with the Plan, including, without limitation, the exercise price,
term and any restrictions on the exercisability of the options granted. Such
terms often include the automatic termination of options upon certain events,
such as the death, disability or termination of employment of an optionee.
The price per share for discretionary grants may be any price
determined by the Committee (or the Board); provided, however, that in no event
shall the option price of any incentive stock option be less than the fair
market value per share of Common Stock on the date of grant. For purposes of
the Plan, and for so long as the Company's Class A Common Stock is listed on
the American Stock Exchange, the term "fair market value" means the closing
price of the Class A Common Stock as reported on the American Stock Exchange on
the business day immediately preceding the date of grant, unless the Committee
or the Board shall determine otherwise in a fair and uniform manner. The
exercise price of an option may be paid in cash, by certified or official bank
check, by money order, by delivery of already owned shares of Class A Common
Stock having a fair market value equal to the exercise price, or by a
combination of the foregoing. The Plan also authorizes the Company to make
loans to optionees to enable them to exercise their options. If the exercise
price is paid with the optionee's promissory note, the note must (i) provide
for recourse to the optionee, (ii) bear interest at a rate no less than the
prime rate of interest of the Company's principal lender, and (iii) be secured
by the shares of Class A Common Stock purchased. Cash payments will be used by
the Company for general corporate purposes. Payments made in Class A Common
Stock must be made by delivery of stock certificates in negotiable form.
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Already owned shares of Class A Common Stock may be used to pay the
exercise price of an option in a single transaction or by "pyramiding" already
owned shares in successive, simultaneous option exercises. In general,
pyramiding permits an option holder to start with as little as one share of
Class A Common Stock and exercise an entire option to the extent then
exercisable (no matter what the number of shares subject thereto). By utilizing
already owned shares of Class A Common Stock, no cash (except for fractional
share adjustments) is needed to exercise an option. Consequently, the optionee
would receive Class A Common Stock equal in value to the spread between the
fair market value of the shares subject to the option and the exercise price of
the option. In addition, the Plan allows other forms of cashless exercise
procedures approved by the Committee or the Board.
Generally, options granted under the Plan are not assignable or
transferable, other than by will or by the laws of descent and distribution or
with the prior consent of the Committee or the Board. During the lifetime of an
optionee, an option is exercisable only by the optionee. The expiration date of
an option will be determined by the Committee or the Board at the time of the
grant, but in no event will an option be exercisable after the expiration of 10
years from the date of grant. An option may be exercised at any time or from
time to time or only after a period of time or in installments, as the
Committee or the Board determines. The Committee or the Board may in its sole
discretion accelerate the date on which any option may be exercised.
Each Option Agreement shall set forth when the unexercised portion of
any option granted under the Plan shall be terminated. To prevent dilution of
the rights of a holder of an option, the Plan provides for appropriate
adjustment of the number of shares for which options may be granted, the number
of shares subject to outstanding options and the exercise price of outstanding
options, in the event of any increase or decrease in the number of issued and
outstanding shares of the Company's capital stock resulting from a stock
dividend, recapitalization or other capital adjustment of the Company. The
Committee or the Board has discretion to make appropriate antidilution
adjustments to outstanding options in the event of a merger, consolidation or
other reorganization of the Company or a sale or other disposition of
substantially all the Company's assets.
The Plan will expire on February 14, 2007, and any option outstanding
on such date will remain outstanding until it expires or is exercised. The
Committee or the Board may amend the Plan or any option at any time, provided
that such amendment may not substantially impair the rights of an optionee
under an outstanding option without the optionee's consent. Any such amendment
shall be subject to shareholder approval if necessary under any federal law or
state law or regulation (including, without limitation, Rule 16b-3 or to comply
with Section 162(m) of the Code) or under the rules of any stock exchange or
automated quotation system on which the Common Stock may be listed or traded.
FEDERAL INCOME TAX CONSEQUENCES
The Plan is not qualified under the provisions of Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), nor is it subject
to any of the provisions of the Employee Retirement Income Security Act of
1974, as amended.
Nonqualified Stock Options. An optionee granted a nonqualified stock
option under the Plan will generally recognize, at the date of exercise of such
option, ordinary income equal to the difference between the exercise price and
the fair market value of the shares purchased pursuant to the exercise of the
option. This taxable ordinary income will be subject to Federal income tax
withholding, and the Company will be entitled to a deduction for Federal income
tax purposes equal to the amount of ordinary income recognized by the optionee,
provided that such amount constitutes an ordinary and necessary business
expense to the Company and is reasonable, and either the employee includes that
amount in his income or the Company timely satisfies its reporting requirements
with respect to that amount.
If an optionee exercises a nonqualified stock option by delivering
shares of the Company's Common Stock, the optionee will not recognize gain or
loss with respect to the exchange of such shares, even if their then fair
market value is different from the optionee's tax basis. The optionee, however,
will be taxed as described above with respect to the exercise of the
nonqualified stock option as if he had paid the exercise price in cash, and the
Company likewise generally will be entitled to an equivalent tax deduction.
Provided a separate identifiable stock certificate is issued therefor, the
optionee's tax basis in that number of shares received on such exercise which
is equal to the number of shares surrendered on such exercise will be equal to
his tax basis in the shares surrendered, and his holding period for such number
of shares received will include his holding period for the shares surrendered.
The optionee's tax basis and holding period for the additional shares received
on exercise of a nonqualified stock option paid for, in whole or in part, with
shares will be the same as if the optionee had exercised the nonqualified stock
option solely for cash.
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<PAGE> 21
Incentive Stock Options. The Plan provides for the grant of stock
options that qualify as "incentive stock options" as defined in Section 422 of
the Code. Under the Code, an optionee generally is not subject to ordinary
income tax upon the grant or exercise of an incentive stock option. However, an
employee who exercises an incentive stock option by delivering shares of common
stock previously acquired pursuant to the exercise of an incentive stock option
is treated as making a "Disqualifying Disposition" (as defined below) of such
shares if the employee delivers such shares before the expiration of the
holding period applicable to such shares. The applicable holding period is the
longer of two years from the date of grant or one year from the date of
exercise. The effect of this provision is to prevent "pyramiding" the exercise
of an incentive stock option (i.e., the exercise of the incentive stock option
for one share and the use of that share to make successive exercises of the
incentive stock option until it is completely exercised) without the imposition
of current income tax.
If, subsequent to the exercise of an incentive stock option (whether
paid for in cash or in shares), the optionee holds the shares received upon
exercise for a period that exceeds (a) two years from the date such incentive
stock option was granted or, if later, (b) one year from the date of exercise
(the "Required Holding Period"), the difference (if any) between the amount
realized from the sale of such shares and their tax basis to the holder will be
taxed as long-term capital gain or loss.
In general, if, after exercising an incentive stock option, an
employee disposes of the shares so acquired before the end of the Required
Holding Period (a "Disqualifying Disposition"), such optionee would be deemed
in receipt of ordinary income in the year of the Disqualifying Disposition in
an amount equal to the excess of the fair market value of the shares at the
date the incentive stock option was exercised over the exercise price. If the
Disqualifying Disposition is a sale or exchange that would permit a loss to be
recognized under the Code (were a loss in fact to be sustained), and the sales
proceeds are less than the fair market value of the shares on the date of
exercise, the optionee's ordinary income would be limited to the gain (if any)
from the sale. If the amount realized upon disposition exceeds the fair market
value of the shares on the date of exercise, the excess would be treated as
short-term or long-term capital gain, depending on whether the holding period
for such shares exceeded one year.
The amount by which the fair market value of the shares of Common
Stock acquired pursuant to the exercise of an incentive stock option exceeds
the exercise price of such shares under such option generally will be treated
as an item of adjustment included in the optionee's alternative minimum taxable
income for purposes of the alternative minimum tax for the year in which the
option is exercised. If, however, there is a Disqualifying Disposition of the
shares in the year in which the option is exercised, there will be no item of
adjustment for purposes of the alternative minimum tax as a result of the
exercise of the option with respect to those shares. If there is a
Disqualifying Disposition in a year after the year of exercise, the income on
the Disqualifying Disposition will not be considered income for purposes of the
alternative minimum tax in that subsequent year. The optionee's tax basis for
shares acquired pursuant to the exercise of an incentive stock option will be
increased for purposes of determining his alternative minimum tax by the amount
of the item of adjustment recognized with respect to such shares in the year
the option was exercised.
Only employees of the Company or its subsidiaries qualify for the tax
treatment applicable to incentive stock options. Thus, optionees who are
non-employee advisors or consultants to the Company will be taxed solely under
the rules applicable to nonqualified stock options.
An income tax deduction is not allowed to the Company with respect to
the grant or exercise of an incentive stock option or the disposition, after
the Required Holding period, of shares acquired upon exercise. In the event of
a Disqualifying Disposition, a Federal income tax deduction will be allowed to
the Company in an amount equal to the ordinary income to be recognized by the
optionee, provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable, and either the employee
includes that amount in his income or the Company timely satisfies its
reporting requirements with respect to that amount.
Importance of Consulting Tax Adviser. The information set forth above
is a summary only and does not purport to be complete. In addition, the
information is based upon current federal income tax rules and therefore is
subject to change when those rules change. Moreover, because the tax
consequences to any optionee may depend on his or her particular situation,
each optionee should consult his or her tax adviser as to the Federal, state,
local and other tax consequences of the grant or exercise of an option or the
disposition of Common Stock acquired on exercise of an option.
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<PAGE> 22
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the votes cast by the holders of
the Class A Common Stock and Class B Common Stock, voting together as a single
class, will be required for approval of the Plan at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
COMPANY'S 1997 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountant for the year ended
December 31, 1996 was and for 1997 will be the firm of Coopers & Lybrand L.L.P.
It is expected that one or more representatives of such firm will attend the
Annual Meeting and be available to respond to any questions. These
representatives will be given an opportunity to make statements at the Annual
Meeting if they so desire.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by a proxy
to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a shareholder intending to present a proposal to be presented at
the 1998 Annual Meeting of Shareholders must deliver a proposal in writing to
the Company's principal executive offices on or before December 26, 1997.
By Order Of The Board Of Directors
/s/ PETER W. KLEIN
Peter W. Klein
Secretary
Miami, Florida
April 25, 1997
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APPENDIX A
--------------------------------
ATLANTIS PLASTICS, INC.
1997 STOCK OPTION PLAN
--------------------------------
1. Purpose. The purpose of this Plan is to advance the interests
of Atlantis Plastics, Inc., a Florida corporation (the "Company"), and its
Subsidiaries by providing an additional incentive to attract and retain
qualified and competent persons who provide services to the Company and its
Subsidiaries, and upon whose efforts and judgment the success of the Company
and its Subsidiaries is largely dependent, through the encouragement of stock
ownership in the Company by such persons.
2. Definitions. As used herein, the following terms shall have
the meaning indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the committee appointed by the
Board pursuant to Section 13(a) hereof.
(c) "Common Stock" shall mean the Company's Class A Common
Stock, par value $.10 per share.
(d) "Director" shall mean a member of the Board.
(e) "Fair Market Value" of a Share on any date of reference
shall mean the "Closing Price" (as defined below) of the Common Stock on the
business day immediately preceding such date, unless the Committee in its sole
discretion shall determine otherwise in a fair and uniform manner. For the
purpose of determining Fair Market Value, the "Closing Price" of the Common
Stock on any business day shall be (i) if the Common Stock is listed or
admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the last
reported sale price of Common Stock on such system or, if sales prices are not
reported, the mean between the closing high bid and low asked quotations for
such day of Common Stock on such system, as reported in any newspaper of
general circulation or (iii) if neither clause (i) or (ii) is applicable, the
mean between the high bid and low asked quotations for the Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and asked quotations for Common Stock
on at least five of the ten preceding days. If neither (i), (ii), or (iii)
above is applicable, then Fair Market Value shall be determined in good faith
by the Committee or the Board in a fair and uniform manner.
(f) "Incentive Stock Option" shall mean an incentive stock
option as defined in Section 422 of the Internal Revenue Code.
(g) "Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(h) "Non-Qualified Stock Option" shall mean an Option which
is not an Incentive Stock Option.
(i) "Officer" shall mean the Company's Chairman of the Board,
President, Chief Executive Officer, principal financial officer, principal
accounting officer, any vice-president of the Company in charge of a principal
business unit, division or function (such as sales, administration or finance),
any other officer who performs a policy-making function, or any other person
who performs similar policy-making functions for the Company. Officers of
Subsidiaries shall be deemed Officers of the Company if they perform such
policy-making
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functions for the Company. As used in this paragraph, the phrase "policy-making
function" does not include policy-making functions that are not significant. If
pursuant to Item 401(b) of Regulation S-K (17 C.F.R. Section 229.401(b)) the
Company identifies a person as an "executive officer," the person so identified
shall be deemed an "Officer" even though such person may not otherwise be an
"Officer" pursuant to the foregoing provisions of this paragraph.
(j) "Option" (when capitalized) shall mean any option granted
under this Plan.
(k) "Optionee" shall mean a person to whom a stock option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(l) "Outside Director" shall mean a member of the Board who
qualifies as an "outside director" under Section 162(m) of the Internal Revenue
Code and the regulations thereunder and as a "Non-Employee Director" under Rule
16b-3 promulgated under the Securities Exchange Act.
(m) "Plan" shall mean this 1997 Stock Option Plan for the
Company.
(n) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(o) "Share" shall mean a share of Common Stock.
(p) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the Company if,
at the time of the granting of the Option, each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50 percent or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
3. Shares Available for Option Grants. The Committee or the Board may
grant to Optionees from time to time Options to purchase an aggregate of up to
TWO HUNDRED THOUSAND (200,000) Shares from the Company's authorized and
unissued Shares. If any Option granted under the Plan shall terminate, expire,
or be canceled or surrendered as to any Shares, new Options may thereafter be
granted covering such Shares.
4. Incentive and Non-Qualified Options.
(a) An Option granted hereunder shall be either an Incentive
Stock Option or a Non-Qualified Stock Option as determined by the Committee or
the Board at the time of grant of such Option and shall clearly state whether
it is an Incentive Stock Option or a Non-Qualified Stock Option. All Incentive
Stock Options shall be granted within 10 years from the effective date of this
Plan. Incentive Stock Options may not be granted to any person who is not an
employee of the Company or any Subsidiary.
(b) Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent that the
aggregate fair market value (determined at the time the Option is granted) of
the Shares, with respect to which Options meeting the requirements of Section
422(b) of the Internal Revenue Code are exercisable for the first time by any
individual during any calendar year (under all plans of the Company and its
parent and subsidiary corporations as defined in Section 424 of the Internal
Revenue Code), exceeds $100,000.
5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an option agreement
that may contain any term deemed necessary or desirable by the Committee or the
Board, provided such terms are not inconsistent with this Plan or any
applicable law. Optionees shall be (i) those persons selected by the Committee
or the Board from the class of all regular employees of , or persons who
provide consulting or other services as independent contractors to, the Company
or its Subsidiaries, including Directors and Officers who are regular
employees, and (ii) Directors or Officers who are not employees of the Company
or of any Subsidiaries. Any person who files with the Committee or the Board,
in a form satisfactory to the Committee or the Board, a written waiver of
eligibility to receive any Option under this Plan shall not be eligible to
receive any Option under this Plan for the duration of such waiver.
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(b) In granting Options, the Committee or the Board shall
take into consideration the contribution the person has made to the success of
the Company or its Subsidiaries and such other factors as the Committee or the
Board shall determine. The Committee or the Board shall also have the authority
to consult with and receive recommendations from officers and other personnel
of the Company and its Subsidiaries with regard to these matters. The Committee
or the Board may from time to time in granting Options under the Plan prescribe
such other terms and conditions concerning such Options as it deems
appropriate, including, without limitation, (i) prescribing the date or dates
on which the Option becomes exercisable, (ii) providing that the Option rights
accrue or become exercisable in installments over a period of years, or upon
the attainment of stated goals or both, or (iii) relating an Option to the
continued employment of the Optionee for a specified period of time, provided
that such terms and conditions are not more favorable to an Optionee than those
expressly permitted herein.
(c) The Options granted to employees under this Plan shall be
in addition to regular salaries, pension, life insurance or other benefits
related to their employment with the Company or its Subsidiaries. Neither the
Plan nor any Option granted under the Plan shall confer upon any person any
right to employment or continuance of employment by the Company or its
Subsidiaries.
(d) Notwithstanding any other provision of this Plan, an
Incentive Stock Option shall not be granted to any person owning directly or
indirectly (through attribution under Section 424(d) of the Internal Revenue
Code) at the date of grant, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company (or of its parent
or subsidiary corporation [as defined in Section 424 of the Internal Revenue
Code] at the date of grant) unless the option price of such Option is at least
110% of the Fair Market Value of the Shares subject to such Option on the date
the Option is granted, and such Option by its terms is not exercisable after
the expiration of five years from the date such Option is granted.
(e) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, the aggregate number of
Options granted to any one Optionee may not exceed 75,000, subject to
adjustment as provided in Section 10 hereof.
6. Option Price. The option price per Share of any Option shall be any
price determined by the Committee or the Board but shall not be less than the
par value per Share; provided, however, that in no event shall the option price
per Share of any Incentive Stock Option be less than the Fair Market Value of
the Shares underlying such Option on the date such Option is granted.
7. Exercise of Options. An Option shall be deemed exercised when (i)
the Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii)
arrangements that are satisfactory to the Committee or the Board in its sole
discretion have been made for the Optionee's payment to the Company of the
amount that is necessary for the Company or Subsidiary employing the Optionee
to withhold in accordance with applicable Federal or state tax withholding
requirements. Unless further limited by the Committee or the Board in any
Option, and subject to such guidelines as the Committee or the Board may
establish, the option price of any Shares purchased shall be paid (1) in cash,
(2) by certified or official bank check, (3) by money order, (4) with Shares,
(5) by the withholding of Shares issuable upon exercise of the Option or by any
other form of cashless exercise procedure approved by the Committee or the
Board , or (6) in such other consideration as the Committee or the Board deems
appropriate, or by a combination of the above. The Committee or the Board in
its sole discretion may accept a personal check in full or partial payment of
any Shares. If the exercise price is paid in whole or in part with Shares, or
through the withholding of Shares issuable upon exercise of the Option, the
value of the Shares surrendered or withheld shall be their Fair Market Value on
the date the Option is exercised. The Company in its sole discretion may, on an
individual basis or pursuant to a general program established in connection
with this Plan, lend money to an Optionee, guarantee a loan to an Optionee, or
otherwise assist an Optionee to obtain the cash necessary to exercise all or a
portion of an Option granted hereunder or to pay any tax liability of the
Optionee attributable to such exercise. If the exercise price is paid in whole
or part with Optionee's promissory note, such note shall (i) provide for full
recourse to the maker, (ii) be collateralized by the pledge of the Shares that
the Optionee purchases upon exercise of such Option, (iii) bear interest at the
prime rate of the Company's principal lender, and (iv) contain such other terms
as the Board in its sole discretion shall reasonably require. No Optionee shall
be deemed to be a holder of any Shares subject to an Option unless and until a
stock certificate or certificates for such Shares are issued to such person(s)
under the terms of this Plan. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as expressly provided in Section 10
hereof.
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8. Exercisability of Options. Any Option shall become
exercisable in such amounts, at such intervals and upon such terms as the
Committee or the Board shall provide in such Option, except as otherwise
provided in this Section 8.
(a) The expiration date of an Option shall be determined by
the Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date on which the Option
is granted.
(b) The Committee or the Board may in its sole discretion
accelerate the date on which any Option may be exercised and may accelerate the
vesting of any Shares subject to any Option or previously acquired by the
exercise of any Option.
9. Termination of Option Period. The unexercised portion of any
Option shall automatically and without notice terminate and become null and
void at those times determined by the Committee or the Board and set forth in
the option agreement that evidences the Option.
10. Adjustment of Shares.
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under the Plan, or
available for grant to any person under the Plan, so that the same
percentage of the Company's issued and outstanding Shares shall
continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject
to any outstanding Option, so that the same percentage of the
Company's issued and outstanding Shares shall remain subject to
purchase at the same aggregate exercise price.
(b) Unless otherwise provided in any Option, the Committee or
the Board may change the terms of Options outstanding under this Plan, with
respect to the option price or the number of Shares subject to the Options, or
both, when, in the Committee's or Board's sole discretion, such adjustments
become appropriate so as to preserve but not increase benefits under the Plan.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class, either in
connection with a direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made to, the number of or exercise price
for Shares then subject to outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt
securities, or preferred or preference stock that would rank above the Shares
subject to outstanding Options; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the assets
or business of the Company; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
11. Transferability of Options and Shares.
(a) No Incentive Stock Option, and unless the prior written
consent of the Committee or the Board is obtained and the transaction does not
violate the requirements of Rule 16b-3 promulgated under the Securities
Exchange Act no Non-Qualified Stock Option, shall be subject to alienation,
assignment, pledge, charge or other transfer other than by the Optionee by will
or the laws of descent and distribution, and any attempt to
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make any such prohibited transfer shall be void. Each Option shall be
exercisable during the Optionee's lifetime only by the Optionee, or in the case
of a Non-Qualified Stock Option that has been assigned or transferred with the
prior written consent of the Committee or the Board, only by the permitted
assignee.
(b) Unless the prior written consent of the Committee or the
Board is obtained and the transaction does not violate the requirements of Rule
16b-3 promulgated under the Securities Exchange Act, no Shares acquired by an
Officer or Director pursuant to the exercise of an Option may be sold,
assigned, pledged or otherwise transferred prior to the expiration of the
six-month period following the date on which the Option was granted.
12. Issuance of Shares.
(a) Notwithstanding any other provision of this Plan, the
Company shall not be obligated to issue any Shares unless it is advised by
counsel of its selection that it may do so without violation of the applicable
Federal and State laws pertaining to the issuance of securities, and may
require any stock so issued to bear a legend, may give its transfer agent
instructions, and may take such other steps, as in its judgment are reasonably
required to prevent any such violation.
(b) As a condition to any sale or issuance of Shares upon
exercise of any Option, the Committee or the Board may require such agreements
or undertakings as the Committee or the Board may deem necessary or advisable
to facilitate compliance with any applicable law or regulation including, but
not limited to, the following:
(i) a representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that he is acquiring
the Shares to be issued to him for investment and not with a view to,
or for sale in connection with, the distribution of any such Shares;
and
(ii) a representation, warranty and/or agreement to
be bound by any legends endorsed upon the certificate(s) for such
Shares that are, in the opinion of the Committee or the Board,
necessary or appropriate to facilitate compliance with the provisions
of any securities laws deemed by the Committee or the Board to be
applicable to the issuance and transfer of such Shares.
13. Administration of the Plan.
(a) The Plan shall be administered by a committee appointed
by the Board (the "Committee") which shall be composed of two or more Directors
all of whom shall be Outside Directors. The membership of the Committee shall
be constituted so as to comply at all times with the applicable requirements of
Rule 16b-3 promulgated under the Securities Exchange Act and Section 162(m) of
the Internal Revenue Code. The Committee shall serve at the pleasure of the
Board and shall have the powers designated herein and such other powers as the
Board may from time to time confer upon it.
(b) The Board may grant Options pursuant to this Plan to
Directors who are not employees of the Company or any Subsidiary and/or other
persons to whom Options may be granted under Section 5(a) hereof.
(c) The Committee or the Board, from time to time, may adopt
rules and regulations for carrying out the purposes of the Plan. The
determinations by the Committee or the Board, and the interpretation and
construction of any provision of the Plan or any Option by the Committee or the
Board, shall be final and conclusive.
(d) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at
a meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
14. Withholding or Deduction for Taxes. If at any time specified
herein for the making of any issuance or delivery of any Option or Common Stock
to any Optionee or beneficiary, any law or regulation of any governmental
authority having jurisdiction in the premises shall require the Company to
withhold, or to make any deduction for, any taxes or take any other action in
connection with the issuance or delivery then to be made, such
A-5
<PAGE> 28
issuance or delivery shall be deferred until such withholding or deduction
shall have been provided for by the Optionee or beneficiary, or other
appropriate action shall have been taken.
15. Interpretation.
(a) As it is the intent of the Company that the Plan comply
in all respects with Rule 16b-3 promulgated under the Securities Exchange Act
("Rule 16b-3"), any ambiguities or inconsistencies in construction of the Plan
shall be interpreted to give effect to such intention, and if any provision of
the Plan is found not to be in compliance with Rule 16b-3, such provision shall
be deemed null and void to the extent required to permit the Plan to comply
with Rule 16b-3. The Committee or the Board may from time to time adopt rules
and regulations under, and amend, the Plan in furtherance of the intent of the
foregoing.
(b) The Plan shall be administered and interpreted so that
all Incentive Stock Options granted under the Plan will qualify as Incentive
Stock Options under section 422 of the Internal Revenue Code. If any provision
of the Plan should be held invalid for the granting of Incentive Stock Options
or illegal for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as if
such provision had never been included in the Plan.
(c) This Plan shall be governed by the laws of the State
of Florida.
(d) Headings contained in this Plan are for convenience
only and shall in no manner be construed as part of this Plan.
(e) Any reference to the masculine, feminine, or neuter
gender shall be a reference to such other gender as is appropriate.
16. Amendment and Discontinuation of the Plan. The Committee or
the Board may from time to time amend, suspend or terminate the Plan or any
Option; provided, however, that, any amendment to the Plan shall be subject to
the approval of the Company's shareholders if such shareholder approval is
required by any federal or state law or regulation (including, without
limitation, Rule 16b-3 or to comply with Section 162(m) of the Internal Revenue
Code) or the rules of any Stock exchange or automated quotation system on which
the Common Stock may then be listed or traded. Except to the extent provided in
Sections 9 and 10 hereof, no amendment, suspension or termination of the Plan
or any Option issued hereunder shall substantially impair the rights or
benefits of any Optionee pursuant to any Option previously granted without the
consent of the Optionee.
17. Effective Date and Termination Date. The effective date of
the Plan is February 14, 1997, the date on which the Board adopted this Plan,
and the Plan shall terminate on the tenth anniversary of such adoption.
A-6
<PAGE> 29
PROXY
ATLANTIS PLASTICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
CLASS A COMMON STOCK
The undersigned, a holder of Class A Common Stock, par value $.10 per share
("Class A Common Stock"), of ATLANTIS PLASTICS, INC., a Florida corporation (the
"Company"), hereby appoints Earl W. Powell and Phillip T. George, M.D., and each
of them, as proxies for the undersigned, each with full power of substitution,
and hereby authorizes them to represent and to vote, as designated on the
reverse, all the shares of Class A Common Stock held of record by the
undersigned at the close of business on April 14, 1997 at the Annual Meeting of
Shareholders of the Company to be held at the Grand Bay Office Plaza, 2665 South
Bayshore Drive, Suite 800, Miami, Florida, on June 3, 1997 at 9:00 a.m., local
time, and at any adjournments thereof.
(See reverse side)
<PAGE> 30
[X] PLEASE MARK YOUR
VOTES AS IN THE
EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR EACH PROPOSAL:
1. ELECTION VOTE FOR all nominees
OF listed at right
DIRECTORS accept authority to vote
withheld from the following VOTE WITHHELD
nominees (if any) From all nominees
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominees's name on the space provided below:
- ---------------------------------------------------------------
NOMINEES: Charles D. Murphy, III
Chester B. Vanatta
As Directors by holders of
the Company's Class A
Common Stock.
2. Approval of the adoption of the Company's 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Upon such other matters as may properly come before such Annual Meeting or
any adjournments thereof. In their discretion, the proxies are authorized
to vote upon such other business as may properly come before the Annual
Meeting and any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ALL OF THE PROPOSALS.
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting for the 1997 Annual Meeting and related proxy statement, and (ii) the
Company's 1996 Annual Report to Shareholders.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE
PROVIDED. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
SIGNATURE DATE
---------------------------------------------------- --------------
SIGNATURE DATE
---------------------------------------------------- --------------
IF SIGNED JOINTLY
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you now plan to attend the meeting. When signing as an
attorney, executor, administrator, trustee or guardian, please give
full title as such. When shares are held by joint tenants, both
should sign. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
