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
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or
Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
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 No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
ATLANTIS PLASTICS, INC.
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 4, 1998
----------------------------
To the shareholders of
Atlantis Plastics, Inc.
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of
Atlantis Plastics, Inc., a Florida corporation (the "Company"), will be held at
9:00 a.m., local time, on Thursday, June 4, 1998, 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 1998 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 6, 1998
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,
Marilyn D. Kuffner
SECRETARY
Miami, Florida
April 21, 1998
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>
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 1998
Annual Meeting of Shareholders of the Company, to be held on the 4th day of
June, 1998, 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 21, 1998.
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 1998 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 1998 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>
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 6, 1998
(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 March 16,
1998, there were 4,585,187 shares of Class A Common Stock and 2,945,605 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 1998 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 1998 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 1998 Stock Option Plan.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock as of March 16, 1998 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
BENEFICIALLY OWNED(2)(3) BENEFICIALLY OWNED(2) COMBINED
---------------------------- -------------------------- VOTING POWER
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES PERCENT SHARES PERCENT OF VOTING STOCK
- ------------------------------------------ ---------------- ---------- -------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Michael W. Cook Asset Management,
Inc.(4)............................ 588,800 12.84% -- -- 1.7%
Dimensional Fund Advisors Inc.(5)..... 267,520 5.83% -- -- *
Triad Capital Fund(6)................. 221,353 4.8% 1,333,032 45.3% 39.8%
Trivest of Florida, Ltd.(6)........... 1,279 * 12,499 * *
Cesar L. Alvarez(7)................... 4,000 * -- -- *
Anthony F. Bova(8).................... 255,000 5.3% -- -- *
John A. Geary(9)...................... 13,070 * -- -- *
Phillip T. George, M.D.(10)(11)....... 379,947 8.1% 608,319 20.7% 18.9%
Larry D. Horner(12)................... 6,000 * -- -- *
Charles D. Murphy, III(13)............ 25,826 * 27,562 * *
Joseph D. Piccione(14)................ 5,000 * -- -- *
Earl W. Powell(10)(15)................ 343,063 7.2% 717,834 24.4% 22.0%
Paul Rudovsky(16)..................... 109,000 2.3% -- -- *
Chester B. Vanatta(17)................ 30,567 * 27,562 * *
All directors and executive officers
as a group (11 persons)(18)........ 1,380,588 26.4% 2,726,808 92.6% 82.7%
</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) The indicated ownership is based on a Schedule 13G, dated February 23,
1998, filed with the Securities and Exchange Commission, which indicates
that the owner's address is 1613 Winchester Road, Suite 210, Memphis,
Tennessee 38116.
(5) The indicated ownership is based on a Schedule 13G, dated February 6,
1998, filed with the Securities and Exchange Commission, which indicates
that all such shares are owned by advisory clients of Dimensional Fund
Advisors Inc., that Dimensional Fund Advisors Inc. disclaims all
beneficial ownership of such shares, and that the owner's address is 1299
Ocean Avenue, 11th Floor, Santa Monica, California 90401.
(6) 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.
(7) 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.
3
<PAGE>
(8) The number of shares of Class A Common Stock indicated includes (i)
35,000 shares directly owned; and (ii) 220,000 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.
(9) The number of shares of Class A Common Stock indicated includes (i) 70
shares directly owned; (ii) 9,000 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's 1987
Stock Option Plan; and (iii) 4,000 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's Amended
and Restated 1990 Stock Option Plan. Mr. Geary's address is 57850
Tailwind Court, Elkhart, Indiana 46517.
(10) Does not include shares indicated as beneficially owned by Triad Capital
Fund or Trivest of Florida. See footnote 6 above.
(11) The number of shares of Class A Common Stock indicated includes (i)
241,357 shares directly owned; (ii) 60,240 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) 27,100 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 608,319 shares directly owned.
(12) The number of shares of Class A Common Stock indicated includes 6,000
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.
(13) 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) 14,510 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
directly owned. Mr. Murphy's address is 4019 Los Arabis Drive, Lafayette,
California 94549.
(14) Represents 1,000 shares issuable upon exercise of presently exercisable
options granted under the Company's 1987 Stock Option Plan, and 4,000
shares issuable upon exercise of presently exercisable options granted
under the Company's Amended and Restated 1990 Stock Option Plan. Mr.
Piccione's address is 4920 S. 48th Avenue West, Tulsa, Oklahoma 74107.
(15) 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) 193,963 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) 100,104 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 717,834 shares directly owned.
(16) The number of shares of Class A Common Stock indicated includes (i)
48,000 shares directly owned; (ii) 51,000 shares issuable upon exercise
of presently exercisable options granted pursuant to the Company's 1987
Stock Option Plan; and (iii) 10,000 shares issuable upon exercise of
presently exercisable options granted pursuant to the Company's Amended
and Restated 1990 Stock Option Plan. Mr. Rudovsky's address is 1870 The
Exchange, Suite 200, Atlanta, Georgia 30339.
(17) 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) 14,510 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
directly owned. Mr. Vanatta's address is 5140 East Mission Hill Drive,
Tucson, Arizona 85718.
(18) 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.
4
<PAGE>
ELECTION OF DIRECTORS
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 1999 Annual Meeting of Shareholders, expected to be held in
June 1999, or until his successor has been duly elected and qualified.
NOMINEES
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>
MANAGEMENT
<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE POSITION(S) HELD WITH THE COMPANY
- ------------------------------------ --- ------------------------------------------------------------------------
<S> <C> <C>
Earl W. Powell...................... 59 Chairman of the Board
Phillip T. George, MD............... 58 Vice Chairman of the Board and Chairman of the Executive Committee of
the Board of Directors
Anthony F. Bova..................... 52 President, Chief Executive Officer and Director
Paul Rudovsky....................... 53 Executive Vice President - Finance & Administration, Chief Financial
Officer and Director
John A. Geary....................... 51 Vice President and General Manager, Profile Extrusion and Injection
Molding Divisions
Joseph D. Piccione.................. 36 Vice President and General Manager, Stretch Film Division
William E. Rice, III 51 Vice President and General Manager, Custom and Institutional Film
Division
Cesar L. Alvarez.................... 50 Director
Larry D. Horner..................... 64 Director
Charles D. Murphy, III.............. 54 Director
Chester B. Vanatta.................. 62 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 also presently serves as 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 National Market company engaged in the manufacture of
contract seating and 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. Dr. George's executive position with Trivest has been his
principal occupation since retiring from the private practice of plastic and
reconstructive surgery in February 1986.
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>
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. 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. In May 1997, he was appointed Vice President and General Manager of
the Stretch Film Division. 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. Rice joined the Company in July 1997 as Vice President and General
Manager of the Custom and Institutional Film Division. From 1987 until 1997, Mr.
Rice worked for AEP Industries, most recently as Executive Vice President,
Stretch Film Division. From 1975 until 1985, Mr. Rice worked for Mobil Chemical
Corporation in various sales and marketing positions in Europe and the United
States.
Mr. Alvarez was appointed as a director of the Company in May 1995. Mr.
Alvarez has been a lawyer with the law firm of Greenberg Traurig Hoffman Lipoff
Rosen & Quentel, P.A. for over twenty years, where he has served as the chairman
of its corporate, securities and banking department and currently serves as the
firm's Chief Executive Officer and Managing Shareholder. Mr. Alvarez also serves
as a director of FDP Corp., Pediatrix Medical Group, Inc., Texpack, N.V. and
Watsco, Inc.
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. 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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during 1997 and also took
action by written consent. No incumbent director attended fewer than 75 percent
of the aggregate of (i) the number of Board meetings held during 1997, and (ii)
the number of meetings held by all committees of the Board of Directors on which
such director served during 1997.
7
<PAGE>
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.
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 1997.
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 1997.
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 1997.
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 other stock option plans, including the 1998
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 1997.
8
<PAGE>
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, 1995, 1996 and 1997 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 1997 was
$100,000 or more (the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ---------- -------
LTIP
NAME AND OTHER ANNUAL PAYOUTS ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION OPTIONS(#) ($) COMPENSATION
- ------------------ ---- --------- -------- -------------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earl W. Powell 1997 $ 465,690 -- -- -- -- $ 6,720(1)
Chairman of the Board 1996 450,432 -- -- -- -- 6,300(1)
1995 436,331 -- -- -- -- 7,200(1)
Anthony F. Bova 1997 $ 332,339 -- -- -- -- $ 3,878(3)
President & Chief 1996 307,020 $ 429,093 -- 25,000 Shares -- 4,750(3)
Executive Officer 1995 263,850 -- $ 126,664(2) 350,000 Shares -- --
Paul Rudovsky 1997 $ 202,834 -- -- -- -- $ 3,878(3)
Executive Vice 1996 188,693 $ 198,648 -- 65,000 Shares -- 4,199(3)
President and Chief 1995 145,865 -- $ 92,716(4) 75,000 Shares -- --
Financial Officer
John A. Geary 1997 $ 138,010 -- -- 20,000 Shares -- $ 3,878(3)
Vice President 1996 123,327 $ 93,240 -- 15,000 Shares -- 6,354(5)
1995 104,520 22,162 -- 7,500 Shares -- 11,427(5)
Joseph D. Piccione 1997 $ 145,608 $ 50,000 $ 28,677(7) 25,000 Shares -- $ 3,134(3)
Vice President 1996 113,452 72,121(6) $ 39,518(7) 15,000 Shares -- --
</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) $18,672 in 1997 and $27,332 in 1996 for relocation and
temporary living expenses incurred in connection with the commencement of
Mr. Piccione's employment with the Company, (ii) $8,186 in 1997 and
$10,979 in 1996 to reimburse Mr. Piccione for taxes due in connection
with certain of the payments described in the preceding clause (i), and
(iii) $1,819 in 1997 and $1,207 in 1996 for other perquisites.
9
<PAGE>
STOCK OPTION GRANTS
The following table sets forth information concerning the grant of
stock options to the Named Executive Officers in 1997. The Company did not grant
any stock appreciation rights in 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM(2)
GRANTED EMPLOYEES IN BASE EXPIRATION --------------------------
NAME (#)(1) FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- ---- -------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
John A. Geary 20,000 20.8% $9.75 2/14/07 $122,634 $310,780
Joseph D. Piccione 10,000 10.4% $9.75 2/14/07 $ 61,317 $155,390
Piccione 15,000 15.6% $6.625 6/10/07 $ 62,496 $158,378
</TABLE>
- -------------------------
(1) The options become exercisable for 20% of the shares on the first
anniversary of the date of grant and for the balance in equal annual
installments over the four-year period thereafter, so long as employment
with the Company or one of its subsidiaries continues. To the extent not
already exercisable, the options generally become fully exercisable upon
liquidation or dissolution of the Company, a sale or other disposition of
all or substantially all of the Company's assets, or a merger or
consolidation pursuant to which existing shareholders cease to hold more
than 50% of the voting power of the resulting entity. In addition, the
Compensation Committee of the Board of Directors may, in its discretion,
accelerate the date on which any option may be exercised, and may
accelerate the vesting of any shares subject to any option.
(2) Based on assumed annual rates of stock price appreciation from the
closing price of the Company's Class A Common Stock on the date of grant.
These amounts represent assumed rates of appreciation only. Actual gains,
if any, on stock option exercises and Common Stock holdings are dependent
on the future performance of the Class A Common Stock and overall stock
market conditions.
10
<PAGE>
STOCK OPTION EXERCISES AND FISCAL YEAR-END VALUE TABLE
The following table sets forth information, with respect to the Named
Executive Officers, concerning options exercised in 1997 and unexercised options
held by them as of the end of such fiscal year:
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
-----------------------------------------------------------------------------------------
NUMBER OF VALUE OF
UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
SHARES AT DECEMBER 31, 1997(#) OPTIONS AT DECEMBER 31, 1997($)(1)
ACQUIRED VALUE -------------------------- ----------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE(2) UNEXERCISABLE
---- ----------- -------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Earl W. Powell....... - - 309,475(2) 15,525 $ 489,052 -
Anthony F. Bova...... - - 145,000 230,000 $ 3,438 $ 13,750
Paul Rudovsky........ - - 43,000 97,000 $ 2,063 $ 8,250
John A. Geary........ - - 6,000 36,500 $ 2,063 $ 8,250
Joseph D. Piccione... 1,000 $ 3,000 2,000 37,000 $ 875 $ 6,250
</TABLE>
- -------------------------
(1) The closing sales price for the Company's Common Stock as reported by the
American Stock Exchange on December 31, 1997 was $5.4375. Option value is
calculated by multiplying (a) the positive difference, if any, between
$5,4375 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, 1997 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
The Company's employment agreement with Mr. Powell described below
terminated on December 31, 1997 and has not been renewed. 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, was 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 was adjusted annually thereafter for cost of
living increases.
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 reflected in the
preceding Summary Compensation Table and certain customary benefits) annual
performance-based cash bonuses tied to incremental annual percentage increases
in the Company's earnings per share (as adjusted pursuant to the agreements). On
February 14, 1997, Mr. Bova's employment agreement and Mr. Rudovsky's employment
agreement were amended to modify the formula for the performance-based bonus for
fiscal 1997 only, which amendments increased the target Adjusted Earnings Per
Share (as defined) which must be exceeded for fiscal 1997 before a bonus
accrues. See "Compensation Committee Report on Executive Compensation" below.
Each of the Named Executive Officers holds options to purchase Common
Stock granted under the Company's stock option plans. To the extent not already
exercisable, such options generally become 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) a controlling amount of the
voting power of the Company's voting stock is acquired. 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
11
<PAGE>
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 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. At
various times prior to fiscal 1997, the Compensation Committee granted to Mr.
Bova options to purchase shares of Class A Common Stock at a price equal to the
market price on the date of grant. The Compensation Committee believes that
these attributes of Mr. Bova's compensation provide appropriate
performance-based incentives. In February 1997, the Compensation Committee
approved an amendment to Mr. Bova's cash bonus formula that increased the
Company's "target" Adjusted Earnings Per Share (as defined) from $0.25 to $0.50
for fiscal 1997, which target was required to be exceeded in order for Mr. Bova
to receive a bonus under his Employment Agreement for fiscal 1997. Pursuant to
the amended bonus formula, Mr. Bova did not receive a bonus for 1997. 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 recommended approval of amendments to Mr.
Rudovsky's employment agreement comparable to those established for Mr. Bova for
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 1997 the Compensation Committee approved
fair market value option grants to certain executive officers.
Larry D. Horner
Charles D. Murphy, III
Chester B. Vanatta
12
<PAGE>
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.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG ATLANTIS PLASTICS, INC., THE RUSSELL 2000 INDEX
AND A PEER GROUP INDEX
- --------------------------------------------------------------------------------
12/92 12/93 12/94 12/95 12/96 12/97
- --------------------------------------------------------------------------------
Atlantis Plastics, Inc. 100 117.95 125.19 110.90 213.88 114.86
- --------------------------------------------------------------------------------
Peer Group 100 101.63 110.31 118.57 183.28 205.47
- --------------------------------------------------------------------------------
Russell 2000 100 118.91 116.75 149.95 174.85 213.91
- --------------------------------------------------------------------------------
Peer Group: AEP Industries, Inc., Atlantis Plastics, Inc., Bemis Co.,
Blessings Corp., Spartech Corporation.
* Assumes $100 invested on 12/31/92 in stock or index, and
reinvestment of dividends.
13
<PAGE>
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 one or more of the Company's stock option plans. No non-employee
directors were granted options in 1997.
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 ended December 31, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
1998 MANAGEMENT AGREEMENT. Since the organization of the Company,
Trivest has rendered consulting, financial and management services to the
Company, including advice and assistance with respect to acquisitions, pursuant
to management agreements between the parties which have been replaced and
amended from time to time. The Management Agreement currently in effect
commenced as of January 1, 1998 and continues through December 31, 2002 unless
terminated earlier. The Management Agreement provides for Trivest to be the
exclusive manager and consultant of the Company's business (subject to the
Company's right to engage additional financial advisors in connection with
certain material transactions if approved by the Company's Board of Directors).
Trivest's services include advice and assistance concerning any and all aspects
of the operations, planning and financing of the Company as needed from time to
time, including identifying and assisting with acquisitions and identifying
executive personnel for the Company. The Management Agreement also provides that
neither Trivest 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. Trivest's base compensation is $750,000
annually, payable quarterly and subject to annual adjustments to reflect changes
in the consumer price index. If the Company acquires or commences new business
operations, the parties will in good faith determine whether and to what extent
the base compensation should be increased as a result thereof. As additional
incentive compensation, Trivest will also receive for each fiscal year during
the term of the Management Agreement, an annual payment equal to 1% of the
Company's earnings for such year before interest, taxes, depreciation and
amortization and before compensation to Trivest under the Management Agreement,
but only if such earnings before expenses exceed $20,000,000. Trivest will also
receive a one-time fee, to be determined on a case by case basis by the Company
and Trivest in good faith, with respect to (i) any acquisition or disposition of
a business operation, introduced or negotiated by Trivest and (ii) certain other
material non-ordinary course transactions involving or resulting from Trivest's
efforts on behalf of the Company, including public or private financings.
PRIOR MANAGEMENT AGREEMENT. During 1997, Trivest rendered consulting,
financial and management services to the Company under the Company's prior
Management Agreement with Trivest which expired December 31, 1997 (the "Prior
Management Agreement"), pursuant to which Trivest agreed to provide its
corporate
14
<PAGE>
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. The Prior Management
Agreement also provided that neither Trivest nor any of its affiliates (other
than the Company) would 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. The Prior Management Agreement
provided for annual base compensation adjusted annually to reflect cost of
living increases, which base compensation was $517,408 for 1997. Pursuant to the
Prior Management Agreement, for each additional business operation acquired by
the Company or its subsidiaries, Trivest's annual base compensation would
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 Prior Management Agreement, for each
acquisition or disposition of any business operation of the Company or its
subsidiaries introduced or negotiated by Trivest, Trivest would 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 such transaction fees were paid to Trivest
during 1997.
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 1997, the Company paid Trivest $69,188 for services rendered by the
Trivest legal department. The Company believes that the fees charged by the
Trivest legal department in 1997 were no less favorable to the Company than fees
charged by unaffiliated third parties for similar services.
SHARED EXPENSES; ASSIGNMENT OF LEASE AND CERTAIN RELATED ASSETS. Since
April 1985 through December 31, 1997, 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, have been allocated among the Company
and these companies. The Company's share of such allocations was 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 were reviewed by and subject to the
approval of the Audit Committee of the Company's Board of Directors. During
1997, the Company paid an aggregate of $332,104 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.
Such expense sharing arrangement was terminated as of January 1, 1998,
and in connection with such termination the Company assigned an office lease and
certain related fixed assets to Trivest II, Inc. ("Trivest II"), an affiliate of
Trivest controlled by Messrs. Powell and George. The lease that was assigned was
the Company's lease for office space occupied by Trivest in Miami, Florida,
pursuant to which the Company leased such space from the unaffiliated owner of
the building. In connection with such lease assignment (i) Trivest II assumed
approximately $170,000 of liabilities relating to such lease which were
reflected on the Company's balance sheet, (ii) the Company transferred to
Trivest II certain fixed assets located at the leased premises, including office
equipment, furniture, leasehold improvements and artwork, and (iii) the Company
agreed to continue providing to Messrs. Powell and George the use of the leased
automobiles provided by the Company for them plus related operating expenses
through the time of expiration of such leases in 1999.
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
15
<PAGE>
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.
16
<PAGE>
APPROVAL OF ATLANTIS PLASTICS, INC.
1998 STOCK OPTION PLAN
The following resolution will be considered at the Annual Meeting:
RESOLVED, that the Company's 1998 Stock Option Plan, as
adopted by the Board of Directors of the Company (subject to
shareholder approval) on February 13, 1998, in the form of Appendix A
of the proxy statement for the 1998 Annual Meeting of Shareholders, is
hereby approved.
GENERAL
The Company's Board of Directors adopted the Company's 1998 Stock
Option Plan (the "Plan") on February 13, 1998, subject to the approval of the
Company's shareholders at the 1998 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 1,350 persons. Approximately 30 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.
The Board adopted the Plan in order to provide additional capacity to
grant stock options in fiscal 1998 and future years. The only other plan that
the Company is currently using to grant options is the Company's 1997 Stock
Option Plan. As of the date of this Proxy Statement, no additional options can
be granted under the 1997 Stock Option Plan due to the limit on options under
that plan (unless currently outstanding options under that plan either expire or
terminate without being exercised). Accordingly, the 1998 Stock Option Plan was
implemented so the Company can continue to grant options in the future as deemed
appropriate under the Plan.
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
17
<PAGE>
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 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. 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 13, 2008, 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.
Such requirements for shareholder approval may be applicable to certain material
amendments, such as increases in the number of shares available for issuance
under the Plan.
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
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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.
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.
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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.
SECURITIES ACT REGISTRATION
The Company intends to register the shares of Common Stock available
for issuance under the Plan pursuant to a Registration Statement on Form S-8
filed with the SEC.
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 1998 STOCK OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountant for the year ended December
31, 1997 was Coopers & Lybrand L.L.P. and for 1998 will be the firm of Ernst &
Young LLP. It is not expected that representatives of either such firms will
attend the Annual Meeting.
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
1999 Annual Meeting of Shareholders must deliver a proposal in writing to the
Company's principal executive offices on or before December 22, 1998.
By Order Of The Board Of Directors
Marilyn D. Kuffner
SECRETARY
Miami, Florida
April 21, 1998
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APPENDIX A
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ATLANTIS PLASTICS, INC.
1998 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
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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 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. ss.
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
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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.
(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
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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.
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.
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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 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.
A-5
<PAGE>
(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 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 13, 1998, the date on which the Board adopted this Plan, and the
Plan shall terminate on the tenth anniversary of such adoption.
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FORM OF 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 below, all of the shares of Class A Common Stock held of record by
the undersigned at the close of business on April 6, 1998 at the Annual Meeting
of Shareholders of the Company to be held at the Grand Bay Hotel, 2669 South
Bayshore Drive, Miami, Florida, on June 4, 1998 at 9:00 a.m., local time, and at
any adjournments thereof.
The Board of Directors unanimously recommends a vote FOR each proposal.
1. Election of Charles D. Murphy, III and Chester B. Vanatta as Directors
by holders of the Company's Class A Common Stock.
VOTE FOR all nominees listed above, except vote withheld from the
following nominees (if any).
VOTE WITHHELD from all nominees.
2. Approval of the adoption of the Company's 1998 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 1 AND 2.
(See reverse side)
<PAGE>
(Continued from other side)
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting for the 1998 Annual Meeting and related Proxy Statement, and (ii) the
Company's 1997 Annual Report to Shareholders.
Dated: _______________________________, 1998
______________________________________
(Signature)
______________________________________
(Signature if held 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 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.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
