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 [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Materials Pursuant to Rule
14a-11(c) or Rule 14a-12
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:
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ATLANTIS PLASTICS, INC.
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 13, 2000
----------------------------
To our Shareholders:
The 2000 Annual Meeting of Shareholders of Atlantis Plastics, Inc. will
be held at 9:00 a.m., local time, on Tuesday, June 13, 2000 at the Grand Bay
Hotel, 2669 South Bayshore Drive, Miami, Florida 33133. At the meeting,
shareholders will vote on the following matters:
1. Election of eight directors, each for a term of one year; and
2. Any other matters that properly come before the meeting and
any postponement or adjournment thereof.
Shareholders of record as of the close of business on April 17, 2000
are entitled to notice of, and to vote at the meeting and any postponement or
adjournment 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 24, 2000
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>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ABOUT THE MEETING.................................................................................................1
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?...............................................................1
WHO IS ENTITLED TO VOTE AT THE MEETING?..................................................................1
WHAT ARE THE VOTING RIGHTS OF SHAREHOLDERS?..............................................................1
WHO MAY ATTEND THE MEETING?..............................................................................1
WHAT CONSTITUTES A QUORUM?...............................................................................1
HOW DO I VOTE?...........................................................................................2
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?.......................................................2
WHAT ARE THE BOARD'S RECOMMENDATIONS?....................................................................2
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?..............................................................2
WHAT ARE THE EFFECTS OF "BROKER NON-VOTES"?..............................................................2
WHO WILL PAY FOR THE PREPARATION OF THE PROXY?...........................................................2
STOCK OWNERSHIP...................................................................................................4
Who are the largest owners of our stock and how much do our directors and executive officers
Own?............................................................................................4
Secion 16(a) Beneficial Ownership Reporting Compliance...................................................6
ELECTION OF DIRECTORS.............................................................................................7
Directors Standing for Election..........................................................................7
How are directors compensated?...........................................................................7
How often did the board meet during 1999?................................................................7
What committees has the board established?...............................................................7
MANAGEMENT........................................................................................................9
EXECUTIVE COMPENSATION AND OTHER INFORMATION.....................................................................12
Summary Compensation Table..............................................................................12
Stock Option Grants.....................................................................................13
Stock Option Exercises and Values for Fiscal 1999.......................................................14
Report of the Compensation Committee....................................................................14
Compensation Committee Interlocks and Insider Participation.............................................15
Employment Contracts and Termination of Employment Arrangements.........................................15
PERFORMANCE GRAPH................................................................................................17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................................................................18
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS.................................................................18
1999 ANNUAL REPORT ON FORM 10-K..................................................................................19
OTHER MATTERS....................................................................................................19
SHAREHOLDERS PROPOSALS FOR THE 2001 ANNUAL MEETING...............................................................19
</TABLE>
<PAGE>
ATLANTIS PLASTICS, INC.
ANNUAL MEETING OF SHAREHOLDERS
---------------
PROXY STATEMENT
---------------
This proxy statement contains information related to our annual meeting
of shareholders to be held on Tuesday, June 13, 2000, beginning at 9:00 a.m.
local time, at the Grand Bay Hotel, 2669 South Bayshore Drive, Miami, Florida
33133. The purpose of this proxy statement is to solicit proxies from the
holders of our Class A common stock for use at the meeting. Our Class B common
stock is not registered under Section 12 of the Securities Exchange Act of 1934
and no proxies are being solicited from the holders of our Class B common stock.
The approximate date that this proxy statement, the accompanying notice of
annual meeting and the enclosed form of proxy are being sent to shareholders is
April 24, 2000. You should review this information in conjunction with our 1999
Annual Report to Shareholders which accompanies this proxy statement.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the annual meeting, shareholders will act upon the matters outlined
in the accompanying notice of meeting, including the election of directors. In
addition, our management will report on our performance during 1999 and respond
to questions from shareholders.
WHO IS ENTITLED TO VOTE AT THE MEETING?
Only shareholders of record at the close of business on the record
date, April 17, 2000, are entitled to receive notice of the annual meeting and
to vote the shares of common stock that they held on that date at the meeting,
or any postponements or adjournments of the meeting.
WHAT ARE THE VOTING RIGHTS OF SHAREHOLDERS?
We currently have outstanding two classes of common stock, Class A
common stock and Class B common stock, both of which are entitled to vote at the
meeting. Each holder of the Class A common stock is entitled to one vote per
share on all matters that are voted on at the meeting. The holders of Class A
common stock vote separately as a class to elect 25 percent of our directors.
Currently, this means the Class A common shareholders will elect two of our
directors. Each holder of the Class B common stock is entitled to 10 votes per
share on all matters voted on at the meeting except for the election of
directors, for which each Class B common shareholder is entitled to one vote per
share. The Class B common shareholders vote separately as a class to elect 75
percent of our directors. Currently, this means the Class B common shareholders
will elect six of our directors. On all matters except the election of
directors, the holders of both classes of common stock vote together as a single
class.
WHO MAY ATTEND THE MEETING?
All shareholders as of the record date, or their duly appointed
proxies, may attend the meeting. Please note that if you hold shares in "street
name" (that is, through a broker or other nominee), you will need to bring a
copy of a brokerage statement reflecting your stock ownership as of the record
date.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of each of the Class A and Class B common stock
outstanding on the record date will constitute a quorum, permitting the meeting
to conduct its business. As of the record date, 4,838,566 shares of our Class A
common stock and 2,676,947 shares of our Class B common stock were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculation of the number of shares considered to be present at the
meeting.
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If less than a majority of the outstanding shares of each class of
common stock are represented at the meeting, a majority of the shares present at
the meeting may adjourn the meeting without further notice.
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and
return it to us, it will be voted as you direct. If you are a registered
shareholder and attend the meeting, you may deliver your completed proxy card in
person. "Street name" shareholders who wish to vote at the meeting will need to
obtain a proxy form from the institution that holds their shares.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote
at any time before the proxy is exercised by filing with us either a notice of
revocation or a duly executed proxy bearing a later date. The powers of the
proxy holders will be suspended if you attend the meeting in person and so
request, although attendance at the meeting will not by itself revoke a
previously granted proxy.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of our board of directors. Each of the board's recommendations
is set forth together with the description of each item in this proxy statement.
In summary, the board recommends a vote FOR election of its nominees for
directors (see page 7).
Our board of directors does not know of any other matters that may be
brought before the meeting nor does it foresee or have reason to believe that
the proxy holders will have to vote for substitute or alternate board nominees
for directors. In the event that any other matter should properly come before
the meeting or any nominee for director is not available for election, the proxy
holders will vote as recommended by the board of directors or, if no
recommendation is given, in accordance with their best judgment.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The holders of our Class A common stock and
Class B common stock will each vote separately as a class for the election of
directors. The affirmative vote of a plurality of the votes cast at the meeting
by each class of common stock (either in person or by proxy) is required for the
election of directors by that class.
OTHER ITEMS. For each other item, the affirmative vote of a plurality
of the votes cast at the meeting by both classes of common shareholders, voting
together as a single class (either in person or by proxy), will be required for
approval. A properly executed proxy marked "ABSTAIN" with respect to any such
matter will not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention will have the
effect of a negative vote.
WHAT ARE THE EFFECTS OF "BROKER NON-VOTES"?
If you hold your shares in street name through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to some of the matters to be acted upon. Thus, if you do
not give your broker or nominee specific instructions, your shares may not be
voted on those matters. Shares represented by these "broker non-votes" will,
however, be counted in determining whether there is a quorum. As a result,
"broker non-votes" will have the effect of a negative vote on some matters.
WHO WILL PAY FOR THE PREPARATION OF THE PROXY?
We will pay the cost of preparing, assembling and mailing the proxy
statement, notice of meeting and enclosed proxy card. In addition to the use of
mail, our employees may solicit proxies personally and by telephone. Our
employees will receive no compensation for soliciting proxies other than their
regular salaries. We may request
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banks, brokers and other custodians, nominees and fiduciaries to forward copies
of the proxy material to the beneficial owners of our common stock and to
request authority for the execution of proxies and we may reimburse such persons
for their expenses incurred in connection with these activities.
Our principal executive offices are located at 1870 The Exchange, Suite
200, Atlanta, Georgia 30339, and our telephone number is (800) 497-7659. A list
of shareholders entitled to vote at the annual meeting will be available at our
offices for a period of ten days prior to the meeting and at the meeting itself
for examination by any shareholder.
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<PAGE>
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF OUR STOCK AND HOW MUCH DO OUR DIRECTORS AND
EXECUTIVE OFFICERS OWN?
The following table shows the amount of each class of common stock
beneficially owned as of April 17, 2000 by (a) each of our directors and
nominees for director, (b) each of our current executive officers named in the
Summary Compensation Table below, (c) all of our directors and current executive
officers as a group, and (d) each person known by us to own beneficially more
than five percent of our outstanding common stock. Unless otherwise indicated,
the address of each person is 2665 South Bayshore Drive, Suite 800, Miami,
Florida 33133.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
BENEFICIALLY OWNED(1)(2) BENEFICIALLY OWNED(1) COMBINED
---------------------------- --------------------------- VOTING POWER OF
NAME AND ADDRESS SHARES PERCENT(3) SHARES PERCENT(3) VOTING STOCK
---------------- ---------- -------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Michael W. Cook Asset Management,
Inc. (4)........................... 662,906 13.7 % -- -- 2.1 %
Dimensional Fund Advisors Inc. (5).... 266,420 5.5 % -- -- *
Triad Capital Fund (6)................ 221,353 4.8 % 1,333,032 49.8 % 42.9 %
Cesar L. Alvarez(7) (20).............. 10,000 * -- -- *
Anthony F. Bova(8) (22)............... 424,200 8.1 % -- -- *
John A. Geary(9) (21)................. 41,570 * -- -- *
Gary A. Crutchfield(10)(21)........... 8,400 * -- -- *
Phillip T. George, M.D.(11) (12) (22). 505,288 10.4 % 608,319 22.7 % 20.8 %
Larry D. Horner (13) (20)............. 10,000 * -- -- *
Charles D. Murphy, III (14) (20)...... 28,540 * 17,762 * *
Joseph D. Piccione (15) (21).......... 29,000 * -- -- *
Earl W. Powell (11) (16) (22)......... 518,737 10.6 % 717,834 26.8 % 24.3 %
Paul Rudovsky (17) (22)............... 182,600 3.7 % -- -- *
Chester B. Vanatta (18) (20).......... 60,807 1.3 % -- * *
All directors and executive officers
as a group (11 persons) (19)....... 2,040,495 36.5 % 2,676,947 100.0 % 89.0 %
</TABLE>
- ---------------------
* Represents less than 1% of our outstanding common stock.
(1) 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.
(2) Although each named person is deemed to be the beneficial owner of shares
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 person does not include shares of Class A common stock
issuable upon conversion of Class B common stock.
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(3) The percentage of each class is calculated based upon the total number of
shares of each class outstanding on April 17, 2000.
(4) Based on a Schedule 13G, dated February 23, 1999, filed by Michael W. Cook
Asset Management, Inc. with the Securities and Exchange Commission (the
"SEC"), which indicates that its address is 1613 Winchester Road, Suite
210, Memphis, Tennessee 38116.
(5) Based on a Schedule 13G, dated February 3, 2000, filed by Dimensional Fund
Advisors, Inc. ("Dimensional"), an investment advisor registered under the
Investment Advisors Act of 1940, with the SEC, which indicates that all
such shares are owned by advisory clients of Dimensional, that Dimensional
disclaims beneficial ownership of such shares, and that its 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, Mr.
Powell and Dr. George are limited partners of Trivest of Florida.
(7) The number of shares of Class A Common Stock indicated includes 10,000
shares issuable upon exercise of presently exercisable options granted
pursuant to the Company's 1987 Stock Option Plan (the "1987 Plan"). Mr.
Alvarez' address is c/o Greenberg Traurig, P.A., 1221 Brickell Avenue,
Miami, Florida 33131.
(8) The number of shares of Class A Common Stock indicated includes (i) 35,000
shares directly owned with his wife as tenants in common; (ii) 370,000
shares issuable upon exercise of presently exercisable options granted
under the Company's Amended and Restated 1990 Stock Option Plan (the "1990
Plan"); and (iii) 19,200 shares issuable upon exercise of shares issuable
upon exercise of presently exercisable options granted under the Company's
1997 Stock Option Plan (the "1997 Plan"). Mr. Bova's address is c/o
Atlantis Plastics, Inc., 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) 19,500 shares issuable upon exercise of
presently exercisable options granted under the 1987 Plan; (iii) 12,000
shares issuable upon exercise of presently exercisable options granted
under the 1990 Plan; and (iv) 10,000 shares issuable upon exercise of
presently exercisable options granted under the 1997 Plan. Mr. Geary's
address is 57850 Tailwind Court, Elkhart, Indiana 46517.
(10) The number of shares of Class A Common Stock indicated includes (i) 6,000
shares issuable upon exercise of presently exercisable options granted
under the 1998 Plan and (ii) 2,400 shares issuable upon exercise of
presently exercisable options granted under the 1999 Plan. Mr.
Crutchfield's address is c/o Atlantis Plastics, Inc., 1870 The Exchange,
Suite 200, Atlanta, Georgia 30339.
(11) Excludes shares indicated as beneficially owned by Triad Capital Fund. See
footnote 7 above.
(12) The number of shares of Class A Common Stock indicated includes (i) 396,416
shares directly owned; (ii) 63,934 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) 13,813
shares held of record by Trivest Plan Sponsor, Inc., a Delaware corporation
("Trivest Plan Sponsor"), owned by Dr. George and Mr. Powell; and (iv)
31,125 shares issuable upon exercise of presently exercisable options
granted pursuant to the 1990 Plan. The number of shares of Class B Common
Stock indicated includes 608,319 shares directly owned. Dr. George's
address is 2601 South Bayshore Drive, Suite 725, Miami, Florida 33133.
(13) The number of shares of Class A Common Stock indicated includes 10,000
shares issuable upon exercise of presently exercisable options granted
under the 1990 Plan. Mr. Horner's address is 100 Park Avenue, 28th Floor,
New York, New York 10017.
(14) The number of shares of Class A Common Stock indicated includes (i) 11,352
shares directly owned and (ii) 17,188 shares issuable upon exercise of
presently exercisable options granted under the 1990 Plan. The number of
shares of Class B Common Stock indicated reflects 17,762 shares directly
owned. Mr. Murphy's address is 4019 Los Arabis Drive, Lafayette, California
94549.
(15) Represents (i) 2,000 shares issuable upon exercise of presently exercisable
options granted under the 1987 Plan; (ii) 8,000 shares issuable upon
exercise of presently exercisable options granted under the 1990 Plan; and
(iii) 19,000 shares issuable upon exercise of presently exercisable options
granted under the 1997 Plan. Mr. Piccione's address is c/o Atlantis
Plastics, Inc., 1870 The Exchange, Suite 200, Atlanta, Georgia 30339.
(16) Excludes 2,690 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) 427,299 shares directly owned;
(ii) 13,813 shares held of record by Trivest Plan Sponsor; and (iii) 77,625
shares issuable upon exercise of presently exercisable options granted
under the 1990 Plan. The number of shares of Class B Common Stock indicated
reflects 717,834 shares directly owned.
(17) The number of shares of Class A Common Stock indicated includes (i) 48,000
shares directly owned; (ii) 87,000 shares issuable upon exercise of
presently exercisable options granted under the 1987 Plan; (iii) 30,000
shares issuable upon exercise of presently exercisable options granted
under the 1990 Plan; and (iv) 17,600 shares issuable upon exercise of
presently exercisable options granted under the 1997 Plan. Mr. Rudovsky's
address is c/o Atlantis Plastics, Inc., 1870 The Exchange, Suite 200,
Atlanta, Georgia 30339.
(18) The number of shares of Class A Common Stock indicated includes (i) 38,619
shares directly owned and (ii) 17,188 shares issuable upon exercise of
presently exercisable options granted under the 1990 Plan. Mr. Vanatta's
address is 5140 East Mission Hill Drive, Tucson, Arizona 85718.
(19) Includes the shares owned indirectly by Mr. Powell and Dr. George through
Triad Capital Fund.
(20) The named individual is a director of the Company.
(21) The named individual is an executive officer of the Company.
(22) The named individual is a director and executive officer of the Company.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To our knowledge, based solely on a review of the copies of filings
furnished to us and representations that no other reports were required, we
believe that all of our officers, directors and greater than 10 percent
beneficial owners complied during 1999 with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934, except that each of Mr.
Powell and Dr. George amended a report on Form 4 that had been previously filed
in a timely manner to correct a clerical error.
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ELECTION OF DIRECTORS
Our bylaws provide that the board of directors shall consist of not
fewer than two nor more than nine members. At present, the board of directors
consists of eight members: two directors elected by the holders of Class A
common stock and six directors elected by the holders of Class B common stock.
The present term of all such directors will expire at the meeting. Each of the
eight directors to be elected at the meeting will serve for a one-year term
expiring at the 2001 annual meeting of shareholders and until a successor has
been duly elected and qualified. The board of directors proposes that the
nominees described below, both of whom are currently serving as Class A
directors, be re-elected by the holders of Class A common stock for a new
one-year term and until their successors are duly elected and qualified.
DIRECTORS STANDING FOR ELECTION
The holders of our Class A common stock, voting separately as a class,
will elect two Class A directors at the meeting. The board of directors has
nominated Charles D. Murphy, III and Chester B. Vanatta, both of whom are
currently serving as Class A directors, to stand for re-election and proxies
representing our Class A common stock will be voted for them absent contrary
instructions. For additional information concerning Messrs. Murphy and Vanatta,
including a description of their business experience, please see
"Management--Directors and Executive Officers" beginning on page 9.
The holders of our Class B common stock, voting separately as a class,
will elect six Class B directors at the meeting. The board of directors has
nominated Earl W. Powell, Phillip T. George, M.D., Anthony F. Bova, Paul
Rudovsky, Cesar L. Alvarez and Larry D. Horner, all of whom are currently
serving as Class B directors, to stand for re-election.
The board of directors has no reason to believe that any nominee will
refuse to act or be unable to accept election. However, if any of the nominees
for director to be elected by the holders of Class A common stock is unable to
accept election or if any other unforeseen contingencies should arise, the board
of directors may designate a substitute nominee. In that case, the persons named
as proxies will vote for the substitute nominee designated by the board.
HOW ARE DIRECTORS COMPENSATED?
FEES. We pay each of our non-employee directors an annual fee of
$14,000, which is paid quarterly, and a $750 fee for each meeting of the board
they attend. Additionally, we pay members of our audit committee and our
compensation committee a fee for each committee meeting they attend. If the
meeting is held on the same day as a meeting of the full board, the fee is $300;
if not, the fee is $600. We also reimburse our directors for all out-of-pocket
expenses incurred in the performance of their duties as directors.
OPTIONS. All of our directors are eligible to receive grants of stock
options under one or more of our stock option plans. None of our non-employee
directors were granted stock options in 1999.
HOW OFTEN DID THE BOARD MEET DURING 1999?
The board of directors held four meetings during 1999 and also took
action by written consent. Each of our directors attended more than 75% of the
total number of meetings of the board and committees on which he served.
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
Our board of directors has established four standing committees: an
executive committee, an audit committee, a nominating committee and a
compensation committee.
EXECUTIVE COMMITTEE. The executive committee has, and may exercise, all
of the power and authority of the board of directors in the management of our
business and affairs. The executive committee also administers our 1987
Disinterested Directors Stock Option Plan. The current members of the executive
committee are Dr. George,
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who chairs the committee, and Messrs. Powell and Bova. The executive committee
held no meetings during 1999, but did take action by unanimous written consent.
AUDIT COMMITTEE. The audit committee of our board of directors reviews
and monitors our corporate financial reporting and our external audits,
including, among other things, our control functions, the results and scope of
the annual audit and other services provided by our independent auditors and our
compliance with legal requirements that have a significant impact on our
financial reports. The audit committee also consults with our management and our
independent auditors regarding the preparation of financial statements and, as
appropriate, initiates inquiries into aspects of our financial affairs. In
addition, the audit committee has the responsibility to consider and recommend
the appointment of, and to review fee arrangements with, our independent
auditors. The current members of the audit committee are Mr. Vanatta, who chairs
the committee, and Messrs. Murphy and Horner. The audit committee held two
meetings during 1999.
NOMINATING COMMITTEE. The nominating committee considers and recommends
to the board of directors a slate of nominees for election as our directors at
the annual meeting of our shareholders. The nominating committee also recommends
candidates for election by the board of directors to fill vacancies on the board
when they occur. Additionally, from time to time the nominating committee
evaluates, and makes recommendations to the board of directors regarding, the
size and compensation of the board. Although the nominating committee does not
solicit suggestions for nominees, the committee will consider nominees
recommended by our shareholders if the recommendations are accompanied by
biographical data and are sent to our company secretary. The current members of
the nominating committee are Mr. Horner, who chairs the committee, Mr. Powell
and Dr. George. The nominating committee held no meetings in 1999, but did take
action by written consent.
COMPENSATION COMMITTEE. The compensation committee is responsible for
setting and administering the policies that govern the compensation of our
executive officers. The compensation committee has the exclusive power 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 our other executive officers. The compensation committee also
administers our stock option plans. The current members of the compensation
committee are Mr. Horner, who chairs the committee, and Messrs. Murphy and
Vanatta. The compensation committee held one meeting and took action by written
consent in 1999.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table, together with the accompanying text, present
certain information, as of April 17, 2000, with respect to each of our directors
and executive officers. Each of our directors is a United States citizen. Each
of our directors is elected annually and serves until the next annual meeting of
shareholders or until a successor is duly elected and qualified. Each of our
executive officers serves until the election and qualification of his successor
or until his death, resignation or removal by our board of directors.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD WITH THE COMPANY
- ---- --- ---------------------------------
<S> <C> <C>
Earl W. Powell......................... 61 Chairman of the Board
Phillip T. George, M.D................. 60 Vice Chairman of the Board and Chairman of the Executive
Committee of the Board of Directors
Anthony F. Bova........................ 54 President, Chief Executive Officer and Director
Paul Rudovsky.......................... 55 Executive Vice President - Finance and Administration, Chief
Financial Officer and Director
John A. Geary.......................... 53 Vice President and General Manager, Profile Extrusion and
Injection Molding Divisions
Joseph J. Piccione..................... 38 Vice President and General Manager, Stretch Film Division
Gary A. Crutchfield.................... 50 Vice President and General Manager, Custom and Institutional
Film Division
Cesar L. Alvarez....................... 52 Director
Larry D. Horner........................ 66 Director
Charles D. Murphy, III................. 56 Director
Chester B. Vanatta..................... 64 Director
</TABLE>
There are no family relationships among the our executive officers or
directors.
EARL W. POWELL, one of our cofounders, has served as Chairman of our
Board of Directors since our organization. Mr. Powell also served as our Chief
Executive Officer from our organization until February 1995 and served as our
President from November 1993 to February 1995. Mr. Powell has served as Chairman
of the Board of Biscayne Apparel, Inc., a publicly traded company whose
principal subsidiaries are engaged in the apparel industry, since October 1985
and also presently serves as Chief Executive Officer of Biscayne. In February
1999, Biscayne and its principal subsidiary M & L International, Inc. filed
petitions for protection under Chapter 11 of the Bankruptcy Code with the United
States Bankruptcy Court for the Southern District of New York. Mr. Powell also
serves as Chairman of the Board, President and Chief Executive Officer of
Trivest, Inc., a private investment firm formed by Mr. Powell and Dr. George in
1981 that specializes in management services and acquisitions, dispositions and
leveraged buyouts. From 1971 until 1985, Mr. Powell was a partner with KPMG Peat
Marwick, certified public accountants, where his positions included serving as
managing partner of Peat Marwick's Miami office.
9
<PAGE>
PHILLIP T. GEORGE, M.D., one of our cofounders, has served as the Vice
Chairman of our Board of Directors since our organization and as Chairman of the
Executive Committee of the Board of Directors since February 1990. Since January
2000, Dr. George has served as the Chairman and Chief Executive Officer of
Biometics, LLC, a medical device company, as his principal occupation. From 1986
until December 1999, Dr. George served as the Vice Chairman of the Board of
Trivest. Dr. George was previously engaged in the private practice of plastic
and reconstructive surgery.
ANTHONY F. BOVA has been our President, Chief Executive Officer and a
director since 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.
PAUL 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
Chief Executive Officer 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.
JOHN A. GEARY has served as the Vice President and General Manager of
our Profile Extrusion Division since March 1995 and our Injection Molding
Division since November 1995. These divisions together constitute our Molded
Products Group. Mr. Geary joined us in October 1994 as the President of our
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.
JOSEPH J. PICCIONE joined us in January 1996 and was appointed Vice
President and General Manager of our Custom and Institutional Film Division in
August 1996. In May 1997, he was appointed Vice President and General Manager of
our 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.
GARY A. CRUTCHFIELD has served as Vice President and General Manager of
our Custom and Institutional Film Division since October 1998. From 1974 until
1998, Mr. Crutchfield was employed by Sonoco Products Company, a Fortune 500
paper and plastics packaging company, in various capacities, including serving
as the Vice President of the company's Special Products Group from 1991 until
1994, and serving as Vice President and General Manager of its Industrial
Container Division from 1994 until 1998.
CESAR L. ALVAREZ was appointed as one of our directors in May 1995. Mr.
Alvarez has been a lawyer with the law firm of Greenberg Traurig, 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.
LARRY D. HORNER was appointed as one of our directors 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, Newmark Homes Corp. and Biological &
Popular Culture, Inc.
CHARLES D. MURPHY, III, was appointed as one of our directors in
October 1987, and 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
10
<PAGE>
banking and securities brokerage firm, and served most recently as Executive
Vice President and Director of Corporate Finance for that firm.
CHESTER B. VANATTA was appointed as one of our directors in February
1987, and 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 LLP), certified public
accountants.
11
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth information concerning the compensation
paid by us for the fiscal years ended December 31, 1999, 1998 and 1997 to our
Chief Executive Officer and each of our four other most highly compensated
executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------
OTHER ANNUAL SECURITIES LTIP ALL OTHER
COMPENSATION UNDER-LYING PAYOUTS COMPENSATION($)
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS(#) (2) ($)
- ----------------------------- ---- --------- -------- ------------ -------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Anthony F. Bova 1999 331,470 163,942 -- -- -- 3,573(3)
President and Chief 1998 322,620 323,038 -- 48,000 -- 1,913(3)
Executive Officer 1997 332,339 -- -- -- -- 3,878(3)
Paul Rudovsky 1999 205,068 151,201 -- -- -- 3,573(3)
Executive Vice President 1998 198,983 148,967 -- 44,000 -- 1,913(3)
and Chief Financial Officer 1997 202,834 -- -- -- -- 3,878(3)
John A. Geary 1999 151,873 85,000 -- -- -- 3,573(3)
Vice President - Profile 1998 142,016 44,330 -- 25,000 -- 1,913(3)
Extrusion Division 1997 138,010 -- -- 20,000 -- 3,878(3)
Joseph J. Piccione 1999 190,541 100,000 19,118(4) 15,000 -- 3,573(3)
Vice President - Stretch 1998 168,077 140,000 -- 25,000 - 1,913(3)
Film Division 1997 145,608 50,000 28,677(5) 25,000 -- 3,134(3)
Gary A. Crutchfield 1999 200,000 80,000 -- 12,000 -- 1,426(3)
Vice President - Custom 1998 42,308 35,000(6) -- 30,000 -- --
and Institutional Film 1997 -- -- -- -- -- --
Division
- -------------------------
<FN>
(1) Except as otherwise provided in this table, no amounts for perquisites and other personal benefits received by
any of the named executive officers are shown because the aggregate dollar amounts were lower than the
reporting requirements established by the rules of the SEC.
(2) Shares of our Class A common stock underlie these options.
(3) Represents matching contributions by us under our 401(k) Plan.
(4) Includes (i) $12,029 for relocation and temporary living expenses and (ii) $7,089 for taxes due in connection
with certain of the payments described in the preceding clause.
(5) Includes (i) $18,672 for relocation and temporary living expenses incurred in connection with the commencement
of Mr. Piccione's employment with the Company, (ii) $8,186 to reimburse Mr. Piccione for taxes due in
connection with certain of the payments described in the preceding clause (i), and (iii) $1,819 for other
perquisites.
(6) Represents a signing bonus paid in connection with the commencement of Mr. Crutchfield's employment with the
Company.
</FN>
</TABLE>
12
<PAGE>
STOCK OPTION GRANTS
The following table sets forth information concerning the grant of
stock options in 1999 to our Chief Executive Officer and our four other highest
paid executive officers named in the Summary Compensation Table in 1999. We did
not grant any stock appreciation rights in 1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS EXERCISE OF STOCK PRICE APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------- --------- ------------ -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Joseph J. Piccione 15,000 32 % 8.8125 2/09/09 86,187 215,531
Gary A. Crutchfield 12,000 26 % 8.8125 2/09/09 68,950 172,424
- -------------------------
<FN>
(1) Represents options to purchase shares of our Class A common stock. The options become exercisable for
20% of the underlying 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 the named executive remains
employed by us or one of our subsidiaries. To the extent they are not already exercisable, the options
generally become fully exercisable if we are liquidated or dissolved, upon a sale or other disposition
of all or substantially all of our assets, or a merger or consolidation after which our existing
shareholders cease to hold more than 50% of the voting power of the resulting entity. In addition, the
compensation committee of our 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) Potential realizable value assumes that the stock price increases from the date of the grant until the
end of the option term (10 years) at the annual rate specified (5% and 10%). The 5% and 10% assumed
annual rates of appreciation are mandated by SEC rules and do not represent our estimate or projection
of the future price of our Class A common stock. We do not believe that this method accurately
illustrates the potential value of a stock option.
</FN>
</TABLE>
13
<PAGE>
STOCK OPTION EXERCISES AND VALUES FOR FISCAL 1999
The following table sets forth information, with respect to the named
executive officers, concerning options exercised in 1999 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 UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
AT DECEMBER 31, 1999 OPTIONS AT DECEMBER 31, 1999($)(1)
SHARES ----------------------------------
ACQUIRED VALUE -----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ----------- -------- ------------ --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Anthony F. Bova...... - - 304,600 118,400 $1,775,350 $807,650
Paul Rudovsky........ - - 107,800 76,200 $ 765,550 $565,950
John A. Geary........ - - 28,000 39,500 $ 200,250 $286,625
Joseph J. Piccione... - - 15,000 56,000 $ 108,875 $394,188
Gary A. Crutchfield.. - - 6,000 36,000 $ 48,000 $254,250
- -------------------------
<FN>
(1) The closing sales price per share for our Class A common stock as reported by the American Stock Exchange
on December 31, 1999 was $14.00. The option value is calculated by multiplying (a) the positive difference,
if any, between $14.00 and the option exercise price by (b) the number of shares of Class A common stock
underlying the option.
</FN>
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
THE FOLLOWING REPORT ON EXECUTIVE COMPENSATION AND THE PERFORMANCE
GRAPH INCLUDED ELSEWHERE IN THIS PROXY STATEMENT DO NOT CONSTITUTE SOLICITING
MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE IN ANY
OTHER FILING OF OURS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE
ACT OF 1934, EXCEPT TO THE EXTENT THAT WE SPECIFICALLY INCORPORATE THIS REPORT
OR THE PERFORMANCE GRAPH BY REFERENCE THEREIN.
Under rules established by the Securities and Exchange Commission, we
are required to provide a report explaining the rationale and considerations
that led to fundamental compensation decisions affecting our executive officers
(including the executive officers named in the Summary Compensation Table above)
during the past fiscal year. The report of our compensation committee is set
forth below.
Anthony F. Bova became our President and Chief Executive Officer in
February 1995. In 1995, the compensation committee approved a five-year
employment agreement with Mr. Bova, which was amended in 1999 to extend his
employment term until 2001. Our agreement with Mr. Bova provides for a base
salary (subject to annual cost of living increases) which the committee believes
to be consistent with industry parameters. The employment agreement also
provides customary benefits and annual performance-based cash bonuses for Mr.
Bova that are tied to incremental increases in our earnings per share. Prior to
fiscal 1999, the compensation committee granted to Mr. Bova options to purchase
shares of our Class A common stock at a price equal to the market price on the
date of grant. No options were granted to Mr. Bova in 1999. The compensation
committee believes that the attributes of Mr. Bova's compensation provide
appropriate performance-based incentives.
The compensation committee's general philosophy with respect to the
compensation of our other executive officers has been to recommend competitive
compensation programs designed to attract and retain key executives critical to
our long-term success and to recognize an individual's contribution and personal
performance. In addition, we maintain stock option plans which are designed to
attract and retain executive officers and other employees and to reward them for
delivering long-term value to us. Pursuant to these plans, in 1999 the
compensation committee approved fair market value option grants to certain
executive officers.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
generally disallows a federal income tax deduction to public companies for
certain compensation in excess of $1 million paid to a corporation's chief
executive officer or any of its four other most highly compensated executive
officers. Qualifying performance-
14
<PAGE>
based compensation will not be subject to the deduction limit if certain
requirements are met. We have structured our equity-based compensation plans
(i.e., obtained shareholder approval of plans) to qualify the compensation
income deemed to be received upon the exercise of stock options granted under
the plans as performance-based compensation. The Compensation Committee intends
to review the potential effects of Section 162(m) periodically and in the future
may decide to structure additional portions of our compensation programs in a
manner designed to permit unlimited deductibility for federal income tax
purposes. We are not currently subject to the limitations of Section 162(m)
because none of our executive officers received cash payments from us during
1999 in excess of $1 million.
Larry D. Horner
Charles D. Murphy, III
Chester B. Vanatta
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of our compensation committee is or has been an
officer or employee of ours or serves as member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving as a member of our board of directors or compensation committee.
Additionally, none of the members of our compensation committee had any
relationship with us in 1999 requiring disclosure under "Certain Relationships
and Related Transactions" beginning on page 18.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
We have entered into an employment agreement, effective as of February
1, 1995, with Anthony F. Bova, our President and Chief Executive Officer. We
have also entered into an employment agreement, effective as of March 6, 1995,
with Paul Rudovsky, our Executive Vice President-Finance and Administration.
These employment agreements had an initial term of five years, and both were
amended in 1999 to extend the term for an additional year. Both of the
agreements provide for annual base salaries (subject to annual cost of living
increases), customary benefits and annual performance-based cash bonuses tied to
incremental increases in our earnings per share (subject to adjustments
contained in the agreements). In addition, the agreements provide severance
payments upon termination without cause. If we terminate Mr. Bova's employment
without cause, he is entitled to a sum of $300,000, which is payable by us in
twelve equal installments beginning on the effective date of termination. If we
terminate Mr. Rudovsky without cause, he is entitled to a sum equal to his then
current base salary, which is payable by us in twelve equal monthly installments
beginning on the effective date of termination. Joseph J. Piccione, the Vice
President of our Stretch Film Division, is employed pursuant to a letter
agreement effective as of August 20, 1998, which entitles Mr. Piccione to
receive an amount equal to one year of his base salary if we terminate his
employment without cause. Gary A. Crutchfield, the Vice President of our Custom
and Institutional Film Division, is employed pursuant to a letter agreement
effective as of October 12, 1998, which entitles Mr. Crutchfield to receive an
amount equal to one year of his base salary if we terminate his employment
without cause.
In August 1999, we entered into severance agreements with Messrs. Bova,
Rudovsky, Geary, Piccione and Crutchfield, which provide for payments to these
officers if their employment is terminated after we have experienced certain
changes in control. These agreements have an initial term until December 31,
2000, and automatically renew for additional one-year terms unless we give 90
days' notice of nonrenewal. The agreement with Mr. Bova will remain in effect
for one year after a change in control, and the agreements with Messrs.
Rudovsky, Geary, Piccione and Crutchfield may be terminated six months after a
change in control. Under Mr. Bova's agreement, if, after a change in control, he
is terminated for cause or voluntarily resigns other than for a good reason (as
defined in the agreement), he is entitled to base salary up to the date of
termination, along with any benefits under any retirement plan we then have in
effect. If Mr. Bova is terminated without cause, or voluntarily resigns for a
good reason (as defined in the agreement), he is entitled to base salary through
the date of termination, any accrued bonus, a severance payment of twice his
then current annual salary, any legal fees incurred by him as a result of the
termination, and a two-year continuation of coverage under any insurance plans
in which he was participating at the date of termination. Under our agreement
with Mr. Rudovsky, if, after a change in control, he is terminated without cause
or voluntarily resigns for a good reason (as defined in the agreement) he is
entitled to base salary through the date of termination, any accrued bonus, a
severance payment equal to his then current annual salary, any legal fees
incurred by him as a result of the termination, and a one year continuation of
coverage under any insurance plans in which he was participating at the date of
termination. Our agreements with Messrs. Geary, Piccione and Crutchfield,
provide for payment of base salary through the date of termination, any accrued
bonus, a severance payment equal to the executive's then current annual salary,
any legal fees incurred by any of them as a
15
<PAGE>
result of the termination, and a six month continuation of coverage under any
insurance plans in which the executive was participating at the date of
termination.
Each of our executive officers holds options to purchase shares of our
common stock that were granted under our stock option plans. To the extent not
already exercisable, these options generally become exercisable upon our
liquidation or dissolution, a sale or other disposition of all or substantially
all of our assets, or a merger or consolidation where (i) we are not the
surviving entity, or (ii) a controlling amount of the voting power of the our
voting stock is acquired. In addition, the compensation committee of our board
of directors may grant "limited stock appreciation rights" with respect to
options granted under our 1987 Stock Option Plan. With these limited stock
appreciation rights, if a third party makes a tender offer or exchange offer for
more than 20% of our outstanding common stock, the options with respect to which
the rights were granted will automatically be canceled in return for a cash
payment to the holder of the options that is equal to the difference between the
highest price paid per share by the acquiror in the tender or exchange offer and
the exercise price of the options.
16
<PAGE>
PERFORMANCE GRAPH
The following graph compares, for the five year period ended on
December 31, 1999, the cumulative total shareholder return on our Class A common
stock against the cumulative total return of:
/bullet/ the Russell 2000 Index; and
/bullet/ a peer group consisting of us and four other publicly traded plastics
companies that we have selected.
The graph assumes $100 was invested on 12/31/94 in our Class A common
stock, the peer group and the Russell 2000 Index, and the reinvestment of all
dividends. The companies included in the peer group were AEP Industries Inc.,
Atlantis Plastics, Inc., Bemis Company, Inc., Intertape Polymer Group and
Spartech Corporation.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG ATLANTIS PLASTICS, INC., THE RUSSELL 2000 INDEX
AND A PEER GROUP INDEX
================================================================================
12/94 12/95 12/96 12/97 12/98 12/99
- --------------------------------------------------------------------------------
Atlantis Plastics, Inc. 100 88.59 170.85 91.75 134.99 236.23
- --------------------------------------------------------------------------------
Peer Group 100 119.62 187.95 202.26 189.47 195.40
- --------------------------------------------------------------------------------
Russell 2000 100 128.44 149.77 183.23 178.09 212.98
================================================================================
17
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRIVEST MANAGEMENT AGREEMENT. Since our organization, Trivest has
rendered consulting, financial and management services to us, including advice
and assistance with respect to acquisitions, pursuant to management agreements
between us and Trivest 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 our exclusive business manager and
consultant (subject to the our right to engage additional financial advisors in
connection with certain material transactions if approved by the our board of
directors). Trivest's services include advice and assistance concerning any and
all aspects of our operations, planning and financing, including identifying and
assisting with acquisitions and identifying executive personnel for us. The
management agreement also provides that neither Trivest nor any of its
affiliates (other than us) 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 our 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 our board of
directors, 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 we acquire or
commence new business operations, we and Trivest will in good faith determine
whether and to what extent the base compensation should be increased as a
result. As additional incentive compensation, we also pay Trivest an annual
payment equal to 1% of our earnings for that year before interest, taxes,
depreciation and amortization and before compensation to Trivest under the
management agreement, but only if our earnings before expenses exceed
$20,000,000. We will also pay Trivest a one-time fee, to be determined on a case
by case basis by us and Trivest in good faith, with respect to (i) any
acquisition or disposition of a business operation which is introduced or
negotiated by Trivest and (ii) certain other transactions that do not occur in
the normal course of our business involving or resulting from Trivest's efforts
on our behalf, including public or private financings.
For 1999, the total fees and related expenses we paid to Trivest under
the management agreement were approximately $1,150,000.
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 us, for services rendered at prevailing rates. In
1999, we paid Trivest approximately $79,452 for services rendered by the Trivest
legal department. We believe that the fees charged by the Trivest legal
department in 1999 were no less favorable to us than fees charged by
unaffiliated third parties for similar services.
STOCK OPTION EXERCISES. In 1999, we loaned Dr. George and Messrs.
Powell, Murphy and Vanetta, all of who are directors of ours, $115,500,
$184,800, $32,585 and $23,100, respectively, in connection with their exercise
of options to acquire 26,250, 42,000, 5,250 and 5,250 shares, respectively, of
our Class A common stock. Each loan is evidenced by a promissory note due March
16, 2002 that bears interest at a simple, per annum rate equal to Citibank's
prime rate in effect from time to time, and is collateralized by the shares of
Class A common stock.
In 1998, we loaned Dr. George and Messrs. Powell, Murphy and Vanetta
$200,103.75, $600,311.25, $78,906.06 and $100,050.06, respectively, in
connection with their exercise of options to acquire 165,375, 55,125, 17,762 and
27,562 shares of our Class B common stock, respectively. These loans were made
on the same terms and conditions as the above loans and are due February 2001.
All these loans remain outstanding except for Mr. Vanetta's, which was repaid in
full in April 1998.
MISCELLANEOUS. Mr. Alvarez, one of our directors, is a shareholder of
Greenberg Traurig, P.A., a law firm which has been engaged to perform legal
services for us in the past and which may be so engaged in the future. The fees
we paid to Greenberg Traurig for legal services in 1999 did not exceed five
percent of the law firm's revenues.
18
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP ("Ernst & Young") were our independent public
accountants for the year ended December 31, 1999 and will serve in that capacity
for the 2000 fiscal year unless the board of directors deems it advisable to
make a substitution. It is not expected that representatives of Ernst & Young
will attend the annual meeting.
The accounting firm of Coopers & Lybrand L.L.P. (now known as
PricewaterhouseCoopers LLP, "PWC") served as our independent public accountants
with respect to calendar years 1990-1997. Effective April 6, 1998, PWC was
dismissed by our board of directors (pursuant to a duly authorized telephone
conference call on April 6, 1998) based upon the recommendation of the audit
committee of our board of directors (which recommendation was made pursuant to a
duly authorized telephone conference call on April 6, 1998). During the 1997
calendar year, there were no (i) disagreements between us and PWC on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of PWC, would have caused it to make reference to the subject
matter of the disagreement in connection with its reports, or (ii) reportable
events as defined in paragraph (a) (1) (v) of Item 304 of Regulation S-K. PWC's
reports on our financial statements for the most recent calendar year did not
contain an adverse opinion or disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope, or accounting principles. Upon
recommendation by the audit committee effective April 6, 1998, our board of
directors engaged Ernst & Young as our independent public accountants for
calendar year 1998. Between January 1, 1996 and April 6, 1998, Ernst & Young was
not consulted regarding any matters set forth in paragraphs (a) (2) (i) or (ii)
of Item 304 of Regulation S-K.
1999 ANNUAL REPORT ON FORM 10-K
We have mailed, with this proxy statement, a copy of our annual report
to each shareholder of record as of April 17, 2000. If a shareholder requires an
additional copy of our annual report, we will provide one, without charge, on
the written request of any such shareholder addressed to our Secretary at
Atlantis Plastics, Inc., 2665 South Bayshore Drive, Suite 800, Miami, Florida
33133.
OTHER MATTERS
As of the date of this proxy statement, we know of no matter that will
be presented for consideration at the annual meeting other than the election of
directors. If, however, any other matter should properly come before the annual
meeting for action by shareholders, proxies in the enclosed form returned to us
will be voted in accordance with the recommendation of the board of directors
or, in the absence of such a recommendation, in accordance with the judgment of
the proxy holder.
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Shareholders interested in presenting a proposal to be considered for
inclusion in the proxy statement for presentation at the 2001 annual meeting of
shareholders may do so by following the procedures prescribed in Rule 14a-8
under the Securities Exchange Act of 1934. To be eligible for inclusion,
shareholder proposals must be received by us on or before January 26, 2001.
Shareholders interested in presenting a proposal for consideration at
the 2001 annual meeting of shareholders must submit their proposal to us, and
the proposal must be received by us on or before March 9, 2001.
By Order of the Board of Directors,
Marilyn D. Kuffner
SECRETARY
Miami, Florida
April 24, 2000
19
<PAGE>
[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 hereby, a holder of Class A Common Stock, par value
$.10 per share ("Class A Common Stock"), of ATLANTIS PLASTICS, INC., a Florida
corporation (the "Company") hereby appoints Earl W. Powell and Phillip T.
George, M.D., and each of them, as proxies for the undersigned, each with full
power of substitution, and hereby authorizes them to represent and to vote, as
designated on the reverse, all of the shares of Class A Common Stock held of
record by the undersigned at the close of business on April 17, 2000 at the 2000
Annual Meeting of Shareholders of the Company to be held at The Grand Bay Hotel,
2669 South Bayshore Drive, Miami, Florida 33133 on June 13, 2000 at 9:00 a.m.,
local time, and at any adjournment or postponement thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
<PAGE>
[X] Please mark your
votes as in this example
VOTE FOR all nominees
listed at right, except
vote withheld from the
nominees (if any) VOTE WITHHELD
indicated below. from all nominees
1. ELECTION [ ] [ ] NOMINEES: Charles B. Murphy, III
OF Chester B. Vanetta
DIRECTORS
AS DIRECTORS BY HOLDERS OF THE
COMPANY'S CLASS A COMMON STOCK.
- --------------------------------------------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual nominee(s), write
that nominee's name on the space provided below:
2. UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE SUCH ANNUAL MEETING OR
ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ALL OF THE PROPOSALS.
The undersigned hereby acknowledges receipt of (1) the Notice of Annual
Meeting and proxy statement relating to the 2000 Annual Meeting and (2) the
Company's 1999 Annual Report to Shareholders.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE
PROVIDED. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
SIGNATURE(S) DATE
------------------------------------------------ ----------------
NOTE: Please date and sign exactly as the name appears hereon. When shares
are held by joint tenants, all should sign. When signing as fiduciary
(e.g., attorney, executor, administrator, conservator, trustee or
guardian), please give title. If a corporation or partnership, please
sign in corporate or partnership name by an authorized person.
