<PAGE> 1
As filed with the Securities and Exchange Commission on April 23, 1997
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------------------
PVC CONTAINER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-26165435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 Industrial Way West 07724
Eatontown, New Jersey (Zip Code)
(Address of Principal Executive Offices)
--------------------------------------------
EMPLOYEE 1996 INCENTIVE STOCK OPTION PLAN
(Full title of the Plan)
--------------------------------------------
Herbert S. Meeker, Esq.
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(Name and address of agent for service)
(212) 702-5700
(Telephone number, including area code, of agent for service)
Copies to: Herbert S. Meeker, Esq.
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
(212) 702-5700
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed
TITLE OF Maximum Proposed Maximum
SECURITIES Amount to be Offering Price Aggregate Offering Amount of
TO BE REGISTERED Registered(1) Per Share(2) Price(2) Registration Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares, $.01
par value per share 1,000,000 shares $4.50 $4,500,000 $1,364.00
===================================================================================================================
</TABLE>
(1) Pursuant to Rule 416, this Registration Statement also covers such
additional securities as may become issuable to prevent dilution
resulting from stock splits, stock dividends and similar events.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) and (c) on the basis of the average of the high
and low sale prices of the Registrant's Common Shares on the Nasdaq
National Market on February 28, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed by PVC Container
Corporation, a corporation formed under the laws of the State of Delaware (the
"Registrant"), with the Securities and Exchange Commission (the "Commission"),
are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for its fiscal year
ended 6/30/96 under the Securities Exchange Act of 1934 ("Exchange Act"), that
contains audited financial statements for the Registrant's latest fiscal year
for which such statement has been filed.
(b) The Registrant's Information Statement relating to a special
meeting of Shareholders held on January 16, 1997 pursuant to which the 1996
Incentive Stock Option Plan was approved and described.
(c) The description of the Registrant's shares of Common Stock $.01 par
value which is contained in the Registrant's Registration Statement filed with
the Commission on Form 8-A under Section 12 of the Exchange Act including any
amendment or report filed for the purpose of updating such description.
In addition, all documents filed subsequent to the date of this
Registration Statement by the Registrant pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of
a post-effective amendment to this Registration Statement which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant shall indemnify and advance expenses to the fullest
extent permitted by Section 145 of the General Corporation Law of Delaware
("GCL"), as amended from time to time, each person who is or was a director or
officer of the Registrant and the heirs, executors and administrators of such a
person. Any expenses (including attorneys' fees) incurred by each person who is
or was a director or officer of the Registrant, and the heirs, executors and
administrators of such a person in connection with defending any such proceeding
in advance of its final disposition shall be paid by the Registrant; provided,
however, that if the GCL requires, an advancement of expenses incurred by an
indemnitee in his capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such indemnitee, including,
without limitation, service to an employee benefit plan) shall be made only upon
delivery to the Registrant of an undertaking by or on behalf of such indemnitee,
to repay all amounts so advanced, if it shall ultimately be determined that such
indemnitee is not entitled to be indemnified for such expenses under this
Article or otherwise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
Number
4.1 1996 Incentive Stock Option Plan of PVC Container Corporation
(incorporated by reference to the Registrant's Report on Form 8-K
filed with the Commission on January 8, 1997 and approved by the
Stockholders of the Registrant on January 16, 1997 with respect to
600,000 shares of Common Stock of the Registrant.
*5.1 Opinion of Baer Marks & Upham LLP.
*23.1 Consent of Ernst & Young.
*23.2 Consent of Baer Marks & Upham LLP (contained in Exhibit 5.1).
*24.1 Powers of Attorney (included on signature page of this Registration
Statement).
- ---------------------
*Filed herewith.
-2-
<PAGE> 4
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (ii) do not apply if the
registration statement is on Form S-3 or S-8 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
-3-
<PAGE> 5
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
-4-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Eatontown, New Jersey, on the 19th day of February, 1997.
PVC Container Corporation
By: /s/ Philip L. Friedman
------------------------------
Phillip L. Friedman
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Phillip L. Friedman and John C. D'Avella
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Phillip L. Friedman Chief Executive Officer February 19, 1997
- ---------------------------- (principal executive
Phillip L. Friedman officer) and Director
/s/William Del Pizzo Vice President and Chief February 19, 1997
- ---------------------------- Financial Officer
William Del Pizzo (principal financial
officer and principal
accounting officer)
/s/John C. D'Avella Executive Vice President February 19, 1997
- ---------------------------- Secretary and Director
John C. D'Avella
/s/Raymond A. Lancaster Director February 24, 1997
- ----------------------------
Raymond A. Lancaster
/s/George R. Begley Director February 24, 1997
- ----------------------------
George R. Begley
/s/Michael Sherwin Director February 25, 1997
- ----------------------------
Michael Sherwin
/s/John F. Turben Director February 25, 1997
- ----------------------------
John F. Turben
</TABLE>
-5-
<PAGE> 7
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 1996 Incentive Stock Option Plan of PVC Container Corporation
(incorporated by reference to the Registrant's Report on Form 8-K
filed with the Commission on January 8, 1997 and approved by the
Stockholders of the Registrant on January 16, 1997 with respect to
600,000 shares of Common Stock of the Registrant.
*5.1 Opinion of Baer Marks & Upham LLP.
*23.1 Consent of Ernst & Young.
*23.2 Consent of Baer Marks & Upham LLP (contained in Exhibit 5.1).
*24.1 Powers of Attorney (included on signature page of this Registration
Statement).
- ---------------------
*Filed herewith.
<PAGE> 1
[BAER MARKS & UPHAM LLP LETTERHEAD]
5767
April 23, 1997
PVC Container Corporation
401 Industrial Way West
Eatontown, New Jersey 07724
Gentlemen:
We have acted as counsel to PVC Container Corporation, a corporation
formed under the laws of the State of Delaware (the "Registrant"), in connection
with a Registration Statement on Form S-8 (the "Registration Statement") being
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to the offering of 1,000,000 common shares (the
"Shares"), $.01 par value per Share, issuable upon the exercise of options
granted or to be granted to certain employees and others of the Registrant
pursuant to the Registrant's 1996 Incentive Stock Option Plan (the "Employee
Plan").
In connection with the foregoing, we have examined originals or copies,
satisfactory to us, of all such corporate records and of all such agreements,
certificates and other documents as we have deemed relevant and necessary as a
basis for the opinion hereinafter expressed. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity with the original documents of
all documents submitted to us as copies. As to any facts material to such
opinion, we have, to the extent that relevant facts were not independently
established by us, relied on certificates of public officials and certificates
of officers or other representatives of the Registrant.
Based upon and subject to the foregoing, we are of the opinion that,
when issued and paid for in accordance with the Employee Plan the Shares will be
validly issued, fully paid and non-assessable.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement. In giving such consent, we do not thereby
concede that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations thereunder.
Very truly yours,
/s/ Herbert S. Meeker
----------------------
Herbert S. Meeker
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-______) pertaining to the PVC Container Corporation 1996
Incentive Stock Option Plan of our report dated August 16, 1996, with respect
to the consolidated financial statements and schedules of PVC Container
Corporation included in this Annual Report (Form 10-K) for the year ended June
30, 1996 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
MetroPark, New Jersey
March 31, 1996
<PAGE> 2
April 23, 1997
Page 5
SECTION 10(a)
PROSPECTUS
PVC CONTAINER CORPORATION
This Section 10(a) Prospectus (the "Prospectus") is being furnished by
PVC Container Corporation (the "Company") to all persons ("Optionees") selected
by the Company to participate in the Company's 1996 Incentive Stock Option Plan
(the "1996 Option Plan").
The information contained herein relating to the Plan is being provided
to Optionees in accordance with Rule 428 of the General Rules and Regulations
under the Securities Act of 1933, as amended (the "Securities Act"). Such
information is qualified in its entirety by the specific provisions of the
option agreement that each Optionee has executed or will execute in connection
with the grant of options to such Optionee.
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
The date of this Prospectus is April, 29, 1997.
-5-
<PAGE> 3
April 23, 1997
Page 6
GENERAL
Subject to the approval of the Company's stockholders on January 16,
1997, the Board of Directors of the Company adopted on November 19, 1996 the
1996 Stock Option Plan (the "1996 Option Plan"). The 1996 Option Plan is
intended to help the Company to attract, retain and motivate key employees
(including officers) of the Company.
The 1996 Option Plan provides for the grant of options ("Options") to
purchase Common Stock that are intended to qualify as incentive stock options
("Incentive Options") under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") as well as options that do not so qualify ("Non-Qualified
Options").
DESCRIPTION OF THE 1996 OPTION PLAN
The following is a summary of the principal features of the 1996 Option
Plan. This summary is qualified in its entirety by reference to the specific
provisions of the plan, the full text of which is available to all persons
granted options under the 1996 Option Plan in the offices of the Corporation.
ADMINISTRATION OF THE 1996 OPTION PLAN
The 1996 Option Plan will be administered by the Board of Directors or
by a committee (the "Committee") which is appointed by the Board of Directors.
The Committee will consist of two non-employee members of the Company's Board of
Directors, neither of whom is eligible at any time for the grant of Incentive
Options under the 1996 Option Plan and each of whom is a "non-employee director"
within the meaning of Rule 16b-3 promulgated under the Exchange Act and an
"outside director" within the meaning of Treasury Regulation Section
1.162-27(e)(3). The Company's Board of Directors or the Committee is authorized
to interpret the 1996 Option Plan, adopt and amend rules and regulations
relating to the 1996 Option Plan, and determine the recipients, form, and terms
of Options granted under the 1996 Option Plan. All Options must be evidenced by
a written agreement.
SHARES AVAILABLE
Under the 1996 Option Plan, the maximum number of shares of Common
Stock that may be subject to Options may not exceed at this time an aggregate of
600,000 shares. The maximum number of shares will be adjusted in certain events,
such as a stock split, reorganization or recapitalization.
-6-
<PAGE> 4
April 23, 1997
Page 7
ELIGIBILITY
Employees (including officers and directors who are employees) of the
Company or its subsidiaries are eligible for the grant of Incentive Options
under the 1996 Option Plan. Directors who are not employees or officers are not
eligible to participate. In the event of Incentive Options, the aggregate fair
market value (determined at the time the Option is granted) of the Common Stock
with respect to which Incentive Options become exercisable for the first time by
the Option holder (i.e., vest) during any calendar year cannot exceed $100,000.
This limit does not apply to Non-Qualified Options. To the extent an Option that
otherwise would be an Incentive Option exceeds this $100,000 threshold, it will
be treated as a Non-Qualified Option.
EXERCISE PRICE OF OPTIONS
The Company will receive no monetary consideration for the grant of
Options under the 1996 Option Plan. In case of an Incentive Option, the exercise
price cannot be less than the fair market value (as defined in the 1996 Option
Plan) of the shares on the date the Option is granted, and if an optionee is a
shareholder who beneficially owns 10% or more of the outstanding Common Stock,
the exercise price of Incentive Options cannot be less than 110% of such fair
market value. The exercise price of Non-Qualified Options shall be determined by
the Company's Board of Directors or the Committee. The exercise price of Options
will be adjusted in certain events, such as a stock split, reorganization or
recapitalization.
PAYMENT UPON EXERCISE OF OPTIONS
Payment for shares purchased by exercising an Option is to be made by
cash or check, or by any other means which the Board of Directors determines are
consistent with the purposes of the 1996 Option Plan and with applicable laws
and regulations.
TERM OF OPTIONS
The term of an Option cannot exceed ten years, and in the case of an
optionee who owns 10% or more of the outstanding Common Stock, cannot exceed
five years.
TERMINATION OF EMPLOYMENT
Individual option agreements generally will provide that the Options
will expire upon termination of employment except that (i) in the case of
termination that is not for cause or otherwise attributable to a breach by the
optionee of an
-7-
<PAGE> 5
April 23, 1997
Page 8
employment or confidentiality or non-disclosure agreement, the Option will be
exercisable for three months after termination to the same extent that it was
exercisable prior to termination, (ii) in the case of termination due to
disability, the Option will be exercisable for one year after termination (or
within such lesser period as may be specified in the applicable option
agreement) to the same extent that it was exercisable prior to termination and
(iii) in the case of death while in the employ of the Company or, within the
three month period referred to in (i), the Option will be exercisable for one
year after death (or within such lesser period as may be specified in the
applicable option agreement). After the death of an optionee, the Option is
exercisable by the legal representative of the optionee or by the person that
acquired the Option by reason of the death of the Optionee.
NON-TRANSFERABILITY OF OPTIONS
Options are not transferable by the optionee except by will or by the
laws of descent and distribution. The disposition of shares acquired pursuant to
the exercise of an Option will be subject to any applicable restrictions on
transferability imposed by the Commission's regulations.
EFFECTIVE DATE
The 1996 Option Plan became effective when adopted by the Board of
Directors, but no Incentive Option granted under the plan shall become
exercisable unless and until the plan shall have been approved by the Company's
shareholders which occurred on January 16, 1997.
DURATION OF THE 1996 OPTION PLAN
The 1996 Option Plan will terminate automatically and no Options may be
granted after ten years have elapsed from the date the 1996 Option Plan was
approved by the Company's Board of Directors. The 1996 Option Plan may be
terminated at any prior time by the Board of Directors. Termination of the 1996
Option Plan will not affect Options that were granted prior to the termination
date.
AMENDMENTS OR MODIFICATIONS
The 1996 Option Plan may be amended or modified from time to time by
the Company's Board of Directors. However, if at any time the approval of the
shareholders of the Company is required under Section 422 of the Code or Rule
16b-3, the Board of Directors may not effect such modification or amendment
without such approval.
-8-
<PAGE> 6
April 23, 1997
Page 9
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary outlines certain federal income tax consequences
of the 1996 Option Plan to the Company and participants under present law.
INCENTIVE OPTIONS
A participant will not recognize income for federal income tax purposes
upon the grant of an Incentive Option. A participant also will not be taxed on
the exercise of an Incentive Option, provided that the Common Stock acquired
upon exercise of the Incentive Option is not sold by the participant within two
years after the Option was granted and one year after the Option is exercised
(the "required holding period").
However, for alternative minimum tax ("AMT") purposes, the difference
between the exercise price of the Incentive Option and the fair market value of
the Common Stock acquired upon exercise is an item of tax preference in the year
the Incentive Option is exercised. The participant is required to include such
amount in AMT income in such year and to compute the tax basis of the shares so
acquired in the same manner as if a Non-Qualified Option had been exercised,
including the availability of a Section 83 election (discussed below). Whether a
participant will be liable for AMT in the year the Incentive Option is exercised
will depend on the participant's particular tax circumstances. AMT paid in such
year will be allowed as a credit to the extent regular tax exceeds AMT in
subsequent years.
On a sale, after the required holding period, of Common Stock that was
acquired by exercising an Incentive Option, the difference between the
participant's tax basis in the Common Stock and the amount received in the sale
is taxed as long-term capital gain or loss.
If Common Stock acquired upon the exercise of an Incentive Option is
disposed of by the participant during the required holding period (a
"disqualifying disposition"), the excess, if any, of (i) the amount realized on
such disposition (up to the fair market value of the Common Stock on the
exercise date) over (ii) the exercise price, will be taxed to the participant as
ordinary income. If a participant pays the exercise price of an Incentive Option
by delivering Common Stock that was previously acquired by exercising an
Incentive Option and such delivery occurs before the end of the required holding
period of such Common Stock, the participant is treated as making a disqualified
disposition of the Common Stock so delivered.
The Code puts a $100,000 limit on the value of stock subject to
Incentive Options that first become exercisable in any one year, based on the
fair market value of the underlying Common Stock on the date of grant. To the
extent Options exceed this limit, they are taxed as Non-Qualified Options.
-9-
<PAGE> 7
April 23, 1997
Page 10
NON-QUALIFIED OPTIONS
A participant who receives a Non-Qualified Option does not recognize
taxable income on the grant of the Option. Upon exercise of a Non-Qualified
Option, a participant generally has ordinary income in an amount equal to the
excess of the fair market value of the shares at the time of exercise over the
exercise price paid for the shares.
However, if the participant (i) is an officer or director of the
Company or the beneficial owner of more than 10% of the Company's equity
securities (in each case, within the meaning of Section 16 of the Exchange Act
- -- as so defined, an "Insider"), (ii) does not make a Section 83 election and
(iii) receives shares upon the exercise of a Non-Qualified Option, the
recognition of income (and the determination of the amount of income) is
deferred until the earlier of (a) six months after the shares are acquired or
(b) the earliest date on which the Insider could sell the shares at a profit
without being subject to liability under Section 16(b) of the Exchange Act (six
months after the Non-Qualified Option is granted, in the case of an
"in-the-money" Option). If the participant makes a Section 83 election, income
is not deferred. Rather, income is recognized on the date of exercise of the
Non-Qualified Option in an amount equal to the excess of the fair market value
of the shares acquired upon exercise over the exercise price. A Section 83
election must be filed with the Internal Revenue Service within thirty (30) days
after an Option is exercised.
A participant's tax basis in shares received upon exercise of a
Non-Qualified Option is equal to the amount of ordinary income recognized on the
receipt of the shares plus the amount of cash, if any, paid upon exercise. The
holding period for the shares begins on the day after the shares are received
or, in the case of an Insider that has not made a Section 83 election, on the
day after the date on which income is recognized by the Insider on account of
the receipt of the shares.
If a participant exercises a Non-Qualified Option by delivering
previously held shares in payment of the exercise price, the participant does
not recognize gain or loss on the delivered shares, even if their fair market
value is different from the participant's tax basis in the shares. The exercise
of the Non-Qualified Option is taxed however, and the Company generally is
entitled to a deduction, in the same amount and at the same time as if the
participant had paid the exercise price in cash. Provided the participant
receives a separate identifiable stock certificate therefor, his tax basis in
the number of shares received that is equal to the number of shares surrendered
on exercise will be the same as his tax basis in the shares surrendered. His
holding period for such number of shares will include his holding period for the
shares surrendered. The participant's tax basis and holding period for the
additional shares received upon exercise will be the same as it would if the
participant had paid the exercise price in cash.
If a participant receives shares upon the exercise of a Non-Qualified
Option and thereafter disposes of the shares in a taxable transaction, the
difference between
-10-
<PAGE> 8
April 23, 1997
Page 11
the amount realized on the disposition and the participant's tax basis in the
shares is taxed as capital gain or loss (provided the shares are held as a
capital asset on the date of disposition), which is long-term or short-term
depending on the participant's holding period for the shares.
DEDUCTION BY THE COMPANY
The Company is not allowed a federal income tax deduction on the grant
or exercise of an Incentive Option or the disposition, after the required
holding period, of shares acquired by exercising an Incentive Option. On a
disqualifying disposition of such shares, the Company is allowed a federal
income tax deduction in an amount equal to the ordinary income recognized by the
participant as a result of the disqualifying disposition, provided that such
amount constitutes an ordinary and necessary business expense of the Company, is
reasonable in amount and is not disallowed by Section 162(m) of the Code
(discussed above).
The ordinary income recognized by an employee of the Company on account
of the exercise of a Non-Qualified Option is subject to both wage withholding
and employment taxes. A deduction for federal income tax purposes is allowed to
the Company in an amount equal to the amount of ordinary income taxable to the
participant, provided that such amount constitutes an ordinary and necessary
business expense of the Company, that such amount is reasonable, and that the
Company satisfies any tax reporting obligation that it has with respect to such
income.
AVAILABLE INFORMATION
The Company is subject to certain of the informational requirements of
the Securities and Exchange Act (the "Exchange Act"), and in accordance
therewith files certain reports and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: 500 West Madison Street, Suite 1400, Chicago, IL 60661 and 7 World
Trade Center, 13th Floor, New York, NY 10048. Copies of such material can also
be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
-11-
<PAGE> 9
April 23, 1997
Page 12
(a) The Company's Annual Report on Form 10-K for its fiscal year ended
6/30/96 under the Securities Exchange Act of 1934 ("Exchange Act"), that
contains audited financial statements for the Company's latest fiscal year for
which such statements have been filed.
(b) The Company's Quarterly Report on Form 10-Q for the period ended
September 30, 1996.
(c) The Company's Quarterly Report on Form 10-Q for the period ended
December 31, 1996.
(d) The description of the Company's Common Shares, no par value per
share, which is contained in the Company's Registration Statement on Form 8-A
filed under Section 12 of the Securities Exchange Act of 1934, as amended,
including any amendment or report filed for the purpose of updating such
description.
In addition, all other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing by the Company of a post-effective amendment to the Company's
Registration Statement (of which this Prospectus forms a part) which indicates
that all securities under the 1996 Option Plan and each Option Agreement have
been sold or which deregisters all securities under such plans and agreements
remaining unsold, are also deemed to be incorporated by reference herein.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such documents), as well as any other documents (including all documents sent to
the Company's stockholders generally) required to be delivered to such persons
pursuant to Rule 428(b) promulgated under the Exchange Act. Requests for any
such documents should be directed to William Del Pizzo, Vice President and Chief
Financial Officer, of PVC Container Corporation.
-12-
