<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
PVC CONTAINER CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
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(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
PVC CONTAINER CORPORATION
401 INDUSTRIAL WAY WEST
EATONTOWN, NEW JERSEY 07724
(732) 542-0060
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of the stockholders of PVC Container
Corporation (the "Company"), a Delaware corporation, will be held at the
Company's new facility known as Novapak Corporation located at 370 Stevers
Crossing Road, Philmont, New York 12565, Tel. (518) 672-7721, Fax (518) 672-7351
at 10:00 o'clock in the forenoon E.S.T. to act upon the following:
1. To elect a Board of Directors to serve until the next
Annual Meeting and until their respective successors shall be elected and
qualify;
2. To approve the selection of independent auditors for the
Company for its fiscal year ending June 30, 1999; and
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record as of the close of business on
October 2, 1998 will be entitled to vote at the meeting.
By Order of the Board of
Directors
Herbert S. Meeker
Secretary
Eatontown, New Jersey
October 16, 1998
<PAGE> 3
PVC CONTAINER CORPORATION
INFORMATION STATEMENT
This Information Statement is being furnished to you in
connection with the annual meeting of stockholders of PVC Container Corporation
(the "Company") to be held on November 5, 1998 at 10:00 o'clock in the forenoon
E.S.T. at the Company's new facility known as Novapak Corporation located at 370
Stevers Crossing Road, Philmont, New York 12565, Tel. (518) 672-7721, Fax (518)
672-7351 at 10:00 o'clock in the forenoon E.S.T. to act upon the following:
WE ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY
The address of the principal executive offices of the Company
is 401 Industrial Way West, Eatontown, New Jersey 07724. The approximate date
this Information Statement is first being sent to stockholders is October 16,
1998.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The Common Stock is the only authorized voting security of the
Company. The record date for determining holders of Common Stock entitled to
vote is October 2, 1998. On that date, 7,004,705 shares of Common Stock were
outstanding, each of which is entitled to one vote. The Common Stock does not
have cumulative voting rights.
The following table sets forth, as of October 2, 1998 the
beneficial ownership of Common Stock of (i) any person who is known by the
Company to own more than 5% of the voting securities of the Company, (ii) the
Chief Executive Officer and each of the Company's other four most highly
compensated executive officers whose salary and bonus exceed $100,000 for the
fiscal year ended June 30, 1998 (collectively, the "Named Executive Officers"),
(iii) each director, and (iv) all directors and executive officers of the
Company as a group. Except as otherwise indicated, the Company believes, based
on information furnished by such owners, that the beneficial owners of the
Company's common stock listed below have sole investment voting power with
respect to such shares, subject to any applicable community property laws:
<PAGE> 4
<TABLE>
<CAPTION>
Amount of Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
- - ------------------------ -------------------- --------
<S> <C> <C>
Kirtland Capital Partners II L.P. ("KCPII") 4,110,679 59(1)(5)(8)
Kirtland Capital Company II ("KCC II") 356,736 5(1)(5)(8)
Phillip L. Friedman(10) 556,666 8(2)
William A. Del Pizzo(10) 28,000 *(3)
Joel F. Roberts(10) 25,875 *(4)
Raymond A. Lancaster(11) *(5) *(5)
Michael A. Sherwin(11) 31,000 *(6)
George R. Begley(11) *(7) *(7)
John F. Turben(11) 10,000*(8) *(8)
Luis Hernandez, Jr., Jacquelyn Hernandez and 355,059 5.07%
Luis Hernandez Sr.(12)
Lionheart Group Inc. (13) 448,000 6.4%
All directors and executive officers as a group 772,541(9) 11%(9)
(7 in number)
</TABLE>
* Less than 1%
(1) KCP II located at 2550 SOM Center Road Suite 105, Willoughby Hills,
Ohio,44094 acquired on December 12, 1996 an aggregate of 4,110,679
shares of common stock of the Company's and KCCII acquired on December
12, 1996 and January 3, 1997 an aggregate of 356,736 shares of common
stock of the Company which are owned directly and beneficially by
KCPII and KCCII, respectively, in the aggregate amount of 4,467,415
constituting 64% of the presently issued and outstanding shares of
common stock of the Company.
(2) Includes an aggregate of 160,000 shares which may be acquired upon
exercise of such options granted by the Company under the 1996
Incentive Stock Option Plan of the Company ("Option Plan").
(3) Includes an aggregate of 15,000 options which may be acquired upon
exercise of such options granted by the Company under the Option Plan.
(4) Includes an aggregate of 20,000 options which may be acquired upon
exercise of such options under the Option Plan.
(5) Mr. Lancaster is the Executive Vice President of KCC, an Ohio
corporation, which as the general partner controls KCP II and has sole
voting and investment power over all of the common stock held by KCP
II. KCC is also the general partner of Evergreen Partners II
-2-
<PAGE> 5
L.P., an Ohio limited partnership ("Evergreen") which is the managing
member of KCCII. KCC has sole voting and investment power over all of
the common stock held by KCC II. KCP II acquired on December 12, 1996
an aggregate of 4,110,679 shares of common stock of the Company and
KCC II acquired on December 12, 1996 and January 3, 1997 an aggregate
of 356,736 shares of common stock of the Company which are owned
directly and beneficially by KCPII and KCCII, respectively, in the
aggregate amount of 4,467,415 constituting 64% of the presently issued
and outstanding shares of common stock of the Company. Mr. Lancaster
disclaims beneficial ownership of the above described securities.
Mr. Lancaster has been granted 10,000 options under the Option Plan.
(6) Mr. Sherwin has a 10% interest in Midwest Forge Corporation which has
a .0143% direct interest as a limited partner in KCPII which owns an
aggregate of 110,679 shares of the common stock of the Company
constituting a 64% interest in the presently issued and outstanding
shares of common stock to the Company. Mr. Sherwin disclaims
beneficial ownership of the interest of Midwest Forge Corporation in
KCPII. Mr. Sherwin has been granted 10,000 options under the Option
Plan.
(7) Mr. Begley has been granted 10,000 options under the Option Plan. Mr.
Begley's wife has .29% limited partnership interest in KCPII and
12,000 shares of common stock of the Company. Mr. Begley disclaims any
beneficial interest in such partnership interest or shares.
(8) Mr. Turben has been granted 10,000 options under the Option Plan. Mr.
Turben is Chairman of the Board of Directors of KCC, an Ohio
corporation, which as the general partner controls KCP II and has sole
voting and investment power over all of the common stock held by KCP
II. KCC is also the general partner of Evergreen Partners II L.P., an
Ohio limited partnership ("Evergreen") which is the managing member of
KCCII. KCC has sole voting and investment power over all of the common
stock held by KCC II. KCP II acquired on December 12, 1996 an
aggregate of 4,110,679 shares of common stock of the Company and KCC
II acquired on December 12, 1996 and January 3, 1997 an aggregate of
356,736 shares of common stock of the Company which are owned directly
and beneficially by KCPII and KCCII, respectively, in the aggregate
amount of 4,467,415 constituting 64% of the presently issued and
outstanding shares of common stock of the Company.
Mr. Turben disclaims beneficial ownership of the above-described
securities.
(9) Includes 291,000 options granted under the Option Plan to Executive
Officers.
(10) Messrs. Friedman, Del Pizzo and Roberts are located at the Company.
(11) Messrs. Lancaster, Sherwin, Begley, and Turben are located at KCP II.
(12) Luis Hernandez Jr. is located at 3069 Misty Harbour Dr, Las Vegas,
N.V. 89117.
(13) Lionheart Group, Inc, 230 Park Avenue, Suite 516, New York, N.Y. 10169
-3-
<PAGE> 6
ELECTION OF DIRECTORS
At the Annual Meeting, five persons will be proposed to serve as
Directors of the Company until their successors have been duly elected and
qualified as provided in the Certificate of Incorporation, as amended, and the
By-Laws of the Company, as amended. All of such persons have been previously
elected as directors of the Company. The following persons have consented to be
nominated and, if elected, to serve as Directors of the Company. None of the
nominees is related by blood, marriage or adoption to any other Director or
Executive Officer nor is a party adverse to the Company or any of its
subsidiaries in any material proceeding nor has any beneficial interest adverse
to the Company or any of its subsidiaries. For information as to Directors'
beneficial ownership of the Company's Common Stock, see the foregoing "Security
Ownership of Certain Beneficial Owners and Management."
PHILLIP L. FRIEDMAN Company Director since 1981
Age: 51
Mr. Friedman, since 1981, has served as President and Chief Executive and
Financial Officer of the Company. He is a member of the executive committee of
the Board of Directors of the Company. He was employed by Occidental Chemical
Corporation (formerly Hooker Chemical Corporation), a leading manufacturer and
supplier of polyvinyl chloride resins and compounds, from 1969 until December
1981, when he joined the Company. During his last five years with Occidental,
Mr. Friedman was Manager of Business Development and Director of Commercial
Development for the Polyvinyl Chloride Plastics Division. As the Director of
Commercial Development he was responsible for coordinating and reducing to
commercial practice various research and development projects within the
plastics industry.
GEORGE R. BEGLEY Age: 55
Mr. Begley is an independent investment advisor a director of North Coast Energy
and a member of the audit committees of the Company.
RAYMOND A. LANCASTER Age: 52
Mr. Lancaster is the Managing Partner of Kirtland Capital Partners II L.P. (see
"Security Ownership of Certain Beneficial Owners and Management") and was the
managing partner of Kirtland Capital Partners from 1995 to 1996 and of Key Corp.
from 1990 to 1995. He is a Member of the Executive and Audit Committee of the
Company. Currently, Mr. Lancaster is a KCP I and KCP II Advisory Board member
and a member of the Board of Directors of Fairmount Minerals, Ltd., PVC
Container Corporation, R. Tape Corporation, ShoreBridge Corp., STERIS
Corporation, and Unifrax Corporation.
MICHAEL SHERWIN Age: 57
-4-
<PAGE> 7
Mr. Sherwin is the Vice Chairman of Mid-West Forge Corporation and Chairman and
Chief Executive Officer of Columbiana Boiler Company. Prior to joining Mid-West
Forge Corporation, Mr. Sherwin was the President of National City Venture
Corporation and National City Capital Corporation, both subsidiaries of National
City Corporation. He is chairman of the Audit Committee of the Company.
JOHN F. TURBEN Age: 63
Mr. Turben is the Chairman of Kirtland Capital Partners and is a KCP I and KCP
II Advisory Board member and serves as Chairman of The Hickory Group, PVC
Container Corporation and Harrington and Richardson 1871, Inc. He is also
Chairman of the Executive Committee of Fairmount Minerals, Ltd. and Execution
Services Inc. He is a director of NACCO Industries, Unifrax Corporation and
TruSeal Technologies Inc. He is Chairman of the Board of the Company and a
member of its Executive Committee.
MEETINGS AND COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The business affairs of the Company are managed by the Board of
Directors. Members of the Board are informed about the Company's affairs through
presentations, reports and other documents distributed to them, through
operating and financial reports routinely presented at meetings and through
other means. In addition, the Company's directors perform their duties
throughout the year not only by attending Board meetings but also through
personal meetings and other communications, including telephone contact with
members of management and others regarding matters of interest and concern to
the Company.
During fiscal year ended June 30, 1998, the Company's Board of
Directors held 4 meetings and acted by unanimous written consent 2 times. Each
director attended at least 75% of the Board meetings and committee meetings,
held during such fiscal year.
On January 16, 1997, the Board of Directors approved an increase in
the number of directors constituting the whole Board from two to six. There is
currently one vacancy on the Board.
The Securities and Exchange Commission has comprehensive rules
relating to the reporting of securities transactions by directors, officers and
stockholders who beneficially own more than 10% of the Company's Common Stock
(collectively, the "Reporting Persons"). These rules are complex and difficult
to interpret. Based solely on a review of copies of Section 16 reports received
by the Company from Reporting Persons and without conducting any independent
investigation of its own, the Company believes that no Reporting Person failed
to timely file Section 16 reports for the year ended June 30, 1998 which failure
was not previously reported.
The Board of Directors has an Audit Committee whose members are
appointed by the Board. The Board of Directors does not have a compensation or
nominating committee.
-5-
<PAGE> 8
The Audit Committee recommends to the Board of Directors the firm to
be selected each year as independent auditors of the Company's financial
statements and to perform services related to such audit. The Audit Committee
also has responsibility for (i) reviewing the scope and results of the audit
with the independent auditors, (ii) reviewing the Company's financial condition
and results of operations with management (iii) considering the adequacy of the
internal accounting, bookkeeping and control procedures of the Company, and (iv)
reviewing any non-audit services and special engagements to be performed by the
independent auditors and considering the effect of such performance on the
auditors' independence. The current members of the Audit Committee are Messrs.
Sherwin, Begley and Lancaster.
The Company has not established a compensation, nominating committee
and/or a corporate governance committee. However, the Company believes that the
nomination of directors and other issues normally considered by these committees
can be effectively managed by the Board of Directors or the Executive Committee
thereof due to its relatively small size, or by the Audit Committee which is
composed substantially of unrelated directors.
The Company has an Executive Committee of the Board of Directors of
the Company consisting of Messrs. Turben (Chairman), Friedman and Lancaster. The
Executive Committee generally has the power to act by majority vote in absence
of the Board of Directors.
Directors are reimbursed for reasonable expenses actually incurred in
connection with attending each formal meeting of the Board of Directors or any
committee thereof. In addition, each director of the Company is paid $1,250 per
quarter.
The following table sets forth the Directors and Executive Officers of
the Company as at October 2, 1998. Each Director holds office until his
successor is elected and qualified.
<TABLE>
<CAPTION>
Held
Office
Name Age Since Offices with the Company
- - ---- --- ----- ------------------------
<S> <C> <C> <C>
Phillip L. Friedman 51 1982 President, Chief Executive Officer and Director
William A. Del Pizzo 40 1996 Vice President, Chief Financial Officer
Joel Francis Roberts 54 1989 Vice President Operations
Raymond A. Lancaster 52 1997 Director
Michael Sherwin 57 1997 Director
George R. Begley 55 1997 Director
John F. Turben 63 1997 Director
</TABLE>
EXECUTIVE COMPENSATION AND
TRANSACTIONS WITH MANAGEMENT
-6-
<PAGE> 9
The following table sets forth for the fiscal years ended June
30, 1998, 1997 and 1996 compensation paid by the Company to the chief executive
officer and to each of the four most highly compensated officers of the Company
whose total annual salary and bonus exceed $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------
Name and LTIP All Other
Principal Position Year Salary Bonus Payouts Compensation
- - ------------------ ---- ------ ----- ------- ------------
($) ($) $ (2) ($) (1)
<S> <C> <C> <C> <C> <C>
Phillip L. Friedman 1998 165,000 315,600 7,249 13,500
1997 165,000 231,300 35,683 13,624
1996 165,000 223,200 23,234 20,396
John C. D'Avella* 1998 111,286 218,700 4,678 8,355
1997 104,342 164,500 22,334 8,743
1996 101,148 167,400 21,179 12,446
Joel Francis Roberts 1998 100,655 20,030 4,080 7,461
1997 93,824 25,000 19,430 7,888
1996 92,198 50,000 18,444 9,460
Bertram D. Berkowitz 1998 85,088 10,578 3,676 5,271
1997 82,002 10,000 17,493 5,237
1996 79,493 27,000 16,623 8,079
William A. Del Pizzo 1998 92,675 11,457 0 800
</TABLE>
* Deceased during Fiscal year ended 6/30/98
Profit Sharing Savings Plan
On September 29, 1983 the Board of Directors of the Company
adopted the PVC Container Corporation Profit Sharing Savings Plan (the "Plan"),
which Plan became effective July 1, 1984. The Plan supersedes the 1980 PVC
Container Corporation Profit Sharing Pension Plan. All employees of the Company
who have completed one year of service and are not covered by a collective
bargaining agreement are eligible for participation in the Plan.
The Plan has been drafted to comply with Section 401(k) of the
Internal Revenue Code. Each participating employee can defer from 1% to 6% of
his salary into his
-7-
<PAGE> 10
Plan account, and the Company makes a matching contribution. Such contribution
for the fiscal year ended June 30, 1998 was equal to 25% of the amount deferred
by the employee. Contributions are made by the Company on a monthly basis. In
addition to matching contributions the Company, at its option, may make payments
based on a percentage of quarterly profits. Such payments can be made directly
to or for the Plan account of participating employees and are based on a
percentage of the employee's compensation. The Company made discretionary
payments during the fiscal year ended June 30, 1998 of $331,086 which amount
includes the 25% contribution referred to above. All amounts deferred by and
paid to the officers of the Company pursuant to the Plan have been included in
"Remuneration of Directors, Executive Officers and Transactions with Management
and Others."
Deferred Compensation Plan
On June 4, 1986, the Board of Directors approved the
establishment of a Deferred Compensation Plan, effective July 1, 1986, under
which executives of the Company may defer and accrue for three years a certain
amount of the compensation due them. Four percent of the salary as at June 30,
1994 was accrued as deferred compensation payable July 1, 1997 if employed at
that time. The Company will retain the right to use such deferred compensation
during such period for working capital or plant investment.
Employee Stock Ownership Plan
The Company adopted on June 28, 1996 an Employee Stock Option
Ownership Plan ("ESOP") effective as of July 1, 1995. The ESOP is designed to
enable participating employees to share in the growth of the Company through
ownership of common stock of the Company. Employees eligible to participate in
the ESOP include all employees who have attained he age of twenty-one years of
age and have completed at least one year of service with the Company except that
certain employees (such as "leased employees" and employees covered by
collective bargaining agreements) are not eligible to participate in the ESOP.
Contributions to the ESOP will be made from time to time in amounts determined
by the Company on behalf of the eligible participants and will be invested
primarily in common stock of the Company In general, participants will become
fully vested in their account balances under the ESOP after completing five
years of service with the Company. Vested benefits are payable after termination
of employment in the form of common stock of the Company, cash or a combination
of both as more fully described in the ESOP. The Company makes all contributions
to the ESOP and employees are neither required nor allowed to contribute to the
ESOP and no contributions have been made as of the date hereof.
Employment Agreement
The directors of the Company have approved an Amended and
Restated Employment Agreement between Phillip L. Friedman and the Company and
such agreement
-8-
<PAGE> 11
became effective as of July 1, 1996. The employment agreement provides for,
among other things, compensation consisting of a base salary of $165,0000 per
annum and incentive compensation equal to 4% of the Company's net income before
taxes as finally determined by the regularly employed certified public
accountants of the Company. Such compensation is identical to that contained in
the existing employment agreement between the Company and Phillip L. Friedman.
The initial term of the amended employment agreement will expire on June 30,
1999 and shall be automatically renewed for successive two year periods unless
Mr. Friedman elects for good reason not to renew or the Company terminates for
cause as defined in the agreement. The agreement also provides for certain
benefits payable to Mr. Friedman in the event of death or disability of Mr.
Friedman.
REPORT ON EXECUTIVE COMPENSATION
BY THE BOARD OF DIRECTORS
Compensation Policy
The Company's Board of Directors or its Executive Committee
(the "Board") is responsible for setting and administering the policies which
govern annual executive salaries, raise and bonuses and the award of stock
options under the Company's 1996 Incentive Stock Option Plan. The Board is
presently composed of two members, both of whom are executive officers of the
Company.
The general policy of the Board is to provide compensation to
the Chief Executive Officer and the Company's other executive officers which
reflects the contribution of such executives, the Company's growth in sales and
earnings, the enhancement of shareholder value as reflected in the growth of the
Company's market capitalization and the implementation of the strategic plans
consistent with the long term growth objectives of the Company. Contributions to
specific Company objectives which include development of new product
opportunities, the successful marketing of the Company's principal products and
research and development work which is the basis for some new products are
evaluated in setting compensation policy. Growth in sales and earnings is the
primary factor in the consideration of compensation at the executive levels. In
addition, and in order to assure the Company's ability to attract and retain
managerial talent, an attempt is made to keep compensation competitive with
compensation offered by other companies of comparable size and performance.
Executive compensation decisions have traditionally been made on a calendar year
basis.
Company Performance and Chief
Executive Officer Compensation
The Chief Executive's Compensation is determined primarily by
his employment agreement with the Company which as indicated above relates in
part to net income before taxes of the Company, and it is believed to be fair
and reasonable in light of compensation paid to chief executive officers of
companies which have comparable sales and
-9-
<PAGE> 12
earnings, and also considering the growth of the Company during the Chief
Executive Officer's employment by the Company.
1996 INCENTIVE STOCK OPTION PLAN
General
The Board of Directors of the Company adopted on November 19,
1996 and the Stockholders approved on January 16, 1997 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").
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 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. As of June 30, 1998,
374,000 options have been granted under the Option Plan. See Note 8 to the Notes
to the Financial Statements.
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
-10-
<PAGE> 13
Option Plan. Options may also be granted to other persons provided that such
options shall be treated as non-qualified options. Directors who are not
employees or officers are eligible to participate and be granted non-qualified
options under the Option Plan. 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. 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.
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.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Ernst & Young is recommended for
election to serve for the fiscal year ending June 30, 1999 as the Company's
principal accountant and to audit the Company's financial statements. The
holders of a majority of the Company's Common Stock consented to such firm's
engagement as its principal accountant for the fiscal year ended June 30, 1998.
It is not anticipated that a representative of such firm will attend the annual
meeting.
ANNUAL REPORT
The annual report to stockholders concerning the operations of
the Company for the fiscal year ended June 30, 1998, including financial
statements for that year, accompanies this Information Statement.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholder proposals for consideration at the annual meeting
expected to be held in November, 1999 must be received by the Company no later
than August 31, 1999 in order for them to be included in the information
statement for the 1999 annual meeting. In
-11-
<PAGE> 14
order to be included, proposals must be proper under law and must comply with
the Rules and Regulations of the Securities and Exchange Commission.
PERFORMANCE GRAPH
The graph appearing on the next page compares the cumulative
total shareholder return on the common stock for the last five fiscal years of
the Company with the cumulative total return for the NASDAQ (US companies) and
the NASDAQ stocks (SIC 3000-3099) over the same period (assuming an investment
of $100 in the common stock in each of the two NASDAQ indexes on June 30, 1993
and the reinvestment of all dividends.
OTHER MATTERS
The Board of Directors is not aware of any other matters which
are to be presented at the Annual Meeting. However, if any other matter should
properly come before the Annual Meeting, the persons entitled to vote on that
matter will be given the opportunity to do so.
The above notice and Information Statement are sent by order
of the Board of Directors.
Herbert S. Meeker
Secretary
Eatontown, New Jersey
October 16, 1998
-12-
<PAGE> 15
[LETTERHEAD]
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
PVC Container Corporation
Prepared by the Center for Research in Security Prices
Produced on 09/16/98 including data to 06/30/98
(GRAPH)
Legend
<TABLE>
<CAPTION>
Symbol CRSP Total Returns Index for: 06/30/93 06/30/94 06/30/95 06/28/96 06/30/97 06/30/98
- - ------ ----------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
_______ PVC Container Corporation 100.0 138.6 227.0 272.8 302.9 660.4
...___. Nasdaq Stock Market (US Companies) 100.0 101.0 134.8 173.0 210.4 277.6
- - ------- NASDAQ Stocks (SIC 3000-3099 US + Foreign) 100.0 78.9 96.5 125.9 136.1 193.9
Rubber and miscellaneous plastics products
</TABLE>
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 06/30/93.
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