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 |_|
|X| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c)
to Rule 14a-12
|_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
Ultra Pac, Inc.
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(Name of Registrant as Specified in Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6j(2) or
Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 011 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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|_| 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:
N/A
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(2) Form, Schedule or Registration Statement No.:
N/A
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(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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ULTRA PAC, INC.
May 27, 1996
TO: THE SHAREHOLDERS OF ULTRA PAC, INC.
You are cordially invited to attend the Annual Meeting of Shareholders of
Ultra Pac, Inc., to be held on July 16, 1996, at 3:30 p.m. at the Radisson Plaza
Hotel, 35 S. 7th Street, Minneapolis, Minnesota. I encourage you to attend.
Whether or not you plan to attend the meeting, I urge you to complete and sign
the accompanying Proxy and return it in the enclosed envelope. Also attached for
your review are the formal Notice of Meeting and Proxy Statement.
On behalf of your Board of Directors and employees, thank you for your
continued support of Ultra Pac, Inc.
Very truly yours,
Calvin S. Krupa,
President and Chairman of the
Board of Directors
ULTRA PAC, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 16, 1996
To: The Shareholders of Ultra Pac, Inc.:
The Annual Meeting of Shareholders of Ultra Pac, Inc. (the "Company") will
be held on Tuesday, July 16, 1996 at 3:30 p.m. at the Radisson Plaza Hotel, 35
S. 7th Street, Minneapolis, Minnesota.
The items of business are:
1. To set the number of members of the Board of Directors at five;
2. To elect five directors, each to hold office for a term of one year,
ending in 1997 or when their successors are elected;
3. To approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of Capital Stock from
5,000,000 to 10,000,000; and
4. To take action on any other business that may properly come before the
meeting or any adjournment thereof.
Only shareholders of record as shown on the books of the Company at the
close of business on May 17, 1996, will be entitled to vote at the meeting and
any adjournment thereof.
THIS NOTICE, THE ENCLOSED PROXY STATEMENT AND PROXY ARE SENT TO YOU BY
ORDER OF THE BOARD OF DIRECTORS.
James A. Thole,
Secretary
Date: May 27, 1996
Minneapolis, Minnesota
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON.
SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON
IF THEY DESIRE.
ULTRA PAC, INC.
21925 Industrial Boulevard
Rogers, Minnesota 55374
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
JULY 16, 1996
PROXY SOLICITED BY THE BOARD OF DIRECTORS
This Proxy Statement is furnished to the record holders of shares of Common
Stock of Ultra Pac, Inc., a Minnesota corporation (the "Company"), as of May 17,
1996, by order of the Board of Directors. This Proxy Statement is furnished in
connection with the Board of Directors' solicitation of the enclosed Proxy for
the Annual Meeting of Shareholders to be held on July 16, 1996, at 3:30 p.m., at
the Radisson Plaza Hotel, 35 S. 7th Street, Minneapolis, Minnesota. A
shareholder giving a Proxy may revoke it at any time prior to the actual voting
at the Annual Meeting of Shareholders by filing written notice of the
termination of the appointment with an officer of the Company, by attending the
Annual Meeting of Shareholders and voting in person, or by filing a new written
appointment of a Proxy with an officer of the Company. The revocation of a Proxy
will not affect any vote taken prior to the revocation. This Proxy Statement is
expected to be first mailed to shareholders on or about June 9, 1996.
The Annual Meeting of Shareholders has been called for the purpose of
setting the number of members of the Board of Directors at five, electing five
directors to a one-year term and to approve an amendment to the Company's
Articles of Incorporation to increase the number of authorized shares of Capital
Stock from 5,000,000 to 10,000,000 shares. All properly executed proxies
received at or prior to the meeting will be voted at the meeting. If a
shareholder directs how the Proxy is to be voted with respect to the business
coming before the meeting, the Proxy will be voted in accordance with the
shareholder's directions. Where specification has not been made, it will be
voted FOR setting the number of members of the Board of Directors at five, FOR
electing management's nominees as members of the Company's Board of Directors,
and FOR the Amendment of the Company's Articles of Incorporation.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on May 17, 1996, the record date for the Annual
Meeting of Shareholders, there were ______________ shares of Common Stock
outstanding. The Company's only class of Capital Stock outstanding is Common
Stock. Each share of Common Stock is entitled to one vote on each matter
properly coming before the meeting. Cumulative voting for directors is not
permitted.
A list of those shareholders entitled to vote at the Annual Meeting of
Shareholders will be available for a period of 10 days prior to the Annual
Meeting of Shareholders for examination by any shareholder at the Company's
principal executive offices, 21925 Industrial Boulevard, Rogers, Minnesota, and
at the Annual Meeting of Shareholders.
1
ELECTION OF DIRECTORS
(PROPOSALS #1 AND #2)
The Bylaws of the Company provide that at each annual meeting the
shareholders shall determine the number of directors for the ensuing year;
provided, however, that the number may be increased by resolution of the Board
of Directors. The number of directors is currently set at five. The Board of
Directors recommends that the number of directors be set at five for the coming
year and that the nominees named below be elected. Directors are elected to
serve a one-year term. Directors being elected at this Annual Meeting of
Shareholders will serve until the next Annual Meeting of Shareholders, or until
their successors have been duly elected and qualified.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present in person or by proxy at the annual meeting and entitled
to vote is required for approval of the proposal to set the number of directors
at five and to elect directors.
THE BOARD RECOMMENDS A VOTE FOR SETTING THE NUMBER OF DIRECTORS AT FIVE AND
FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR.
All nominees have consented to serve if elected, but if any becomes unable
to serve, the persons named as proxies may exercise their discretion to vote for
a substitute nominee. The name, age, business experience and offices held by
each nominee for director are as follows:
Name Age Company Position Director Since
Calvin S. Krupa 49 President, Chief Executive Officer and 1987
Chairman of the Board of Directors
James A. Thole 56 Secretary and Director 1987
John F. DeBoer 54 Director 1991
Frank I. Harvey 45 Director 1991
Michael J. McGlynn 45 Director 1995
CALVIN S. KRUPA has served as President, Chief Executive Officer and a
Director since February 1987. For the three years prior to 1987, Mr. Krupa was
marketing manager for Innovative Plastics, Inc., a Minneapolis-based producer of
plastic packaging.
JAMES A. THOLE has served as Secretary and a Director of the Company since
February 1987. From February 1987 to August 1991, Mr. Thole also served as
Treasurer of the Company. Mr. Thole is not an employee of the Company. Mr. Thole
has served as Chief Executive Officer and President of Packaging Plus, Inc., a
Minneapolis packaging company, since 1979.
JOHN F. DEBOER is Secretary of SIG Holding U.S.A., Inc., a privately held
holding company. Mr. DeBoer is also Vice President-Finance for Doboy Packaging
Machinery, Inc., a wholly owned subsidiary of SIG Holding U.S.A., Inc., which is
engaged in the manufacture and sale of packaging equipment.
FRANK I. HARVEY is a shareholder in the law firm of Larkin, Hoffman, Daly &
Lindgren, Ltd., where he has been an attorney since 1976.
2
MICHAEL J. MCGLYNN has served as Chief Executive Officer and a director of
McGlynn Bakeries, Inc., a Minneapolis, Minnesota retail bakery, since April
1993. From February 1992 to April 1993, Mr. McGlynn was a Vice President of The
Pillsbury Company. Prior to February 1992, Mr. McGlynn served as President and a
director of McGlynn Bakeries, Inc.
During the fiscal year ended January 31, 1996, the Board of Directors met
and took action by unanimous written consent on _______ occasions.
BOARD COMMITTEES
The Board of Directors has appointed three standing committees of the
Company: (i) the Audit Committee; (ii) the Compensation Committee; and (iii) the
Stock Option Committee.
The Audit Committee consists of Calvin S. Krupa, Frank I. Harvey and
Michael J. McGlynn. Its purpose is to recommend the appointment of an auditor
for the Company, review the scope of the audit, examine the auditor's reports,
make appropriate recommendations to the Board of Directors as a result of such
review and examination, and make inquires into the effectiveness of the
financial and accounting functions and controls of the Company. The Audit
Committee held ______ meeting[S] during the fiscal year ended January 31, 1996.
The Compensation Committee consists of James A. Thole, Frank I. Harvey and
John F. DeBoer and is responsible for setting the compensation of executive
officers of the Company. The Compensation Committee held ______ meeting[S]
during the fiscal year ended January 31, 1996.
The Stock Option Committee consists of Frank I. Harvey and John F. DeBoer.
Its purpose is to administer the Company's 1991 Stock Option Plan (the "Plan")
and to designate appropriate individuals to receive options pursuant to the
Plan. The Stock Option Committee held ______ meeting[S] during the fiscal year
ended January 31, 1996.
3
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid for service rendered
in all capacities to the Company during the Company's fiscal years ended January
31, 1996, 1995 and 1994 by Calvin S. Krupa, President and Chief Executive
Officer, and Bradley C. Yopp, Chief Financial Officer (NO OTHER EXECUTIVE
OFFICER'S COMPENSATION EXCEEDED $100,000).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------------- ------------
Fiscal Other Securities
Name and Year Salary Bonus Annual Underlying All Other
Principal Ended Compensation(1) Options Compensation(2)
Position January 31
- --------------- ---------- ------- ------- -------------- ------------ ---------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Calvin S. Krupa, 1996 275,144 35,000 _______ 20,000 3,000
President and 1995 241,827 50,000 15,999 20,000 3,000
Chief Executive 1994 213,750 60,000 15,834 20,000 4,354
Officer
Bradley C. Yopp 1996 100,355 10,000 0 5,000 1,080
Chief Financial 1995 _______ ______ ______ ______ _____
Officer 1994 _______ ______ ______ ______ _____
</TABLE>
(1) Includes the cost to the Company of a rental automobile provided to Mr.
Krupa and the cost of a disability income policy for Mr. Krupa.
(2) Matching contributions by the Company to a 401(k) plan for such person's
benefit.
- ------------------------
OPTION GRANTS DURING FISCAL 1996
The following table sets forth information with respect to each option and
similar instrument granted or entered into during the fiscal year ended January
31, 1996 to the executive officers named in the Summary Compensation Table:
<TABLE>
<CAPTION>
Percent of Potential Realizable
Total Value at Assumed
Options Annual Rates of Stock
Granted Market Price Appreciation
To Price For Option Term
Options Employees Exercise On Date Expiration ---------------------
Name Granted This Year Price of Grant(1) Date 5% 10%
---- ------- --------- ----- ----------- ---- ---- ---
(#) (%) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Calvin S. Krupa 20,000 49.4 6.00 6.00 7/24/00 (2)
Bradley C. Yopp 5,000 12.3 6.00 6.00 7/24/00
</TABLE>
- ------------------------
(1) The market values shown are as of the date of grant of the options. All
options were fully vested on the date of grant.
(2) Computed based upon the closing price of the Company's Common Stock on
_____________, the date of grant. No assurance can be given that the stated
rates of appreciation (5% and 10%) will be or can be achieved. They are
presented pursuant to applicable rules of the Securities and Exchange
Commission. Solely for illustration, if such rates of appreciation were
applied to the total market value of all of the Company's outstanding
Common Stock over a five-year term (the same as the stock options granted
to Mr. Krupa), the value at ___________, was $______ per share or an
aggregate of $____________, and at _____________ (the expiration date of
the option), assuming an annual stock price appreciation of 5% would be
$_______ per share or an aggregate of $_____________, and assuming an
annual stock price appreciation of 10% would be $_______ per share or an
aggregate of $_________________.
AGGREGATE OPTION EXERCISES IN FISCAL 1996
AND FISCAL YEAR-END OPTION VALUES
The following table summarizes options exercised during the year ended
January 31, 1996 by the executive officers named in the Summary Compensation
Table (no options were exercised) and the value of the unexercised options held
as of January 31, 1996:
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Acquired Value Options at 1/31/96 Options at 1/31/96
Name on Exercise Realized (All Exercisable) (All Exercisable)
- ---------------- --------------- ----------- ---------------------- ---------------------
(#) ($) (#) ($)
<S> <C> <C> <C> <C>
Calvin S. Krupa -- -- 80,000 --(1)
Bradley C. Yopp -- -- 15,000 --(1)
</TABLE>
(1) The exercise prices of all options exceeded the market value of the shares
underlying such options on January 31, 1996.
- ------------------------
COMPENSATION OF DIRECTORS
The Company pays each director, who is not an employee of the Company, a
director's fee of $2,500 per year. The Outside Directors' Option Plan (the
"Directors' Plan") provides for an annual non-discretionary grant of an option
to purchase 1,000 shares (2,500 shares if the director has not previously
received an option under the Directors' Plan) to each nonemployee director of
the Company, who is a Company director immediately after each Annual Meeting of
Shareholders. The exercise price shall be equal to the closing price of the
Company's Common Stock, as reported by Nasdaq, on the date of grant. The options
are immediately exercisable and expire five years from the date of grant,
subject to earlier cancellation 30 days after termination as a director. The
payment for option exercises may be by cash or by delivery of shares of the
Company's Common Stock that have been owned for at least six months.
In addition, the Company's directors who are also employees of the Company
are eligible to be granted incentive stock options or non-qualified stock
options. During the fiscal year ended January 31, 1996, the Company granted Mr.
Krupa a non-qualified option to purchase 20,000 shares of Common Stock at an
exercise price of $6.00 per share. Such option expires in July 2000.
EMPLOYMENT AGREEMENT
The Company entered into an employment agreement with Calvin S. Krupa on
June 20, 1989, as amended on March 31, 1990 and January 3, 1992 (the "Employment
Agreement"). The Employment Agreement provides for an annual salary to be set by
the Compensation Committee ($_________ effective July 1995), discretionary
bonuses as determined by the Compensation Committee and other employment
benefits. Pursuant to the Employment Agreement, Mr. Krupa must give 90 days
notice prior to termination and is subject to a one year covenant not to
compete. Mr. Krupa's Employment Agreement also provides for severance pay in the
amount equal to three years' base salary in effect on the date of termination
if: (i) the Company terminates him for any reason other than "for cause," as
defined in the Employment Agreement, or even "for cause," if terminated during
the 18 months following a "change in control," also defined in the Employment
Agreement, or (ii) Mr. Krupa voluntarily terminates his employment within 18
months after a "change in control." These amounts are payable, at the option of
Mr. Krupa, in a lump sum or in semi-monthly installments.
5
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") is responsible for setting the
compensation of the Company's executive officers, including the executive
officers named in the Summary Compensation Table, Calvin S. Krupa, President,
Chairman of the Board and Chief Executive Officer and Bradley C. Yopp, Chief
Financial Officer.
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return,
assuming $100 invested on January 31, 1991, as if such amount had been invested
in each of: (i) the Company's Common Stock; (ii) the stocks comprising the Dow
Jones Containers and Packaging Industrial Sector; and (iii) the stocks included
in the Dow Jones Industrial Average. The graph assumes the reinvestment of all
dividends (the Company has never paid a dividend). The prices for the Company's
Common Stock are closing bid prices as reported by Nasdaq.
[GRAPHIC OMITTED]
1/31/91 1/31/92 1/29/93 1/31/94 1/31/95 1/31/96
Ultra Pac, Inc. 100 445 281 194 145 87
Dow Jones Containers 100 143 151 155 148 160
and Packaging Industrial
Sector
Dow Jones Industrial 100 122 129 159 158 228
Average
- ------------------------
6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Frank I. Harvey, a director of the Company, is an attorney with and a
shareholder of the law firm of Larkin, Hoffman, Daly & Lindgren, Ltd., which
currently serves as legal counsel to the Company and served as legal counsel to
the Company during the fiscal year ended January 31, 1996.
Michael J. McGlynn, a director of the Company, serves as Chief Executive
Officer and a director of McGlynn Bakeries, Inc., which purchased products
valued at approximately $531,000 from the Company during the period from his
election as a director in July 1995 through the fiscal year end, January 31,
1996. McGlynn Bakeries, Inc. expects to continue purchasing products in similar
amounts from the Company during the fiscal year ending January 31, 1997.
COMPLIANCE WITH SECTION 16 REPORTING OBLIGATIONS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons holding 10% of the Company's Common
Stock to file reports regarding their ownership and regarding their acquisitions
and dispositions of the Company's Common Stock with the Securities and Exchange
Commission.
7
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of January 31, 1996,
concerning the number of shares of Common Stock held: (i) by all persons known
to own beneficially more than 5% of the Company's outstanding Common Stock; (ii)
by each director and director nominee; (iii) by each executive officer named in
the Summary Compensation Table; and (iv) by all directors and officers as a
group. Where the persons listed have the right to acquire additional shares of
Common Stock through the exercise of options or warrants within 60 days of
January 31, 1996, such additional shares are deemed to be outstanding for the
purpose of computing the percentage of outstanding shares owned by such person,
but are not deemed to be outstanding for the purpose of computing the percentage
ownership interest of any other person. Unless otherwise indicated, each person
is believed to hold the Common Stock with sole voting and investment power.
Number of Shares Beneficially Owned
Name and Address --------------------------------------------
of Beneficial Owner Shares Percent
- --------------------------------- ------------------------ ------------------
Calvin S. Krupa 412,000(1) 10.7%
21925 Industrial Boulevard
Rogers, Minnesota 55374
James A. Thole _______(2) --
5800 Main Street, N.E.
Minneapolis, Minnesota 55432
Frank I. Harvey 10,110(2)(3) *
1500 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington, Minnesota 55431
John F. DeBoer 6,500(2)(4) *
535 East 3rd Street
New Richmond, Wisconsin 54017
Phillip T. Levin 241,000 6.4
5353 Nathan Lane
Plymouth, Minnesota 55442
Michael J. McGlynn 3,500(2) *
7350 Commerce Lane
Minneapolis, Minnesota 55432
Bradley C. Yopp 18,000(5) *
21925 Industrial Boulevard
Rogers, Minnesota 55374
All directors and officers _______(6) ______%
of the Company as a group
(6 persons)
- ------------------------
* Less than 1%.
See footnotes on next page.
8
- ------------------------
(1) Includes 80,000 shares issuable upon exercise of currently exercisable
options.
(2) Excludes options to be issued, effective immediately after the Company's
Annual Meeting of Shareholders, for an additional 1,000 shares to each
non-employee director elected.
(3) Includes options to purchase 5,500 shares of the Company's Common Stock.
(4) Includes: (i) options to purchase 5,500 shares of Common Stock and (ii)
1,000 shares owned jointly with Mr. DeBoer's spouse.
(5) Includes: (i) options to purchase 15,000 shares of Common Stock; and (ii)
3,000 shares owned jointly with Mr. Yopp's spouse.
(6) Includes _________ shares issuable upon exercise of currently exercisable
options.
- ------------------------
AMENDMENT OF ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED SHARES
(PROPOSAL #3)
The Articles of Incorporation of the Company, as currently in effect,
authorize the Company to issue up to 5,000,000 shares of Capital Stock, no par
value. The Board of Directors proposes to increase the number of authorized
shares to 10,000,000. The Board of Directors has the power to establish more
than one class or series of shares and to fix the relative rights and
preferences of any such different classes or series. The Board of Directors has
not established any additional class or series of Capital Stock and, therefore,
in accordance with the Restated Articles of Incorporation, all currently issued
and unissued Capital Stock is Common Stock. At January 31, 1996, there were
3,766,215 shares of Common Stock outstanding. Additionally, approximately
480,000 shares of Common Stock were reserved for issuance pursuant to the
Company's various stock option plans and stock option agreements.
The principal purpose of the Amendment of Articles of Incorporation (the
"Proposed Amendment") is to give the Company greater flexibility in its
financial affairs by making 5,000,000 additional shares of Capital Stock
available for issuance by the Company, without further action by its
shareholders, in such transaction or transactions as the Board of Directors may
approve, whether in public or private offerings, as stock splits or dividends or
otherwise, at such time or times as the Board of Directors may approve whether
prior to (subject to the approval by the Company's shareholders and the taking
effect of such Proposed Amendment as described herein) or after the meeting of
shareholders of the Company.
Although the Company does not currently have any plans, understandings or
agreements for the issuance of the proposed additional shares of Capital Stock
nor for the issuance of rights to purchase or acquire additional shares of
Capital Stock, the Board of Directors believes that the Company needs additional
authorized shares to provide the Company with the flexibility, as the need
arises, to use Capital Stock or securities convertible into Capital Stock
without the expense and delay of a special shareholders meeting in the event of
any future public offerings, private placements, acquisitions by the Company of
any businesses or properties, restructuring of the Company's capital structure,
debt conversions, stock dividends and for other purposes. Such activities could
require more shares of Capital Stock than are currently available to the
Company.
The additional shares of Capital Stock proposed to be authorized would be
identical to the existing Capital Stock in all respects. The ability of the
Board of Directors, both as to shares currently authorized and the proposed
additional shares, to designate and issue classes or series of preferred stock
could impede or deter an unsolicited tender offer or takeover proposal regarding
the Company and could adversely affect the voting power and rights of holders of
the Company's Common Stock.
9
The Proposed Amendment could, under certain circumstances, have an
anti-takeover effect. However, the only intended purpose of the Proposed
Amendment is to increase the number of available shares of Capital Stock in
order to give the Board of Directors more flexibility in conducting business
operations and, possibly, restructuring the Company's capital structure, and the
proposal is not being presented as, nor is it part of, a plan to adopt a series
of anti-takeover measures.
Because shareholders do not have preemptive rights under the Articles of
Incorporation, the rights of existing shareholders may (depending upon the
particular circumstances in which additional Capital Stock is issued) be diluted
by any such issuance. Although the Company is unaware of any specific efforts to
obtain control of the Company, the increased authorized shares could be used to
make an attempt to effect a merger or other change in control more difficult and
less likely or to dilute the interest of a party attempting to obtain control of
the Company.
Unless required by law or by the rules of any stock exchange on which the
Company's Capital Stock may in the future be listed, no further authorized vote
by the shareholders will be sought for any issuance of shares of Capital Stock.
However, under existing Nasdaq regulations, approval by a majority of the
holders of outstanding shares of Common Stock may, nonetheless, be required
prior to the original issuance of additional shares of Capital Stock, other than
a public offering for cash, if (i) the shares to be issued (including securities
convertible into or exercisable for such shares) has, or will have upon
issuance, voting power equal to or in excess of 20% of the voting power
outstanding before the issuance of the additional shares; or (ii) the number of
shares to be issued is or will be equal to or in excess of 20% of the number of
shares outstanding before the issuance of the additional shares; or (iii) the
issuance would result in a change in control of the Company. If any of such
conditions are applicable to the issuance of any of the additional shares, the
Company intends to comply with such Nasdaq requirements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THIS
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION.
INDEPENDENT AUDITORS
The Board of Directors has selected Divine, Scherzer & Brody, Ltd., as the
Company's independent auditors for the fiscal year ending January 31, 1997.
Representatives of Divine, Scherzer & Brody, Ltd., are expected to be present at
the Annual Meeting of Shareholders with the opportunity to make a statement if
they so desire and to respond to appropriate shareholder questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
The rules of the Securities and Exchange Commission permit shareholders of
the Company, after notice to the Company, to present proposals for shareholder
action in the Company's proxy statement where such proposals are consistent with
applicable law, pertain to matters appropriate for shareholder action, and are
not properly omitted by Company action in accordance with the proxy rules
published by the Securities and Exchange Commission. The 1997 Ultra Pac, Inc.
Annual Meeting of Shareholders is expected to be held on or about July 15, 1997,
and proxy materials in connection with that meeting are expected to mailed on or
about May 26, 1997. Shareholder proposals prepared in accordance with the proxy
rules must be received by the Company on or before January 23, 1997.
OTHER PROPOSALS
The Board of Directors of the Company does not intend to present any
business at the meeting other than the matters specifically set forth in this
Proxy Statement and knows of no other business to come before the meeting.
10
COSTS AND METHOD OF SOLICITATIONS
Solicitations of proxies will be made by preparing and mailing the Notice
of Annual Meeting, Proxy and Proxy Statement to shareholders of record as of the
close of business on May 17, 1996. The cost of making the solicitation includes
the cost of preparing and mailing the Notice of Annual Meeting, Proxy and Proxy
Statement and the payment of charges made by brokerage houses and other
custodians, nominees and fiduciaries for forwarding documents to shareholders.
In certain instances, officers of the Company may make special solicitations and
proxies either in person or by telephone. Expenses incurred in connection with
special solicitations are expected to be nominal. The Company will bear all
expenses incurred in connection with the solicitation of proxies for the annual
meeting.
It is important that your shares are represented and voted at the meeting,
whether or not you plan to attend. Accordingly, we respectfully request that you
sign, date and mail your Proxy in the enclosed envelope as promptly as possible.
BY ORDER OF THE BOARD OF DIRECTORS
James A. Thole,
Secretary
Date: May 27, 1996
11
- --------------------------------------------------------------------------------
[FRONT]
ULTRA PAC, INC. PROXY
21925 INDUSTRIAL BOULEVARD
ROGERS, MINNESOTA 55374
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Calvin S. Krupa and James A. Thole, and each of
them, with full power of substitution, his or her Proxies to represent and vote,
as designated below, all of the shares of the Common Stock of Ultra Pac, Inc.,
registered in the name of the undersigned on May 17, 1996, with the powers the
undersigned would possess if personally present at the 1996 Annual Meeting of
Shareholders to be held at the Radisson Plaza Hotel, 35 S. 7th Street,
Minneapolis, Minnesota at 3:30 p.m. on July 16, 1996, and at any adjournment
thereof, hereby revoking any proxy or proxies previously given.
1. Proposal to set the number of directors at five:
|_| FOR |_| AGAINST |_| ABSTAIN
2. ELECTION OF DIRECTORS:
FOR all nominees listed below |_| WITHHOLD AUTHORITY |_|
(except as marked to the contrary below) to vote for all nominees listed below
(To withhold authority to vote for any individual nominee strike a line
through the nominee's name below)
Calvin S. Krupa John F. DeBoer Frank I. Harvey
James A. Thole Michael J. McGlynn
3. Proposal to approve an amendment to the Company's Articles of Incorporation
to increase the number of authorized shares of Capital Stock from 5,000,000 to
10,000,000:
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion, the appointed Proxies are authorized to vote upon such
other business as may properly come before the meeting or any adjournment.
(Continued on other side)
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[BACK]
THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN, THE PROXY WILL
BE VOTED "FOR" PROPOSAL 1, "FOR"
ALL NOMINEES FOR DIRECTOR, "FOR"
PROPOSAL 3 AND IN THE PROXY'S
DISCRETION ON ANY OTHER MATTERS TO
COME BEFORE THE MEETING.
Dated _______________________, 1996
__________________________________
(Signature)
__________________________________
(Second signature)
PLEASE DATE AND SIGN ABOVE exactly
as your name appears at left,
indicating where appropriate,
official position or representative
capacity.
