INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE
ACT OF 1934 (AMENDMENT NO. )
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14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or Rule 14a-12
Ultra Pac, Inc.
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ULTRA PAC, INC.
May 12, 1997
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 June 19, 1997, at 3:30 p.m. local time 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 Card 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
JUNE 19, 1997
To: The Shareholders of Ultra Pac, Inc.:
The Annual Meeting of Shareholders of Ultra Pac, Inc. (the "Company")
will be held on Thursday, June 19, 1997 at 3:30 p.m. local time 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 to hold office until the next Annual
Meeting of Shareholders or until their successors are elected
and qualified; and
3. 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 April 22, 1997, will be entitled to vote at the meeting and
any adjournment thereof.
THIS NOTICE, THE ENCLOSED PROXY STATEMENT AND PROXY CARD ARE SENT TO
YOU BY ORDER OF THE BOARD OF DIRECTORS.
Date: May 12, 1997 James A. Thole,
Minneapolis, Minnesota SECRETARY
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
JUNE 19, 1997
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
the close of business on April 22, 1997, by order of the Board of Directors.
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of proxies for the Annual Meeting of Shareholders to be held
on June 19, 1997, at 3:30 p.m. local time 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 May 12, 1997.
The Annual Meeting of Shareholders has been called for the purpose of
setting the number of members of the Board of Directors at five and electing
five members of the Board of Directors. All properly executed Proxy Cards
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, the proxy 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, with respect to any other business that may properly come before
the meeting, at the discretion of the persons named as proxies in the Proxy
Card.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on April 22, 1997, the record date for the
Annual Meeting of Shareholders, there were 3,835,265 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. Abstentions and broker non-votes (brokers failing to vote shares of
the Company's Common Stock held in nominee name for customers by proxy) will be
treated as present at the meeting for purposes of determining the existence of a
quorum. With respect to any matter brought to a vote at the meeting, abstentions
will be treated as shares entitled to vote and broker non-votes will be treated
as shares not entitled to vote. A list of those shareholders entitled to vote at
the Annual Meeting of Shareholders will be available for review at the Annual
Meeting of Shareholders.
A copy of the Company's Annual Report to Shareholders, which includes
the financial statements of the Company for the fiscal year ended January 31,
1997, is enclosed.
ELECTION OF DIRECTORS
(PROPOSALS 1 AND 2)
The Bylaws of the Company provide that at each Annual Meeting of
Shareholders 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 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 meeting and entitled
to vote is required for approval of the proposal to set the number of directors
at five and for approval of the proposal to elect the nominees for director.
THE BOARD OF DIRECTORS 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, positions held with the Company,
initial year of service as a director and description of business experience of
each nominee are as follows:
<TABLE>
<CAPTION>
Name Age Company Position Director Since
---- --- ---------------- --------------
<S> <C> <C> <C>
Calvin S. Krupa (1) 50 President, Chief Executive Officer and 1987
Chairman of the Board
James A. Thole (2) 57 Secretary and Director 1987
John F. DeBoer (2)(3) 55 Director 1991
Frank I. Harvey (1)(2)(3) 46 Director 1991
Thomas F. Rains (1) 62 Director 1996
</TABLE>
- -----------------------------------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Stock Option Committee.
CALVIN S. KRUPA has served as the Company's President and Chief
Executive Officer 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 of the Company since February
1987. From February 1987 to August 1991, he also served as Treasurer of the
Company. Mr. Thole is not an employee of the Company. He has served as the
President and Chief Executive Officer of Packaging Plus, Inc., a
Minneapolis-based packaging company, since 1979.
JOHN F. DEBOER is the Secretary of SIG Holding U.S.A., Inc., a
privately-held holding company. Mr. DeBoer is also Vice President-Finance for
SIG Packaging Technology N.A. Inc. based in New Richmond, Wisconsin, 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. based in Bloomington, Minnesota, where he has practiced
law since 1976.
THOMAS F. RAINS was employed by Pillsbury Bakeries and Food Service,
Inc., a Minneapolis-based food products company, from 1992 until his retirement
in June 1995, at which time he held the position of Vice President/General
Manager - In-Store Retail Bakeries. From 1965 to 1992, Mr. Rains was employed by
McGlynn Bakeries, Inc. in various positions, including President of the Frozen
Products Division. From November 1996 to February 1997, Mr. Rains was Interim
Chief Operating Officer of the Company while the Company searched for a new
Chief Operating Officer.
INFORMATION ABOUT THE BOARD OF DIRECTORS
During the fiscal year ended January 31, 1997, the Board of Directors
held five meetings and took action by unanimous written consent on eight
occasions. None of the members of the Board of Directors proposed for
re-election attended less than 75% of the meetings of the Board of Directors and
Committees of the Board of Directors held during the period in which they served
as a director in the fiscal year ended January 31, 1997, except that Mr. DeBoer
attended approximately 71% of such meetings.
BOARD OF DIRECTOR COMMITTEES
The Company has three standing committees of the Board of Directors:
(i) the Audit Committee; (ii) the Compensation Committee; and (iii) the Stock
Option Committee.
The purpose of the Audit Committee 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 inquiries into the effectiveness of the
financial and accounting functions and controls of the Company. The Audit
Committee also addresses conflicts of interest that may arise in transactions
between the Company and its officers and directors. The Audit Committee held one
meeting during the fiscal year ended January 31, 1997.
The Compensation Committee is responsible for setting the compensation
of executive officers of the Company. The Compensation Committee held one
meeting during the fiscal year ended January 31, 1997.
The purpose of the Stock Option Committee is to administer the
Company's 1991 and 1996 Stock Option Plans and to designate appropriate
individuals to receive options pursuant to such Plans. The Stock Option
Committee held one meeting during the fiscal year ended January 31, 1997.
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
WILLIAM J. HOWARD, an executive officer of the Company, became Chief
Operating Officer of the Company in March 1997. From January 1995 to February
1997, Mr. Howard served as Senior Vice President, Business Development of GE
Capital Fleet Services, a financial services company based in Eden Prairie,
Minnesota. From June 1992 until January 1995 he served as Vice President,
Business Development with Pillsbury Bakeries and Food Service, Inc., a
Minneapolis-based food products company. Mr. Howard also served as Vice
President, Finance of Pillsbury Bakeries and Food Service, Inc. from May 1990 to
June 1992.
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned for services
rendered in all capacities to the Company during the Company's fiscal years
ended January 31, 1995, 1996 and 1997 by Calvin S. Krupa, President and Chief
Executive Officer and Bradley C. Yopp, Chief Financial Officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
Fiscal ---------------------------------------- ------------
Year Other Annual Securities All Other
Name and Ended Compensation(1) Underlying Compensation(2)
Principal Position January 31 Salary($) Bonus($) ($) Options(#) ($)
- ---------------------- ----------- --------- --------- ---------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Calvin S. Krupa, 1997 297,105 -- 20,947 20,000 --
President and Chief 1996 275,144 35,000 20,336 20,000 3,000
Executive Officer 1995 241,827 50,000 15,999 20,000 3,000
Bradley C. Yopp 1997 109,720 -- -- 12,000 --
Chief Financial 1996 100,355 10,000 -- 5,000 2,207
Officer 1995 89,809 -- -- 3,000 1,796
</TABLE>
- -----------------------
(1) Includes the cost to the Company of an automobile provided to Mr. Krupa
and the cost of a disability income policy for the benefit of Mr.
Krupa.
(2) Matching contributions by the Company to a 401(k) plan for the benefit
of the person named.
OPTION GRANTS DURING FISCAL 1997
The following table sets forth information with respect to each option
granted during the fiscal year ended January 31, 1997 to the executive officers
named in the Summary Compensation Table:
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Number of Percentage of Annual Rates of Stock
Securities Total Price Appreciation
Underlying Options Granted For Option Term (1)
Options To Employees Exercise Expiration -----------------------
Name Granted (#) in Fiscal Year(%) Price ($/Share) Date 5% ($) 10%($)
---- ----------- ----------------- --------------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Calvin S. 20,000 7.0 3.25 9/16/01 17,958 39,683
Krupa
Bradley C. 2,000 0.7 2.94 3/31/01 1,625 3,590
Yopp 10,000 3.5 3.25 9/16/01 8,979 19,842
</TABLE>
- ------------------------
(1) Computed based upon the closing price of the Company's Common Stock on
the date of grant. No assurance can be given that the stated rates of
appreciation (5% and 10%) will be or can be achieved.
AGGREGATE OPTION EXERCISES IN FISCAL 1997
AND FISCAL YEAR-END OPTION VALUES
The following table summarizes options exercised during the year ended
January 31, 1997 by the executive officers named in the Summary Compensation
Table and the value of the unexercised options held as of January 31, 1997:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Acquired Value Options at Fiscal Year End(#) Options at Fiscal Year End
Name on Exercise(#) Realized($) (Exercisable/Unexercisable) (Exercisable/Unexercisable)(1)
---- --------------- ----------- ----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Calvin S. Krupa -- -- 80,000/-- 20,000/--
Bradley C. Yopp -- -- 27,000/-- 12,620/--
</TABLE>
- ------------------------
(1) Based on a closing Common Stock trade price of $4.25 per share on
January 31, 1997, the Company's fiscal year end. The value of
unexercised in-the-money options is equal to the difference between
fair market value of the Common Stock underlying the options at fiscal
year-end and the exercise price of the options. Exercisable options
refer to those options that are exercisable as of January 31, 1997,
while unexercisable options refer to those options that become
exercisable at various times thereafter.
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 director immediately after each Annual Meeting of
Shareholders. The exercise price of such options is equal to the closing price
of the Company's Common Stock on the date of grant. The options are immediately
exercisable and expire five years from the date of grant, subject to earlier
cancellation upon termination as a director. The Company does not compensate
employee directors for service on the Board of Directors.
Two members of the Board of Directors received additional compensation
from the Company during the fiscal year ended January 31, 1997. The Company paid
Mr. Thole $2,500 for services as the Company's Secretary. The Company paid Mr.
Rains a total salary of $24,231 and granted Mr. Rains a five-year, immediately
exercisable option to purchase up to 15,000 shares of the Company's Common Stock
at an exercise price of $2.75 per share. Mr. Rains received this compensation in
consideration for his service as the Company's Interim Chief Operating Officer
from November 1996 through February 1997. The Company has also agreed to employ
Mr. Rains on a part-time basis and to pay him an annual salary of $25,000 for
services to be rendered in connection with various projects of the Company
during the fiscal year ending January 31, 1998.
EMPLOYMENT AGREEMENT, TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
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, 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 if such termination occurs "for cause," during the 18 months
following a "change in control," as 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.
The Company and Bradley C. Yopp are parties to a Change of Control
Termination Agreement dated February 25, 1995 (the "Change of Control
Agreement"). The Change of Control Agreement provides that following a "change
in control termination" the Company will pay Mr. Yopp a lump sum payment in an
amount equal to two times Mr. Yopp's annual compensation. A "change in control
termination" means a termination within one year of a change of control by the
Company or its successors or a termination by Mr. Yopp for "good reason" as
defined in the Change of Control Agreement. The amount payable to Mr. Yopp under
the Change of Control Agreement is subject to certain limitations set forth in
the Internal Revenue Code.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION. This report is provided by the Compensation Committee of
the Board of Directors of the Company (the "Committee"). The Committee, which
consists solely of non-employee directors, is responsible for establishing and
administering the Company's executive compensation program. The members of the
Committee do not receive awards under the Company's incentive compensation
programs. The Compensation Committee met in September 1996 to set annual
compensation and to award bonuses to the Company's executive officers based on
the Company's results for the fiscal year ended January 31, 1996.
COMPENSATION PROGRAM. The Committee is responsible for establishing,
implementing and monitoring the Company's executive compensation program. The
Company's current executive compensation program involves a combination of base
salary, performance-based bonuses and long-term incentive awards. Base salaries
are intended to attract and retain highly-qualified executives. Bonuses to
executive officers are intended to reward short-term performance of the
executive officer and the Company. Grants of stock options by the Company are
intended to encourage and reward executive officers based upon the Company's
long-term performance and to provide executive officers with a financial
interest in the success of the Company, which aligns the executive officers'
interests with the interests of the Company's shareholders.
BASE SALARY. The philosophy of the Committee is to set base salaries
for each of the executive officers of the Company at appropriate levels for the
relative positions of the officer and the duties of the position. The Committee
has the authority to determine the salaries of the Company's Chief Executive
Officer and other executive officers, subject to the terms of pre-existing
employment agreements. The Committee believes that there should be little change
from year to year in the base salary of the executive officers other than
increases due to: (i) growth of the Company's sales; (ii) growth in
responsibility of the position; or (iii) cost of living increases. The Committee
believes that additional compensation above base levels should be by bonus based
on individual performance and the financial performance of the Company.
PERFORMANCE-BASED BONUSES. Payment of bonuses to officers of the
Company is determined based upon the Company's financial results.
LONG-TERM INCENTIVE AWARDS. The Company's long-term incentive program
consists of stock option grants which encourage achievement of long-term goals
and objectives consistent with enhancing shareholder value. Awards of stock
options provide executives with increased motivation and incentive to exert
their best efforts on behalf of the Company by increasing their personal stake
in the Company's success through the opportunity to acquire a greater equity
interest in the Company and to benefit from appreciation in the value of the
Company's stock. All stock options granted to executive officers have an
exercise price of not less than the market value of the Company's Common Stock
on the date of grant, thereby ensuring that any value derived from such options
is dependent upon subsequent increases in share value which will be realized by
shareholders generally. Executives generally must be continually employed in
order for stock options to vest and become exercisable.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. When it met in September
1996, the Committee determined that Mr. Krupa would not receive a salary
increase, which means that Mr. Krupa's annual salary will continue to be
$291,500, as set in July 1995, and that he would not receive any bonus payment
based on the Company's performance during the fiscal year ended January 31,
1996. Mr. Krupa was awarded options to purchase up to 20,000 shares of the
Company's Common Stock exercisable at a price equal to the fair market value of
a share of the Company's Common Stock on the date of grant. The options vested
and became exercisable upon grant and have a term of five years. The Committee
believes Mr. Krupa's compensation is reasonable.
The foregoing Compensation Committee Report will not be deemed
incorporated by reference by any statement incorporating by reference this Proxy
Statement, or any portion thereof, into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934 and shall not otherwise be
deemed filed under such Acts.
James A. Thole
John F. DeBoer
Frank I. Harvey
ULTRA PAC, INC. COMPENSATION COMMITTEE
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total shareholder return,
assuming $100 invested on January 31, 1992, 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 dividends on its Common Stock. The prices
for the Company's Common Stock are closing bid prices as reported by the Nasdaq
Stock Market.
The historical stock price performance of the Company's Common Stock shown
below is not necessarily indicative of future performance. The graph below will
not be deemed incorporated by reference by any statement incorporating by
reference this Proxy Statement, or any portion thereof, into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934 and
shall not otherwise be deemed filed under such Acts.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
------------ ------------ ------------- ------------ ------------ ------------
1/31/92 1/29/93 1/31/94 1/31/95 1/31/96 1/31/97
- --------------------------------- ------------ ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Ultra Pac, Inc. 100 62 42 33 20 25
- --------------------------------- ------------ ------------ ------------- ------------ ------------ ------------
Dow Jones Containers and 100 105 108 100 112 145
Packaging Industrial Sector
- --------------------------------- ------------ ------------ ------------- ------------ ------------ ------------
Dow Jones Industrial Average 100 106 131 130 187 241
- --------------------------------- ------------ ------------ ------------- ------------ ------------ ------------
</TABLE>
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, 1997.
COMPLIANCE WITH SECTION 16 REPORTING OBLIGATIONS
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires executive officers and directors of the Company, and persons who
beneficially own more than 10 percent of the Company's outstanding shares of
Common Stock, to file initial reports of ownership and reports of changes in
ownership of securities of the Company with the Securities and Exchange
Commission and the Nasdaq Stock Market. Officers, directors and persons owning
more than 10 percent of the Company's outstanding Common Stock are required by
Securities and Exchange Commission regulation to furnish the Company with copies
of all Section 16(a) forms filed. Based solely on a review of the copies of such
reports and amendments thereto furnished to or obtained by the Company, or
written representations that no other reports were required, the Company
believes that during the fiscal year ended January 31, 1997, the Company's
directors, officers and beneficial owners of more than 10 percent of the
Company's shares of Common Stock complied with all applicable filing
requirements.
PRINCIPAL SHAREHOLDERS
Shareholders of record as of the close of business on April 22, 1997
are entitled to receive notice of and to vote at the Annual Meeting of
Shareholders. As of the record date there were outstanding and entitled to be
voted at the meeting, 3,835,265 shares of Common Stock, each share being
entitled to one vote.
SHARE OWNERSHIP OF MANAGEMENT
The following sets forth certain information as of the record date with
respect to shares of Common Stock beneficially owned by each executive officer
of the Company named in the Summary Compensation Table, each director of the
Company and by all executive officers and directors of the Company as a group.
Unless otherwise indicated, each of the following persons has sole voting and
investment power with respect to the shares of Common Stock set forth opposite
their respective names.
<TABLE>
<CAPTION>
Common Shares Beneficially Owned(1)
-----------------------------------------------
Name of Beneficial Owner Number of Shares Percent
- ---------------------------------------------- -------------------------- -----------------
<S> <C> <C>
Calvin S. Krupa 414,050 (2) 10.6%
James A. Thole 228,500 (3)(4) 5.9%
Frank I. Harvey 17,110 (3)(4) *
John F. DeBoer 7,500 (3)(5) *
Thomas F. Rains 36,349 (6) *
Bradley C. Yopp 30,000 (7) *
All directors and executive officers of the 759,634 (8) 19.1%
Company as a group
(7 persons)
</TABLE>
- ---------------------------------------------
*Less than 1%.
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's or the group's right to acquire them as of April 22, 1997,
or within 60 days of such date, are treated as outstanding when
determining the percent of the class owned by such individual and when
determining the percent of the class owned by the group.
(2) Includes options to purchase up to 80,000 shares of Common Stock.
(3) 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.
(4) Includes options to purchase up to 6,500 shares of the Common Stock.
(5) Includes options to purchase up to 6,500 shares of Common Stock and
1,000 shares owned jointly with Mr. DeBoer's spouse.
(6) Includes options to purchase up to 17,500 shares of Common Stock.
(7) Includes options to purchase up to 27,000 shares of Common Stock and
3,000 shares owned jointly with Mr. Yopp's spouse.
(8) Includes options to purchase up to 169,000 shares of Common Stock.
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, 1998.
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 if 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. Proposals that
shareholders may wish to present at the next Annual Meeting of Shareholders in
1998 must be received by the Company prior to January 31, 1998 to be included in
the Proxy Statement and Proxy Card relating to that meeting.
OTHER PROPOSALS
The Board of Directors of the Company does not intend to present any
business at the meeting other than matters specifically set forth in this Proxy
Statement and knows of no other business to come before the meeting. If,
however, any other matters should properly come before the meeting, it is the
intention of the persons named as proxies in the Proxy Card to vote the shares
represented thereby in accordance with their best judgment upon such matters.
COSTS AND METHOD OF SOLICITATIONS
The Company will bear all expenses incurred in connection with the
solicitation of proxies for the Annual Meeting of Shareholders. Solicitations of
proxies will be made by preparing and mailing the Notice of Annual Meeting,
Proxy Card, Proxy Statement and Annual Report to shareholders of record as of
the close of business on April 22, 1997. The cost of making the solicitation
includes the cost of preparing and mailing the Notice of Annual Meeting, Proxy
Card, Proxy Statement and Annual Report. In certain instances, officers of the
Company may make special solicitations of proxies either in person or by
telephone. Expenses incurred in connection with special solicitations are
expected to be nominal.
It is important that your shares are represented and voted at the
Annual Meeting of Shareholders, whether or not you plan to attend. Accordingly,
we respectfully request that you sign, date and mail your Proxy Card in the
enclosed envelope as promptly as possible. Thank you.
BY ORDER OF THE BOARD OF DIRECTORS
Date: May 12, 1997 James A. Thole,
SECRETARY
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[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, 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 at the close of business on April 22,
1997, with the powers the undersigned would possess if personally present at the
1997 Annual Meeting of Shareholders to be held at the Radisson Plaza Hotel, 35
S. 7th Street, Minneapolis, Minnesota at 3:30 p.m. local time on June 19, 1997,
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 Thomas F. Rains
3. 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)
- --------------------------------------------------------------------------------
[BACK]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL
BE VOTED AS DIRECTED. IF NO DIRECTION IS
GIVEN, THE PROXY WILL BE VOTED "FOR"
EACH PROPOSAL AND IN THE PROXY'S
DISCRETION ON ANY OTHER MATTERS TO COME
BEFORE THE MEETING.
Dated ____________________________, 1997
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(Signature)
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(Second signature)
PLEASE DATE AND SIGN ABOVE exactly as
your name appears at left, indicating
where appropriate, official position or
representative capacity.
