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: / / 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 <SUBSECTION> 240.14a-11(c) or
<SUBSECTION> 240.14a-12
AG-BAG INTERNATIONAL LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
AG-BAG INTERNATIONAL LIMITED
2320 SE AG-BAG LANE
WARRENTON, OREGON 97146
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF AG-BAG INTERNATIONAL LIMITED:
The annual meeting of stockholders of Ag-Bag International
Limited (the "Company") will be held at the offices of the Company, 2320 SE
Ag-Bag Lane, Warrenton, Oregon, on Monday, June 2, 1997, at 9:00 A.M. Pacific
Daylight Time, for the following purposes:
1. Electing three directors to serve for a three-year
term and until their successors are elected and qualified; and
2. Transacting such other business as may properly come
before the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on
April 3, 1997 as the record date. Only stockholders of record as of such date
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof. A list of stockholders entitled to vote
at the annual meeting will be available for inspection at the offices of the
Company.
BY ORDER OF THE BOARD OF DIRECTORS
LouAnn Tucker, Secretary
April 29, 1997
- -------------------------------------------------------------------------------
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK AND SIGN THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOUR PROMPT
RESPONSE COULD SAVE THE COMPANY THE EXPENSE OF A FOLLOW-UP MAILING.
- -------------------------------------------------------------------------------
<PAGE>
AG-BAG INTERNATIONAL LIMITED
2320 SE AG-BAG LANE
WARRENTON, OREGON 97146
(503) 861-1644
--------------------------------------
PROXY STATEMENT
--------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
AG-BAG INTERNATIONAL LIMITED
TO BE HELD AT
AG-BAG INTERNATIONAL LIMITED
2320 SE AG-BAG LANE
WARRENTON, OREGON
JUNE 2, 1997 AT 9:00 A.M. PDT
--------------------------------------
PERSONS MAKING THIS SOLICITATION
The accompanying proxy is solicited by the Board of Directors
of Ag-Bag International Limited, a Delaware corporation, 2320 SE Ag-Bag Lane,
Warrenton, Oregon 97146 (the "Company"). Copies of this proxy statement and the
accompanying proxy are being mailed to the stockholders on or about April 29,
1997.
The expense of this solicitation will be paid by the Company.
Solicitations will be made by the Company primarily by the use of the mails. If
necessary to obtain reasonable representation of stockholders at the annual
meeting, solicitations made by the Company may also be made by telephone,
telegraph or personal interview. Such further solicitation, if any, will be made
by regular employees of the Company who will not be additionally compensated
therefor. The Company will request brokers, banks or other persons holding stock
in their names, or in the names of their nominees, to forward proxy materials to
the beneficial owners of such stock or request authority for the execution of
the proxies and will reimburse brokers or other persons for their expenses in so
doing.
VOTING
Only stockholders of record at the close of business on April
3, 1997, are entitled to notice or, and to vote at, the meeting. At the close of
business on that date, the Company had 12,053,751 shares of common stock, $0.01
par value per share ("Common Stock") outstanding.
Each share of Common Stock outstanding on the record date is
entitled to one vote per share at the annual meeting of stockholders. Shares of
Common Stock represented in person or by proxy at the annual meeting (including
abstentions and broker non- votes) will be counted in determining that a quorum
is present. A plurality of votes cast at the annual meeting is required to elect
the directors. Broker non-votes will not be treated as votes cast at the meeting
and therefore, will not be counted in calculating a plurality. Proxies
withholding authority to vote for a nominee will be treated as votes cast.
There are no cumulative voting rights.
1
<PAGE>
When a proxy in the form accompanying this proxy statement is
properly executed and returned, the shares represented will be voted at the
meeting in accordance with the instructions specified in the proxy. If no
instructions are specified, the shares will be voted FOR the proposal as
indicated in the proxy and such votes will be counted toward determining a
quorum.
REVOCABILITY OF PROXY
Any person giving a proxy in the form accompanying this proxy statement
has the power to revoke it at any time before its exercise. The stockholder may
revoke a proxy given in response to this solicitation by (i) giving written
notice of revocation to the Secretary of the Company, (ii) delivering a
later-dated proxy to the Company, or (iii) attending the meeting and voting in
person. Attendance at the meeting will not by itself revoke a proxy.
ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of
two Class I directors, Messrs. Anderson and Foster, three Class II directors,
Messrs. Leahy, Schuette and Soderstrom, and three Class III directors, Messrs.
Inman, Cunningham and Thurston. At each annual meeting of stockholders,
directors are elected for a term of three years to succeed those directors whose
terms expire at that annual meeting.
The nominees for election as Class II directors are Michael B.
Leahy, Arthur P. Schuette, and Rolf E. Soderstrom. They have consented to serve
as directors, if elected. Messrs. Leahy, Schuette and Soderstrom are members of
the present Board. The Class II directors to be elected at the 1997 annual
meeting will serve until the annual meeting of stockholders in 2000 and until
their successors are elected and qualified.
Unless authority to vote for a director or directors is
withheld, the accompanying proxy, if properly executed and returned, will be
voted for the election of the nominees named below.
The following table sets forth information with respect to
each person nominated for election as a Class II director and each other
director, including their names and ages as of April 29, 1997, business
experience during the past five years and directorships in other public
corporations.
<TABLE>
<CAPTION>
Director Business
Name Age Since Experience
- ---- --- ----- ----------
CLASS I (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1999):
- -------
<S> <C> <C> <C>
Roy I. Anderson 77 1990 Director of the Company (since 1990),
Secretary of the Company (1990-1996);
sole practitioner (legal, 1949 to
present).
Michael W. Foster 56 1990 Director of the Company (since 1990);
President of Oregon Pacific Industries
of LaPine, Oregon (pallet mill
operation) (1988 to 1995); President
of Astoria Pacific Industries, Inc.
(investment company) (since 1989);
President of Airporter Marketing
Company, Inc. (marketing
company) (since 1995); Educator (1976- 1996).
2
<PAGE>
CLASS II (NOMINEES FOR TERMS OF OFFICE TO EXPIRE IN 2000):
- --------
Michael B. Leahy 62 1994 Director of the Company (since 1994);
self-employed investor.
Arthur P. Schuette 57 1990 Director of the Company (since
1990) and Vice President of Sales of the
Company (since 1991); Treasurer of
the Company (1990-1991) and
Ag-Bag Corporation (1983-1991), a former
subsidiary.
Rolf E. Soderstrom 64 1996 Director of the Company (since 1996);
President of the TCS Group
(consulting company) (since 1991);
Managing Director of the Nassau
Group (investment banking
company) (since 1992); General Partner of
Green Field Capital Management
(investment company) (since 1993);
Director of Environment One
Corporation (manufacturing
company) (Since 1991);
CLASS III (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1998):
- ---------
Larry R. Inman 46 1990 Director, Chairman of the Board and
Chief Executive Officer of the
Company (since 1990); President of
the Company since 1993; President of
Ag- Bag Corporation (1984-1989) and
Chairman (1989-1994) of Ag-Bag
Corporation (former subsidiary).
Lemuel E. ("Book") 75 1990 Director of the Company (since 1990);
Cunningham Vice President of the Company (1990-
1996); Owner/operator of Post Oaks
Ranch and Cunningham Cattle and
Feed Company (since 1958).
Robert N. Thurston 64 1996 Director of the Company (since 1996);
Director of McDonald's Corporation
(food service company) (since 1974);
Director of Jiffy Lube International,
Inc. (automotive service
company) (since 1990); Director of ACNielsen
(market research company) (since
1996).
</TABLE>
3
<PAGE>
Directors' Meetings and Standing Committees
- -------------------------------------------
Meetings
--------. During 1996, eight meetings of the Board of
Directors were held. All directors attended more than 75% of the aggregate
number of meetings of the Board and committees during the period of which such
director was a member of the Board and any such Committee.
Committees
----------. The Company has a standing Audit Committee which
reviews the Company's annual audit and any comments or management reports issued
in connection therewith and reports to the Board of Directors on any matters it
believes should be brought to the Board's attention. It is also responsible for
reviewing the Company's conflicts of interest, if any, as required by the NASD
and Nasdaq and reviews matters relating to disclosure, corporate practices,
regulatory and financial reporting, account procedures and policies, and
financial and accounting controls. The current members of the Audit Committee
are directors Foster and Leahy. The Audit Committee held two meetings in 1996.
The Company also has a committee of three disinterested
directors who administer and make awards under the Company's Incentive Stock
Option Plan and its 1991 Employee Stock Plan. The current members of the
committee are directors Foster, Leahy and Anderson. The stock plan committee
held one meeting in 1996.
The Board of Directors does not have standing compensation or
nominating committees. The Board of Directors will consider nominees for the
Board that are recommended by stockholders. Any stockholder who wishes to
recommend nominees for election as a director at the 1998 annual meeting should
submit his or her recommendations in writing no later than December 30, 1997, to
the Company, Attention: Corporate Secretary, 2320 SE Ag-Bag Lane, Warrenton,
Oregon 97146. The stockholder should specify the name of each proposed nominee
and should set forth information as to the nominee's qualifications for
membership on the Board.
Compensation
------------. On November 11, 1996 the Company adopted a
Nonemployee Director Stock Option Plan. Each Nonemployee director received an
option to purchase 50,000 shares of common stock, which vest over a 3 year
period at the rate of 40% after six months, 40% after two years and 20% after
three years. No consideration was received by the Company upon the grant of the
options. The Nonemployee options are exercisable at the fair market value of the
Common Stock on the date of grant which was $1 1/16. A total of 300,000 options
were granted during 1996 under the Nonemployee Director Stock Option Plan, which
are 40% vested. No options were exercised during 1996. No cash compensation was
paid to any director serving on the Board of Directors.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS
The following table sets forth certain information regarding
the beneficial ownership of the Company's Common Stock as of April 4, 1997, by
(i) each director, director nominee and named executive officer; (ii) each
person known to the Company to be a beneficial owner of more than 5% of the
outstanding Common Stock; and (iii) all directors and executive officers as a
group. Except as otherwise indicated in the notes below, each person whose
ownership is reported has sole voting power and sole dispositive power as to the
number of shares shown.
4
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Name and Address of Beneficial Class
Beneficial Owner Ownership Outstanding
- ---------------- --------- -----------
<S> <C> <C>
Lemuel E. Cunningham 1,334,099 (1)(6) 10.90%
7000 W. Seven Rivers Dr.
Crystal River, FL 32629
Storie Partners, LP 1,130,300 9.23%
Storie Advisors, Inc.
1 Bush St., Suite 1350
San Francisco, CA 94104
Larry R. Inman 1,016,881 (7) 8.31%
2320 SE Ag-Bag Lane
Warrenton, OR 97146
David J. Merriman 681,876 5.57%
150 South Rodeo Drive, Suite 100
Beverly Hills, CA 90212
Roy I. Anderson 572,811 (5)(6) 4.68%
1555 Washington Street
Blair, NE 68008
Arthur P. Schuette 267,959 (2) 2.19%
513 Porter's Neck Road
Wilmington, NC 28405
Michael W. Foster 213,760 (3)(6) 1.75%
1636 Irving Street
Astoria, OR 97103
Michael B. Leahy 90,000 (4)(6) .74%
2944 S.W. Montgomery Dr.
Portland, OR 97201
Robert N. Thurston 25,000 (6) .20%
991 Aster Ct.
Marco Island, FL 34145
Rolf E. Soderstrom 20,000 (6) .16%
111 Freeman Lane
Orleans, MA 02653
All directors and executive officers
as a group (11 persons) (6)(7) 3,954,246 32.30%
- -------------------------------------
<FN>
<F1> Held in trust by the Lemuel E. Cunningham Living Trust, of which Lemuel E.
Cunningham and Naomi Ruth Cunningham are the trustees.
<F2> Held jointly with his wife, except for 980 shares held directly.
5
<PAGE>
<F3> Mr. Foster is the beneficial owner of 193,760 shares, consisting of
(i) 188,642 shares owned directly, and (ii) 5,118 shares owned by
Astoria Pacific Industries, Inc., of which Mr. Foster is the
President.
<F4> Includes 35,000 shares owned by Mr. Leahy as Trustee for the benefit
of his wife Ann Leahy and 35,000 shares owned by Ann Leahy as Trustee
for the benefit of Mr.
Leahy.
<F5> Includes 38,000 shares held in trust by Roy Anderson.
<F6> Includes options to purchase 20,000 shares of Common Stock which were
granted under the Nonemployee Director Stock Option Plan and are
exercisable within 60 days.
<F7> Includes options to purchase 20,000 shares of Common Stock held by
Larry Inman and options to purchase 10,000 shares of Common Stock held
by each of Lou Ann Tucker, Michael Wallis and Walter Jay, which were
granted under the Incentive Stock Option Plan and are exercisable
within 60 days.
</FN>
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid or to be paid by the Company to (1) all individuals serving as
Chief Executive Officer during the last fiscal year and (2) each of the four
most highly compensated executive officers of the Company whose total annual
salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
----------------------
Annual Compensation Awards Pay-outs
-------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Other Restricted Securities Other
Name and Annual Stock Underlying LTIP Pay- Compen-
Principal Salary Bonus Compen- Award(s) Options/ outs sation
Position Year ($) ($) sation ($) ($) SARs (#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Larry 1996 108,000 2,500 14,400(1) 20,000/0 1,523(3)
Inman, 1995 99,000 16,583 (2)
President & 1994 98,400 39,947 (2)
CEO
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Perquisites and other personal benefits included a $4,800 automobile
expense allowance and a $9,600 farm-related expense allowance.
<F2> Perquisites and other personal benefits, if any, did not exceed the
lesser of either $50,000 or 10% of total annual salary and bonus for
any of the periods indicated.
<F3> Constitutes matching cash contributions by the Company under the Company's 401(k) plan.
</FN>
</TABLE>
The following table summarizes the aggregate number of options and
stock appreciation rights granted to executive officers of the Company named in
the Summary Compensation Table:
6
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
Individual Grants
- --------------------------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees or Base Expiration
Granted in Fiscal Price Date
Name (#)(1) Year (2) ($/Sh.)(3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Larry Inman 20,000/0 40%/0 $1 1/16 Nov. 2001
President &
CEO
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Options vest immediately.
<F2> Based on total options granted to employees of 50,000.
<F3> Fair market value at date of grant.
</FN>
</TABLE>
The following table summarizes aggregated options and stock
appreciation rights exercised during 1996 and the number and value of options
and stock appreciation rights held at year end by executive officers of the
Company named in the Summary Compensation Table:
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired
on Exercise (#) Value Realized Exercisable/ Exercisable/
Name ($) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Larry Inman 0 $0 20,000/0 $0/0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended
("Section 16") requires that all executive officers and directors of the Company
and all persons who beneficially own more than 10% of the Company's Common Stock
file certain reports regarding their ownership of and changes in their ownership
of the Company's securities with the Securities and Exchange Commission.
7
<PAGE>
Based solely upon the Company's review of the copies of the
filings which it received with respect to the fiscal year ended December 31,
1996, or written representations from certain reporting persons, all forms were
filed on a timely basis except that: (1) Mr. Soderstrom inadvertently filed a
late Form 3 stating his initial stock ownership upon becoming a director; (2)
Mr. Anderson, Mr. Cunningham, Mr. Foster, Mr. Leahy, Mr. Soderstrom and Mr.
Thurston inadvertently filed late Form 5's to report the grant of options on
November 11, 1996, to purchase shares of Common Stock under the Nonemployee
Director Stock Option Plan; and (3) Mr. Inman, Ms. Tucker, Mr. Wallis and Mr.
Jay inadvertently filed late Form 5's to report the grant of options on November
11, 1996, to purchase shares of Common Stock under the Incentive Stock Option
Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 25, 1995, Roy I. Anderson loaned the Company $75,000,
which was evidenced by a promissory note bearing interest at the rate of 10% per
annum. The company is making equal monthly payments on the promissory note which
is to be paid off on April 30, 2000.
Currently, there are 174,000 outstanding shares of Preferred
Stock, Series A, which are owned by the Lemuel E. Cunningham Trust and by
members of his family. The Company has obtained and currently maintains life
insurance on the life of Mr. Cunningham in the amount of $1,000,000 for the
purpose of redeeming the Preferred Stock in the event of his death. In such
event, the Company presently intends to redeem such Preferred Stock and may use
any excess proceeds to reduce or retire any then outstanding loan or loans to
the Company from Mr. Cunningham.
STOCKHOLDER PROPOSALS
Any stockholder proposals to be considered for inclusion in
the proxy materials for the Company's 1998 annual meeting must be received at
the principal executive offices of the Company not later than December 30, 1997.
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG Peat Marwick are not expected to be
present at the annual meeting and are not expected to make a statement at the
annual meeting or be available to respond to questions.
TRANSACTION OF OTHER BUSINESS
The Company is not aware of any other business to be presented
at the annual meeting other than the matters described above. If other matters
properly come before the meeting, the proxyholders intend to vote proxies in
accordance with their best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
LouAnn Tucker, Secretary
8
<PAGE>
AG-BAG INTERNATIONAL LIMITED
ANNUAL MEETING -- JUNE 2, 1997
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Larry Inman and Lou Ann Tucker, and each of
them, proxies with power of substitution to vote on behalf of the undersigned
all shares which the undersigned may be entitled to vote at the annual meeting
of stockholders of Ag-Bag International Limited to be held at 2320 SE Ag-Bag
Lane, Warrenton, Oregon, on June 2, 1997, at 9:00 A.M. Pacific Daylight Time, or
at any adjournment or adjournments thereof, with all powers that the undersigned
would possess if personally present, with respect to the following:
1. ELECTION OF CLASS II DIRECTORS - PROPOSED BY BOARD OF DIRECTORS
/ / FOR all nominees listed below (except as marked to the
contrary below) or, if any named nominee is unable to serve,
for a substitute nominee.
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
MICHAEL B. LEAHY, ARTHUR P. SCHUETTE AND ROLF E. SODERSTROM
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- ---------------------- ----------------------- -----------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
THE PROXIES MAY VOTE IN THEIR DISCRETION AS TO OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE MEETING.
Date: _______________________, 1997.
------------------------------------
Stockholder's Signature
------------------------------------
Stockholder's Signature (if shares are held jointly)
Please date and sign exactly as your name appears
hereon, including designation as executor, trustee,
etc., if applicable. When shares are held jointly,
each joint owner should sign. If a corporation,
please sign in full corporate name by the president
or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
- ------------------------------------------------------------------------------
ENVELOPE.
- --------
