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 / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to <SUBSECTION SIGN> 240.14a-11(c) or
<SUBSECTION SIGN> 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 1, 1998, 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 2, 1998 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
Lou Ann Tucker, Secretary
April 29, 1998
- -------------------------------------------------------------------------------
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 1, 1998 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,
1998.
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 2, 1998,
are entitled to notice or, and to vote at, the meeting. At the close of business
on that date, the Company had 12,061,991 shares of common stock, $0.01 par value
per share ("Common Stock") outstanding.
<PAGE>
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.
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 III directors are Larry R. Inman,
Lemuel E. ("Book") Cunningham and Robert N. Thurston. They have consented to
serve as directors, if elected. Messrs. Inman, Cunningham and Thurston are
members of the present Board. The Class III directors to be elected at the 1998
annual meeting will serve until the annual meeting of stockholders in 2001 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 III director and each other
director, including their names and ages as of April 29, 1998, business
experience during the past five years and directorships in other public
corporations.
4
<PAGE>
Director Business
Name Age Since Experience
- ---- --- -------- ----------
Class I (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 1999):
- -------
Roy I. Anderson 78 1990 Director of the Company (since 1990),
Secretary of the Company (1990-1996);
sole practitioner (legal, 1949 to
present).
Michael W. Foster 57 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).
CLASS II (DIRECTORS WHOSE TERMS OF OFFICE WILL EXPIRE IN 2000):
- --------
Michael B. Leahy 63 1994 Director of the Company (since 1994);
self-employed investor; Managing
Director of Leahy Timber (Tree Farm)
(since 1962); Director and Secretary of
Ladd Estate Company (Real Estate
Investment Company) (since 1997).
Arthur P. Schuette 58 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 65 1996 Director of the Company (since 1996);
President of the TCS Group (consulting
company) (since 1991); Managing Director
of the Nassau Group (investment
(investment banking company) (since
1992); General Partner of Green Field
Capital Management company) (since
1993); Director of Environment One
Corporation (manufacturing company)
(Since 1991).
5
<PAGE>
CLASS III (NOMINEES FOR TERMS OF OFFICE TO EXPIRE IN 2001):
- ---------
Larry R. Inman 47 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") 76 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 65 1996 Director of the Company (since 1996);
Director of McDonald's Corporation (food
service company) (since 1974); Director
of ACNielsen (market research company)
(since 1996).
Directors' Meetings and Standing Committees
- -------------------------------------------
MEETINGS. During 1997, six 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 1997.
The Company also has a committee of three nonemployee 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 1997.
6
<PAGE>
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 1999 annual meeting should
submit his or her recommendations in writing no later than December 30, 1998, 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 1997. No fees were 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 8, 1998, 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.
7
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Name and Address of Beneficial Class
Beneficial Owner Ownership Outstanding
- ------------------- ---------- -----------
<S> <C> <C>
Steven G. Ross 1,800,000 (9) 14.72%
2000 West Marshall Dr.
Grand Prairie, TX 75051
Lemuel E. Cunningham 1,334,099 (1)(6) 10.91%
7000 W. Seven Rivers Dr.
Crystal River, FL 32629
Larry R. Inman 1,016,881 (7) 8.31%
2320 SE Ag-Bag Lane
Warrenton, OR 97146
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 125,000 (6)(8) 1.02%
991 Aster Ct.
Marco Island, FL 34145
Rolf E. Soderstrom 220,000 (6) 1.80%
111 Freeman Lane
Orleans, MA 02653
All directors and executive officers
as a group (11 persons) (6)(7) 4,284,278 35.03%
8
<PAGE>
<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.
<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.
<F8> Includes 5,000 shares held directly by wife.
<F9> Mr. Ross purchased 1,200,000 shares from High View Fund, High View
Asset Management Corp., The High View Fund, L.P. and The High View Fund
II, L.P. on April 6, 1998.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with its President and CEO
which automatically renews on a yearly basis, unless terminated by the death or
disability of the employee, or upon at least six months written notification by
either party. The employment agreement provides for base compensation, bonus
compensation and participation in the employee benefit plans offered by the
Company.
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 $100,000:
9
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
- --------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
---------------------------
Annual Compensation Awards Pay-outs
------------------- ------ --------
- --------------------------------------------------------------------------------------------------------------------
Other Restricted Securities LTIP All
Name and Annual Stock Underlying Pay- Other
Principal Salary Bonus Compen- Award(s) Options/ outs Compen-
Position Year ($) ($) sation($) ($) SARs (#) ($) sation
($)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Larry 1997 108,000 9,085 14,400 (1) 3,513 (3)
Inman, 1996 108,000 2,500 14,400 (1) 20,000/0 1,523 (3)
President & CEO 1995 99,000 16,583 (2)
- --------------------------------------------------------------------------------------------------------------------
<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 $50,000 or 10% of total annual salary
and bonus for any of the periods indicated.
<F3> Constitutes matching cash contributions by the Company under the Company's 401(k) plan.
</FN>
</TABLE>
The following table summarizes the aggregate number of options and
stock appreciation rights granted to executive officers of the Company named in
the Summary Compensation Table:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
Individual Grants
- --------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh.) Date
- --------------------------------------------------------------------------------
<S> <C>
None
- --------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
The following table summarizes aggregated options and stock
appreciation rights exercised during 1997 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 ($)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) 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.
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, 1997, or
written representations from certain reporting persons, all forms were filed on
a timely basis.
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.
11
<PAGE>
STOCKHOLDER PROPOSALS
Any stockholder proposals to be considered for inclusion in the proxy
materials for the Company's 1999 annual meeting must be received at the
principal executive offices of the Company not later than December 30, 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick was the principal accounting firm of the Company for
fiscal year 1997. Management expects to recommend KPMG Peat Marwick as the
principal accounting firm of the Company for fiscal year 1998. 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
Lou Ann Tucker, Secretary
12
<PAGE>
AG-BAG INTERNATIONAL LIMITED
ANNUAL MEETING -- JUNE 1, 1998
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 1, 1998, 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:
ELECTION OF CLASS III 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.
LARRY R. INMAN, LEMUEL E. ("BOOK") CUNNINGHAM AND ROBERT N. THURSTON
(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.
<PAGE>
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: _______________________, 1998.
------------------------------------
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.
- ------------------------------------------------------------------------------
