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:
|X| Preliminary proxy statement |_| Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|_| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BPI PACKAGING TECHNOLOGIES, INC.
(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)(1) 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: September 5, 1997
<PAGE>
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
DIGHTON, MASSACHUSETTS 02764
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of BPI
Packaging Technologies, Inc., a Delaware corporation (the "Company"), will be
held on October 21, 1997 at 8:00 a.m. at The Holiday Inn, 700 Myles Standish
Boulevard, Taunton, Massachusetts, 02780 for the following purposes:
1 To elect two (2) members of the Company's Board of Directors for a
three-year term,
2. To consider and act upon a proposal to amend the Certificate of
Incorporation of the Company (the "Certificate") to increase the
authorized number of shares of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), from 30,000,000 shares to
60,000,000 shares,
3. To consider and act upon a proposal to amend the Certificate to
increase the authorized number of shares of the Company's Preferred
Stock, par value $.01 per share (the "Preferred Stock"), from 2,000,000
shares to 6,000,000 shares, and
4. To consider and act upon any matters incidental to the foregoing and
any other matters that may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on September 8,
1997 as the record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at the meeting and any
adjournment or adjournments thereof.
We hope that all stockholders will be able to attend the meeting in
person. In order to assure that a quorum is present at the meeting, please date,
sign and promptly return the enclosed proxy whether or not you expect to attend
the meeting. A postage-paid envelope, addressed to American Stock Transfer &
Trust Company, the Company's transfer agent and registrar, has been enclosed for
your convenience. If you attend the meeting, your proxy will, at your request,
be returned to you and you may vote your shares in person.
By Order of the Board of Directors
Dennis O'Connor
Secretary
Dighton, Massachusetts
September [15], 1997
<PAGE>
PRELIMINARY COPY
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
DIGHTON, MASSACHUSETTS 02764
September [15], 1997
---------------
PROXY STATEMENT
---------------
The enclosed proxy is solicited by the Board of Directors (the "Board
of Directors") of BPI Packaging Technologies, Inc. (the "Company"), a Delaware
corporation, for use at the Annual Meeting of Stockholders to be held at The
Holiday Inn, 700 Myles Standish Boulevard, Taunton, Massachusetts 02780 at 8:00
a.m. on October 21, 1997, and at any adjournment or adjournments thereof.
Stockholders of record at the close of business on September 8, 1997
(the "Record Date") will be entitled to vote at the meeting or any adjournment
or adjournments thereof. On that date, ____________ shares of Common Stock, $.01
par value per share, of the Company ("Common Stock") were issued and
outstanding. There were also __________ shares of Series A Convertible Preferred
Stock ("Series A Preferred Stock") issued and outstanding on the Record Date
(collectively, the Common Stock and Series A Preferred Stock are referred to as
the "Voting Securities"). Each share of Common Stock and Series A Preferred
Stock entitles the holder thereof to one vote with respect to all matters
submitted to stockholders at the meeting.
The presence of the holders of a majority of the issued and outstanding
shares of Common Stock and Series A Preferred Stock voting as a single class,
entitled to vote at the meeting, either in person or represented by a properly
executed proxy, is necessary to constitute a quorum for the transaction of
business at the meeting.
The election of directors will be determined by a plurality of the
votes cast. The proposal to increase the number of authorized shares of Common
Stock will require the vote of a majority of all outstanding Common Stock, and a
majority of all outstanding Voting Securities, for passage. The proposal to
increase the number of authorized shares of Preferred Stock will require the
vote of a majority of all outstanding Voting Securities for passage. Abstentions
and broker non-votes (which result when a broker holding shares for a beneficial
holder has not received timely instructions on certain matters from such
beneficial holder and the broker does not have discretionary voting power on
such matters) are counted for purposes of determining the presence or absence of
a quorum at the meeting. Abstentions are counted in tabulation of the votes cast
on proposals presented to stockholders, whereas broker non-votes are not counted
for purposes of determining whether a proposal has been approved.
<PAGE>
-2-
The directors and officers of the Company as a group own or may be
deemed to control 3,395,629 shares of Common Stock, constituting approximately
___% of the outstanding shares of Common Stock and Series A Preferred Stock,
voting as a single class, of the Company. Each of the directors, nominated
directors and officers has indicated his or her intent to vote all shares of
Voting Securities owned by him or her in favor of each item set forth herein.
Stockholders may vote in person or by proxy. Execution of a proxy will
not in any way affect a stockholder's right to attend the meeting and vote in
person. A proxy may be revoked at any time before it is exercised by written
notice to the Secretary prior to the meeting, or by giving the Secretary a duly
executed proxy bearing a later date than the proxy being revoked at any time
before such proxy is voted, or by appearing at the meeting and voting in person.
The shares represented by all properly executed proxies received in time for the
meeting will be voted as specified therein. In the absence of a special choice,
shares will be voted in favor of the election of those persons named in this
Proxy Statement as directors and in favor of all other items set forth herein.
The Board of Directors knows of no other matter to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote may be taken, such shares represented by all proxies received by the Board
of Directors will be voted with respect thereto in accordance with the judgment
of the persons named as attorneys in the proxies. The Board of Directors knows
of no matter to be acted upon at the meeting that would give rise to appraisal
rights for dissenting stockholders.
The Company is providing to each stockholder entitled to vote at this
meeting, simultaneously with the mailing of this proxy, without charge, a copy
of the Company's Annual Report on Form 10-K (the "Form 10-K") for the fiscal
year ended February 28, 1997 ("Fiscal 1997").
This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about September [15], 1997.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Certificate and Bylaws, as amended, provide that the
members of the Board of Directors are to be classified into three classes, each
with, as nearly as possible, one-third of the members of the Board of Directors.
The classified Board is designed to assure continuity and stability in the Board
of Directors' leadership and policies. The Board of Directors believes that the
classified Board assists the Board of Directors in protecting the interests of
the Company's stockholders in the event of an unsolicited offer for the Company.
Dennis N. Caulfield and Ivan J. Hughes are classified as Class I directors and
have been elected to serve a three year term, expiring at the Company's 1998
Annual Meeting of stockholders. David N. Laux and C. Jill Beresford are
classified as Class II directors and will be nominated at
<PAGE>
-3-
this meeting to serve as directors until the year 2000 Annual Meeting. Ronald V.
Caulfield is classified as a Class III director and has been elected to serve
until the 1999 Annual Meeting. At each annual meeting of stockholders, the
successors to the class of directors whose terms expire at that meeting are
elected for a term of office to expire at the third succeeding annual meeting
after their election and until their successors have been duly elected by the
Company's stockholders. Directors who are chosen to fill vacancies on the
classified Board shall hold office until the next election of the class for
which those directors were chosen, and until their successors are duly elected
by the stockholders. Officers are elected by and serve at the discretion of the
Board of Directors, subject to their employment contracts.
Shares represented by all proxies received by the Board of Directors
and not so marked as to withhold authority to vote for an individual Class II
director, or for all Class II directors, will be voted (unless one or more
nominees are unable or unwilling to serve) FOR the election of Mr. David N. Laux
and Ms. C. Jill Beresford as Class II directors, each to serve until the year
2000 Annual Meeting. The Board of Directors knows of no reason why either such
nominee should be unwilling to serve, but if such should be the case, proxies
will be voted for the election of some other person or for fixing the number of
Class II directors at a lesser number.
The following table sets forth the ages of and positions and offices
presently held by each nominee Class II director and the directors of the
Company, as well as the date each individual was first elected a director. For
information about ownership of the Company's Voting Securities by each nominee
Class III director and director, see "BENEFICIAL OWNERSHIP OF VOTING
SECURITIES."
<TABLE>
<CAPTION>
Class to
Date Which
First Nominee or
Became Positions and Offices Director
Name Age Director With the Company Belongs
---- --- -------- ---------------- -------
<S> <C> <C> <C> <C>
Dennis N. Caulfield...................... 58 4/24/89 Chairman of the Board of I
Directors and Chief Executive
Officer
C. Jill Beresford*....................... 43 4/24/89 President, Treasurer and Director II
Ronald V. Caulfield...................... 55 5/20/94 President and Chief Executive III
Officer of RC American, Inc. and
Director
David N. Laux*........................... 69 1/1/93 Director II
Ivan J. Hughes........................... 68 5/25/96 Director I
- -------------------------------------
<FN>
* Nominees for election at this meeting.
</FN>
</TABLE>
<PAGE>
-4-
Compliance with Section 16(a)
Section 16(a) ("Section 16(a)") of the Securities Exchange Act of 1934,
as amended (the"Exchange Act"), requires executive officers and directors, and
persons who beneficially own more than ten percent (10%) of the Company's Common
Stock or Series A Preferred Stock, to file initial reports on Form 3, reports of
changes in ownership on Form 4 and annual statements of changes in beneficial
ownership on Form 5 with the Securities and Exchange Commission ("SEC") and any
national securities exchange on which the Company's securities are registered.
Executive officers, directors and greater than ten percent (10%) beneficial
owners are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and representations from the Company's executive officers and directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, directors and greater than ten percent (10%) beneficial
owners were complied with for Fiscal 1997, except that Paul J. DeChristofaro
filed a Form 3 on May 7, 1997 which related to his becoming an officer of the
Company on January 20, 1997.
Committees of the Board--Board Meetings
The Board of Directors established both an Audit Committee and a
Compensation Committee on December 31, 1992. David N. Laux and Ivan J. Hughes
are the members of the Audit Committee. The purposes of the Audit Committee are
to: (i) review the Company's financial results and recommend the selection of
the Company's independent auditors; (ii) review the effectiveness of the
Company's accounting policies and practices, financial reporting and internal
controls; and (iii) review the scope of independent audit coverage, the fees
charged by the independent auditors, any transactions which may involve a
potential conflict of interest, and internal control systems. The Audit
Committee met ___ (__) times during Fiscal 1997.
The Compensation Committee consists of the Company's two outside
directors, David N. Laux and Ivan J. Hughes. The Compensation Committee was
established to set and administer the policies which govern annual compensation
for the Company's executives. Following review and approval by the Compensation
Committee of the compensation policies, all issues pertaining to executive
compensation are submitted to the Board of Directors for approval. The
Compensation Committee negotiates and approves compensation arrangements for
officers, employees, consultants and directors of the Company, including, but
not limited to, the grant of options of the Company's Common Stock pursuant to
the Company's 1990 and 1993 Stock Option Plans or other plans which may be
established. The Compensation Committee met once during Fiscal 1997.
The Company does not have a standing nominating committee or a
committee performing similar functions.
The Board of Directors met ____ (__) times during Fiscal 1997 and also
met informally on a number of occasions, voting on corporate actions by written
consent. [All of the Company's directors attended all of the meetings of the
Board of Directors in Fiscal 1997 during the period for which they were
directors and/or served on the Audit and Compensation Committees.]
<PAGE>
-5-
C. Jill Beresford, the Company's President, Treasurer and a director
and Gregory M. Davall, the Company's Vice President, Office of the Chairman, are
spouses. Dennis N. Caulfield, the Company's Chief Executive Officer, and Ronald
V. Caulfield, President of RC America, Inc., a subsidiary of the Company and a
director of the Company, are brothers. Except for such relationships, no
director or executive officer is related by blood, marriage or adoption to any
other director or executive officer.
Background
The principal occupations during the past five years of each of the
Company's directors and nominees are as follows:
Dennis N. Caulfield. Mr. Caulfield has been Chairman of the Board of
Directors and Chief Executive Officer of the Company since May 1990 and a
Director of the Company since March 1989. From March 1989 to March 1990, Mr.
Caulfield provided consulting services to the Company. From 1984 to 1988 he was
Chairman of the Board of Directors and Chief Executive Officer of Northeast
Precision Feed Screw, Inc., a manufacturer of plastics processing equipment. Mr.
Caulfield was Chairman and Chief Executive Officer of Synthetic Materials
Corporation, a processor of thermoplastics, from 1979 to 1984. Mr. Caulfield
received a Bachelor of Arts degree in Political Science and a Master of Arts
degree in Economics from the University of Connecticut. Mr. Caulfield is the
brother of Ronald V. Caulfield, the Chief Executive Officer and President of RC
America, Inc. and a Director of the Company.
C. Jill Beresford. Ms. Beresford has been the Company's President since
July 1996. She has been Treasurer of the Company since May 1990 and a Director
of the Company since March 1989. From May 1990 to July 1996, she was the Vice
President of Marketing. From 1987 to 1989, Ms. Beresford was President of CJB
Communications, a communications consulting firm involved in marketing,
advertising and public relations. From 1982 to 1987, Ms. Beresford was a Vice
President of Grey Canada, a marketing and communications firm, with
responsibility for marketing, advertising, and public relations programs for
Grey Canada's clients. Since 1984, Ms. Beresford has been a director of
Beresford-Canada. Ms. Beresford attended the University of Guelph, Ontario,
Canada and received a Masters degree in Business Administration from Boston
University. Ms. Beresford is a 100% shareholder of Beresford- Canada. Ms.
Beresford is the wife of Gregory M. Davall, the Company's Vice President, Office
of the Chairman.
Ronald V. Caulfield. Mr. Caulfield has served as a Director of the
Company since June 1994. Mr. Caulfield has been the Chief Executive Officer and
President of RC America, Inc. since November 1992. From March 1989 to October
1992, Mr. Caulfield was the Vice President of Purchasing for F&F Merchandising
Company, a privately owned wholesale company, where he was principally
responsible for negotiating the purchase of nationally advertised brand name
close outs direct from the manufacturer. From February 1988 to March 1989, he
was the Executive Vice President of Mars Stores, Inc., a publicly held retail
discount store company. In this capacity, Mr. Caulfield was responsible for
establishing and achieving business plans for all buying, marketing and store
operations activities. From 1971 to 1988, Mr. Caulfield was employed in various
<PAGE>
-6-
capacities at Caldor, Inc., a publicly owned discount store company, serving
lastly as the Vice President, Divisional Merchandise Manager and as a member of
the Operating Committee. Mr. Caulfield attended the University of Connecticut.
Mr. Caulfield is the brother of Dennis N. Caulfield, the Company's Chief
Executive Officer and Chairman of the Board of Directors.
David N. Laux. Mr. Laux has served as a Director of the Company since
January 1993. Since 1990, Mr. Laux has been President of the USA-ROC Economic
Council, a private non- profit association which promotes business relations
between the United States and Taiwan. From 1986 to 1990, Mr. Laux was Chairman
and Managing Director of the American Institute of Taiwan, a non-profit
corporation under contract to the United States Department of State to manage
commercial, cultural and other relations between the United States and Taiwan.
From 1982 to 1986, Mr. Laux was Director of Asian Affairs for the National
Security Council in the White House and prior to that held appointments at the
Department of Commerce, the Department of Treasury and other United States
Government agencies, primarily in Asian affairs. Mr. Laux is a Trustee of the
ROC Taiwan Fund. Mr. Laux received his Bachelor of Arts from Amherst College and
his Master of Business Administration from The American University in
Washington, D.C. and he has done graduate work at the University of California
(Berkeley) and Georgetown University. Mr. Laux is also a graduate of the
Advanced Management Program at Harvard Business School.
Ivan J. Hughes. Mr. Hughes has served as a Director of the Company
since March 1996. Since 1991, Mr. Hughes has been the President of the Plastic
Division of Duro Bag Manufacturing Company, a privately held company which
manufactures grocery bags, shopping and specialty bags as well as plastic bags
for the food and retail industry. Mr. Hughes has been employed by Duro Bag in
various positions for the past 32 years. Mr. Hughes received a Bachelor of
Science in Mechanical Engineering at Lafayette College and completed his
graduate studies at Columbia University.
Executive Officers
The executive officers of the Company, their ages and positions held in
the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Dennis N. Caulfield............................. 58 Chairman of the Board of Directors and Chief
Executive Officer
C. Jill Beresford............................... 43 President, Treasurer and Director
Paul J. Decristofaro............................. 50 Chief Financial Officer
Alex F. Vaicunas................................ 69 Vice President, Film Sales
Gregory M. Davall............................... 41 Vice President, Office of the Chairman
Ronald V. Caulfield.............................. 55 Chief Executive Officer and President of RC America,
Inc. and Director
Don Cameron...................................... 51 President of Market Media, Inc. and Director
</TABLE>
<PAGE>
-7-
The following is a brief summary of the background of each executive
officer of the Company other than Mr. Caulfield and Ms. Beresford, whose
backgrounds are summarized above.
Paul J. Decristofaro. Mr. Decristofaro is a certified public accountant
and has been the Company's Chief Financial Officer since January 1997. From 1991
to 1996, Mr. DeCristofaro served as Chief Financial Officer to Carlo Gavazzi,
Inc., a privately held company that designs and manufactures custom computer
enclosures, peripherals and electronic components. From 1980 to 1991, Mr.
DeCristofaro served as Vice President of Finance and Chief Financial Officer for
Hersey Products, Inc., a privately held manufacturer of liquid measurement and
control devices. Mr. DeCristofaro received a Bachelor of Science degree in
Accounting from Stonehill College, a Masters of Science degree in Taxation from
Bentley College and a Masters degree in Business Administration from
Northeastern University.
Alex F. Vaicunas. Mr. Vaicunas has been the Company's Vice President,
Film Sales since 1996. From 1988 to 1996 he was the Company's Vice President of
Sales. From 1985 to 1987, he was Vice President of Sales and a consultant to
Surrey Industries, Inc., the manufacturer whose business was acquired by the
Company in 1988. From 1973 to 1985, Mr. Vaicunas was Sales Manager in the
flexible film packaging markets for the Plastic Products Group of Union Camp
Corporation. Mr. Vaicunas previously held senior sales management positions at
Northern Petro Chemical and Philips Petroleum Corporation and has over 30 years
of experience in the marketing and sales of flexible film packaging.
Gregory M. Davall. Mr. Davall has been the Company's Vice President,
Office of the Chairman, since March 1997, and previously served as the Vice
President of Manufacturing from May 1992 to March 1997. Mr. Davall was a
director of the Company from February 1994 to March 1997. Mr. Davall has 18
years experience in manufacturing and process engineering. From 1986 through
April 1992, Mr. Davall was employed in various capacities at Pacific Scientific,
Inc., a manufacturer of factory and office automation equipment, including Vice
President of Manufacturing and Director of Operations. From 1978 to 1986, Mr.
Davall served in various engineering capacities at Martin Marietta Energy
Systems. Mr. Davall received a Bachelor of Science degree in Mechanical
Engineering from Bucknell University, where he also engaged in postgraduate
studies in mechanical engineering and received a Masters in Business
Administration from Boston University. Mr. Davall is the husband of C. Jill
Beresford, the Company's President, Treasurer and a Director of the Company.
Don Cameron. Mr. Cameron will become President of Market Media Inc.,
and a Director upon the completion of the private placement. Mr. Cameron was
Canadian Counsel General to New England from 1993 to 1997 and Premier of Nova
Scotia from 1991 to 1993. Prior to being elected Premier of Nova Scotia, Mr.
<PAGE>
-8-
Cameron was Minister of Industry for the Province of Nova Scotia from 1988 to
1991. Mr. Cameron was first elected to the Nova Scotia Legislature in 1974,
appointed Minister Recreation, then Minister of Fisheries, followed by Minister
of Industry. Mr. Cameron also served as Chairman of the Legislature's Free Trade
Committee in 1987. Mr. Cameron is a successful Canadian business man and built,
owned and managed a successful dairy farm business which evolved into one of the
largest farms of the Province of Nova Scotia. Mr. Cameron attended McGill
University, Montreal, Quebec and received a Bachelor of Science degree in 1968.
Significant Employees
The Company also employs the following significant employees:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Steven J. Fabrizio.............................. 49 Sales Manager, Traditional T-shirt Bag Products
Tracy L. McGrath................................ 32 Marketing Manager, Convenience Stores
Richard H. Nurse, Ph.D.......................... 52 Vice President of Technical Development
Paul A. Wallace, III............................ 55 National Sales Manager, Convenience Stores
</TABLE>
Steven J. Fabrizio. Mr. Fabrizio has been the Company's General Sales
Manager since November 1995. From 1994 to 1995, Mr. Fabrizio was a
broker/consultant in the flexible film industry. From 1990 to 1994, Mr. Fabrizio
was the General Sales Manager, Eastern Region, for Gaylord Bag, a publicly held
company that manufactures kraft paper and paper packaging. From 1986 to 1990,
Mr. Fabrizio was Regional Sales Manager for the southwest region for Stone
Container Corporation, a vertically integrated manufacturer of paper packaging.
From 1972 to 1986, Mr. Fabrizio was base Training Instructor for Eastern
Airlines, Inc. Mr. Fabrizio graduated from Hawthorne College, where he majored
in psychology.
Richard H. Nurse, Ph.D. Dr. Nurse has been the Company's Vice President
of Technical Development since January 1995. Since 1989, Dr. Nurse has been an
independent consultant to the plastics industry. From 1987 to 1988, Dr. Nurse
was the Director of Research and Development for Cookson Performance Plastics, a
plastics additive manufacturer. From 1985 to 1987, Dr. Nurse was a Technical
Manager for Nortech Company, a plastics additive manufacturer. From 1979 to
1985, Dr. Nurse was the Manager of Technical Service and Applications
Development for American Hoechst Corp., a plastics resin manufacturer. Dr. Nurse
received a Ph.D. degree in Polymer Technology from the University of Manchester
Institute of Science and Technology in England and a Bachelor of Science degree
in Chemical and Plastics Technology from the Polytechnic of South Bank in
England.
Tracy L. McGrath. Ms. McGrath has been the Company's Marketing Manager
since November 1993. From 1988 to 1993, Ms. McGrath was employed at WFSB TV/3 in
Hartford, Connecticut, first as Promotion Coordinator, then as Sales Service
Coordinator, and then as a Research Assistant. Ms. McGrath has a Bachelor of
Science degree in Communications from Eastern Connecticut State University.
<PAGE>
-9-
Paul A. Wallace, III. Mr. Wallace has been the Company's National Sales
Representative since June 1995. From 1990 to 1995, Mr. Wallace was a Senior
Account Representative, High Density Film Products Division, Convenience Store
Group for Sonoco Products Company and from 1985 to 1990, Mr. Wallace held other
sales positions in the Sonoco Products Company Convenience Store Group. From
1984 to 1985, Mr. Wallace worked as a Detail Sales Representative for E.R.
Squibb & Sons, where he was responsible for selling pharmaceutical products to
doctors and hospitals. From 1982 to 1983, Mr. Wallace was employed by Geer Drug
Company as a Sales Representative, where he was responsible for selling
pharmaceutical and over-the-counter products to pharmacy chains and independent
drugstores. Mr. Wallace received a Bachelor of Arts degree from the University
of South Carolina.
Certain Relationships and Related Transactions
In November 1990, the Company loaned $132,197 to Dennis N. Caulfield,
its Chairman. The note was amended in June 1996 and again in August 1997, and is
now payable on or before the end of the fiscal year ending February 29, 2000.
Effective at the beginning of Fiscal 1996, the note accrues interest at the rate
equal to the interest rate charged on the Company's revolving line of credit
with Citizens Savings Bank. The balance of the loan as of February 28, 1997 was
approximately $479,797, which included interest on the loan and additional
advances of $72,598 received by Mr. Caulfield in the past year. Mr. Caulfield
has agreed to apply any bonus payments received under the Company's executive
bonus plan (the Bonus Plan ) to reduce the amounts outstanding under the loan.
Ivan J. Hughes, a director of the Company, is the President of the
Plastics Division Duro Bag Manufacturing Company ("Duro"). For Fiscal 1996 and
1997, Duro accounted for approximately 10% and 16%, respectively, of the
Company's sales.
Effective February 26, 1994, Ronald Caulfield exchanged his 49,500
shares of Common Stock of RC America for 200,000 shares of the Company's Common
Stock, pursuant to the terms of a Stock Exchange Agreement by and between the
Company and Ronald Caulfield (the "Exchange Agreement"). The Exchange Agreement
also provides for the issuance to Ronald Caulfield of up to an additional
100,000 shares of the Company's Common Stock over a five (5) year period based
on RC America attaining certain levels of pre-tax earnings. As a result of RC
America's earnings for Fiscal 1995, Fiscal 1996 and Fiscal 1997, 17,400, 2,550
and 2,640 shares, respectively, of the 100,000 shares of Common Stock were
issued to Mr. Ronald Caulfield. The Exchange Agreement contains demand and
piggy-back registration rights for the shares.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table sets forth, as of the Record Date, certain
information concerning stock ownership of the Company by (i) each person who is
known by the Company to own beneficially 5% or more of the Company's Common
Stock or Series A Preferred Stock, (ii) each of the Company's directors, and
<PAGE>
-10-
(iii) all directors and officers as a group ("Beneficial Owners"). Except as
otherwise indicated, the stockholders listed in the table have sole voting and
investment powers with respect to the shares indicated.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percentage of
of Beneficial Owner Beneficially Owned Class(1)(2)
------------------- ------------------ -----------
<S> <C> <C>
C. Jill Beresford(3)(4)(5)(6).............................. 1,627,249 __%
Dennis N. Caulfield(3)(7)(8)............................... 1,304,506 __%
Ronald V. Caulfield(9)..................................... 142,590 __%
74 Boston Post Road, Suite 101
Guilford, Connecticut 06437
Ivan J. Hughes(10)......................................... 74,256 __%
Davies and Oak Streets
Ludlow, Kentucky 41016-0250
David N. Laux(11).......................................... 11,572 __%
1726 M Street, N.W., Suite 601
Washington, DC 20036
All Officers and Directors 3,395,629 __%
as a Group (8 persons)(2)(4)(5)(6)
(7)(8)(9)(10)(11)(12)(13).................................
<FN>
* Less than one percent.
(1) Pursuant to the rules of the Securities and Exchange Commission, shares of Common Stock which an individual or group has a
right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the
purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown in the table. This table reflects the ownership of
all shares of Common Stock and the Series A Convertible Preferred Stock voting as a single class, since each is entitled to
one vote per share.
(2) Except as otherwise noted, does not give effect to the issuance of an aggregate of 2,378,855 shares of Common Stock
issuable upon the exercise, conversion or issuance of (i) Series B Convertible Preferred Stock for an aggregate of 146,695
shares of Common Stock; (ii) exercise of warrants issued to an individual and principals of the placement agent in the
Company's Regulation S offerings for an aggregate of 21,000 shares of Common Stock; (iii) 1,933,750 options granted or
available for grant under the Company's 1990, 1993 and 1996 Stock Option Plans; (iv) up to 77,410 additional shares
issuable in connection with the
<PAGE>
-11-
acquisition of the interest of a minority shareholder of RC America, Inc. (the "RC America Stock"); and (v) 200,000 shares
of Common Stock issuable upon the exercise of warrants issued to financial consultants of the Company, subject to
adjustments.
(3) These individuals may be reached at the Company's headquarters located at 455 Somerset Avenue, North Dighton, Massachusetts
02764.
(4) Includes 1,314,130 shares of Common Stock and 146,695 shares of Series B Convertible Preferred Stock. C. Jill Beresford
owns 100% of the outstanding voting stock of Beresford-Canada. Ms. Beresford may be deemed to be a "parent" and "promoter"
of the Company within the meaning of the rules and regulations of the Securities and Exchange Commission.
(5) Includes 3,200 shares of Common Stock held jointly by Ms. Beresford and Mr. Davall.
(6) Includes 163,224 shares of Common Stock issuable upon the exercise of an option at a price of $2.50 per share at any time
prior to the expiration date which is June 30, 2003. Effective April 28, 1997, the exercise price of this option was
repriced from $4.00 to $2.50.
(7) Consists of all shares of the Company held by Kingsley Associates, Ltd. ("Kingsley"). Mr. Caulfield owns 50% of the shares
of Kingsley and the remaining 50% interest in Kingsley is held by trusts for the benefit of Mr. Caulfield's children, in
which Mr. Caulfield disclaims any beneficial interest. Mr. Caulfield may be deemed to be a "parent" and "promoter" of the
Company within the meaning of the rules and regulations of the Securities and Exchange Commission.
(8) Includes 265,230 shares of Common Stock issuable upon the exercise of an option at a price of $2.50 per share at any time
prior to the expiration date which is June 30, 2003. Effective April 28, 1997, the exercise price of this option was
repriced from $4.00 to $2.50.
(9) Excludes up to 77,410 shares of Common Stock that may be issued to Ronald V. Caulfield pursuant to the terms of a Stock
Exchange Agreement between him and the Company. See "Certain Transactions."
(10) Includes 7,500 shares of Common Stock issuable upon exercise of an option at a purchase price of $2.38 per share through
March 24, 2006.
(11) Includes 7,500 shares of Common Stock issuable upon exercise of an option at a purchase price of $2.50 per share through
June 9, 2002. Effective April 28, 1997, the exercise price of this option was repriced from $4.00 to $2.50.
(12) Includes the following holdings of Mr. Vaicunas: (i) 20,000 shares of Common Stock; (ii) 8,000 shares of Common Stock
issuable upon exercise of an option at a price of $3.00 per share any time prior to the expiration date which is August 2,
2000; (iii) 12,000 shares issuable upon the exercise of an option at a price of $3.88 per share at any time prior to the
<PAGE>
-12-
expiration date which is July 8, 2001; (iv) 10,000 shares issuable upon the exercise of an option at a price of $2.50 per
share at any time prior to the expiration date which is June 15, 2002; and (v) 86,713 shares issuable upon the exercise of
an option at a price of $2.50 per share at any time prior to the expiration date which is June 30, 2003. Effective April
28, 1997, the exercise prices of the options listed in (iv) and (v) were repriced from $4.00 and $4.00 respectively, to
$2.50.
(13) Includes the following holdings of Mr. Davall: (i) 3,200 shares of Common Stock held jointly with Ms. Beresford; (ii)
12,000 shares issuable upon the exercise of an option at a price of $2.50 per share at any time prior to the expiration
date which is June 15, 2002; and (iii) 86,713 shares of Common Stock issuable upon the exercise of an option at a price of
$2.50 per share at any time prior to the expiration date which is June 30, 2003. Effective April 28, 1997, the exercise
price of these options were repriced from $4.00 to $2.50.
</FN>
</TABLE>
Executive Officers' Compensation
The following tables set forth the compensation paid to the Company's
Chief Executive Officer and the four most highly compensated executive officers,
with respect to services rendered to the Company during the fiscal years ended
February 28. 1997, February 24. 1996 and February 24, 1995 (" Fiscal Years
1995-1997").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
------------------- ------
(a) (b) (c) (d) (g) (i)
--- --- --- --- --- ---
<S> <C> <C> <C> <C> <C>
Dennis N. Caulfield................. 1997 $320,000 $ 0 265,320 $ 122,220(3)
Chairman of the Board 1996 $320,000 $ 0 265,320 $ 36,174(3)
Chief Executive Officer 1995 $320,000 $ 0 265,320 $ 35,472(3)
Alex F. Vaicunas.................... 1997 $125,000 $ 0 86,713 $ 780(5)
Vice President of Sales 1996 $125,000 $ 0 86,713 $ 780(5)
1995 $125,000 $ 0 86,713 $ 780(5)
James F. Koehlinger................. 1997 $ 89,700 $ 0 0 $ 20,200(6)
Former Chief Financial Officer 1996 $135,300 $ 0 12,500 $ 0
1995 $136,530 $ 0 12,500 $ 0
Gregory M. Davall................... 1997 $125,000 $ 0 86,713 $ 17,826(7)
Vice President, Office of 1996 $125,000 $ 0 86,713 $ 9,582(7)
Chairman 1995 $125,000 $ 0 86,713 $ 1,140(7)
<PAGE>
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<FN>
(1) Amounts shown indicate cash compensation earned and received by executive officers; no amounts were earned but deferred at
the election of those officers. Executive officers participate in Company group life and health insurance. In Fiscal Years
1995-1997, the Company made no awards of restricted stock.
(2) Effective July 1, 1993, Mr. Caulfield, Ms. Beresford, Mr. Vaicunas and Mr. Davall participate in an executive compensation
program which provides them with an aggregate bonus equal to six percent of the Company's pre-tax profit for the first
$1,000,000 in pre- tax profits in any fiscal year, and 12% of pre-tax profits in excess of $1,000,000 in any fiscal year
except that in the discretion of the Board of Directors the bonus will not exceed $750,000 in the aggregate in any fiscal
year beginning with Fiscal 1995. Except for a bonus of $25,000 paid to Mr. Davall under his old compensation program,
described below, no bonuses were paid for Fiscal 1995, 1996 or 1997 under the new program. See "MANAGEMENT - Employment
Contracts, Termination of Employment and Change In Control Arrangements."
(3) Effective December 15, 1993, the Company pays approximately $335 and $990 per month, respectively for two (2) personal term
life insurance policies for Mr. Caulfield and $700 per month for a disability policy effective February 7, 1994. The
Company also makes monthly automobile and insurance payments of approximately $980, $980 and $930 for Fiscal 1997, Fiscal
1996 and 1995, respectively, for an automobile for Mr. Caulfield. The Fiscal 1997 amount includes $73,846 paid for unused
vacation from prior fiscal years and $12,308 for unused vacation from Fiscal 1997.
(4) Effective December 15, 1993, the Company pays approximately $80 per month for a personal term life insurance policy for Ms.
Beresford and approximately $190, $190 and $180 per month in Fiscal 1997, Fiscal 1996 and Fiscal 1995, respectively, for a
disability policy that became effective February 7, 1994. Effective November 1, 1995, the Company also makes monthly
automobile and insurance payments of approximately $790 for an automobile for Ms. Beresford. The amount includes $10,385
and $7,616 of unused vacation pay that was paid in Fiscal 1997 and 1996, respectively.
(5) Effective February 7, 1994, the Company pays approximately $65 per month for a disability policy. Excludes monthly
automobile and insurance payments from the Company on behalf of Mr. Vaicunas of approximately $760 for an automobile. Mr.
Vaicunas reimburses the Company for any personal use of the automobile.
(6) After his termination in October 1996 as Chief Financial Officer, Mr. Koehlinger provided contractual services to the
Company for specific projects.
(7) Effective December 15, 1993, the Company pays approximately $50 per month for a personal term life insurance policy for Mr.
Davall and $45 per month for a disability policy for Mr. Davall effective February 7, 1994. Effective November 1, 1995, the
Company also makes monthly automobile and insurance payments of approximately $790 for an automobile for Mr. Davall. The
amount includes $7,212 and $5,288 of unused vacation pay that was paid in Fiscal 1997 and 1996.
</FN>
</TABLE>
<PAGE>
-14-
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
AND FY-END OPTION VALUES
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options
Value FY-End Exercisable/
Realized Exercisable/ Unexercisable
Name Shares Acquired ($) Unexercisable ($)(1)
---- --------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Dennis N. Caulfield....................... 0 0 198,922/66,308 0/0
C. Jill Beresford......................... 0 0 122,418/40,806 0/0
Alex F. Vaicunas.......................... 0 0 73,356/43,357 0/0
James F. Koehlinger(2).................... 0 0 0 / 0 0/0
Gregory M. Davall......................... 0 0 55,356/43,357 0/0
<FN>
(1) In-the-Money options are those options for which the fair market value of the underlying Common Stock is greater than the
exercise price of the option. On February 28, 1997, the last day of Fiscal 1997, the fair market value of the Company's
Common Stock underlying the options (as determined by the last sale price quoted on NASDAQ/NMS)
was $1.625. Since the exercise price of all of the options reflected in this table is greater than $1.625, the options held
by these individuals are not In-the-Money and are therefore not included in this calculation.
(2) Mr. Koehlinger's options terminated upon his resignation as the Company's Chief Financial Officer in October 1996.
</FN>
</TABLE>
Compensation of Directors
Messrs. Laux and Hughes are paid $1,875 each per calendar quarter. No
other directors receive any compensation. In June 1992 and March 1996, David N.
Laux and Ivan J. Hughes each received options to purchase a total of 7,500
shares of Common Stock at a purchase price of $2.50 and $2.38 per share through
June 9, 2002 and March 24, 2006, respectively. In April 1997, accrued and unpaid
director fees of Messrs. Laux and Hughes were converted into 1,035 and 4,138
shares of the Company's Common Stock, respectively, based on the closing bid
price of the Company's Common Stock on April 25, 1997 of $1.875 as reported by
NASDAQ/NMS.
<PAGE>
-15-
Employment Contracts, Termination of Employment and Change In Control
Arrangements
The Company has entered into employment, non-competition, and
confidentiality agreements with each of Mr. Caulfield, Ms. Beresford, Mr.
Vaicunas and Mr. Davall. Base salaries for Mr. Caulfield, Ms. Beresford, Mr.
Vaicunas and Mr. Davall are $320,000, $180,000, $125,000 and $125,000 per annum,
respectively, subject to periodic review by the Board of Directors. Each of
these agreements expires on June 30, 1998. These agreements provide for
severance payments of 24 months' base salary in the event employment is
terminated without cause and prohibit the individual from competing with the
Company for a period of 24 months following termination of employment with the
Company. In the event of a change of control in the Company, the individuals
have the option to terminate their employment and to receive additional
severance compensation subject to the provisions of their employment agreement.
The Company is the owner and the beneficiary of key-person life insurance on Mr.
Caulfield and Ms. Beresford in the amount of at least $1,000,000 per individual.
Prior to leaving the Company in October 1996, Mr. Koehlinger was paid on a
per-diem basis at a rate of $600 and he participated in health benefits that
were generally available to the Company's employees. The Company has also
entered into non-competition and confidentiality agreements with Mr. Koehlinger
and certain other employees.
Compensation Committee Interlocks and Insider Participation
The Board of Directors established a Compensation Committee on December
31, 1992. Members of the Compensation Committee are David N. Laux and Ivan J.
Hughes, the two outside Directors of the Company. None of the executive officers
of the Company have served
on the Board of Directors of any other entity that has had any of such entity's
officers serve either on the Company's Board of Directors or Compensation
Committee.
Board Compensation Committee Report on Executive Compensation
On October 15, 1992, the Securities and Exchange Commission adopted
substantial amendments to its disclosure rules relating to executive
compensation. To adequately address and comply with these rules, the Board of
Directors established a Compensation Committee (the "Committee") on December 31,
1992. The Committee is composed of the two outside Directors, David N. Laux and
Ivan J. Hughes. The Committee is responsible for setting and administering the
policies which govern annual compensation for the Company's executives.
Following review and approval by the Committee of the compensation policies, all
issues pertaining to executive compensation are submitted to the Board of
Directors for approval.
This report is not incorporated by reference in prior Securities Act of
1933 and Securities Exchange Act of 1934 filings made by the Company that might
have incorporated future filings in their entirety, except to the extent that
the Company specifically incorporates this information by reference, and should
not be otherwise deemed filed under such Acts.
<PAGE>
-16-
The Committee believes that the primary objectives of the Company's
compensation policies are to attract and retain a management team that can
effectively implement and execute the Company's strategic business plan. These
compensation policies include (i) an overall management compensation program
that is competitive with management compensation programs at companies of
similar size; (ii) short-term bonus incentives for management to meet the
Company's net income performance goals; and (iii) long-term incentive
compensation in the form of stock options and other long-term equity
compensation which will encourage management to continue to focus on shareholder
return.
The Committee's goal is to use compensation policies to closely align
the interests of the Company with the interests of shareholders so that the
Company's management has incentives to achieve short-term performance goals
while building long-ter n value for the Company's shareholders. The Committee
will review its compensation policies from time to time in order to determine
the reasonableness of the Company's compensation programs and to take into
account factors which are unique to the Company.
As discussed in our last report, the Company entered into new
employment agreements with Dennis N. Caulfield, C. Jill Beresford, Alex
Vaicunas, and Gregory Davall in July 1993. These agreements expire on June 30,
1998, and provide for termination for cause as well as termination without cause
and limit competition if the officer's employment is terminated. James F.
Koehlinger, the Company's Chief Financial Officer, works for the Company on a
per diem basis without any employment contract.
Base Salaries. Mr. Caulfield's base salary has remained at $320,000 per
annum. Ms. Beresford's base salary also has remained $180,000 per annum. Mr.
Vaicunas' and Mr. Davall's base salaries each remain at $125,000 per annum. The
Compensation Committee believes that these salaries reflect base salaries paid
to senior officers of other companies of similar size.
Bonus Plan. To further incentivize management to continue to improve
operating results, in October 1993, the Committee expanded the Bonus Plan. This
Bonus Plan awards Messrs. Caulfield, Vaicunas, and Davall and Ms. Beresford a
bonus based on a percentage of pre-tax profits, shared in a pool among them,
with a bonus pool equal to six percent (6%) of the first $1,000,000 in pre-tax
profits and an additional twelve percent (12%) of all pre-tax profits in excess
of $1,000,000. This Bonus Plan has a cap of $750,000 for Fiscal 1996 and fiscal
year ending February 28, 1997. The Bonus Plan currently provides for sharing of
the pool as follows: CEO--40.2%; President--25%; Vice President of Sales--17.4%;
and Vice President of Manufacturing--17.4%.
Compensation for Chief Executive Officer. Mr. Caulfield's compensation
was based upon careful analysis of other comparable public companies' Chief
Executive Officers' compensation and Mr. Caulfield's efforts and success in the
following areas: Establishing strategic goals and objectives for the long-term
growth of the Company; raising equity and debt capital needed to allow the
Company to erase its working capital and shareholders' equity deficits and
adequately capitalizing the Company to move forward; improving the Company's
operating results; and establishing critical strategic partnerships with vendors
and distribution channels.
<PAGE>
-17-
Compensation Committee Members
DAVID N. LAUX
IVAN J. HUGHES
Dated: September __, 1997
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
(assuming reinvestment of dividends) from investing $100 on February 28, 1992,
and plotted at the end of Fiscal Years 1993, 1994, 1995,1996 and 1997 in each of
(i) the Company's Common Stock, (ii) The National Association of Securities
Dealers Automated Quotation System ("NASDAQ") Market Index of companies, and
(iii) Media General Industry Group 386--Plastic Packaging Materials, which
consists of other companies in the plastic packaging materials industry.
[GRAPHIC OMITTED]
[Graph showing investment returns of the Company, the NADAQ Market Index and
Media General Industry Group 386 for the period from February 29, 192 to
February 28, 1997.]
<PAGE>
-18-
PRICE RANGE OF COMMON STOCK
The Company's Common Stock has been traded on the National Association
of Securities Dealers Automated Quotation National Market System ("NASDAQ/NMS")
since October 12. 1992. Prior to October 12, 1992, the Company's Common Stock
was traded on the over-the-counter market through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"). In addition, the
Company's Class B Redeemable Common Stock Purchase Warrants trade on NASDAQ/NMS
while the Series A Preferred Stock trades on NASDAQ.
As of the Record Date, the Company had _________ holders of record of
its Common Stock and ________ holders of record for its Series A Preferred
Stock. Management believes that there are approximately ________ to _______
beneficial owners of the Company's Common Stock and Series A Preferred Stock.
For the fiscal quarters reported below, the following table sets forth
the range of high and low sale quotations for the Common Stock as reported by
NASDAQ and NASDAQ/NMS. Such quotations represent interdealer quotations without
adjustment for retail markups, markdowns or commissions and may not represent
actual transactions.
High Sale Low Sale
COMMON STOCK
Fiscal Year 1996
First Quarter.............................. $ 4.875 $ 3.50
Second Quarter ............................ $ 4.00 $ 2.875
Third Quarter ............................. $ 3.00 $ 1.875
Fourth Quarter ............................ $ 2.50 $ 1.25
Fiscal Year 1997
First Quarter .............................. $ 4.25 $ 1.375
Second Quarter.............................. $ 3.625 $ 1.625
Third Quarter............................... $ 3.6875 $ 1.8125
Fourth Quarter.............................. $ 2.3125 $ 1.625
Fiscal Year 1998
First Quarter............................... $1.96875 $1.5625
Second Quarter (through September __, 1997). $ $
DIVIDENDS
The Company has not paid any dividends on its Common Stock since
inception and does not anticipate the payment of cash dividends on its Common
Stock in the foreseeable future. It is expected that any earnings which may be
generated from operations, after payment of
<PAGE>
-19-
dividends on the Company's Series A, B and C classes of Preferred Stock, will be
used to finance the growth of the Company. Dividends on each of these classes of
Preferred Stock are non-cumulative.
PROPOSAL NO. 2
INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK
The Board of Directors has authorized an amendment to the Certificate
to increase the number of authorized shares of Common Stock from 30,000,000
shares to 60,000,000 shares, and directed that such amendment be submitted to
the stockholders for their approval. Shares of the Company's Common Stock,
including the additional shares proposed to be authorized, do not have
preemptive or similar rights.
The Board of Directors believes that the authorized number of shares of
Common Stock should be increased to provide sufficient shares for such corporate
purposes as my be determined by the Board of Directors to be necessary and
desirable, which may include raising capital through the sale of Common Stock.
The Company has no present commitments, agreements or undertakings to issue any
such additional shares of Common Stock, although it evaluates and discusses such
transactions with other parties from time to time. The Board of Directors
considers the authorization of additional shares of Common Stock advisable to
ensure prompt availability of shares for issuance should the occasion arise.
The issuance of additional shares of Common Stock could have the effect
of diluting earnings per share and book value per share, which could adversely
affect the Company's existing stockholders. Issuance of additional shares of
Common Stock could be used to make a change of control of the Company more
difficult or costly by diluting the ownership of persons seeking to obtain
control of the Company. The Company is not aware, however, of any pending or
threatened efforts to obtain control of the Company, and the Board of Directors
has no current intention to use the additional shares of Common Stock to impede
a takeover attempt.
The stockholders are being asked to approve the amendment to the
Certificate to increase the number of authorized shares of Common Stock. The
affirmative vote of a majority of the Common Stock and a majority of the Voting
Securities outstanding on the Record Date is required to approve the amendment
to the Certificate. The Board of Directors recommends that the stockholders vote
FOR the proposed amendment to the Certificate to increase the number of
authorized shares of Common Stock. Shares represented by all proxies received by
the Board of Directors and not so marked as to withhold authority to vote in
favor such amendment, will be voted FOR the approval of such amendment.
<PAGE>
-20-
PROPOSAL NO. 3
INCREASE IN THE NUMBER OF SHARES OF PREFERRED STOCK
The Board of Directors has authorized an amendment to the Certificate
to increase the number of authorized shares of Preferred Stock from 2,000,000
shares to 6,000,000 shares, and directed that such amendment be submitted to the
stockholders for their approval. If approved, the additional shares of Preferred
Stock will be issuable in one or more series, the terms of which may be
determined by the Board of Directors without further action by the stockholders,
and may include voting rights (including the right to vote as a series on
particular matters), preferences as to dividends and liquidation, conversion and
redemption rights and sinking fund provisions.
The Board of Directors believes that the authorized number of shares of
Preferred Stock should be increased to provide sufficient shares for such
corporate purposes as my be determined by the Board of Directors to be necessary
and desirable, which may include raising capital through the sale of Preferred
Stock. The Company has no present commitments, agreements or undertakings to
issue any such additional shares of Preferred Stock, although it evaluates and
discusses such transactions with other parties from time to time. The Board of
Directors considers the authorization of additional shares of Preferred Stock
advisable to ensure prompt availability of shares for issuance should the
occasion arise.
The issuance of additional Preferred Stock could adversely affect the
rights, and the per share value, of the Voting Securities. Also, the issuance of
additional shares of Preferred Stock could make a change of control of the
Company more difficult or costly by diluting the ownership of persons seeking to
obtain control of the Company. The Company is not aware, however, of any pending
or threatened efforts to obtain control of the Company, and the Board of
Directors has no current intention to use the additional shares of Preferred
Stock to impede a takeover attempt.
The stockholders are being asked to approve the amendment to the
Certificate to increase the number of authorized shares of Preferred Stock. The
affirmative vote of a majority of the Voting Securities outstanding on the
Record Date is required to approve the amendment to the Certificate. The Board
of Directors recommends that the stockholders vote FOR the proposed amendment to
the Certificate to increase the number of authorized shares of Preferred Stock.
Shares represented by all proxies received by the Board of Directors and not so
marked as to withhold authority to vote in favor such amendment, will be voted
FOR the approval of such amendment.
ACCOUNTING MATTERS
A representative of Price Waterhouse LLP is expected to be present at
the meeting, and will have the opportunity to make a statement and answer
questions from stockholders.
<PAGE>
-21-
VOTING AT MEETING
The Board of Directors has fixed September 8, 1997, as the record date
for the determination of stockholders entitled to vote at the meeting. At the
close of business on that date there were outstanding and entitled to vote
_________ shares of Common Stock and _______ shares of Series A Preferred Stock.
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by mail, officers and employees of the
Company may solicit in person or by telephone. The Company may reimburse brokers
or persons holding stock in their names, or in the names of their nominees, for
their expenses in sending proxies and proxy material to beneficial owners.
REVOCATION OF PROXY
Subject to the terms and conditions set forth herein, all proxies
received by the Company will be effective, notwithstanding any transfer of the
shares to which such proxies relate, unless prior to the meeting the Company
receives a written notice of revocation signed by the person who, as of the
record date, was the registered holder of such shares. The Notice of Revocation
must indicate the certificate number or numbers of the shares to which such
revocation relates and the aggregate number of shares represented by such
certificate(s).
STOCKHOLDER PROPOSALS
In order to be included in proxy material for the 1998 Annual Meeting,
tentatively scheduled to be held on October 21, 1998, stockholders' proposed
resolutions must be received by the Company on or before May 15, 1998. It is
suggested that proponents submit their proposals by certified mail, return
receipt requested, addressed to the Secretary of the Company.
ANNUAL REPORT ON FORM 10-K
The Company is providing to each stockholder, simultaneously with the
mailing of this proxy, without charge, a copy of the Company's annual report on
Form 10-K, including the financial statements for the Company's most recent
fiscal year ended February 28, 1997.
<PAGE>
-22-
MISCELLANEOUS
The management does not know of any other matters which may come before
this meeting However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise act, in accordance with their judgment on such matters.
By Order of the Board of Directors
Dennis O'Connor
Secretary
Dighton, Massachusetts
September [15], 1997
MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
<PAGE>
BPI PACKAGING TECHNOLOGIES, INC.
Dear Shareholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the proxy materials that have been sent to stockholders.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders, on
October 21, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
BPI Packaging Technologies, Inc.
<PAGE>
BPI PACKAGING TECHNOLOGIES, INC.
455 Somerset Avenue, Dighton, MA 02764
Annual Meeting of Stockholders, on October 21, 1997
The undersigned hereby appoints ____________ and _________, and each or either
of them, with full power of substitution, as proxies and attorneys in BPI
Packaging Technologies, Inc. Corporation (the "Company"), to be held October 21,
1997, at the Holiday Inn, 700 Myles Standish Boulevard, Taunton, Massachusetts,
02780 and at any adjournment thereof, in respect of all shares of Common Stock,
par value $.01 per share (the "Common Stock"), and those shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock") which have been
designated Series A Preferred Stock, of the Company with respect to which the
undersigned would be entitled to vote and act if personally present.
The undersigned hereby acknowledges receipt of the Notice of the Meeting and the
accompanying Proxy Statement and hereby directs said proxies, or their
substitutes, to vote and act on the following matters set forth in such Notice
and Proxy Statement as specified by the undersigned. You may revoke this Proxy
by submitting a proxy bearing a latter date or by voting in person if you attend
the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF CHANCELLOR CORPORATION AND
WILL BE VOTED AS DIRECTED, IF NO CHOICE IS INDICATED, IT WILL BE VOTED "FOR" ALL
ITEMS AND IN THE DISCRETION OF THE PROXIES AS TO ANY OTHER MATTER WHICH MAY
PROPERLY COME BEFORE THIS MEETING.
- ----------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
<PAGE>
Please sign this proxy exactly as your name appears on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- ----------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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<TABLE>
<CAPTION>
PROXY CARD
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
<S> <C> <C> <C> <C>
For Withhold
1 Electing the two Class II director nominees listed
. below. ________ ________
C. Jill Beresford ________ ________
David N Laux ________ ________
2 Approval of amendment to the For Against Abstain
. Company's certificate of
incorporation authorizing a ________ ________ ________
total of 60,000,000 shares of
Common Stock.
3 Approval of amendment to the For Against Abstain
. Company's certificate of
incorporation authorizing a ________ ________ ________
total of 6,000,000 shares of
Preferred Stock.
4 In their discretion, such other For Against Abstain
. matters as may properly come
before the meeting or any ________ ________ ________
adjournment thereof.
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RECORD DATE SHARES: Common Stock ___________
Series A Preferred Stock ___________
Please be sure to sign and date this Proxy. Date
Shareholder sign here ________________ Co-owner sign here __________________
Mark box at right if comments or address
change have been noted on the reverse of
this card. __________
