<PAGE>
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:
[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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
BPI LETTERHEAD
April 30, 1999
Dear Stockholder:
You are cordially invited to attend our Annual Meeting of Stockholders
on Thursday, June 3, 1999. The meeting will be held at The Courtyard by
Marriott, 35 Foxborough Boulevard, Foxborough, Massachusetts, at 10:00 a.m.,
eastern time.
This Notice of Annual Meeting of Stockholders and the Proxy Statement
accompanying this letter describe the business we will consider at the meeting.
In particular, please note that management is requesting the stockholders to
approve one item in addition to the election of directors and the ratification
of the Board of Directors appointment of independent accountants. As management
and the Board of Directors, we strongly recommend increasing the number of
authorized shares of common stock of the Company.
Your vote is very important. I urge you to sign, date and return the
enclosed proxy in the envelope provided to be certain your shares are
represented at our Annual Meeting, even if you plan to attend our Annual
Meeting.
I look forward to seeing you at the meeting.
Ivan J. Hughes
CHAIRMAN OF THE BOARD OF DIRECTORS
<PAGE>
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
NORTH DIGHTON, MASSACHUSETTS 02764
____________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1999
____________________
TO THE STOCKHOLDERS OF BPI PACKAGING TECHNOLOGIES, INC.:
The Annual Meeting of Stockholders of BPI Packaging Technologies, Inc. (the
"Company"), a Delaware corporation, will be held on Thursday, June 3, 1999 at
10:00 a.m. at The Courtyard by Marriott, 35 Foxborough Boulevard, Foxborough,
Massachusetts (the "Annual Meeting") for the following purposes:
1 To elect two Class I directors for a term expiring in 2002;
2. To vote on an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), from 60,000,000
shares to 150,000,000 shares;
3. To ratify the appointment of Livingston & Haynes, P.C. as the
Company's independent accountants for the year ending December 31,
1999; and
4. To transact any other business that may be properly presented at the
meeting.
These items of business are more fully described in the Proxy Statement
accompanying this Notice.
Only stockholders of record at the close of business on April 9, 1999 are
entitled to notice of and to vote at the Annual Meeting.
Your vote is important. Whether or not you plan to attend the Annual
Meeting, please mark, sign, date and return the enclosed proxy promptly. If you
are present at the Annual Meeting, and wish to do so, you may revoke the proxy
and vote in person.
This Proxy Statement, the proxy and the Company's Annual Report on Form
10-K for the year ended December 31, 1998 were first mailed to stockholders on
or about May 5, 1999.
By Order of the Board of Directors
Hanspeter Schulz
PRESIDENT
North Dighton, Massachusetts
April 30, 1999
<PAGE>
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
NORTH DIGHTON, MASSACHUSETTS 02764
APRIL 30, 1999
_______________
PRELIMINARY PROXY STATEMENT
_______________
This Proxy Statement is furnished in connection with the solicitation of
proxies 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 (the "Annual Meeting") to be held at The
Courtyard by Marriott, 35 Foxborough Boulevard, Foxborough, Massachusetts at
10:00 a.m. on Thursday, June 3, 1999, and at any adjournments thereof.
At the Annual Meeting, holders of common stock of the Company (the
"Common Stock") and holders of the Series A Convertible Preferred Stock of
the Company (the "Series A Preferred Stock") (collectively, the "Voting
Securities") will be asked to consider and vote upon the following proposals
(the "Proposals"): (i) the election of two Class II directors for a term
expiring in 2002; (ii) an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 60,000,000 shares to 150,000,000 shares; and (iii) the
ratification of Livingston & Haynes, P.C. as the Company's independent
accountants for the year ending December 31, 1999. 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.
MAILING
The Company is providing to each stockholder entitled to vote at the Annual
Meeting, simultaneously with the mailing of this Proxy Statement, without
charge, a copy of the Company's Annual Report on Form 10-K (the "Form 10-K") for
the fiscal year ended December 31, 1998. This Proxy Statement, the proxy and
the Form 10-K were first mailed to stockholders on or about May 5, 1999.
Record Date, Voting
At the close of business on April 9, 1999, the record date (the "Record
Date") for the determination of stockholders of the Company entitled to receive
notice of and to vote at the Annual Meeting, 21,495,621 and 193,358 shares of
the Company's Common Stock and Series A Preferred Stock, respectively, were
issued and outstanding. Each share of Common Stock and Series A Preferred Stock
is entitled to one vote upon each of the matters to be voted on at the Annual
Meeting. The presence, in person or by proxy (including abstentions and "broker
non-
<PAGE>
votes"), of at least a majority of the outstanding shares of the Voting
Securities is required for a quorum.
If you sign and return your proxy card but do not specify your choices,
your shares will be voted as recommended by your Board of Directors. The
Board of Directors recommends that you vote "For" the two nominees to the
Board of Directors who are listed in this Proxy Statement; "For" the
amendment to the Company's Certificate of Incorporation to increase the
number of authorized shares of the Company's Common Stock from 60,000,000
shares to 150,000,000 shares; and "For" the appointment of Livingston &
Haynes, P.C. as the Company's independent accountants for the year ending
December 31, 1999.
There are different voting requirements for the various proposals.
Directors will be elected by a plurality of the votes cast at the Annual Meeting
in person or by proxy, meaning the two nominees receiving the most votes will be
elected directors. Only votes cast for a nominee will be counted, except that
the accompanying proxy will be voted for the two nominees unless the proxy
contains instructions to the contrary. Abstentions, broker non-votes, and
instructions on the accompanying proxy to withhold authority to vote for one or
more of the nominees will result in those nominees receiving fewer votes.
However, such action will not reduce the number of votes otherwise received by
the nominee.
The amendment to the Certificate of Incorporation and the ratification of
the independent accountants each require an affirmative vote of a majority of
the shares present in person or by proxy and entitled to vote at the Annual
Meeting. For these proposals, an abstention will have the same effect as a vote
against the proposal. Broker non-votes will not be voted for or against the
proposals, will not be counted as entitled to vote and so will not have any
effect on such proposals.
As of March 31, 1999, the directors and officers of the Company as a group
own or may be deemed to control 1,775,749 shares of Voting Securities,
constituting approximately 8.11% of the outstanding shares of Common Stock and
Series A Preferred Stock, voting as a single class, of the Company.
REVOCABILITY OF PROXIES
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 Chief Financial Officer prior to the meeting, or by giving the
Company's Chief Financial Officer 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 proposals set forth herein.
2
<PAGE>
SOLICITATION
The Company will bear the entire cost of the solicitation of proxies from
its stockholders, including preparation, assembly, printing and mailing of this
Proxy Statement, the proxy and any additional information furnished to
stockholders. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries and custodians holding in their names shares of
the Company's stock beneficially owned by others to forward to such beneficial
owners. Original solicitation of proxies by mail may be supplemented by
telephone, facsimile, telegram or personal solicitation by directors, officers
or other regular employees of the Company. No additional compensation will be
paid to such persons for such services. The Company also intends to employ the
services of Beacon Hill Partners, Inc., a professional solicitation company
("Beacon Hill"), to assist with solicitation of stockholders. Beacon Hill will
be paid a fee of $5,000 plus out-of-pocket expenses.
American Stock Transfer Corporation, transfer agent and registrar for the
Company's Stock, will be paid its customary fee, estimated to be $5,000.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Under the Company's Certificate of Incorporation and By-laws, each as
amended, the Board of Directors is classified into three classes, with
approximately one-third of the directors standing for election each year for a
three-year term. A classified board is designed to assure continuity and
stability in the board's leadership and policies. Ivan J. Hughes and Allen S.
Gerrard (collectively, the "Nominees") serve as the Class I directors and will
be voted on at the Annual Meeting to be held in June 1999.
David N. Laux and Hanspeter Schulz are the Class II directors and serve
until the Annual Meeting of Stockholders to be held in the year 2001. Gary R.
Edidin, Bruce M. Fleisher and Theodore L. Koenig are the Class III directors and
serve until the Annual Meeting of Stockholders to be held in the year 2000. The
successors to the class of directors whose terms expire at an annual meeting
would be 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 stockholders. Directors chosen to fill vacancies on a classified board
hold office until the next election of the class for which directors shall have
been 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.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting in present or by proxy, meaning the two nominees receiving the most
votes will be elected directors. Only votes cast for a nominee will be
counted, except that the accompanying proxy will be voted for the two
management nominees unless the proxy contains instructions to the contrary.
Abstentions, broker non-votes, and instructions on the accompanying proxy to
withhold authority to vote for one or more of the nominees will result in
those nominees receiving fewer votes. However, such action will not reduce
the number of votes otherwise received by the nominee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINEES AS CLASS I DIRECTORS OF THE COMPANY TO SERVE UNTIL THE YEAR 2002.
The following table provides information regarding the Nominees and
continuing directors of the Company:
4
<PAGE>
<TABLE>
<CAPTION>
Class to
which
Date First Nominee or
Became Positions and Offices with the Director
Name Age Director Company Belongs
- ---- --- --------- ------------------------------ --------
<S> <C> <C> <C> <C>
NOMINEES:
Ivan J. Hughes 70 7/13/98 Chairman of the Board of Directors I
Allen S. Gerrard 63 1/27/99 Director I
CONTINUING DIRECTORS:
David N. Laux 71 1/1/93 Director II
Hanspeter Schulz, Ph.D. 60 1/27/99 President and Director II
Gary R. Edidin 54 1/27/99 Director III
Bruce M. Fleisher 68 4/26/99 Director III
Theodore L. Koenig 40 4/26/99 Director III
</TABLE>
BACKGROUND
The principal occupations during the past five years of each of the Company's
directors and nominees are as follows:
NOMINEES
IVAN J. HUGHES. Mr. Hughes was re-elected as a Director of the Company on
July 13, 1998 and became Chairman of the Board of Directors on January 27, 1999.
Mr. Hughes previously served as a Director of the Company from March 1996 to
February 1998. Since 1991, Mr. Hughes has been the President of the Plastic
Division of Duro Bag Manufacturing Company ("Duro Bag"), a privately held
company which manufactures grocery bags, shopping and specialty bags for the
food and retail industry. Mr. Hughes has been employed by Duro Bag in various
positions for the past 35 years and presently serves on the Executive and
Compensation Committees. Mr. Hughes received a Bachelor of Science degree in
Mechanical Engineering at Lafayette College and completed his graduate studies
at Columbia University.
ALLEN S. GERRARD. Mr. Gerrard has served as a Director of the Company since
January 1999. Since 1996, Mr. Gerrard has served as a Director of Deere Park
Capital Management, an investment and merchant banking firm, and since April
1998 he has also served as Vice-Chairman of such company. Beginning in January
1999, Mr. Gerrard has been a Member of the Board of Managers and Treasurer of
DGJ, L.L.C. ("DGJ"). From November 1998 to March 1999, Mr. Gerrard served as
Director of McConnell Dowell Corporation, Limited, a publicly traded company
involved in construction. Since 1997, Mr. Gerrard has served as a Director of
5
<PAGE>
Dominion Bridge Company, a publicly-traded construction and shipbuilding
company. Mr. Gerrard was a Principal in the law firm of Allen S. Gerrard &
Associates from 1978 to 1999. Mr. Gerrard received his Bachelor of Arts degree
in Political Science from the University of Illinois in Champaign-Urbana and his
Juris Doctor degree from the University of Michigan Law School.
CONTINUING DIRECTORS
DAVID N. LAUX. Mr. Laux has served as a Director of the Company since
January 1993. Since 1991, Mr. Laux has served as a Director of ROC Taiwan Fund,
a closed end fund listed on the New York Stock Exchange. 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. Mr. Laux received his Bachelor of Arts degree from Amherst College and
his Master of Business Administration degree from the American University in
Washington, D.C. He has done graduate work at the University of California at
Berkeley and Georgetown University. Mr. Laux is also a graduate of the Advanced
Management Program at Harvard Business School.
HANSPETER SCHULZ, PH.D. Dr. Schulz has been the Company's President and a
Director since January 1999. Prior thereto, Dr. Schulz served as a consultant
to the Company since August 1998. From 1996 to 1998, Dr. Schulz was a Director
of Business Integration for Celanese Ltd., and was one of three managers
responsible for the global installation of SAP, including the redesign of
relevant business processes. From 1993 to 1996, Dr. Schulz was Business
Director for Methanol/Formaldehyde/Polyols, a global commodity business of
Celanese with production sites in the United States, Canada and Germany. In
1995, Dr. Schulz served as a member of the Board of a Celanese joint venture in
Saudi Arabia. From 1982 to 1995, Dr. Schulz was Vice President and General
Manager of the High Density and Ultra High Molecular Weight Polyethylene
business at American Hoechst. From 1959 to 1969, Dr. Schulz studied chemistry
and related subjects at the Universities of Stuttgart, Germany, Kansas, USA (on
a scholarship basis) and Hamburg, Germany resulting in a Ph.D. of Natural
Sciences in 1969.
GARY R. EDIDIN. Mr. Edidin has served as a Director of the Company since
January 1999. In January 1999, Mr. Edidin became a Member of the Board of
Managers, Chairman, President and Chief Executive Officer of DGJ. In 1975, Mr.
Edidin co-founded Edidin Associates, an investment banking firm. He has been
Managing Partner of Edidin Associates since 1980. In 1992, Mr. Edidin
co-founded Franklin Capital Corp., a regional asset based lender, and is
presently the Co-Chairman and member of its Board of Directors. In 1980, Mr.
Edidin served as the Chief Executive Officer and Chairman of Optique Du Monde,
Ltd. ("ODM"), an eyewear company. In 1988, ODM was sold to the Safilo Group, an
Italian publicly traded eyewear company. Since 1988, he has been a management
consultant to the Safilo Group and Safilo USA, its U.S. subsidiary. In 1997,
Mr. Edidin represented Safilo Group in its acquisition of Smith Sports Optics,
Inc. and began serving that company as a member of the Board of Directors and
Executive Committee. He has also served as the Chairman and Chief Executive
Officer of Clarin Corp., a manufacturer of institutional seating, since 1993.
Since 1998, Mr. Edidin has served as a member of the Board of Directors of
Colors For Plastic, a plastic coloration company. In 1977, a group of
investors, including Edidin Associates, purchased the Lawndale Trust and Savings
Bank, a community bank in
6
<PAGE>
Chicago. The same investors subsequently purchased the Garfield Ridge Trust
and Savings Bank and the Bank of Chicago, two Chicago community banks. In
1995, these three banks were merged into one under the name Bank of Chicago.
In 1997, Bank of Chicago was sold to TCF, a publicly traded savings bank
headquartered in Minnesota. Mr. Edidin served these banks in various
capacities over the years, including Chairman and Chief Executive Officer.
Mr. Edidin received his Bachelor of Science degree from the University of
Pennsylvania, Wharton School, and his Juris Doctor degree from the University
of Chicago Law School. Mr. Edidin also attended the University of Chicago
Business School.
BRUCE M. FLEISHER. Mr. Fleisher has served as a Director of the Company
since April 1999. Since 1998, Mr. Fleisher has been involved in private
investing. From October 1997 to 1998, he served as the Vice President and
Division Manager, Chicago for the Supply Systems Division of Unisource
Worldwide, Inc., a wholesale distributor of paper and packaging supplies. From
1996 to 1997, he was the President and Division Manager of Darter, Inc., another
division of Unisource Worldwide, Inc. Since 1996, he has been a member of the
Board of Directors and Chairman of the Industrial Committee for the National
Paper Trade Association. Mr. Fleisher received his Bachelor of Science degree in
Economics from the University of Pennsylvania, Wharton School, and his Masters
degree in Business Administration from George Washington University.
THEODORE L. KOENIG. Mr. Koenig has served as a Director of the Company
since April 1999. In 1996, Mr. Koenig founded and since has served as President
of Monroe Investments, Inc., a Chicago-based investment and merchant banking
firm specializing in strategic growth investment opportunities. Mr. Koenig's
principal occupation is that of an attorney. He has been a partner with Holleb
& Coff, a Chicago-based law firm since 1989. Mr. Koenig received his Bachelor of
Arts degree in Accounting from Indiana University Kelley School of Business and
his Juris Doctor degree from the Illinois Institute of Technology, Chicago Kent
School of Law. Mr. Koenig is also a Certified Public Accountant.
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>
Hanspeter Schulz, Ph.D. 60 President and Director
Richard H. Nurse, Ph.D. 54 Vice President of Manufacturing
Peter W. Blackett 50 Senior Vice President of Sales
James F. Koehlinger 62 Chief Financial Officer and
Treasurer
C. Jill Beresford 44 Vice President of Marketing
</TABLE>
No director or executive officer is related by blood, marriage or adoption
to any other director or executive officer.
RICHARD H. NURSE, PH.D. Dr. Nurse has been the Company's Vice President of
Manufacturing since January 1999. Prior thereto, he was the Company's Vice
President of Technical Development since January 1995. From 1989 to 1995, Dr.
Nurse was an independent consultant to the plastics industry. From 1987 to
1988, Dr. Nurse was the Director of Research
7
<PAGE>
and Development for Cookson Performance Plastics, a plastics additive
manufacturer. From 1985 to 1987, he was a Technical Manager for Nortech
Company, another plastics additive manufacturer. From 1973 to 1985, Dr.
Nurse was with Hoechst AG, a plastics resin manufacturer, serving in
technical application and development management in South Africa and Germany
and since 1979, in the United States. 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, London, England.
PETER W. BLACKETT. Mr. Blackett has been the Company's Senior Vice
President of Sales since March 1999. From 1997 to March 1999, he was employed
with Fina Oil and Chemical Company as Regional Sales Manager and from 1992 to
1997, as a Technical Service Manager for Fina's High Density Polyethylene
business group. Mr. Blackett holds a Higher National Certificate in Mechanical
Engineering from Peterborough Technical College and a Graduateship of the
Plastics Institute from Borough Polytechnic in South London.
JAMES F. KOEHLINGER. Mr. Koehlinger has been the Company's Chief
Financial Officer since January 1999. Prior thereto, Mr. Koehlinger was a
senior consultant with Benchmark, a financial consulting firm. Commencing
February 1998, Mr. Koehlinger began working on a part-time basis as the
Company's Chief Financial Officer. He previously served as the Company's
Chief Financial Officer from February 1989 to October 1996. Mr. Koehlinger
received a Bachelor of Science degree from Indiana University and a Master of
Business Administration degree from Clark University. He is also a certified
public accountant.
C. JILL BERESFORD. Ms. Beresford has been the Company's Vice President
of Marketing since January 1999. From June 27, 1998 until January 27, 1999,
she was the Company's Chairman, Chief Executive Officer and Chief Financial
Officer. She also served as the Chief Operating Officer of the Company from
1995 to 1998. She served as the Company's President from July 1996 to June
1998. She was Treasurer of the Company from May 1990 to January 27, 1999 and
a Director of the Company from March 1989 until January 1999. From May 1990
to July 1995, Ms. Beresford was the Company's Vice President of Marketing.
Ms. Beresford attended the University of Guelph, Ontario, Canada and received
a Masters degree in Business Administration from Boston University.
SIGNIFICANT EMPLOYEE
The following employee is not an executive officer of the Company but is
expected to make significant contributions to the business of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Tracy McGrath 34 Vice President of Sales
</TABLE>
TRACY L. MCGRATH. Ms. McGrath has served as the Company's Vice President
of Sales since January 1999. Prior thereto, she was the Company's Vice
President of Marketing since
8
<PAGE>
December 1997 and, prior thereto, was the Company's Marketing Manager since
November 1993. Ms. McGrath has a Bachelor of Science degree in Communications
from Eastern Connecticut State University.
BOARD OF DIRECTORS, BOARD COMMITTEES AND MEETINGS
The Board of Directors has established an Audit Committee, a Compensation
Committee and an Executive Committee. The Board of Directors held three
meetings during 1998. Each director attended at least 75% of all meetings of the
Board of Directors and applicable Committees held during 1998.
EXECUTIVE COMMITTEE
The Executive Committee is empowered to act with all authority granted
to the Board of Directors between Board of Directors meetings, except with
respect to those matters required by Delaware law or by the Company's By-laws
to be subject to the power and authority of the Board of Directors as a
whole. Messrs. Ivan J. Hughes, Hanspeter Schulz and Gary R. Edidin are the
current members of the Executive Committee. The former Executive Committee
did not meet during 1998.
AUDIT COMMITTEE
The Board of Directors has established an Audit Committee whose current
members are David N. Laux, an outside director, Gary R. Edidin and Allen S.
Gerrard. The purpose of the Audit Committee is 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 functions of the Audit Committee are to: (i) recommend annually to the
Board of Directors the appointment of the independent public accountants of the
Company; (ii) discuss and review the scope and the fees of the prospective
annual audit and to review the results thereof with the Company's independent
public accountants; (iii) review and approve non-audit services of the
independent public accountants; (iv) review compliance with existing major
accounting and financial policies of the Company; (v) review the adequacy of the
financial organization of the Company; and (vi) review management's procedures
and policies relative to the adequacy of the Company's internal accounting
controls.
During 1998, the former Audit Committee met one time and the new Audit
Committee has met twice in 1999 for the purposes of: (i) reviewing the
arrangements and scope of the Company's annual audit; (ii) discussing the
matters of concern to the Committee with regard to the Company's financial
statements or other results of the audit; and (iii) reviewing the Company's
internal accounting procedures and controls and the activities and
recommendations of the Company's independent public accountants.
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of David N. Laux, Gary R. Edidin and
Allen S. Gerrard. 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. However, Ivan J. Hughes, a Director of the Company, serves on the
Compensation Committee of Duro Bag, a customer of the Company. See "Certain
Relationships and Related Transactions" below.
COMPENSATION COMMITTEE
Messrs. David N. Laux, Gary R. Edidin and Allen S. Gerrard serve on the
Compensation Committee. The former Compensation Committee did not meet during
1998.
BOARD OF DIRECTORS COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation 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 to attract, retain and motivate superior talent in the Company's
industry; (ii) short-term bonus incentives for management to meet the Company's
overall business strategy and profitability goals, including net income
performance goals; (iii) promoting the Company's pay-for-performance philosophy;
and (iv) long-term incentive compensation which will encourage management to
continue to focus on stockholder return.
It is the intention of the Compensation Committee to utilize a
pay-for-performance compensation strategy that will facilitate the attainment of
the Company's sales growth and profitability goals. Also, the Compensation
Committee's goal is to use compensation policies to closely align the interests
of the Company with the interests of stockholders so that the Company's
management has incentives to achieve short-term performance goals while building
long-term value for the Company's stockholders. The Compensation Committee will
review its compensation policies from time to time to determine the
reasonableness of the Company's compensation programs and to take into account
factors which are unique to the Company.
BONUS PLAN. To incentivize senior management of the Company, Ms. Beresford,
Mr. Koehlinger, Dr. Nurse, Dr. Schulz, Mr. Blackett and Mr. Hughes shall receive
options to purchase Common Stock, at $0.04 per share, during the term of their
respective employment or consulting agreements if the Company equals or exceeds
certain financial performance goals in 1999, 2000 and 2001. If the Company's
net earnings for the particular fiscal years plus amounts deducted in the
computation thereof for: (a) interest expense; (b) Federal, state and local
income taxes; (c) depreciation; (d) amortization of intangibles, as computed by
the Company's accountants in accordance with generally accepted accounting
principals, consistently applied; and (e) any expenses or other charges
associated with the investment, loans, and equipment leases made by DGJ to the
Company and all other charges ("EBITDA"), equals or exceeds one of the EBITDA
performance goals as stated in the employment or consulting agreements, the
10
<PAGE>
Company shall grant such individuals options to purchase a certain number of
shares of Common Stock. The maximum number of options to purchase Common Stock,
in the aggregate for all such individuals will not exceed 14,500,000 shares of
Common Stock. See "Employment Contracts, Termination of Employment and Change
in Control Arrangements" section below for a description of these agreements.
COMPENSATION FOR PRIOR CHIEF EXECUTIVE OFFICERS. Mr. Caulfield's and Ms.
Beresford's compensation as Chief Executive Officer was based upon analysis by
the predessor Compensation Committee of other comparable public companies' chief
executive officers' compensation and each'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 deficit and adequately capitalizing the Company to
move forward; improving the Company's operating results; and establishing
critical strategic partnerships with vendors and distribution channels.
BASE SALARIES. Ms. Beresford's base salary will continue to be $180,000 per
annum until June 30, 1999 and for her employment term from July 1, 1999 to June
30, 2000, her base salary will be $125,000 per annum. The current Compensation
Committee believes that executive officer salaries reflect base salaries paid to
senior officers of other companies of similar size.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally disallows tax deductions to public companies for compensation
over $1 million paid to a corporation's chief executive officer and the four
other most highly compensated executive officers. Qualifying "performance-based"
compensation will not be subject to the deduction limit if certain requirements
are met. The Compensation Committee has discussed and considered and will
continue to evaluate the potential impact Section 162(m) has on the Company in
making compensation determinations, but has not established a set policy with
respect to future compensation determinations.
CONCLUSION
The current Compensation Committee believes that the newly-instituted
executive compensation plan implemented as part of the January 1999 Financing is
consistent with the overall corporate strategy for continued growth in sales,
manufacturing and earnings and stockholder value.
COMPENSATION COMMITTEE
Gary R. Edidin
David N. Laux
Allen S. Gerrard
EXECUTIVE OFFICERS' COMPENSATION
The following table sets forth certain information with respect to the
annual and long term compensation for services in all capacities to the
Company during 9198, the 10 months ended December 31, 1997 and the fiscal
years ended February 28, 1997 ("Fiscal 1997") and
11
<PAGE>
February 23, 1996 ("Fiscal 1996"), of those persons who were, at December 31,
1998: (i) the Company's Chief Executive Officer (including persons who held
this position at any time during 1998); and (ii) other executive officers of
the Company receiving total cash and bonus compensation in excess of $100,000
(the "Named Officers"). The Company did not grant any restricted stock
awards or stock appreciation rights or make any long term incentive plan
payouts to the individuals named in the tables below during the periods
indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation Awards
Annual Compensation ----------------------------
------------------- Securities
Underlying All Other
Name and Principal Position Fiscal Year Salary(1) Bonus(2) Options(#) Compensation
--------------------------- ----------- --------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Dennis N. Caulfield (3) 1998 $ 89,846 $0 0 $ 9,923(3)
1997(A) $266,666 $0 0 $ 43,323(3)
1997 $320,000 $0 0 $130,220(3)
1996 $320,000 $0 0 $ 36,174(3)
C. Jill Beresford (4) 1998 $182,506 $0 0 $ 12,848(4)
1997(A) $150,000 $0 0 $ 6,424(4)
1997 $180,000 $0 0 $ 26,716(4)
1996 $180,000 $0 0 $ 14,612(4)
Alex F. Vaicunas (5) 1998 $124,856 $0 0 $ 1,746(5)
1997(A) $104,167 $0 0 $ 3,150(5)
1997 $125,000 $0 0 $ 3,232(5)
1996 $125,000 $0 0 $ 1,213(5)
Richard Nurse, Ph.D. (6) 1998 $119,115 $0 0 $ 8,935(6)
1997(A) $ 64,399 $0 0 $ 3,410(6)
1997 $ 77,279 $0 0 $ 4,401(6)
1996 $ 71,936 $0 0 $ 3,656(6)
Paul J. DeCristofaro (7) 1998 $ 32,332 $0 0 $ 668
1997(A) $ 83,410 $0 0 $ 0
1997 $100,092 $0 0 $ 0
</TABLE>
INCLUDE 401(k) MATCHING IN LAST COLUMN.
(A) Reflects information for the 10 months ended December 31, 1997.
(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.
12
<PAGE>
(2) From July 1, 1993 through December 31, 1998, Mr. Caulfield, Ms. Beresford
and Mr. Vaicunas had been eligible to participate in an executive
compensation program which provided them with an aggregate bonus equal to
6% 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 would not exceed $750,000 in the aggregate in any
fiscal year beginning with fiscal year 1995. No bonuses were paid to Mr.
Caulfield, Ms. Beresford or Mr. Vaicunas during 1998, the 10 month period
ended December 31, 1997, in Fiscal 1997 or in Fiscal 1996 under this
program. This program is no longer in effect.
(3) In the periods presented, the Company paid approximately $335 and $990 per
month for two personal term life insurance policies for Mr. Caulfield and
$700 per month for a disability policy. The Company also made automobile
and insurance payments of approximately $980 per month during 1998, the 10
months ended December 31, 1997, in Fiscal 1997 and in Fiscal 1996, 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. Mr. Caulfield's employment with the Company terminated
on July 2, 1998. Includes $0, $6,400, $8,000 and $0 the Company contributed
to the individuals 401(k) account during 1998, the 10 months ended
December 31, 1997, in Fiscal 1997 and in Fiscal 1996, respectively.
(4) In the periods presented, the Company paid approximately $80 per month for
a personal term life insurance policy for Ms. Beresford and approximately
$190 per month for a disability policy. In the periods presented, the
Company also made automobile and insurance payments of approximately $435
and $790, respectively, per month for an automobile for Ms. Beresford for
1998 and all other periods presented, respectively. The amount also
includes $10,385 and $7,616 of unused vacation pay that was paid in Fiscal
1997 and Fiscal 1996, respectively. Ms. Beresford began serving as the
Chairman of the Board of Directors and Chief Executive Officer on July 2,
1998, when Mr. Caulfield's employment with the Company ceased. Includes
$3,655, $3,655, $3,738 and $623 the Company contributed to the individuals
401(k) account during 1998, the 10 months ended December 31, 1997, in
Fiscal 1997 and in Fiscal 1996, respectively.
(5) In the periods presented, the Company paid approximately $65 per month for
a disability policy for Mr. Vaicunas. This amount excludes automobile and
insurance payments from the Company on behalf of Mr. Vaicunas of
approximately $760 per month for an automobile. Mr. Vaicunas reimburses
the Company for any personal use of the automobile. Mr. Vaicunas served as
the Vice President of Film Sales until December 26, 1998. Includes $0,
$2,500, $2,452 and $433 the Company contributed to the individuals 401(k)
account during 1998, the 10 months ended December 31, 1997, in Fiscal 1997
and in Fiscal 1996, respectively.
(6) In the periods presented, the Company reimbursed Dr. Nurse for mileage on
his car and travel expenses associated with Company business. Dr. Nurse
served as the Vice President of Technical Development throughout 1998.
(7) Mr. DeCristofaro served as the Company's Chief Financial Officer until
March 1998. Includes $668 the Company contributed to the individuals
401(k) account during 1998.
13
<PAGE>
STOCK OPTION PLANS
In May 1990, the Company adopted a stock option plan and on October 25,
1993, the Company approved a stock option plan that provides certain individuals
the right to purchase up to 200,000 shares and 750,000 shares, respectively, of
Common Stock. In September 1996, the Company adopted a stock option plan that
entitles certain individuals the right to purchase up to 1,000,000 shares of
Common Stock. The Board of Directors determines those individuals who shall
receive options, the time period during which the options may be exercised, the
number of shares of Common Stock that may be purchased and the exercise price
(which cannot be less than the fair market value of the Common Stock at the date
of grant). Options generally vest ratably over two to five years. The Company
may not grant employee incentive stock options with a fair value in excess of
$100,000 that is exercisable during any one calendar year. Options granted
under the stock option plans generally expire 10 years from the date of grant.
AGGREGATED OPTION EXERCISED IN THE LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES AT FY-END EXERCISABLE/
ACQUIRED VALUE EXERCISABLE/ UNEXERCISABLE
NAME ON EXERCISE REALIZED($) UNEXERCISABLE ($)(1)
--- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
C. JILL BERESFORD.. 0 0 163,224/0 0 / 0
</TABLE>
(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 December 31, 1998, the fair market value of the Company's
Common Stock underlying the options (as determined by the last sale price
quoted on NASDAQ/OTC Bulletin Board) was $0.19. Since the exercise price
of all of the options reflected in this table is greater than $0.19, the
options held by this individual were not In-the-Money and are, therefore,
not included in this calculation.
401(k) RETIREMENT SAVINGS PLAN
The Company provides an employee retirement savings plan under Section
401(k) of the Internal Revenue Code which covers substantially all employees
(the "Plan"). Under the terms of the Plan, employees may contribute a
percentage of their salary, up to a maximum of 15%, which is then invested in
one or more of several mutual funds selected by the employee. The
14
<PAGE>
Company matches 100% of the employee contribution up to a maximum of 2% of
their salary. Company contributions to the plan were $33,165, $47,604,
$80,503 and $52,120 for 1998, the 10 month period ended December 31, 1997,
Fiscal Year 1997 and Fiscal Year 1996, respectively.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
In prior years, the Company entered into employment, non-competition, and
confidentiality agreements with each of Mr. Caulfield, Ms. Beresford and Mr.
Vaicunas. Base salaries for Mr. Caulfield, Ms. Beresford and Mr. Vaicunas were
$320,000, $180,000 and $125,000 per annum, respectively, subject to periodic
review by the Board of Directors. Each of these agreements expired on June 30,
1998. Ms. Beresford's employment agreement was renewed for an additional one
year term. Her agreement provides for severance payments of 60 months base
salary in the event her employment is terminated without cause and prohibits her
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, she has the option to terminate her employment and to receive
additional severance compensation subject to the provisions of their employment
agreements. The Company has also entered into non-competition and
confidentiality agreements with certain other employees.
In conjunction with the January 1999 Financing (as defined in "Certain
Relationships and Related Transactions" below), on January 27, 1999, the Company
entered into an employment agreement with each of Ms. Beresford, Mr. Koehlinger,
Dr. Nurse and Dr. Schulz (each as an "Employee" or collectively, the
"Employees"). Base salaries for Ms. Beresford, Mr. Koehlinger and Dr. Nurse are
$125,000 each per annum. Dr. Schulz's base salary is $150,000 per annum. Mr.
Koehlinger's, Dr. Nurse's and Dr. Schulz's employment terms are from January 27,
1999 to January 27, 2002 and after such terms, each individual's employment
shall revert to the status of employment at will and shall thereafter be subject
to termination by either party at any time and regardless of cause. Ms.
Beresford's employment term begins on July 1, 1999 and terminates on June 30,
2000 and upon expiration of her term, the Company, at its option, may extend her
employment term for an additional 18 months provided the Company gives Ms.
Beresford proper notice.
Under the terms of each Employee's employment agreement, each Employee
shall receive options to purchase Common Stock during the term of each's
respective agreement if the Company equals or exceeds certain financial
performance goals. See "Compensation Committee - Board of Directors
Compensation Committee Report on Executive Compensation - Bonus Plan" above for
a description of the performance goals. Also, in consideration of the Employee
entering into his or her employment agreement, the Company granted each Employee
a warrant to purchase a certain number of shares of Common Stock. Such warrants
are not exercisable until the Company's stockholders approve an amendment to the
Company's Certificate of Incorporation increasing the number of shares of
authorized Common Stock (see Proposal No. 2) and such warrants expire on January
27, 2009. Dr. Schulz was granted a warrant to purchase 2,188,000 shares of
Common Stock at $0.04 per share. Dr. Nurse and Mr. Koehlinger were each granted
a warrant to purchase 1,719,000 shares of Common Stock at $0.04 per share. Ms.
Beresford was granted a warrant to purchase 937,000 shares of Common Stock at
$0.04 per share. Each of the Employees has paid to the Company their respective
amount due under these
15
<PAGE>
warrants. Messrs. Schulz, Koehlinger and Nurse and Ms. Beresford borrowed
funds in the aggregate amount of $262,520 from DGJ necessary to exercise
their warrants described above. In consideration for the loan from DGJ to
these individuals, each Employee pledged the shares which will be issued upon
exercise of the warrants. Dr. Schulz is also given as consideration for his
employment costs related to an apartment and automobile for the duration of
his employment.
On March 22, 1999, the Company entered into an employment agreement with
Peter M. Blackett with a base salary of $125,000 per annum. The term of his
employment agreement is three years, terminating on March 21, 2002. After the
stated term in this agreement, Mr. Blackett's employment with the Company will
revert to the status of employment at will and shall thereafter be subject to
termination by either party at any time regardless of cause. Under the terms of
the agreement, Mr. Blackett shall receive options to purchase Common Stock
during the term of employment if the Company equals or exceeds certain
performance goals. See "Compensation Committee - Board of Directors
Compensation Committee Report on Executive Compensation - Bonus Plan" above for
a description of the performance goals. Mr. Blackett is also given as
consideration for his employment reasonable and necessary expenses incurred in
connection with the moving of his personal residence close to the Company's
office.
CONSULTING AGREEMENT
Also in connection with the January 1999 Financing, the Company entered
into a consulting agreement with Mr. Hughes for a three year term ending on
January 27, 2002. Mr. Hughes receives a consulting fee of $1,000 per week
and will receive options to purchase Common Stock during the term of his
agreement if the Company equals or exceeds certain financial performance
goals. See "Compensation Committee - Board of Directors Compensation
Committee Report on Executive Compensation - Bonus Plan" above for a
description of the performance goals. Also, in consideration of Mr. Hughes
execution of the consulting agreement, the Company granted him a warrant to
purchase 937,000 shares of Common Stock at $0.04 per share. Mr. Hughes has
paid to the Company the full amount due under this warrant. Such warrant is
not exercisable until the Company's stockholders approve an amendment to the
Company's Certificate of Incorporation increasing the number of shares of
authorized Common Stock and the warrant expires on January 27, 2009.
Each of the employment agreements with the Employees and Mr. Blackett and
the consulting agreement with Mr. Hughes contains a covenant not to compete
provision and a confidentiality provision.
COMPENSATION OF DIRECTORS
All outside Directors of the Company are paid $1,875 each per calendar
quarter. No other Directors receive any compensation. In June 1992, David N.
Laux, an outside Director, received options to purchase a total of 7,500 shares
of Common Stock at a purchase price of $2.50 per share through June 9, 2002. In
March 1996, Ivan J. Hughes, then considered an outside Director, received
options to purchase a total of 7,500 shares of Common Stock at a purchase price
of $2.38 per share through June 9, 2003. In January 1998, Mr. Laux received
16
<PAGE>
options to purchase a total of 25,000 shares of Common Stock at a purchase price
of $1.25 per share through December 31, 2003.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ivan J. Hughes, a Director of the Company, is the President of the
Plastic's Division, and a Director and a member of the Executive and
Compensation Committees of Duro Bag. In January, February and March, Duro Bag
issued purchase orders for $192,000, $190,335 and $209,513 to the Company to
purchase bags for Duro Bag customers. The Company expects similar monthly
orders from Duro Bag throughout 1999.
In November 1990, the Company established an officer's loan receivable to
Dennis N. Caulfield, its Chairman for $132,197. The note was amended in April
1998 and the interest rate changed to 6% effective from November 1990 and is now
payable on or before January 1, 2001. As the Company has suffered recurring net
losses and operating cash flow deficiencies, a reserve of $586,978 established
for this loan as of December 31, 1997. In addition, the Company paid, on behalf
of the former Chairman, approximately $36,000 of a $200,000 levy in exchange for
an interest bearing note due on or before June 30, 1998, which has not yet been
repaid.
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 year period based on RC America
attaining certain levels of pre-tax earnings. No shares of Common Stock were
issued in 1998 or for the 10 month period ended December 31, 1997. As a result
of RC America's earnings for Fiscal Year 1997 and Fiscal Year 1996, 2,649 and
2,550 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.
On January 27, 1999, the Company entered into a Securities Purchase
Agreement (the "Securities Purchase Agreement") with DGJ (the "January 1999
Financing"), whereby the Company agreed to issue and sell to DGJ, and DGJ agreed
to purchase from the Company:
1. a Promissory Note in the aggregate principal amount of $3,200,000 (the
"Note");
2. a Common Stock Purchase Warrant for the purchase of up to 80,000,000
shares of the Company's Common Stock, at an exercise price of $0.04 per share,
exercisable until January 27, 2009; and
3. 1,629,930 shares of Series C Preferred Stock of the Company.
In addition, certain members of the Company's management invested $300,000
in the Company's warrants. The Common Stock represented by the warrants cannot
be issued until approval for an increase in the Company's authorized shares of
Common Stock is obtained at the
17
<PAGE>
Annual Meeting. See "Employment Contracts, Termination of Employment and
Change In Control" section above for a description of these warrants.
The shares of the Series C Preferred Stock were purchased by DGJ for an
aggregate purchase price of $100. Some of the rights and restrictions of Series
C Preferred Stock include the following: (i) the holders of Series C Preferred
Stock have no voting rights; provided, however, upon an Event of Default, as
defined in the Securities Purchase Agreement, holders of the Series C Preferred
Stock will be entitled to vote with the holders of the Common Stock as a single
class on each matter submitted to a vote to the Company's stockholders, with
each share of the Series C Preferred Stock having 30 votes per one vote of each
share of Common Stock; (ii) if the Note has been retired in its entirety, the
Company, at its option, may elect to redeem all or a portion of the outstanding
Series C Preferred Stock, at an aggregated redemption price of $100 plus accrued
interest at a rate of 6% per annum commencing on January 27, 1999; and (iii) the
shares of the Series C Preferred Stock are not convertible into shares of Common
Stock.
Pursuant to a Factoring Agreement, dated January 27, 1999, between the
Company and Franklin Capital Corporation ("Franklin"), a company related to DGJ,
Franklin provides the Company with $2,000,000 of financing secured by the
Company's accounts receivable and $1,000,000 secured by its inventory. The term
for both the accounts receivable and inventory financing is six months, subject
to automatic renewal unless the Company gives at least 90 days written notice of
termination. The financing bears interest at the prime rate plus 5% on the
outstanding balance on the inventory loan and the prime rate plus 2% on all
accounts receivable submitted for financing. The Company may borrow up to 85%
of its qualified accounts receivable and 33% of its qualified inventory.
Pursuant to an Equipment Lease, dated January 27, 1999, the Company's
equipment, capital and operating leases are now funded by a new equipment lease
with DGJ. Current obligations of $3,800,000 and accrued lease obligations of
$1,643,000 were retired and $1,679,000 of equipment previously under operating
leases was added to the property and equipment accounts. The new lease carries
no debt reduction obligation and is treated as long-term debt. The combined
monthly payments under the retired leases were reduced from approximately
$305,000 per month to $102,000 per month under the new lease agreement.
Four of the Company's directors are either related to DGJ or have been
designated by DGJ. Gary R. Edidin and Allen S. Gerrard were appointed to the
Board of Directors in January 1999. In April 1999, the Company appointed Bruce
M. Fleisher and Theodore L. Koenig as Class III directors. Mr. Koenig is a
partner with the Chicago-based law firm of Holleb & Coff, which is now providing
legal services to the Company.
In February 1999, the Company borrowed approximately $219,000 from DGJ to
purchase an additional piece of equipment. This loan bears interest at a rate
of 18% per annum and matures in September 1999.
18
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
FIVE-PERCENT BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of Common Stock and
Series A Preferred Stock as of March 31, 1999 by persons who beneficially owned
more than 5% of the Common Stock and Series A Preferred Stock or by persons who
did not beneficially own more than 5% of the Common Stock and Series A Preferred
Stock but who constituted members of a "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, beneficially owning
more than 5% of the Common Stock and Series A Preferred Stock. Each of the
persons listed below was a member of such a group by virtue of being a party to
a Lockup Agreement by and among Ms. Beresford, Mr. Hughes and DGJ, dated January
27, 1999, pursuant to which the parties agreed to vote their shares of stock as
directed by DGJ on any matters presented to the Company's stockholders with
respect to the Securities Purchase Agreement. Each of the persons listed below
disclaims beneficial ownership in any shares beneficially owned by the others.
The number of shares of Common Stock and Series A Preferred Stock beneficially
owned by each person listed below is based on information contained in the
Schedule 13D filed with the Commission on behalf of the listed persons. The
percentage of shares of the Common Stock and Series A Preferred Stock each
listed person is indicated as beneficially owning is based on 21,495,621 and
193,358 shares of Common Stock and Series A Preferred Stock, respectively,
outstanding on March 31, 1999.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF COMMON
OF BENEFICIAL OWNER BENEFICIALLY OWNED STOCK (1)(2)
- ------------------- ------------------ --------------------
<S> <C> <C>
C. Jill Beresford(3)(5) 1,624,249 7.45%
455 Somerset Avenue
North Dighton, Massachusetts 07264
Ivan J. Hughes(4)(5) 90,000 *
Davis and Oak Streets
Ludlow, Kentucky 41016-0250
DGJ (6) 30,937,500 58.79%
600 Central Avenue, Suite 262
Highland Park, Illinois 60036
</TABLE>
* Less than one percent.
(1) Pursuant to the rules of the 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
19
<PAGE>
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) Does not give effect to the issuance of: (i) up to 340,053 shares of
Common Stock issuable upon conversion of Series A and Series B Convertible
Preferred Stock; (ii) up to 180,372 shares issuable upon exercise of
warrants issued to an individual and principals of the placement agent in
the Company's private placements to overseas investors; (iii) up to
1,950,000 shares issuable upon exercise of options granted or available for
grant under the Company's 1990, 1993 and 1996 stock option plans; (iv) up
to 200,000 shares of Common Stock issuable upon the exercise of warrants
issued to financial consultants of the Company, subject to adjustment; and
(v) up to 5,000,000 shares of Common Stock issuable upon the exercise of
options expiring January 27, 2009 issued to consultants of the Company,
subject to adjustments.
(3) Includes: (i) 1,314,130 shares of Common Stock; (ii) 146,695 shares of
Series B Convertible Preferred Stock; and (iii) 163,224 shares of Common
Stock issuable upon the exercise of an option at a price of $2.50 per share
through June 30, 2003.
(4) Includes 82,500 shares of Common Stock and 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.
(5) These individuals received warrants to purchase a certain number of shares
Common Stock at $0.04 per share. These warrants expire on January 27, 2009
and are described above in Section "Board of Directors and Executive
Officers - Employment Contracts, Termination of Employment and Change in
Control Arrangements." These warrants are not exercisable until the
Company's stockholders approve an amendment to the Company's Certificate of
Incorporation increasing the number of shares of the Company's authorized
Common Stock.
(6) Includes 30,937,500 shares of Common Stock issuable upon the exercise of a
warrant at a price of $0.04 per share through January 27, 2009. However,
DGJ has indicated that it has no current intention of exercising this
warrant to purchase Common Stock. Does not include 1,629,930 shares of
Series C Preferred Stock of the Company, which do not have voting rights at
this Annual Meeting. See "Certain Relationships and Related Transactions"
above for a description of the rights and privileges of the Series C
Preferred Stock.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of Common Stock or
Series A Convertible Preferred Stock as of March 31, 1999 by: (i) directors of
the Company; (ii) executive officers of the Company; and (iii) directors and
executive officers of the Company as a group. The number of shares beneficially
owned of Common Stock and Series A Convertible Preferred Stock listed below is
based on information contained in a Schedule 13D filed with the Commission on
behalf of the named persons and on information provided to the Company by the
named persons. The percentage of shares of the class each person is listed as
beneficially
20
<PAGE>
owning is based upon 21,495,621 and 193,358 shares of Common Stock and Series
A Convertible Preferred Stock outstanding, respectively, as of March 31,
1999. 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 CLASS
OF BENEFICIAL OWNER BENEFICIALLY OWNED (1)(2)
- ------------------- ------------------ -------------------
<S> <C> <C>
Hanspeter Schulz, Ph.D.(3)(11) 0 0%
Richard H. Nurse, Ph.D.(3)(11) 6,000 *
C. Jill Beresford(3)(4)(6)(11) 1,627,249 7.45%
James F. Koehlinger(3)(11) 0 0%
Peter W. Blackett (3) 0 0%
Ivan J. Hughes(5)(6)(11) 90,000 *
Davis and Oak Streets
Ludlow, Kentucky 41016-0250
David N. Laux(7) 52,500 *
1700 N. Moore St, Suite 1703
Arlington, Virginia 22209
Gary R. Edidin (8) 30,937,500 58.79%
Edidin & Associates
600 Central Avenue
Suite 262
Highland Park, IL 60035
Allen S. Gerrard (9) 30,937,500 58.79%
Deere Park Capital Management
40 Skokie Boulevard
Suite 110
Northbrook, IL 60062
Theodore L. Koenig (10) 0 0%
55 East Monroe Street, Suite 4100
Chicago, Illinois 60603
Bruce M. Fleisher 0 0%
2350 North Lincoln Park West
Chicago, Illinois 60614
All Officers and Directors 32,713,249 54.52%
as a Group (11 persons)(4)(5)(6)(7)
</TABLE>
* Less than one percent.
(1) Pursuant to the rules of the 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
21
<PAGE>
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: (i) up
to 340,053 shares of Common Stock issuable upon conversion of Series A and
Series B Convertible Preferred Stock; (ii) up to 180,372 shares issuable
upon exercise of warrants issued to an individual and principals of the
placement agent in the Company's private placements to overseas investors;
(iii) up to 1,950,000 shares issuable upon exercise of options granted or
available for grant under the Company's 1990, 1993 and 1996 Stock Option
Plans; (iv) up to 200,000 shares of Common Stock issuable upon the exercise
of warrants issued to financial consultants of the Company, subject to
adjustment; and (v) up to 5,500,000 shares of Common Stock issuable upon
the exercise of options expiring January 27, 2009 issued to 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: (i) 1,314,130 shares of Common Stock; (ii) 146,695 shares of
Series B Convertible Preferred Stock; and (iii) 163,224 shares of Common
Stock issuable upon the exercise of an option at a price of $2.50 per share
through June 30, 2003.
(5) Includes 82,500 shares of Common Stock and 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.
(6) Under the terms of the Lockup Agreement, this individual agreed to vote as
directed by DGJ with respect to any matters presented to the Company's
stockholders with respect to the Securities Purchase Agreement and agreed
not to sell shares of Common Stock without the prior written consent of DGJ
(7) Includes: (i) 20,000 shares of Common Stock; (ii) 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; and (iii) 25,000 shares of Common Stock
issuable upon exercise of an option at a purchase price of $1.25 per share
through December 31, 2003.
(8) A member of DGJ and also a member of the Board of Managers, Chairman,
President and Chief Executive Officer of DGJ. Mr. Edidin holds no shares
of the Company directly, but may be deemed to beneficially own 30,937,500
shares of Common Stock beneficially owned by DGJ by virtue of his positions
with DGJ. Does not include 1,629,930 shares of Series C Preferred Stock of
the Company, which do not have voting rights at this Annual Meeting. Mr.
Edidin disclaims beneficial ownership of all such shares.
22
<PAGE>
(9) A Director of Deere Park Capital Management, which is a member of DGJ. He
is also a Member of the Board of Managers and Treasurer of DGJ. Mr.
Gerrard holds no shares of the Company directly, but may be deemed to
beneficially own 30,937,500 shares of Common Stock beneficially owned by
DGJ by virtue of his positions with DGJ. Does not include 1,629,930 shares
of Series C Preferred Stock of the Company, which do not have voting rights
at this Annual Meeting. Mr. Gerrard disclaims beneficial ownership of such
shares.
(10) A member of Monroe Investments, Inc., which is a member of Hilco BPI,
L.L.C., which is a member of DGJ. He disclaims beneficial ownership of
stock of the Company except to the extent of his membership interest in DGJ
through such entities.
(11) These individuals acquired warrants to purchase a certain number of shares
Common Stock at $0.04 per share. These warrants expire on January 27, 2009
and are described above in Section "Board of Directors and Executive
Officers - Employment Contracts, Termination of Employment and Change in
Control Arrangements." These warrants are not exercisable until the
Company's stockholders approve an amendment to the Company's Certificate of
Incorporation increasing the number of shares of the Company's authorized
Common Stock.
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
(assuming reinvestment of dividends) from investing $100 on December 31, 1993,
and plotted at December 31, 1994, 1995, 1996, 1997 and 1998 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 representing Packaging and Container Companies, which
consists of other companies in the packaging and containers manufacturing
industry.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG BPI PACKAGING
TECHNOLOGIES, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BPI Packaging
Technologies, Inc. $100 $ 62.26 $ 32.08 $ 28.77 $ 16.98 $ 10.85
NASDAQ Market Index $100 $104.99 $136.18 $169.23 $207.00 $291.96
Peer Companies Group $100 $101.48 $100.15 $108.45 $100.92 $ 87.00
</TABLE>
GRAPHIC OMITTED
23
<PAGE>
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file with the Commission reports of ownership
and changes in ownership of Common Stock and other equity securities of the
Company. Officer, directors and greater-than-10% stockholders are required by
the Commission regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of such reports furnished to the
Company or written representations that not other reports were required, the
Company believes that, during 1998, its officers, directors and greater-than-10%
beneficial owners were in compliance with all filing requirements.
24
<PAGE>
PROPOSAL NO. 2
INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The Board of Directors recommends an amendment to the Certificate of
Incorporation, as amended, to increase the authorized number of shares of Common
Stock from 60,000,000 shares to 150,000,000 shares.
On January 27, 1999, the Company undertook a financing of the business,
the January 1999 Financing, with DGJ, which allowed the Company to avoid seeking
protection from its creditors filing for bankruptcy, pay-off and terminate
equipment leases that were in default and provide positive cash flow for the
business to allow it to continue its operations and lease new equipment
necessary for its future success.
As part of the January 1999 Financing, DGJ purchased from the Company, for
$100, a warrant which grants DGJ the right to purchase up to 80,000,000 shares
of Common Stock at an exercise price of $0.04 per share, for an aggregate
purchase price of $3,200,000. To reserve the appropriate number of shares for
issuance upon the exercise of DGJ's warrant, the number of authorized shares of
Common Stock must be increased by approximately 49,000,000 shares, as 30,937,500
have already been reserved for issuance upon the exercise of DGJ warrant.
Assuming the stockholders approve the increase of the authorized number of
shares of Common Stock and if DGJ were to exercise the warrant in full, DGJ
would own approximately 64% of the issued and outstanding shares of Common Stock
on a fully diluted basis (assuming conversion into Common Stock of all
outstanding shares of Series A and Series B Preferred Stock and exercise of all
issued and outstanding warrants and options). Accordingly, the Securities and
Exchange Commission (the "SEC") may deem the issuance of the warrant to DGJ to
be a change of control of the Company. See "Certain Relationships and Related
Transactions."
Also, as part of the January 1999 Financing, the Company issued warrants to
purchase 5,500,000 shares of Common Stock for financial advisory services. In
addition, as described in Proposal No. 1, to incentivize new management of the
Company, management received warrants to purchase 7,500,000 shares of Common
Stock as well as options to purchase up to an additional 14,750,000 shares of
Common Stock if the Company succeeds in reaching its performance objectives over
the next three years. To fulfill the terms of these agreements, it is necessary
to increase the number of authorized shares of Common Stock. Thus, management
of the Company has an interest in amending the Certificate of Incorporation.
As part of the January 1999 Financing, the Company and DGJ agreed that the
Company would use reasonable efforts to register a rights offering with the SEC
and to offer rights to stockholders, other than DGJ, the Company or their
affiliates, to purchase up to 15,000,000 shares of Common Stock at a price of
$0.04 per share, pro rata according to their ownership of Common Stock. DGJ
agreed that it would cooperate with the Company in such rights offering and not
take any action intended to prevent the consummation thereof. In order to have
the stockholders' rights offering, it is necessary for the number of authorized
shares of Common Stock to be increased.
25
<PAGE>
It is not DGJ's intention to exercise its warrants in the near future.
However, if the number of authorized shares of Common Stock is not increased by
stockholder vote so as to fulfill all of the requirements of the Securities
Purchase Agreement and other related agreements, DGJ may be forced to exercise
its warrant to the extent shares of Common Stock are reserved for such issuance
(30,937,500 shares) and vote in favor of the increase in the authorized number
of shares of Common Stock.
Additionally, the proposed increase in the number of shares of authorized
Common Stock will ensure that shares can be issued by the Company if needed, in
connection with stock splits, stock dividends, acquisitions and other corporate
purposes. The Board of Directors believes that it is beneficial to the Company
to have the additional shares available for such purposes without delay or the
necessity and expense of a special stockholders' meeting.
No further action by the Company's stockholders would be necessary to issue
the additional shares of Common Stock unless required by applicable law or
regulatory agencies or by the rules of any stock exchanges on which the
Company's securities may then be listed.
The holders of any of the additional shares of Common Stock issued in the
future would have the same rights and privileges as the holders of the shares of
Common Stock currently authorized and outstanding. These rights do not include
preemptive rights with respect to the future issuance of any additional shares.
The issuance of additional shares of Common Stock will have the effect of
diluting 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 unaware of any effort to accumulate the
Company's shares or to obtain control of the Company by means of a merger,
tender offer, solicitation in opposition to management or otherwise. The Board
of Directors has no current intention to use the additional shares to impede a
takeover attempt.
The amendment to the Certificate of Incorporation to increase the number of
authorized shares of Common Stock requires an affirmative vote of a majority of
the shares present in person or by proxy and entitled to vote at the Annual
Meeting. For this proposal, an abstention will have the same effect as a vote
against the proposal. Broker non-votes will not be voted for or against the
proposals and will not be counted as entitled to vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION INCREASING THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK FROM 60,000,000 SHARES TO 150,000,000 SHARES.
26
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of Livingston
& Haynes, P.C. as the Company's independent accountants for the fiscal year
ending December 31, 1999, subject to the ratification by the Company's
stockholders. Representatives of Livingston & Haynes, P.C. are expected to be
present at the Annual Meeting and will have an opportunity to make a statement,
if they desire to do so, and to respond to appropriate questions from those
attending the meeting. Livingston & Haynes, P.C. has served as auditors for the
Company since July 1998.
On July 6, 1998, the Company reported on Form 8-K the resignation of
PricewaterhouseCoopers LLP as the Company's independent accountants. In
connection with the audits of the Company's financial statements for the 10
month period ended December 31, 1997 and the years ended February 28, 1997 and
February 23, 1996, and during the subsequent interim period through July 6,
1998, there were no disagreements between the Company and PricewaterhouseCoopers
LLP relative to accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which, if not resolved to the
satisfaction of PricewaterhouseCoopers LLP, would have caused
PricewaterhouseCoopers LLP to make reference to the matter in its reports on the
financial statements for such periods.
On July 29, 1998, the Company reported on Form 8-K the engagement of
Livingston & Haynes, P.C. as the Company's independent accountants. The
decision to engage Livingston & Haynes, P.C. was approved by the Company's Audit
Committee.
The ratification of the independent accountants requires an affirmative
vote of a majority of the shares present in person or by proxy and entitled to
vote at the Annual Meeting. For this proposal, an abstention will have the same
effect as a vote against the proposal. Broker non-votes will not be voted for
or against the proposals and will not be counted as entitled to vote. If the
resolution is rejected, or if Livingston & Haynes, P.C. declines to act or
becomes incapable of action, or its employment is discontinued, the Board of
Directors will appoint other independent accountants whose continued employment
after the following Annual Meeting of Stockholders will be subject to
ratification by stockholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION
OF LIVINGSTON & HAYNES, P.C. AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR THE
YEAR ENDING DECEMBER 31, 1999.
27
<PAGE>
PROPOSALS OF STOCKHOLDERS
Any proposal of a stockholder intended to be presented at the Annual
Meeting of Stockholders to be held in 2000 must be in the form required by the
Company's By-laws and received at the Company's principal executive offices no
later than January 5, 2000, if the proposal is to be considered for inclusion in
the Company's proxy statement relating to such meeting. It is suggested that
proponents submit their proposals by certified mail, return receipt requested,
addressed to the Chief Financial Officer of the Company.
OTHER MATTERS
The management of the Company does not know of any other matters which may
come before this Annual 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
Hanspeter Schulz
President
North Dighton, Massachusetts
April 30, 1999
28
<PAGE>
PRELIMINARY PROXY
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
NORTH DIGHTON, MA 02764
510-623-9001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
JUNE 3, 1999
The undersigned hereby appoints Hanspeter Schulz and James F. Koehlinger
and each of them, as proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of BPI Packaging
Technologies, Inc. (the "Company") which the undersigned may be entitled to
vote at the Annual Meeting of Stockholders of the Company to be held at The
Courtyard by Marriott, 35 Foxborough Boulevard, Foxborough, Massachusetts on
June 3, 1999, at 10:00 a.m., eastern time, and at any and all continuations
and adjournments thereof, with all powers that the undersigned would possess
if personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as
to any and all other matters that may properly come before the meeting.
(Continued, and to be signed on the other side)
<PAGE>
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE
NOMINEES LISTED IN PROPOSAL 1, AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTORS LISTED
BELOW AND A VOTE FOR PROPOSALS 2 AND 3.
1. PROPOSAL 1: To elect two Class I directors to hold office until the Annual
Meeting of Stockholders to be held in the year 2002.
FOR WITHHOLD
FOR ALL
0 0
NOMINEES: Ivan J. Hughes and Allen S. Gerrard
(INSTRUCTION: To withhold authority to vote for any nominee, write the
nominee's name in the space provided below.)
-------------------------------
2. PROPOSAL 2: To authorize an amendment to our Certificate of Incorporation
to increase the number of authorized shares of Common Stock from 60,000,000
shares to 150,000,000 shares.
FOR AGAINST ABSTAIN
0 0 0
3. PROPOSAL 3: To ratify selection of Livingston & Haynes, P.C. as
independent accountants of the Company for the year ending
December 31, 1999.
FOR AGAINST ABSTAIN
0 0 0
- ------------------------------------------------------------------------------
I PLAN TO ATTEND THE MEETING Please sign exactly as your name appears
hereon. If the stock is registered in the
YES NO names of two or more persons, each should
sign. Executors, administrators, trustees,
guardians or attorneys-in-fact should add
their titles. If signer is a corporation,
please give full corporate name and have a
Date: __________________ duly authorized officer sign, stating title.
If signer is a partnership, please sign in
partnership name by authorized person.
_______________________________
Signature
_______________________________
Signature (if held jointly)
- ------------------------------------------------------------------------------
Please vote, date and promptly return this proxy in the enclosed envelope which
is postage prepaid if mailed in the United States.
