<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [ ]
<TABLE>
<CAPTION>
Check the appropriate box:
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[x] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
</TABLE>
TUFCO TECHNOLOGIES, INC.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if Other Than 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:
- -------------------------------------------------------------------------------
<PAGE> 2
TUFCO TECHNOLOGIES, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 24, 1998
------------------------
TO OUR STOCKHOLDERS:
You are invited to attend either in person or by proxy the Annual
Meeting of Stockholders of Tufco Technologies, Inc. (the "Company") to be held
at South Seas Plantation, Captiva Island, Florida 33924 on Tuesday, February
24, 1998, at 8:00 a.m., local time for the following purposes:
1. To elect seven directors to serve for a one-year term and
until their successors are elected and qualified.
2. To approve an amendment to the Company's 1992 Non-Qualified
Stock Option Plan to increase the number of shares authorized for issuance
under the plan.
3. To approve an amendment to the Company's 1993 Non-Employee
Director Stock Option Plan to increase the number of shares authorized for
issuance under the plan.
4. To ratify the selection of Deloitte & Touche LLP as
independent auditors for the Company for the fiscal year ending September 30,
1998.
5. To transact such other business as may properly come before
the Annual Meeting or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on January 23,
1998 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting or any postponements or adjournments thereof.
The Board of Directors hopes that you will find it convenient to
attend the Annual Meeting in person, but whether or not you plan to attend,
please complete, sign, date and return the enclosed Proxy to ensure that your
shares of Common Stock are represented at the Annual Meeting. Returning your
Proxy does not deprive you of the right to attend the Annual Meeting and vote
your shares in person.
Gregory L. Wilemon,
Secretary
February 6, 1998
<PAGE> 3
TUFCO TECHNOLOGIES, INC.
4800 SIMONTON ROAD
DALLAS, TEXAS 75244
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, FEBRUARY 24, 1998
---------------------
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Directors of Tufco Technologies, Inc. (the "Company"
or "Tufco") for use at the 1998 Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held at South Seas Plantation, Captiva Island,
Florida 33924 on Tuesday, February 24, 1998 at 8:00 a.m., local time, and at
any postponements or adjournments thereof. Only stockholders of record as of
the close of business on January 23, 1998 (the "Record Date") are entitled to
notice of and to vote at the Annual Meeting. As of the Record Date, the
Company had outstanding 3,713,757 shares of Common Stock, $0.01 par value (the
"Common Stock"), the only outstanding class of stock entitled to vote. Each
stockholder of record on the Record Date is entitled to one vote for each share
of Common Stock held.
Shares of Common Stock cannot be voted at the Annual Meeting unless
the holder of record is present in person or by proxy. All stockholders are
urged to complete, sign, date and promptly return the Proxy in the enclosed
postage- paid envelope after reviewing the information contained in this Proxy
Statement and in the Annual Report. Valid Proxies will be voted at the Annual
Meeting and at any postponements or adjournments thereof in the manner
specified therein. If no direction is given, but the Proxy is validly
executed, such Proxy will be voted FOR the election of the nominees for the
Board of Directors set forth in this Proxy Statement, FOR the amendment of the
1992 Non-Qualified Stock Option Plan, FOR the amendment of the 1993
Non-Employee Director Stock Option Plan and FOR the ratification of the
selection of Deloitte & Touche LLP as independent auditors for the Company for
the fiscal year ending September 30, 1998 ("Fiscal 1998"). The persons
authorized under the Proxies will vote upon such other business as may properly
come before the Annual Meeting in accordance with their best judgment.
A stockholder may revoke his or her Proxy at any time before it is
voted either by filing with the Secretary of the Company, at the Company's
principal executive office, a written notice of revocation or by submitting a
duly executed Proxy bearing a later date, or by attending the Annual Meeting
and expressing the desire to vote his or her shares in person.
A majority of the outstanding shares of Common Stock, represented in
person or by proxy, shall constitute a quorum for the transaction of business
at the Annual Meeting; however, if a quorum is not present in person or
represented by proxy at the Annual Meeting, the stockholders entitled to vote
thereat, present in person or represented by proxy, have the power to adjourn
the meeting until a quorum is present or represented. At any such adjourned
meeting at which a quorum is present or represented, any business may be
transacted that might have been transacted at the original meeting.
Broker non-votes (i.e., a nominee holding shares of Common Stock for a
beneficial owner has not received voting instructions from the beneficial owner
with respect to a particular matter and such nominee does not possess or choose
to exercise discretionary authority with respect thereto) will not be included
in the determination of the number of shares present at the Annual Meeting for
quorum purposes.
1
<PAGE> 4
This Proxy Statement, accompanying Proxy and Annual Report to
Stockholders (the "Annual Report") for the fiscal year ended September 30, 1997
("Fiscal 1997") are first being mailed to stockholders on or about February 9,
1998. Although the Annual Report is being mailed to stockholders with this
Proxy Statement, it does not constitute part of this Proxy Statement.
YOUR PROXY VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE,
DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. IF YOU PLAN TO ATTEND THE ANNUAL MEETING TO VOTE IN
PERSON AND YOUR SHARES ARE REGISTERED WITH THE COMPANY'S TRANSFER AGENT
(STOCKTRANS, INC.) IN THE NAME OF A BROKER OR BANK, YOU MUST SECURE A PROXY
CARD FROM THE BROKER OR BANK ASSIGNING VOTING RIGHTS TO YOU FOR YOUR SHARES.
PROPOSAL ONE
NOMINATION AND ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors will
consist of one to twelve directors, as determined from time to time by
resolution of the Board. The Board has fixed the number of directors at seven,
all of whom are to be elected at the Annual Meeting. Each director will serve
until the 1999 Annual Meeting and until his successor has been elected and
qualified or until the director's earlier death, resignation or removal. Each
nominee has consented to being named in this Proxy Statement and to serve if
elected.
The Board of Directors has no reason to believe that any of the
nominees will not serve if elected, but if any of them should become
unavailable to serve as a director, and if the Board of Directors designates a
substitute nominee, the persons named in the accompanying Proxy will vote for
the substitute nominee designated by the Board of Directors, unless a contrary
instruction is given in the Proxy.
Each stockholder is entitled to cast one vote for each share of Common
Stock held on the Record Date. The affirmative vote of a plurality of the
quorum shares is required to elect each director. Votes may be cast in favor
or withheld. Votes that are withheld will be excluded entirely from the vote
and will have no effect. Votes that are withheld for a particular nominee will
be excluded from the vote for that nominee only.
NOMINEES
The persons nominated to be directors of the Company are listed below.
All of the nominees listed below are currently directors of the Company and
have been directors since 1992, except Mr. LeCalsey, who became a director in
September 1996.
The following information as of January 27, 1998 is submitted
concerning the nominees named for election as directors:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Robert J. Simon (1)(2)(3) 39 Chairman of the Board of Directors
Samuel J. Bero (1)(3) 62 Director
C. Hamilton Davison, Jr. 38 Director
Patrick J. Garland (1)(3) 66 Director
Louis LeCalsey III 58 Director, President and Chief Executive Officer
Edward A. Leinss (2) 56 Director
William J. Malooly (2) 55 Director
</TABLE>
_____________________
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
2
<PAGE> 5
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each nominee during
the last five years has been furnished to the Company by each such nominee:
Robert J. Simon -- Mr. Simon has been Chairman of the Board of
Directors of Tufco since February 1992. Mr. Simon has been a Senior Managing
Director of Bradford Ventures Ltd., a private investment firm, since 1992 and a
general partner of Bradford Associates since 1989. Prior to that time, Mr.
Simon held the following positions with Bradford Ventures Ltd.: Managing
Director from 1989 to 1991; Senior Vice President from 1987 to 1989; and Vice
President from 1984 to 1987. Mr. Simon is Chairman of the Board or director of
numerous public and private companies, including Ampco Metal, Inc., HoloPak
Technologies, Inc., Overseas Private Investors Ltd., Overseas Equity Investors
Ltd., Pamarco Technologies, Inc. and Paramount Cards Inc.
Samuel J. Bero -- Mr. Bero had been President and Chief Executive
Officer from November 1993 until he retired in July 1995, Executive Vice
President since November 1992, and General Manager of Tufco Industries, Inc.
(the "Predecessor") since 1974, when he co-founded the Predecessor with Mr.
Garland and two other individuals. Mr. Bero has been a director of the Company
since it was founded in 1992 and has over 34 years of experience in the
converting industry.
C. Hamilton Davison, Jr. -- Mr. Davison has been a director of the
Company since it was founded in 1992. Mr. Davison has been an executive
officer and director of Paramount Cards Inc. since 1988, serving as its
President from 1988 through 1996, and as President and Chief Executive Officer
from 1996 to the present. Mr. Davison served as the 1996 president of the
greeting card industry trade association and continues to serve as a director
and a member of its executive committee. Mr. Davison is also a director of
Valley Resources, Inc.
Patrick J. Garland -- Mr. Garland has been a director of the Company
since it was founded in 1992. Mr. Garland was the President of Tufco from
1974, when he co-founded the Predecessor with Mr. Bero and two other
individuals, until November 1993. Mr. Garland retired from Tufco in February
1994 when his employment agreement expired. He continues to serve as a
director of Tufco and has over 34 years of experience in the converting
industry.
Louis LeCalsey III -- Mr. LeCalsey has been a Director, President and
Chief Executive Officer of Tufco since September 19, 1996. He served as
President of the Predecessor from April 1996 through September 18, 1996, and as
Vice President of Worldwide Logistics for Scott Paper Co. from 1992 through
March 1996.
Edward A. Leinss -- Mr. Leinss has been a director of the Company
since it was founded in 1992. Mr. Leinss has been President and Chief
Executive Officer of Ahlstrom Filtration, Inc., a manufacturer of filtration
media, since 1989 and of its predecessor, Filtration Sciences, Inc., from 1981
to 1989.
William J. Malooly -- Mr. Malooly has been a director of the Company
since it was founded in 1992. Mr. Malooly has been the Chairman and Chief
Executive Officer of Bank One, Green Bay since 1977.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE ELECTION OF DIRECTORS AS SET FORTH IN PROPOSAL ONE.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During Fiscal 1997, the Board of Directors held four meetings. No
director attended less than 75% of the meetings held by the Board of Directors
and the committees on which he served.
The Board of Directors has established an Executive Committee, an
Audit Committee, and a Compensation Committee. The Board of Directors has not
established a nominating committee.
The Executive Committee is authorized to exercise all of the authority
of the Board of Directors in the business and affairs of the Company with
certain exceptions. The Executive Committee is intended to serve in the event
action must be taken by the Board at a time when convening a meeting of the
entire Board is not feasible. Its current members are Samuel J. Bero, Robert
J. Simon and Patrick J. Garland. The Executive Committee did not meet during
Fiscal 1997.
3
<PAGE> 6
The Audit Committee is authorized to review proposals of the Company's
independent auditors regarding annual audits, recommend the engagement or
discharge of the auditors, review recommendations of such auditors concerning
accounting principles and the adequacy of internal controls and accounting
procedures and practices, review the scope of the annual audit, approve or
disapprove each professional service or type of service other than standard
auditing services to be provided by the auditors, and review and discuss the
audited financial statements with the auditors. Its current members are Robert
J. Simon, Edward A. Leinss and William J. Malooly. The Audit Committee held
one meeting during Fiscal 1997.
The Compensation Committee is authorized to review annual salaries and
bonuses and has the authority to determine the recipients of stock options, the
time or times at which stock options shall be granted, the exercise price of
each option, and the number of shares to be issuable upon the exercise of each
stock option. Its current members are Samuel J. Bero, Robert J. Simon and
Patrick J. Garland. The Compensation Committee held one meeting during Fiscal
1997. See "Report of the Compensation Committee of the Board of Directors on
Executive Compensation."
COMPENSATION OF DIRECTORS
Directors of the Company who are not employees of the Company receive
an annual fee of $6,000, a payment of $1,000 for each Board meeting attended
and a payment of $1,000 for each committee meeting attended. In addition, upon
election or reelection to the Board at the Annual Meeting, each non-employee
director shall receive an option to acquire 2,000 shares of Common Stock under
the Company's 1993 Non-Employee Director Stock Option Plan. The stock options
are exercisable immediately at an exercise price equal to the fair market value
of the Common Stock on the date of the Annual Meeting, as determined in
accordance with the terms of the plan.
MANAGEMENT
EXECUTIVE OFFICERS
Executive officers serve at the discretion of the Board of Directors
and are elected by the Board of Directors following each annual meeting of the
stockholders. Set forth below is information regarding the names and ages of
the executive officers of the Company, all positions held with the Company by
each individual, and a description of the business experience of each
individual for at least the past five years.
<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- --- -----
<S> <C> <C>
Louis LeCalsey III 58 Director, President and Chief Executive Officer
Gregory L. Wilemon 37 Chief Financial Officer, Chief Operating Officer, Secretary and
Treasurer
</TABLE>
Information regarding the business experience of Mr. LeCalsey is
provided under "Proposal One--Nomination and Election of Directors."
Gregory L. Wilemon -- Mr. Wilemon has been Chief Financial Officer
since September 18, 1995 and was appointed Secretary/Treasurer by the Board of
Directors effective November 12, 1995 and Chief Operating Officer in September
1996. Mr. Wilemon had been Chief Operating Officer at Executive Roll
Manufacturing from 1991 until May 1993. From 1993 until he rejoined the
Company, Mr. Wilemon was Vice President of Finance at Great North American
Companies. Prior to his earlier tenure with the Company, Mr. Wilemon was a
Senior Business Planner with PepsiCo from 1987 to 1991.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the Company
for each of the fiscal years ended September 30, 1997, 1996 and 1995 to the
Chief Executive Officer of the Company and the other most highly compensated
executive officers of the Company (the "Named Executive Officers") who received
a total annual salary and bonus in excess of $100,000 in Fiscal 1996.
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------- ------------
SECURITIES ALL
NAME AND OTHER ANNUAL UNDERLYING OTHER
PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
------------------ ----------- ------ ----- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Louis LeCalsey III (1) . . . 1997 $ 200,000 $ 95,000 $ - 50,000 $78,621(2)
Director, President and 1996 94,627 21,700 - 9,569 -
Chief Executive Officer 1995 - - - - -
Gregory L. Wilemon (3) . . . 1997 150,000 71,251 - 10,000 -
Chief Financial Officer, 1996 125,000 48,750 - 17,908 -
Chief Operating Officer, 1995 4,553 - - - -
Secretary and Treasurer
</TABLE>
- ---------------
(1) Mr. LeCalsey became a Director, President and Chief Executive Officer
of the Company effective October 1, 1997. Information regarding Mr.
LeCalsey's employment agreement with the Company is provided under
"--Employment Agreements." Mr. LeCalsey served as President of the
Predecessor from April 1996 until he assumed his current position with
the Company.
(2) Represents reimbursed moving costs.
(3) Mr. Wilemon became Chief Financial Officer of the Company on September
18, 1995. See "--Employment Agreements."
EMPLOYMENT AGREEMENTS
Mr. LeCalsey entered into an employment agreement with the Company
effective September 19, 1996, under which Mr. LeCalsey will serve as the
Company's President and Chief Executive Officer for an initial term of three
years with successive one-year renewal terms. If the Company terminates Mr.
LeCalsey's employment for cause, or as a result of his death or disability, the
Company's obligation to compensate him immediately terminates. If Mr. LeCalsey
is terminated without cause, the Company will be obligated to compensate him
for the remaining term of the agreement or for a period of one year, whichever
is greater. The employment agreement prohibits Mr. LeCalsey from competing
with the Company while employed by the Company (or while receiving severance
pay from the Company) and for one year after termination of his employment with
the Company. Mr. LeCalsey's employment agreement provides for an annual base
salary of $200,000, an annual bonus and various fringe benefits. Mr.
LeCalsey's bonus is based upon a budget for pre-tax income determined by the
Board of Directors.
Mr. Wilemon entered into an employment agreement with the Company
effective October 1, 1996, under which Mr. Wilemon will serve as Chief
Financial Officer, Chief Operating Officer, Secretary and Treasurer for an
initial term of two years with successive one-year renewal terms. If the
Company terminates Mr. Wilemon's employment for cause, or as a result of his
death or disability, the Company's obligation to compensate him immediately
terminates. If Mr. Wilemon is terminated without cause, the Company will be
obligated to compensate him for the remaining term of the agreement or for a
period of one year, whichever is greater. The employment agreement prohibits
Mr. Wilemon from competing with the Company while employed by the Company (or
while receiving severance pay from the Company) and for one year thereafter.
Mr. Wilemon's employment agreement provides for an annual base salary of
$150,000, an annual bonus and various fringe benefits. Mr. Wilemon's bonus is
based upon a budget for pre-tax income determined by the Board of Directors.
5
<PAGE> 8
OPTION GRANTS
The following table sets forth the stock option grants made in Fiscal
1997 to each of the Company's Named Executive Officers. The table also sets
forth the hypothetical gains that would exist for the options at the end of
their five-year terms after vesting, assuming compound rates of stock
appreciation of 5% and 10%. The actual future value of the options will depend
on the market value of the Company's Common Stock. All option exercise prices
are based on market price on the grant date.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION AT
END OF FIVE YEAR
INDIVIDUAL OPTION TERM (1)
----------------------------------------------------------- ------------------------
NUMBER OF
SHARES % OF TOTAL EXERCISE
UNDERLYING OPTIONS GRANTED PRICE
OPTIONS TO EMPLOYEES IN PER EXPIRATION
NAME GRANTED(2) FISCAL 1997 SHARE DATE 5% 10%
---- ------------- -------------- ------ ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Louis LeCalsey III 50,000 50% $7.00 10/1/01 $96,699 $213,678
Gregory L. Wilemon 10,000 10% 6.75 11/07/01 18,649 41,209
</TABLE>
- -------------------
(1) "Potential Realizable Value" is disclosed in response to Securities
and Exchange Commission rules, which require such disclosure for
illustrative purposes only, and is based on the difference between the
potential market value of shares issuable (based upon assumed
appreciation rates) upon exercise of such options and the exercise
price of such options. The values disclosed are not intended to be,
and should not be interpreted as, representations or projections of
future value of the Company's stock or of the stock price.
(2) Stock option grants vest in equal increments on each of the first
three anniversaries of their date of grant.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the
value of the unexercised options as of September 30, 1997 held by the Named
Executive Officers. No options were exercised in Fiscal 1997 by any of the
Named Executive Officers.
AGGREGATE OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
1997 YEAR-END FISCAL 1997 YEAR-END (1)
------------------------------------ ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Louis LeCalsey III 3,190 56,379 $11,259 $191,268
Gregory L. Wilemon 5,969 21,939 30,762 97,773
</TABLE>
- -------------------
6
<PAGE> 9
(1) The fair market value on September 30, 1997 of the Common
Stock underlying the options was $10.38 per share.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company's executive compensation is supervised by the Compensation
Committee of the Board of Directors. The functions of the Compensation
Committee are to review general compensation policies and to review
recommendations made regarding the salaries of executive officers. The Company
seeks to provide executive compensation that will support the achievement of
the Company's financial goals while attracting and retaining talented
executives and rewarding superior performance. In performing this function,
the Compensation Committee reviews executive compensation surveys and other
available information and may from time to time consult with independent
compensation consultants.
In general, the Company compensates its executive officers through
base salary, but may also consider cash bonuses and long-term incentive
compensation. In addition, executive officers participate in benefit plans
that are generally available to the Company's employees.
The Compensation Committee's compensation policies for executive
officers follow the Company's compensation policy for all employees. This
policy emphasizes the principle that compensation should be commensurate with
performance of the individual and the Company. With regard to the Chief
Executive Officer (the "CEO"), the Compensation Committee considers a broad
array of factors in establishing the CEO's base salary and bonus, including the
salary and bonus payments for CEOs at companies in similar businesses. The CEO
for Fiscal 1997 had an employment agreement with the Company that provided for
a minimum base salary of $200,000.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
limits the deduction that may be claimed by a "public company" for total
compensation in excess of $1 million paid to the chief executive officer or to
any of the other four most highly compensated officers except to the extent
that any compensation in excess of $1 million is paid pursuant to a
performance-based plan. This provision became effective January 1, 1994 with
respect to the Company. After considering the application of Section 162(m) to
its compensation policies, the Committee has determined that the provisions of
that Section would not affect the compensation of any of the officers named
above. To the extent that this might not continue to be the case, the
Committee would consider any changes necessary to conform to the provisions of
that Section 162(m).
The Compensation Committee determined the salary for the Company's CEO
for Fiscal 1997 based on the foregoing factors.
Respectfully submitted,
Compensation Committee:
Samuel J. Bero
Patrick J. Garland
Robert J. Simon
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Bero and Mr. Simon serve on the Company's Compensation Committee.
Mr. Bero was an officer of the Company from November 1993 until his retirement
in June 1995 and Mr. Simon currently is a general partner of Bradford
Associates.
7
<PAGE> 10
The Company leases one of its facilities from a partnership in which
Samuel J. Bero and Patrick J. Garland are partners with two others. The lease
has a five-year term that expires on February 28, 2001. The Company has
options to renew the lease for an additional three-year term at a negotiable
rental rate. The Company paid total rent of $124,500 to the partnership that
is the lessor of this facility for Fiscal 1997. The Company believes that the
terms of this lease are at least as favorable to the Company as could have been
obtained from an unaffiliated party.
The Company has made interest-free advances to Messrs. Bero and
Garland and two other former stockholders of Tufco Industries, Inc. to purchase
life insurance policies on their lives. The policies are collectively assigned
to the Company, as security for the advances. As of September 30, 1997, the
only outstanding advance in excess of $60,000 was $113,928 to Mr. Garland.
Upon completion of the acquisition of ECC in January 1994, the Company
amended an agreement with Bradford Ventures, Ltd. ("Bradford"), an affiliate of
Bradford Venture Partners, L.P., a stockholder of the Company, and Mr. Simon,
under which Bradford will provide various financial consulting services to the
Company for an initial term of ten years, with successive automatic renewal
terms of one year each unless terminated by either party. Under this
agreement, Bradford has assisted the Company in structuring its initial public
offering and the ECC acquisition and restructuring its long-term obligations.
The Company expects to use the services of Bradford in the future for similar
services as well as in any major transaction, such as loans, subsequent public
offerings and acquisitions. The Company is obligated to pay Bradford an annual
fee of $220,500 under the agreement, subject to a 5% annual increase, plus
reasonable out-of-pocket expenses. During Fiscal 1997, the Company paid
Bradford $220,500 in fees. The Company believes that the terms of the
agreement with Bradford are at least as favorable to the Company as could be
obtained from an unaffiliated party.
8
<PAGE> 11
PERFORMANCE GRAPH
The rules and regulations of the Securities and Exchange Commission
require the presentation of a line graph comparing, over a period of five years
(or such shorter period that a class of securities has been registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), the cumulative total stockholder return to a performance indicator of a
broad equity market index and either a nationally recognized industry index or
a peer group index constructed by the Company.
The graph below compares the performance of the Company's Common Stock
with the performance of the NASDAQ Market Index and the MG Paper Products Group
Index from January 21, 1994, when the Company's Common Stock became publicly
traded, through September 30, 1997. The comparison assumes $100 was invested
on January 21, 1994 in the Company's Common Stock and in each of the
aforementioned indices and assumes reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
TUFCO TECHNOLOGIES, INC.,
NASDAQ MARKET INDEX AND MG PAPER PRODUCTS GROUP INDEX
9
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of January 27, 1998 by (i) each
person known by the Company to own beneficially more than 5% of the outstanding
Common Stock, (ii) each current director of the Company, (iii) each current
Named Executive Officer, and (iv) all current directors and current Named
Executive Officers of the Company as a group. Unless otherwise indicated, the
shares listed in the table are owned directly by the individual or entity, or
by both the individual and the individual's spouse, and the individual or
entity has sole voting and investment power as to shares shown or, in the case
of the individual, such power is shared with the individual's spouse.
Certain of the shares listed below are deemed to be owned beneficially
by more than one stockholder under Rule 13d-3 of the Securities and Exchange
Commission. Accordingly, the sum of the ownership percentages listed exceeds
100%.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNERSHIP CLASS
-------------------- ----------
OVER 5% STOCKHOLDERS
<S> <C> <C>
Robert J. Simon (1)(2)(3)(6)(7) . . . . . . . . . . . . 2,640,543 58.0 %
Barbara M. Henagan (1)(2)(3)(5) . . . . . . . . . . . . 2,629,345 57.7
Bradford Venture Partners, L.P. (1)(2) . . . . . . . . 1,909,870 41.9
Overseas Equity Investors Partners (3)(4)(8) . . . . 709,870 15.6
OTHER DIRECTORS AND EXECUTIVE OFFICERS
Patrick J. Garland (6)(9)(10) . . . . . . . . . . . . . 211,841 4.7
Samuel J. Bero (6)(11)(12) . . . . . . . . . . . . . . 204,000 4.5
Louis LeCalsey III(13) . . . . . . . . . . . . . . . . 59,380 1.3
Robert E. Coghan (7)(16) . . . . . . . . . . . . . . . 11,842 *
C. Hamilton Davison, Jr. (7) . . . . . . . . . . . . . 11,842 *
Edward A. Leinss (7) . . . . . . . . . . . . . . . . . 17,605 *
William J. Malooly (7) . . . . . . . . . . . . . . . . 11,000 *
Gregory L. Wilemon (14) . . . . . . . . . . . . . . . . 19,043 *
Directors and Executive Officers
as a Group (9 persons) (1)(15) . . . . . . . . . . . 3,181,172 69.8
</TABLE>
- -----------
* Less than one percent.
(1) The amounts shown for Mr. Simon and Ms. Henagan include the shares
owned of record by Bradford Venture Partners, L.P. ("BVP"), as to
which they may be deemed to share beneficial ownership due to their
having voting and dispositive power over such shares. Bradford
Associates, a general partnership of which such two persons are the
partners, is the sole general partner of BVP and, as such, holds a 1%
interest in that partnership.
(2) The address of the stockholder is 44 Nassau Street, Princeton, New
Jersey 08542.
(3) The amounts shown for Mr. Simon and Ms. Henagan
includes the shares owned of record by Overseas Equity
Investors Partners ("OEIP"), as to which they may be deemed to share
beneficial ownership due to their having voting power over such
shares. Mr. Simon and Ms. Henagan serve as Co-Chairmen of the Board
of Directors of the corporation that acts as the managing partner of
OEIP. Bradford Associates holds a 1% partnership interest in OEIP,
which may increase upon the satisfaction of certain contingencies
related to the overall performance of OEIP's investment portfolio, and
also acts as an investment advisor for OEIP.
(4) OEIP holds Non-Voting Common Stock of the Company. Non-Voting Common
Stock is not entitled to vote on any matters except as a separate
class on any amendment to the Company's Certificate of Incorporation
adversely affecting OEIP's rights. The Non-Voting Common Stock is
substantially equivalent to the Common
10
<PAGE> 13
Stock except for voting rights and the fact that Non-Voting Common
Stock is convertible into Common Stock at any time on a one-for-one
basis. Therefore, OEIP is deemed to be a beneficial owner of the
Common Stock for purposes of the ownership table and, accordingly, the
ownership percentage of OEIP reflects OEIP's stock ownership as if the
Non-Voting Common Stock was converted into Common Stock. OEIP is the
sole holder of Non-Voting Common Stock of the Company.
(5) The amount shown for Ms. Henagan includes 3,842 shares that
she owns of record as trustee under two trusts for the benefit of a
nephew and a niece of Ms. Henagan.
(6) The stockholder is also a director of the Company.
(7) The amount shown includes 8,000 shares that may be acquired under
options that are currently exercisable.
(8) The address of the stockholder is Clarendon House, Church Street,
Hamilton 5-31, Bermuda.
(9) The amount shown includes 6,000 shares that may be acquired under
options that are currently exercisable.
(10) The address of the stockholder is 3319 Capri Court, Green Bay,
Wisconsin 54301.
(11) The amount shown includes 4,000 shares that may be acquired under
options that are currently exercisable.
(12) The address of the stockholder is 3322 New Plank Road, DePere, WI
54115.
(13) The amount shown includes 19,856 shares that may be acquired under
options that are currently exercisable.
(14) The amount shown includes 13,882 shares that may be acquired under
options currently exercisable.
(15) The amount shown includes an aggregate of 83,738 shares that may be
acquired under options that are currently exercisable.
(16) Mr. Coghan has decided not to seek re-election as a director of the
Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership of such securities with the Securities and Exchange Commission.
Officers, directors and greater than 10% beneficial owners are required by
applicable regulations to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of the copies of Forms 3, 4, and 5 (and any
amendments thereto) furnished to the Company with respect to Fiscal 1997, or
written representations from certain reporting persons that no Forms 5 were
required, no person failed to disclose on a timely basis reports required by
Section 16(a) of the Exchange Act.
PROPOSAL TWO
APPROVAL OF AMENDMENT OF THE 1992 NON-QUALIFIED STOCK OPTION PLAN
GENERAL
The Company adopted the 1992 Non-Qualified Stock Option Plan (the
"1992 Plan") to retain and attract and provide incentives to officers and other
key employees of the Company. The 1992 Plan, as of the Record Date, authorizes
the issuance of up to 200,000 shares of Common Stock (an amount equal to 5.39%
of the issued and outstanding shares of Common Stock on such date). Through
January 27, 1997, options to purchase 194,072 shares of Common Stock were
outstanding under the 1992 Plan. Accordingly, there remain only 5,928 shares
of Common Stock available for issuance under the 1992 Plan. The Board of
Directors believes that providing an increased availability of shares of Common
Stock for issuance under the 1992 Plan is important in order for the Company to
be able to grant long-term incentives to retain key executives and employees.
On January 6, 1998, the Board of Directors unanimously voted to amend
the 1992 Plan, subject to the approval of the stockholders, to increase the
maximum number of shares of Common Stock available for issuance under the 1992
Plan to 400,000 shares of Common Stock.
11
<PAGE> 14
OVERVIEW OF 1992 PLAN
The 1992 Plan is administered by the Board of Directors (the "Plan
Committee"). The Plan Committee generally has the authority, within
limitations set forth in the 1992 Plan, to establish rules and regulations
concerning the 1992 Plan, to determine the persons to whom stock options
("Options") may be granted, the number of shares of Common Stock to be covered
by each Option and the terms and provisions of the Options to be granted.
Pursuant to the 1992 Plan, officers and key management personnel of
the Company may be offered the opportunity to acquire shares of Common Stock
through the grant of non-qualified Options.
The number of shares of Common Stock which may be granted under the
1992 Plan or for which any outstanding Options are exercisable is subject to
customary anti-dilution provisions. The maximum term of any Option granted
pursuant to the 1992 Plan is five years from the date of grant. Shares of
Common Stock subject to Options granted under the 1992 Plan which expire,
terminate or are canceled without having been exercised in full become
available again for Option grants.
The 1992 Plan provides that the exercise price of an Option will be
fixed by the Plan Committee on the date of grant, but may not be less than the
fair market value of the Common Stock on the date of grant. The Options become
exercisable at such time as the Plan Committee shall determine and are
exercisable by the holder thereof subject to terms fixed by the Plan Committee.
Options are exercisable immediately upon the termination of the holder's
employment by the Company for any reason other than (i) total disability (as
defined in the 1992 Plan), (ii) death, (iii) cause (as defined in the 1992
Plan) or (iv) retirement, to the extent otherwise exercisable on the date of
such termination, for a period of 45 days after the date of such termination.
In the event of termination resulting from retirement or total disability, such
Options shall be exercisable for a period of three months after such
termination. In the event of termination resulting from death, such Options
shall be exercisable for a period of one year from the date of death. In the
event of termination for cause, all Options shall automatically terminate as of
the termination date.
The 1992 Plan may be terminated and may be modified or amended by the
Board of Directors at any time. No such termination, modification or amendment
of the 1992 Plan will alter or affect the terms of any then-outstanding Options
without the consent of the holders thereof.
BENEFITS TO CERTAIN PERSONS UNDER THE 1992 PLAN
As described above, the employees of the Company and its subsidiaries
who will receive awards under the 1992 Plan and the size of the awards are
generally to be determined by the Plan Committee in its discretion. Thus, it
is not possible either to predict the benefits or amounts that will be received
by or allocated to particular individuals or groups of employees or to
determine the benefits or amounts that will be received or allocated to such
persons under the 1992 Plan, as amended.
The following table sets forth certain information concerning the
grant of Options under the 1992 Plan as of the Record Date, including Options
to purchase 74,072 shares, which 74,072 Options are contingent upon stockholder
approval of the proposed amendment of the 1992 Plan.
<TABLE>
<CAPTION>
NUMBER OF STOCK NUMBER OF Exercise Price of
OPTIONS CONTINGENT Contingent
NAME HELD OPTIONS Options
---- --------------- ---------- -----------------
<S> <C> <C> <C>
Louis LeCalsey III . . . . . . . . . . . . . . 59,569 30,000 $9.50
Gregory L. Wilemon . . . . . . . . . . . . . . 27,908 13,500 9.50
All employees (other than the Named Executive
Officers) as a group . . . . . . . . . . . . . 112,523 20,572 9.50
10,000 11.00
</TABLE>
12
<PAGE> 15
CERTAIN FEDERAL INCOME TAX MATTERS
The federal income tax consequences to an individual who receives
non-qualified Options generally will, under current law, be as follows:
An individual will not realize any income at the time the Option is
granted. Generally, an individual will realize ordinary income, at the time
the Option is exercised, in a total amount equal to the excess of the then fair
market value of the Common Stock acquired over the exercise price. However,
Section 83 of the Internal Revenue Code of 1986, as amended (the "Code")
provides that, if an officer or principal stockholder (i.e., an owner of more
than 10% of the outstanding Common Stock) receives Common Stock pursuant to the
exercise of a non-qualified stock option, he or she is not required to
recognize any income until the date on which such shares can be sold at a
profit without liability under Section 16(b) of the Securities Exchange Act of
1934, as amended. At such time, the officer or principal stockholder will
realize income equal to the amount by which the then fair market value of the
Common Stock acquired pursuant to the exercise of such Option exceeds the price
paid for such Common Stock. Alternatively, an officer or principal stockholder
who would not otherwise be taxed at the time the Common Stock is transferred
may file a written election, within 30 days of such transfer, with the Internal
Revenue Service, to be taxed as of the date of transfer, on the difference
between the then fair market value of the Common Stock and the price paid for
such Common Stock.
All income realized upon the exercise of a non-qualified Option will
be taxed as ordinary income. The Company will be entitled to a tax deduction
(as compensation) for the amount taxable to an individual (including an officer
and principal stockholder) upon the exercise of a non-qualified Option, as
described above, in the same year as those amounts are taxable to the
individual.
Common Stock issued pursuant to the exercise of a non-qualified Option
generally will constitute a capital asset in the hands of an individual
(including an officer or principal stockholder) and will be eligible for
capital gain or loss treatment upon any subsequent disposition. The holding
period of such individual will commence upon the date he or she exercises the
non-qualified Option. The individual's basis in the Common Stock will be equal
to the greater of their fair market value as of that date or the amount paid
for such Common Stock. If, however, an individual uses Common Stock which he
or she owns to pay, in whole or in part, the exercise price for Common Stock
acquired pursuant to the exercise of a non-qualified Option, (a) the holding
period for the newly issued Common Stock equal in value to the old Common Stock
which was surrendered upon the exercise shall include the period during which
the old Common Stock was held, (b) the individual's basis in such newly issued
Common Stock will be the same as his or her basis in the surrendered Common
Stock, (c) no gain or loss will be realized by the individual on the old Common
Stock surrendered, and (d) the individual will realize ordinary income in an
amount equal to the fair market value of the additional number of shares of
Common Stock received over and above the number of old shares of Common Stock
surrendered.
The foregoing summary with respect to federal income taxation does not
purport to be complete and reference is made to the applicable provisions of
the Code.
STOCKHOLDER VOTE REQUIRED
Adoption of Proposal Two requires approval by the holders of a
majority of shares of Common Stock present in person or represented by proxy,
and entitled to vote at the Annual Meeting. Abstentions may be specified on
this proposal. Abstentions will be considered present and entitled to vote at
the Annual Meeting but will not be counted as votes cast in the affirmative.
Abstentions will have the effect of a negative vote for this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
AS SET FORTH IN PROPOSAL TWO.
13
<PAGE> 16
PROPOSAL THREE
APPROVAL OF AMENDMENT OF THE 1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
GENERAL
The Company adopted the 1993 Non-Qualified Stock Option Plan (the
"1993 Plan") to retain and attract non- employee directors of outstanding
ability. The 1993 Plan, as of the Record Date, authorizes the issuance of up
to 50,000 shares of Common Stock (an amount equal to 1.35% of the issued and
outstanding shares of Common Stock on such date). Through January 27, 1997,
Options to purchase 50,000 shares of Common Stock were outstanding under the
1993 Plan. Accordingly, there are no additional shares of Common Stock
available for issuance under the 1993 Plan. The Board of Directors believes
that providing an increased availability of shares of Common Stock for issuance
under the 1993 Plan is important in order for the Company to be able to grant
long-term incentives to retain and attract directors.
On January 6, 1998, the Board of Directors unanimously voted to amend
the 1993 Plan, subject to the approval of the stockholders, to increase the
maximum number of shares of Common Stock available for issuance under the 1993
Plan to 100,000 shares of Common Stock.
OVERVIEW OF 1993 PLAN
The 1993 Plan is administered by the Plan Committee. The Plan
Committee generally has the authority, within limitations set forth in the 1993
Plan, to establish rules and regulations concerning the 1993 Plan, to determine
the persons to whom Options may be granted, the number of shares of Common
Stock to be covered by each Option and the terms and provisions of the Options
to be granted.
Pursuant to the 1993 Plan, non-employee directors of the Company may
be offered the opportunity to acquire shares of Common Stock through the grant
of non-qualified Options.
The number of shares of Common Stock which may be granted under the
1993 Plan or for which any outstanding Options are exercisable is subject to
customary anti-dilution provisions. The maximum term of any Option granted
pursuant to the 1993 Plan is [five years] from the date of grant. Shares of
Common Stock subject to Options granted under the 1993 Plan which expire,
terminate or are canceled without having been exercised in full become
available again for Option grants.
The 1993 Plan provides that the exercise price of an Option will be
fixed by the Plan Committee on the date of grant, but may not be less than the
fair market value of the Common Stock on the date of grant. The Options are
immediately exercisable by the recipient upon the termination of the holder's
employment by the Company for any reason other than (i) total disability (as
defined in the 1993 Plan), (ii) death, or (iii) retirement, to the extent
otherwise exercisable on the date of such termination, for a period of 45 days
after the date of such termination. In the event of termination resulting from
retirement or total disability, such Options shall be exercisable for a period
of three months after such termination. In the event of termination resulting
from death, such Options shall be exercisable for a period of one year from the
date of death.
The 1993 Plan may be terminated and may be modified or amended by the
Board of Directors at any time. No such termination, modification or amendment
of the 1993 Plan will alter or affect the terms of any then-outstanding Options
without the consent of the holders thereof.
BENEFITS TO CERTAIN PERSONS UNDER THE 1993 PLAN
Each non-employee director shall receive immediately exercisable
Options to purchase 2,000 shares of Common Stock upon election or re-election
to the Board at each annual meeting of stockholders. If this proposal is
14
<PAGE> 17
approved and if they are re-elected to the Board, Messrs. Simon, Bero, Davison,
Garland, Leinss and Malooly will each receive Options to purchase 2,000 shares
of Common Stock.
CERTAIN FEDERAL INCOME TAX MATTERS
The federal income tax consequences to an individual who receives
non-qualified Options are outlined under "Proposal Two-Approval of Amendment of
the 1992 Non-Qualified Stock Option Plan-Certain Federal Income Tax Matters."
STOCKHOLDER VOTE REQUIRED
Adoption of Proposal Three requires approval by the holders of a
majority of shares of Common Stock present in person or represented by proxy,
and entitled to vote at the Annual Meeting. Abstentions may be specified on
this proposal. Abstentions will be considered present and entitled to vote at
the Annual Meeting but will not be counted as votes cast in the affirmative.
Abstentions will have the effect of a negative vote for this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
AS SET FORTH IN PROPOSAL THREE.
PROPOSAL FOUR
RATIFICATION OF INDEPENDENT AUDITORS
The stockholders are asked to ratify the appointment by the Board of
Directors of Deloitte & Touche LLP as the Company's independent auditors for
Fiscal 1998. The selection was based upon the recommendation of the Audit
Committee.
Effective March 11, 1996, the Company dismissed its independent
auditors for the fiscal year ended September 30, 1995 ("Fiscal 1995"), Wipfli
Ullrich Bertelson, and retained as its new independent auditors, Deloitte &
Touche LLP. Wipfli Ullrich Bertelson's Independent Auditors' Report on the
Company's financial statements for Fiscal 1995 did not contain an adverse
opinion or a disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope or accounting principles. The decision to change
independent auditors was recommended by the Audit Committee and approved by the
Board of Directors on March 11, 1996. During Fiscal 1995 and through March 11,
1996, there were no disagreements between the Company and Wipfli Ullrich
Bertelson on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Wipfli Ullrich Bertelson, would have caused
it to make reference to the subject matter of the disagreements in connection
with the report.
During Fiscal 1995 and through March 11, 1996, the Company did not
consult Deloitte & Touche LLP regarding the application of accounting
principles to a specified transaction or any audit opinion.
Representatives of Deloitte & Touche LLP will be available by
teleconference at the Annual Meeting to respond to appropriate questions from
stockholders and to make a statement if they desire.
Adoption of Proposal Four requires approval by the holders of a
majority of shares of Common Stock present in person or represented by proxy,
and entitled to vote at the Annual Meeting. Abstentions may be specified on
this proposal to ratify the selection of the independent auditors. Abstentions
will be considered present and entitled to vote at the Annual Meeting but will
not be counted as votes cast in the affirmative. Abstentions will have the
effect of a negative vote for this proposal to ratify the selection of the
independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR FISCAL 1998.
15
<PAGE> 18
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder for presentation at the
Company's 1999 Annual Meeting and received by the Corporate Secretary at the
Company's principal executive office no later than October 13, 1998 will be
included in the Proxy Statement and Proxy related to the 1999 Annual Meeting.
OTHER BUSINESS
Management of the Company knows of no other business that will be
presented at the Annual Meeting. If other matters requiring a vote of the
stockholders properly comes before the Annual Meeting, the persons authorized
under the Proxies will vote and act according to their best judgment.
EXPENSES
The expense of preparing, printing, and mailing proxy materials to the
Company's stockholders will be borne by the Company. In addition to the
solicitation of Proxies by use of the mail, Proxies may be solicited personally
or by telephone or facsimile by directors, officers and regularly engaged
employees of the Company, none of whom will receive additional compensation
therefor. Brokerage houses, nominees and other similar record holders will be
requested to forward proxy materials to the beneficial owners of the Common
Stock and will be reimbursed by the Company upon request for their reasonable
out-of-pocket expenses.
ANNUAL REPORT
The Company has provided without charge a copy of the Annual Report to
Stockholders for Fiscal 1997 to each person being solicited by this Proxy
Statement. UPON THE WRITTEN REQUEST BY ANY PERSON BEING SOLICITED BY THIS
PROXY STATEMENT, THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE ANNUAL
REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
(EXCLUDING EXHIBITS, FOR WHICH A REASONABLE CHARGE SHALL BE IMPOSED). All such
requests should be directed to: Gregory L. Wilemon, Corporate Secretary, Tufco
Technologies, Inc., 4800 Simonton Road, Dallas, Texas 75244.
16
<PAGE> 19
- --------------------------------------------------------------------------------
PROXY
TUFCO TECHNOLOGIES, INC.
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 24, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TUFCO
TECHNOLOGIES, INC.
The undersigned hereby appoints ROBERT J. SIMON and GREGORY L. WILEMON, and
each of them, jointly and severally, as proxies, each with full power of
substitution, to vote all of the undersigned's shares of Common Stock held of
record on January 23, 1998, at the 1998 Annual Meeting of Stockholders or at any
postponements or adjournments thereof.
This Proxy, when properly executed, will be voted in accordance with the
directions made on the reverse side. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE FIRST FOUR PROPOSALS. THE PROXIES WILL VOTE WITH RESPECT TO THE
FIFTH PROPOSAL ACCORDING TO THEIR BEST JUDGMENT.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below (except as [ ] WITHHOLD AUTHORITY to vote for [ ]
marked below to the contrary) all nominees listed below
</TABLE>
(Samuel J. Bero, C. Hamilton Davison, Jr., Patrick J. Garland, Louis LeCalsey
III, Edward A. Leinss, William J. Malooly and Robert J. Simon)
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name above.
2. AMENDMENT OF THE COMPANY'S 1992 NON-QUALIFIED STOCK OPTION PLAN TO INCREASE
THE NUMBER OF AUTHORIZED SHARES.
<TABLE>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
3. AMENDMENT OF THE COMPANY'S 1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN TO
INCREASE THE NUMBER OF AUTHORIZED SHARES.
<TABLE>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
4. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR THE 1998 FISCAL YEAR.
<TABLE>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
(Continued and to be Signed on Reverse Side)
- --------------------------------------------------------------------------------
<PAGE> 20
- --------------------------------------------------------------------------------
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENTS OR
ADJOURNMENTS THEREOF.
Please sign exactly as name appears below. When shares are held in more than
one name, all parties should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by an authorized officer. If a
partnership, please sign in partnership name by an authorized person.
Dated: , 1998
------------------------- (SEAL)
Signature
--------------------------------
Signature if shares held in more
than one name
PLEASE MARK, SIGN, DATE AND
PROMPTLY RETURN THIS PROXY IN
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
