<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
BADGER PAPER MILLS, INC.
(NAME OF ISSUER)
COMMON STOCK, WITHOUT NOMINAL OR PAR VALUE
------------------------------------------
(TITLE OF CLASS OF SECURITIES)
056543101
--------------
(CUSIP NUMBER)
GORDON R. LEWIS
WARNER NORCROSS & JUDD LLP
900 OLD KENT BUILDING
111 LYON STREET, NW
GRAND RAPIDS, MICHIGAN 49503-2489
(616) 752-2752
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(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
DECEMBER 10, 1996
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this Schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with this statement [ ]
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act.
Page 1 of 10 Pages
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CUSIP No. 056543101 13D
(1) Name of Reporting Person: Bomarko, Inc.
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(2) Check the Appropriate Box (a) [X]
if a Member of a Group: (b) [ ]
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(3) SEC Use Only:
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(4) Source of Funds PF
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(5) Check box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e): [ ]
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(6) Citizenship or Place of Organization: Delaware
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Number of Shares (7) Sole Voting Power: 276,664
Beneficially Owned (8) Shared Voting Power: -------
By Reporting Person (9) Sole Dispositive Power: 276,664
With (10) Shared Dispositive Power: -------
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(11) Aggregate Amount Beneficially Owned by Reporting Person: 276,664
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(12) Check box if the Aggregate Amount in Row (11) Excludes Certain
Shares: [ ]
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(13) Percent of Class Represented by Amount in Row (11): 14.2%
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(14) Type of Reporting Person: CO
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Page 2 of 10 Pages
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CUSIP No. 056543101 13D
(1) Name of Reporting Person: Extrusions Division, Inc.
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(2) Check the Appropriate Box (a) [X]
if a Member of a Group: (b) [ ]
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(3) SEC Use Only:
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(4) Source of Funds PF
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(5) Check box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e): [ ]
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(6) Citizenship or Place of Organization: Michigan
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Number of Shares (7) Sole Voting Power: 200
Beneficially Owned (8) Shared Voting Power: ---
By Reporting Person (9) Sole Dispositive Power: 200
With (10) Shared Dispositive Power: ---
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(11) Aggregate Amount Beneficially Owned by Reporting Person: 200
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(12) Check box if the Aggregate Amount in Row (11) Excludes Certain
Shares: [ ]
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(13) Percent of Class Represented by Amount in Row (11): 0.0%
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(14) Type of Reporting Person: CO
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Page 3 of 10 Pages
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CUSIP No. 056543101
(1) Name of Reporting Person: James D. Azzar
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(2) Check the Appropriate Box (a) [X]
if a Member of a Group: (b) [ ]
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(3) SEC Use Only:
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(4) Source of Funds OO
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(5) Check box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e): [ ]
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(6) Citizenship or Place of Organization: United States
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Number of Shares (7) Sole Voting Power: 276,864*
Beneficially Owned (8) Shared Voting Power: --------
By Reporting Person (9) Sole Dispositive Power: 276,864*
With (10) Shared Dispositive Power: --------
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(11) Aggregate Amount Beneficially Owned by Reporting Person: 276,864*
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(12) Check box if the Aggregate Amount in Row (11) Excludes Certain
Shares: [ ]
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(13) Percent of Class Represented by Amount in Row (11): 14.2%
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(14) Type of Reporting Person: IN
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*Includes Shares beneficially owned by Bomarko and EDI
Page 4 of 10 Pages
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This amendment no. 2 is filed for the purpose of generally
updating information previously filed.
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this joint
Statement on Schedule 13D ("Statement") relates is Common Stock, without
nominal or par value ("Shares"). The name and address of the principal
executive offices of the issuer of such securities is Badger Paper Mills,
Inc. ("Issuer"), 200 West Front Street, Peshtigo, Wisconsin 54157.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed jointly on behalf of Bomarko, Inc.
("Bomarko"), Extrusions Division, Inc. ("EDI"), and James D. Azzar
(collectively referred to as the "Reporting Persons"). The Reporting
Persons constitute a "group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934.
Bomarko is a Delaware corporation. Its principal business is the
manufacture and sale of coated and printed paper products. The address of
its principal business and principal office is Bomarko, Inc., North Oak
Road, Post Office Box K, Plymouth, Indiana 46563.
The name, residence or business address, principal occupation or
employment (and the name, principal business and address of any corporation
or other organization in which such employment is conducted) of each of the
directors and executive officers of Bomarko are as follows:
<TABLE>
<CAPTION>
NAME AND RELATIONSHIP TO
BOMARKO ADDRESS PRINCIPAL EMPLOYMENT
<S> <C> <C>
James D. Azzar, Chairman 208 Pioneer Club Road, Private Investor
of the Board, Chief East Grand Rapids,
Executive Officer and Michigan 49506
Director
Jennifer L. Azzar 208 Pioneer Club Road, Private Investor
Director East Grand Rapids,
Michigan 49506
Michael B. Azzar, Director 201 Cottage Grove, SE, Vice President, Azzar
Grand Rapids, Michigan Store Equipment (Equip-
49507 ment Sales), 201 Cottage
Grove, SE, Grand Rapids,
Michigan 49507
Page 5 of 10 Pages
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John Yeakey, Treasurer North Oak Road, Treasurer and Chief Finan-
and Chief Financial Officer Plymouth, Indiana 46563 cial Officer of Bomarko,
Inc. (Manufacture of Paper
Products), North Oak
Road, Plymouth Indiana
46563
Steven C. Steketee, 201 Cottage Grove, SE, President of Multi-Tech
Director Grand Rapids, Michigan Precision Machining Com-
49507 pany (General Manufactur-
ing), 259 Cottage Grove,
SE, Grand Rapids, Michi-
gan 49507
Peter R. Tolley 5650 Foremost Dr., SE, Attorney, Tolley, Verwys,
Director Grand Rapids, Michigan VandenBosch & Walton
49546 PC, 5650 Foremost Dr.,
SE, Grand Rapids, Michi-
gan 49546
</TABLE>
Each of the individuals named above is a United States citizen.
EDI is a Michigan corporation. Its principal business is the sale of
plastic parts. The address of its principal business and principal officer
is 208 Pioneer Club Road, East Grand Rapids, Michigan 49506. James D.
Azzar is the President, sole director and sole shareholder of EDI. Mr.
Azzar's business address is 208 Pioneer Club Road, East Grand Rapids,
Michigan 49506.
James D. Azzar is a United States citizen. He is a private investor.
His business address is 208 Pioneer Club Road, East Grand Rapids,
Michigan 49506.
During the last five years, neither Bomarko, EDI, James D. Azzar, nor
any of the foregoing persons has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
All shares were purchased with cash on hand or obtained from the sale
of investment securities held for the portfolio of the reporting person.
Page 6 of 10 Pages
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ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons' purpose in acquiring the Shares reported
hereunder was to acquire a significant equity interest in the Issuer as an
investment.
Recent strategic actions by the Issuer and continuing substantial
operating losses have caused the Reporting Persons to reevaluate the risks
and prospects of their investment in the Issuer. Reporting Persons now
believe that the most viable strategy by which the Reporting Persons and
other stockholders can limit the risk of further substantial losses in the
value of their investment in the Issuer may be to pursue a prompt sale of
the Issuer or its assets. To that end, the Reporting Persons intend to
communicate with management of the Issuer and take other measures to
encourage the board of directors and management to take appropriate
measures to maximize stockholders' value, including, if feasible, a sale of
the Issuer or its assets.
If the Issuer is offered for sale, the Reporting Persons might or
might not offer to acquire the Issuer or some or all of its assets.
However, the desire of the Reporting Persons to pursue a sale of the Issuer
is not primarily motivated by an intent to acquire the Issuer or any
substantial portion of its assets. The Reporting Persons believe that the
defensive provisions included in the Issuer's articles of incorporation and
certain laws available to the board of directors of the Issuer in the state
of Wisconsin render it comparatively unlikely that the Reporting Persons
could acquire control of the Issuer or its assets without the support of
the present board of directors.
In furtherance of their desire to enhance stockholders' value, the
Reporting Persons may seek to change the present board of directors or
management of the Issuer or to change the Issuer's articles of
incorporation or bylaws, but they have no specific present intention to do
so.
The Reporting Persons may acquire additional shares of the Issuer in
order to enhance their ability to influence management, to promote a sale
of the Issuer, or to supplement or protect their investment.
On December 10, 1996, the Reporting Persons submitted to the Issuer a
Request for a Shareholder Vote on a resolution pursuant to Wis. Stat.
<Section> 180.1150, which would approve and restore full voting power to
Shares held by the Reporting Persons if the Reporting Persons acquire in
excess of 20% of the voting power in the election of directors of the
Issuer. The Reporting Persons' Notice of Proposed Resolution is attached
as Appendix A to this Statement. The Reporting Persons believe that
approval of the proposed resolution, perhaps accompanied by further
purchases of Shares, would tend to enhance Reporting Persons' ability to
promote the purposes described in this item.
Page 7 of 10 Pages
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On December 10, 1996, the Reporting Persons also submitted to the
Issuer a Shareholder Proposal for inclusion in the Issuer's 1997 proxy
statement. The Reporting Person's Shareholder Proposal and Supporting
Statement is attached as Appendix B to this Statement.
The Reporting Persons may acquire additional Shares from time to time
in the future, depending upon their evaluation of the Issuer's business and
prospects, future developments, and availability of Shares, but have no
specific plan or intention concerning the number of Shares which will be
acquired or the timing, price or nature of purchase transactions. The
Reporting Persons may also, depending upon their evaluation of the Issuer's
business and prospects, future developments and the availability of Shares
determined, dispose of Shares.
Reporting Persons intend to monitor the business and management of the
Issuer closely, to discuss strategic issues, key decisions, and management
effectiveness with the management of the Issuer from time to time, and to
take such actions as they may, in the future, deem necessary to protect and
enhance the value of their investment.
Except as stated above, as of the date of this filing, the Reporting
Persons have no current plans or proposals that would result in any of the
actions required to be described in Item 4 of Schedule 13D. The Reporting
Persons intend to continue to review their investments and may consider and
form plans that may result in such actions in the future.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(A) and (B) The Issuer reported in its report on Form 10-Q for the
quarter ended September 30, 1996, that it had 1,945,130 Shares issued and
outstanding as of September 30, 1996. All of the percentages reported in
this Statement are based on that number. All percentages have been rounded
to the nearest one-tenth of a percent.
Bomarko beneficially owns 276,664 Shares, representing approximately
14.2% of the issued and outstanding Shares. Bomarko has the sole power to
vote or to direct the vote and sole power to dispose or direct the
disposition of such Shares.
EDI beneficially owns 200 Shares, representing 0.0% of the issued and
outstanding Shares. EDI has the sole power to vote or to direct the vote
and sole power to dispose or direct the disposition of such Shares.
James D. Azzar beneficially owns 276,864 Shares, representing
approximately 14.2% of the issued and outstanding Shares, including Shares
beneficially owned by Bomarko and EDI. Mr. Azzar has the sole power to
direct the voting and disposition of Shares beneficially owned by Bomarko
and EDI.
Page 8 of 10 Pages
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No other person named in Item 2 is known by the Reporting Persons to
be the beneficial owner of any Shares.
Except for James D. Azzar, each of the executive officers and
directors of Bomarko disclaims beneficial ownership of the Shares held by
Bomarko.
(C) The Reporting Persons have not purchased or sold Shares of the
Issuer's common stock during the 60 days preceding the date of this
amendment to the Reporting Persons' Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Not applicable.
Page 9 of 10 Pages
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete
and correct.
BOMARKO, INC.
Dated: December 10, 1996 By /S/ JAMES D. AZZAR
James D. Azzar, Chairman of the Board
and Chief Executive Officer
EXTRUSIONS DIVISION, INC.
Dated: December 10, 1996 By /S/ JAMES D. AZZAR
James D. Azzar, President
Dated: December 10, 1996 /S/ JAMES D. AZZAR
James D. Azzar
Page 10 of 10 Pages
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APPENDIX A
NOTICE OF PROPOSED RESOLUTION
This Notice and the accompanying resolution are submitted to the
shareholders of Badger Paper Mills, Inc. ("Badger") pursuant to Wis. Stat.
<Section> 180.1150 on behalf of Bomarko, Inc. ("Bomarko"), Extrusions
Division, Inc. ("EDI"), and James D. Azzar (collectively referred to as the
"Investors"). The Investors request a shareholder vote to approve
restoration of full voting power to the Investors in the event that the
Investors purchase shares of Badger in excess of 20% of the voting power in
the election of directors.
Recent strategic actions by the Issuer and continuing substantial
operating losses have caused the Investors to reevaluate the risks and
prospects of their investment in Badger. Investors now believe that the
most viable strategy by which the Investors and other stockholders can
limit the risk of further substantial losses in the value of their
investment in Badger may be to pursue a prompt sale of Badger or its
assets. The Investors intend to communicate with management and take other
measures to encourage the board of directors and management to take
appropriate measures to maximize stockholders' value, including, if
feasible, a sale of Badger or its assets.
The Investors may acquire additional shares of the Issuer for the
purpose of enhancing their ability to influence management, to promote a
sale of the Issuer, or to supplement or protect their investment. However,
the Investors believe that purchases of shares without full voting rights
would not further this purpose. The Investors believe that approval of the
proposed resolution, perhaps accompanied by further purchases of Shares,
would tend to enhance the Investors' ability to encourage the board of
directors and management to maximize shareholder value.
At this time, the Investors propose to acquire more than 20
percent but less than 50 percent of the total Badger Shares outstanding.
The Investors propose to acquire such shares with cash on hand or obtained
from the sale of other investment securities, or from existing lines of
credit. Purchases will be made on the open market and in privately
negotiated transactions with individual shareholders of Badger. Although
the Investors have no present intention to purchase shares otherwise than
as set forth above, they reserve the right to acquire shares by any lawful
means.
If Badger is offered for sale, the Investors might or might not
offer to acquire Badger or some or all of its assets. However, the desire
of the Investors to pursue a sale of the Issuer is not primarily motivated
by an intent to acquire Badger or any substantial portion of its assets.
<PAGE>
The Investors believe that the defensive provisions included in the
Issuer's articles of incorporation and certain laws available to the board
of directors of the Issuer in the state of Wisconsin render it
comparatively unlikely that the Investors could acquire control of Badger
or its assets without the support of the present board of directors.
Bomarko beneficially owns 276,664 shares of Badger common stock.
EDI beneficially owns 200 Badger shares. Mr. Azzar beneficially owns
276,864 Badger shares, or over 14% of the voting power in the election of
directors, including shares beneficially owned by Bomarko and EDI. Bomarko
is a converter and manufacturer of coated and printed paper products. In
the ordinary course of its business, it purchases substantial quantities of
paper of types manufactured by Badger. Bomarko is a competitor of Badger
in some product lines.
The Investors have no present plans to gain control of Badger.
In furtherance of their desire to enhance stockholders' value, the
Investors may seek to change the present board of directors or management
of Badger or change Badger's articles of incorporation or bylaws, although
they have no specific present intention to do so. The Investors have no
specific present plans or proposals to liquidate Badger, to sell
substantially all of its assets, or merge it or exchange its shares with
any other person, to change the location of its principal office or a
material portion of its business activities, to change materially its
management or policies of employment, to alter materially its relationship
with suppliers or customers or the communities in which it operates, or
make any other material change in its business, corporate structure,
management or personnel. However, the Investors do intend to encourage the
board of directors and management to sell Badger or its assets, and such a
sale may affect any or all of these factors.
Dated: December 10, 1996
BOMARKO, INC.
By /S/ JAMES D. AZZAR
James D. Azzar, Chairman of the
Board and Chief Executive Officer
EXTRUSIONS DIVISION, INC.
By /S/ JAMES D. AZZAR
James D. Azzar, President
/S/ JAMES D. AZZAR
James D. Azzar
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SHAREHOLDER RESOLUTION
RESOLVED, that pursuant to Wis. Stat. <Section> 180.1150, full
voting power is hereby approved and restored to all shares of this
corporation to be acquired or held by Bomarko, Inc., Extrusions Division,
Inc., and James D. Azzar in excess of 20% of the voting power in the
election of directors.
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APPENDIX B
BADGER PAPER MILLS, INC.
SHAREHOLDER PROPOSAL
RESOLVED, that the shareholders of Badger Paper Mills, Inc. (the
"Company"), believing that the value of their investment in the Company can
best be maximized through the immediate sale or merger of the Company,
hereby urge the board of directors to establish a committee of directors
who are not current or former officers or employees of the Company for the
purpose of engaging an investment banking firm, facilitating and promoting
a sale or merger of the Company or a sale of substantially all of its
assets, reviewing and negotiating any sale or merger proposal received by
the Company, and making a recommendation to the board of directors with
respect to any such proposal.
SUPPORTING STATEMENT
This shareholder proposal is submitted by Bomarko, Inc.,
Extrusions Division, Inc. and James D. Azzar (the "Shareholders.") The
shareholders are substantial investors in the Company, owning over 14% of
its shares.
The shareholders believe that the stock price performance of the
Company and its future prospects have been adversely affected by poor
management and questionable strategic decisions. Recent decisions by the
board of directors to sell timberlands, close a pulp mill, and terminate a
sizeable portion of the Company's work force have, shareholders believe,
deprived the Company of significant intrinsic value. The Company's losses
are draining the Company of its remaining value at a rapid rate. The
shareholders question the Company's continuing ability to profitably sell
it's products in a highly competitive commodity market. The Company's poor
stock price performance is dramatically illustrated by the five year
cumulative total shareholder return performance chart contained in the
Company's 1996 proxy statement.
The shareholders believe that these poor results are tolerated in
part because half of the Company's directors are current or former officers
of the Company and the other half of the Company's directors are affiliated
with concerns which do business with the Company. The Company does not
have a nominating committee composed of independent directors for the
purpose of finding independent and qualified individuals to serve on the
board.
<PAGE>
Consequently, the shareholders believe that a sale or merger of
the Company or a sale of substantially all of its assets offers the most
likely means by which the value of the Company could be realized, free of
the constraining effects of current management. Accordingly, the
shareholders believe that the Company should hire an investment banking
firm and initiate other steps necessary to achieve a sale or merger of the
Company as promptly as possible.
The shareholders believe that the longer it takes the management
to implement the sale of the Company, the lower the price we will receive
for our shares due to the extremely high rate of losses being realized.
The shareholders recommend that all shareholders vote "For" this
proposal. If management opposes this proposal and you want to vote in
favor of the recommendation, you must mark the "For" box on the proxy card
next to the proposal.
Please vote "For" this proposal and help yourself and your fellow
shareholders realize the value of their investment in the Company.
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