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(3)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BADGER PAPER MILLS, INC.
(Name of Registrant as Specified in its Charter)
___________________________________
(Name of person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
BADGER PAPER MILLS, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held March 10, 1998
To the Shareholders of Badger Paper Mills, Inc.:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Badger
Paper Mills, Inc. will be held on Tuesday, March 10, 1998, at 10:00 a.m.,
local time, at the Best Western Riverfront Inn, 1821 Riverside Ave.,
Marinette, Wisconsin, for the following purposes:
1. To consider and act on a shareholder proposal from a group of
shareholders controlled by James D. Azzar (the "Azzar Group") to
approve the restoration of voting power pursuant to Section 180.1150
of the Wisconsin Business Corporation Law, if such proposal is
presented at the meeting.
2. To consider and act on any other business as may properly come before
the meeting or any adjournment or postponement thereof.
The close of business on February 2, 1998, has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of, and to vote at, the meeting and any adjournment or postponement
thereof.
A proxy for the meeting and a proxy statement are enclosed herewith.
By Order of the Board of Directors
BADGER PAPER MILLS, INC.
Miles L. Kresl, Jr.
Corporate Secretary
Peshtigo, Wisconsin
February __, 1998
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
TO ASSURE REPRESENTATION AT THE MEETING, PLEASE DATE THE ENCLOSED PROXY,
WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY HOW YOUR NAME
APPEARS THEREON AND RETURN IMMEDIATELY.
<PAGE>
BADGER PAPER MILLS, INC.
200 West Front Street
Peshtigo, Wisconsin 54157-0149
PROXY STATEMENT
For
SPECIAL MEETING OF SHAREHOLDERS
To Be Held March 10, 1998
This proxy statement is being furnished to shareholders by the
Board of Directors (the "Board") of Badger Paper Mills, Inc. (the
"Company") beginning on or about February __, 1998, in connection with a
solicitation of proxies by the Board for use at the Special Meeting of
Shareholders to be held on Tuesday, March 10, 1998, at 10:00 a.m., local
time, at the Best Western Riverfront Inn, 1821 Riverside Ave., Marinette,
Wisconsin, and all adjournments or postponements thereof (the "Special
Meeting") for the purposes set forth in the attached Notice of Special
Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will
not affect a shareholder's right to attend the Special Meeting and to vote
in person. Presence at the Special Meeting of a shareholder who has
signed a proxy does not in itself revoke a proxy. Any shareholder giving
a proxy may revoke it at any time before it is exercised by giving notice
thereof to the Company in writing at or before the Special Meeting.
A proxy, in the enclosed form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with
the instructions contained therein. The shares represented by executed
but unmarked proxies will be voted (i) "AGAINST" the shareholder proposal
to restore voting power to the Azzar Group, and (ii) on such other
business or matters which may properly come before the Special Meeting in
accordance with the best judgment of the persons named as proxies in the
enclosed form of proxy. Other than the proposed shareholder resolution,
the Board has no knowledge of any other matters to be presented for action
by the shareholders at the Special Meeting.
Only holders of record of the Company's common stock, no par
value (the "Common Stock"), as of the close of business on February 2,
1998, are entitled to vote at the Special Meeting. On that date, the
Company had outstanding and entitled to vote 1,951,855 shares of Common
Stock, each of which is entitled to one vote per share.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of February 2, 1998 by: (i) each
director; (ii) the executive officers required to be named in the Summary
Compensation Table set forth in the Proxy Statement distributed in
connection with the 1997 Annual Meeting of shareholders; (iii) all of the
directors, nominees and executive officers (including the executive
officers named in the Summary Compensation Table) as a group; and (iv)
each person or other entity known by the Company to own beneficially more
than 5% of the class of Common Stock. Except as otherwise indicated in
the footnotes, each of the holders listed below has sole voting and
investment power over the shares beneficially owned.
Shares of Percent of
Common Stock Common Stock
Name of Beneficial Owner Beneficially Owned Beneficially Owned
Claude L. Van Hefty,
Director, President and
Chief Executive Officer . . . 9,931 (1) *
Mark D. Burish, Director . . 12,489
Thomas J. Kuber, Director . . 20,879 *
James L. Kemerling, Director . 2,469 *
John R. Peterson, Director. . 1,266 *
Ralph D. Searles, Director. . 2,269 *
All directors and executive
officers as a group
(11 persons) . . . . . . . 61,775 (2) 3.2%
Walter F. Adrian . . . . . 112,000 (3) 5.7%
James D. Azzar . . . . . . 276,864 (4) 14.2%
Edwin A. Meyer, Jr. . . . . 327,562 (5) 16.8%
Bennie C. Burish . . . . . 101,048 (6) 5.2%
____________________________
*Denotes less than 1%.
(1) Amounts shown include 2,000 shares of Common Stock owned by Mr. Van
Hefty and Karen J. Van Hefty, Mr. Van Hefty's wife, as joint tenants
as to which they share voting and investment power, and 5,431 shares
allocated to Mr. Van Hefty's account under the Company's Proit Sharing
Plan and Trust for Non-Union Employees.
(2) In the aggregate, directors and executive officers have sole voting
and dispositive power with respect to 52,807 shares and in the
aggregate, directors and executive officers have shared voting and
dispositive power with respect to 7,768 shares. One executive officer
has sole voting rights only with respect to 1,200 shares.
(3) The share amount listed is from the Schedule 13G dated April 17, 1995
filed with the Securities and Exchange Commission and the Company.
Mr. Adrian's address is 201 Emery Avenue, South, Peshtigo, Wisconsin
54157.
(4) According to a report of beneficial ownership on an amended Schedule
13D dated September 18, 1997, James D. Azzar ("Azzar"), Bomarko, Inc.
("Bomarko") and Extrusions Division, Inc. ("EDI") (collectively
referred to as the "Azzar Group") constitute a "group" with respect
to the acquisition of Common Stock. Of the reported shares, 276,664
are owned by Bomarko and 200 are owned by EDI. Azzar is deemed to
beneficially own all of such shares in his capacity as chairman of
the board, chief executive officer and director of, and investor in,
Bomarko, and president, sole director and sole shareholder of EDI.
Azzar's address is 208 Pioneer Club Road, East Grand Rapids, Michigan
49506. The address of Bomarko's principal office is North Oak Road,
P.O. Box K, Plymouth, Indiana 46563. The address of EDI's principal
office is 208 Pioneer Club Road, East Grand Rapids, Michigan 49506.
(5) Amounts shown include 55,500 shares as to which Mr. Meyer has voting
rights but disclaims beneficial ownership. Mr. Meyer's address is
7255 Cortland Circle, Egg Harbor, Wisconsin 54209.
(6) The share amount listed is from the Schedule 13G dated April 26, 1995
filed with the Securities and Exchange Commission and the Company.
Mr. Burish's address is 352 Brown Avenue, Peshtigo, Wisconsin 54157.
SHAREHOLDER PROPOSAL TO RESTORE FULL VOTING POWER
Under Section 180.1150 of the Wisconsin Business Corporation Law
("WBCL"), the voting power of shares of Common Stock held by any person,
or group acting in concert, in excess of 20% of the aggregate of all
shares eligible to vote in the election of Company directors is limited in
voting on any matter to 10% of the full voting power of such excess
shares, unless Company shareholders have voted to restore full voting
power. Shares held or acquired under certain circumstances are excluded
from the application of Section 180.1150, but such exceptions are not
relevant in the matter being voted upon. If a shareholder requests a
meeting of shareholders to consider and act upon a proposal to restore
full voting power of shares and such shareholder meets certain conditions,
then the Board must call such a meeting.
In late February 1996, the Company received a shareholder
resolution and notice pursuant to Section 180.1150 from the Azzar Group.
Pursuant to the WBCL, the Azzar Group requested that a shareholder
resolution restoring full voting power to the Azzar Group be submitted to
a vote of the shareholders at the 1996 Annual Meeting. The Board
submitted the resolution at the 1996 Annual Meeting and the resolution was
defeated by the Company's shareholders, with 1,233,130 shares or
approximately 72.7% of the shares voting against the resolution, 456,228
shares or approximately 26.9% of the shares voting in favor of the
resolution, and 7,577 shares abstaining.
On December 13, 1996, the Company received another shareholder
resolution and notice pursuant to Section 180.1150 from the Azzar Group.
Pursuant to the WBCL, the Azzar Group requested that the following
shareholder resolution be submitted to a vote of the shareholders and that
a special meeting of shareholders be held. The Board called a special
meeting of shareholders that was held on January 23, 1997, and the
resolution was again defeated by the Company's shareholders, with
1,166,087 shares or approximately 72.4% of the shares voting against the
resolution, 416,176 shares or approximately 25.9% voting in favor of the
resolution and 27,701 shares or approximately 1.7% abstaining.
On January 19, 1998, the Company received yet another
shareholder resolution and notice pursuant to Section 180.1150 from the
Azzar Group. Pursuant to the WBCL, the Azzar Group has requested that the
following shareholder resolution be submitted to a vote of the
shareholders and that the Special Meeting be held. Therefore, as provided
by the WBCL, the Board is once again required to submit the following
resolution at the Special Meeting and is including the resolution and
notice in the exact form they were received from the Azzar Group.
Notice of Proposed Resolution
"BADGER PAPER MILLS, INC.
NOTICE OF SPECIAL MEETING OF THE SHAREHOLDERS
To: The Directors and Shareholders of Badger Paper
Mills, Inc.
From: James D. Azzar Bomarko, Inc. and Extrusions Division, Inc.
(collectively the "Azzar Group")
PLEASE TAKE NOTICE that the Azzar Group, currently the
beneficial owners of approximately 14.2% of the outstanding
issue in the corporation, pursuant to Wisconsin Statutes
180.1150(4) specifically request a special meeting of
shareholders for purposes of obtaining relief from the
provisions of Wisconsin Statutes 180.1150(2) and specifically
request that the shareholders vote to restore regular voting
power to any and all shares of stock in Badger Paper Mills, Inc.
obtained by the Azzar Group, including all shares in excess of
20% of the outstanding shares of the corporation as permitted by
Wisc. Statutes Section 180.1150.
This notice and proposed resolution are submitted
under Wis. Stats. Section 180.1150(4). The Azzar Group, with
funds of Bomarko, Inc., Extrusions Division, Inc. and James D.
Azzar may purchase additional shares in the corporation. These
shares would be held for investment purposes. The "Azzar Group"
has no intention of liquidating the corporation, selling
substantial assets of the corporation, changing the location of
the corporation, or making any material changes in the business
or structure of the company.
James D. Azzar"
Shareholder Resolution
The Azzar Group is expected to offer the following
resolution for consideration by shareholders at the Special
Meeting:
"WHEREAS, James D. Azzar, Bomarko, Inc., and
Extrusions Division (collectively referred to as the "Azzar
Group"), currently are the beneficial owners of 276,864 shares
of the common stock of Badger Paper Mills representing
approximately 14.2% of the outstanding common stock in the
corporation; and
WHEREAS, the Azzar Group may desire to purchase
additional common stock in the corporation exceeding 20%; and
WHEREAS, the Azzar Group has requested that the
shareholders be called to a special meeting to vote on
restoration of full voting rights to all stock held by the Azzar
Group in excess of 20% of the outstanding issue of the
corporation;
NOW, THEREFORE, the shareholders of record of Badger
Paper Mills, Inc. by a majority vote, resolve to restore full
and regular voting power to any and all stock in Badger Paper
Mills, Inc. owned by the Azzar Group, including those shares
which exceed 20% of the outstanding stock in the corporation, as
permitted by Wisc. Stats. 180.1150(4)."
Board's Statement of Position Against Proposal
THE BOARD UNANIMOUSLY RECOMMENDS THAT COMPANY SHAREHOLDERS VOTE
"AGAINST" THIS SHAREHOLDER PROPOSAL. The Azzar Group has, for the third
time, submitted a shareholder proposal to void an important provision of
Wisconsin corporate law. This shareholder proposal is the latest in a
series of Azzar Group attempts to exert control over Badger's affairs.
This Azzar Group proposal seeks to restore full voting power to
any shares of Common Stock owned by the Azzar Group in excess of 20% of
the class of Common Stock. The Azzar Group currently owns approximately
14.2% of the class of Common Stock, and it is reasonable to assume that
the Azzar Group will acquire additional shares if it prevails on this
shareholder proposal.
The Wisconsin legislature enacted Section 180.1150 to protect
all shareholders, particularly minority shareholders, of a Wisconsin
corporation. This statutory provision limits the voting power of any
single shareholder or shareholder group by substantially reducing the
voting rights for shares held in excess of the 20% threshold. The
Wisconsin lawmakers wisely concluded that the concentration of voting
power in the hands of a single shareholder or shareholder group could be
detrimental to the interests of minority shareholders.
Today, no single Company shareholder owns more than 20% of the
class of Common Stock. A diverse shareholder base, such as that which the
Company enjoys today, protects small shareholders from the capriciousness
of a single shareholder or shareholder group wielding substantial or
controlling voting power.
The Azzar Group proposal has been rejected twice by Company
shareholders in the past two years, and each time by a wide margin. In
both cases holders of more than 72% of the Common Stock voted against this
Azzar Group proposal. For a third time the Company requests your
assistance in defeating this Azzar Group proposal.
The Board's Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS VOTING "AGAINST" THE
SHAREHOLDER PROPOSAL. THE BOARD BELIEVES THAT THE ACCUMULATION OF VOTING
RIGHTS IN EXCESS OF 20% BY ANY ONE SHAREHOLDER OR GROUP OF SHAREHOLDERS IS
CONTRARY TO THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS.
SHARES OF COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL
BE VOTED "AGAINST" THE SHAREHOLDER PROPOSAL.
Vote Required
The number of votes cast "FOR" the shareholder proposal at the
Special Meeting must exceed the number of votes cast "AGAINST" the
shareholder proposal to approve the shareholder proposal. Consequently,
abstentions and broker nonvotes have no impact on the approval or
disapproval of the proposed resolution.
MISCELLANEOUS
Shareholder Proposals
In order to be entitled to submit proposals to be considered at
the Company's annual meeting a shareholder must be a record or beneficial
owner of at least 1% or $1,000 in market value of Common Stock at the time
the proposal is submitted, shall have held such Common Stock for at least
one year, and shall continue to own such Common Stock through the date on
which the annual meeting is held. Proposals which shareholders of the
Company intend to present at and have included in the Company's proxy
statement for the 1998 Annual Meeting must have been received by the
Company by the close of business on December 8, 1997. Although the
deadline for submission of proposals for the 1998 Annual Meeting has
passed, prior to the deadline and in addition to the shareholder proposal
described in this proxy statement, the Azzar Group submitted a shareholder
proposal which will be taken up at the Company's 1998 Annual Meeting,
unless withdrawn by the Azzar Group prior to such meeting.
The cost of soliciting proxies will be borne by the
Company. In addition to soliciting proxies by mail, proxies may be
solicited personally and by telephone by certain officers and regular
employees of the Company. The Company will reimburse brokers and other
nominees for their reasonable expenses in communicating with the persons
for whom they hold Common Stock.
By Order of the Board of Directors
BADGER PAPER MILLS, INC.
Miles L. Kresl, Jr.
Corporate Secretary
February __, 1998
<PAGE>
BADGER PAPER MILLS, INC. PROXY THIS PROXY IS
Peshtigo, Wisconsin 54147 SOLICITED ON BEHALF
OF THE BOARD OF
DIRECTORS.
The undersigned hereby appoints Claude L. Van Hefty and Mark D. Burish, as
Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Badger Paper Mills, Inc., held of record by the
undersigned on February 2, 1998, at the special meeting of shareholders to
be held March 10, 1998, and any adjournment or postponement thereof.
1. SHAREHOLDER RESOLUTION TO RESTORE FULL VOTING POWER.
[__] AGAINST [__] FOR [__] ABSTAIN
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "AGAINST" THE SHAREHOLDER RESOLUTION IN ITEM 1 AND ON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING IN ACCORDANCE
WITH THE BEST JUDGMENT OF THE PROXIES NAMED HEREIN.
Please sign exactly as name appears below.
When shares are held by joint
tenants, both should sign. When
signing as attorney, as executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporate name by
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
[__] Please check here if you
plan to attend the
special meeting in
person.
Dated ______________________, 1998 ____________________________
Signature
_________________________________________
Please mark, sign, date, and promptly
return the proxy card, using the
enclosed envelope. ____________________________
________________________________________ Signature, if held jointly
