<PAGE>
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
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
Confidential, for Use of the Commission Only (as Permitted
by Rule 14a-6(e)(2))
BADGER PAPER MILLS, INC.
- ---------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
JAMES D. AZZAR, BOMARKO, INC., AND EXTRUSIONS DIVISION, INC.
- ---------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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2
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JAMES D. AZZAR
208 Pioneer Club Road
East Grand Rapids, Michigan 49506
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
OF BADGER PAPER MILLS, INC.
TO BE HELD MARCH 10, 1998
AND
ANNUAL MEETING OF SHAREHOLDERS
OF BADGER PAPER MILLS, INC.
TO BE HELD __________, 1998
This Proxy Statement is being furnished to shareholders of Badger
Paper Mills, Inc. (the "Company") by James D. Azzar, on or about February
___, 1998, in connection with a solicitation of proxies by Mr. Azzar for
use at (i) the Special Meeting of Shareholders of the Company to be held on
March 10, 1998, at 10:00 a.m., local time, and all adjournments or
postponements thereof (the "Special Meeting") for the purposes set forth
below, and (ii) the 1998 Annual Meeting of Shareholders of the Company, and
all adjournments or postponements thereof (the "Annual Meeting") for the
purposes set forth below. As of the date of this Proxy Statement, the date
of the Annual Meeting and the Record Date for determining the shareholders
entitled to vote at the Annual Meeting have not, to the knowledge of the
Participants (defined below), been determined. However, the Company's
Bylaws provide that annual shareholders' meetings will, unless otherwise
determined by the Board of Directors of the Company, be held on the first
Tuesday in May of each year.
In addition to Mr. Azzar, other participants in this solicitation are
Bomarko, Inc. ("Bomarko") and Extrusions Division, Inc. ("EDI"),
corporations controlled by Mr. Azzar. (Mr. Azzar, Bomarko, and EDI are
collectively referred to in this Proxy Statement as the "Participants" or
the "Azzar Group") Mr. Azzar, Bomarko, and EDI collectively are the
beneficial owners of 276,864 shares (14.2%) of the Company's common stock,
no par value ("Common Stock").
This Proxy Statement concerns two proposals, one of which will be
presented at the Special Meeting, and the other of which will be presented
at the Annual Meeting. To the Participants' knowledge, there are no other
proposals to be presented for shareholder action at the Special Meeting.
However, there will be other proposals to be acted on at the Annual Meeting
(such as the election of Directors).
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PROPOSAL I
To the knowledge of the Participants, the only matter to be presented
at the Special Meeting is the following proposal submitted by the
Participants ("Proposal I"):
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 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 Wis.
Stats. 180.1150(4).
ABOUT PROPOSAL I
In January 1998, the Participants submitted to the Company Proposal I
and the following notice pursuant to Section 180.1150 and requested that
Proposal II be submitted to a vote of the shareholders.
Set forth below is the notice accompanying the Proposal:
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
specifically request a special meeting of shareholders for
2
purposes of obtaining relief from the provisions of Wisconsin
Statutes 180.1152(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 in the corporation, as permitted by Wisc. Statutes
<Section>180.1150.
This notice and proposed resolution are submitted under
Wisc. 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, or making any material changes in the
business or structure of the company.
/S/JAMES D. AZZAR
James D. Azzar
Generally speaking, 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, the Board must call a meeting of shareholders to
consider and act upon a proposal to restore full voting power of the
shares. In response to the notice described above, the Company called the
Special Meeting.
PROPOSAL II
One of the matters to be presented at the Annual Meeting is the
following shareholder proposal submitted by the Participants ("Proposal
II"):
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
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<PAGE>
received by the Company, and making a recommendation to the board
of directors with respect to any such proposal.
ABOUT PROPOSAL II
On December 6, 1997, the Participants sent Proposal II to the
Company. The Participants included the following Supporting Statement with
Proposal II:
SUPPORTING STATEMENT
This shareholder proposal is submitted by Bomarko, Inc.,
Extrusions Division, Inc. and James D. Azzar. We are substantial
investors in the Company, owning over 14% of its shares.
This proposal, which is absolutely not binding, is
resubmitted this year as an opportunity for the shareholders to
offer a vote of "no confidence" in the Board of Directors and
management of the Company. A vote "FOR" this proposal is a way
that you, as a shareholder and investor, can send a message that
you are not satisfied with the results achieved by the Board of
Directors and management to produce value for shareholders.
Last year, the Board of Directors recommended that you vote
against the proposal, arguing that the proposal was "moot." The
Board assured you that it had already created a committee to
review strategic options, engaged an investment banking firm and
was in the process of reviewing strategic alternatives.
You might have actually believed management's assertions and
promises and voted against the proposal last year. Don't be
fooled again this year. For if 1997 has taught us anything, it
is that the Board has not followed through on its promises.
While the Board may have taken some token steps to appear to be
concerned with shareholder value, positive results have not been
achieved.
We believe that the stock price performance of the Company
and its future prospects have been adversely affected by poor
management and questionable strategic decisions. We question the
Company's continuing ability to profitably sell its products in a
highly competitive environment. We believe that these poor
results are tolerated in part because a substantial portion of
the Company's directors are current or former officers of the
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Company or are affiliated with concerns which do business with
the Company.
Consequently, we believe that a sale or merger of the
Company or a sale of substantially all of its assets offers the
most likely means to realize the value of the Company.
Please vote "For" this proposal and help yourself and your
fellow shareholders prevent further losses in the value of their
investment in the Company. If management opposes this proposal
and you want to vote in favor of it, you must mark the "For" box
on the proxy card next to the proposal.
SOLICITATION OF PROXIES
This solicitation is not being made by or on behalf of the Company or
the Company's Board of Directors. Proxies are being solicited by and on
behalf of Mr. Azzar and the Participants. Mr. Azzar and employees of the
Participants may solicit proxies by use of the mails and perhaps by
telephone. Bomarko, Inc. will bear all of the costs of this solicitation.
Mr. Azzar, Bomarko and EDI constitute a "group" within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and are also considered "participants in a solicitation"
within the meaning of Instruction 3 to Item 4 of Regulation 14A under the
Exchange Act. Mr. Azzar is a United States citizen. His principal
occupation is as a private investor. His address is 208 Pioneer Club Road,
East Grand Rapids, Michigan 49506. 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.
Mr. Azzar is the Chairman of the Board, the Chief Executive Officer and a
Director of Bomarko. EDI is a Michigan corporation. Its principal
business is the sale of plastic parts. The address of its principal
business and principal office is 208 Pioneer Club Road, East Grand Rapids,
Michigan 49506. Mr. Azzar is the President, sole director and sole
shareholder of EDI.
The Special Meeting will take place at the Best Western Riverfront
Inn, 1821 Riverside Avenue, Marinette, Wisconsin, on Tuesday, March 10,
1998, at 10:00 a.m. As of the date of this Proxy Statement, the
Participants do not know where or when the Annual Meeting will be held,
except that, as stated above, the Company's Bylaws provide that the annual
shareholders' meetings are generally to be held on the first Tuesday of
May.
The address of the Company's principal executive office is 200 West
Front Street, Peshtigo, Wisconsin 54157-0149.
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Execution of a proxy given in response to this solicitation will not
affect a shareholder's right to attend either or both of the Special
Meeting and the Annual Meeting and to vote in person at such meetings.
Presence at the Special Meeting and/or 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
and/or Annual Meeting, as applicable, or by executing a later-dated proxy.
Other than Proposal I and Proposal II, which are described above, the
Participants have no knowledge of any other matters to be presented for
action by the shareholders at the Special Meeting or the Annual Meeting
(except that Directors will be elected at the Annual Meeting).
On or about February ____, 1998, the Company mailed its proxy state-
ment (the "Company Proxy Statement") relating to the Special Meeting. In
the Company Proxy Statement, the Company noted that only holders of record
of the Company's Common Stock as of the close of business on February 2,
1998 are entitled to vote at the Special Meeting. In the Company Proxy
Statement, the Company reported that, on that date, it had 1,951,855 shares
of Common Stock outstanding and entitled to vote, each of which is entitled
to one vote per share.
As of the date of this Proxy Statement, the Company has not filed with
the Securities and Exchange Commission a preliminary or definitive proxy
statement relating to the Annual Meeting. Accordingly, the Participants do
not have knowledge of any matters other than Proposal II to be presented at
the Annual Meeting, although the shareholders will be asked to vote on the
election of Directors at the Annual Meeting. Likewise, the shareholders do
not know the record date for determining the shareholders who will be
entitled to vote at the Annual Meeting or the number of shares that are or
will be entitled to vote as of such record date.
INTEREST OF THE PARTICIPANTS IN THE PROPOSALS
PROPOSAL I. If Proposal I is approved (see "Vote Required"), the
Participants, should they collectively purchase additional shares of Common
Stock sufficient to bring their collective ownership level above 20 percent
of the outstanding Common Stock, will have full voting rights for all of
their shares of Common Stock.
PROPOSAL II. The Participants have no direct interest in Proposal II
that is different from any other shareholder. If Proposal II is approved
(see "Vote Required"), the Company's Board of Directors is free to ignore
Proposal II and choose not to begin the process of selling the Company.
Proposal II, if approved, would communicate to the Company's management that
the shareholders desire that the Company be sold. If the Company is indeed
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sold, it is expected that all shareholders would share equally (on a
per-share basis) in the gains, if any, that are produced by such a sale.
As such, the Participants would not be treated differently than any other
shareholder on a per-share basis.
VOTE REQUIRED
PROPOSAL I. The number of votes cast "FOR" Proposal I at the Special
Meeting must exceed the number of votes cast "AGAINST" Proposal I to
approve Proposal I. Abstentions and broker non-votes will not be counted
except to establish the existence of a quorum.
PROPOSAL II. The number of votes cast "FOR" Proposal II at the Annual
Meeting must exceed the number of votes cast "AGAINST" Proposal II to
approve Proposal II. Abstentions and broker non-votes will not be counted
except to establish the existence of a quorum.
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 Company Proxy Statement distributed in
connection with the 1998 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 other the shares beneficially owned. This information was taken from
the Company Proxy Statement. The Participants have no knowledge of, and
are not responsible for, such information, except to the extent that it
relates to the Participants.
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<PAGE>
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
COMMON STOCK COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------------ ------------------ ------------------
<S> <C> <C> <C>
Claude L. Van Hefty,
Director, President and
Chief Executive Officer 9,931<F1> *
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<F2> 3.2%
Walter F. Adrian 112,000<F3> 5.7%
James D. Azzar 276,864<F4> 14.2%
Edwin A. Meyer, Jr. 327,562<F5> 16.8%
Bennie C. Burish 101,048<F6> 5.2%
<FN>
___________________________
<F*>Denotes less than 1%.
<F1> 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 Profit
Sharing Plan and Trust for Non-Union Employees.
<F2> 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.
<F3> The share amount listed is from the Schedule 13G dated April 17,
1995 filed with the Securities and Exchange Commission and the
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Company. Mr. Adrian's address is 201 Emery Avenue, South, Peshtigo,
Wisconsin 54157.
<F4> 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.
<F5> 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.
<F6> 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.
</FN>
</TABLE>
SHAREHOLDER PROPOSALS
As of the date of this Proxy Statement, the Participants have no
knowledge of the deadline by which proposals which shareholders of the
Company intend to present at and have included in the Company's proxy
statement for the 1999 annual meeting must be received by the Company.
This information is required to be set forth in the Company's proxy
statement relating to the 1998 Annual Meeting.
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PROXY BADGER PAPER MILLS, INC.
The undersigned hereby appoints James D. Azzar, as Proxy, with the power
to appoint his substitute, and hereby authorizes him 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.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF JAMES D. AZZAR; BOMARKO, INC.; AND
EXTRUSIONS DIVISION, INC. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSAL I AND ON SUCH OTHER BUSINESS AS MAY COME BEFORE
THE MEETING IN THE DISCRETION OF THE PROXY NAMED.
Dated ________________, 1998 X_______________________________________
X_______________________________________
Please sign exactly as your name appears
on the records of the Company. 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 MARK "FOR", DATE, SIGN AND RETURN THIS PROXY IN THE ENVELOPE PROVIDED.
<PAGE>
PROXY BADGER PAPER MILLS, INC.
The undersigned hereby appoints James D. Azzar, as Proxy, with the power
to appoint his substitute, and hereby authorizes him 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 the record date for the
1998 Annual Meeting of Shareholders, and any adjournment or postponement
thereof.
1. SHAREHOLDER RESOLUTION TO RECOMMEND SALE OF COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In his discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF JAMES D. AZZAR; BOMARKO, INC.; AND
EXTRUSIONS DIVISION, INC. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE SHAREHOLDER RESOLUTION IN ITEM 1 AND ON SUCH OTHER
BUSINESS AS MAY COME BEFORE THE MEETING IN THE DISCRETION OF THE PROXY
NAMED.
Dated ________________, 1998 X_______________________________________
X_______________________________________
Please sign exactly as your name
appears on the records of the
Company. 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.
