<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
SEDA SPECIALTY PACKAGING CORP.
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
----------------------------------------------------------------------
(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
SEDA SPECIALTY PACKAGING CORP.
2501 WEST ROSECRANS BOULEVARD
LOS ANGELES, CALIFORNIA 90059-3510
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, JUNE 12, 1996
2:00 P.M. PACIFIC TIME
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of SEDA Specialty Packaging Corp. will
be held at the offices of the Company, 2501 West Rosecrans Boulevard, Los
Angeles, California 90059-3510, on Wednesday, June 12, 1996 at 2:00 P.M. Pacific
Time for the following purposes:
1. To elect five (5) directors.
2. To ratify the selection of Price Waterhouse LLP as independent auditors
for the year ending December 31, 1996.
3. To transact such other business as may properly come before the
meeting.
Only stockholders of record at the close of business on May 22, 1996 are
entitled to notice of and to vote at this meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors
Ronald W. Johnson,
Secretary
Los Angeles, California
May 23, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE PAID
ENVELOPE.
<PAGE> 3
SEDA SPECIALTY PACKAGING CORP.
2501 WEST ROSECRANS BOULEVARD
LOS ANGELES, CALIFORNIA 90059-3510
------------------------
PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board of Directors of
SEDA Specialty Packaging Corp., a Delaware corporation (the "Company"), for use
at the Annual Meeting of Stockholders of the Company to be held at 2:00 P.M.,
Pacific Time, on June 12, 1996. The approximate mailing date for this proxy
statement and the enclosed proxy is May 23, 1996. Only stockholders of record at
the close of business on May 22, 1996 (the "Record Date") will be entitled to
vote. At such date, the Company had outstanding 5,097,500 shares of its common
stock, $0.001 par value (the "Common Stock"). Holders of Common Stock are
entitled to one vote for each share held. An abstaining vote will be counted as
a vote against the relevant proposal.
Any person signing a proxy in the form accompanying this proxy statement
has the power to revoke it prior to or at the meeting. A proxy may be revoked by
a writing delivered to the Secretary of the Company stating that the proxy is
revoked, by a subsequent proxy signed by the person who signed the earlier
proxy, or by attendance at the meeting and voting in person.
The expense of soliciting proxies in the enclosed form will be paid by the
Company. Following the original mailing of the proxies and soliciting materials,
employees of the Company may solicit proxies by mail, telephone, telegraph,
telecopy and personal interviews. The Company will request brokers, custodians,
nominees and other record holders to forward copies of the proxies and
soliciting materials to persons for whom they hold shares of the Company's
Common Stock and to request authority for the exercise of proxies; in such
cases, the Company will reimburse such holders for their reasonable expenses.
<PAGE> 4
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date by (i) each person
known by the Company to own beneficially 5% or more of the Common Stock, (ii)
each current director of the Company, (iii) each executive officer listed in the
Summary Compensation Table under "Executive Compensation" below and (iv) all
current directors (each of whom is a nominee for director) and executive
officers as a group:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME AND ADDRESS(1) OWNED(2) PERCENT OWNED
------------------------------------------------- ------------ -------------
<S> <C> <C>
Shapour and Pamela Sedaghat, as joint tenants.... 2,185,967 42.9%
Shawn Sedaghat(3)................................ 1,609,133 28.5%
Edward F. Csaszar(4)............................. 31,500 *
Ronald W. Johnson(5)............................. 21,250 *
Dann V. Angeloff(6).............................. 31,250 *
Alfred E. Osborne, Jr.(6)........................ 27,250 *
Robert H. King(5)................................ 7,500 *
All Directors and Executive Officers as a Group 1,766,508 30.7%
(9 persons)(7).................................
</TABLE>
- ---------------
* Less than one percent.
(1) Each of such persons may be reached through the Company at 2501 West
Rosecrans Boulevard, Los Angeles, California 90059-3510.
(2) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
person, subject to applicable community property laws.
(3) Includes 545,000 shares issuable pursuant to stock options exercisable
within 60 days of the Record Date.
(4) Includes 23,500 shares issuable pursuant to stock options exercisable within
60 days of the Record Date.
(5) Represents shares issuable pursuant to stock options exercisable within 60
days of the Record Date.
(6) Includes 21,250 shares issuable pursuant to stock options exercisable within
60 days of the Record Date.
(7) Includes 683,375 shares issuable pursuant to stock options exercisable
within 60 days of the Record Date.
ELECTION OF DIRECTORS
Five directors of the Company are to be elected, each to hold office until
the next annual meeting of stockholders and until their respective successors
are elected, or until death, resignation or removal. Shares represented by the
accompanying proxy will be voted for the election of the following five nominees
recommended by the Board of Directors, unless the proxy is marked in such a
manner as to withhold authority so to vote. Such nominees are the incumbent
directors of the Company. The candidates receiving the highest number of votes,
up to the number of directors to be elected, will be elected. If any such person
is unable or unwilling to serve as a nominee for the office of director at the
date of the Annual Meeting or any postponement or adjournment thereof, the
proxies may be voted for a substitute nominee, designated by the proxy holders
or by the present Board of Directors to fill such vacancy, or for the balance of
those nominees named without nomination of a substitute. The Board of Directors
has no reason to believe that any of such nominees will be unwilling or unable
to serve if elected as a director.
The names, ages and principal occupation at the Record Date and for the
past five years and directorships of the nominated directors are as follows:
SHAHROKH "SHAWN" SEDAGHAT, age 30, was elected President of the Company in
November 1992 and Chairman of the Board and Chief Executive Officer of the
Company in February 1995. From March 1985 to
2
<PAGE> 5
November 1992, Mr. Sedaghat held various positions with the Company including
machine operator, assembly supervisor, molding supervisor, quality control
manager and general manager.
ROBERT H. KING, age 74, was named to the vacancy on the Board of Directors
created by Shapour Sedaghat's retirement in February 1995. Mr. King has served
as President of Consumer Marketing Services, Inc., a consumer product marketing
company, since 1984. From 1978 to 1984, he served as Chairman, President, Chief
Executive Officer and Chief Operating Officer of World Book, Inc., a publisher
of reference books. From 1968-1978, he served as President of Time-Life
Libraries, Inc., a publishing subsidiary of Time-Life, Inc.
RONALD W. JOHNSON, age 48, has been Vice President of Finance and Chief
Financial Officer of the Company since November 1992. From July 1983 until
joining the Company, he was employed by McDonnell Douglas Information Systems
Company in various executive positions with various subsidiaries and divisions
of such company, including Vice President of Finance and Administration of
McDonnell Douglas Computer Systems Company, Vice President of Financial Planning
and Analysis of McDonnell Douglas Information Systems Group and Vice President
of Finance and Chief Financial Officer of Microdata Corporation. From 1978 to
1983 he was Corporate Controller and Chief Accounting Officer of Electronic
Memories and Magnetics Corporation, and from 1972 to 1978 he was employed by
Price Waterhouse. Mr. Johnson is a Certified Public Accountant.
DANN V. ANGELOFF, age 60, became a director of the Company in September
1993. Since 1976 Mr. Angeloff has been the President of The Angeloff Company, a
corporate financial advisory firm. Mr. Angeloff serves on the Board of Directors
of Bonded Motors, Inc., Compensation Resource Group, Datametrics Corporation,
Nicholas/Applegate Growth Equity Fund, Nicholas/Applegate Investment Trust,
Public Storage, Inc., Ready Pac Produce, Inc., Royce Medical Company and Storage
Properties, Inc. Mr. Angeloff is a former Trustee of the University of Southern
California and is a University Counselor to the President of the University of
Southern California.
ALFRED E. OSBORNE, JR., PH.D., age 51, became a director of the Company in
November 1993. He currently serves as Associate Professor of Business Economics
and the Director of the Harold Price Center for Entrepreneurial Studies in the
Anderson Graduate School of Management at U.C.L.A., where he has held several
management and teaching positions since 1972. Dr. Osborne currently serves on
the Board of Directors of First Interstate Bank of California, Greyhound Lines,
Inc., Nordstrom, Inc., ReadiCare, Inc., The Times Mirror Company and United
States Filter Corporation. He has authored numerous articles, reports and other
publications with respect to capital market issues confronting small and growing
enterprises and is a member of the Council of Economic Advisors for California.
There are no family relationships between any of the directors or executive
officers of the Company.
The Board of Directors held five meetings during 1995. Each director
attended at least 75% of the aggregate of all meetings held by the Board in 1995
during his tenure as a director.
DIRECTORS' COMPENSATION
For 1995, outside directors were entitled to: (i) an annual payment of
$10,000, payable in equal quarterly installments of $2,500, (ii) $750 per
meeting of the Board of Directors or any committee thereof that is attended in
person, (iii) $500 per attended telephonic Board meeting, and (iv) $750 per
Committee meeting for serving as a Committee Chairman. These amounts were pro
rated for the time served by the outside directors.
In addition, each outside Board member was granted stock options
exercisable for 15,000 shares at a per share price equal to the market price of
the Company's Common Stock on the date such person became a member of the Board,
vesting at the rate of 25% a year. For each year after the first year of Board
membership, an outside director will be granted additional options for 5,000
shares per year at the then-market price on the date of grant. The Company may
change this policy in the future. In October 1994, the Company issued each of
Dann V. Angeloff and Alfred E. Osborne, Jr., Ph.D. stock options for 5,000
shares at a per
3
<PAGE> 6
share exercise price of $12.50. In February 1995, the Company issued each of
Dann V. Angeloff, Alfred E. Osborne, Jr. and Robert H. King stock options for
15,000 shares at a per share exercise price of $11.1875.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors reviews and approves
the Company's compensation programs. See "Report of Compensation Committee."
Dann V. Angeloff, Chairman, and Alfred E. Osborne, Jr. are the current members
of the Company's Compensation Committee which was formed in September 1993. The
Committee held two meetings during 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
2501 West Rosecrans, Inc. is 100% owned by Shapour and Pamela Sedaghat. On
April 20, 1994, the Company acquired from 2501 West Rosecrans, Inc. the building
and real estate comprising its manufacturing facilities and corporate
headquarters, at a cost of approximately $6.3 million, which approximated fair
market value, in exchange for a promissory note in the principal amount of $1.6
million due and paid in June 1995 bearing interest at 6% per annum and the
Company's assumption of the existing five-year note due to a financial
institution in the principal amount of approximately $4.7 million bearing
interest at 8.5% per annum. At the closing of the transaction, the Company paid
$1 million to the financial institution to reduce the amount outstanding on the
five-year note. Prior to this transaction, the Company leased the facility from
2501 West Rosecrans, Inc. Total rent paid by the Company in 1994, prior to the
closing of this transaction, to 2501 West Rosecrans, Inc. was $219,000.
Tube Tech Corporation of Delaware (Tube Tech) was 50% owned by Shapour
Sedaghat until the Company acquired his 50% interest in July 1993 for $90,000.
Tube Tech became an exclusive sales representative of the Company in 1992 for
selected plastic tube products customers. Total commissions paid by the Company
to Tube Tech for the year ended December 31, 1995, was $294,000. The Company's
investment in Tube Tech is accounted for using the equity method of accounting
for investments.
Pacific Atlantic Brokerage, Inc. ("Pacific Atlantic"), a corporation
majority owned by Shawn Sedaghat, provides freight forwarding services to the
Company. The cost of the services provided by Pacific Atlantic to the Company in
1995, and charged to operations was $911,000. The Company's Audit Committee
periodically reviews the freight forwarding services and terms under which those
services are provided to the Company by Pacific Atlantic. To the extent that
such freight forwarding services are not competitive in terms of price and
otherwise with those that could be obtained from independent sources, the
Committee would consider modifying the relationship accordingly or associating
with another freight forwarding company.
As of December 31, 1995, in the aggregate, the Company owed $136,000 to
these related parties.
The Company believes that the terms of the transactions referenced in the
first three paragraphs of this section were on terms as favorable to the Company
as would have been received in transactions negotiated at arms-length.
OTHER COMMITTEES
The Audit Committee of the Board of Directors consists of Messrs. Osborne,
Chairman, and Angeloff. It met two times in 1995 and each member attended the
meetings. The Board of Directors presently has no Nominating Committee.
4
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth certain summary information regarding
compensation paid by the Company for services rendered during the fiscal years
ended December 31, 1995, 1994 and 1993 to the Company's Chief Executive Officer
and its most highly paid executive officers other than the Chief Executive
Officer whose compensation exceeded $100,000 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME AND --------------------------- OTHER ANNUAL STOCK UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS OPTIONS(#)
- ---------------------------------- ---- --------- -------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shapour Sedaghat(1)............... 1995 $ 66,692 $60,000 $11,186(2)
Former Chief Executive Officer 1994 203,333 -- 13,045(2) -- --
1993 209,511 -- 17,100(2) -- --
Shawn Sedaghat(3)................. 1995 300,150 60,000 17,796(2) -- 250,000
President and Chief Executive 1994 193,167 -- 11,550(2) -- 60,000
Officer 1993 190,000 -- 13,500(2) -- 250,000
Edward F. Csaszar(4).............. 1995 174,821 5,000 10,256(2) -- 15,000
Vice President of Sales and 1994 150,123 -- 9,600(2) -- 2,000
Marketing 1993 54,808 -- 3,200(2) -- 15,000
Ronald W. Johnson................. 1995 100,259 30,000 7,093(2) -- 15,000
Vice President of Finance, Chief 1994 100,415 -- 1,200(2) -- 5,000
Financial Officer and Secretary 1993 100,000 -- -- -- 15,000
Edward S. Dombroski............... 1995 98,153 5,000 6,155(2) -- 15,000
Vice President and 1994 86,634 -- 5,152(2) -- 5,000
General Manager 1993 75,385 -- 5,105(2) -- 6,000
</TABLE>
- ---------------
(1) Effective February 28, 1995, Shapour Sedaghat retired as Chairman of the
Board Chief Executive Officer of the Company. Subsequent to his retirement
Mr. Sedaghat provided consulting services to the Company and was paid
$70,000 for consulting fees in 1995.
(2) Represents primarily automobile expenses paid by the Company.
(3) Shawn Sedaghat was elected Chairman of the Board and Chief Executive Officer
effective February 28, 1995. He also retained the title of President.
(4) Mr. Csaszar joined the Company in August 1993 at an annual salary of
$150,000, plus annual increases which are subject to adjustments. For
further information see "--Employment Agreements."
OPTION GRANTS, EXERCISES AND YEAR END VALUES
The following stock options were granted by the Company to the Named
Executive Officers during the fiscal year ended December 31, 1995:
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1995
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS EMPLOYEES BASE EXPIRATION ----------------------
NAME GRANTED IN FISCAL YEAR PRICE($/SH) DATE 5%($) 10%($)
- --------------------- --------- --------------- ----------- ----------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shapour Sedaghat..... 0 N/A N/A N/A N/A N/A
Shawn Sedaghat....... 70,000 18.6% $ 11.96 February 22, 2000 $231,303 $ 511,119
180,000 47.7 12.31 February 27, 2000 612,185 1,352,768
Edward F. Csaszar.... 15,000 4.0 11.1875 February 27, 2000 46,363 102,451
Ronald W. Johnson.... 15,000 4.0 11.1875 February 27, 2000 46,363 102,451
Edward S. Dombroski.. 15,000 4.0 11.1875 February 27, 2000 46,368 102,451
</TABLE>
- ---------------
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% annual rates of stock appreciation prescribed by the Securities
and Exchange Commission and are not intended to forecast possible future
appreciation, if any, of the Company's stock price. No gain to the optionees
is possible without an increase in the price of the Company's stock, which
will benefit all stockholders commensurately.
5
<PAGE> 8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT FY-END
FY-END ($)(2)
SHARES ---------------- --------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED($) UNEXERCISABLE(1) UNEXERCISABLE
- ------------------------------------------ ----------- ----------- ---------------- --------------
<S> <C> <C> <C> <C>
Shapour Sedaghat.......................... 0 N/A 0 0
Shawn Sedaghat............................ 0 N/A 545,000/0 $598,875/0
Edward F. Csaszar......................... 0 N/A 19,750/12,250 10,078/13,359
Ronald W. Johnson......................... 0 N/A 17,500/17,500 8,672/14,766
Edward S. Dombroski....................... 0 N/A 10,750/15,250 6,141/13,359
</TABLE>
- ---------------
(1) For a description of the terms of such options, see "Proposed Amendments to
1993 Stock Plan."
(2) Based on a price per share of $12.375, which was the price of a share of
Common Stock as quoted on the Nasdaq National Market at the close of
business on December 29, 1995.
EMPLOYMENT AGREEMENTS
Effective June 1, 1993, Shapour Sedaghat entered into a three-year
employment agreement at an annual salary of $200,000, subject to adjustment for
inflation, plus an annual bonus in an amount to be determined by the Board of
Directors, but in no event to exceed 100% of his base salary. Mr. Sedaghat
retired as Chairman and Chief Executive Officer, and the employment agreement
was terminated in February 1995.
Effective June 1, 1993, Shawn Sedaghat entered into a three-year employment
agreement at an annual salary of $190,000, subject to adjustment for inflation,
plus an annual bonus in an amount to be determined by the Board of Directors,
but in no event to exceed 100% of his base salary. In February 1995, Mr.
Sedaghat was elected Chairman and Chief Executive Officer of the Company, and
his employment agreement was amended, effective January 1, 1995, to increase his
salary to $300,000.
Effective June 1, 1993, Ronald Johnson entered into a three-year employment
agreement at an annual salary of $100,000, subject to adjustment for inflation,
plus an annual bonus in an amount to be determined by the Board of Directors,
but in no event to exceed 50% of his base salary.
Under each of the aforementioned employment agreements, the Company is
required to pay compensation to each respective employee following termination
as follows: (i) with cause: the Company shall only be obligated to pay salary
through the date on which termination occurs or (ii) without cause: the Company
is required to pay the base salary owed through the term of the agreement plus a
bonus equal to at least what was paid in the previous period, not to exceed 100%
of the then-current salary.
Effective August 16, 1993, the Company entered into a three-year employment
agreement with Edward F. Csaszar at an annual salary of $150,000, with
subsequent annual increases equal to 0.5% of the increase in the Company's
annual sales for the prior 12-month period as compared to the corresponding
period one year earlier, provided that such annual increase may not exceed 50%
of the previous year's salary. In addition, the Company has agreed to pay
certain costs on behalf of Mr. Csaszar in an amount not to exceed approximately
$2,250.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") was formed by the Board of
Directors in 1993 to set and administer the policies governing the Company's
compensation programs, including stock option plans. The Committee receives and
evaluates information regarding compensation practices for comparable businesses
in similar industries, and considers this information in determining base
salaries, bonuses and stock-based compensation. The Committee is authorized to
engage or employ such outside professional consultants
6
<PAGE> 9
or other services as in its discretion may be required to fulfill its
responsibilities. The Committee also discusses and considers executive
compensation matters and makes decisions thereon.
The Company's compensation policies are structured to link the compensation
to the Chief Executive Officer, the Named Executive Officers and other
executives of the Company with corporate performance. Through the establishment
of compensation programs, the Company has attempted to align the financial
interests of its executives with the results of the Company's performance, which
is designed to put the Company in a competitive position regarding executive
compensation and to ensure corporate performance, which will then enhance
stockholder value.
The Company's executive compensation philosophy is to set base salaries in
accordance with those of comparable businesses, and then to provide
performance-based variable compensation, such as bonuses, as determined by the
Compensation Committee according to factors such as the Company's earnings as
well as value received by stockholders. This philosophy allows total
compensation to fluctuate from year to year. As a result, the Named Executive
Officers' actual compensation levels in any particular year may be above or
below those of the Company's competitors, depending upon the evaluation of the
compensation factors described above by the Compensation Committee.
In line with the Company's overall compensation program and the annual
objectives set by the Committee, the Company's executive officers have a
percentage of their total compensation at risk, dependent upon the Company's
financial performance and other factors as considered by the Committee. The base
compensation for fiscal 1993, 1994 and 1995 for Messrs. Shapour Sedaghat, Shawn
Sedaghat, Edward F. Csaszar and Ronald W. Johnson was determined in 1993, based
upon Employment Agreements entered into by and between the Company and such
executives. See "Employment Agreements."
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Committee considers the anticipated
tax treatment to the Company and to the executives of various compensation. Some
types of compensation and their deductibility depend upon the timing of an
executive's vesting or exercise of previously granted rights. Further,
interpretations of and changes in the tax laws also affect the deductibility of
compensation. To the extent reasonably practicable and to the extent it is
within the Committee's control, the Committee intends to limit executive
compensation in ordinary circumstances to that deductible under Section 162(m)
of the Internal Revenue Code of 1986, as amended. In doing so, the Committee may
utilize alternatives (such as deferring compensation) for qualifying executive
compensation for deductibility and may rely on grandfathering provisions with
respect to existing contractual commitments.
The Committee believes that its overall executive compensation program has
been successful in providing competitive compensation appropriate to attract and
retain highly qualified executives and also to encourage increased performance
from the executive group which should create added stockholder value.
COMPENSATION COMMITTEE
Dann V. Angeloff -- Chairman
Alfred E. Osborne, Jr.
7
<PAGE> 10
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
TOTAL RETURN TO STOCKHOLDERS
REINVESTED DIVIDENDS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SEDA SPECIALTY S&P 500
(FISCAL YEAR COVERED) PACKAGING CP COMP-LTD PEER GROUP
<S> <C> <C> <C>
10/26/93 100 100 100
1993 151.79 100.71 136.46
1994 83.93 102.04 157.76
1995 88.40 140.39 171.18
- ------------------------------------------------------------------------------------------------------------
10/26/93 1993 1994 1995
- ------------------------------------------------------------------------------------------------------------
Seda Specialty Packaging CP 100 151.79 83.93 88.40
- ------------------------------------------------------------------------------------------------------------
S&P 500 Comp-Ltd 100 100.71 102.04 140.39
- ------------------------------------------------------------------------------------------------------------
Peer Group 100 136.46 157.76 171.18
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Set forth above is a performance graph comparing the cumulative total
stockholder returns on the Company's Common Stock, the S&P 500 Stock Index and
an index average of the Company's peer group, composed of comparable publicly
traded companies in the plastics packaging business, as selected by the Company.
Such peer group includes: Aptargroup Inc., Kerr Group, Inc., Liqui-Box Corp.,
PCI Services, Inc., Sealright Co., Inc., Sun Coast Industries, Inc. and
Tuscarora, Inc. The performance graph covers the period commencing October 26,
1993 (the effective date of the Company's initial public offering) and ended
December 31, 1995, and assumes $100 invested on October 26, 1993 in the
Company's Common Stock, the S&P 500 Stock Index and the stock index of the peer
group.
8
<PAGE> 11
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, have been the Company's
independent auditors since 1992 and have been selected by the Board of Directors
to serve as auditors for the year ending December 31, 1996. Stockholders are
being asked to ratify the selection. A representative of Price Waterhouse LLP
will be present at the Annual Meeting and will be given the opportunity to make
a statement if he or she wishes and will also be available to respond to
appropriate questions at the meeting.
This proposal may be adopted by the affirmative vote of the holders of a
majority of the outstanding shares present in person or by proxy and entitled to
vote at the Annual Meeting of Stockholders. The Board of Directors recommends a
vote FOR the proposal to ratify the selection of Price Waterhouse LLP as the
Company's independent accountants for 1996.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
the Board of Directors intends to present or has reason to believe others will
present at the Annual Meeting of Stockholders. If other matters properly come
before the meeting, those who act as proxies will vote in accordance with their
judgment.
STOCKHOLDER PROPOSALS -- NEXT ANNUAL MEETING
Stockholders are entitled to present proposals for action at a forthcoming
stockholders' meeting if they comply with the requirements of the proxy rules.
Any proposals intended to be presented at the next Annual Meeting of
Stockholders of the Company must be received at the Company's offices on or
before February 11, 1997 in order to be considered for inclusion in the
Company's proxy statement and form of proxy relating to such meeting.
Ronald W. Johnson,
Secretary
May 23, 1996
Los Angeles, California
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE PREPAID ENVELOPE.
9
<PAGE> 12
SEDA SPECIALTY PACKAGING CORP.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON JUNE 12, 1996. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Ronald W. Johnson and Shahrokh "Shawn"
Sedaghat, or either of them, each with full power of substitution, as proxies of
the undersigned to attend the Annual Meeting of Stockholders of SEDA Specialty
Packaging Corp., at the offices of the Company, 2501 West Rosecrans Boulevard,
Los Angeles, California 90059-3510, on Wednesday, June 12, 1996 at 2:00 P.M.
Pacific Time, and any adjournment or postponement thereof, and to vote the
number of shares the undersigned would be entitled to vote if personally present
on the following:
<TABLE>
<S> <C> <C>
1. Election of / / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote
Directors (except as marked to the contrary for all nominees listed below
below)
</TABLE>
Shahrokh "Shawn" Sedaghat - Robert H. King - Ronald W. Johnson - Dann V.
Angeloff - Alfred E. Osborne, Jr., Ph. D.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
-----------------------------------------------------------------------------
The Board of Directors recommends a vote FOR each of the nominees.
<PAGE> 13
2. To ratify the selection of Price Waterhouse LLP as independent auditors for
the year ending December 31, 1996.
The Board of Directors recommends a vote FOR.
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, upon any and all such other matters as may properly come
before the meeting or any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE FIVE NOMINEES FOR ELECTION AND FOR PROPOSAL 2. (Please sign
exactly as name appears. 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.)
Dated: , 1996
------------
------------------------
Signature
------------------------
Signature, if held
jointly
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
