SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FOILMARK, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
|x| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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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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[_] 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:
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<PAGE>
FOILMARK, INC.
4 Mullikan Way
Newburyport, Massachusetts 01950
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held Wednesday, May 13, 1998
To the Shareholders of Foilmark, Inc.:
The Annual Meeting of Shareholders of Foilmark, Inc., a Delaware
corporation (the "Company"), will be held at the offices of Hinckley, Allen &
Snyder, 28 State Street, 29th Floor, Boston, Massachusetts on Wednesday, May 13,
1998, at 10:00 a.m., E.D.S.T., for the following purposes:
1. To elect directors; and
2. To consider and act upon any other matter which may properly come before
the meeting and any postponements or adjournments thereof, including matters
which the Board of Directors did not know would be presented at the Annual
Meeting a reasonable time before this solicitation.
The Board of Directors of the Company has fixed the close of business on
April 1, 1998 as the record date for the determination of the shareholders
entitled to receive notice of and to vote at the Meeting or any adjournment
thereof. The stock transfer books will not be closed.
All shareholders are cordially invited and urged to attend the Meeting.
PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY EVEN IF YOU PLAN TO ATTEND
THE MEETING. Upon your arrival your proxy will be returned to you, if you desire
to revoke it or vote in person. Your attendance in person is encouraged, but
should anything prevent your attendance in person, your presence by proxy will
still allow your shares to be voted.
By Order of the Board of Directors,
Carol J. Robie, Secretary
April 9, 1998
<PAGE>
FOILMARK, INC.
4 MULLIKAN WAY
NEWBURYPORT, MASSACHUSETTS 01950
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
the accompanying Proxy on behalf of the Board of Directors of Foilmark, Inc.
(the "Company"), to be used at the Annual Meeting of Shareholders of the Company
(the "Annual Meeting") and all adjournments thereof, to be held at the time and
place and for the purposes set forth in the foregoing Notice of Annual Meeting.
A shareholder giving a proxy may revoke it at any time before it is exercised by
delivering to the Secretary of the Company, at the address set forth in the
Notice of Annual Meeting, a letter signed by the record holder of the shares of
common stock of the Company ("Common Stock") indicating the proxy is revoked.
All proxies will be voted in accordance with instructions thereon. ANY PROXY
UPON WHICH NO INSTRUCTION HAS BEEN INDICATED WILL BE VOTED "FOR" THE SPECIFIC
MATTERS SET FORTH IN THE FOREGOING NOTICE OF ANNUAL MEETING AND, AT THE
DISCRETION OF THE PERSONS NAMED IN THE PROXY, UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING. The solicitation is being made by use
of the mails and the cost thereof will be borne by the Company. In addition to
the solicitation by the use of the mails, proxies may be solicited personally by
telephone or telegraph by regular employees of the Company or its subsidiaries
without additional remuneration therefor. The Company will reimburse banks,
brokers, custodians, nominees and fiduciaries for expenses incurred in
forwarding proxies and proxy soliciting materials to their principals.
This Proxy Statement and the related proxy form are first being mailed to
shareholders on or about April 9, 1998.
VOTING SECURITIES AND PRINCIPAL OWNERS THEREOF
As of the close of business on April 1, 1998, the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting, the Company had outstanding 4,169,132 shares of Common Stock held by 66
record holders and approximately 750 beneficial holders, of which 1,714,187
shares, or 41.1%, were beneficially owned by directors and officers of the
Company. Each share entitles the holder of record to one vote. Cumulative voting
for the election of directors is permitted. Accordingly, with respect to the
election of directors, each shareholder may cast a number of votes equal to the
number of shares held by such shareholder multiplied by the number of directors
(in this case, four) to be elected at the Annual Meeting, and may cast all of
such votes for a single director or may distribute them among the number to be
voted for, or for any two or more of them as such shareholder may choose.
The holders of one-third of the shares entitled to vote, present in person
or represented by proxy, will constitute a quorum for the transaction of
business at the Annual Meeting. A plurality of votes cast is required to elect
the directors. Abstentions are treated as present and entitled to vote and
therefore have the effect of a vote against a matter. A broker non-vote on a
matter is considered not entitled to vote on the matter and thus is not counted
in determining whether a matter requiring approval of a majority of the shares
present and entitled to vote has been approved.
<PAGE>
Security Ownership of Certain
Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of April 1, 1998 as to (a) each person known to
the Company who beneficially owns 5% or more of the outstanding shares of Common
Stock, (b) directors and nominees, (c) each of the named executive officers and
(d) all directors and executive officers as a group. Each of such shareholders
has sole voting and investment power as to shares shown unless otherwise noted.
<TABLE>
<CAPTION>
Amount and Nature Percent of
Name of Beneficial Owner (a) of Beneficial Ownership Class
- ---------------------------- ----------------------- -----
<S> <C> <C>
Martin A. Olsen (b)(c)............................... 527,477 13.0%
Estate of Frank J. Olsen ............................ 222,724 5.3%
Frank J. Olsen, Jr. (b)(d)........................... 456,092 10.9%
Leonard A. Mintz (b)(e).............................. 244,696 5.9%
Wilhelm P. Kutsch (f)................................ 78,230 1.9%
Philip Leibel (g).................................... 56,130 1.3%
Carol J. Robie (b)(h)................................ 203,009 4.9%
Edward D. Sullivan (b)............................... 153,834 3.7%
Michael J. Bertuch (i)............................... 5,000 *
Michael Foster (j)................................... 5,000 *
Thomas R. Schwarz (k)................................ 5,000 *
Kenneth R. Harris.................................... 128,522 3.1%
Douglas A. Parker.................................... 0 *
Parties to Voting Agreement (l)...................... 1,585,121 38.0%
All Directors and Executive Officers
as a Group (13 persons)(c)(m)................... 1,871,087 44.9%
</TABLE>
- ----------
* Less than one percent.
(a) If applicable, beneficially owned shares include shares owned by the
spouse, children and certain other relatives of the beneficial owner,
director, nominee or officers, as well as shares held by trusts of which
the person is a trustee or in which he has a beneficial interest. Any such
beneficially owned shares will be noted separately for each owner, except
in the case of shares beneficially owned by all directors and executive
officers as a group. All information with respect to beneficial ownership
has been furnished by the respective directors, officers and 5% owners.
Except as set forth above, management knows of no person who, as of April
1, 1998, owned beneficially more than 5% of the Company's outstanding
Common Stock. The information includes, where applicable, shares issuable
upon exercise of stock options granted under the Company's 1993 and 1995
Stock Option Plans, which options are presently or will be exercisable
within 60 days of the date of this Proxy Statement. Unless otherwise
indicated, the address of the persons identified in above is c/o Foilmark,
Inc., 4 Mullikan Way, Newburyport, MA 01950.
(b) Excludes shares held by other parties to the Voting Agreement described in
"Certain Relationships and Related Transactions" which may be deemed to be
beneficially owned by these individuals.
(c) Includes (i) 11,000 shares held by Mr. Olsen's wife as to which he
disclaims beneficial ownership and (ii) 27,356 shares deemed beneficially
owned in his capacity as executor of the Estate of Florence J. Olsen. Mr.
Olsen's address is 3299 Old Barn Road East, Ponte Vedra Beach, Florida
32082.
(d) Includes 33,100 shares issuable upon exercise of options which are
presently or will become exercisable within 60 days, and 222,724 shares
deemed beneficially owned in his capacity as executor of the Estate of
Frank J. Olsen.
(e) Includes 10,000 shares issuable upon exercise of options which are
presently or will become exercisable within 60 days. Mr. Mintz's address is
89 Blueberry Lane, Westwood, Massachusetts 02090.
(f) Includes 41,400 shares issuable upon exercise of options which are
presently or will become exercisable within 60 days.
(g) Includes 38,200 shares issuable upon exercise of options which are
presently or will become exercisable within 60 days.
(h) Includes 11,700 shares issuable upon exercise of options which are
presently or will become exercisable within 60 days.
(i) Includes 5,000 shares issuable upon exercise of options which are presently
or will become exercisable within 60 days. Mr. Bertuch's address is c/o
ViaTech Publishing Solutions, 1440 Fifth Avenue, Bayshore, New York 11706
(j) Includes 5,000 shares issuable upon exercise of options which are presently
or will become exercisable within 60 days. Mr. Foster's address is c/o WPI
Group, Inc., 1155 Elm Street, Manchester, New Hampshire 03101.
2
<PAGE>
(k) Includes 5,000 shares issuable upon exercise of options which are presently
or will become exercisable within 60 days. Mr. Schwarz's address is 60 West
Cliff Road, Weston, Massachusetts 02193.
(l) For the purposes of disclosure of beneficial ownership under the Securities
Exchange Act of 1934, the persons identified as parties to the Voting
Agreement described in "Certain Relationships and Related Transactions" are
deemed to be a single person and the beneficial owners of the shares of
Common Stock owned by all parties to the Voting Agreement.
(m) Includes 141,900 shares issuable upon exercise of options which are
presently or will become exercisable within 60 days.
Compliance with Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who beneficially own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission and furnish the Company with reports
of securities ownership and changes in such ownership
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, or written representations that no other
reports were required for those persons, the Company believes that during the
fiscal year ended December 31, 1997 its officers, directors, and greater than
ten percent (10%) beneficial owners complied with all Section 16(a) filing
requirements.
NOMINATION AND ELECTION OF DIRECTORS
The Board has fixed the number of directors at twelve (12), of which two
(2) board seats are to be left vacant in order to permit qualified additions to
the Board of Directors if the need arises in the future. The remaining ten seats
are divided into three classes, the terms of which expire in 1998, 1999 and
2000, respectively. Currently there are four (4) directors serving terms
expiring in 1998, three (3) directors serving terms expiring in 1999 and three
(3) directors whose terms expire in 2000. There are four (4) directors to be
elected at the 1998 Annual Meeting, three (3) to serve three year terms ending
in 2001, and one (1) to serve a one year term ending in 1999, in each case until
a successor has been elected and qualified or until the director's earlier
resignation or removal. Each nominee has consented to be named in this Proxy
Statement and to serve, if elected. If any nominee shall be unable to serve, the
proxy may be voted with discretionary authority for a substitute. The Board of
Directors has no reason to believe that any nominee will become unavailable to
serve. Any vacancies occurring in the Board of Directors, regardless of the
term, shall be filled by the Board of Directors to serve only until the next
annual or special meeting of the shareholders.
In voting for directors, each shareholder is entitled to four (4) votes for
each share of Common Stock held, one for each of the four (4) directors to be
elected. A shareholder may cast his votes evenly for all nominees, cumulate his
votes and cast them for one nominee or distribute his votes among two or more
nominees. The four persons receiving the highest number of votes cast, in person
or by proxy, shall be elected to the Board of Directors. Abstentions from voting
and broker non-votes for the election of directors will have no effect since
they will not represent votes cast at the Annual Meeting for the purpose of
electing directors.
Shareholders may withhold authority to vote for any individual nominee by
striking through the nominee's name on the proxy card. Any proxy which is not so
marked to withhold authority or struck through shall be deemed to be a vote for
such nominee and, unless otherwise indicated on the proxy, shares will be
distributed evenly among the nominees for whom authority to vote has not been
withheld.
The Board of Directors recommends a vote "FOR" the election of each of the
nominees for director.
Certain information concerning each nominee for Director, all current
Directors, all executive officers and key employees of the Company is set forth
below. Except as otherwise indicated, each of the persons has been employed by
his or her current employer for the preceding five years. There are no family
relationships between any executive officers, directors or key employees of the
Company, except that Martin A. Olsen is the uncle of Frank J. Olsen, Jr. and
Carol J. Robie, who are brother and sister.
3
<PAGE>
A. NOMINEES FOR A THREE YEAR TERM ENDING IN 2001:
FRANK J. OLSEN, JR. Director since 1992
Frank J. Olsen, Jr., 46, has served as Chairman of the Board since October
1995 and President of the Company since March 1992. He is the Chief Executive
Officer of the Company and each of its subsidiaries. Prior to March 1992 he was
employed as Vice President - Engineering, and in various other capacities with
the Company and its predecessors since 1976. Mr. Olsen is the brother of Carol
J. Robie.
WILHELM P. KUTSCH Director since 1994
Wilhelm P. Kutsch, 55, has been Senior Vice President - Foil Operations
since March 1992, and served as Vice President - Foil Operations prior to March
1992. He has also served as Vice President and Operations Manager of Foilmark
Manufacturing Corporation since 1979. Mr. Kutsch has over 20 years experience in
the hot stamping industry.
CAROL J. ROBIE Director since 1992
Carol J. Robie, 42, has been Vice President - Administration since March
1992. She served as Administrative Manager of the Company in 1990 and 1991, and
also has been employed in various capacities by Foilmark Manufacturing
Corporation since 1977. She also serves as Secretary of the Company. Ms. Robie
is the sister of Frank J. Olsen, Jr.
B. NOMINEE FOR A ONE YEAR TERM ENDING IN 1999:
THOMAS R. SCHWARZ Director since 1997
Thomas R. Schwarz, 61, was Chairman of Grossman's Inc., a retailer of
building materials, from 1990 to 1994. From 1980 to 1990, he was President,
Chief Operating Officer and a director of Dunkin' Donuts Incorporated, a food
service company. Mr. Schwarz has been a director of Tridex Corporation since
1995 (and a member of the Compensation Committee), Chairman of the Board of
Directors of TransAct Technologies Incorporated (and a member of the
Compensation Committee) since 1996 and Lebhar-Friedman Publishing Company since
1995.
C. CURRENT DIRECTORS AND OFFICERS:
Directors Whose Terms Expire in 2000:
MARTIN A. OLSEN Director since 1992
Martin A. Olsen, 73, retired as an active employee of the Company in
October 1995. Prior to that time he was Chairman of the Board of Directors since
March 1992, and Secretary of the Company and all of its subsidiaries since
September 1993. He was employed by Kensol-Olsenmark, Inc., a predecessor of the
Company, in various capacities since 1946, and was its President since 1962. Mr.
Olsen is the uncle of Frank J. Olsen, Jr. and Carol J. Robie.
LEONARD A. MINTZ Director since 1992
Leonard A. Mintz, 62, has been Senior Vice President - Equipment since
March 1992. Previously he served as President of Franklin Manufacturing
Corporation since 1967, until its acquisition by the Company in 1992. He had
been employed at Franklin in various capacities since 1958.
4
<PAGE>
EDWARD D. SULLIVAN Director since 1994
Edward Sullivan, 65, has served as a consultant to the Company since his
retirement on December 31, 1996. Mr. Sullivan served as Vice President - West
Coast Operations of the Company from 1994 until his retirement on December 31,
1996, and Vice President and General Manager of West Foils, Inc., a subsidiary
of the Company, from 1995 until December 31, 1996. He was President of West
Foils, Inc. which he founded in 1988, through 1994.
Directors Whose Terms Expire in 1999:
MICHAEL J. BERTUCH Director since 1997
Michael J. Bertuch, 37, has been the President of ViaTech Publishing
Solutions, a manufacturer of vinyl loose-leaf books, since January 1992. Prior
to 1992, he was employed by DVC Industries in various executive capacities since
1986.
MICHAEL FOSTER Director since 1997
Michael Foster, 63, is the founder, and, since 1988, has served as Chairman
of the Board and Chief Executive Officer, of WPI Group, Inc., a publicly-held
manufacturer of hardware, software and electronic products for commercial and
industrial markets.
KENNETH R. HARRIS Director since 1996
Kenneth R. Harris, 47, is Vice President - Pad Printing Operations of the
Company since August 1995. From 1978 to 1995 he was Vice President of Intram
Industries, Inc. He also is Secretary and Treasurer of COMDEC, Inc., a
commercial decorating company. Mr. Harris has over 20 years experience in the
pad printing industry.
Non-Director Executive Officers:
PHILIP LEIBEL Officer since 1992
Philip Leibel, 60, has been Vice President - Finance since March 1992 and
is Treasurer, Assistant Secretary and Chief Financial Officer of the Company and
each of its subsidiaries. He has been Chief Financial Officer of the Company and
its predecessors since 1977.
GLENN R. REGAN Officer since 1992
Glenn R. Regan, 50, has been Vice President - Tool & Die of the Company
since November 1994, and has been employed as Sales Manager - Foil with
predecessors of the Company since 1990.
DOUGLAS A. PARKER Officer since 1996
Douglas Parker, 43, has served as Vice President - Pad Printing Machinery
Sales since June 1996 and has been employed by the Company since October 1995.
From 1980 through 1995, he was Vice President--Sales of Imtran Industries, Inc.
5
<PAGE>
General Information About Board of Directors
There were four (4) regular and one (1) special meetings of the Board of
Directors in the 1997 fiscal year. During this period, each incumbent director
attended at least 75% of the aggregate of (a) the total number of meetings of
the Board held during the period for which such incumbent was a director, and
(b) the total number of meetings held by all committees of the Board on which
such incumbent served.
Directors of the Company who are not full time employees of the Company or
its operating subsidiaries receive $1,250 for each meeting attended, as well as
a fee of $500 per committee meeting attended, plus out-of-pocket expenses for
attending meetings. Effective October 1, 1997, the Board of Directors voted that
directors of the Company who are not full time employees of the Company or its
subsidiaries receive a retainer of $2,000 per calendar quarter as well as a fee
of $750 per Board Meeting attended and $350 per committee meeting attended in
person or telephonically. The Board of Directors has four standing committees:
the Executive Committee, the Compensation Committee, the Audit Committee and the
Stock Option Committee.
The Executive Committee consists of Frank J. Olsen, Jr., Michael J.
Bertuch, Michael Foster and Edward D. Sullivan. Wilhelm P. Kutsch and Leonard A.
Mintz resigned from the Committee in January 1997 and Raymond Downey resigned in
March 1997. In addition, Philip Leibel attends Executive Committee Meetings in a
non-voting capacity. The Executive Committee conducts the affairs and business
of the Company between meetings of the Board of Directors, subject to certain
limitations set forth in the Company's Certificate of Incorporation. The
Executive Committee met four (4) times during fiscal 1997.
The Compensation Committee consists of Raymond T. Downey (until his
resignation in March 1997), Michael J. Bertuch, Michael Foster, Thomas R.
Schwarz, Frank J. Olsen, Jr. and Leonard A. Mintz. The Compensation Committee
determines the compensation to be paid by the Company to its officers. The
Compensation Committee met two (2) times during fiscal 1997.
The Audit Committee consists of Raymond T. Downey (until his resignation in
March 1997), Michael J. Bertuch and Michael Foster. The Audit Committee is
responsible primarily for recommending the accounting firm to be appointed as
independent public accountant to audit the Company's financial statements and to
perform services related to the audit, reviewing the scope and results of the
audit with the independent public accountants, reviewing with management and the
independent public accountants the Company year-end operating results,
considering the adequacy of the internal accounting and control procedures of
the Company, reviewing the non-audit services to be performed by the independent
public accountants and considering the effect of such performance on the
accountants' independence. The Audit Committee met two (2) times during fiscal
1997.
The Stock Option Committee consisted of Raymond T. Downey (until his
resignation in March 1997), Michael J. Bertuch, Michael Foster and Thomas R.
Schwarz. The Stock Option Committee administers the 1993 Stock Option Plan, and
the Non-Employee Directors' Stock Plan and determines to whom such options will
be granted and the number of shares of Common Stock to be included in such
options. The Stock Option Committee met one (1) time during fiscal 1997.
Martin A. Olsen, a director of the Company and, until October 1995,
Chairman of the Board and Secretary of the Company, received $176,800 in 1997
pursuant to a Consulting Services Agreement with the Company which was entered
into in December 1995. The Consulting Agreement provides for annual compensation
of $176,800, and terminates in December 1998. The compensation is payable
regardless of Mr. Olsen's disability or death. In the event of his death,
amounts payable under the Consulting Agreement would be payable to his spouse or
heirs. The agreement prohibits Mr. Olsen from competing with the Company during
the term of the agreement, and for a period of one year thereafter, and
prohibits the disclosure of any confidential or proprietary information. The
Consulting Agreement also entitles Mr. Olsen to other benefits from the Company,
including the use of an automobile, health insurance, life insurance and
director's and officer's liability insurance.
On January 1, 1997, the Company and Edward D. Sullivan entered into a
Consulting Agreement which expires December 31, 1998 and terminates and replaces
an Employment Agreement with the same term. Under the Consulting Agreement, Mr.
Sullivan shall receive fifty percent (50%) of his average compensation for 1995
and 1996, which was
6
<PAGE>
payable pursuant to his Employment Agreement. In return, Mr. Sullivan shall
provide advisory services to the Company in conjunction with sales management,
strategic sales objectives and general supervision of the Company's Westfoils
subsidiary. The Consulting Agreement prohibits Mr. Sullivan from competing with
the Company during the term of the Consulting Agreement and for a period of
three (3) years thereafter. The Consulting Agreement prohibits the disclosure of
any confidential or proprietary information, including inventions. The Agreement
also entitles Mr. Sullivan to the use of an automobile.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation of the chief
executive officer and the other four most highly compensated executive officers
(the "Named Executive Officers") of the Company for services in all capacities
to the Company or its subsidiaries for the fiscal year ended December 31, 1997
and the total compensation earned by such individuals for the Company's two
previous fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation(a) Awards
---------------------------------------- --------------------------------
Options All Other
Name and Principal Position Year Salary ($) Bonus ($) (#)(b) Compensation (c)
===================================================================================================================
<S> <C> <C> <C> <C> <C>
Frank J. Olsen, Jr. 1997 202,413 -- -- 4,160
President and Chief 1996 195,546 -- 10,000 --
Executive Officer 1995 191,610 13,125 23,100 2,874
- -------------------------------------------------------------------------------------------------------------------
Leonard A. Mintz 1997 170,368 -- -- --
Senior Vice President 1996 175,149 -- -- --
1995 173,090 -- 2,500 2,596
- -------------------------------------------------------------------------------------------------------------------
Wilhelm P. Kutsch 1997 172,272 -- -- 4,160
Senior Vice President 1996 180,098 9,352 8,500 --
1995 177,318 -- 32,900 2,666
- -------------------------------------------------------------------------------------------------------------------
Philip Leibel 1997 160,789 -- -- 4,160
Vice President & Chief 1996 155,498 -- 7,500 --
Financial Officer 1995 159,668 9,352 30,700 2,395
- -------------------------------------------------------------------------------------------------------------------
Douglas A. Parker 1997 133,256 -- -- --
Vice President - 1996 130,524 -- -- --
Machinery Sales(d) 1995 46,540 -- -- --
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Any perquisites or other personal benefits received from the Company by any
of the named executives were substantially less than the reporting
thresholds established by the Securities and Exchange Commission (the
lesser of $50,000 or 10% of the individual's salary and bonus).
(b) There were no option grants made to the Named Executive Officers during the
fiscal year ended December 31, 1997.
(c) Amounts in the "All Other Compensation" column represent contributions to
the Company's Profit-Sharing Plan.
(d) Mr. Parker assumed this position on June 1, 1996.
7
<PAGE>
The following table sets forth certain information regarding stock options
exercised during 1997 and unexercised options held by the Named Executive
Officers as of the end of the 1997 fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SAR at Fiscal In-the-Money Option/
Acquired Year End 1997 SARS($)
Options/SARs ($) on Value ------------------------- ----------------------------
Name Exercise Realized($)(a) Exercisable/Unexercisable Exercisable/Unexercisable(b)
---------------- -------- -------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Frank J. Olsen, Jr. -- -- 33,100/0 0/0
Leonard A. Mintz -- -- 10,000/0 0/0
Wilhelm P. Kutsch -- -- 41,400/0 0/0
Philip Leibel -- -- 38,200/0 0/0
Douglas A. Parker -- -- 0/0 0/0
</TABLE>
(a) Based on closing price of the Common Stock on date of exercise less the
exercise price.
(b) Based on the closing price of the Common Stock on December 31, 1997
($3.125) minus the exercise price.
8
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for setting and administering the
policies which govern both annual compensation and incentive programs for key
managerial executives. The Committee usually meets twice annually for the
purpose of granting salary increases and bonus awards. It evaluates corporate
and individual performance, current compensation, and share ownership of the
managerial group. The employees of the Company who participate in the bonus and
stock option plans are those who, in the estimation of the Compensation
Committee, have a substantial opportunity to enhance shareholder value over
time.
The Committee's purpose is to ensure that management is enabled to attract
and retain well-qualified employees who are capable of managing for the benefit
of shareholders and contributing to the Company's success. To accomplish this
goal, compensation is intended to be competitive both within the industry as a
whole and when compared to like-size companies in the geographical areas served
by the Company. Inflation, the cost of living, and business conditions are taken
into consideration. Additionally, the Company surveys other manufacturing
companies and obtains compensation information from approximately 10 industry
participants.
The final determination of the base salary adjustments and incentive bonus
awards is made solely by the Compensation Committee after consultation with the
Chief Executive Officer. Stock Option grants are made by the Stock Option
Committee, which presents its recommendations to the Compensation Committee for
review before final Stock Option Grants are made by the Stock Option Committee.
In setting an executive's base salary and bonus and in granting stock options,
consideration is given to maintenance of the executive's level of
responsibility, and the performance of the executive's area of responsibility.
Stock options are granted considering the nature of the industry and the
desirability of long-term incentives. Bonus awards are paid following fiscal
year end and represent awards for the preceding year.
With respect to compensation of the Chief Executive Officer ("CEO"), the
Compensation Committee meets without him being present to evaluate his
performance and reports on that evaluation to the independent directors of the
Board. The Compensation Committee exercises greater discretion with respect to
CEO compensation than with other key executives, and considers the performance
of the Company relative to the Company's profit goals. The Compensation
Committee also considers the short and long-term performance of the Company
relative to industry peers and to similar industries. Major weight is given to
operating earnings, as with other managers. Finally, the Compensation Committee
considers particular accomplishments of the CEO which are judged to contribute
to long-term shareholder value. Other factors which influence the CEO's
compensation include his establishment of clear and sound objectives and the
achievement of those objectives, his ability to create overall management
strength, his performance in communicating and in causing top managers to
communicate effectively with the Board, and his use of the Board as a resource
to aid effective management. The Committee does not evaluate these factors by a
predetermined formula or weighting, but reaches its conclusions based on the
judgments of its members. There were no bonuses paid to executive officers of
the Company in 1997. In May 1997, the 10% salary reduction agreed to in
September 1996 was restored to Frank J. Olsen, Jr., Leonard A. Mintz, Wilhelm P.
Kutsch and Philip Leibel.
The foregoing reports are presented by the following:
As to the matters relating to cash compensation:
Michael J. Bertuch
Michael Foster
Thomas R. Schwarz
Frank J. Olsen, Jr.
Leonard A. Mintz
As to the matters relating to stock options:
Michael J. Bertuch
Michael Foster
Thomas R. Schwarz
9
<PAGE>
Employment Agreements
The Company entered into employment agreements with executive officers and
key employees in September 1993. The terms of the employment agreements are
substantially the same, except for the base salary and duties to be performed.
The 1997 base salaries for the officers listed in the Summary Compensation Table
are as follows: Frank J. Olsen, Jr. - $202,559, Leonard A. Mintz - $178,639,
Wilhelm P. Kutsch - $157,716, Philip Leibel - $163,722, and Douglas Parker -
$125,000. Each employment agreement expires December 31, 1998, with successive
one-year renewal terms unless terminated by either party, except for the
agreement with Leonard A. Mintz, which expires on his 65th birthday in 2000. If
an employee's employment is terminated with cause or as a result of his death or
disability, the Company's obligation to compensate the employee under his
employment agreement also terminates. If the Company terminates an employee's
employment without cause, the Company is obligated to pay severance of one
month's salary for every year that the employee has been employed. In addition,
the Company will pay Leonard Mintz $50,000 per annum for a period of 5 years
following his retirement or termination without cause. In connection with the
Imtran acquisition Imtran Foilmark entered into a three year employment
agreement with Kenneth Harris providing for a base salary in the first year of
$100,000, with review at the end of each calendar year by the Board of Directors
(see "Certain Relationships and Related Transactions" for further information).
The terms of Harris' employment agreement are substantially the same as the
employment agreements with other executive officers and key employees.
Each employment agreement prohibits the employee from competing with the
Company during the term of the agreement and for a period of up to two years
following the date of termination, or five years in the case of Leonard Mintz.
Each employee is eligible under the agreements to a calendar year-end bonus at
the Board's discretion. Employees' benefits include group medical insurance
coverage (partially contributory), holidays, life insurance, long-term
disability insurance (contributory), short-term disability insurance (partially
contributory), travel accident insurance, profit sharing plan and four weeks
paid vacation each year. The Agreements prohibit employees from using or
disclosing any proprietary information to any other party at any time during the
period of employment by the Company or thereafter, except with the written
consent of the Board of Directors of the Company or as may be required under any
state or federal law, rule or regulation or by a court of competent jurisdiction
during the period of employment by the Company or thereafter.
Compensation Committee Interlocks and Insider Participation
During fiscal 1997, the Compensation Committee consisted of Raymond T.
Downey (until March 1997), Michael J. Bertuch, Michael Foster, Thomas R.
Schwarz, Frank J. Olsen, Jr. and Leonard A. Mintz. Messrs. Olsen and Mintz are
executive officers of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the acquisition of the assets of Imtran Industries, Inc.
("Imtran") in 1995, the Company entered into a Registration Rights Agreement
with Kenneth R. Harris. The Agreement obligates the Company to include at its
expense (except underwriting commissions) securities owned by Mr. Harris in a
registration statement initiated by the Company on a pro rata basis, to the
extent the managing underwriter advises the Company that the aggregate number of
securities sought to be offered can be sold.
Also in connection with the Imtran acquisition, Imtran Foilmark, Inc., the
wholly-owned subsidiary of the Company to which Imtran's assets were
transferred, entered into a five year lease of the premises where Imtran
operated its business. Mr. Harris is a trustee of the trust that owns the
premises. The terms of the lease provide for annual rent of $137,500 during the
initial five year term, and payment of "Market Rent" for the duration of a
single extension term of two years. In July 1996, in consideration of the use by
the Company of additional space, the Company increased its annual rental
payments by $5,000 per month to $197,500 per year.
10
<PAGE>
In connection with the Consulting Services Agreement with Martin A. Olsen,
the Company entered into a Registration Rights Agreement with him, individually
and in his capacity as guardian for Florence Olsen. Mr. Olsen, or persons to
whom rights under the Registration Rights Agreement have been transferred in
accordance with the provisions thereof, has the right to demand that one
registration statement be filed by the Company with respect to any portion of
his securities so long as Olsen is a director or officer of the Company, or he
and/or his assignees hold beneficial ownership of at least ten percent (10%) of
the Company's Common Stock. The Company is also obligated to include stock owned
by Mr. Olsen or his assignees on a pro rata basis in any registration not
initiated by Mr. Olsen or his assignees.
In November 1994, Leonard A. Mintz, Martin A. Olsen, Frank J. Olsen, Jr.,
Carol J. Robie, and Florence J. Olsen (collectively, the "Management
Shareholders") entered into a Voting Agreement with Edward Sullivan, which
obligates the parties to vote for each Management Shareholder as a Director so
long as such individual maintains ownership of at least 5% of the Company's
Common Stock outstanding on such date (without regard to new issues) and remains
an officer of the Company or any of its subsidiaries and (ii) obligates the
Management Shareholders to vote for the election of Mr. Sullivan as a Director
of the Company, so long as he is a shareholder of the Company and an officer or
employee of the Company or any of its subsidiaries. The Voting Agreement expires
in 2004. An aggregate of 1,575,108 shares of Common Stock is beneficially owned
by the parties to the Voting Agreement, including 222,724 shares held by Frank
J. Olsen, Jr. in his capacity as executor of the Estate of Frank J. Olsen and
27,356 shares held by Martin A. Olsen in his capacity as executor of the Estate
of Florence J. Olsen.
Comparative Performance Graph
The following graph compares the cumulative total shareholder return on the
Common Stock with the cumulative total shareholder return of (i) the Standard
and Poor's 500 Index (the "S & P 500 Index"), (ii) the Dow Jones
Industrial-Diversified index selected by the Company for purpose of the
comparison ("DJ Industrial-Dvrsfd"), and (iii) a peer group of companies
consisting of Advanced Deposition Technologies, CFC International Inc.,
Envirodyne Industries, Inc., Holopak Technologies, Inc. and Outlook Group Corp.
(the "Peer Group") assuming an investment of $100 on June 23, 1994, in each of
the Common Stock of the Company, the S & P 500 Index, the DJ Industrial-Dvrsfd
and the Peer Group stocks. The graph assumes dividend reinvestment with respect
to companies in the DJ Industrial-Dvrsfd and the Peer Group, and the returns of
each such company have been weighted at each measurement point to reflect
relative stock market capitalization. The graph commences as of June 23, 1994,
the date the Common Stock became publicly traded.
11
<PAGE>
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL.]
COMPARISON OF 42 MONTH CUMULATIVE TOTAL RETURN*
AMONG FOILMARK, INC., THE S & P 500 INDEX,
THE DOW JONES INDUSTRIAL-DIVERSIFIED INDEX AND A PEER GROUP
6/23/94 12/94 12/95 12/96 12/97
------- ----- ----- ----- -----
FOILMARK, INC. $100 $118 $109 $ 43 $ 56
PEER GROUP $100 $103 $ 70 $ 87 $106
S & P 500 $100 $104 $143 $175 $234
DOW JONES
INDUSTRIAL-DIVERSIFIED $100 $ 96 $126 $163 $213
* $100 INVESTED ON 6/23/94 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
12
<PAGE>
OTHER BUSINESS OF THE MEETING
The Board of Directors is not aware of any matters to come before the
meeting other than those stated in the Proxy Statement. In the event that other
matters properly come before the meeting or any adjournment thereof, it is
intended that the persons named in the accompanying proxy and acting thereunder
will vote in accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Company intends to hold its Annual Meeting approximately the same date
next year. Any shareholder proposals for consideration by the Company for
inclusion in the Company's proxy statement and form of proxy must be made in
writing and received by the Company on or before December 10, 1998. All
proposals must comply with the terms of Rule 14a-8 of the Securities and
Exchange Act of 1934.
INDEPENDENT PUBLIC ACCOUNTANTS
At the Annual Meeting, representatives from the Company's independent
public accountants, KMPG Peat Marwick LLP, are expected to be present and
available to respond to questions.
ANNUAL REPORT
The Annual Report to Shareholders, including financial statements for the
Company's fiscal year ended December 31, 1997, has been mailed to all
shareholders. The Annual Report is not a part of the proxy soliciting material.
Additional copies of the Annual Report are available upon written request to the
Company.
FORM 10-K
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, UPON WRITTEN REQUEST TO PHILIP LEIBEL, VICE PRESIDENT -
FINANCE, FOILMARK, INC., 4 MULLIKAN WAY, NEWBURYPORT, MASSACHUSETTS 01950.
13
<PAGE>
FOILMARK, INC.
THIS PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
Wednesday, May 13, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes and appoints Frank J. Olsen, Jr. and
Carol J. Robie, and each of them, as proxies with full power of substitution, to
vote all shares of Common Stock of FOILMARK, INC. held of record on April 1,
1998 by the undersigned at the Annual Meeting of Shareholders to be held at
10:00 a.m. (E.D.S.T.) on Wednesday, May 13, 1998, at Hinckley, Allen & Snyder,
28 State Street, 29th Floor, Boston, Massachusetts, and any adjournment or
postponement thereof.
This proxy when properly executed will be voted (i) as directed hereon, or,
in the absence of such direction, this proxy will be voted FOR the specified
nominees in Proposal 1 and (ii) in accordance with the judgment of the proxies
upon other matters that may properly come before said meeting or any
adjournments or postponements thereof.
THE DIRECTORS RECOMMEND A VOTE FOR EACH PROPOSAL.
(Continued and to be signed on reverse side)
FOLD AND DETACH HERE
Please mark
your votes as |X|
indicated in
this example
PROPOSAL 1 - Election of Thomas R. Schwarz, Frank J. Olsen, Jr., Wilhelm P.
Kutsch and Carol J. Robie as directors
<TABLE>
<S> <C> <C>
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote for any individual
listed (except as AUTHORITY nominee(s), write the name(s) of such nominee(s) on the line below.)
marked to the to vote for all
contrary) nominees listed --------------------------------------------------------------------
[___] [___]
</TABLE>
Cumulative votes for one or more
nominees as follows:
Nominee:
Thomas J. Schwarz_______________________
Frank J. Olsen, Jr._____________________
Wilhelm P. Kutsch_______________________
Carol J. Robie__________________________
This Proxy must be signed exactly as the
name of the Shareholder(s) appears on
this card.
Dated:____________________________, 1998
Signature:______________________________
Signature:______________________________
(if held jointly)
PLEASE SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
FOLD AND DETACH HERE
