<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TRIPLE S PLASTICS, INC.
(Name of registrant as specified in its charter)
TRIPLE S PLASTICS, INC.
(Name of person(s) filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l), or 14a-6(i)(2)
[previously paid]
[ ] $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: _______________
____________________________________________________________
(4) Proposed maximum aggregate value of transaction: ___________
[ ] 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
[TRIPLE S LOGO]
14320 SOUTH PORTAGE ROAD
VICKSBURG, MICHIGAN 49097-0905
NOTICE OF 1996 ANNUAL MEETING
- - --------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF TRIPLE S PLASTICS, INC.:
Please take notice that the Annual Meeting of Shareholders of Triple S
Plastics, Inc. will be held at the Radisson Plaza Hotel, Kalamazoo Center, 100
West Michigan Avenue, Kalamazoo, Michigan 49007, on Thursday, July 25, 1996, at
10:00 a.m. local time, for the following purposes:
1. To elect one director for a term of three years as described in the
Proxy Statement.
2. To consider and act upon a proposal to adopt the Company's 1996 Outside
Director Stock Option Plan.
3. To consider and act upon a proposal to amend the Company's Employee
Stock Option Plan.
4. To transact any other business that may properly come before the
meeting.
Only shareholders of record as of the close of business on May 31, 1996,
are entitled to vote at the meeting, including any adjournment. A list of
shareholders entitled to vote has been prepared by the Company's stock transfer
agent and will be available for inspection by shareholders at the meeting, but
only for purposes germane to the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ROBERT D. MONK
- - --------------------
Robert D. Monk
Secretary
June 25, 1996
- - --------------------------------------------------------------------------------
IMPORTANT NOTICE
Please sign, date, and return the accompanying Proxy in the enclosed
self-addressed envelope regardless of whether you expect to attend the
meeting in person. Any person giving a Proxy has the power to revoke that
Proxy, at any time, and shareholders who are present at the meeting may
withdraw their Proxies and vote in person if they wish.
- - --------------------------------------------------------------------------------
<PAGE> 3
PROXY STATEMENT
TRIPLE S PLASTICS, INC.
14320 SOUTH PORTAGE ROAD
VICKSBURG, MICHIGAN 49097-0905
SOLICITATION OF PROXIES
- - --------------------------------------------------------------------------------
This Proxy Statement is being furnished to the shareholders of Triple S
Plastics, Inc. (the "Company") in connection with the solicitation of Proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Shareholders. The meeting will be held at 10:00 a.m. on Thursday, July 25, 1996,
at the Radisson Plaza Hotel, Kalamazoo Center, 100 West Michigan Avenue,
Kalamazoo, Michigan 49007. The purposes of the meeting are set forth in the
Notice of 1996 Annual Meeting. This Proxy Statement and the accompanying Proxy
are being mailed on or about June 25, 1996, to shareholders of record of the
Company's common stock as of the close of business on May 31, 1996. Each share
held on the record date entitles the registered holder to one vote at the Annual
Meeting. As of May 31, 1996, there were 3,730,467 shares of the Company's common
stock issued and outstanding.
If the form of Proxy accompanying this Proxy Statement is properly executed
and returned to the Company, the shares represented by the Proxy will be voted
at the Annual Meeting of Shareholders in accordance with the directions of the
shareholder(s). If the Proxy is signed and returned without any direction given,
the shares will be voted in accordance with the recommendations of the Board of
Directors as described in this Proxy Statement. Any shareholder giving a Proxy
may revoke the Proxy, at any time before it is voted at the meeting, by
delivering a written notice of revocation to the Secretary of the Company, by
submitting a subsequently executed proxy or by attending the meeting and voting
in person. The Chairman of the meeting will announce the closing of the polls
during the meeting, and all Proxies must be received prior to the closing of the
polls in order to be counted.
The cost of the solicitation of Proxies will be borne by the Company. In
addition to the use of the mails, Proxies may be solicited personally or by
telephone or facsimile by a few regular employees of the Company without
additional compensation. The Company does not intend to pay any compensation for
the solicitation of Proxies, except that brokers, nominees, custodians and other
fiduciaries will be reimbursed by the Company for their expenses in connection
with sending proxy materials to beneficial owners and obtaining their Proxies.
ELECTION OF DIRECTORS
- - --------------------------------------------------------------------------------
The Company's Articles of Incorporation provide for a classified Board of
Directors, with approximately one-third of the directors to be elected annually
for terms of three years each. The Articles also provide that the exact size of
the Board is to be determined by the directors, and that number is currently
fixed at seven members. David L. Stewart, an incumbent director whose term of
office expires at the annual meeting has been nominated by the Board of
Directors for reelection to a three-year term expiring in 1999.
Unless otherwise directed by an appropriate mark on a shareholder's Proxy,
the persons named as proxy voters in the accompanying Proxy will vote for the
nominee described below. In the event this nominee is no longer a candidate at
the time of the Annual Meeting of Shareholders (a situation which is not now
anticipated), the Board of Directors may designate a substitute nominee, in
which case the accompanying Proxy will be voted for the substituted nominee.
Under Michigan law, directors are elected by a plurality of the votes cast
by shareholders. Therefore, the nominees who receive the largest number of
affirmative votes will be elected, irrespective of the number of votes received.
Broker non-votes, votes withheld and votes cast against any nominee will not
have a bearing on the outcome of the election. Votes will be counted by
Inspectors of Election appointed by the presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR the election of the person
nominated by the Board.
<PAGE> 4
The content of the following table relating to business experience is based
upon information furnished to the Company by the nominees and directors.
<TABLE>
<CAPTION>
NAMES, (AGES), POSITIONS AND BACKGROUNDS
OF DIRECTORS AND NOMINEES SERVICE AS A DIRECTOR
- - --------------------------------------------------------- -----------------------------
<S> <C>
NOMINEE FOR TERM TO EXPIRE IN 1999
David L. Stewart (57) has been retired for more than five Director since 1969
years. Prior to his retirement Mr. Stewart served as Member of Audit Committee
the Company's Chairman and Chief Executive Officer.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Daniel B. Canavan (42) is the Chairman of the Board and Director since 1982
the Company's Chief Executive Officer, and he has held
that position for more than five years.
Albert C. Schauer (53) is the Chairman and Chief Director since 1990
Executive Officer of Clausing Industrial, Inc. (machine Member of Compensation and
tool distribution), Kalamazoo, Michigan, and he has held Audit Committees
that position for more than five years. Mr. Schauer also
serves as a director of the 600 Group PLC, (an
international engineering company) with shares publicly
traded on the London Stock Exchange. In addition, Mr.
Schauer is a director of Griffith Laboratories Worldwide,
Inc. (food ingredient and flavor system manufacturer)
Alsip, Illinois, First of America Bank-Michigan, N.A. of
Kalamazoo, Michigan, and Windquest Companies, Inc.
(investment/management firm), Grand Rapids, Michigan.
William J. Stewart (52) is the Company's Executive Vice Director since 1989
President, and he has held that position for more than
five years.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Victor V. Valentine, Jr. (50) has been the Company's Director since 1983
President since 1990, and prior to that time he served
as the Company's Vice President of Sales and Marketing
for more than five years.
James F. Hettinger (47) is the President and Chief Director since 1992
Executive Officer of Battle Creek Unlimited, Inc. (an Member of Compensation
industrial park development corporation), and he has held Committee
that position for more than five years.
Daniel D. Northup (44) is the President of the Company's Director since 1992
mold making operation, Satellite Mold, and he has held
that position for more than five years.
- - ---------------------------------------------------------
</TABLE>
William J. Stewart and David L. Stewart are brothers. There are no other
family relationships between the nominees, directors and executive officers of
the Company.
The Company has an Audit Committee which recommends to the Board of
Directors the selection of independent public accountants to serve as the
Company's auditors, and reviews the scope of their audit, their audit report and
any recommendations made by them. This Committee also conducts reviews of any
related-party transactions or potential conflict of interest situations. This
Committee met on two occasions during the preceding fiscal year.
The Company has a Compensation Committee which annually reviews the
Corporation's compensation policy for executive officers and makes
recommendations to the Board of Directors with respect to that policy, as well
as making compensation decisions for executive officers. The Committee also
administers the Corporation's incentive plans involving the Company's common
stock. This Committee met on one occasion during the preceding fiscal year.
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The Company does not have a standing nominating committee.
The Board of Directors met six times during the preceding fiscal year, and
all directors attended at least seventy-five percent (75%) of the aggregate
number of meetings of the Board and meetings of committees on which they served.
PROPOSAL TO APPROVE ADOPTION OF OUTSIDE DIRECTOR OPTION PLAN
- - --------------------------------------------------------------------------------
On May 24, 1996, the Board of Directors adopted the Triple S Plastics, Inc.
Outside Director Stock Option Plan (the "Director Plan"), subject to approval by
the shareholders of the Company. The purpose of the Plan is to make service on
the Board of Directors of the Company more attractive to present and prospective
outside directors, since the continued service of qualified nonemployee, or
outside directors is considered essential to the Company's sustained progress.
If the Director Plan is approved, each newly-elected director, at the time
of election, will receive an option to acquire that number of shares that is
equal to 3,000 shares, multiplied by a fraction that is equal to 365 minus the
number of days that have elapsed since the last Annual Meeting of shareholders,
and dividing that difference by 365; the result will be rounded to the nearest
whole share. Thereafter, effective as of the date of each Annual Meeting of
shareholders of the Company, each outside director who continues in office as a
director subsequent to that meeting will be granted an option to acquire 3,000
shares. Incumbent outside directors who continue in office after the 1996 Annual
Meeting will receive an initial option grant of 3,000 shares. Of the incumbent
directors and nominees listed in the table under the caption "Election of
Directors," only Albert C. Schauer, David L. Stewart, and James F. Hettinger are
eligible to receive options under the Director Plan. Options will be granted at
fair market value as of the date of grant. The following paragraphs summarize
the principal features of the Director Plan. The full text of the Director Plan
is appended hereto as Appendix A.
Shares Subject to Plan. The aggregate number of shares of the Company's
common stock, which may be issued under the Director Plan will not exceed
150,000 shares, subject to certain adjustments to prevent dilution. If any
option or any portion of an option is terminated or surrendered for any reason
without being exercised, the shares subject to the unexercised portion of the
option shall be available for subsequent option grants under the Director Plan.
Eligibility and Administration. Only the Company's outside directors are
eligible to participate in the Director Plan. The Director Plan will be
administered by the Board. Because the Plan establishes the terms, conditions
and amount of any option grants, the Board will exercise only limited discretion
in administering the Plan.
Terms of Options. All options granted under the Director Plan will be
non-statutory stock options, evidenced by an agreement between the Company and
each director. Upon the exercise of an option, the Company may issue new shares
or reissue shares repurchased by the Company.
Options will be granted automatically to incumbent directors upon approval
of the Director Plan by shareholders and to newly-elected directors at the time
of the election to the Board, and to each director at annual intervals after
their initial grants. Each option will be exercisable at a price equal to fair
market value as of the date of grant. The closing price for the Company's common
stock, as reported on June 13, 1996, was $6.00. Options may be exercised only
following the expiration of six months after grant.
Transferability and Termination. Options granted under the Director Plan
are non-transferable except by will or pursuant to the laws of descent and
distribution upon an optionee's death. During the optionee's lifetime, options
may be exercised only by the optionee. No option may be exercised more than ten
years after the date of grant.
Modification of the Plan. The Director Plan will terminate automatically on
July 25, 2006, unless terminated earlier by the Board of Directors. The Board
may amend the Director Plan, except that no amendment may change the number of
shares subject to the Director Plan (other than to prevent dilution),
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<PAGE> 6
change the class of directors eligible to participate, materially increase the
benefits accruing to participants in the Director Plan, or impair the optionee's
rights under any option previously granted without the consent of the optionee,
without approval of shareholders.
Tax Treatment. All options granted under the Director Plan are
non-statutory options, not entitled to special tax treatment under Section 422
of the Internal Revenue Code of 1986, as amended. The grant of a stock option
does not result in taxable income to the recipient. The difference between the
fair market value of the shares at the time an option is exercised and the
exercise price, generally will be taxed as ordinary income to the optionee, and
the Company will be entitled to a corresponding deduction. Tax consequences to
an optionee will arise again at the time the shares of common stock are sold. In
general, if the shares have been held for more than one year, the gain or loss
will be treated as long-term capital gain or loss. Otherwise, the gain or loss
will be treated as short-term capital gain or loss. The amount of any gain or
loss will be calculated under the general principles for determining gain or
loss and will equal the difference between the amount realized on the sale and
the tax basis in the shares of common stock. The tax basis will equal the cost
of the shares plus any income recognized upon the exercise of the option.
The rules governing the tax treatment of options and stock acquired upon
the exercise of options are quite technical. Therefore, the foregoing
description of tax consequences is necessarily general and does not purport to
be complete.
The affirmative vote of a majority of the Company's outstanding common
stock represented and voted at the Annual Meeting is required to approve the
adoption of the Director Plan. Since a majority of the votes cast is required
for approval, any negative vote will necessitate an offsetting affirmative vote
to assure approval. Broker non-votes and ballots for proxies marked "abstain"
will be counted as a negative vote. Note that the accompanying proxy will be
voted FOR the approval of the adoption of the Director Plan, if no contrary
direction is made on the card. Votes will be counted by Inspectors of Election
appointed by the presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR the approval of the adoption
of the Director Plan.
PROPOSED AMENDMENT TO THE COMPANY'S EMPLOYEE STOCK OPTION PLAN
- - --------------------------------------------------------------------------------
In 1994, the Board of Directors adopted, and the shareholders approved, the
Company's Employee Stock Option Plan (the "Plan"). The Plan provides for the
granting of options to management employees of the Company to purchase shares of
Common Stock of the Company. The purpose of the Plan is to encourage stock
ownership by management employees of the Company, to provide them with an
additional incentive to contribute to the success of the Company, to encourage
them to remain in the employ of the Company, and to assist the Company in
attracting and retaining key personnel. A total of 150,000 shares were reserved
for issuance under the Plan. As of June 13, 1996, 45,500 shares were available
for issuance under the Plan.
On May 24, 1996, the Board of Directors approved an amendment to the Plan,
subject to shareholder approval, to make an additional 300,000 shares available
for issuance under the Plan. The Board adopted this amendment to ensure that
management employees will continue to be able to acquire Company stock under the
Plan. The Board believes that the availability of an opportunity to purchase
Company stock is important to attract and retain key personnel, who are
essential to the success of the Company, and that stock ownership is important
to providing such persons with an additional incentive to perform in the best
interests of the Company and its shareholders.
At the Annual Meeting, the Company's shareholders are being requested to
consider and approve this amendment. The following paragraphs summarize the
principal features of the Plan.
DESCRIPTION OF THE PLAN
Administration. The Plan is administered by a committee of the Board of
Directors (the "Committee"). The Committee determines the employees to be
granted options, the amount of stock to be optioned to each employee, and the
terms of the options to be granted. The Committee has the full power and
authority to
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<PAGE> 7
interpret the provisions of the Plan and to supervise the administration of the
Plan, including the power to adopt forms and procedures for administration. The
Plan provides that all determinations made by the Committee are final and
conclusive.
Option Grants. Options granted under the Plan may be incentive stock
options ("ISOs") as defined in Section 422 of the Internal Revenue Code of 1986,
as amended, or non-ISOs, as identified by the Committee. The primary
distinctions between ISOs and non-ISOs are set forth under the caption "Tax
Treatment" below. Each option is evidenced by a written agreement containing
such terms and conditions as may be established by the Committee. Nothing
contained in the Plan or any agreement executed pursuant to the Plan will confer
upon any participant the right to continue in the employ of the Company or
obligates the Company to retain the participant in its employ for any period.
Each option agreement will state the number of shares to which it pertains.
The option price, set forth in each option agreement, must be 100% of the
"Market Value" of the shares on the date an option is granted, except that the
option price of any ISO granted to an employee who owns more than 10 percent of
the Company's Common Stock must be 110% of the "Market Value" of the Common
Stock. The Plan provides that the "Market Value" per share of Common Stock will
be the closing sale price of such stock as reported in the National Association
of Securities Dealers Automated Quotation ("the Nasdaq Stock Market") on the
date immediately preceding the date the option is granted. The option price for
each share purchased pursuant to the exercise of an option is payable in full
upon exercise, and must be paid in cash, by tendering previously acquired shares
of Common Stock or a combination of cash and previously acquired Common Stock.
Terms of Options. The term of each option granted under the Plan is
established by the Committee; however, no option may be exercised prior to the
expiration of six months from the date of grant, or after ten years from the
date of grant. An option may be exercised at any time and from time to time
during the term of the option upon written notice to the Company of the intent
to exercise the option or a portion thereof. Options may be exercised in any
order regardless of the date of grant or the existence of any other outstanding
stock option.
In general, options are exercisable only during an optionee's employment
with the Company. Options may be exercisable after termination of employment in
such a manner approved by the Committee in each option agreement. ISOs, in order
to maintain their special tax effects, must be exercised on or before the
expiration of three months from the date of termination of employment, except
for termination of employment due to permanent and total disability, in which
case the exercise period may be extended to one year following the date of
termination of employment.
TAX EFFECTS OF PARTICIPATION IN THE PLAN
Tax Treatment. The following discussion of the federal income tax
consequences with respect to the grant and exercise of options under the Plan is
based on management's understanding of the federal income tax laws in effect on
the date hereof.
Non-Incentive Stock Options. An optionee will not recognize taxable income
at the time an option is granted under the Plan unless the option has a readily
ascertainable market value at the time of grant. Management understands that
options granted under the Plan do not have a readily ascertainable market value;
therefore, income will not be recognized by an optionee before the time of
exercise of an option. The difference between the fair market value of the
shares at the time an option is exercised and the option price generally will be
treated as ordinary income to the optionee. The Company will be entitled to a
deduction equal to the amount of the optionee's ordinary income.
Tax consequences to an optionee will arise again at the time the shares of
Common Stock are sold. In general, if the shares have been held for more than
one year, the gain or loss will be treated as long-term capital gain or loss.
Otherwise, the gain or loss will be treated as short-term capital gain or loss.
The amount of any gain or loss will be calculated under the general principles
for determining gain and loss, and will equal the difference between the amount
realized in the sale and the tax basis in the shares of Common Stock. The tax
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<PAGE> 8
basis will equal the cost of the shares (the option price paid) plus any income
recognized upon exercise of the option.
Incentive Stock Options. As with non-ISOs, employees who receive ISOs under
the Plan will not realize any income for federal income tax purposes as the
result of the receipt of such options. However, unlike non-ISOs, holders of ISOs
will also not realize any income for federal income tax purposes as a result of
the exercise of an ISO. In addition, if Common Stock acquired as a result of the
exercise of an ISO is disposed of more than two years after the date the option
was granted and more than one year after the date the option was exercised, the
entire gain, if any, realized upon disposition of such Common Stock will be
treated for federal income tax purposes as capital gain. Under these
circumstances, no deduction will be allowable to the Company in connection with
either the grant or exercise of an ISO.
Exceptions to these general rules for ISOs apply in the case of a
"disqualifying disposition." If an optionee disposes of shares of Common Stock
acquired pursuant to the exercise of an ISO before the expiration of two years
after the date of grant or one year after the date of exercise, the sale of such
stock will be treated as a "disqualifying disposition." As a result, the
optionee will recognize ordinary income and the Company will be entitled to a
deduction in the year in which such disposition occurred. The amount of the
deduction and the ordinary income recognized will generally be equal to the
lesser of: (a) the sale price of the shares sold minus the option price, or (b)
the fair market value of the shares at the time of exercise minus the option
price. Any additional gain recognized upon disposition, in excess of the
ordinary income, will be taxable as capital gain.
The exercise of an ISO may result in an alternative minimum tax liability.
Optionees who have tax preference items or who suspect that they may be subject
to the alternative minimum tax should consult a tax advisor.
The affirmative vote of a majority of the Company's outstanding common
stock represented and voted at the Annual Meeting is required to approve the
adoption of the amendment to the Plan. Since a majority of the votes cast is
required for approval, any negative vote will necessitate an offsetting
affirmative vote to assure approval. Broker non-votes and ballots for proxies
marked "abstained," will be counted as a negative vote. Please note that the
accompanying proxy will be voted FOR the approval of the adoption of the
amendment to the Plan, if no contrary direction is made on the card. Votes will
be counted by Inspectors of Election appointed by the presiding officer at the
Annual Meeting.
The Board of Directors recommends a vote FOR the approval of the adoption
of the amendment to the Plan.
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SECURITIES OWNERSHIP OF MANAGEMENT
- - --------------------------------------------------------------------------------
The following table contains information regarding ownership of the
Company's common stock by each director and nominee for election as a director,
each executive officer named in the tables under the caption Executive
Compensation, and all directors and executive officers as a group. The content
of this table is based upon information supplied by the persons identified in
the table and represents the Company's understanding of circumstances in
existence as of May 31, 1996.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
------------------------ ----------------------- ---------
<S> <C> <C>
Daniel B. Canavan.............................................. 925,670 24.8
Victor V. Valentine, Jr. ...................................... 924,666 24.8
William J. Stewart............................................. 81,739(2) 2.2
Daniel D. Northup.............................................. 36,720 1.0
Albert C. Schauer.............................................. 1,000 *
David L. Stewart............................................... 170,185 4.6
James F. Hettinger............................................. 200 *
All executive officers and directors as a group (10 persons)... 2,225,536 59.7
</TABLE>
- - -------------------------
* Less than one percent.
(1) Unless otherwise noted, the persons named in the table have sole voting and
sole investment power or share voting and investment power with their
respective spouses.
(2) Includes 5,508 shares owned by Mr. Stewart's children and 50 shares held by
him as custodian for his grandchild, and Mr. Stewart disclaims beneficial
ownership of those shares.
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EXECUTIVE COMPENSATION
- - --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
The following table contains information regarding compensation with
respect to the three preceding fiscal years of the Company's chief executive
officer and each other executive officer whose salary and bonus exceeded
$100,000 (the "Named Executives"). This information is reflected on an accrual
basis for each fiscal year so that bonuses relate to the year of performance,
even though paid in the ensuing fiscal year.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------- ALL OTHER
EXECUTIVE YEAR SALARY($) BONUS($) COMPENSATION($)(1)
--------- ---- --------- -------- ------------------
<S> <C> <C> <C> <C>
Daniel B. Canavan................................ 1996 $145,989 $ -0- $3,010
Chief Executive Officer 1995 137,369 63,000 1,672
1994 125,625 60,000 2,434
Victor V. Valentine, Jr.......................... 1996 $147,949 $ -0- $3,265
President 1995 138,378 63,000 2,423
1994 127,485 60,000 2,636
William J. Stewart............................... 1996 $110,745 $ -0- $2,821
Executive Vice President 1995 104,139 42,000 1,980
1994 96,358 40,000 1,452
</TABLE>
- - -------------------------
(1) The amounts set forth in this column include: (a) Company matching
contributions under the Company's Profit Sharing Plan, pursuant to which
substantially all employees of the Company are eligible to participate; and
(b) payments by the Company of premiums for term life insurance for the
benefit of the Named Executives.
REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program falls under the jurisdiction
of the Compensation Committee of the Board of Directors. At the beginning of the
last fiscal year, this Committee consisted of three directors: the Company's
chief executive officer and two independent, outside directors. However, during
the course of the year, Mr. Canavan, the Company's chief executive officer,
resigned from the Committee so that the Committee is currently composed
exclusively of outside directors. The Committee is responsible for reviewing the
cash and non-cash compensation arrangements for executive officers and making
recommendations thereon to the Board of Directors. The Committee is also
responsible for administering the Company's stock-based incentive plans and the
grant of awards and other decisions under these plans are the sole province of
this Committee in order to meet the "disinterested administration" requirement
of Rule 16b-3 promulgated under the Securities Exchange Act of 1934.
The Company's executive compensation program is designed to help attract,
motivate, and retain executive management personnel. In formulating and
administering this program, the Company attempts to position itself favorably
against comparable employers, considering factors such as relative size, growth
rate, geographic situation, and industry. Three components of the compensation
program -- base salary, cash bonus, and stock options -- are available to the
Committee in fashioning packages for individual executives.
Base salary for each executive is predicated on the individual executive's
level of responsibility and prevailing competitive circumstances for managerial
talent. Base salaries for executives other than the Chief Executive Officer are
reviewed annually and adjusted where appropriate based upon recommendations by
Mr. Canavan, the Chief Executive Officer. Mr. Canavan's base salary is also
reviewed annually by the Committee without Mr. Canavan's participation. All
adjustments approved by the Committee are subject to approval by the full Board
of Directors.
The Company's cash bonus plan is designed to positively impact the
Company's annual earnings by means of an annual cash payment to the Company's
managers and is dependent on the Company's
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<PAGE> 11
profitability. Cash bonuses for executives, including the Chief Executive
Officer, for the preceding fiscal year were determined under a plan established
at the beginning of the year. The plan specifies a certain minimum return on
shareholders' equity, and no bonuses accrue unless and until that minimum return
is achieved. A predetermined percentage of the Company's net earnings in excess
of that minimum constitutes a bonus pool that is available for distribution to
all managerial employees, including executive officers, primarily in proportion
to their respective base salaries.
A stock option plan was established early in 1994 in connection with the
initial public offering of the Company's common stock. This plan was adopted to
provide stock-based incentive compensation that focuses on long-term Company
performance and to more closely align the interests of management with the
interests of public shareholders.
Compensation Committee
JAMES F. HETTINGER
ALBERT C. SCHAUER
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STOCK PERFORMANCE GRAPH
The following graph depicts the cumulative total return on the Company's
common stock compared to the cumulative total return for the NASDAQ composite
market (all U.S. companies) and a peer group of plastics-diversified companies
selected by the Company. The graph assumes an investment of $100 on March 16,
1994, when the Company's stock was first traded in a public market. Reinvestment
of dividends is assumed in all cases.
<TABLE>
<CAPTION>
Triple S NASDAQ
Measurement Period Plastics, Composite
(Fiscal Year Covered) Inc. Peer Group(1) (US)
<S> <C> <C> <C>
3/16/94 100.00 100.00 100.00
3/31/94 110.00 95.10 92.50
9/30/94 100.00 111.39 108.27
3/31/95 70.00 104.77 109.60
9/29/95 80.00 115.83 133.07
3/29/96 58.00 146.94 140.89
</TABLE>
(1) The companies included in the self-determined peer group are as follows:
Cimco, Inc.
Essef Corp.
Schawk, Inc.
Gencorp, Inc.
Intek Diversified, Inc.
IPL, Inc.
Leader Industries, Inc.
Spartech Corp.
Sun Coast Industries, Inc.
Tredegar Industries, Inc.
The returns of each company included in the self-determined peer group are
weighted according to each respective company's stock market capitalization.
10
<PAGE> 13
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for
services as directors. Directors who are not employees of the Company receive a
$2,000 annual retainer as well as a director's fee of $750 for each Board
meeting attended and $500 for each committee meeting attended. In addition, the
Company reimburses directors for their out-of-pocket expenses related to
attendance at meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
At the beginning of the preceding fiscal year, Mr. Canavan, the Company's
chief executive officer, and Messrs. Hettinger and Schauer comprised the
Company's Compensation Committee. Mr. Canavan resigned from the Committee in
January of 1996, so the Committee is currently composed exclusively of outside
directors.
MISCELLANEOUS
The Company has not adopted any long-term incentive plan or any defined
benefit or actuarial plan, as those terms are defined in the applicable
regulations promulgated by the Securities and Exchange Commission. Neither does
the Company have any contracts with its executive officers assuring them of
continued employment, nor any compensatory arrangements for executives linked to
a change in control of the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
- - --------------------------------------------------------------------------------
The financial statements of the Company for the fiscal year ended March 31,
1996, have been audited by BDO Seidman, LLP, independent public accountants, and
the Board of Directors has selected BDO Seidman, LLP to serve as the Company's
independent accountants for the fiscal year ending March 31, 1997.
Representatives of BDO Seidman, LLP are expected to be present at the Annual
Meeting of Shareholders to respond to appropriate questions and will have an
opportunity to make a statement if they desire.
COMPLIANCE WITH REPORTING REQUIREMENTS
- - --------------------------------------------------------------------------------
Based upon a review of Forms 3, 4 and 5 furnished to the Company during or
with respect to the preceding fiscal year and written representations from
certain reporting persons, the Company is not aware of any failure by any
reporting person to make timely filings of those forms as required by Section
16(a) of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS -- 1997 ANNUAL MEETING
- - --------------------------------------------------------------------------------
Shareholder Proposals intended to be presented at the next Annual Meeting
of the Shareholders of the Company must be received by the Company not later
than February 13, 1997, to be considered for inclusion in the Company's Proxy
Statement relating to that meeting. Shareholder proposals should be addressed to
the attention of the Secretary, 14320 South Portage Road, Box E, Vicksburg,
Michigan 49097-0905.
11
<PAGE> 14
MISCELLANEOUS
- - --------------------------------------------------------------------------------
The Company's Annual Report to Shareholders including financial statements,
is being mailed to shareholders with this Proxy Statement.
Management is not aware of any matters to be presented for action at the
Annual Meeting other than as set forth in this Proxy Statement. If other
business should come before the meeting, the persons named as proxy holders in
the accompanying Proxy intend to vote the shares in accordance with their
judgment, and discretionary authority to do so is included in this Proxy.
By Order of the Board of Directors
/s/ ROBERT D. MONK
------------------
ROBERT D. MONK
Secretary
June 25, 1996
Vicksburg, Michigan
12
<PAGE> 15
APPENDIX A
TRIPLE S PLASTICS, INC.
OUTSIDE DIRECTOR STOCK OPTION PLAN
ARTICLE I
GENERAL PROVISIONS
1.1 PURPOSE AND SCOPE. The purpose of this Outside Director Stock Option
Plan is to make service on the Board of Directors of the Company more attractive
to present and prospective outside directors, as the continued services of
qualified outside directors are considered essential to the Company's sustained
progress.
1.2 DEFINITIONS. The following words and phrases shall have the following
meanings as used in this Plan:
(a) "Board" means the Board of Directors of the Company.
(b) "Company" means Triple S Plastics, Inc.
(c) "Market Value" means the closing sale price reported in the Nasdaq
Stock Market or, if such value is not available, such other estimate of
fair market value as the Board shall determine.
(d) "Option Price" means the purchase price for Shares payable upon
exercise of an option granted under this Plan.
(e) "Optionee" means a person to whom an option has been granted under
this Plan.
(f) "Outside Director" means a person who is a member of the Board of
Directors of the Company, but who is not an employee of the Company.
(g) "Plan" means this Triple S Plastics, Inc. Outside Director Stock
Option Plan.
(h) "Shares" means the shares of common stock of the Company.
1.3 ADMINISTRATION. The Plan shall be administered by the Board, and its
interpretation and construction of any provision of the Plan shall be final and
binding. Each person who is or shall have been a member of the Board shall be
defended, indemnified, and held harmless by the Company, to the maximum extent
permitted by law, from and against any cost, liability, or expense imposed or
incurred in connection with such persons taking or failing to take any action
under the Plan.
1.4 SHARES SUBJECT TO PLAN. The maximum number of Shares subject to options
granted under the Plan shall be 150,000 Shares, subject to adjustment as
provided in Section 3.1 below. The Shares may be authorized but unissued shares
or treasury shares. If any outstanding option expires or is terminated for any
reason before the end of the term for this Plan, the Shares covered by that
option shall be available for options subsequently granted under this Plan.
1.5 ELIGIBILITY; GRANT OF OPTIONS. Only Outside Directors shall be eligible
to receive options under this Plan. Outside Directors who are incumbent
directors at the time this Plan is proposed for approval by the Company's
shareholders and who continue in office as directors subsequent to that
shareholder approval shall be granted initial options to acquire 3,000 Shares
each, effective as of the date shareholders approve the Plan. Thereafter,
effective as of the date of each annual meeting of shareholders of the Company,
each Outside Director who continues in office as a director subsequent to that
meeting shall be granted an option to acquire 3,000 Shares. Any Outside Director
who is elected as a director by the Board, shall be granted an option to acquire
that number of Shares that is equal to 3,000 Shares multiplied by a fraction
that is equal to 365 minus the number of days that have elapsed since the last
annual meeting of shareholders, and dividing that difference by 365; the result
shall be rounded to the nearest whole share.
A-1
<PAGE> 16
ARTICLE II
OPTIONS AND RIGHTS
2.1 NON-STATUTORY STOCK OPTIONS. All options granted under the Plan shall
be non-statutory options, not entitled to special tax treatment under Section
422 of the Internal Revenue Code of 1986, as amended.
2.2 TERMS, CONDITIONS, AND FORM OF OPTIONS. Each option granted under this
Plan shall be evidenced by a written agreement in such form and containing such
terms as the Board shall from time to time approve, which agreements shall
comply with and be subject to the following terms and conditions:
(a) OPTIONS NON-TRANSFERABLE. Each option granted under the Plan by
its terms shall not be transferable by the Optionee otherwise than by will,
or by the laws of descent and distribution, and shall be exercised during
the lifetime of the Optionee only by him or her. No option or interest
therein may be transferred, assigned, pledged or hypothecated by the
Optionee during his or her lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process.
(b) PERIOD OF OPTION. Options shall terminate upon the expiration of
ten (10) years from the date upon which such options were granted (subject
to prior termination as hereinafter provided).
(c) EXERCISE OF OPTIONS. Options may be exercised, in full or in part,
only by giving written notice to the Company, stating the number of Shares
with respect to which the option is being exercised, accompanied by payment
in full for such Shares, which payment may be made, in whole or in part, in
cash, in Shares already owned by the Optionee, valued at Market Value as of
the date of the notice of exercise, or by the surrender of option rights
hereunder valued at the difference between the Option Price and Market
Value for the underlying Shares; provided, however, that (i) there shall be
no such exercise at any one time as to fewer than one hundred (100) Shares,
unless fewer than one hundred (100) Shares remain to be purchased under the
option being exercised, and (ii) options may not be exercised for a period
of six (6) months after the date of grant.
(d) DEATH OF DIRECTOR. Any option granted an Optionee under the Plan
and outstanding on the date of his or her death may be exercised by the
personal representative of the Optionee's estate or by the person or
persons to whom the option is transferred pursuant to the Optionee's will
or in accordance with the laws of descent and distribution, at any time
prior to the specified expiration date of such option or the first
anniversary of the Optionee's death, whichever is the first to occur. Upon
the occurrence of the earlier such event, the option shall then terminate.
2.3 OPTION PRICE. The Option Price for an option granted under the Plan
shall be the Market Value of the Shares covered by the option on the last
business day before the day the option is granted.
2.4 NOTIFICATION OF EXERCISE. Options shall be exercised by written notice
directed to the Chief Financial Officer of the Company at the principal
executive offices of the Company. Exercise by an Optionee's heir or personal
representative shall be accompanied by evidence of his or her authority to act,
in form reasonably satisfactory to the Company.
ARTICLE III
ADDITIONAL PROVISIONS
3.1 EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN. The aggregate number of
Shares available for options under the Plan, the Shares subject to any option
and the exercise price per share all shall be proportionately adjusted for any
increase or decrease in the number of issued Shares subsequent to the effective
date of the Plan resulting from: (a) a subdivision or consolidation of Shares or
any other capital adjustment; (b) the payment of a stock dividend; or (c) other
increase or decrease in such Shares effected without receipt of consideration by
the Company. If the Company shall be the surviving corporation in any merger or
consolidation, any option shall pertain, apply, and relate to the securities to
which a holder of the number of Shares subject to the option would have been
entitled after the merger or consolidation. Upon dissolution or liquidation of
the Company, or as of the effective date for a merger or consolidation in which
the
A-2
<PAGE> 17
Company is not the surviving corporation, all options outstanding under the Plan
shall terminate unless other provisions have been made in any outstanding option
agreement.
3.2 COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of options, and the obligation of the Company to sell and deliver
Shares under options, shall be subject to all applicable federal and state laws,
rules, and regulations and to such approvals by any government or regulatory
agency as may be required. The Company shall not be required to issue or deliver
any certificates for Shares prior to the completion of any registration or
qualification of such Shares under any federal or state law, or any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
3.3 AMENDMENTS. The Board may discontinue the Plan at any time, and may
amend it from time to time, but no amendment, without approval by shareholders,
may: (a) increase the total number of Shares which may be issued under the Plan
or to any individual under the Plan; (b) reduce the Option Price for Shares
which may be purchased pursuant to options under the Plan; (c) extend the period
during which options may be granted; or (d) modify the eligibility requirements
for participation in the Plan. Other than as expressly permitted under the Plan,
no outstanding option may be revoked or altered in a manner unfavorable to the
Optionee without the consent of the Optionee.
3.4 NO RIGHTS AS SHAREHOLDER. No Optionee shall have any rights as a
shareholder with respect to any Share subject to his or her option prior to the
date of issuance of a certificate evidencing ownership of such Share, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date of the certificate, except as provided in Section 3.1.
3.5 WITHHOLDING. Whenever the Company proposes or is required to issue or
transfer Shares under the Plan, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any federal,
state or local withholding tax liability prior to the delivery of any
certificate or certificates for such Shares.
3.6 GOVERNING LAW. The Plan and determinations made and actions taken
pursuant to the Plan shall be governed by, interpreted, and construed in
accordance with the laws of the state of Michigan, and the state courts seated
in Kalamazoo County, Michigan and the federal court seated in the Western
District of Michigan shall have exclusive jurisdiction and venue with respect to
any litigation of disputes arising out of the Plan, or relating to options
granted pursuant to the Plan.
3.7 EFFECTIVE DATE; DURATION. The Plan shall become effective at such time
as it is approved by the shareholders of the Company, and it shall continue in
effect until the tenth anniversary of the date the Plan was adopted by the
Board. Options granted on or before the termination of the Plan may be exercised
according to the terms of the option agreements governing those options and
shall continue to be governed by and interpreted consistent with the terms of
this Plan.
CERTIFICATION
The foregoing Plan was adopted by the Company's Board of Directors on May
24, 1996, subject to subsequent shareholder approval.
/s/ ROBERT D. MONK
------------------
ROBERT D. MONK
Secretary
A-3
<PAGE> 18
TRIPLE S PLASTICS, INC.
EMPLOYEE STOCK OPTION PLAN
(AS AMENDED EFFECTIVE JULY 25, 1996)
ARTICLE I
GENERAL PROVISIONS
1.1 Purpose and Scope. The purposes of this Plan are to encourage stock
ownership by management employees of Triple S Plastics, Inc., to provide them
with an additional incentive to contribute to the success of the Company, to
encourage such employees to remain in the Company's employ, and to assist the
Company in attracting and retaining key personnel through the grant of Options
to purchase shares of the Company's common stock.
1.2 Definitions. The following words and phrases shall have the following
meanings as used in this Plan:
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the committee appointed by the Board pursuant
to Section 1.3 of this Plan.
(c) "Company" means Triple S Plastics, Inc. and any subsidiary
corporation or other entity in which Triple S Plastics, Inc. holds a
proprietary interest.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Market Value" means the closing sale price reported in the
NASDAQ/NMS or, if such value is not available, such other estimate of
fair market value as the Committee shall determine.
(f) "Qualified Option" means a right to purchase Stock, granted
pursuant to this Plan which is intended to qualify as an incentive stock
option under Section 422 of the Code.
(g) "Option Price" means the purchase price for Stock payable upon
exercise of an Option granted under this Plan.
(h) "Optionee" means a person to whom an option has been granted
under this Plan.
(i) "Plan" means this Triple S Plastics, Inc. Employee Stock Option
Plan.
(j) "Stock" means the common stock of the Company.
<PAGE> 19
1.3 Administration.
(a) The Plan shall be administered by a Committee appointed by the
Board, consisting of such number of persons as the Board shall determine
from time to time. A majority of members of the Committee shall
constitute a quorum for the transaction of business. The Committee shall
be responsible for the operation of the Plan, and the determination as to
persons entitled to participate in the Plan. The interpretation and
construction of any provision of the Plan by the Committee shall be final
and binding.
(b) The Committee shall consist entirely of members who, during the
one year prior to service on the Committee, or during such service, have
not been granted or awarded equity securities of the Company (including
derivative securities) pursuant to this Plan or any other plan of the
Company or any of its affiliates, except for the types of plans set forth
in Rule 16b-3(c)(2)(i)(A)-(D) promulgated by the Securities and Exchange
Commission.
(c) The granting of any Option pursuant to this Plan shall be
entirely within the discretion of the Committee, and nothing contained in
this Plan shall be interpreted or construed to give any person any right
to participate under this Plan.
(d) Each person who is or shall have been a member of the Committee
shall be defended, indemnified and held harmless by the Company, to the
maximum extent permitted by law, from and against any cost, liability or
expense imposed or incurred in connection with such persons taking or
failing to take any action under the Plan.
1.4 Eligibility. The Committee may grant Options at any time, and from
time to time, to such employees, including or excluding persons previously
granted Options, as the Committee shall determine in its sole and absolute
discretion. Options granted simultaneously or at different times need not
contain similar provisions.
1.5 Shares Subject to Plan. The maximum number of shares of Stock subject
to Options and Stock Appreciation Rights granted under the Plan shall be
450,000 shares, subject to adjustment as provided in Section 1.7 below. The
shares of Stock may be authorized but unissued shares or treasury shares. If
any outstanding Option expires or is terminated for any reason before the end
of the term for this Plan, the shares of Stock covered by that Option shall be
available for Options subsequently granted under this Plan.
1.6 Terms and Conditions of Option. Options granted pursuant to the Plan
shall be authorized by the Committee and shall be evidenced by agreements in
such form as the Committee shall approve from time to time, including, without
limitation, the following:
(a) Option Price. The purchase price per share for Stock under each
Option shall be not less than one hundred percent (100%) of the Market
Value of a share of the Stock as of the day preceding the date the Option
is granted.
-2-
<PAGE> 20
(b) Time and Method of Payment. The Option Price shall be paid in
full at the time an Option is exercised, and may be paid (i) in cash,
(ii) by the surrender of shares of Stock owned by the Optionee having a
Market Value on the date of exercise equal to the aggregate Option
Price, (iii) or a combination of (i) and (ii). Promptly after the
exercise of an Option and the payment of the full Option Price, the
Optionee shall be entitled to the issuance of a stock certificate
evidencing ownership of such Stock.
(c) Number of Shares. Each Option shall state the total number of
shares of Stock to which it pertains.
(d) Option Period and Limitations on Exercise of Options. The
Committee may, in its discretion, provide that an Option may not be
exercised in whole or in part for any period or periods of time specified
in the Option Agreement. Except as otherwise provided in the Option
Agreement, an Option may be exercised in whole or in part at any time
during its term. No Option may be exercised for a fractional share of
Stock.
(e) Termination of Employment. An Optionee's Options shall
terminate as provided in the pertinent Option Agreement upon the
termination of his or her employment by the Company; provided, however,
the Committee may, in its discretion in any particular case, subsequent
to the time of granting of the Option specify that all or part of an
Optionee's Options may be exercisable upon such termination or for a
certain period of time after termination. Without limiting the
discretion of the Committee to devise termination procedures that it
deems appropriate in a given case, the Committee may follow one or more
of the following policies:
(i) to permit an Optionee to exercise all Options that are
exercisable as of the date of termination;
(ii) to accelerate the vesting of any nonvested Option, in
whole or in part, and permit their exercise on termination;
(iii) to permit an Optionee to exercise Options after
termination during the balance of their original term; or
(iv) to permit an Optionee who dies or becomes totally and
permanently disabled while employed by the Company to exercise (or
have his or her estate, personal representative or beneficiary
exercise) Options during the balance of the original term.
The decision of the Committee to permit any one or more of the
foregoing accelerations or exercises may result in a Qualified Option
being treated as a Nonqualified Option for tax purposes, and the Company
shall have no responsibility for any adverse tax consequence to the
Optionee.
-3-
<PAGE> 21
(f) Nonassignability. Options shall not be transferable other than
by will or by the laws of descent and distribution, and during an
Optionee's lifetime shall be exercisable only by the Optionee or his
guardian or legal representative. The Company may, in the event it deems
the same desirable to assure compliance with applicable federal and
state securities laws, legend any certificate representing shares issued
pursuant to the exercise of any Option with an appropriate restrictive
legend and may also issue appropriate stop transfer instructions to its
transfer agent with respect to such shares.
1.7 Effect of Change in Stock Subject to the Plan. The aggregate number
of shares of Stock available for Options under the Plan, the shares subject to
any Option and the exercise price per share shall all be proportionately
adjusted for any increase or decrease in the number of issued shares of Stock
subsequent to the effective date of the Plan resulting from: (a) a subdivision
or consolidation of shares or any other capital adjustment; (b) the payment of
a stock dividend; or (c) other increase or decrease in such shares effected
without receipt of consideration by the Company. If the Company shall be the
surviving corporation in any merger or consolidation, any Option shall pertain,
apply, and relate to the securities to which a holder of the number of shares
of Stock subject to the Option would have been entitled after the merger or
consolidation. Upon dissolution or liquidation of the Company, or as of the
effective date for a merger or consolidation in which the Company is not the
surviving corporation, all Options outstanding under the Plan shall terminate
unless other provisions have been made in any outstanding Option Agreement.
1.8 Notification of Exercise. Options shall be exercised by written
notice directed to the Chief Financial Officer of the Company at the principal
executive offices of the Company. Exercise by an Optionee's heir or personal
representative shall be accompanied by evidence of his or her authority to act,
in form reasonably satisfactory to the Company.
ARTICLE II
QUALIFIED STOCK OPTIONS
2.1 Terms of Qualified Stock Options. Each Qualified Stock Option granted
under the Plan shall be exercisable during a term fixed by the Committee that
shall begin no sooner than six (6) months and end no later than ten (10) years
after the date the Qualified Stock Option is granted.
2.2 Limitations on Options. The aggregate Market Value of Stock
(determined at the time the Qualified Stock Option is granted) subject to the
Qualified Stock Options granted to an employee under this Plan that become
exercisable for the first time by such employee during any calendar year may
not exceed One Hundred Thousand Dollars ($100,000).
2.3 Termination of Employment. Subject to Section 1.6(e) above, if an
Optionee ceases to be employed by the Company his or her Qualified Stock
Options shall terminate immediately, except that if an Optionee's cessation of
employment by the Company is a result of retirement with the consent of the
Company, the Optionee may exercise outstanding Qualified Stock Options that are
otherwise exercisable, at any time within three (3) months after the
termination of employment. Subject to Section 1.6(e) above, in the event an
Optionee dies while employed by the Company or
-4-
<PAGE> 22
within three (3) months after having retired with the consent of the
Company, the Optionee's heirs or personal representative shall have the right
to exercise Qualified Stock Options to the same extent that the deceased
Optionee had at the date of death.
2.4 Continued Employment. Whether military, government, or other service
or other leave of absence shall constitute a termination of employment shall be
determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive.
2.5 Special Rule for Ten Percent Shareholder. If at the time a Qualified
Stock Option is granted, the Optionee owns Stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, as determined using the applicable attribution rules of the Code, then
the terms of the Option shall specify that the Option price shall be at least
one hundred ten percent (110%) of the Market Value of the Stock subject to the
Option and such Option shall not be exercisable after the expiration of five
(5) years from the date such Option is granted.
2.6 Interpretation. In interpreting this Article II of the Plan and the
provisions of individual Option Agreements, the Committee and the Board shall
be governed by the principles and requirements of the pertinent provisions of
the Code and applicable Treasury Regulations.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
3.1 Terms of Nonqualified Options. Each Nonqualified Stock Option granted
under the Plan shall be exercisable only during a term fixed by the Committee
at the time of grant, not shorter than six (6) months and not longer than ten
(10) years following the date of grant.
3.2 Termination of Employment. Subject to Section 1.6(e) above, the
Committee in its discretion may provide such limitations on the exercise of any
Nonqualified Stock Option after termination of employment as the Committee
deems prudent at the time of grant.
3.3 Additional Terms. The Committee may add additional terms and
conditions to a Nonqualified Stock Option, including, but not limited to, a
cash award for any federal tax liability suffered by the Optionee upon the
grant and/or exercise of a Nonqualified Stock Option.
-5-
<PAGE> 23
ARTICLE IV
ADDITIONAL PROVISIONS
4.1 Shareholder Approval. The Plan shall be submitted to the shareholders
of the Company for approval at the first meeting of shareholders held
subsequent to the adoption of the Plan. If the shareholders of the Company do
not approve the Plan, the Plan shall terminate.
4.2 Compliance With Other Laws and Regulations. The Plan, the grant and
exercise of Options, and the obligation of the Company to sell and deliver
shares under Options, shall be subject to all applicable federal and state
laws, rules, and regulations and to such approvals by any government or
regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Stock prior to the completion
of any registration or qualification of such shares under any federal or state
law, or any ruling or regulation of any government body which the Company
shall, in its sole discretion, determine to be necessary or advisable.
4.3 Amendments. The Board of Directors may discontinue the Plan at any
time, and may amend it from time to time, but no amendment, without approval by
shareholders, may: (a) increase the total number of shares which may be issued
under the Plan or to any individual under the Plan; (b) reduce the Option Price
for shares which may be purchased pursuant to Options under the Plan; (c)
extend the period during which Options may be granted; or (d) modify the
eligibility requirements for participation in the Plan. Other than as
expressly permitted under the Plan, no outstanding Option may be revoked or
altered in a manner unfavorable to the Optionee without the consent of the
Optionee.
4.4 No Rights As Shareholder. No Optionee shall have any rights as a
shareholder with respect to any share of Stock subject to his or her Option
prior to the date of issuance of a certificate evidencing ownership of such
Stock, and no adjustment will be made for dividends or other rights for which
the record date is prior to the date of the certificate, except as provided in
Section 1.7.
4.5 Tax Withholding. The exercise of any Option under the Plan is subject
to the satisfaction of withholding tax or other withholding liabilities, if
any, under federal, state, and local laws in connection with such exercise.
The exercise of an Option shall not be effective unless applicable withholding
shall have been effected or obtained in the following manner. Each Optionee
may satisfy any such withholding tax obligation by any of the following means
or by a combination of such means:
(a) Tendering a cash payment;
(b) Authorizing the Company to withhold from the Stock otherwise
issuable to the Optionee as a result of the exercise of the stock Option
a number of shares of Stock having a Market Value as of the date that the
amount of tax to be withheld is to be determined ("Tax Date"), which
shall be the date of exercise of the Option, less than or equal to the
amount of the withholding obligation; or
-6-
<PAGE> 24
(c) Delivering to the Company unencumbered shares of Stock, owned by
the Optionee prior to the date of exercise, having a Market Value, as of
the Tax Date, less than or equal to the amount of the withholding tax
obligation.
An Optionee's election to pay the withholding tax obligation by means of 4.5(b)
above must either: (i) be made at least six months prior to the Tax Date and
must be irrevocable for a period of at least six months prior to the Tax Date;
or (ii) the exercise of the Option must be effective during the period
beginning on the third business day following the date of release of the
Company's quarterly or annual summary statement of sales and earnings and
ending on the twelfth business day following such date.
4.6 Continued Employment Not Presumed. This Plan and any document
describing this Plan and the grant of any Option hereunder shall not give any
Optionee or other employee a right to continued employment by the Company or
affect the right of the Company to terminate the employment of any such person
with or without cause.
4.7 Acceleration. The Board shall have the right, in its sole
discretion, to direct the Committee to declare that all Options then
outstanding shall become immediately exercisable, notwithstanding any
limitations on exercise in Option Agreements, if in the opinion of the Board a
change in control of the Company is imminent.
4.8 Effective Date; Duration. The Plan became effective as of February 1,
1994, and shall expire on January 31, 2004. No Options may be granted under
the Plan after January 31, 2004, but Options granted on or before that date may
be exercised according to the terms of the Option Agreements and shall continue
to be governed by and interpreted consistent with the terms of this Plan
CERTIFICATION
The foregoing Plan was amended by the Company's Board of Directors on May
24, 1996, subject to subsequent shareholder approval.
---------------------------------
ROBERT D. MONK, SECRETARY
-7-
<PAGE> 25
PROXY
TRIPLE S PLASTICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder(s) signing on the reverse side hereby appoint(s) Robert
D. Monk and Vicki W. Eichstaedt as Proxies, each with the power to appoint a
substitute, and hereby authorizes them to represent and to vote, as designated
herein, all of the shares of common stock of Triple S Plastics, Inc. held of
record by such shareholder(s) on May 31, 1996 at the Annual Meeting of
Shareholders to be held on July 25, 1996 or at adjournment thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
BY THE SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEE LISTED ON REVERSE FOR A THREE-YEAR TERM AND FOR
PROPOSALS 2 AND 3.
(To be Signed on Reverse Side) SEE REVERSE
SIDE
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<S><C>
PLEASE MARK YOUR
A /X/ VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of NOMINEE: David L. Stewart 2. Approval and adoption of the Company's / / / / / /
Director for / / / / 1996 Outside Director Stock Option Plan.
a three-year
term 3. Approval of the amendment to the
Company's Employee Stock Option Plan. / / / / / /
4. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before
the meeting.
YES NO
I PLAN TO ATTEND THE MEETING. / / / /
SIGNATURE(S)______________________________________________________________ DATE:______________________________________________
NOTE: Please sign as your name appears hereon, when shares are held jointly, each holder should sign. When signing for an estate,
trust or corporation, the title and capacity should be stated. Persons signing as attorneys in fact should submit powers of
attorney.
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