<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
[ ] 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 Section 240.14A-11(c) or Section 240.14a-12
TRIPLE S PLASTICS, INC.
-----------------------
(Name of registrant as specified in its charter)
(Name of person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies: _______
(2) Aggregate number of securities to which transaction applies: __________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ________
(4) Proposed maximum aggregate value of transaction: ______________________
(5) Total fee Paid: _______________________________________________________
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid: _______________________________________________
(2) Form, schedule, or registration statement no.: ________________________
(3) Filing party: _________________________________________________________
(4) Date filed: ___________________________________________________________
<PAGE> 2
TRIPLE S PLASTICS, INC.
14320 PORTAGE ROAD
VICKSBURG, MICHIGAN 49097-0905
------------------------
NOTICE OF 1999 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 22, 1999, at
10:00 a.m. local time, for the following purposes:
1. To elect three directors for terms of three years each as described
in the Proxy Statement.
2. To consider and act upon a proposal to amend the Company's Employee
Stock Option Plan.
3. To transact any other business that may properly come before the
meeting.
Only shareholders of record as of the close of business on June 7, 1999,
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
Daniel B. Canavan
Acting Secretary
June 7, 1999
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
TRIPLE S PLASTICS, INC.
14320 PORTAGE ROAD
VICKSBURG, MICHIGAN 49097-0905
------------------------
PROXY STATEMENT
------------------------
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 22, 1999,
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 1999 Annual Meeting. This Proxy Statement and the accompanying Proxy
are being mailed on or about June 18, 1999, to shareholders of record of the
Company's common stock as of the close of business on June 7, 1999. Each share
held on the record date entitles the registered holder to one vote at the Annual
Meeting. As of the record date, there were 3,738,063 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 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.
VOTING SECURITIES AND RECORD DATE
June 7, 1999, has been fixed by the Board of Directors as the record date
for determining shareholders entitled to vote at the Annual Meeting. On that
date, 3,738,063 shares of the Company's common stock, no par value, were issued
and outstanding. Shareholders are entitled to one vote for each share of the
Company's common stock registered in their names at the close of business on the
record date.
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. Robert D. Bedilion, David L. Stewart, and Evan C.
Harter, incumbent directors whose terms of office expire at the annual meeting,
have been nominated by the Board of Directors for election to three-year terms
expiring in 2002.
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
nominees described below. In the event a nominee is no longer a candidate at the
time of the Annual Meeting of Shareholders (a situation which is not now
<PAGE> 4
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 for each class who receive the largest
number of affirmative votes will be elected, irrespective of the number of votes
received. Broker nonvotes, votes withheld and votes cast against any nominee
will not have a bearing on the outcome of the election. Votes will be counted by
Inspector(s) of Election appointed by the presiding officer at the Annual
Meeting.
The Board of Directors recommends a vote FOR the election of the persons
nominated by the Board.
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>
NOMINEES FOR TERMS TO EXPIRE IN 2002
Robert D. Bedilion (61) retired December 31, 1996, from his Director since 1997
position as President of Polymerland Incorporated, a subsidiary of Member of Compensation Committee
General Electric Company, which he had held since 1989.
David L. Stewart (60) has been retired for more than five years. Director since 1969
Prior to his retirement Mr. Stewart served as the Company's Member of Audit Committee
Chairman and Chief Executive Officer.
Evan C. Harter (56) is the Chairman and Chief Executive Officer of Director since 1998
International Marketing Strategies (IMS, Inc.), an organization Member of Audit Committee
that assists businesses to grow from strong regional manufacturers
into internationally competitive businesses. He has held that
position for more than five years.
DIRECTORS WHOSE TERMS EXPIRE IN 2000
Daniel B. Canavan (45) is the Chairman of the Board, and he has Director since 1982
held that position for more than five years. Prior to June 1,
1999, he also served as the Company's Chief Executive Officer.
Albert C. Schauer (56) is currently the Chief Executive Officer of Director since 1990
the Company, and was appointed such on June 1, 1999. Prior to Member of Compensation and Audit
becoming the Company's Chief Executive Officer he was the Chairman Committees until his appointment as
and Chief Executive Officer of Clausing Industrial, Inc. (machine CEO of the Company, at which time he
tool distribution), Kalamazoo, Michigan, a position that he held resigned from both Committees
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 International,
Inc. (food ingredient and flavor system manufacturer) Alsip,
Illinois, and The Windquest Companies, Inc. (a manufacturer of
storage systems) Grand Rapids, Michigan.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Victor V. Valentine, Jr. (53) has been the Company's President Director since 1983
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 (50) is the President and Chief Executive Director since 1992 Member of
Officer of Battle Creek Unlimited, Inc. (an industrial park Compensation Committee
development corporation), and he has held that position for more
than five years.
</TABLE>
------------------------
2
<PAGE> 5
William J. Stewart, a Vice President of the Company, and David L. Stewart
are brothers. There are no other family relationships between or among 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 two occasions during the preceding fiscal year. A
report from this Committee appears infra under the caption Report on Executive
Compensation.
The Company does not have a standing nominating committee.
The Board of Directors met ten 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 THE AMENDMENT TO THE
COMPANY'S EMPLOYEE STOCK OPTION PLAN
In 1994, the shareholders of the Company approved the Triple S Plastics,
Inc. Employee Stock Option Plan providing for the grant of options to key
personnel of the Company for the purchase of not more than 450,000 shares of the
Company's common stock. At June 7, 1999, not including the effect of the
amendment to the Option Plan and related grant discussed below, 340,500 shares
had been reserved for issuance upon the exercise of outstanding options and
109,500 shares remained available for the grant of options. Effective May 13,
1999, the Board of Directors took action to amend the Option Plan subject to the
approval of the Company's shareholders. The amendment to the Option Plan
modifies the existing plan by increasing the maximum number of shares of the
Company's common stock authorized for issuance pursuant to options granted under
the Option Plan. The day after the Board of Directors approved the amendment of
the Option Plan, a nonqualified option grant was made to Mr. Albert C. Schauer
in the amount of 470,000 shares, subject to approval of the amended Option Plan
by shareholders. Mr. Schauer has recently been appointed the Company's chief
executive officer and has been given this one-time grant as a means of retaining
his services and to provide appropriate incentives for him to contribute to the
success of the Company. Shareholders will be asked to consider and approve the
Option Plan, as amended, at the Annual Meeting. The following paragraphs
summarize the principal features of the amended Option Plan.
PURPOSE
The purpose of the Option Plan is to encourage stock ownership by
management employees of the Company, to provide such employees with 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.
ELIGIBILITY AND ADMINISTRATION
The Option Plan is administered by a committee appointed by the Board of
Directors. The granting of any option pursuant to the Option Plan is entirely
within the discretion of the committee, and nothing contained in the Option Plan
is to be interpreted or construed to give any person any right to participate in
the Option Plan. 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 determines in its sole and absolute discretion. As of
June 7, 1999, 24 employees have been granted options under the Option Plan.
3
<PAGE> 6
SHARES SUBJECT TO THE PLAN
In its existing form, the Option Plan provides that a maximum of 450,000
shares of the Company's common stock are authorized for sale pursuant to options
granted under the plan, and 109,500 shares currently remain available for
grants. The Option Plan, as amended, would provide for a maximum of 920,000
shares of the Company's common stock as authorized for sale pursuant to options
granted under the Plan, and 109,500 shares would then be available for grants
(taking into account the one-time grant of nonqualified stock options to
purchase 470,000 shares made to Mr. Schauer, as discussed above). The shares of
stock may be authorized by unissued shares or treasury shares. If any
outstanding option expires or is terminated for any reason before the end of the
term of the Option Plan, the shares of stock covered by that option will be
available for options subsequently granted under the Option Plan. The Option
Plan provides for appropriate adjustments in the number of shares and option
prices in the event of any subdivision or consolidation of shares or any other
capital adjustment, the payment of a stock dividend, or other increases or
decreases in such shares effected without receipt of consideration by the
Company in order to prevent dilution of the interest of the optionees. If the
Company is the surviving corporation in any merger or consolidation, any option
will pertain, apply, and relate to 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. This provision for acceleration of exercise rights in the
event of merger or consolidation of the Company may have the effect of
discouraging attempts to acquire control of the Company which shareholders may
deem to be in their best interest.
OPERATION OF THE PLAN
The Option Plan provides for the granting of options which qualify as
incentive stock options as defined by section 422 of the Internal Revenue Code
and for the granting of nonqualified stock options. The exercise price of any
option may not be less than 100 percent of the per share fair market value of
the Company's common stock on the date the option is granted. Upon exercise, the
price must be paid in full and may be paid in cash, by the surrender of
previously issued shares, or by a combination of each. Under the terms of the
Option Plan, the fair market value is deemed to equal the closing sales price on
the date preceding the date the option is granted. On May 31, 1999, the closing
sale price for the Company's common stock as reported by the Nasdaq Stock Market
was $5.25.
Options may be exercised in whole or in part after such dates as may be
specified in option agreements, and no option may extend for a period of more
than ten (10) years. Individual option agreements will contain such termination
provisions that the committee deems advisable. Options are not transferable
except by will or pursuant to laws of dissent and distribution upon optionee's
death. During the lifetime of an optionee, options may be exercised only by
optionee or his guardian or legal representative.
AMENDMENT AND TERMINATION
The Option Plan, as amended, will terminate 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 agreement
and shall continue to be governed by and interpreted consistent with the terms
of the Option Plan. The Board of Directors may discontinue the Option Plan at
any time, and may amend it from time to time, but no amendment without
shareholder approval may increase the total number of shares which may be issued
under the Option Plan or to any individual under the Option Plan, reduce the
option price for shares which may be purchased pursuant to options under the
Option Plan, extend the period during which options may be granted, or modify
the eligibility requirements for participation in the Option Plan. Other than is
expressly permitted under the Option Plan, no outstanding option may be revoked
or amended in any manner unfavorable to the optionee without the consent of the
optionee.
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES
The following paragraph summarizes the federal income tax consequences with
respect to options granted under the Option Plan based on management's
understanding of the existing federal income tax laws. This
4
<PAGE> 7
summary is necessarily general in nature and does not purport to be complete.
Also, state and local income tax consequences are not discussed and they may
vary from locality to locality.
Option Plan participants will not recognize taxable income at the time an
option is granted under the Option Plan unless the option has a readily
ascertainable market value at the time of grant. Management understands that
options to be granted under the Option Plan will not have readily ascertainable
market value; therefore, income will not be recognized by participants before
the time of exercise of an option. For nonqualified stock options, 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, in which case the Company will be entitled to a deduction equal to
the amount of the optionee's ordinary income. With respect to incentive stock
options, participants will not realize income for federal income tax purposes as
a result of the exercise of such options. In addition, if common stock acquired
as a result of the exercise of an incentive stock option is disposed of more
than two years after the date the option is 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 as capital gain for federal
income tax purposes. Under these circumstances, no deduction will be allowable
to the Company in connection with either the grant or exercise of an incentive
stock option. Exceptions to the general rules apply in the case of a
"disqualifying disposition."
If a participant disposes of shares of common stock acquired pursuant to
the exercise of an incentive stock option before the expiration of one year
after the date of exercise or two years after the date of grant, the sale of
such stock will be treated as a "disqualifying disposition." As a result, such
participant would recognize ordinary income and the Company would be entitled to
a deduction in the year in which such disposition occurred. The amount that the
deduction and ordinary income recognized upon a disqualifying disposition would
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.
If the disposition is to a related party (such as a spouse, brother,
sister, lineal descendent, or certain trusts for business entities in which the
seller holds a direct or indirect interest), the ordinary income recognized
generally is equal to the excess of the fair market value of the shares at the
time of exercise over the exercise price. Any additional gain recognized upon
disposition, in excess of ordinary income, will be taxable as capital gain. In
addition, the exercise of incentive stock options may result in an alternative
minimum tax liability. The amount, if any, by which the fair market value of the
shares transferred to the optionee upon the exercise of an option exceeds the
option price will constitute an item of tax preference, subject, in certain
circumstances, to the alternative minimum tax. The rules governing the tax
treatment of options and stock acquired upon the exercise of options are quite
technical. Therefore, as already noted, the foregoing description of tax
consequences is necessarily general and does not purport to be complete.
The 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 Option Plan, as amended. Since a majority of the votes cast is required
for approval, any negative vote will necessitate an offsetting affirmative vote
to assure approval. Any ballot or proxy marked "abstain" and any broker nonvote
will be counted as a negative vote. Votes will be counted by Inspector(s) of
Election appointed by the presiding officer at the Annual Meeting.
The Board of Directors recommends a vote FOR the approval of the Amendment.
5
<PAGE> 8
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 March 31, 1999.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
----------------------------------
SHARES BENEFICIALLY EXERCISABLE
NAME OF BENEFICIAL OWNER OWNED (1) OPTIONS(2) PERCENT OF CLASS
- ------------------------ ------------------- ----------- ----------------
<S> <C> <C> <C>
Robert D. Bedilion............................. 16,033 5,033 *
Daniel B. Canavan.............................. 943,670 13,000 24.6
Evan C. Harter................................. 0 0 *
James F. Hettinger............................. 6,533 6,333 *
Robert D. Monk................................. 25,000 17,500 *
Albert C. Schauer.............................. 7,333 6,333 *
David L. Stewart............................... 176,518 6,333 4.6
William J. Stewart............................. 79,231 3,000 2.1
Victor V. Valentine, Jr........................ 942,666 13,000 24.5
Michael E. Zaagman............................. 11,457 10,500 *
All executive officers and directors
as a group (12 persons)........................ 2,208,641 94,032 57.5
</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) This column reflects shares subject to options exercisable within 60 days,
and these shares are included in the column captioned "Shares Beneficially
Owned."
(3) Includes 50 shares held by Mr. Stewart as custodian for his grandchild; Mr.
Stewart disclaims beneficial ownership of those shares.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table contains information with respect to ownership of the
Company's common stock by persons or entities who are beneficial owners of more
than five percent of the Company's voting securities. The information contained
in this table is based on information contained in Schedules 13D and 13G
supplied to the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
Pioneering Management Corporation........................ 200,000 5.34%
60 State Street
Boston, MA 02109
</TABLE>
6
<PAGE> 9
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 of the four (4) other most highly compensated executive
officers 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........................... 1999 183,527 -0- 2,535
Chief Executive Officer 1998 196,062 -0- 3,257
1997 145,712 3,500 2,453
Victor V. Valentine, Jr..................... 1999 149,558 -0- 3,324
President 1998 154,735 -0- 2,946
1997 147,327 3,500 3,529
Michael E. Zaagman.......................... 1999 110,955 -0- 2,482
Vice President of Operations 1998 122,397 4,000 2,170
1997 76,365 8,500 1,818
Robert D. Monk (2).......................... 1999 118,304 -0- 1,252
Vice President, Chief Financial 1998 121,561 4,000 1,466
Officer, Secretary/Treasurer 1997 104,949 3,500 1,474
William J. Stewart.......................... 1999 113,830 2,291
Vice President 1998 119,227 -0- 2,394
1997 110,785 5,500 3,068
</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.
(2) Mr. Monk's employment with the Company terminated as of April 30, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
There were no option grants in the previous fiscal year.
The following table contains information regarding the exercise of options
during the preceding fiscal year by the above-named executives, as well as
unexercised options held by them at fiscal year end:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
YEAR-END(#) FISCAL YEAR-END ($)
---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Daniel B. Canavan........................ 13,000 30,000 -0- -0-
Victor V. Valentine...................... 13,000 30,000 -0- -0-
William J. Stewart....................... 3,000 -0- -0- -0-
Robert D. Monk........................... 17,500 22,500 -0- -0-
Michael E. Zaagman....................... 10,000 22,500 -0- -0-
</TABLE>
7
<PAGE> 10
REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program falls under the jurisdiction
of the Compensation Committee of the Board of Directors, composed exclusively of
outside directors. The Committee is responsible for reviewing the cash and
non-cash compensation arrangements for all executive level management and
officers of the Company. The Committee is also responsible for administering the
Company's stock-based incentive plans.
The Company's executive compensation program is designed to attract,
motivate, and retain executive management personnel. In formulating and
administering this program, the Company attempts to favorably position itself
against comparable employers, considering factors such as relative size, growth
rate, geographic location, and industry. Four components of the compensation
program -- base salary, short term cash bonus, stock options, and
benefits -- 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, value they bring to the Company, and prevailing
competitive circumstances for executive talent. Base salaries for executives,
other than the Chief Executive Officer, are reviewed annually and adjusted where
appropriate based upon recommendations by the Chief Executive Officer and the
Vice President of Human Resources who present to the Compensation Committee the
recommended compensation program for the entire Company. The Chief Executive
Officer's base salary is also reviewed annually by the Committee without the
Chief Executive Officer's participation. The Company's bonus programs are
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
profitability. The plan specifies a certain minimum for the Company's earnings
per share ("EPS"), and no bonuses accrue unless that minimum is achieved. The
Plan also specifies certain target levels of EPS above the minimum, and
achievement of those targets results in cash bonuses for executives based upon
specified percentages of their base pay, where the percentages increase
corresponding to increases in the target levels of EPS above the minimum.
The Option Plan was established early in 1994 in connection with the
initial public offering of the Company's common stock. The Option 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. It is also important in attracting and
retaining key personnel such as Mr. Albert C. Schauer.
The benefit program for each executive is determined by prevailing
competitive circumstances for executive talent. At the time of the annual base
salary review, the benefits package is also reviewed by the Compensation
Committee. The Chief Executive Officer and the Vice President of Human Resources
make recommendations to the Compensation Committee for their review and
approval. The Chief Executive Officer's benefits are reviewed without the Chief
Executive Officer's participation.
Compensation Committee:
James F. Hettinger
Robert D. Bedilion
8
<PAGE> 11
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 31,
1994. Reinvestment of dividends is assumed in all cases.
[GRAPH] TOTAL RETURN TO STOCKHOLDERS
<TABLE>
<CAPTION>
TRIPLE S. PLASTICS, INC. PEER GROUP NASDAQ COMPOSITE (US)
------------------------ ---------- ---------------------
<S> <C> <C> <C>
'3/31/94' 100.00 100.00 100.00
'3/31/95' 63.64 96.21 109.92
'3/31/96' 52.73 125.13 149.09
'3/31/97' 50.81 148.84 165.74
'3/31/98' 45.45 283.73 250.22
'3/31/99' 25.45 247.45 336.78
</TABLE>
The companies included in the Company's peer group are as follows:
Essef Corp
Gencorp, Inc.
Intek Diversified, Inc.
IPL, Inc.
Leader Industries, Inc.
Spartech Corp.
The returns of each company included in the self-determined peer groups are
weighted according to each respective company's stock market capitalization.
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no compensation for
services as directors. For the fiscal year ended March 31, 1999, directors who
were not employees of the Company received a $4,000 annual retainer as well as a
director's fee of $1,000 for each Board meeting attended and $500 for each
committee meeting attended. For the fiscal year ended March 31, 1999, each
nonemployee director received an option to acquire 10,000 shares of the
Company's common stock (with the exception of Evan C. Harter who received an
option to acquire 7,000 shares) at the market price as of the date of the grant
pursuant to the Company's Outside Director Stock Option Plan (the "Director
Plan"). Options have a term of three and one-half years, and are subject to
annual vesting at the rate of approximately one-third of the total shares
subject to grant.
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<PAGE> 12
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. Other than
with respect to Mr. Albert C. Schauer, the Company does not 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,
1999, 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, 2000.
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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 -- 2000 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 January 30, 2000, 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 Portage Road, Box E, Vicksburg, Michigan
49097-0905.
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
Daniel B. Canavan
Acting Secretary
June 7, 1999
Vicksburg, Michigan
10
<PAGE> 13
TRIPLE S PLASTICS, INC.
EMPLOYEE STOCK OPTION PLAN
(AS AMENDED EFFECTIVE MAY 13, 1999)
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.
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.
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<PAGE> 14
(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 920,000
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.
(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
12
<PAGE> 15
(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.
(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 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.
13
<PAGE> 16
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.
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
14
<PAGE> 17
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
(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
13, 1999, subject to subsequent shareholder approval.
--------------------------------------
Daniel B. Canavan, Acting Secretary
15
<PAGE> 18
TRIPLE S PLASTICS, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
By signing this card, the shareholder(s) hereby appoint(s) Daniel B.
Canavan and Victor V. Valentine, Jr. as Proxies, each with the power to appoint
a substitute, and hereby authorize(s) 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 June 7, 1999, at the Annual Meeting of
Shareholders, to be held on July 22, 1999, 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 LISTED NOMINEES AND "FOR" PROPOSAL 2.
1. Election of Directors for a three-year term:
Nominees: Robert D. Bedilion
David L. Stewart
Evan C. Harter
FOR WITHHELD
/ / / /
For, except votes withheld from the following
nominee(s):
----------------------------------
2. Approval of the Amendment to the Company's Employee Stock
Option Plan:
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the Proxies are authorized to act upon
such other business as may properly come before the meeting.
I plan to attend the meeting:
YES NO
/ / / /
Please mark the boxes on the above Proxy to indicate how you wish your
shares to be voted. SIGN AND DATE THE PROXY AND RETURN IT IN THE ENCLOSED
PREPAID ENVELOPE. We must receive your vote before the Annual Meeting of
Shareholders on July 22, 1999.
SIGNATURE(S): Date:
-------------------------------------------- ----------------
NOTE: Please sign your name as it 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.
