JOTAN INC
PRE 14A, 1998-05-28
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                            SCHEDULE 14A INFORMATION
   Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act   
                                   of 1934
                               (Amendment _______)


   Filed by the Registrant [  ]
   Filed by a Party other than the Registrant [  ]

   Check the appropriate box:

   [X ] Preliminary Proxy Statement             [  ] Confidential, for Use of
                                                     the Commission Only (as
                                                     permitted by Rule 14a-
                                                     6(e)(2))
   [  ] Definitive Proxy Statement
   [  ] Definitive Additional Materials
   [  ] Soliciting Material Pursuant to Section  240.14a-11(c) or Section 
        240.14a-12


                                   JOTAN, INC.
                (Name of Registrant as Specified in its Charter)


   Payment of Filing Fee (Check the appropriate box):

   [X]  No fee required.

   [  ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
        11.

        1)   Title of each class of securities to which transaction applies:

        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>
                                   JOTAN, INC.
                               118 W. Adams Street
                                  P.O. Box 836
                          Jacksonville, Florida  32201


                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS



   To be held on July 21, 1998

   TO THE SHAREHOLDERS:

        NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
   "Meeting") of Jotan, Inc., a Florida corporation (the "Company"), will be
   held on July 21, 1998 at [10:00 a.m.] Eastern Time, at the [Omni
   Jacksonville Hotel, 245 West Water Street,] Jacksonville, Florida for the
   following purposes:

        1.   For the holders of Common Stock and Series A Convertible
   Preferred Stock, voting together as a single class, to elect three
   directors and the holders of Series B Redeemable Preferred Stock to elect
   three directors, each to serve a one-year term scheduled to end in
   conjunction with the next Annual Meeting of Shareholders or until his
   successor is elected and qualified;

        2.   To consider and vote upon a proposed amendment to the Company's
   Articles of Incorporation that would increase the number of authorized
   shares of Common Stock issuable thereunder from 40,000,000 to 150,000,000
   shares; 

        3.   To transact such other business as may properly come before the
   Meeting or any adjournment thereof.

        The foregoing items of business are more fully described in the Proxy
   Statement accompanying this Notice.

        Only stockholders of record at the close of business on June 10, 1998
   are entitled to notice of and to vote at the Meeting.

        All stockholders are cordially invited to attend the Meeting in
   person.  However, to assure your representation at the Meeting, you are
   urged to mark, sign, date, and return the enclosed proxy for that purpose. 
   Any stockholder attending the Meeting may vote in person even if he or she
   has returned a proxy.

                            By order of the Board of Directors,



                            Edward L. Lipscomb, Secretary

   <PAGE>
                                   JOTAN, INC.
                              118 West Adams Street
                                  P.O. Box 836
                          Jacksonville, Florida  32201



             PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
                           TO BE HELD ON JULY 21, 1998


                                  INTRODUCTION

        This Proxy Statement is furnished in connection with the solicitation
   by the Board of Directors of Jotan, Inc., (the "Company" or "Jotan") of
   proxies for use at the Annual Meeting of Shareholders of the Company (the
   "Meeting") to be held Tuesday, July 21, 1998 at the [Omni Hotel,]
   Jacksonville, Florida, commencing at 10:00 a.m., Eastern time, and any
   adjournments thereof.  The principal executive offices of the Company are
   located at 118 West Adams Street, Jacksonville, Florida 32202.  This Proxy
   Statement and the accompany Proxy Card are first being mailed to the
   stockholders on or about June 22, 1998.

        The Company's Annual Report to Shareholders for the year ended
   December 31, 1997, is being mailed to the stockholders with the mailing of
   this Proxy Statement.


                                  SOLICITATION

        The costs of preparing, assembling and mailing the proxy materials
   will be borne by the Company.  Certain officers and regular employees of
   the Company or its subsidiaries, without additional compensation, may use
   their personal efforts, by telephone or otherwise, to obtain proxies in
   addition to this solicitation by mail.  The Company expects to reimburse
   brokers, banks, custodians and other nominees for their reasonable out-of-
   pocket expenses in handling proxy materials for beneficial owners of the
   Common Stock.


                  VOTING AND REVOCABILITY OF PROXY APPOINTMENTS

        Each share of common stock par value $0.01 per share (the "Common
   Stock") is entitled to one vote at the Meeting, and each share of Series A
   Convertible Preferred Stock, $0.01 par value (the "Series A Convertible
   Preferred Stock") is entitled to two votes per share.  The Board of
   Directors has fixed June 10, 1998 as the record date for determining
   stockholders who are entitled to vote at the meeting.  At the close of
   business on that date, there were outstanding and entitled to vote
   [21,414,013] shares of Common Stock held by approximately _____
   stockholders of record and 1,435,705 shares of Series A Convertible
   Preferred Stock held by one stockholder of record.  The holders of a
   majority of the votes represented by the Common Stock and the Series A
   Convertible Preferred Stock, voting together as a single class (the
   "Voting Stock"), will constitute a quorum for the Meeting.  If a quorum is
   present, (i) the affirmative vote of the holders of a plurality of the
   votes represented by the shares of Voting Stock present or represented at
   the Meeting is required for the election of three Directors; (ii) both the
   affirmative vote of the holders of a majority of the votes represented by
   the shares of Voting Stock voting thereon and the affirmative vote of the
   holders of a majority of the votes represented by the shares of Common
   Stock voting thereon are required to approve the proposed amendment to the
   Company's Articles of Incorporation; and (iii) the affirmative vote of the
   holders of a majority of the votes represented by the Voting Stock present
   or represented at the Meeting is required for approval of any other matter
   to be voted upon.  Abstentions and broker non-votes each are included in
   determining the number of shares present at the Meeting, but are not
   counted in tabulations of the votes cast on proposals.

        All proxies will be voted in accordance with the instructions
   contained therein, and, if no choice is specified, the proxies will be
   voted in favor of the nominees and the proposals set forth in the
   accompanying Notice of Meeting and this Proxy Statement.  Any proxy may be
   revoked by a stockholder at any time before it is exercised by giving
   written notice to that effect to the Secretary of the Company, by
   execution and delivery of a subsequent proxy or by attending the Meeting,
   giving notice and voting in person.  Please note that a revocation shall
   not be effective as to any matter upon which, prior to such revocation, a
   vote shall have been cast pursuant to the authority conferred by the
   Proxy.

             INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

        Two nominees for members of the Board of Directors, Jeffrey P.
   Sangalis and James P. Wilson are principals in, and one director nominee,
   Philip A. Davidson, is a managing director of, Rice, Sangalis, Toole &
   Wilson, the manager of Rice Partners, II, L.P. ("Rice").  As of April 14,
   1998, in connection with the purchase by Rice of $250,000 of the Company's
   Series B Redeemable Preferred Stock in January, 1998 and the purchase of
   $1,250,000 of senior subordinated notes as of April 14, 1998, the Company
   issued to Rice warrants (the "April Warrants") to purchase 8,475,638
   shares and 42,377,173 shares, respectively, of the Company's common stock
   at a nominal exercise price.  The number of shares of common stock
   issuable under the April Warrants may be reduced if a fairness opinion
   that has been requested by the Company indicates that the number of shares
   issuable under the April Warrants is not fair to the Company's
   shareholders.  The exercise of the April Warrants is conditioned upon
   approval of the proposal to amend the Company's Articles of Incorporation
   to increase the Company's authorized shares from 40,000,000 to 150,000,000
   by the holders of a majority of the Company's common stock and by the
   holders of a majority of Voting Stock.  As of April 14, 1998, Rice, by
   exercising a warrant issued by the Company to Rice as of February 27,
   1998, acquired 15,717,402 shares of the Company's common stock.  If Rice
   votes all of its shares in favor of the proposal to so amend the Company's
   Articles of Incorporation, this vote alone will constitute the vote
   required to approve this proposal.


                                CHANGE OF CONTROL

        As of February 28, 1997, the Company issued senior subordinated debt,
   senior preferred stock and warrants to purchase shares of Common Stock in
   a transaction (the "Change of Control Transaction") which resulted in a
   change of control of the Company as more fully described in an Information
   Statement Pursuant to Section 14(f) of the Securities and Exchange Act of
   1934 and Rule 14f-1 thereunder which was mailed to holders of the
   Company's common stock and Series A Convertible Preferred Stock on or
   about February 18, 1997.  The Company issued to Rice Partners II, L.P., a
   Delaware limited partnership ("Rice") $7 million of senior subordinated
   debt and $8 million of its newly created Series B Redeemable Preferred
   Stock.  The Company also issued to F-Southland, L.L.C., a North Carolina
   limited liability company, and FF-Southland, L.P., a North Carolina
   limited partnership (collectively, the "Southland Purchasers"), entities
   affiliated with Franklin Street/Fairview Capital, L.L.C. ("Fairview"), an
   aggregate of $2 million of senior subordinated debt and $2 million of its
   Series B Redeemable Preferred Stock.  The Company also issued to Rice
   warrants which, if exercised for an aggregate purchase price of less than
   $200, would result in Rice owning approximately 51.4% of the Company's
   issued and outstanding Common Stock, on a fully diluted basis after
   conversion of the Series A Convertible Preferred Stock.  The Company also
   issued to the Southland Purchasers warrants which, if exercised for an
   aggregate purchase price of less than $200, and together with the
   conversion of the Series A Convertible Preferred Stock, would result in
   affiliates of Fairview owning approximately 24.5% of the Company's issued
   and outstanding Common Stock, on a fully diluted basis.  The funds
   received by the Company in the Change of Control Transaction, together
   with funds obtained through credit facilities established with Banque
   Paribas, were used by the Company to acquire all of the outstanding
   capital stock of Southland Holding Company ("Southland") for an aggregate
   purchase price of approximately $27.5 million and non-competition fees to
   the shareholders of Southland in the aggregate amount of $6,570,249 and to
   provide a funding base for additional possible acquisitions.

        In connection with the Change of Control Transaction, Rice was given
   the right to elect a majority of the members of the Company's Board of
   Directors for so long as Rice owns at least 10% of the equity interest in
   the Company that it acquired on February 28, 1997.  In addition, the
   Southland Purchasers were given the right to elect one member of the
   Company's Board of Directors.  The Company's Restated Articles of
   Incorporation were amended to provide that the Series B Redeemable
   Preferred Stock (voting separately as a class) has the right to elect a
   majority of the Board of Directors.

        Rice and the Southland Purchasers were paid a pro rata fee of
   $225,000 for providing the subordinated debt financing and a pro rata fee
   of $250,000 for providing the senior redeemable preferred stock financing.

        Two members of the Board of Directors of the Company which approved
   the Change of Control Transaction, James D. Lumsden and Jeremiah M.
   Callahan, are members of Fairview, the controlling entity of each of the
   Southland Purchasers.  Fairview also is the controlling entity of F-Jotan,
   L.L.C., the holder of the Company's Series A Convertible Preferred Stock,
   the consent of which was required and obtained in order to consummate the
   Change of Control Transaction. 


         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information as of April 15,
   1998, concerning beneficial ownership of voting securities of the Company
   by (i) each person known by the Company to be the owner of more than 5% of
   each outstanding class of the Company's voting securities, (ii) all
   directors and nominees, (iii) the individuals named in the Summary
   Compensation Table elsewhere herein, and (iv) all executive officers and
   directors as a group.  

<TABLE>
<CAPTION>
                                                  Amount and                  Percent
                                                  Nature of       Percent       of
          Name and Address          Title of      Beneficial        of        Voting
         of Beneficial Owner         Class       Ownership(1)     Class(2)    Stock(3)
         -------------------        --------     ------------     --------    --------                    

    <S>                             <C>            <C>             <C>          <C>
    Rice Partners II, L.P.(4)       Common         66,570,213      92.1%        88.6%
    5847 San Felipe, Suite 4350     B Preferred        54,375      84.5
    Houston, TX  77057
    Jeffrey P. Sangalis (5)         Common         66,570,213      92.1         88.6
    5847 San Felipe, Suite 4350     B Preferred        54,375      84.5
    Houston, TX  77057

    Philip A. Davidson (5)          Common         66,570,213      92.1         88.6
    5847 San Felipe, Suite 4350     B Preferred        54,375      84.5
    Houston, TX  77057

    James P. Wilson (5)             Common         66,570,213      92.1         88.6
    5847 San Felipe, Suite 4350     B Preferred        54,375      84.5
    Houston, TX  77057
    F-Jotan, L.L.C.                 Common          5,985,472      21.9         21.9
    F-Southland, L.L.C. and         A Preferred     1,435,705     100.0 
    FF-Southland, L.P. (6)          B Preferred        10,000      15.5
    702 Oberlin Road, Suite 150
    Raleigh, NC  27605

    Jeremiah Callahan(6)(7)         Common          5,988,072      21.9         21.9
    702 Oberlin Road, Suite 150     A Preferred     1,435,705     100.0 
    Raleigh, NC  27605              B Preferred        10,000      15.6

    James D. Lumsden(6)(7)          Common          5,988,072      21.9         21.9
    702 Oberlin Road, Suite 150     A Preferred     1,435,705     100.0 
    Raleigh, NC  27605              B Preferred        10,000      15.6

    Shea E. Ralph (8)               Common            983,000       4.6          4.1
    118 West Adams Street
    Jacksonville, FL  32201

    William Ames                    -                       0         0            0

    Raleigh C. Minor                -                       0         0            0

    All directors and executive     Common         73,538,685      94.0         94.0
    officers as a group             A Preferred     1,435,705    100.00
                                    B Preferred        64,375    100.00
</TABLE>

   (1)  Pursuant to rule 13d-3 under the Securities Exchange Act of 1934, as
        amended (the "Exchange Act"), beneficial ownership of a security
        consists of sole or shared voting power (including the power to vote
        or direct the vote) and/or the sole or shared investment power
        (including the power to dispose or direct the disposition) with
        respect to a security.  The number of shares of Common Stock includes
        the number of shares of Common Stock that are subject to the exercise
        of options or warrants within 60 days of the date of this Proxy
        Statement and the number of shares of Common Stock issuable upon
        conversion of such beneficial owner's shares of Series A Convertible
        Preferred Stock (each of which is immediately convertible into two
        shares of Common Stock), excluding accrued dividends thereon.
   (2)  Percent of Class of Common Stock with respect to each beneficial
        owner of Common Stock was calculated based on the ratio of the number
        of shares of Common Stock beneficially owned by such beneficial owner
        to the sum of (a) the total number of outstanding shares of Common
        Stock as of April 15, 1998, (b) the number of shares of Common Stock
        issuable upon conversion of shares of Series A Convertible Preferred
        Stock (each of which is immediately convertible into two shares of
        Common Stock) held by the applicable beneficial owner and (c) the
        number of shares of Common Stock issuable upon exercise of options or
        warrants held by the applicable beneficial owner exercisable within
        60 days of the date of this Proxy Statement.  Percent of Class of
        Series A Convertible Preferred Stock was calculated based on the
        ratio of the number of shares of Series A Convertible Preferred Stock
        beneficially owned by such beneficial owner to the total number of
        outstanding shares of Series A Convertible Preferred Stock.  Percent
        of Class of Series B Redeemable Preferred Stock was calculated based
        on the ratio of the number of shares of Series B Redeemable Preferred
        Stock beneficially owned by such beneficial owner to the total number
        of outstanding shares of Series B Redeemable Preferred Stock.
   (3)  Percent of Voting Stock with respect to each beneficial owner was
        calculated based on the ratio of the number of shares of Common Stock
        beneficially owned by such beneficial owner to the sum of (a) the
        total number of outstanding shares of Common Stock as of April 15,
        1998, (b) the number of shares of Common Stock issuable upon
        conversion of shares of Series A Convertible Preferred Stock (each of
        which is immediately convertible into two shares of Common Stock) and
        (c) the number of shares of Common Stock issuable upon exercise of
        options or warrants held by the applicable beneficial owner
        exercisable within 60 days of the date of this Proxy Statement.
   (4)  Includes 50,852,811 shares of Common Stock issuable under warrants
        owned by Rice Partners, II, L.P.  The number of shares of Common
        Stock issuable under these warrants may be reduced if a fairness
        opinion which has been requested by the Company indicates that the
        number of shares issuable under the warrants is not fair to the
        Company's shareholders.  The exercise of such warrants is also
        subject to approval by the holders of Voting Stock and the holders of
        Common Stock of an amendment to the Articles of Incorporation of the
        Registrant increasing its authorized common stock and the filing of
        such an amendment with the Florida Secretary of State.  The
        affirmative vote of Rice alone will constitute the vote required for
        such shareholder approval.
   (5)  Jeffrey P. Sangalis and James P. Wilson, directors of the Company,
        are principals of Rice, Sangalis, Toole & Wilson, the manager of Rice
        Partners II, L.P.  Philip A. Davidson is a Managing Director of Rice,
        Sangalis, Toole & Wilson, the manager of Rice Partners II, L.P.  The
        shares shown as owned by Messrs. Sangalis, Davidson and Wilson are
        the same shares and consist in each case of the shares owned by Rice
        Partners II, L.P., which are deemed to be beneficially owned by
        Messrs. Sangalis, Davidson, and Wilson due to their ability to
        control Rice Partners II, L.P. with regard to the voting and
        disposition of such shares.
   (6)  Includes (i) 5,000 shares of Series B Redeemable Preferred Stock
        beneficially owned by F-Southland, L.L.C., (ii) 5,000 shares of
        Series B Redeemable Preferred Stock beneficially owned by FF-
        Southland, L.P., (iii) 1,557,031 shares of Common Stock issuable
        under warrants owned by F-Southland, L.L.C., (iv) 1,557,031 shares of
        Common Stock issuable under warrants owned by FF-Southland, L.P., and
        (v) 2,871,410 shares of Common Stock issuable to F-Jotan, L.L.C. on
        conversion of 1,435,705 shares of Series A Convertible Preferred
        Stock owned by F-Jotan, L.L.C.  Shares owned by F-Southland, L.L.C.,
        FF-Southland, L.P. and F-Jotan, L.L.C. (the "Fairview Shareholders")
        are deemed to be beneficially owned by all Fairview Shareholders by
        virtue of having a common manager.
   (7)  James D. Lumsden, a director of the Company, Jeremiah Callahan, a
        former director and former chief executive officer of the company,
        are each a member of Franklin Street/Fairview Capital, L.L.C., the
        manager of F-Jotan, F-Southland, L.L.C. and FF-Southland, L.P.  The
        shares shown as owned by Mr. Lumsden are the same shares and consist
        in each case of the shares beneficially owned by F-Jotan,
        F-Southland, L.L.C. and FF-Southland, L.P. over which Mr. Lumsden and
        Mr. Callahan have shared voting investment power (except for 2,600
        and 2,800 shares of common stock owned directly by Mr. Lumsden and
        Mr. Callahan, respectively, which were received for services provided
        as directors of the Company prior to February 28, 1997.
   (8)  Includes 33,000 shares of Common Stock issuable upon exercise of
        employee stock options.



                                 PROPOSAL NO. 1
                              ELECTION OF DIRECTORS

        The Board of Directors of the Company has nominated Shea E. Ralph,
   Raleigh C. Minor and James D. Lumdsen as directors to stand for election
   by the holders of the Voting Stock, and the holders of the Series B
   Redeemable Preferred Stock, who have the right to elect a majority of the
   Board of Directors, have nominated Jeffrey P. Sangalis, Philip A. Davidson
   and James P. Wilson  to stand for reelection by such holders
   (collectively, the "Series B Nominees").  Pursuant to a separate
   Shareholder Agreement among the Company, F-Jotan, Rice, the Southland
   Purchasers and Shea E. Ralph, Mr. Lumsden has been nominated as the
   designee of the Southland Purchasers and Messrs. Sangalis, Davidson and
   Wilson have been nominated as the designees of Rice, and the parties to
   the Shareholder Agreement have agreed to vote in favor of such designees. 
   Under such Shareholder Agreement and the Company's Articles of
   Incorporation, Rice has the right, but not the obligation, to designate a
   majority of the members of the Board of Directors and its failure to do so
   at this time is not a waiver of its right to designate an additional
   director at a later date in accordance with the provisions of the
   Shareholder Agreement.  All of the individuals nominated except Mr. Minor
   are currently directors of the Company.  Only the holders of Series B
   Redeemable Preferred Stock have the right to vote for the election of
   directors to fill the positions held by the Series B Nominees.  The
   holders of the Voting Stock have the right to vote for the election of the
   remaining directors.  Proxies solicited by the Board of Directors relate
   only to the election of Mr. Ralph, Mr. Minor and Mr. Lumdsen as its
   nominees for such directorships.  The Company expects each of the nominees
   to be available to serve as a Director.  If, however, Mr. Ralph, Mr. Minor
   or Mr. Lumdsen is unable or declines to serve for any reason, proxies will
   be voted (in the absence of any contrary specification by a stockholder)
   for the election of a substitute nominee selected by the proxy holders.

        All directors hold office until the next annual meeting of
   Shareholders and until their successors have been duly elected and
   qualified.  For each nominee's beneficial ownership of Common Stock, see
   "Security Ownership of Certain Beneficial Owners and Management."  The
   business experience during the past five years of each of the nominees is
   as follows:

        The names and ages of the directors, director nominees and executive
   officers of the Company and the business experience during the past five
   years of each of the directors and executive officers of the Company are
   as follows:

        SHEA E. RALPH, age 37, has been a director of the Company since March
   1994.  From March 1994 until February 1997, Mr. Ralph was President and
   Chief Executive Officer of the Company.  He served as Vice President of
   Atlantic Bag & Paper Company (a former subsidiary of the Company) from
   1988 to 1993.

        JEFFREY P. SANGALIS, age 39, has been a director of the Company since
   February 1997.  He is a founding principal of Rice, Sangalis, Toole &
   Wilson, a private investment firm based in Houston, Texas, which manages
   Rice Partners II, L.P., a private investment fund organized to invest in
   subordinated debt and equity securities of middle market companies, and
   has served in that capacity since 1989.  Mr. Sangalis serves as a director
   of Bayou Steel Corporation, a producer of light structural steel products.

        PHILIP A. DAVIDSON, age 33, has been a director of the Company since
   February 1997.  He has been a Managing Director since 1993 of Rice,
   Sangalis, Toole & Wilson, a private investment firm based in Houston,
   Texas, which manages Rice Partners II, L.P., a private investment fund
   organized to invest in subordinated debt and equity securities of middle
   market companies.

        JAMES P. WILSON, age 39, has been a director of the Company since
   February 1997.  He is a founding Principal of Rice, Sangalis, Toole &
   Wilson, a private investment firm based in Houston, Texas, which manages
   Rice Partners II, L.P., a private investment fund organized to invest in
   subordinated debt and equity securities of middle market companies, and
   has served in that capacity since 1989.

        JAMES D. LUMSDEN, age 44, has been a director of the Company since
   March, 1998 and served as a director of the Company from May, 1996 until
   February, 1997.  Mr. Lumsden is President and Managing Principal of
   Franklin Street/Fairview Capital, L.L.C., a private investment fund. 
   Prior to that time, Mr. Lumsden was President and co-founder of Fairview
   Advisors, Inc., a regional investor in assets held by the Resolution Trust
   Corporation. 

        RALEIGH C. MINOR, age 61, is a director nominee and has been
   President and Chief Executive Officer of the Company since April, 1998. 
   Since 1986, Mr. Minor was a principal and Chairman of the Board of Allomet
   Partners, Ltd., a general management consulting firm engaged by the
   Company and which specializes in turnarounds and crisis management.  As a
   principal of Allomet, Mr. Minor served as Interim Chief Executive Officer
   of the Company from January, 1998 until his election as President and
   Chief Executive Officer.

        EDWARD L. LIPSCOMB, age 48, joined the Company in October, 1997. 
   Prior to that time, he was Vice President and Chief Financial Officer of
   Bancroft Bag, Inc.  He has held financial and operating management
   positions with Domtar, Inc. (Vice President Administration) and Stone
   Container.

   None of the officers, directors, or control persons of the Company have
   been an executive officer or partner of any business which filed or was
   subject to any bankruptcy petition, been convicted in or been the subject
   of any pending criminal proceedings, have been the subject of any order,
   judgement, or decree involving the violation of any state or federal
   securities or commodities laws or limiting his involvement in any type of
   business, securities, or banking activities.

        The Board of Directors unanimously recommends a vote "FOR" Mr. Ralph,
   Mr. Minor and Mr. Lumdsen as its nominees for reelection by the holders of
   the Voting Stock.



                                 PROPOSAL NO. 2
                 PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION

        The Board of Directors also has proposed that Section 4.1 of the
   Company's Articles of Incorporation be amended to increase the number of
   authorized shares of Common Stock from 40 million to 150 million shares. 
   As of the date of the Proxy Statement, the Company had outstanding
   21,414,013 shares of Common Stock and additionally had reserved for
   issuance (i) 3,114,062 shares issuable on exercise of warrants held by the
   Southland Purchasers; (ii) 2,871,410 shares issuable upon the conversion
   of the Series A Convertible Preferred Stock held by F-Jotan; and
   (iii) 2,000,000 shares reserved for issuance under the Company's 1996
   Long-Term Incentive Plan.  In addition, the Company has issued to Rice
   (i) a warrant (the "Second Supplemental Warrant A-3") for the purchase of
   8,475,638 shares of common stock and (ii) a warrant (the "Priority
   Warrant" and, collectively with the Second Supplemental Warrant A-3, the
   "Rice Warrants") for the purchase of 42,377,173 shares of Common Stock. 
   The number of shares issuable under the Second Supplemental Warrant A-3
   and the Priority Warrant may be reduced if a fairness opinion which has
   been requested by the Company from a third party indicates that the number
   of shares issuable thereunder is not fair to the Company's shareholders. 
   The exercise of the Second Supplemental Warrant A-3 and the Priority
   Warrant are conditioned on approval of the proposed amendment to the
   Company's Articles of Incorporation.  Currently, the Company does not have
   sufficient authorized common stock to issue the number of shares issuable
   under the Rice Warrants.  The Company agreed with Rice to use its diligent
   best efforts to obtain the required shareholder approval of the proposed
   amendment.  The Board of Directors believes that it is in the best
   interest of the Company to have sufficient authorized but unissued Common
   Stock to enable the Company to meet its obligations to Rice and to have
   additional authorized shares for other general corporate purposes as
   described below.

        The text of the proposed amendment is included as part of Exhibit A. 
   The additional authorized shares may be used for any proper corporate
   purpose approved by the Board of Directors.  The availability of
   additional authorized shares would enable the Board of Directors to act
   with flexibility and dispatch when favorable opportunities arise to
   enhance the Company's capital structure.  Additional shares may be issued
   in connection with acquisitions of properties or businesses, raising
   additional capital for the Company, employee benefit plans, and stock
   dividends.  The issuance of additional shares of Common Stock will likely
   result in dilution of the interest of existing shareholders.  The Company
   has no present plans, agreements, commitments, undertakings or proposals
   with respect to the issuance and sale of additional authorized shares of
   Common Stock except with respect to the shares reserved for future
   issuance under the Rice Warrants as described above.  Shareholders do not
   have preemptive rights to purchase any additional shares issued except for
   preemptive rights of Rice, F-Jotan and the Southland Purchasers arising
   under certain Shareholder Agreements entered into by the Company which
   rights have been waived.

        Both the affirmative vote of a majority of the total votes cast
   represented by the holders of Voting Stock voting on Proposal 2 and the
   affirmative vote of a majority of the total votes cast represented by
   holders of Common Stock voting on Proposal 2 are required to approve the
   proposed Amendment to Section 4.1 increasing the number of authorized
   shares of Common Stock from 40 million to 150 million.  For this purpose,
   broker non-votes and abstentions will not be counted.

        The Company's Board of Directors unanimously recommends a vote "FOR"
   the proposal to amend Section 4.1 of the Articles of Incorporation to
   increase the number of authorized shares of Common Stock to 150 million. 
   All proxies solicited by the Board of Directors will be so voted unless
   shareholders specify in their proxies a contrary choice.


                MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

        The Board of Directors of the Company held 16 meetings during the
   year ended December 31, 1997.  Each director attended at least 75% of the
   total number of Board and Committee meetings that they were eligible to
   attend.  The Company's Board of Directors has two standing committees --
   the Audit Committee and the Compensation Committee.  The Board of
   Directors does not have a standing nominating committee, such function
   being reserved to the full Board of Directors.

        The Audit Committee presently consists of Mr. Ralph and Mr.
   Davidson.  The Audit Committee has been assigned the principal functions
   of: (i) recommending the independent auditors; (ii) reviewing and
   approving the annual report of the independent auditors; (iii) approving
   the annual financial statements; and (iv) reviewing and approving summary
   reports of the auditors' findings and recommendations.  During the year
   ended December 31, 1997, the Audit Committee conducted its business at
   meetings of the full Board of Directors and held no separate
   meetings.

        The Compensation Committee presently consists of Mr. Davidson and
   Mr. Sangalis.  The Compensation Committee has been assigned the functions
   of approving and monitoring the remuneration arrangements for senior
   management.  In addition, the Compensation Committee administers the
   Company's stock option plans.  During the year ended December 31, 1997,
   the Compensation Committee conducted its business at meetings of the full
   Board of Directors and held no separate meetings.


             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Securities Exchange Act of 1934, as amended, and
   regulations of the Securities Exchange Commission thereunder require the
   Company's executive officers, directors and persons who own more than 10%
   of the Company's common stock, as well as certain affiliates of such
   persons, to file reports of beneficial ownership of the Company's common
   stock and changes in such ownership with the Securities and Exchange
   Commission.

        The Company is not aware of whether Richard M. Gray, Gert Schumann,
   Suzi Hernandez, William A. Hightower, James D. Lumsden and Jeremiah M.
   Callahan, all of whom resigned as directors of the Company effective
   February 7, 1997 (except Mr. Callahan who resigned effective March 4,
   1998) engaged in any post-termination transactions reportable under SEC
   rules.  In particular, the Company is not aware of whether any of such
   persons reported on a Form 5 between 2600 and 3000 shares of the Company's
   common stock acquired by each of these persons in April, 1997 as
   consideration for services provided to the Company as directors prior to
   February 7, 1997 (see "Director Compensation" below).  The acquisition of
   such shares would have been exempt from immediate reporting under an SEC
   rule permitting the deferred reporting of small acquisitions.  

        Edward L. Lipscomb filed a late Form 3 Initial Statement of
   Beneficial Ownership showing that he holds employee stock options to
   purchase 30,000 shares of the Company's common stock granted to him
   pursuant to his Employment Agreement with the Company.

        The Company is taking a number of steps to ensure that its directors,
   executive officers and greater than 10% shareholders are aware of and
   comply promptly with the reporting requirements of Section 16(a).


                               EXECUTIVE OFFICERS

        The following table sets forth the names of the executive officers of
   the Company their ages, their positions with the Company and their
   principal occupations and employers for at least the last five years, and
   any other directorships held by them in certain other companies.  The term
   of the current executive officers expires on the date of the first meeting
   of the Board of Directors held following the 1998 Annual Meeting of
   shareholders.  For information concerning executive officers' ownership of
   Common Stock, see "Security Ownership of Certain Beneficial Owners" above.

        Executive officers are appointed annually by the Board of Directors,
   and each executive officer serves at the discretion of the Board of
   Directors.


                             EXECUTIVE COMPENSATION

        The following table sets forth the cash and non-cash compensation
   paid by the Company for services rendered for the fiscal years ended
   December 31, 1997, 1996 and 1995 to all individuals serving as the
   Company's Chief Executive Officer or President (the "Named Executive
   Officer").  No other executive officer of the Company received a salary in
   excess of $100,000 annually for the period depicted.



                           SUMMARY COMPENSATION TABLE
                               ANNUAL COMPENSATION

            Name and                                                 All other
       Principal Position      Year     Salary         Bonus       Compensation
       ------------------      ----     ------         -----       ------------

    Shea E. Ralph, Chairman,   1997    $118,748      $36,500(1)      $9,178(2)
    President and Chief        1996      70,519            0          3,600(3)
    Executive Officer (prior   1995      60,599            0            720(3)
    to 2/28/97)

    Jeffrey P. Sangalis,       1997    $      0      $     0         $    0
    Chief Executive Officer
    (2/28/97 - 6/11/97)

    Jeremiah Callahan, Chief   1997    $      0      $     0         $    0
    Executive Officer
    (6/11/97 - 10/1/97)

    William H. Ames            1997    $114,478      $     0         $3,324(4)
    President
    (6/11/97 - 1/5/98)

   (1) Bonus paid in connection with acquisition of Southland Holding
       Company. 

   (2) Includes $1,978 paid as a matching contribution under the Company's
       401(k) Plan and $7,200 paid as a car allowance.

   (3) Car allowance.

   (4) Matching contribution under the Company's 401(k) Plan.


        Since February 28, 1997, the Company has not compensated its
   directors for services provided as a director other than reimbursement for
   expenses incurred in connection with board and committee meetings
   attended.  Prior to February 28, 1997 each director received 1,800 shares
   of the Company's common stock annually plus 100 additional shares of
   common stock for each meeting of the Board attended.


                              EMPLOYMENT AGREEMENTS

        During 1996, the Company entered into a three-year employment agree-
   ment with Shea E. Ralph pursuant to which he will receive an annual salary 
   of $85,000 subject to adjustment by the Board of Directors.  The employment
   agreement prohibits the employee from directly or indirectly competing
   with the Company during and for a period of two years following
   termination of his employment with the Company.  In addition, the
   employment agreement requires the Company to pay Mr. Ralph his salary for
   the remaining portion of the three-year term in the event Mr. Ralph's
   employment is terminated without cause (as such term is defined in the
   employment agreement).  


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        During the Company's last two fiscal years, there have been no
   transactions between the Company and any officer, directors, nominees for
   election as director, or any shareholder owning greater than five percent
   (5%) of any class of the Company's voting securities, nor any member of
   any such person's immediate family, except as set forth below:

        Mr. Sidney Ralph, father of Shea E. Ralph, owns all of the
   outstanding shares of common stock of Total Supply Systems, Inc. ("Total
   Supply"), a private corporation.  Total Supply has made certain financial
   advances to the Company pursuant to an arrangement similar to a line of
   credit with interest charged at prime plus one percent.

         On December 31, 1993, the Company purchased all of the outstanding
   capital stock of Atlantic Bag and Paper Company ("Atlantic Bag") from
   Total Supply in exchange for a $750,000 note payable to Total Supply.  On
   September 8, 1994, the Company refinanced its short-term line of credit
   arrangement and the $750,000 note payable to Total Supply into a
   convertible subordinated debenture.  On February 22, 1995, the Company
   entered into an agreement with Total Supply whereby the previous debt
   agreements were canceled and a new agreement put in their place.  The
   revised agreement converted a portion of the face value ($919,833) into
   shares of Common Stock at fair value (determined to be $3.00) and the
   balance of $750,000 was payable over an 81-week period at $10,000 per week
   including interest at 9.25%.  The balance due under the agreement was paid
   in full during September, 1996.

        The Company also leases a warehouse from Sidney Ralph and another
   warehouse from Total Supply.  These two leases each have a term which
   expires in 2004 and a monthly lease payment of $4,000 and $1,000
   respectively. 

        On May 16, 1996, F-Jotan, L.L.C., a North Carolina limited liability
   company ("F-Jotan"), invested $2,000,000 in the Company in exchange for
   100% of the outstanding Series A Convertible Preferred Stock.  James D.
   Lumsden and Jeremiah M. Callahan are members of Franklin Street/Fairview
   Capital L.L. C. ("Fairview"), the manager of F-Jotan, and were elected to
   the Company's Board of Directors in 1996 in connection with the investment
   by F-Jotan.  James D. Lumsden currently serves as a member of the Board of
   Directors of the Company.

        As of February 28, 1997, the Company issued to Rice Partners II,
   L.P., a Delaware limited partnership ("Rice") and to F-Southland, L.L.C.,
   a North Carolina limited liability company, and FF-Southland, L.P., a
   North Carolina limited partnership (collectively, the "Southland
   Purchasers"), entities affiliated with F-Jotan, senior subordinated debt,
   senior preferred stock and warrants to purchase shares of Common Stock in
   a transaction (the "February 1997 Transaction") which resulted in a change
   of control of the Company.  In connection with the February 1997
   Transaction, Rice was given the right to elect a majority of the members
   of the Company's Board of Directors for so long as Rice owned at least 10%
   of the equity interest in the Company that it acquired on February 28,
   1997.  In addition, the Southland Purchasers were given the right to elect
   one member of the Company's Board of Directors.  The Company's Restated
   Articles of Incorporation were amended to provide that the Series B
   Redeemable Preferred Stock (voting separately as a class) has the right to
   elect a majority of the Board of Directors.

        In the February 1997 Transaction, Rice and the Southland Purchasers
   were paid a pro rata fee of $225,000 for providing the subordinated debt
   financing and a pro rata fee of $225,000 for providing the senior
   redeemable preferred stock financing.

        Two members of the Board of Directors of the Company which approved
   the February 1997 Transaction, James D. Lumsden and Jeremiah M. Callahan,
   are members of Fairview, the controlling entity of each of the Southland
   Purchasers.  Fairview also is the controlling entity of F-Jotan, the
   holder of the Company's Series A Convertible Preferred Stock, the consent
   of which was required and obtained in order to consummate this
   transaction.

        As of September 10, 1997, the Company issued to Rice an additional
   $2,625,000 of Series B Redeemable Preferred Stock and additional warrants
   to acquire 3,620,473 shares of the Company's common stock (the "September
   1997 Transaction").  The funds received by the Company in the September
   1997 Transaction facilitated the Company's acquisition of substantially
   all the assets of Cove Container Corporation.

        As of January 23, 1998 the Company issued to Rice $250,000 of Series
   B Redeemable Preferred Stock for cash the ("January 1998 Transaction"). 
   The funds received were used by the Company to make payments to certain
   individuals who previously owned minority interests in certain Southland
   subsidiaries.

        As of April 14, 1998, as a condition to the most current amendment of
   the credit agreement with the Company's senior lenders, Rice loaned the
   Company an additional $1,250,000.  In exchange for this loan, the Company
   issued to Rice its 12.5% priority senior subordinated notes and additional
   warrants for the purchase of 42,377,173 shares of the Company's common
   stock (the "April 1998 Transaction").  The Company also issued to Rice
   additional warrants to purchase 8,475,638 shares of the Company's common
   stock as additional consideration for Rice's purchase of $250,000 of
   Series B Redeemable Preferred Stock in January, 1998.  The total number of
   shares of common stock provided under these warrants may be reduced if a
   fairness opinion which has been requested from an independent financial
   advisor indicates that the number of shares issuable under the warrants is
   not fair to the Company's shareholders.

        Three members of the Board of Directors of the Company that approved
   the September 1997 Transaction, the January 1998 Transaction and the April
   1998 Transaction are principals of Rice, Sangalis, Toole & Wilson, the
   manager of Rice.


                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

        The firm of Ernst & Young LLP served as the Company's independent
   public accountants for the fiscal year ended December 31, 1997, and, upon
   the unanimous recommendation of the Company's Board of Directors and its
   Audit Committee, the Company has selected them to act for the current
   fiscal year.

        Representatives of Ernst & Young LLP are expected to be present at
   the Meeting.  They will be available to respond to appropriate questions
   from shareholders and will have the opportunity to make a statement if
   they so desire.


                DEADLINE FOR SUBMISSION OF SHAREHOLDERS PROPOSALS

        Proposals of shareholders intended to be presented at the 1999 Annual
   Meeting of Shareholders must be received by the Company at its principal
   office in Jacksonville, Florida, not later than January 31, 1999.


   THE BOARD OF DIRECTORS HOPES THAT SHAREHOLDERS WILL ATTEND THE MEETING. 
   WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN
   AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.  PROMPT
   RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE METING AND YOUR
   COOPERATION WILL BE APPRECIATED.

   <PAGE>
                                   JOTAN, INC.
                               118 W. Adams Street
                          Jacksonville, Florida  32201

   THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

        KNOW ALL MEN BY THESE PRESENTS that I, the undersigned stockholder of
   Jotan, Inc., a Florida corporation, do hereby nominate, constitute, and
   appoint Raleigh C. Minor or Edward L. Lipscomb or any one or more of them, 
   my true and lawful attorney(s) with full power of substitution for me and 
   in my name, place and stead, to vote all of the Common Stock, par value 
   $.01 per share, of the Company, standing in my name on its books on 
   June 10, 1998, at the 1998 Annual Meeting of its Shareholders, or at any
   adjournment thereof.

   Proposal No. 1:  To elect the following as directors to serve one-year
   terms scheduled to end in conjunction with the next Annual Meeting of
   Shareholders or until his successor is elected and qualified:

      [ ]      For: Shea E. Ralph, Raleigh C. Minor and James D. Lumdsen

      [ ]      Against all nominees

          To withhold authority as to any nominee(s), write name(s) in the
          space provided:
          _____________________________________________________.

   Proposal No. 2:  To approve amending the Company's Articles of
   Incorporation to increase the number of authorized shares from 40,000,000
   to 150,000,000.

               [ ]     FOR      [ ]   AGAINST      [ ]    ABSTAIN

   In their discretion, the proxies are authorized to vote upon such other
   business as may properly come before the meeting.

        I hereby revoke any proxy or proxies heretofore given by me to any
   person or persons whatsoever.  Shares represented by this proxy will be
   voted in accordance with the specifications so made.  IF NO DIRECTION IS
   GIVEN, SUCH SHARES WILL BE VOTED "FOR" PROPOSALS 1 AND 2 AND IN THE
   DISCRETION OF THE PROXIES AS TO ANY OTHER MATTER THAT MAY PROPERLY COME
   BEFORE THE MEETING.


   

                                 _____________________________________________
                                 Signature

                                 _____________________________________________
                                 Signature if jointly held

                                 Dated: _______________________, 1998


          PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY
                   USING THE ENCLOSED SELF-ADDRESSED ENVELOPE.


   <PAGE>
                                   JOTAN, INC.
                               118 W. Adams Street
                          Jacksonville, Florida  32201

   THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

        KNOW ALL MEN BY THESE PRESENTS that I, the undersigned stockholder of
   Jotan, Inc., a Florida corporation, do hereby nominate, constitute, and
   appoint Raleigh C. Minor or Edward L. Lipscomb or any one or more of them, 
   my true and lawful attorney(s) with full power of substitution for me and 
   in my name, place and stead, to vote all of the Series A Convertible
   Preferred Stock, par value $.01 per share, of the Company, standing in my
   name on its books on June 10, 1998, at the 1998 Annual Meeting of its
   Shareholders, or at any adjournment thereof.

   Proposal No. 1:  To elect the following as directors to serve one-year
   terms scheduled to end in conjunction with the next Annual Meeting of
   Shareholders or until his successor is elected and qualified:

      [ ]      For: Shea E. Ralph, Raleigh C. Minor and James D. Lumdsen

      [ ]      Against all nominees

          To withhold authority as to any nominee(s), write name(s) in the
          space provided:
          ___________________________________________________________________.

   Proposal No. 2:  To approve amending the Company's Articles of
   Incorporation to increase the number of authorized shares from 40,000,000
   to 150,000,000.

               [ ]     FOR      [ ]   AGAINST       [ ]   ABSTAIN

   In their discretion, the proxies are authorized to vote upon such other
   business as may properly come before the meeting.

        I hereby revoke any proxy or proxies heretofore given by me to any
   person or persons whatsoever.  Shares represented by this proxy will be
   voted in accordance with the specifications so made.  IF NO DIRECTION IS
   GIVEN, SUCH SHARES WILL BE VOTED "FOR" PROPOSALS 1 AND 2 AND IN THE
   DISCRETION OF THE PROXIES AS TO ANY OTHER MATTER THAT MAY PROPERLY COME
   BEFORE THE MEETING.



                                 _____________________________________________
                                 Signature

                                 _____________________________________________
                                 Signature if jointly held

                                 Dated: _______________________, 1998


          PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY
                   USING THE ENCLOSED SELF-ADDRESSED ENVELOPE.

   <PAGE>
                                                                    EXHIBIT A


           ARTICLES OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
                                       of
                                   JOTAN, INC.

        These Articles of Amendment are filed pursuant to Section 607.1006 of
   the Florida Business Corporation Act:

        1.   The name of the Corporation is Jotan, Inc.

        2.   Section 4.1 of the Restated Articles of Incorporation of Jotan,
             Inc. has been amended in its entirety to read as follows:

                  Section 4.1  Authorized Capital.  The maximum
                  number of shares of stock which the Corporation
                  is authorized to have outstanding at any one time
                  is one hundred fifty million (150,000,000) shares
                  of voting common stock having a par value of one
                  cent ($0.01) per share, and ten million
                  (10,000,000) shares of preferred stock having a
                  par value of one cent ($0.01) per share.  The
                  Board of Directors shall have the authority to
                  establish series of the preferred stock and, by
                  filing the appropriate Articles of Amendment with
                  the Department of State of the State of Florida,
                  to establish the designation of each series and
                  the variations in rights, preferences and
                  limitations for each series.

        3.   The above amendment was adopted by the Corporation's Board of
             Directors on _____________, 1998, by unanimous written consent
             pursuant to 607.0821, Florida Statutes, by the holders of the
             Corporation's Common Stock, voting separately as a class, and by
             the holders of the Corporation's Common Stock and Series A
             Convertible Preferred Stock, voting together as a class, on      
             _____________, 1998, at the annual meeting of shareholders.  The
             number of votes cast for the amendment in each voting group
             entitled to vote thereon was sufficient for approval by that
             voting group.

        IN WITNESS WHEREOF, Jotan, Inc., has caused these Articles of
   Amendment to be signed by Edward L. Lipscomb, its Vice President, Chief
   Financial Officer and Secretary, on this _____ day of _____________, 1998.


                                 JOTAN, INC.



                                 By:__________________________________________
                                      Edward L. Lipscomb
                                      Vice President, Chief Financial Officer
                                      and Secretary



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