SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(3)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BADGER PAPER MILLS, 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule
14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on
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determined):
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5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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fee was paid previously. Identify the previous filing by
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BADGER PAPER MILLS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 14, 1996
To the Shareholders of Badger Paper Mills, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Badger
Paper Mills, Inc. will be held on Tuesday, May 14, 1996, at 10:00 a.m.,
local time, at the Best Western Riverfront Inn, 1821 Riverside Ave.,
Marinette, Wisconsin, for the following purposes:
1. To elect two directors to hold office until the 1999 annual meeting
of shareholders and until their successors are duly elected and
qualified.
2. To consider and act on a proposed amendment to the Restated Articles
of Incorporation.
3. To consider and act on a shareholder proposal from a group of
shareholders controlled by James D. Azzar (the "Azzar Group") to
approve the restoration of voting power pursuant to Section 180.1150
of the Wisconsin Business Corporation Law, if such proposal is
presented at the meeting.
4. To consider and act on a shareholder proposal from the Azzar Group to
establish a shareholder advisory committee, if such proposal is
presented at the meeting.
5. To consider and act on any other business as may properly come before
the meeting or any adjournment or postponement thereof.
The close of business on March 26, 1996, has been fixed as the record date
(the "Record Date") for the determination of shareholders entitled to
notice of, and to vote at, the meeting and any adjournment or postponement
thereof.
A proxy for the meeting and a proxy statement are enclosed herewith.
By Order of the Board of Directors
BADGER PAPER MILLS, INC.
Miles L. Kresl, Jr.
Corporate Secretary
Peshtigo, Wisconsin
April 12, 1996
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
TO ASSURE REPRESENTATION AT THE MEETING, PLEASE DATE THE ENCLOSED PROXY,
WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY HOW YOUR NAME
APPEARS THEREON AND RETURN IMMEDIATELY.
BADGER PAPER MILLS, INC.
200 West Front Street
Peshtigo, Wisconsin 54157-0149
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 14, 1996
This proxy statement is being furnished to shareholders by the
Board of Directors (the "Board") of Badger Paper Mills, Inc. (the
"Company") beginning on or about April 16, 1996, in connection with a
solicitation of proxies by the Board for use at the Annual Meeting of
Shareholders to be held on Tuesday, May 14, 1996, at 10:00 a.m., local
time, at the Best Western Riverfront Inn, 1821 Riverside Ave., Marinette,
Wisconsin, and all adjournments or postponements thereof (the "Annual
Meeting") for the purposes set forth in the attached Notice of Annual
Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will
not affect a shareholder's right to attend the Annual Meeting and to vote
in person. Presence at the Annual Meeting of a shareholder who has signed
a proxy does not in itself revoke a proxy. Any shareholder giving a proxy
may revoke it at any time before it is exercised by giving notice thereof
to the Company in writing at or before the Annual Meeting.
A proxy, in the enclosed form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with
the instructions contained therein. The shares represented by executed
but unmarked proxies will be voted (i) "FOR" the two persons nominated for
election as directors referred to herein, (ii) "FOR" the proposed
amendment to the Restated Articles of Incorporation ("Restated Articles"),
(iii) "AGAINST" the proposed shareholder proposal to restore voting power
to the Azzar Group, (iv) "AGAINST" the shareholder proposal to create a
shareholder advisory committee and (v) on such other business or matters
which may properly come before the Annual Meeting in accordance with the
best judgment of the persons named as proxies in the enclosed form of
proxy. Other than the election of directors, the proposed amendment to
the Restated Articles and the two shareholder proposals, the Board has no
knowledge of any other matters to be presented for action by the
shareholders at the Annual Meeting.
Only holders of record of the Company's common stock, no par
value (the "Common Stock"), as of the close of business on March 26, 1996,
are entitled to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 1,945,130 shares of Common Stock, each of
which is entitled to one vote per share.
ELECTION OF DIRECTORS
The Company's By-Laws provide that the directors shall be
divided into three classes, with staggered terms of three years each. At
the Annual Meeting, the shareholders will elect two directors to hold
office until the 1999 annual meeting of shareholders and until their
successors are duly elected and qualified. Unless shareholders otherwise
specify, shares represented by the proxies received will be voted in favor
of the election as directors of the two persons named as nominees herein.
The Board has no reason to believe that any of the listed nominees will be
unable or unwilling to serve as a director if elected. However, in the
event that any nominee should be unable to serve or for good cause will
not serve, the shares represented by proxies received will be voted for
another nominee selected by the Board. Directors will be elected by a
plurality of the votes cast at the Annual Meeting (assuming a quorum is
present). Consequently, any shares not voted at the Annual Meeting,
whether due to abstentions, broker non-votes or otherwise, will have no
impact on the election of directors. Votes will be tabulated by
inspectors of election appointed by the Board.
The following sets forth certain information, as of March 26,
1996, about the Board's nominees for election at the Annual Meeting and
each director of the Company whose term will continue after the Annual
Meeting.
Nominees for Election at the Annual Meeting
Terms expiring at the 1999 Annual Meeting
Bennie C. Burish, 70, has served on the Board of the Company since 1970.
Mr. Burish retired in 1991 as President and Chief Operating Officer of the
Company but served as Interim President from August 1992 until February
1993.
Edwin A. Meyer, Jr., 69, has been the Chairman of the Board of the Company
since 1976 and a director of the Company since 1958. Mr. Meyer retired in
1993 as Chief Executive Officer of the Company.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND
URGES EACH SHAREHOLDER TO VOTE "FOR" BOTH NOMINEES. SHARES OF COMMON
STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR"
BOTH NOMINEES.
Directors Continuing in Office
Terms expiring at the 1997 Annual Meeting
Claude L. Van Hefty, 57, has served on the Board of the Company since
1994. Mr. Van Hefty has served the Company as President and Chief
Operating Officer since November 1994 and as Chief Executive Officer since
December 1995. Prior thereto, Mr. Van Hefty served the Company as Vice
President-Fibre Procurement, Vice President and General Manager of the
Company's former Dayton, Ohio division and Director of Purchases.
Ralph D. Searles, 54, has served as a director of the Company since 1995.
Mr. Searles has been President and Chief Executive Officer of Great
Northern Corporation located in Appleton, Wisconsin, since 1991.
Terms expiring at the 1998 Annual Meeting
Earl R. St. John, Jr., 59, has served as a director of the Company since
1986. Mr. St. John has been President of St. John Forest Products, Inc.
and St. John Trucking, Inc., both of which are located in Spalding,
Michigan, since 1962, and is the owner of both companies.
Thomas J. Kuber, 55, has served as a director of the Company since 1995.
Mr. Kuber has been President of K&K Warehousing located in Menominee,
Michigan since 1973, and the Chief Executive Officer of Great Lakes Pulp &
Fibre, Inc., also located in Menominee, Michigan, since 1993.
BOARD OF DIRECTORS
General
The Board has appointed Audit, Executive and Compensation
Committees. The Audit Committee is responsible for reviewing (i) the
scope of annual audit activities, (ii) professional services performed by
auditors approved by the Board and (iii) the independence of such
auditors. The Audit Committee also reviews the annual financial
statements of the Company and such other matters with respect to the
accounting, auditing and financial reporting practices and procedures of
the Company as it may find appropriate or as have been brought to its
attention. Bennie C. Burish (Chairman), Earl R. St. John, Jr., Edwin A.
Meyer, Jr. and Ralph D. Searles are members of the Audit Committee. The
Audit Committee held one meeting in 1995.
The Compensation Committee reviews executive compensation
policies and also recommends from time to time to the Board compensation
of the elected officers of the Company. Earl R. St. John, Jr. (Chairman),
Bennie C. Burish, Edwin A. Meyer, Jr. and Thomas J. Kuber are members of
the Compensation Committee. The Compensation Committee held two meetings
in 1995.
The Executive Committee may exercise many of the powers of the
Board in the management of the business and affairs of the Company in the
intervals between meetings of the Board. While its powers are very broad,
in practice it meets only when it would be impractical to call a meeting
of the Board. Edwin A. Meyer, Jr. (Chairman), Bennie C. Burish, Earl R.
St. John, Jr., Ralph D. Searles and Thomas J. Kuber are members of the
Executive Committee. The Executive Committee did not meet in 1995.
The Board has no nominating committee. The Board selects the
director nominees to stand for election at the Company's annual meetings
of shareholders and to fill vacancies occurring on the Board. The Board
will consider nominees recommended by shareholders, but has no established
procedures which shareholders must follow to make a recommendation.
The Board held ten meetings in 1995. Each director attended at
least 75% of the aggregate of the total meetings held by the Board and the
total meetings held by all committees on which each such director served
during 1995, except Mr. Searles, who attended 70% of such meetings.
Director Compensation
Directors who are employees of the Company receive no
compensation as such for service as members of either the Board or
committees thereof. In 1996, directors who are not employees of the
Company will receive a quarterly retainer of $3,000 and a fee of $750 for
each committee meeting attended. See "EXECUTIVE COMPENSATION" for certain
compensation arrangements relating to Messrs. Meyer and Burish, as former
executive officers of the Company.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of March 26, 1996 by: (i) each
director and nominee; (ii) the executive officers named in the Summary
Compensation Table set forth below; (iii) all of the directors, nominees
and executive officers (including the executive officers named in the
Summary Compensation Table) as a group; and (iv) each person or other
entity known by the Company to own beneficially more than 5% of the class
of Common Stock. Except as otherwise indicated in the footnotes, each of
the holders listed below has sole voting and investment power over the
shares beneficially owned.
Shares of Percent of
Common Stock Common Stock
Beneficially Beneficially
Name of Beneficial Owner Owned Owned
Edwin A. Meyer, Jr. . . . 316,022(1) 16.2%
Bennie C. Burish . . . . 100,948(2) 5.2%
Earl R. St. John, Jr. . . 11,000(3) *
Claude L. Van Hefty . . . 4,350(4) *
Miles L. Kresl, Jr. . . . 5,300 *
Thomas J. Kuber . . . . . 1,010 *
Ralph D. Searles . . . . 800 *
All directors, nominees
and executive officers as
a group (10 persons) . . 442,230(5) 22.7%
Walter F. Adrian . . . . 112,000(6) 5.8%
James D. Azzar . . . . . 274,764(7) 14.1%
____________________________
*Denotes less than 1%.
(1) Amounts shown include 49,766 shares owned by Lorraine Meyer, and
22,744 shares owned by Carol Coffey Sheridan, as to which Mr. Meyer
has voting rights but disclaims beneficial ownership. The amounts
shown do not include 8,312 shares of Common Stock owned by Gloria L.
Meyer, Mr. Meyer's wife, as to which he disclaims voting and
dispositive power.
(2) Amounts shown do not include 11,500 shares of Common Stock owned by
Donna M. Burish, Mr. Burish's wife, as to which he disclaims voting
and dispositive power.
(3) Amounts shown include 11,000 shares of Common Stock held in trust as
to which Mr. St. John has sole voting and dispositive power. Amounts
shown do not include 11,000 shares of Common Stock held in trust for
the benefit of Rosemary St. John, Mr. St. John's wife, as to which he
disclaims voting and dispositive power.
(4) Amounts shown include 2,000 shares of Common Stock owned by Mr. Van
Hefty and Karen J. Van Hefty, Mr. Van Hefty's wife, as joint tenants
as to which they share voting and investment power.
(5) In the aggregate, directors and executive officers have sole voting
and dispositive power with respect to 367,020 shares; in the
aggregate, directors and executive officers have sole voting rights
only with respect to 72,510 shares; and in the aggregate, directors
and executive officers have shared voting and dispositive power with
respect to 2,700 shares.
(6) The share amount listed is from the Schedule 13G dated April 17, 1995
filed with the Securities and Exchange Commission and the Company.
Mr. Adrian's address is 201 Emery Avenue, South, Peshtigo, Wisconsin
54157.
(7) According to a report of beneficial ownership on an amendment to
Schedule 13D dated March 20, 1996, James D. Azzar ("Azzar"), Bomarko,
Inc. ("Bomarko") and Extrusions Division, Inc. ("EDI") (collectively
referred to as the "Azzar Group") constitute a "group" with respect
to the acquisition of Common Stock. Of the reported shares, 274,564
are owned by Bomarko, and 200 are owned by EDI. Azzar is deemed to
beneficially own all of such shares in his capacity as chairman of
the board, chief executive officer and director of, and investor in,
Bomarko, and president, sole director and sole shareholder of EDI.
Azzar's address is 201 Cottage Grove, S.E., Grand Rapids, Michigan
49507. The address of Bomarko's principal office is North Oak Road,
P.O. Box K, Plymouth, Indiana 46563. The address of EDI's principal
office is 208 Pioneer Club Road, East Grand Rapids, Michigan 49506.
CERTAIN TRANSACTIONS
Mr. Searles is president and chief executive officer of Great
Northern Corporation from which the Company purchased corrugated packaging
products totaling $173,600 at contracted prices which are competitive with
other manufacturers supplying similar materials.
Mr. St. John is the owner and president of Earl St. John Forest
Products, Inc., from which the Company purchased pulpwood in 1995. See
"COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION."
Mr. Kuber is president of K&K Warehousing to which the Company
made payments in aggregate of $42,600 in 1995. K&K Warehousing provided
storage, handling, pickup and delivery services for raw materials and
finished product at negotiated rates which are competitive with other
warehousemen and contract carriers.
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information concerning
the compensation earned in each of the last three fiscal years by Mr. Van
Hefty, the Company's President, Chief Operating Officer and Chief
Executive Officer and Miles L. Kresl, Jr., the Company's Vice
President/Administration, Treasurer and Corporate Secretary. No other
Company executive officer earned over $100,000 in the fiscal year ended
December 31, 1995. The persons named in the table are sometimes referred
to herein as the "named executive officers."
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts
Other Securities Long-Term
Annual Underlying Incentive
Name and Compensa- Stock Compensation All Other (3)
Principal Position Year Salary($) Bonus($)(1) tion($)(2) Options(#) Payouts($) Compensation($)
Claude L. Van Hefty, Jr. 1995 $165,189 $45,000 -- -- -- $28,128
President, Chief 1994 81,394 -- -- -- -- 11,909
Operating Officer and 1993 -- -- -- -- -- --
Chief Executive Officer
Miles L. Kresl, Jr. 1995 93,109 $10,900 -- -- -- $17,185
Vice President/ 1994 -- -- -- -- -- --
Administration, 1993 -- -- -- -- -- --
Treasurer and Corporate
Secretary
<FN>
(1) Includes bonus grants of shares of Common Stock (valued according to
their fair market value on the date of grant) in the following
amounts: Mr. Van Hefty, 2,000 shares worth $29,000; Mr. Kresl, 200
shares worth $2,900.
(2) The aggregate amount of such compensation for the indicated person
was less than 10% of the total salary and bonus reported for the
named executive officer in the Summary Compensation Table in each
year.
(3) Consists of (a) life insurance premiums paid by the Company in the
amount of $6,500 and $18,576 for Mr. Van Hefty in 1994 and 1995,
respectively, and $12,184 for Mr. Kresl in 1995, and (b) payments
made by the Company under the Company's Profit Sharing Plan and Trust
for Non-Union Employees in the amount of $5,409 and $9,552 to Mr. Van
Hefty in 1994 and 1995, respectively, and $5,001 to Mr. Kresl in
1995.
Agreements with the Named Executive Officers
In January 1995, the Company and Mr. Van Hefty entered into an
Executive Employment Agreement. The Executive Employment Agreement was
motivated by Mr. Van Hefty's and the Board's desire to provide certainty
and continuity for the Company in the event of a change in control of the
Company. Under the Executive Employment Agreement, Mr. Van Hefty is
entitled to continuation of his salary for up to three years in the event
of the termination of Mr. Van Hefty's employment with the Company under
certain circumstances following a change in control covered by the
Executive Employment Agreement. The Executive Employment Agreement does
not mandate any particular salary, bonus or benefit level prior to a
change in control, and does not restrict the Company's ability to
terminate Mr. Van Hefty prior to a change in control.
Agreements with Retired Executive Officers who are Directors
In October 1990, the Board adopted a Supplemental Executive
Retirement Plan (the "SERP"). The SERP provides additional benefits to
former executive officers designated by the Board, which group includes
Messrs. Meyer and Burish. Under the SERP, a participant acquires the
right upon retirement to benefits of $50,000 per year for ten years,
payable monthly. In the event of death of a participant after retirement,
but before payment of benefits in full, his or her spouse acquires the
right to receive the monthly benefits which would have been paid to the
participant had he or she not died. The amounts calculated under the SERP
are not subject to any reduction for Social Security benefits and are not
determined primarily by final compensation or by average final
compensation and years of service.
Report on Executive Compensation
Executive officer compensation is established through
recommendations of the Compensation Committee of the Board. The
Compensation Committee meets as necessary to review with the President the
performance of executive officers of the Company, and without him in the
evaluation of his services. The Compensation Committee recommends
executive compensation to the Board, which then makes its decisions as to
such matters after review and deliberation. The Compensation Committee
also is responsible for establishing and administering policies which
govern incentives.
The philosophy of the Compensation Committee with respect to
executive officer compensation is to position base salaries conservatively
low in relation to perceived comparable market compensation. The
Compensation Committee makes a review of compensation for companies
perceived by the Compensation Committee to be similar, based on available
public information. The companies included in that review are not
necessarily the same as the companies included in the S&P Paper & Forestry
Products Index used in the following performance graph. The Compensation
Committee then establishes base salaries for the various executive officer
positions based on what the Compensation Committee perceives to be the low
range of salaries for positions which, in the Compensation Committee's
judgment, are comparable in responsibilities and function.
Mr. Van Hefty received 2,000 shares of Company Common Stock as a
bonus in 1995. When Mr. Van Hefty was hired, he was informed that a stock
bonus would be considered for him if the Company was profitable. The
Compensation Committee and the Board determined it was in the Company's
best interests to reward good performance by the Company and provide Mr.
Van Hefty with an equity interest in the Company since he was successful
in his first full year as President. Because of the Company's
performance, the Compensation Committee recommended, and the Board
approved, a stock bonus of 2,000 shares of Common Stock for Mr. Van Hefty.
Other executive officers also received stock bonuses based on the
Company's performance, including Mr. Kresl, with a maximum of 200 shares
awarded to any one officer.
Section 162(m) Limitation. It is anticipated that all 1996
compensation to executives will be fully deductible under Section 162(m)
of the Internal Revenue Code and therefore the Compensation Committee
determined that a policy with respect to qualifying the compensation paid
to executive officers for deductibility is not necessary.
BADGER PAPER MILLS, INC.
COMPENSATION COMMITTEE
Earl R. St. John, Jr. (Chairman)
Edwin A. Meyer, Jr.
Bennie C. Burish
Thomas J. Kuber
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Burish and Meyer became members of the Compensation
Committee in July and October, 1993, respectively. Mr. Meyer retired as
the Company's Chief Executive Officer on March 31, 1993, but continues as
the Chairman of the Board. Mr. Burish retired as the Company's President
in May 1991, but served as Interim President from August 1992 to February
1993. The Company purchases pulpwood from a company owned by Mr. St.
John. In 1995, the amount of such purchases was $42,600. The purchases
were under contracts issued by the Company in accordance with its
published pulpwood price lists. See "CERTAIN TRANSACTIONS."
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis changes
during the past five years in (a) the total shareholder return on the
Common Stock with (b) the total return on the Standard & Poor's 500 Stock
Index (the "Standard & Poor's Index") and (c) the total return on the S&P
Paper & Forestry Products Index (the "PF Products Index"). Such changes
have been measured by dividing (a) the sum of (i) the amount of dividends
for the measurement period, assuming dividend reinvestment, and (ii) the
difference between the price per share at the end of and the beginning of
the measurement period, by (b) the price per share at the beginning of the
measurement period. The graph assumes $100 was invested on January 1,
1991 in Common Stock, the Standard & Poor's Index and the PF Products
Index.
[STOCK PERFORMANCE GRAPH]
December December December December December December
31, 1990 31, 1991 31, 1992 31, 1993 31, 1994 31, 1995
Badger Paper
Mills, Inc. $100 $175.17 $113.66 $ 83.04 $ 65.37 $106.72
PF Products
Index 100 130.47 140.41 154.56 156.60 215.45
Standard &
Poor's
Index 100 126.84 145.03 159.84 166.55 183.37
PROPOSED AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
Summary of Proposed Amendment
The Board unanimously approved and recommends for shareholder
approval a proposed amendment (the "Proposed Amendment") to the Company's
Restated Articles which provides that (i) the Company's By-Laws shall set
forth the general powers, number, classification, tenure and
qualifications of directors; (ii) such By-Law provisions shall be amended,
altered, changed or repealed only by the affirmative vote of holders of at
least seventy-five percent (75%) of the voting power of the Company's then
outstanding capital stock entitled to vote generally (currently only the
Common Stock) or by the affirmative vote of the number of directors in the
two largest classes of directors provided for in the By-Laws, plus one
director; (iii) any director shall be removed from office for Cause (as
defined in the Proposed Amendment which is attached hereto as Exhibit A)
by the affirmative vote of holders of at least seventy-five percent (75%)
of the voting power of the Company's then outstanding capital stock
entitled to vote generally or without Cause by resolution of the Board
adopted by the number of directors in the two largest classes of directors
provided for in the By-Laws plus one director, together with the
affirmative vote of holders of a majority of the voting power of the
Company's then outstanding capital stock entitled to vote generally; and
(iv) these amended Restated Articles provisions may only be amended,
altered, changed or repealed by the affirmative vote of holders of at
least seventy-five percent (75%) of the voting power of the Company's then
outstanding capital stock entitled to vote generally. This summary is
qualified in its entirety by reference to the full text of the Proposed
Amendment set forth in Exhibit A.
The provisions of the Company's Restated Articles now provide
that the number of directors constituting the Board shall be fixed by the
By-Laws but shall not be less than five or more than nine. The Restated
Articles do not speak to the requisite vote of shareholders or directors
needed to amend the By-Laws.
Section 3.02 of the Company's current By-Laws provide for a Board
with staggered terms and for the removal of directors by the affirmative
vote of two-thirds (2/3) of the outstanding shares entitled to vote for
the election of such directors or by the affirmative vote of two-thirds
(2/3) of the directors in office at the time such a vote is taken.
Section 3.02 of the By-laws also provides that it may not be amended,
altered or repealed except with the affirmative vote of two-thirds (2/3)
of the outstanding shares entitled to vote on such matter.
Reasons for Proposed Amendment
The Company's By-Laws currently provide for staggered Board terms and
require a two-thirds (2/3) vote of shareholders to remove directors.
However, in order to ensure that these provisions relating to the
structure and composition of the Board are effective and enforceable under
Wisconsin law, the Company's legal counsel has recommended that the
Company adopt the Proposed Amendment.
The Board believes that Proposed Amendment if adopted will make it
more difficult in the future for any person or event to cause an immediate
change in the composition of the Board. If the Proposed Amendment is
adopted, the shareholders acting on their own will only be able to amend
Sections 3.01 or 3.02 of the By-laws or Article IV of the Restated
Articles with the affirmative vote of shareholders holding at least 75% of
the voting power of the Company's then outstanding capital stock entitled
to vote generally; currently, shareholders holding two-thirds (2/3) of the
outstanding Common Stock is necessary to amend those provisions of the By-
laws.
The Proposed Amendment, if adopted, should encourage a third party
seeking to gain control of the Company to consult first with the Board,
and provides the Board with the opportunity to obtain information and
consider relevant factors, which may include the structure of the
transaction and its tax consequences, the long-term prospects of the
Company and the impact on employees, suppliers, customers and communities
in which the Company operates.
In addition, the Proposed Amendment helps to safeguard
continuity and stability of management and policies, thereby enhancing the
ability of the Company to attract competent and qualified officers and
employees necessary for the Company's continued success.
Possible Adverse Consequences
The Proposed Amendment could have the effect of deterring a
third party from making a takeover proposal and thereby deprive
shareholders of an opportunity to receive a premium over prevailing market
prices for the Common Stock which might otherwise result from such action.
Also, approval of the Proposed Amendment will make more difficult or
discourage a proxy contest, assumption of control or removal of an
incumbent director even if such result might be considered by the Board or
a majority of holders of Common Stock to be in their best interests.
Accordingly, the Proposed Amendment could have the effect of perpetuating
the tenure of the Company's present management. The Board is not aware of
any existing or planned effort on the part of any party to acquire control
of the Company by means of a merger, tender offer, solicitation in
opposition to management or otherwise, or to change the Company's
management in any way.
The Company cannot predict the effect of the Proposed Amendment on
the market value of the Common Stock. Such market value will depend on
many factors, including the Company's performance, general market
conditions and conditions relating to companies in the same or similar
industries as the Company.
Recommendation
AFTER CONSIDERING THE FACTORS DEEMED RELEVANT AND BEARING IN MIND
THAT THE STAGGERED BOARD AND A LESSER SUPER- MAJORITY SHAREHOLDER VOTE
PROVISION ARE ALREADY INCLUDED IN THE COMPANY'S CURRENT BY-LAWS, THE BOARD
UNANIMOUSLY RECOMMENDS THE PROPOSED AMENDMENT TO THE SHAREHOLDERS AND
ENCOURAGES SHAREHOLDERS TO VOTE "FOR" THE PROPOSED AMENDMENT. SHARES OF
COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED
"FOR" THE PROPOSED AMENDMENT.
Vote Required
The number of votes cast "FOR" the Proposed Amendment must exceed the
number of votes cast "AGAINST" the Proposed Amendment to approve the
Proposed Amendment.
SHAREHOLDER PROPOSAL TO RESTORE FULL VOTING POWER
Under Section 180.1150 of the Wisconsin Business Corporation Law
("WBCL"), the voting power of shares of Common Stock held by any person,
or group acting in concert, in excess of 20% of the aggregate of all
shares eligible to vote in the election of Company directors is limited in
voting on any matter to 10% of the full voting power of such excess
shares, unless Company shareholders have voted to restore full voting
power. Shares held or acquired under certain circumstances are excluded
from the application of Section 180.1150, but such exceptions are not
relevant in the matter being voted upon. If a shareholder requests, the
Board must call a meeting of shareholders to consider and act upon a
proposal to restore full voting power of the shares.
In late February 1996, the Company received a shareholder resolution
and notice pursuant to Section 180.1150 from the Azzar Group. Pursuant to
the WBCL, the Azzar Group has requested that the following shareholder
proposal be submitted to a vote of the shareholders at the Annual Meeting.
Therefore, as required of it, the Board has agreed to submit the following
proposal at the Annual Meeting and is including the resolution and notice
in the exact form they were received from the Azzar Group.
Notice of Proposed Resolution
"NOTICE OF PROPOSED RESOLUTION
This Notice and the accompanying Resolution are submitted to
the shareholders of Badger Paper Mills, Inc. ("Badger") pursuant to
Wis. Stat. Section 180.1150 on behalf of Bomarko, Inc. ("Bomarko"),
Extrusions Division, Inc. ("EDI"), and James D. Azzar (collectively
referred to as the "Investors"). The Investors hereby request a
shareholder vote to approve restoration of full voting power to the
Investors in the event that the Investors purchase shares of Badger
in excess of 20% of the voting power in the election of directors.
Bomarko beneficially owns 274,564 shares of the common stock
of Badger ("Badger Shares"). EDI beneficially owns 200 Badger
Shares. Mr. Azzar beneficially owns 274,764 Badger Shares, or
approximately 14% of the voting power in the election of directors,
including shares beneficially owned by Bomarko and EDI.
At this time, the Investors propose to acquire more than 20
percent but less than 50 percent of the total Badger Shares
outstanding.
The Investors propose to acquire such shares with cash on
hand or obtained from the sale of other investment securities, or
from existing lines of credit. Purchases will be made on the open
market and in privately negotiated transactions with individual
shareholders of Badger. Although the Investors have no present
intention to purchase shares otherwise than as set forth above, they
reserve the right to acquire shares by any lawful means.
The Investors' purpose in acquiring such shares is to acquire
a significant equity interest in the Issuer as an investment. The
Investors may, from time to time, reevaluate and change their purpose
for owning such shares.
Bomarko is a converter and manufacturer of coated and printed
paper products. In the ordinary course of its business, it purchases
substantial quantities of paper of types manufactured by Badger.
Bomarko is a competitor of Badger in some product lines.
In December of 1995, James D. Azzar proposed to the Badger
board of directors that Bomarko and Badger enter into discussion of a
strategic transaction. He was, however, advised by the board of
directors of Badger that the board did not wish to pursue such
discussions. No such plan or proposal was presently being advanced
by the Investors.
The Investors have no present plans to gain control of
Badger. Accordingly, the Investors have no present plans or
proposals to liquidate Badger, to sell substantially all of its
assets, or merge it or exchange its shares with any other person, to
change the location of its principal office or a material portion of
its business activities, to change materially its management or
policies of employment, to alter materially its relationship with
suppliers or customers or the communities in which it operates, or
make any other material change in its business, corporate structure,
management or personnel. Because the Investors have no present plan
to gain control of Badger, they do not presently expect their
investment in Badger to materially affect Badger employees. Despite
the absence of a present intention to gain control of Badger, the
Investors recognize that an increase in degree of influence will
result from increased stock ownership. The Investors intend to have
an interest and involvement in management that exceeds that of an
ordinary shareholder. The Investors may from time to time reevaluate
and change their plans and intentions with respect to such shares."
Shareholder Resolution
The Azzar Group is expected to offer a resolution for consideration
by shareholders at the annual meeting along the lines of the following:
RESOLVED, that pursuant to Wis. Stat. Section 180.1150, full
voting power is hereby approved and restored to all shares of this
corporation to be acquired or held by Bomarko Inc., Extrusions
Division, Inc., and James D. Azzar in excess of 20% of the voting
power in the election of directors.
Statement in Support of Shareholder Proposal
The statement provided by the Azzar Group in support of this
shareholder proposal is attached as Exhibit B to this Proxy Statement.
EXHIBIT B IS IN THE FORM SUBMITTED BY THE AZZAR GROUP, AND DOES NOT
REPRESENT THE VIEWS OF THE BOARD OR THE COMPANY.
Board's Statement of Position
The Board unanimously recommends that Company shareholders vote
"AGAINST" this shareholder proposal. The Azzar Group indicates that it
will buy additional shares of Common Stock but not go over the 50%
ownership level. A shareholder could seize effective control of the
Company through ownership of a significant percentage equity interest
although less than 50%. The Board cannot support a vague and general
proposal, like that of the Azzar Group, which would allow a third party to
acquire control of the Company and leave other shareholders without an
effective voice in the Company and without compensation for giving up
control.
Since 1929 the Company has enjoyed reasonable growth and has provided
a substantial degree of security to its investors. The Board believes
that this success has been attributable, in no small part, to the
diversity and stability of its shareholder base. The competitive nature
of the paper industry neither rewards radical change nor forgives failings
to predict and act upon market developments. Corporate decisions at the
Company are consequently made with an appreciation of its 66 years of
successful operation and with an eye toward a productive future. The
Company has concentrated on its long-term success and future, with an
understanding that it needs to weather the short-term dips and trends in
the paper industry.
Company shareholders, by and large, are investors who have invested
for the long haul and who do not buy and sell the Common Stock with the
vagaries of the stock market. Company shareholders appreciate the long-
term benefits that the Common Stock offers.
The Board believes strongly that the concentration of voting power in
the hands of a single or a small number of shareholders would be
potentially damaging to the manner in which the Company has done business
and contrary to the interests of the Company's diverse shareholder base.
In recent years, the Company's shareholder ownership has become less
concentrated. Presently, no single shareholder owns in excess of 20% of
the Common Stock. Diverse ownership protects small shareholders from the
capriciousness of a single or small group of shareholders who wield a
substantial or controlling vote.
A large shareholder with a controlling interest in the Company could
change the Company's philosophy or force short-term decisions that
sacrifice the future of the Company. We do not know the Azzar Group's
intentions for the Company, its business, its shareholders or its
employees, either now or in the future. Most importantly, it is unclear
whether the Azzar Group, or any other single large shareholder (especially
one like Bomarko, which is a potential customer of the Company) can fairly
look out for the other shareholders of the Company at the same time it is
looking out for its own interests. Whatever the Azzar Group's intentions
are, they may change at any time or from time to time. The Board feels
that this should be a concern to its shareholders because such a large
shareholder could effectively control the Company without purchasing the
Common Stock of minority shareholders or giving them any opportunity to
vote on that change, other than this vote.
To protect small shareholders, the Wisconsin legislature enacted
legislation which limits the voting rights of a single shareholder who
owns more than 20% of its shares under the belief that the shareholders of
a corporation should have a choice as to whether they want such a large
investor to wield such power. (The Azzar Group knew or should have known
about this restriction when it began purchasing shares.) The Board
believes that the legislature has prudently given this choice to Wisconsin
shareholders and does not believe that it is in the best interest of
Company shareholders to give effective control of the Company to one
shareholder or group of shareholders.
The Azzar Group indicates that it does not intend to acquire more
than 50% of the Common Stock. That means it would acquire effective
control of the Company without dealing with the remaining shareholders.
The Board cannot support any proposal in which holders of more than half
of the Common Stock would not benefit from a change of control. If
control changes, all shareholders must be treated equally and fairly.
Presently small shareholders have a voice in the operation and
management of the Company; a "for" vote would mute this voice.
Recommendation
THE BOARD BELIEVES THAT THE ACCUMULATION OF VOTING RIGHTS IN EXCESS
OF 20% BY ANY ONE SHAREHOLDER OR GROUP OF SHAREHOLDERS IS CONTRARY TO THE
BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, AND UNANIMOUSLY
RECOMMENDS THAT SHAREHOLDERS VOTE "AGAINST" THIS SHAREHOLDER PROPOSAL.
SHARES OF COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL
BE VOTED "AGAINST" THIS SHAREHOLDER PROPOSAL.
Vote Required
The number of votes cast "FOR" this shareholder proposal must exceed
the number of votes cast "AGAINST" this shareholder proposal to approve
this shareholder proposal.
SHAREHOLDER PROPOSAL TO CREATE
SHAREHOLDER ADVISORY COMMITTEE
Shareholder Proposal and Statement in Support of Shareholder Proposal
Extrusions Division, Inc., 208 Pioneer Club Road, East Grand Rapids,
Michigan, has notified the Company that it intends to present at the
Annual Meeting the following proposal:
"SHAREHOLDER PROPOSAL
RESOLVED, that the shareholders request that the Board of
Directors establish a Shareholder Advisory Committee (the
"Committee") on substantially the following terms. The Committee
will advise the Board of shareholders' views pertaining to
significant transactions involving the Company, including without
limitation, sales of Company assets outside the ordinary course of
business ("Transactions").
A majority of the Board will meet with the Committee on a
quarterly basis and will provide the Committee with information that
is reasonably necessary for the Committee to adequately assess
proposed Transactions. The Committee may, at its option, include a
report of its activities, not to exceed 2,500 words, in the Company's
annual proxy statement. The Committee's advice and recommendations
shall not limit or restrict the ability of the Board to take whatever
action it deems best for the Company.
The Committee will adopt regulations to govern its operations.
The Committee will have at least one but no more than five members,
who will serve without compensation except for reimbursement of
reasonable travel and other expenses. The Committee will consist of
one representative of each of the Company's shareholders that, as of
the record date for determining shareholders entitled to vote at each
annual shareholders' meeting: (1) beneficially owns at least ten
percent of the Company's outstanding shares of common stock; and (2)
has not been an officer or director of the Company, or an "affiliate"
or "associate" of an officer or director, as such terms are defined
in Rule 405 under the Securities Act of 1933, as amended, within the
last five years. Such shareholders shall appoint Committee members
by submitting, in writing, to the Company's Secretary within twenty
days following each annual shareholders' meeting, the
representative's name and proof of the shareholder's stock ownership.
No officer or director of the Company shall serve on the Committee.
The Board will ensure the Committee's formation and its annual
reconstitution within forty-five days after each annual shareholders'
meeting and shall use all reasonable efforts to facilitate its
effective operation.
SUPPORTING STATEMENT
The decisions of the Board of Directors on major policy issues
should be made with due consideration for the views of all
shareholders. We believe that the Committee would provide an
effective means of communicating the views of shareholders
independent of management by establishing a formalized structure for
shareholder input. We think that this structure will benefit the
Company by both providing the directors with an important information
resource and in strengthening the relationship between the board and
shareholders.
The Committee would have no authority to bind or act on behalf of
the Board of Directors, nor would it become involved in Company
management. Instead, the Committee would be concerned with major
policy decisions and major transactions that could have a fundamental
impact on the value of our investments. The shareholders, as owners
of the Company, have a right to a say in major events affecting the
Company. The Committee is intended to provide a productive forum in
which such communications can take place."
Board's Statement of Position
The Board does not believe that a "shareholder advisory committee" is
necessary or helpful for its shareholders. The Board is receptive to
comments and questions from Company shareholders, and welcomes the
opportunity to discuss the Company, its operations and its future
prospects with shareholders.
The proponent for this shareholder proposal is controlled by Mr.
James D. Azzar of the Azzar Group, the same shareholder who put forward
the other shareholder proposal in this Proxy Statement. Mr. Azzar's
proposal to create a new "shareholder advisory committee", while couched
in general terms, seeks to advance his own personal interests. Under the
terms proposed by Mr. Azzar for the "shareholder advisory committee" there
would be only one member currently---Mr. Azzar. For a better
understanding of the Board's concerns about Mr. Azzar's undisclosed goals
and intentions for the Company, you may find it helpful to reread the
section of this Proxy Statement captioned "SHAREHOLDER PROPOSAL TO RESTORE
FULL VOTING POWER---Board's Statement of Position" beginning on page 14 of
this Proxy Statement. The Board has had several meetings and discussions
with Mr. Azzar with respect to the Company, its operations and its future
prospects. These discussions have occurred without the need for a
"shareholder advisory committee".
In summary, the Board does not believe that the creation of a
"shareholder advisory committee" is necessary or helpful for the Company's
shareholders, and its creation would only seek to advance the interests of
a single beneficial owner, Mr. Azzar. The Board believes that the Company
should be run for the benefit of ALL shareholders, not just one.
Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "AGAINST"
THIS SHAREHOLDER PROPOSAL. IF THIS PROPOSAL IS PRESENTED AT THE ANNUAL
MEETING, SHARES OF COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED
PROXIES WILL BE VOTED "AGAINST" THE PROPOSAL.
Vote Required
The number of votes cast "FOR" this shareholder proposal must exceed
the number of votes cast "AGAINST" this shareholder proposal to approve
this shareholder proposal.
MISCELLANEOUS
Independent Auditors
Coopers & Lybrand L.L.P. acted as the independent auditors for
the Company in 1995 and it is anticipated that such firm will be similarly
appointed to act in 1996. Representatives of Coopers & Lybrand L.L.P. are
expected to be present at the Annual Meeting with the opportunity to make
a statement if they so desire. Such representatives are also expected to
be available to respond to appropriate questions.
Shareholder Proposals
Any shareholder entitled to submit proposals to be considered at the
1997 annual meeting shall be a record or beneficial owner of at least 1%
or $1,000 in market value of Common Stock at the time the proposal is
submitted, shall have held said Common Stock for at least one year, and
shall continue to own said Common Stock through the date on which the
annual meeting is held. Proposals which shareholders of the Company
intend to present at and have included in the Company's proxy statement
for the 1997 annual meeting must be received by the Company by the close
of business on December 15, 1996.
Other Matters
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers to file reports concerning
their ownership of Company equity securities with the Securities and
Exchange Commission and the Company. Based solely upon information
provided to the Company by individual directors and executive officers,
the Company believes that during the fiscal year ended December 31, 1995,
all its directors and executive officers complied with the Section 16(a)
filing requirements, except that Mr. Kuber was delinquent in filing a Form
3 upon becoming a director in February of 1995 and in filing a Form 4
regarding a stock purchase made in February of 1995 because he was
travelling outside of the country.
The cost of soliciting proxies will be borne by the Company. In
addition to soliciting proxies by mail, proxies may be solicited
personally and by telephone by certain officers and regular employees of
the Company. The Company will reimburse brokers and other nominees for
their reasonable expenses in communicating with the persons for whom they
hold Common Stock.
By Order of the Board of Directors
BADGER PAPER MILLS, INC.
Miles L. Kresl, Jr.
Corporate Secretary
April 12, 1996
Exhibit A
PROPOSED AMENDMENT TO
RESTATED ARTICLES OF INCORPORATION
ARTICLE IV
(A) General Powers, Number, Classification and Tenure of
Directors. The general powers, number, classification, tenure and
qualifications of the directors of the corporation shall be as set forth
in Sections 3.01 and 3.02 of Article III of the By-Laws of the corporation
as such Sections shall exist from time to time. No provision of Section
3.01 or 3.02 of the By-Laws shall be amended, altered, changed or repealed
except by the affirmative vote of shareholders holding at least seventy-
five percent (75%) of the voting power of the then outstanding shares of
capital stock of the corporation entitled to vote generally; provided,
however, that the Board of Directors, by resolution adopted by the
Requisite Vote (as hereinafter defined), may amend, alter, change or
repeal any provision of Sections 3.01 or 3.02 of the By-Laws without a
vote of the shareholders. As used herein, the term "Requisite Vote" shall
mean the affirmative vote of the number of directors in the two largest
classes of directors provided for in Section 3.01 of the By-Laws, plus one
director.
(B) Removal of Directors. Any director may be removed from
office, but only for Cause (as hereinafter defined) by the affirmative
vote of holders of at least seventy-five percent (75%) of the voting power
of the then outstanding shares of capital stock of the corporation
entitled to vote generally; provided, however, that if the Board of
Directors by resolution adopted by the Requisite Vote shall have
recommended removal of a director, then the shareholders may remove such
director from office without Cause by the affirmative vote of shareholders
holding a majority of such outstanding shares. As used herein, "Cause"
shall exist only if the director whose removal is proposed (i) has been
convicted of a felony by a court of competent jurisdiction and such
conviction is no longer subject to direct appeal or (ii) has been adjudged
by a court of competent jurisdiction to be liable for willful misconduct
in the performance of his or her duties to the corporation in a matter
which has a material adverse effect on the business of the corporation and
such adjudication is no longer subject to direct appeal.
(C) Amendments. Notwithstanding any other provision of these
Restated Articles of Incorporation, the provisions of this Article IV
shall be amended, altered, changed or repealed only by the affirmative
vote of shareholders holding at least seventy-five percent (75%) of the
voting power of the then outstanding shares of capital stock of the
corporation entitled to vote generally.
Exhibit B
JAMES D. AZZAR
208 Cottage Grove, S.E.
Grand Rapids, Michigan 49506
(616) 247-3611
April 8, 1996
Shareholders of
Badger Paper Mills, Inc.
Dear Fellow Shareholder,
I, like you, have invested in shares of Badger Paper Mills,
Inc.
In recent years I, and two companies I own, have purchased
Badger shares in the public market. These shares were sold by willing
sellers. When I bought a single large block of shares which came on the
market earlier this year, I became an owner of over 10% of Badger's
shares. Since then I have continued to purchase shares in the public
markets, in occasional transactions. I am presently the beneficial owner
of 274,764 shares, or about 14% of Badger's stock.
I have no specific present intention to acquire any
particular number of shares. Each of my purchases of shares has been and
will be based on an evaluation of Badger's business and prospects, future
developments and the availability of shares.
I have stated in filings with the Securities and Exchange
Commission, and state to you, that my purpose in acquiring Badger shares
has been to acquire a significant equity interest in Badger as an
investment, and that I have no current plans which would result in any
merger, reorganization, liquidation or extraordinary corporate transaction
involving Badger, a sale or transfer of any of its material assets, any
change in its present Board of Directors or management, any change in
present capitalization, dividend policy business or corporate structure of
Badger, or any discontinuation of its SEC registration or NASDAQ listing.
Bomarko is a converter and manufacturer of coated and
printed paper products. In the ordinary course of its business, it
purchases substantial quantities of paper of types manufactured by Badger.
Bomarko is a competitor of Badger in some product lines.
In December of 1995, I proposed to the Badger board of
directors that Bomarko and Badger enter into discussion of a strategic
transaction. I was, however, advised by the board of directors of Badger
that the board did not wish to pursue such discussions. No such plan or
proposal was presently being advanced by the Investors. Indeed, my
ability to do many of these things is already pretty well limited by the
company's Articles of Incorporation and various Wisconsin laws.
The State of Wisconsin has a law that says that if I buy
more than 20% of Badger's shares without your permission, I can't vote
those shares (actually, I lose 90% of my voting rights on those shares).
The right to vote in elections of directors and on proposals for
fundamental corporate transactions is, I believe, the most significant
right a shareholder has. It is this voting right which provides all
shareholders, not just me, with some ability to assure that management is
responsive to the interests of shareholders, and that management manages
the company for the purpose of providing value to shareholders. I have
relatively little interest in continuing to buy shares if I am faced with
limit on the number of shares that I can own, or a limit on the voting
power available to me to protect and promote the rights and interests of
shareholders generally, and myself, specifically.
I am asking you to VOTE FOR a proposal which would extend
the same voting rights you have on your shares to my shares if I buy over
20%. If you vote against the proposal you are, in my opinion, voting that
you and the other shareholders should not have the opportunity to sell
their shares to me if they wish to do so.
I am advised that management will recommend that you vote
against this proposal. I can clearly understand why management might
prefer that a shareholder who is not in the inside management group would
have significant voting power. However, ask yourself whether it is in
YOUR BEST INTEREST to limit the right of a shareholder to vote and to
limit the ability of yourself and other shareholders to sell their shares.
Please VOTE FOR this proposal.
Sincerely,
James D. Azzar
BADGER PAPER MILLS, INC. PROXY THIS PROXY IS SOLICITED ON BEHALF
Peshtigo, Wisconsin 54147 OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Edwin A. Meyer, Jr. and Bennie C. Burish,
as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the
shares of Common Stock of Badger Paper Mills, Inc., held of record by the
undersigned on March 26, 1996, at the 1996 annual meeting of shareholders
to be held May 14, 1996 and any adjournment or postponement thereof.
1. ELECTION OF DIRECTORS.
[__] FOR all nominees listed [__] WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below). listed below.
BENNIE C. BURISH AND EDWIN A. MEYER, JR.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW).
_____________________________________________________________________
2. PROPOSED AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION.
[__] FOR [__] AGAINST [__] ABSTAIN
3. SHAREHOLDER PROPOSAL TO RESTORE FULL VOTING POWER.
[__] FOR [__] AGAINST [__] ABSTAIN
4. SHAREHOLDER PROPOSAL TO CREATE SHAREHOLDER ADVISORY COMMITTEE.
[__] FOR [__] AGAINST [__] ABSTAIN
5. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE TWO SPECIFIED DIRECTOR NOMINEES IN ITEM 1,
"FOR" THE PROPOSED AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION IN
ITEM 2, "AGAINST" THE SHAREHOLDER PROPOSALS IN ITEMS 3 AND 4, AND ON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING IN ACCORDANCE WITH
THE BEST JUDGMENT OF THE PROXIES NAMED HEREIN.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign.
When signing as attorney, as
executor, administrator, trustee
or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
by President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
[__] Please check here if you plan
to attend the annual
meeting in person.
Dated ______________________, 1996 ________________________________
Signature
___________________________________
Please mark, sign, date, and promptly ________________________________
return the proxy card, using the Signature, if held jointly
enclosed envelope.
___________________________________