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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 (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-b(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
DURA AUTOMOTIVE SYSTEMS, INC.
(Name of registrant as specified in its charter)
DURA AUTOMOTIVE SYSTEMS, INC.
(Name of person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies: ______
(2) Aggregate number of securities to which transaction applies: _________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: __________________________________
(4) Proposed maximum aggregate value of transaction:______________________
(5) Total fee paid: ______________________________________________________
[ ] Fee previously paid with preliminary materials.
[ ] Check box if any part of 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 date of its filing.
(1) Amount previously paid: ______________________________________________
(2) Form, schedule, or registration statement no.: _______________________
(3) Filing party: ________________________________________________________
(4) Date filed: __________________________________________________________
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DURA AUTOMOTIVE SYSTEMS, INC.
4508 IDS CENTER
MINNEAPOLIS, MN 55402
April 6, 1998
To Our Stockholders:
You are cordially invited to attend the Company's 1998 Annual Meeting of
Stockholders which will be held on May 21, 1998, at 1:00 p.m. eastern time, at
Dura Automotive Systems, Inc., 2791 Research Drive, in Rochester Hills,
Michigan.
The official Notice of Meeting, Proxy Statement and Proxy are included with
this letter. The matters listed in the Notice of Meeting are more fully
described in the Proxy Statement.
It is important that your shares be represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please mark, sign
and date the enclosed Proxy and return it promptly in the enclosed envelope to
ensure that your shares will be represented. If you do attend the Annual
Meeting, you may, of course, withdraw your Proxy should you wish to vote in
person.
Sincerely,
[SIGNATURE]
S.A. Johnson
CHAIRMAN OF THE BOARD
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DURA AUTOMOTIVE SYSTEMS, INC.
NOTICE OF
1998 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<S> <C>
TIME: 1:00 p.m. eastern time, May 21, 1998.
PLACE: Dura Automotive Systems, Inc., 2791 Research Drive, Rochester Hills,
Michigan.
ITEMS OF (1) Election of directors;
BUSINESS: (2) Ratification of Arthur Andersen LLP as independent public
accountants of the Company; and
any other business that properly comes before the meeting.
RECORD DATE: Holders of record at the close of business on March 27, 1998 are
entitled to notice of and to vote on all matters presented at the
meeting and at any adjournments or postponements thereof. A list of such
holders will be available prior to the meeting at the Company's
corporate office for examination by any such holder for any purpose
germane to the meeting.
</TABLE>
By Order of the Board of Directors,
[SIGNATURE]
David R. Bovee
ASSISTANT SECRETARY
<TABLE>
<S> <C>
Dated: April 6, 1998
</TABLE>
IMPORTANT
YOU CAN HELP US PREPARE FOR THE MEETING AND ELIMINATE EXTRA EXPENSE-- WHETHER
YOU HAVE A FEW SHARES OR MANY--IF YOU WILL COMPLETE AND RETURN THE ENCLOSED
PROXY PROMPTLY. YOUR PROMPT REPLY WILL ELIMINATE EXTRA EXPENSE IN SOLICITING
YOUR PROXY.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
------------------------
PROXY STATEMENT
---------------------
1998 Annual Meeting of Stockholders
May 21, 1998
------------------------
This Proxy Statement and accompanying Proxy are being furnished to the
holders of Class A common stock, par value $.01 per share, (the "Class A Stock")
and Class B common stock, par value $.01 per share, (the "Class B Stock")
(collectively the "Common Stock") of Dura Automotive Systems, Inc. (the
"Company") in connection with the solicitation of Proxies on behalf of the Board
of Directors of the Company (the "Board of Directors") for the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on May 21, 1998 at 1:00 p.m.
eastern time at Dura Automotive Systems, Inc., 2791 Research Drive, in Rochester
Hills, Michigan, and at any adjournments and postponements thereof. These Proxy
materials are being mailed on or about April 6, 1998 to holders of record on
March 27, 1998 of the Common Stock.
When you sign and return the enclosed Proxy and if no direction is
indicated, such proxy will be voted FOR the slate of directors described herein,
FOR the proposal set forth in Item 2 in the Notice of Meeting, and, as to any
other business as may properly be brought before the Annual Meeting and any
adjournments or postponements thereof, in the discretion of the Proxy holders.
Returning your completed Proxy will not prevent you from voting in person at
the Annual Meeting should you be present and wish to do so. In addition, you may
revoke your Proxy any time before it is voted by written notice to the Secretary
of the Company prior to the Annual Meeting or by submission of a later-dated
Proxy or by the withdrawal of your Proxy and voting in person at the Annual
Meeting.
On March 27, 1998, there were 4,165,338 shares of Class A Stock and
4,664,137 shares of Class B Stock outstanding. The Company's Class A Stock and
Class B Stock are substantially identical except with respect to voting power
and conversion rights. The Class A Stock is entitled to one vote per share and
the Class B Stock is entitled to ten votes per share. The Class B Stock is
convertible at the option of the holder, and mandatorily convertible upon the
transfer thereof (except to affiliates) and upon the occurrence of certain other
events, into Class A Stock on a share-for-share basis. The Class A Stock and
Class B Stock will generally vote together as a single class on all matters
submitted to a vote of stockholders. The presence in person or by Proxy of 51%
of such votes shall constitute a quorum. Under Delaware law, abstentions are
treated as present and entitled to vote and therefore have the effect of a vote
against a matter. A broker non-vote on a matter is considered not entitled to
vote on that matter and thus is not counted in determining whether a matter
requiring approval of a majority of the shares present and entitled to vote has
been approved.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of eleven directors. The Board
of Directors has nominated and recommends the election of each of the eleven
nominees set forth below as a director of the Company to serve until the next
annual meeting of stockholders or until their successors are duly elected and
qualified. The Board of Directors expects all nominees named below to be
available for election. In case any nominee is not available, the Proxy holders
may vote for a substitute unless the Board of Directors reduces the number of
directors.
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Directors will be elected at the Annual Meeting by a plurality of the votes
cast at the meeting by the holders of shares represented in person or by Proxy.
Accordingly, the eleven individuals who receive the greatest number of votes
cast by Stockholders would be elected as directors of the Company. There is no
right to cumulative voting as to any matter, including the election of
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
TO THE BOARD OF DIRECTORS.
The following sets forth information as to each nominee for election at the
Annual Meeting, including age as of March 27, 1998, principal occupation and
employment for a minimum of the past five years, directorships in other publicly
held companies and period of service as a director of the Company. Under the
terms of the Stockholders Agreement, Alkin is granted the right to designate
four director nominees. Alkin has informed the Company that it wishes to
designate John C. Jorgensen and Robert J. Orscheln to replace Neil C. Anderson
and Barbara A. Westhues.
S.A. (TONY) JOHNSON, 57, has served as Chairman and a Director of the
Company since November 1990. Mr. Johnson is the founder, Chief Executive Officer
and President of Hidden Creek Industries (Hidden Creek), a private industrial
management company based in Minneapolis, Minnesota, which has provided certain
management and other services to the Company. Mr. Johnson is also the President
of J2R Corporation (J2R). Prior to forming Hidden Creek, Mr. Johnson served from
1985 to 1989 as Chief Operating Officer of Pentair, Inc., a diversified
industrial company. From 1981 to 1985, Mr. Johnson was President and Chief
Executive Officer of Onan Corp., a diversified manufacturer of electrical
generating equipment and engines for commercial, defense and industrial markets.
Mr. Johnson served as Chairman and a director of Automotive Industries Holding,
Inc., a supplier of interior trim components to the automotive industry, from
May 1990 until its sale to Lear Corporation in August 1995. Mr. Johnson is also
Chairman and a director of Tower Automotive, Inc., a manufacturer of engineered
metal stampings and assemblies for the automotive industry.
KARL F. STORRIE, 60, has served as President, Chief Executive Officer and a
Director of the Company since March 1991. Prior to joining the Company and from
1986, Mr. Storrie was Group President of a number of aerospace manufacturing
companies owned by Coltec Industries, a multi-divisional public corporation.
Prior to becoming a Group President, Mr. Storrie was a Division President of two
aerospace design and manufacturing companies for Coltec Industries from 1981 to
1986. During his thirty-five year career, Mr. Storrie has held a variety of
positions in technical and operations management. Mr. Storrie is also a director
of Argo-Tech Corporation, a manufacturer of aircraft fuel, boost and transfer
pumps.
ROBERT E. BROOKER, JR., 60, has served as a Director of the Company since
September 1996. From 1993 to 1995, Mr. Brooker was President and Chief Operating
Officer of Connell Limited Partnership. Prior thereto, Mr. Brooker served six
years as President and Chief Executive Officer at Lord Corporation. Mr. Brooker
is also a director of Full Circle Investments, a private investment company.
W.H. CLEMENT, 70, has served as a Director of the Company since 1993. Mr.
Clement serves as a consultant to Hidden Creek. From 1975 until May 1994, Mr.
Clement served as Chief Executive Officer or as President of Automotive
Industries Holding, Inc. and its predecessor. Mr. Clement is also a director of
F&M National Corporation, a bank holding company, and Tower Automotive, Inc.
JACK K. EDWARDS, 53, has served as a Director of the Company since December
1996. Mr. Edwards joined Cummins Engine Co., Inc. in 1972 and has served as
Executive Vice President and Group President--Power Generation and International
since March 1996. Mr. Edwards is also a director of David J. Joseph Co., a
processor and trader of steel scrap.
ROBERT R. HIBBS, 36, has served as a Director of the Company since August
1994 and as Vice President since November 1990. Mr. Hibbs, a stockholder of J2R,
has also served as Vice President--Corporate
2
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Development of Hidden Creek since January 1994 and as its Director from April
1990 through December 1993. Prior thereto, Mr. Hibbs worked in the corporate
finance area with Drexel Burnham Lambert, an investment banking firm, in New
York from 1988 to 1990.
JOHN C. JORGENSEN, 60, has been nominated for election to serve on the Board
of Directors. Mr. Jorgensen has served as President of ORTECH CO. since March
1992, Senior Vice President of Manufacturing for Orscheln Management Co. since
April 1996 and Executive Vice President of Orscheln Products L.L.C. since March
1992. Prior to 1992, Mr. Jorgensen was responsible for the operations at
Orscheln Co. Manufacturing.
JAMES L. O'LOUGHLIN, 52, has served as a Director of the Company since
August 1994. Mr. O'Loughlin has also served as Vice President and General
Counsel to Orscheln Management Co. since December 1987 and was named Senior Vice
President in October 1995.
ROBERT J. ORSCHELN, 45, has been nominated for election to serve on the
Board of Directors. Mr. Orscheln has served as President of Orbseal Holding Co.
since its founding in 1983. During the past two years, the holding company was
reorganized and Mr. Orscheln also became President of Orbseal L.L.C.,
Orbseal-Australia L.L.C., Orbseal-Europe I L.L.C. and DeNOVUS L.L.C.
WILLIAM L. (BARRY) ORSCHELN, 47, has served as a Director of the Company
since August 1994. Mr. Orscheln has also served as President of Alkin (and its
predecessors) since March 1994, as President of Orscheln Farm and Home since
September 1995, as President of Orscheln Properties Co., L.L.C., since October
1994 and as President of Orscheln Management Co. since December 1987. Mr.
Orscheln has served as a director of UMB Bank, a bank holding company, since
July 1989 and as a director of Orscheln Management Co. since 1987.
ERIC J. ROSEN, 37, has served as a Director of the Company since January
1995. Mr. Rosen is Managing Director of Onex Investment Corp., a diversified
industrial corporation and an affiliate of Onex, and served as a Vice President
of Onex Investment Corp. from 1989 to February 1994. Prior thereto, Mr. Rosen
worked in the merchant banking group at Kidder, Peabody & Co. Incorporated from
1987 to 1989. Mr. Rosen is also a director of Tower Automotive, Inc.
There are no family relationships between any of the foregoing persons or
any of the Company's executive officers, except that Robert J. Orscheln and
William L. Orscheln are brothers.
BOARD AND COMMITTEE MEETINGS
The Board of Directors held four meetings (exclusive of committee meetings)
during the preceding fiscal year. The Board of Directors has established the
following committees, the functions and current members of which are noted
below. During 1997, each director attended at least 75% of the meetings of the
Board of Directors and any committees on which such director served.
EXECUTIVE COMMITTEE. The Executive Committee of the Board of Directors (the
"Executive Committee") consists of Messrs. Johnson (Chairman), W. Orscheln and
Storrie. The Executive Committee has all the power and authority vested in or
retained by the Board of Directors and may exercise such power and authority in
such manner as it shall deem for the best interest of the Company in all cases
in which specific direction shall not have been given by the Board of Directors
and subject to any specific limitations imposed by law or a resolution of the
Board of Directors. The Executive Committee met six times during the preceding
fiscal year.
AUDIT COMMITTEE. The Audit Committee of the Board of Directors (the "Audit
Committee") consists of Messrs. Hibbs (Chairman) and Rosen and Ms. Westhues. The
Audit Committee is responsible for reviewing, as it shall deem appropriate, and
recommending to the Board of Directors, internal accounting and financial
controls for the Company and accounting principles and auditing practices and
procedures to
3
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be employed in the preparation and review of the Company's financial statements.
The Audit Committee is also responsible for recommending to the Board of
Directors independent public accountants to audit the annual financial
statements of the Company. The Audit Committee met twice during the preceding
fiscal year.
COMPENSATION COMMITTEE. The Compensation Committee of the Board of
Directors (the "Compensation Committee") consists of Messrs. Clement (Chairman),
Brooker, and Edwards. During the last fiscal year, the Compensation Committee
had all the power and authority of the Board of Directors with respect to
salaries, compensation and benefits of directors and executive officers of the
Company and made recommendations as to the grant of options under the 1996 Key
Employee Stock Option Plan ("Stock Option Plan"). The Compensation Committee met
three times during the preceding fiscal year.
NOMINATING COMMITTEE. The Company does not have a nominating committee.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or any of its affiliates each
receive an annual fee of $16,000 for serving as a director of the Company. In
addition, each non-employee director receives $1,000 for each Board of Directors
meeting attended, $500 for each committee meeting attended and reimbursement of
out of pocket expenses incurred to attend such meetings.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities to file reports
of securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than ten
percent beneficial owners also are required by rules promulgated by the SEC to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required, the
Company believes that during the period from January 1, 1997 through December
31, 1997 all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as independent public accountants, to audit the
consolidated financial statements of the Company for the year ending December
31, 1998, and to perform other appropriate services as directed by the Company's
management and the Board of Directors.
A proposal will be presented at the meeting to ratify the appointment of
Arthur Andersen LLP as the Company's independent public accountants. It is
expected that a representative of Arthur Andersen LLP will be present at the
Annual Meeting to respond to appropriate questions or to make a statement if he
or she so desires. If the stockholders do not ratify this appointment by the
affirmative vote of a majority of the shares represented in person or by Proxy
at the meeting, other independent public accountants will be considered by the
Board of Directors upon recommendation of the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
4
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OTHER BUSINESS
At the date of this Proxy Statement, the Company has no knowledge of any
business other than that described above that will be presented at the Annual
Meeting. If any other business should properly be brought before the Annual
Meeting and any adjournments or postponements thereof, the Proxies will be voted
in the discretion of the Proxy holders.
SECURITY OWNERSHIP
The table below sets forth certain information regarding the equity
ownership of the Company as of March 1, 1998 by (i) each person or entity known
to the Company who beneficially owns five percent or more of the Common Stock of
the Company, (ii) each Director, Director Nominee and Named Executive Officer
and (iii) all Directors and executive officers of the Company as a group. Unless
otherwise stated, each of the persons named in the table has sole voting and
investment power with respect to the securities beneficially owned by it or him
as set forth opposite its or his name. Beneficial ownership of the Common Stock
listed in the table has been determined in accordance with the applicable rules
and resultations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
------------------------------------------------------
CLASS A STOCK CLASS B STOCK
-------------------------- --------------------------
DIRECTORS, OFFICERS NUMBER OF PERCENT OF NUMBER OF PERCENT OF
AND 5% STOCKHOLDERS SHARES CLASS SHARES CLASS
- ----------------------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
ONEX DHC LLC(1)(2)......................................... -- -- 2,501,990 53.8%
Alkin Co.(2)(3)............................................ -- -- 2,166,810 46.4%
J2R Corporation(2)(4)...................................... -- -- 408,211 8.8%
S.A. Johnson(2)(4)......................................... -- -- 417,879 9.0%
Karl F. Storrie(2)(5)...................................... 44,400 1.1% 115,531 2.5%
David R. Bovee(2).......................................... 3,500 * 31,308 *
Joe A. Bubenzer(2)......................................... 3,900 * 35,814 *
Stephen E.K. Graham........................................ -- -- -- --
Robert R. Hibbs(2)(6)...................................... -- -- 416,160 8.9%
John J. Knappenberger...................................... 30,959 * -- --
Milton D. Kniss(2)......................................... 2,550 * 8,961 *
Neil C. Anderson(2)(3)..................................... -- -- 2,166,810 46.4%
Robert E. Brooker, Jr...................................... 22,500 * -- --
W.H. Clement(2)............................................ 2,000 * -- --
Jack K. Edwards............................................ 2,500 * -- --
John C. Jorgensen(2)(3).................................... -- -- 2,166,810 46.4%
James L. O'Loughlin(2)(3) ................................. -- -- 2,166,810 46.4%
Robert J. Orscheln(2)(3)................................... -- -- 2,166,810 46.4%
William L. Orscheln(2)(3).................................. -- -- 2,166,810 46.4%
Eric J. Rosen(1)(2)........................................ 5,000 * 2,501,990 53.8%
Scott D. Rued(2)(7)........................................ -- -- 412,109 8.9%
Barbara A. Westhues(2)(3).................................. -- -- 2,166,810 46.4%
American Express Company(8)................................ 695,000 16.6% -- --
Dresdner RCM Global Investors LLC(9)....................... 396,500 9.5% -- --
The TCW Group, Inc.(10).................................... 366,000 8.8% -- --
State of Wisconsin Investment Board(11).................... 237,000 5.7% -- --
Frontier Capital Management Company, Inc.(12).............. 216,700 5.2% -- --
The Northwestern Mutual Life Insurance Company(13)......... 206,900 5.0% -- --
All Directors and Officers as a group (19 persons)......... 117,309 2.8% 4,583,063 98.2%
</TABLE>
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* Less than one percent.
5
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(1) Reflects shares of Class B Stock held by Onex DHC LLC, which has shared
voting power over 2,501,990 shares of Common Stock (see footnote (2)) and
sole dispositive power over 1,794,913 shares of Class B Stock. Mr. Rosen, a
Director of the Company, is Managing Director of Onex Investment Corp. and
disclaims beneficial ownership of all shares of Common Stock owned by Onex
DHC LLC. Onex DHC LLC and Onex Investment Corp. are both wholly owned
subsidiaries of Onex Corporation.The address for Onex DHC LLC and Mr. Rosen
is c/o Onex Investment Corp., 712 Fifth Avenue, 40th Floor, New York, New
York 10019.
(2) Onex, J2R, Messrs. Johnson, Storrie, Bovee, Bubenzer, Hibbs, Kniss, Clement,
Rosen and Rued and certain of the Company's other existing stockholders have
entered into agreements pursuant to which such stockholders agreed to vote
their shares of Common Stock in the same manner as Onex votes its shares on
all matters presented to the Company's stockholders for a vote and, to the
extent permitted by law, granted to Onex a proxy to effectuate such
agreement. As a result, Onex has voting control of approximately 49.3% of
the Common Stock. All of the Company's existing stockholders, including
Alkin, have entered into an agreement providing for the election of the
Board. As a result, such stockholders collectively have voting control over
91.8% of the Common Stock.
(3) Includes 14,420 shares issuable upon the exercise of currently exercisable
options issued to Alkin in connection with the Company's acquisition of the
automotive parking brake cable and lever business and light duty cable
business from Alkin. Alkin has granted each of Messrs. Anderson and
O'Loughlin and Ms. Westhues options to acquire 13,218 shares of the Class B
Stock owned by Alkin. Messrs. Anderson, Jorgensen, O'Loughlin, R. Orscheln
and W. Orscheln and Ms. Westhues are officers of Alkin and, other than Mr.
W. Orscheln, each disclaimsbeneficial ownership of the shares owned by Alkin
other than the shares subject to each of their outstanding options. The
address for Alkin is 2000 U.S. Highway 63 South, Moberly, Missouri 65270,
and the address for each such individual is c/o Alkin at the same address.
(4) Includes 408,211 shares owned by J2R, of which Mr. Johnson is President, and
9,668 shares owned by Mr. Johnson. The address for Mr. Johnson and J2R is
c/o Dura Automotive Systems, Inc., 4508 IDS Center, Minneapolis, Minnesota
55402.
(5) Includes 1,400 shares owned by Mr. Storrie's wife. Mr. Storrie disclaims
beneficial ownership of such shares.
(6) Includes 408,211 shares owned by J2R, of which Mr. Hibbs is a stockholder,
and 7,949 shares owned by Mr. Hibbs. Mr. Hibbs disclaims beneficial
ownership of the shares owned by J2R. The address for Mr. Hibbs is c/o Dura
Automotive Systems, Inc., 4508 IDS Center, Minneapolis, Minnesota 55402.
(7) Includes 408,211 shares owned by J2R, of which Mr. Rued is a stockholder,
and 3,898 shares owned by Mr. Rued. Mr. Rued disclaims beneficial ownership
of the shares owned by J2R. The address for Mr. Rued is c/o Dura Automotive
Systems, Inc., 4508 IDS Center, Minneapolis, Minnesota 55402.
(8) American Express Company ("AEC") and American Express Financial Corporation
("AEFC") each reported as of December 31, 1997 shared dispositive power with
respect to 695,000 shares of Class A Stock. IDS Discovery Fund Inc. reported
as of December 31, 1997 shared dispositive power with respect to 475,000
shares of Class A Stock. The address for AEC is American Express Tower, 200
Vesey Street, New York, New York 10285 and the address for AEFC and IDS
Discovery Fund Inc. is IDS Tower 10, Minneapolis, Minnesota 55440.
(9) Dresdener RCM Global Investors LLC, RCM Limited L.P. and RCM General
Corporation each reported as of December 31, 1997 sole voting power with
respect to 354,600 shares of Class A Stock and sole dispositive power with
respect to 396,500 shares of Class A Stock. The address for these entities
is Four Embarcadero Center, Suite 2900, San Francisco, California 94111.
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(10) The TCW Group, Inc. ("TCW") and Robert Day each reported as of December 31,
1997 sole voting and dispositive power with respect to 366,000 shares of
Class A Stock. The address for TCW is 865 South Figueroa Street, Los
Angeles, California 90017 and the address for Robert Day is 200 Park Avenue,
Suite 2200, New York, New York 10166.
(11) State of Wisconsin Investment Board ("SWIB") reported as of December 31,
1997 sole voting and dispositive power with respect to 237,000 shares of
Class A Stock. The address for SWIB is P.O. Box 7842, Madison, Wisconsin
53707.
(12) As of December 31, 1997, the address for Frontier Capital Management
Company, Inc. is 99 Summer Street, Boston, Massachusetts 02110.
(13) The Northwestern Mutual Life Insurance Company ("NWML") reported as of
December 31, 1997 shared voting and dispositive power with respect to
206,900 shares of Class A Stock. The address for NWML is 720 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the Company's chief executive officer's and
the four other most highly compensated executive officers' (the "named executive
officers") compensation packages for the years ended December 31, 1997, 1996 and
1995. Other than the Stock Option Plan, the Company does not maintain any
long-term compensation plans.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- -------------
OTHER ANNUAL OPTIONS ALL OTHER
NAME AND SALARY BONUS COMPENSATION GRANTED COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($)(2) (#) ($)(3)
- ----------------------------------- --------- ---------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Karl F. Storrie 1997 $ 345,833 $ 425,000 $ 13,917 30,000 $ 6,856
President and Chief 1996 294,168 400,000 10,872 80,000 3,725
Executive Officer 1995 258,340 300,000 11,775 -- 3,600
Joe A. Bubenzer 1997 187,083 150,000 7,218 12,500 5,322
Senior Vice President 1996 168,000 140,000 10,424 10,000 2,637
1995 157,333 120,000 8,322 -- 2,616
Milton D. Kniss 1997 167,917 150,000 3,981 12,500 5,724
Vice President 1996 144,000 135,000 5,082 10,000 4,512
1995 122,000 110,000 6,250 -- 2,776
David R. Bovee 1997 155,000 125,000 11,041 10,000 4,931
Vice President 1996 140,000 125,000 10,257 10,000 4,447
1995 130,833 110,000 4,389 -- 2,832
John J. Knappenberger 1997 147,500 120,000 5,852 10,000 5,614
Vice President(4) 1996 135,000 110,000 47,156(5) 27,373 3,375
1995 4,625 45,000 83 -- --
</TABLE>
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(1) Includes amounts deferred by employees under the Company's 401(k) employee
savings plan, pursuant to Section 401(k) of the Internal Revenue Code.
(2) Includes the value of personal benefits and perquisites.
7
<PAGE>
(3) The amounts disclosed in this column include amounts contributed by the
Company to the Company's 401(k) employees savings plan and profit sharing
plan and dollar value of premiums paid by the Company for term life
insurance on behalf of the named executive officers.
(4) Mr. Knappenberger became an employee of the Company on December 18, 1995.
(5) Includes $39,263 for reimbursement of relocation costs.
The tables below disclose, for the named executive officers, information
regarding stock options granted during, or held at the end of, 1997 pursuant to
the Stock Option Plan.
OPTION GRANT TABLE
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM(2)
GRANTED EMPLOYEES IN PRICE EXPIRATION ------------------------
NAME (#)(1) FISCAL YEAR (PER SHARE) DATE 5% 10%
- --------------------------------------------- ---------- --------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
K.F. Storrie................................. 30,000 20.8% $ 24.50 12/17/07 $ 462,238 $ 1,171,401
J.A. Bubenzer................................ 12,500 8.7% 24.50 12/17/07 192,599 488,084
M.D. Kniss................................... 12,500 8.7% 24.50 12/17/07 192,599 488,084
D.R. Bovee................................... 10,000 6.9% 24.50 12/17/07 154,079 390,457
J.J. Knappenberger........................... 10,000 6.9% 24.50 12/17/07 154,079 390,467
</TABLE>
- ------------------------
(1) These options vest ratably over four years commencing one year from the date
of grant.
(2) Amounts reflect certain assumed rates of appreciation set forth in the SEC's
executive compensation disclosure rules. Actual gains, if any, on stock
option exercises depend on future performance of the Company's Common Stock
and overall stock market conditions. No assurances can be made that the
amounts reflected in these columns will be achieved.
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL
YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
YEAR-END(#) YEAR-END($)
--------------- -------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------- --------------- -------------------
<S> <C> <C>
K.F. Storrie............................................ 40,000/70,000 $ 410,000/417,500
J.A. Bubenzer........................................... 2,500/20,000 $10,000/33,125
M.D. Kniss.............................................. 2,500/20,000 $10,000/33,125
D.R. Bovee.............................................. 2,500/17,500 $10,000/32,500
J.J. Knappenberger...................................... 23,623/13,750 $234,323/17,500
</TABLE>
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Messrs. Clement,
Brooker and Edwards. See "Certain Relationships and Related Transactions" for
certain information concerning Onex.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The following has been submitted by the Compensation Committee:
GENERAL EXECUTIVE OFFICER COMPENSATION POLICIES
The Compensation Committee is responsible for developing and recommending
the Company's executive compensation policies to the Board of Directors. The
Compensation Committee believes that executive compensation should be related to
the value created for the Company's stockholders. The executive officer
compensation program has been designed to attract and retain highly qualified
and motivated employees, and to reward superior performance. The executive
compensation program consists of three components: (1) base salary; (2) annual
cash bonus; and (3) long-term equity incentives.
BASE SALARY
The base salaries of the executive officers are based upon market and
competitive factors. This includes a comparison of the salaries for similar
positions at comparable companies. Increases in base salaries are based upon the
performance of the executive officers as compared to pre-established goals.
ANNUAL CASH BONUS
The annual cash bonus for the executive officers is based in part on the
overall financial performance of the Company and in part on the performance of
the executive officer. The financial performance of the Company is measured by
revenue and operating income growth and actual performance against budgeted
performance. The performance of the executive officer is measured against
pre-established goals determined prior to the beginning of the year.
LONG-TERM EQUITY INCENTIVES
The long-term equity incentives consist of awards under the Stock Option
Plan administered by the Compensation Committee. Pursuant to the terms of the
Stock Option Plan, options are granted at an exercise price equal to the
Company's Common Stock price on the date the options are granted. The
Compensation Committee believes the Stock Option Plan aligns management's
long-term interests with stockholder interests, as the ultimate compensation is
based upon the Company's stock performance. The Compensation Committee also
believes the Stock Option Plan is a cost effective method of providing key
management with long-term compensation. The Compensation Committee approves the
employees who participate in the Stock Option Plan based upon recommendations by
the Chairman of the Board of Directors and the Chief Executive Officer. The
Compensation Committee determines the terms and conditions of the options based
upon individual performance, responsibility and tenure with the Company.
9
<PAGE>
The Compensation Committee may also, based on the recommendation of the Board of
Directors, approve the issuance of stock option agreements not in connection
with the Stock Option Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
The 1997 base salary of Karl F. Storrie, the Company's Chief Executive
Officer ("CEO"), $345,833, was based upon market and competitive factors. The
CEO's annual cash bonus is determined in part based on the financial performance
of the Company and in part on the performance of the CEO. The financial
performance of the Company is measured by increases in revenues and operating
income against budgeted amounts. The performance of the CEO is measured against
pre-established goals and against the Company's long-term strategy. The CEO also
participates in the Stock Option Plan and was granted options covering 30,000
shares during 1997.
The foregoing report has been approved by all members of the Compensation
Committee.
Compensation Committee:
W.H. Clement, Chairman
Robert E. Brooker, Jr.
Jack K. Edwards
10
<PAGE>
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return since the Common Stock became publicly traded on August 14, 1996 with the
Nasdaq National Market Index and with the OEM Automotive Supplier Composite
Index. The OEM Automotive Supplier Composite Index consists of the following:
Aeroquip-Vickers, Amcast Industrial Corporation, Borg-Warner Automotive, Inc.,
Breed Technologies, Citation Corporation, Collins & Aikman, Control Devices,
Dana Corporation, Donnelly Corporation, Dura Automotive Systems, Inc., Eaton
Corporation, Excel Industries, Inc., Gentex Corporation, Hayes Wheels
International, Inc., Intermet Corporation, ITT Industries, Johnson Controls,
Lear Corporation, Magna International, Inc., MascoTech, Inc., Modine
Manufacturing, Shiloh, Simpson Industries, Inc., Standard Products Company,
STRATTEC Security, Superior Industries International, TRW, and Walbro
Corporation. The comparison is based on the assumption that $100.00 was invested
on August 15, 1996 in each of the Common Stocks, the Nasdaq National Market
Index and the OEM Automotive Supplier Composite Index with dividends reinvested.
COMPARISON OF TOTAL RETURN
AMONG NASDAQ NATIONAL MARKET INDEX,
OEM AUTOMOTIVE SUPPLIER COMPOSITE INDEX
AND DURA AUTOMOTIVE SYSTEMS, INC.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DRRA NASDAQ OEM SUPPLIERS
<S> <C> <C> <C>
Aug. 14, 1996 100.0 100.0 100.0
Dec. 31, 1996 155.2 112.9 113.8
Dec. 31, 1997 170.7 138.4 140.0
</TABLE>
11
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the 1994 acquisition of Alkin Co. (Alkin), the Company
entered into agreements with Alkin whereby the Company receives services related
to data processing, payroll, personnel administration and other administrative
matters. Amounts paid under these agreements were $1.8 million in 1995, $1.3
million in 1996 and $1.1 million in 1997. In addition, the Company and Alkin
agreed to supply each other's operations with certain items necessary for the
manufacture of their respective products. These supply agreements are for
periods of up to five years and the Company is required to purchase such
supplies from Alkin only so long as the supply terms remain no less favorable
than could be obtained from an independent party.
The Company, Onex, J2R, Alkin and Messrs. Johnson and Hibbs and certain
other investors are parties to a Stockholders Agreement pursuant to which each
party has agreed to vote his or its shares in the same manner that Onex votes
its shares of the Company's Common Stock.
The Company, Onex and certain stockholders including J2R, Alkin, Messrs.
Johnson and Storrie are parties to a registration agreement pursuant to which
the Company has granted certain of its stockholders rights to register shares of
the Company's Common Stock.
The Company paid fees to Hidden Creek of approximately $850,000 in 1997 in
connection with the acquisitions of the VOFA Group and GT Automotive Systems,
Inc.Certain officers and employees of Hidden Creek continue to provide services
to the Company. Subsequent to the termination of the management fee, a portion
of the salaries and expenses of such Hidden Creek officers and employees, of
approximately $200,000, was allocated to the Company.
In connection with the December 1991 private placement of Common Stock, Mr.
Storrie acquired 139,531 shares of Class B Stock of which 115,531 shares are
still held by Mr. Storrie. The Company loaned Mr. Storrie $75,000 in connection
with such purchase. Mr. Storrie has repaid $12,900 of the outstanding balance as
of March 27, 1998.The loan bears interest at 1 1/2% above the Base Rate, matures
on December 31, 1998 and is secured by a pledge of the shares.
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 1999 ANNUAL MEETING
Proposals of Stockholders intended to be presented at the Annual Meeting in
1999 must be received by the assistant secretary of Dura Automotive Systems,
Inc., 2791 Research Drive, Rochester Hills, Michigan, 48309, not later than
December 9, 1998 to be considered for inclusion in the Company's 1999 Proxy
materials. As of March 27, 1998, no proposals to be presented at the 1998 Annual
Meeting had been received by the Company.
ADDITIONAL INFORMATION
This solicitation is being made by the Company. All expenses of the Company
in connection with this solicitation will be borne by the Company. The Company
will request brokerage firms, nominees, custodians and fiduciaries to forward
Proxy materials to the beneficial owners of shares held of record by such
persons and will reimburse such persons and the Company's transfer agent for
their reasonable out-of-pocket expenses in forwarding such materials.
The Company will furnish without charge to each person whose Proxy is being
solicited, upon the written request of any such person, a copy of the Company's
Annual Report on Form 10-K for the fiscal
12
<PAGE>
year ended December 31, 1997, as filed with the SEC, including the financial
statements. Requests for copies of such Annual Report on Form 10-K should be
directed to: Dura Automotive Systems, Inc., 4508 IDS Center, Minneapolis, MN
55402.
PLEASE COMPLETE THE ENCLOSED PROXY AND MAIL IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE AS SOON AS POSSIBLE.
By order of the Board of Directors,
[SIGNATURE]
DAVID R. BOVEE, ASSISTANT SECRETARY
April 6, 1998
13
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, a stockholder of Dura Automotive Systems, Inc. (the
"Company"), hereby appoints S.A. Johnson and Karl F. Storrie, and each of
them, as proxies, each with the power to appoint his substitute, and hereby
authorizes each or either of them to represent and to vote, as designated
below, all the shares of the Class A Common Stock of the Company held of
record by the undersigned on March 27, 1998 at the 1998 Annual Meeting of
Stockholders of the Company to be held on May 21, 1998 at 1:00 p.m.,
Eastern Time, and at any and all adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND "FOR" THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
-arrow- DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED - arrow-
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. 1998 ANNUAL MEETING
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C> <C> <C>
1 - ROBERT E. BROOKER, JR. 2 - W.H. CLEMENT / / FOR all nominees / / WITHHOLD AUTHORITY
3 - JACK K. EDWARDS 4 - ROBERT R. HIBBS listed to the left to vote for all nominees
5 - S.A. JOHNSON 6 - JOHN C. JORGENSEN (except as specified listed to the left.
7 - JAMES L. O'LOUGHLIN 8 - ROBERT J. ORSCHELN below).
9 - WILLIAM L. ORSCHELN 10 - ERIC J. ROSEN
11 - KARL F. STORRIE
</TABLE>
(Instructions: To withhold authority to vote for any ----------------
indicated nominee, write the numbers(s) of the --------- | |
nominee(s) in the box provided to the right.) ----------------
2. To ratify the selection of Arthur Andersen / /FOR / /AGAINST / /ABSTAIN
LLP as the Company's Independent Public
Accountants.
3. In their discretion, the proxy holders are authorized to vote
upon such other matters as may properly come before the 1998
Annual Meeting and at any adjournment or postponement thereof.
Check appropriate box Date _____________ NO. OF SHARES
Indicate changes below:
Address Change? / / Name Change? / / -----------------------------
| |
-----------------------------
SIGNATURE(S) IN BOX
Please sign exactly as your
name appears hereon. When
shares are held by joint
tenants, both should sign.
When signing as attorney,
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 an authorized person.
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, a stockholder of Dura Automotive Systems, Inc. (the
"Company"), hereby appoints S.A. Johnson and Karl F. Storrie, and each of
them, as proxies, each with the power to appoint his substitute, and hereby
authorizes each or either of them to represent and to vote, as designated
below, all the shares of the Class B Common Stock of the Company held of
record by the undersigned on March 27, 1998 at the 1998 Annual Meeting of
Stockholders of the Company to be held on May 21, 1998 at 1:00 p.m.,
Eastern Time, and at any and all adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND "FOR" THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
-arrow- DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED - arrow-
<PAGE>
DURA AUTOMOTIVE SYSTEMS, INC. 1998 ANNUAL MEETING
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C> <C> <C>
1 - ROBERT E. BROOKER, JR. 2 - W.H. CLEMENT / / FOR all nominees / / WITHHOLD AUTHORITY
3 - JACK K. EDWARDS 4 - ROBERT R. HIBBS listed to the left to vote for all nominees
5 - S.A. JOHNSON 6 - JOHN C. JORGENSEN (except as specified listed to the left.
7 - JAMES L. O'LOUGHLIN 8 - ROBERT J. ORSCHELN below).
9 - WILLIAM L. ORSCHELN 10 - ERIC J. ROSEN
11 - KARL F. STORRIE
</TABLE>
(Instructions: To withhold authority to vote for any ----------------
indicated nominee, write the numbers(s) of the --------- | |
nominee(s) in the box provided to the right.) ----------------
2. To ratify the selection of Arthur Andersen / /FOR / /AGAINST / /ABSTAIN
LLP as the Company's Independent Public
Accountants.
3. In their discretion, the proxy holders are authorized to vote
upon such other matters as may properly come before the 1998
Annual Meeting and at any adjournment or postponement thereof.
Check appropriate box Date _____________ NO. OF SHARES
Indicate changes below:
Address Change? / / Name Change? / / -----------------------------
| |
-----------------------------
SIGNATURE(S) IN BOX
Please sign exactly as your
name appears hereon. When
shares are held by joint
tenants, both should sign.
When signing as attorney,
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 an authorized person.
