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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Delco Remy International, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
DELCO REMY INTERNATIONAL, INC.
Notice of Annual Meeting of Shareholders
Date: December 15, 2000
Time: 11:00 a.m.
Place: University Place Conference Center & Hotel
850 West Michigan St.
Indianapolis, IN 46202-5198
The purposes of the Annual Meeting are:
1. To elect directors.
2. To ratify the appointment of independent accountants.
3. To increase the number of shares in the 1997 Stock-Based Incentive
Compensation Plan.
4. To increase the number of shares in the 1997 Non-Qualified Stock Option
Plan for Non-Employee Directors.
5. To transact any other business that may properly come before the
meeting.
By Order of the Board of Directors
/s/ David E. Stoll
David E. Stoll November 17, 2000
Secretary
================================================================================
Admittance to the meeting will be limited to the shareholders eligible to vote
or their authorized representative(s). Beneficial owners holding shares through
an intermediary such as a bank or broker will be admitted upon proof of
ownership.
<PAGE>
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being mailed beginning
November 17, 2000, to owners of shares of Delco Remy International, Inc. (the
"Company") Class A Common Stock in connection with the solicitation of proxies
by the Board of Directors for the 2000 Annual Meeting of Shareholders. This
proxy procedure is necessary to permit all Class A Common Stock shareholders,
many of whom live throughout the United States and in foreign countries and are
unable to attend the Annual Meeting, to vote. The Board of Directors encourages
you to read this document thoroughly and to take this opportunity to vote on the
matters to be decided at the Annual Meeting.
================================================================================
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Voting Procedures......................................................................... 1
Corporate Governance...................................................................... 2
Election of Directors (Item 1 on Proxy Card).............................................. 3
Ratification of Appointment of Independent Accountants (Item 2 on Proxy Card)............. 5
Increase in Shares Available Under 1997 Stock-Based Incentive Compensation Plan (Item
3 on Proxy Card).................................................................... 6
Increase in Shares Available Under 1997 Non-Qualified Stock Option Plan for Non-
Employee Directors (Item 4 on Proxy Card)........................................... 6
Submission of Shareholder Proposals and Director Nominations.............................. 7
Executive Compensation.................................................................... 7
Retirement Plans.......................................................................... 12
Other Forms of Compensation............................................................... 16
Stock Performance Graph................................................................... 18
Security Ownership of Certain Beneficial Owners and Directors and Officers................ 19
Executive Officers........................................................................ 20
Section 16(a) Beneficial Ownership Reporting Compliance................................... 21
Employment Agreement...................................................................... 22
Shareholders Agreement.................................................................... 22
Compensation Committee Interlocks and Insider Participation............................... 23
Other Business............................................................................ 23
</TABLE>
DELCO REMY INTERNATIONAL, INC.
2902 ENTERPRISE DRIVE
ANDERSON, INDIANA 46013
<PAGE>
VOTING PROCEDURES
Your vote is very important. Your shares can only be voted at the Annual Meeting
if you are present or represented by proxy. Whether or not you plan to attend
the Annual Meeting, you are encouraged to vote by proxy to assure that your
shares will be represented. You may revoke your proxy at any time before it is
voted, by written notice to the Secretary of the Company, by submission of a
proxy bearing a later date, or by casting a ballot at the Annual Meeting.
Properly executed proxies that are received before the Annual Meeting's
adjournment will be voted in accordance with the directions provided. If no
directions are given, your shares will be voted by one of the individuals named
on your proxy card as recommended by the Board of Directors. If you wish to give
a proxy to someone other than those named on the proxy card, you should cross
out those names and insert the name(s) of the person(s), not more than four, to
whom you wish to give your proxy.
Who can vote? Shareholders as of the close of business on November 13, 2000 are
entitled to vote. On that day, approximately 18,118,058 shares of Class A Common
Stock were outstanding and eligible to vote. Each share is entitled to one vote
on each matter presented at the Annual Meeting. A list of shareholders eligible
to vote will be available at the offices of Ice Miller, One American Square, Box
82001, Indianapolis, Indiana, 46282-0002, beginning December 5, 2000.
Shareholders may examine this list during normal business hours for any purpose
relating to the Annual Meeting.
What shares are included in the proxy card? The proxy card represents all the
shares of Class A Common Stock registered to your account. Each share of Class A
Common Stock that you own entitles you to one vote.
How are votes counted? The Annual Meeting will be held if a quorum, consisting
of a majority of the outstanding shares of common stock entitled to vote, is
represented. Broker non-votes, votes withheld and abstentions will be counted
for purposes of determining whether a quorum has been reached. "Broker non-
votes" occur when nominees, such as banks and brokers, holding shares on behalf
of beneficial owners, do not receive voting instructions from the beneficial
owners by ten days before the Annual Meeting. In this event, the nominees may
vote those shares only on matters deemed routine by the New York Stock Exchange,
such as the election of Directors and ratification of the appointment of
independent accountants. On non-routine matters, nominees cannot vote and there
is a so-called "broker non-vote" on that matter. Because proposals must be
approved by a majority of the votes cast, broker non-votes and abstentions have
no effect on a proposal's outcome. Because Directors are elected by a plurality
of the votes cast, votes withheld from some or all nominees for Director could
have an effect on the outcome of the election.
Who will count the vote? The Company's transfer agent, American Stock Transfer &
Trust Company, and ADP Investor Communication Services will tally the vote,
which will be certified by an independent Inspector of Election.
1
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Is my vote confidential? Proxies, ballots and voting tabulations are available
for examination only by the independent Inspector of Election and tabulators.
Your vote will not be disclosed to the Board or management of the Company except
as may be required by law.
Who is soliciting this proxy? Solicitation of proxies is made on behalf of the
Board of Directors of the Company, and the cost of preparing, assembling and
mailing the notice of Annual Meeting, proxy statement and form of proxy will be
borne by the Company. In addition to the use of mail, proxies may be solicited
by directors, officers and regular employees of the Company, without additional
compensation, in person or by telephone or other electronic means. The Company
will reimburse brokerage houses and other nominees for their expenses in
forwarding proxy material to beneficial owners of the Company's stock.
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CORPORATE GOVERNANCE
In accordance with Delaware General Corporation Law and the Company's
Certificate of Incorporation and Bylaws, the Company's business, property and
affairs are managed under the direction of the Board of Directors. Although
Directors are not involved in the day-to-day operating details, they are kept
informed of the Company's business through written reports and documents
provided to them regularly, as well as by operating, financial and other reports
presented by the Chairman and other officers of the Company at meetings of the
Board of Directors and committees of the Board.
Meetings of the Board. The Board of Directors held 4 meetings in fiscal year
2000. Each of the incumbent Directors, other than Mr. Cashin, attended at least
75% of the Board and committee meetings to which the Director was assigned. The
incumbent Directors in the aggregate attended 91% of their Board and assigned
committee meetings.
Committees of the Board. The Board of Directors has established two standing
committees.
Audit Committee -- recommends the independent accountants to conduct the annual
audit of the books and accounts of the Company, and reviews the adequacy of the
Company's financial reporting, accounting systems and controls. The Audit
Committee also evaluates the Company's internal and external auditing
procedures. The Committee held two meetings during fiscal year 2000. Current
members of the Committee are Messrs. Billig, Gerrity and Delaney.
Compensation Committee -- reviews and approves salary and other compensation of
officers and administers certain benefit plans. The Compensation Committee also
has the authority to administer, grant and award stock options under the
Company's stock option plans, subject to approval of the Board of Directors. The
Committee held four meetings during fiscal year 2000.
2
<PAGE>
Current members of the Committee are Messrs. Billig, Cashin and Delaney.
Director Compensation and Other Certain Relationships and Related Transactions.
Directors do not receive compensation for their services as directors, except
that Messrs. Gerrity, Billig and Sperlich received $320,000, $200,000 and
$235,733, respectively, during fiscal year 2000 for services relating to special
projects (in connection with acquisitions and strategic alliances) undertaken by
them at the direction of the Board of Directors in their capacities as
Directors, and Mr. Schultz was paid $28,000 in fiscal year 2000 for services
rendered as a director of the Company. Mr. Schultz is entitled to receive an
annual fee of $25,000 plus $1,000 for attendance in person at each quarterly
meeting of the Board of Directors. Outside directors of the Company are also
entitled to receive stock options for Class A Common Stock pursuant to the 1997
Non-Qualified Stock Option Plan for Non-Employee Directors. Options of 2,000
shares per director were granted under such plan to Messrs. Gerrity, Billig,
Cashin, Delaney and Schultz during fiscal year 2000.
Shareholders Agreement. Citicorp Venture Capital Ltd. ("CVC"), World Equity
Partners, L.P., MASG Disposition, Inc. (formerly MascoTech Automotive Systems
Group, Inc.) ("MASG"), Mr. Sperlich, Mr. Gerrity and other individuals are
parties to a Second Amended and Restated Securities Purchase and Holders
Agreement dated March 22, 1998 (the "Shareholders Agreement") whereby they have
agreed to vote their shares in such a manner so as to elect the entire Board of
Directors of the Company. The parties to the Shareholders Agreement beneficially
own over 50% of the outstanding shares of Class A Common Stock and,
consequently, are able to elect the entire Board of Directors of the Company.
--------------------------------------------------------------------------------
ELECTION OF DIRECTORS
ITEM 1 ON PROXY CARD
The Company's directors are elected at each annual meeting and hold office until
the next election. Each of the 7 nominees is currently a director of the
Company. The person named on the accompanying form of proxy will vote the shares
for the nominees, unless you instruct otherwise. Each nominee has consented to
stand for election and the Board does not anticipate that any nominee will be
unavailable to serve. In the event that one or more of the nominees should
become unavailable to serve at the time of the Annual Meeting, the shares
represented by proxy will be voted for the remaining nominees and any substitute
nominee(s) designated by the Board. Director elections are determined by a
plurality of the votes cast.
The following biographies provide a brief description of each nominee's
principal occupation and business experience, age (as of October 20, 2000), and
directorships held in other public corporations.
The Board of Directors recommends a vote FOR each of the listed nominees.
3
<PAGE>
NOMINEES
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Harold K. Sperlich, Chairman of the Board of Directors. Mr. Sperlich has been
Chairman of the Board of Directors since the Company's inception in 1994. Since
retiring from Chrysler Corporation in 1988, having served as its President, Mr.
Sperlich has served as a consultant to the automotive industry. Before joining
Chrysler in 1977, Mr. Sperlich held several senior administrative and operating
posts with Ford Motor Company. Age: 70
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Thomas J. Snyder, President, Chief Executive Officer and Director. Mr. Snyder
was elected Chief Executive Officer effective January 1, 2000. He was elected
President, Chief Operating Officer and Director when the Company was founded in
1994. From 1973 to 1994, he held a variety of managerial and executive positions
with Delco Remy Division of General Motors Corporation. He is a member of the
Board of the Indiana Chamber of Commerce and of Saint John's Health Systems. He
is a member of the Board of Visitors of Hudson Institute and of Indiana
University's Kelley School of Business in Indianapolis.
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E.H. Billig, Vice Chairman of the Board of Directors. Mr. Billig has been Vice
Chairman of the Board of Directors since the Company's inception in 1994. Mr.
Billig has been Chairman of the Board of MSX International, Inc. since 1997,
where he was also, until January 2000, Chief Executive Officer. He was formerly
President and Chief Operating Officer of MascoTech, Inc. He is also a director
of Titan Wheel International, Inc. Age: 73
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Richard M. Cashin, Jr., Director. Mr. Cashin has been a director since the
Company's inception in 1994. Mr. Cashin was President from 1994 to April 2000
and a Managing Director for more than five years of CVC. Since April, he is a
partner of Cashin Capital Partners, a private equity investment firm. In
addition, Mr. Cashin serves as a director of Lifestyle Furnishings International
Ltd., Fairchild Semiconductor Corporation, Freedom Forge, Euromax International,
Plc., Hoover Group, Inc., Gerber Childrenswear Inc., JAC Holdings, GVC Holdings,
MSX International, Inc. Titan Wheel International, Inc., and Flender AG. Age: 47
--------------------------------------------------------------------------------
Michael A. Delaney, Director. Mr. Delaney has been a director since the
Company's inception in 1994. Mr. Delaney has been a Managing Director of CVC
since 1997 and a Vice President for more than the past five years. Mr. Delaney
is also a director of GVC Holdings, JAC Holdings, Palomar Technologies, Inc., SC
Processing, Inc., MSX International, Inc., International Knife and Saw Inc.,
Great Lakes Dredge and Dock Corporation, Trianon Industries Inc., ChipPac Inc.
and Strategic Industries Inc. Age: 46
4
<PAGE>
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James R. Gerrity, Director. Mr. Gerrity has been a director since the Company's
inception in 1994. From 1986 to 1993, Mr. Gerrity was President and a director
of Dyneer Corporation. Mr. Gerrity currently is a director of Palomar
Technologies Corporation, Wescor Graphics, Inc., Ballantrae Corporation and
Flender AG. Age: 59
--------------------------------------------------------------------------------
Robert J. Schultz, Director. Mr. Schultz became a director in 1997. Mr. Schultz
retired as Vice Chairman and a member of the Board of Directors of General
Motors Corporation ("GM") in 1993. Mr. Schultz joined GM in 1955 and served as
General Manger of GM's Delco Electronics Division and Group Executive of
Chevrolet-Pontiac-GM of Canada . Mr. Schultz is also a director of MCT
Corporation, and was Chairman of the Board of OEA, Inc. until its sale earlier
this year. He is also a member of the Board of Trustees of California Institute
of Technology. Age: 70
--------------------------------------------------------------------------------
RATIFICATION OF APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
ITEM 2 ON PROXY CARD
Subject to shareholder ratification, the Board of Directors, acting upon the
recommendation of the Audit Committee, has reappointed the firm of Ernst & Young
LLP, Certified Public Accountants, as independent accountants to examine the
financial statements of the Company for the five-month transition period ending
December 31, 2000. Ratification requires the affirmative vote of a majority of
eligible shares present at the Annual Meeting, in person or by proxy, and voting
thereon. Unless otherwise specified by the shareholders, the shares of stock
represented by the proxy will be voted for ratification of the appointment of
Ernst & Young LLP as independent accountants to audit and report upon the
financial statements of the Company for the five-month transition period ending
December 31, 2000. If this appointment is not ratified by shareholders, the
Audit Committee may reconsider its recommendation.
One or more representatives of Ernst & Young LLP are expected to be at the
Annual Meeting. They will have an opportunity to make a statement and will be
available to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification.
5
<PAGE>
INCREASE IN SHARES AVAILABLE UNDER
1997 STOCK-BASED INCENTIVE COMPENSATION PLAN
ITEM 3 ON PROXY CARD
The Company's 1997 Stock-Based Incentive Compensation Plan, as amended (the
"Incentive Plan") was approved by the Board of Directors and by the shareholders
of the Company in 1997, with a total of 1,224,000 shares of Common Stock
reserved for issuance under the Incentive Plan. Subject to shareholder approval,
in October 2000, the Board of Directors approved an increase of 1,224,000
shares, totaling 2,448,000 shares, authorized for issuance under the Incentive
Plan.
As of October 31, 2000, options to purchase 630,675 shares of Common Stock (net
of cancelled or forfeited options) had been granted under the Incentive Plan,
and 593,325 shares remained available for future grants. The closing price of
the Common Stock on October 31, 2000 was $6.69.
The Board of Directors believes that this proposed increase in the number of
shares authorized for issuance under the Incentive Plan is in the best interest
of the Company. The Board of Directors believes that this increase will
strengthen the Company's ability to attract and retain individuals with the
desired training, experience and expertise as key employees in a highly
competitive labor market. The Board of Directors also believes that this
increase will allow the Company to furnish additional incentives to key
individuals to promote the Company's financial success and be motivated to
increase shareholder value.
The Board of Directors recommends a vote FOR the increase.
--------------------------------------------------------------------------------
INCREASE IN SHARES AVAILABLE UNDER
1997 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
ITEM 4 ON PROXY CARD
The Company's 1997 Non-Qualified Stock Option Plan for Non-Employee Directors
(the "Director Plan") was approved by the Board of Directors and by the
shareholders of the Company in 1997, with a total of 100,000 shares of Common
Stock reserved for issuance under the Director Plan. Subject to shareholder
approval, in October 2000, the Board of Directors approved an increase of
100,000 shares, totaling 200,000 shares, authorized for issuance under the
Director Plan.
As of October 31, 2000, options to purchase 20,000 shares of Common Stock (net
of cancelled and forfeited options) had been granted under the Directors Plan,
and 80,000 options remained available for future grants. The closing price of
the Common Stock on October 31, 2000 was $6.69.
6
<PAGE>
The Board of Directors believes that this proposed increase in the number of
shares authorized for issuance under the Directors Plan is in the best interest
of the Company. The Board of Directors believes that this increase will better
enable the Company to compete successfully with other companies to attract and
retain qualified directors.
The Board of Directors recommends a vote FOR the increase.
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SUBMISSION OF SHAREHOLDER PROPOSALS AND
DIRECTOR NOMINATIONS
The next shareholder meeting will be held on or about May 18, 2001. Shareholders
wishing to have a proposal included in the Board of Directors' 2001 Proxy
Statement must submit the proposal so that the Secretary of the Company receives
it no later than January 18, 2001, 120 days prior to the stated annual meeting
date. The Securities and Exchange Commission rules set forth standards as to
what shareholder proposals are required to be included in a proxy statement.
Shareholders who have missed this deadline but wish to have a proposal presented
at the annual meeting must submit the proposal so that the Secretary of the
Company receives it no later than the close of business on the 10th day
following the earlier of the date on which notice of the date of the meeting was
mailed or public disclosure was made. Shareholders wishing to make a nomination
for election to the board of directors must submit written notice of the
shareholder's intention to make such nomination so that the Chairman of the
Board receives it between February 17 and March 19. The Company's Bylaws set
forth certain informational requirements for shareholders' nominations of
directors and proposals.
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EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
Report of the Compensation Committee of the Board of Directors on Executive
Compensation
Role of Committee. The Compensation Committee of the Board of Directors
(the "Committee") establishes, oversees and directs the Company's executive
compensation programs and policies and administers the Company's stock option
plans. The Committee seeks to align executive compensation with Company
objectives and strategies, management programs, business financial performance
and enhanced shareholder value. The Committee consists of independent
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<PAGE>
outside directors, none of whom is or was an officer or employee of the Company.
The Committee's objectives include (i) attracting and retaining
exceptional individuals as executive officers and (ii) providing key executives
with motivation to perform to the full extent of their abilities in an effort to
maximize Company performance to deliver enhanced value to the Company's
shareholders. The Committee believes it is important to place a greater
percentage of executive officers' compensation at risk than that of non-
executives by tying executive officers' compensation directly to the performance
of the business and value of the Common Stock. Executive compensation consists
primarily of an annual salary, bonuses linked to the performance of the Company
and long-term equity-based compensation.
Compensation. The annual salaries of the Company's executive officers
are set at levels designed to attract and retain exceptional individuals by
rewarding them for individual and Company achievements. The Committee reviews
the annual salary of each executive officer in relation to such officer's
performance and previous salaries and general market and industry conditions or
trends and makes appropriate adjustments. The Committee reviews executive
officers' salaries annually to adjust such salaries based on each executive
officer's past performance, expected future contributions, the scope and nature
of responsibilities of, including changes in such responsibilities, and
competitive compensation data relating to such executive officer.
The Committee believes that a portion of the executives' compensation
should be tied to the financial results of the Company in order to reward
individual performance and overall Company success. Each year, objective targets
are established for each officer. Such targets include the Company's financial
targets, such as revenue, earnings and return on assets, as well as individual
strategic and operating targets. Additionally, a portion of each officer's bonus
is based on subjective criteria particular to each officer's individual
operating responsibilities.
The Company has employee stock option plans in order to offer key
employees the opportunity to acquire an equity interest in the Company, thereby
aligning the interests of these employees more closely with the long term
interests of shareholders. Awards under these employee stock option plans may be
in the form of options, restricted stock or stock appreciation rights. Options,
which have a fixed exercise price and vest over a five-year period and have an
exercise price equal to the market value of the Common Stock on the date of
grant, were granted to executive officers and other key employees in 2000.
2000 Chairman of the Board. The Committee determined the 2000
compensation of Mr. Sperlich, Chairman of the Board, in accordance with the
above discussion. In addition, the Committee based Mr. Sperlich's bonus on his
overall leadership and management of the Company.
Deductibility of Compensation. Section 162(m) of the Internal Revenue
Code imposes a $1 million limit on the deductibility of compensation paid to
executive officers of public
8
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companies. The Committee believes that all of the compensation awarded to the
Company's executive officers will be fully deductible in accordance with this
limit.
COMPENSATION COMMITTEE
E.H. Billig
Richard M. Cashin, Jr.
Michael A. Delaney
9
<PAGE>
COMPENSATION TABLES
Executive Compensation
The following table sets forth, for the fiscal years ending July 31, 2000, 1999
and 1998, information regarding the cash compensation paid by the Company, as
well as other compensation paid or accrued for such year, to each of the
executive officers of the Company named below, in all capacities in which they
served.
Summary Compensation Table
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Dollars in Thousands
<TABLE>
<CAPTION>
Long
Annual Term
Compensation Compensation
------------ ------------
(a) (b) (c) (d) (g) (i)
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options Compensation
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Harold K. Sperlich 2000 $123.6 $262.2 7,000 $252.2(1)
Chairman of the Board 1999 $295.0 $292.4 7,000 $ 23.9(1)
1998 $275.0 $280.5 6,900 $ 29.6(1)
Thomas J. Snyder 2000 $350.0 $387.3 7,000 $ 17.3(2)
President and Chief Executive Officer 1999 $295.0 $292.4 7,000 $ 13.8(2)
1998 $275.0 $280.5 6,900 $ 9.7(2)
J. Timothy Gargaro (3) 2000 $ 62.5 $ 62.7 20,000 $ 0.2(4)
Senior Vice President and Chief Financial 1999 -- -- -- --(4)
Officer 1998 -- -- -- --(4)
Joseph P. Felicelli 2000 $260.0 $103.3 5,000 $ 10.8(5)
Group Vice President, Aftermarket 1999 $235.0 $ 92.4 5,000 $ 13.7(5)
1998 $193.3 $115.3 5,500 $ 8.8(5)
Richard L. Stanley 2000 $275.0 $218.6 5,000 $ 11.2(6)
President, Delco Remy America 1999 $220.0 $135.6 5,000 $ 7.0(6)
1998 $175.0 $127.3 4,400 $ 4.9(6)
Susan E. Goldy 2000 $245.0 $162.8 3,500 $ 22.5(7)
Senior Vice President and 1999 $230.0 $136.7 3,500 $ 23.1(7)
General Counsel 1998 $225.2 $125.3 5,300 $ 22.6(7)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) "All Other Compensation" for Mr. Sperlich includes the following: (i)
$5,509 and $1,375 in matching contributions under the Company's 401(k)
Plan in fiscal years 1999 and 1998, respectively; (ii) $6,824, $2,000
and $3,146 in salaried medical retiree benefits in fiscal years 2000,
1999 and 1998, respectively; (iii) $9,601, $16,385 and $25,040 in
premiums paid under a life insurance policy in fiscal years 2000, 1999
and 1998, respectively; and (iv) $235,733 in directors fees in fiscal
year 2000.
10
<PAGE>
(2) "All Other Compensation" for Mr. Snyder in fiscal years 2000, 1999 and
1998, respectively, includes the following: (i) $7,778, $5,875 and
$2,578 in matching contributions under the Company's 401(k) Plan; and
(ii) $9,542, $7,947 and $7,139 in premiums paid under a life insurance
policy.
(3) Mr. Gargaro joined the Company in May 2000.
(4) "All Other Compensation" for Mr. Gargaro in fiscal year 2000 includes
$235 in salaried medical retiree benefits.
(5) "All Other Compensation" for Mr. Felicelli in fiscal years 2000, 1999
and 1998, respectively, includes the following: (i) $3,821, $6,919 and
$3,850 in matching contributions under the Company's 401(k) Plan; (ii)
$2,000, $2,000 and $2,000 in salaried medical retiree benefits; and
(iii) $4,930, $4,759 and $2,967 in premiums paid under a life insurance
policy.
(6) "All Other Compensation" for Mr. Stanley in fiscal years 2000, 1999 and
1998, respectively, includes the following: (i) $9,216, $5,826 and
$3,142 in matching contributions under the Company's 401(k) Plan; and
(ii) $1,958, $1,138 and $1,797 in premiums paid under a life insurance
policy.
(7) "All Other Compensation" for Ms. Goldy in fiscal years 2000, 1999 and
1998, respectively, includes the following: (i) $3,683, $4,211 and
$3,097 in matching contributions under the Company's 401(k) Plan; (ii)
$2,000, $2,000 and $2,700 in salaried medical retiree benefits; (iii)
$2,310, $2,240 and $1,567 in premiums paid under a life insurance
policy; and (iv) $14,525, $14,622 and $15,233 in living allowances.
Stock Options
The following table sets forth information regarding 2000 fiscal year-end option
values for each of the executive officers named below:
2000 Aggregated Option/SAR Exercises
and Year-End Option/SAR Value
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Value Options/SARs at Year-End In-the-Money Options/
Acquired on Realized (# of Shares) SARs at Year-End(1) ($)
--------------------------- ---------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harold K. Sperlich 0 0 8,340 12,560 0 0
Thomas J. Snyder 0 0 8,340 12,560 0 0
J. Timothy Gargaro 0 0 0 20,000 0 0
Joseph P. Felicelli 0 0 6,300 9,200 0 0
Richard L. Stanley 0 0 5,640 8,760 0 0
Susan E. Goldy 0 0 5,280 7,020 0 0
------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These year-end values represent the differerence between the fair
market value of common stock subject to options (based on the stock's
closing price on the New York
11
<PAGE>
Stock Exchange on July 31, 2000) and the exercise prices of the
options. "In-the-money" means that the fair market value of the stock
is greater than the option's exercise price on the valuation date.
The following table sets forth information regarding stock options granted under
the 1997 Stock-Based Incentive Compensation Plan and the 1997 Non-Qualified
Stock Option Plan for Non-Employee Directors during the fiscal year 2000 to the
executive officers of the Company named below:
2000 Option/SAR Grants
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Individual Grants
------------------------------------------------------------------
Number Securities of % of Total Exercise Grant
Underlying Options/SARs or Base Expiration Date
Options/SARs Granted to Price Date Value(2)
Granted(1) (#) Employees ($/Share) ($)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Harold K. Sperlich 7,000 2.49% $8.50 12/20/09 $24,710
Thomas J. Snyder 7,000 2.49% $8.50 12/20/09 $24,710
J. Timothy Gargaro 20,000 7.12% $8.00 05/09/10 $65,400
Joseph P. Felicelli 5,000 1.78% $8.50 12/20/09 $17,560
Richard L. Stanley 5,000 1.78% $8.50 12/20/09 $17,560
Susan E. Goldy 3,500 1.25% $8.50 12/20/09 $12,355
--------------------------------------------------------------------------------------------------
</TABLE>
(1) The Options become exercisable at a rate of 20% each year, beginning
December 20, 2000, except for options granted to J. Timothy Gargaro which
become exercisable beginning May 9, 2001.
(2) Present values were calculated using the Black-Scholes American option
valuation method. The actual value, if any, that an executive officer may
receive is dependent on the excess of the stock price over the exercise
price. Use of this model should not be viewed as a forecast of the future
performance of the Company's stock price. The estimated grant date
present value of each stock option is $3.53 based on the following
defined option terms and assumptions: (a) a stock price of $8.50; (b) an
exercise price of $8.50; (c) an expected life of 7 years; (d) an
estimated risk-free interest rate of 6.00%; (e) a dividend yield of 0%
representing the stock's current yield; and (f) an estimated stock price
volatility rate of .220.
--------------------------------------------------------------------------------
RETIREMENT PLANS
Delco Remy America, Inc., a wholly owned subsidiary of the Company ("DRA"),
established the Delco Remy America Salaried Retirement Plan (the "Retirement
Plan") primarily to provide eligible salaried employees with a monthly pension
benefit after retirement for life. Except for eligible employees who transferred
to DRA directly from General Motors Corporation ("GM") and began immediate
participation, generally all employees of DRA who are compensated on a
12
<PAGE>
salaried basis are eligible to participate in the Retirement Plan after
completing one year of service and attaining age 21. The Retirement Plan is a
defined benefit, tax-qualified plan under section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and contributions to the Plan generally
are deductible for income tax purposes for the year contributed, and benefits
are not taxable to employees until paid.
The standard retirement benefit under the Retirement Plan is a monthly, single
life annuity starting at age 65, equal to 1.25 % of an employee's average
monthly pay multiplied by the employee's years of service with DRA. Average
monthly pay is generally based on the employee's 60-consecutive month highest
average base pay during the ten-year period before retirement. The benefit for
certain long-service GM employees who transferred to DRA, however, is not less
than $60 times their years of service with DRA. Under the Code the annual
benefit provided by the Retirement Plan cannot exceed the lesser of $135,000 or
100% of compensation (subject to certain further limitations under the
Retirement Plan and Code). Eligible employees generally may retire on or after
age 55 with 10 years of service, with their monthly Retirement Plan benefit
actuarially reduced if payment actually starts prior to age 62. Employees who
terminate with less than five years of service forfeit any benefits which they
may have accrued, and such forfeitures are used to offset future contributions
otherwise required to fund the Plan. Certain late retirement, death and
disability benefits also may be paid under the Retirement Plan.
The years of credited service as of July 31, 2000 for each of the named
executive officers of the Company were Harold K. Sperlich - 6 years; Thomas J.
Snyder - 38 years; J. Timothy Gargaro - 0.3 years; Joseph P. Felicelli - 3
years; Richard L. Stanley - 22.4 years; and Susan E. Goldy - 3.6 years.
The following table shows estimated annual retirement benefits that would be
payable to participants under the Retirement Plan upon normal retirement at age
65 under various assumptions as to final average annual compensation and years
of credited service and on the assumption that benefits will be paid in the form
of a single life annuity. The benefit amounts listed are not subject to any
deduction for Social Security benefits.
Estimated Annual Retirement Benefits (in dollars)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
--------------------------------------------
Years of Service
--------------------------------------------
Final Average Compensation 10 15 20 30 40
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
100,000 ......................................... 12,500 18,750 25,000 37,500 50,000
--------------------------------------------
150,000 ......................................... 18,750 28,125 37,500 56,250 75,000
--------------------------------------------
200,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
250,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
300,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
350,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
400,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
500,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
600,000 ......................................... 21,250 31,875 42,500 63,750 85,000
--------------------------------------------
700,000 ......................................... 21,250 31,875 42,500 63,750 85,000
----------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
The Company established the Delco Remy International, Inc. Supplemental
Executive Retirement Plan (the "Executive Retirement Plan"), effective as of
August 1, 1999. The Executive Retirement Plan provides additional retirement
benefits to a select group of management or highly compensated employees who
have devoted their full time and attention to DRI. Eligibility for the Executive
Retirement Plan is determined by the DRI Compensation Committee. The benefit
under the Executive Retirement Plan is based on a formula taking into account a
percentage of the participant's final average compensation (over the last 5
years, not including bonuses or special compensation) to be paid at retirement
(age 62), death or voluntary termination. A reduced benefit will be paid for
early retirement (age 55-62 and completion of 5 years of service). Payments will
be made quarterly over a 10-year period.
Participants are vested in their benefit as follows:
Less than 5 years of service = 0%
At least 5, but less than 6 years of service = 20%
At least 6, but less than 7 years of service = 40%
At least 7, but less than 8 years of service = 60%
At least 8, but less than 9 years of service = 80%
9 or more years of service = 100%
100% vesting at disability retirement.
Benefits will be forfeited if the participant is or could be terminated "for
cause" (as defined in the Executive Retirement Plan) or if, after retirement or
voluntary termination, the participant engages in activity that would have
constituted grounds to terminate "for cause" (as defined in the Executive
Retirement Plan) if still employed. If the participant dies, benefits shall be
payable to the designated beneficiary. If there is a change in control (as
defined in the Executive Retirement Plan) of DRI, the successor entity will
continue the Plan and implement a Rabbi Trust, and all participants will be 100%
vested.
The following table shows estimated annual retirement benefits that would be
payable to participants under the Executive Retirement Plan upon normal
retirement at age 65 under various assumptions as to final average annual
compensation and years of credited service and on the assumption that benefits
will be paid in the form of a single life annuity. The benefit amounts listed
are not subject to any deduction for Social Security benefits.
14
<PAGE>
Estimated Annual Retirement Benefits (in dollars)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Years of Service
------------------------------------------------
Final Average Compensation 10 15 20 30 40
------------------------------------- ------------------------------------------------
<S> <C> <C> <C> <C> <C>
100,000 ..................................... -- -- -- -- --
------------------------------------------------
150,000 ..................................... -- -- -- -- --
------------------------------------------------
200,000 ..................................... 60,000 60,000 60,000 60,000 60,000
------------------------------------------------
250,000 ..................................... 75,000 75,000 75,000 75,000 75,000
------------------------------------------------
300,000 ..................................... 90,000 90,000 90,000 90,000 90,000
------------------------------------------------
350,000 ..................................... 175,000...175,000 175,000 175,000 175,000
------------------------------------------------
400,000 ..................................... 200,000 200,000 200,000 200,000 200,000
------------------------------------------------
500,000 ..................................... 250,000 250,000 250,000 250,000 250,000
------------------------------------------------
600,000 ..................................... 300,000...300,000 300,000 300,000 300,000
------------------------------------------------
700,000 ..................................... 350,000 350,000 350,000 350,000 350,000
----------------------------------------------------------------------------------------------------
</TABLE>
DRA established the Delco Remy America, Inc. Supplemental Executive Retirement
Plan (the "Supplemental Plan"), effective as of August 1, 1997. The Supplemental
Plan provides additional retirement benefits to an employee of the Company who
was employed in a key executive or managerial position and/or was highly
compensated, who had experienced reductions in retirement benefits due to
limitations imposed by the Code. This employee is not covered by the Executive
Retirement Plan. The benefit is based on a formula taking into account the
individual's base compensation and years of service with the Company and GM.
Payments are made in an installment amount to be provided for 15 years, payable
in 60 equal quarterly installments starting with the calendar quarter of the
individual's retirement date. In the event of the individual's death on or after
his retirement, the benefit will be paid to his beneficiary in a single lump sum
payment equal to the present value, as of the time of death, of any remaining
installments, based on an 8% interest rate assumption, as soon as
administratively feasible after the participant's death. The participant
forfeits any and all rights he may have to his benefits in the event he engages
in competition (as defined in the Supplemental Plan) or is terminated (or could
be terminated) for cause (as defined in the Supplemental Plan) even though the
individual is in pay status under the Plan.
The following table shows estimated annual retirement benefits that are payable
to the participant under the Supplemental Plan, upon normal retirement at age 65
under various assumptions as to final average annual compensation and years of
credited service and on the assumption that benefits will be paid in the form of
a single life annuity. The benefit amounts listed are not subject to any
deduction for Social Security benefits.
15
<PAGE>
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefits (in dollars)
----------------------------------------------------------------------------------------------------
Years of Service
--------------------------------------------
Final Average Compensation 10 15 20 30 40
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
100,000 ............................................ -- -- -- -- --
--------------------------------------------
150,000 ............................................ -- -- -- -- --
--------------------------------------------
200,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
250,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
300,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
350,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
400,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
500,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
600,000 ............................................ 25,440 25,440 25,440 25,440 25,440
--------------------------------------------
700,000 ............................................ 25,440 25,440 25,440 25,440 25,440
----------------------------------------------------------------------------------------------------
</TABLE>
________________________________________________________________________________
OTHER FORMS OF COMPENSATION
401(k) Plan. The Company established the Delco Remy International 401(k)
Retirement and Savings Plan (the "401(k) Plan") to allow eligible employees to
help meet their long-term savings needs. This plan was substantially amended
effective as of January 1, 2000. Except for eligible employees who transferred
to DRA directly from GM and began immediate participation, generally all
employees who are compensated on a salaried or hourly basis (excluding employees
in a collective bargaining unit) are eligible to participate in the 401(k) Plan
after completing three months of continuous employment. The 401(k) Plan is a
defined contribution, tax-qualified plan under section 401(a) of the Code with
employer and employee pre-tax contributions deductible by the Company for income
tax purposes for the year contributed, and such contributions and earnings
thereon are not taxable to employees until paid to them.
An employee in the 401(k) Plan may elect to have from 1% to 20% of base salary
contributed from pay to the 401(k) Plan on a pre-tax basis, and receive a 100%
matching contribution on the employee's pre-tax contributions that do not exceed
3% of base salary, plus a 50% matching contribution on the employee's pre-tax
contributions that exceed 3% but do not exceed 5% of base salary. Discretionary
employer profit-sharing contributions are allowed. Under the Code, the total
contributions allocated to an employee's account for a plan year cannot exceed
the lesser of $30,000 or 25% of the employee's compensation, and the employee's
pre-tax contributions are limited in a calendar year to $10,500 (subject to cost
of living increases under the Code).
Employees are immediately 100% vested in their 401(k) Plan benefits except for
the employer profit-sharing contributions which vest at 20% a year over five
years. Any forfeitures which may result under the 401(k) Plan are used to reduce
future Company contributions. Employees generally may withdraw their vested
benefits from the 401(k) Plan on termination of employment, retirement, or
death, and may also under certain circumstances withdraw benefits while still
employed (including certain financial hardship, plan loan and pre- and post-age
59 1/2, withdrawals). Until fully withdrawn, employees may direct the investment
of their 401(k) Plan benefits among a broad range of investment funds.
16
<PAGE>
Executive Incentive Plan. The Company's executives participate in an Executive
Incentive Plan by which they are entitled to receive certain percentages of
their base compensation as a bonus if a designated target or objective is met.
Designated targets related to earnings, return on invested capital and/or
strategic objectives are set by the Compensation Committee at the beginning of
each year, based on the prior year's results. The Executive Incentive Plan
provides that if a target is exceeded, then any bonus payable under the plan is
commensurately increased, subject to a cap.
Stock-Based Incentive Plan. The Company also has adopted the 1997 Stock-Based
Incentive Plan (the "Stock-Based Incentive Plan") that provides for
discretionary grants or awards of options to purchase stock, stock appreciation
rights that reflect the appreciation in the value of Common Stock ("SARs"), and
restricted stock to employees and independent contractors (other than certain
directors) of the Company. Under the Stock-Based Incentive Plan, 1,224,000
shares of Common Stock may be subject to awards, and no more than 85,680 shares
of Common Stock may be subject to awards to any single individual in any one
year. Such options, SARs and restricted stock will be awarded based on
performance and with vesting schedules to be determined at the time of grant.
Under the Stock-Based Incentive Plan, the exercise price of options will not be
less than the fair market value of the Common Stock on the date of grant.
Options will be subject to vesting provisions as specified in an applicable
option agreement. Options granted under the Stock-Based Incentive Plan may be
designated, for federal income tax purposes, either as non-qualified stock
options or as incentive stock options as defined in Section 422 of the Code. The
Stock-Based Incentive Plan will permit, with the consent of the Compensation
Committee, the exercise of options by delivery of shares of Common Stock owned
by the optionee or by the withholding of such shares of Common Stock upon
exercise of the option in lieu of, or in addition to, cash. The Stock-Based
Incentive Plan will permit the Compensation Committee to adjust the number and
kind of shares subject to awards in the event of a reorganization, merger,
consolidation, reclassification, stock split, stock dividend or combination of
shares.
Non-Qualified Stock Option Plan. The Company also has adopted the 1997
Non-Qualified Stock Option Plan for Non-Employee Directors (the "Non-Qualified
Stock Option Plan") that provides for discretionary grants or awards of options
to purchase stock of the Company. Under the Non-Qualified Stock Option Plan,
100,000 shares of Common Stock may be subject to awards of 2,000 shares per
eligible director per year. Such options will be awarded based on the discretion
of the Board and the director's attendance at two-thirds of the meetings (in the
aggregate) of the Board of Directors and Committees of the Board of which the
director was a member during the immediately preceding one-year period. The
options will vest in twenty percent increments over a five-year period beginning
on the date of the grant. The exercise price of options will equal the fair
market value of the Common Stock on the date of the grant.
The grantee will not have taxable income and the Company is not entitled to a
deduction upon the grant of a non-qualified stock option. Upon exercise of an
option, a grantee will have ordinary
17
<PAGE>
income equal to the excess of the fair market value of the shares received over
the exercise price of the option, and the Company will be entitled to a
corresponding deduction.
________________________________________________________________________________
STOCK PERFORMANCE GRAPH
COMPARISON OF ELEVEN QUARTER CUMULATIVE TOTAL RETURN* AMONG
DELCO REMY INTERNATIONAL, INC.,
THE S & P 500 INDEX, THE S & P AUTO PARTS & EQUIPMENT INDEX AND THE
S & P TRUCKS & PARTS INDEX
The following graph presents a comparison of the Company's stock performance
with that of the Standard & Poor's 500 Index, the Standard & Poor's Auto Parts &
Equipment Index and the Standard & Poor's Trucks & Parts Index from the date of
the Company's initial public offering, December 17, 1997, through July 31, 2000.
[GRAPH]
<TABLE>
<CAPTION>
Cummulative Total Return (Dollars)
----------------------------------------------------------------------------------------
12/17/1997 1/98 4/98 7/98 10/98 1/99 4/99 7/99 10/99 1/00 4/00 7/00
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DELCO REMY INTERNATIONAL, INC. 100.00 105.21 133.33 116.67 93.23 78.65 81.77 85.42 73.44 67.71 66.15 69.79
S & P 500 100.00 102.84 117.07 118.46 116.59 136.25 142.62 142.39 146.52 150.35 157.07 155.17
S & P AUTO PARTS & EQUIPMENT 100.00 100.55 126.51 156.26 146.12 142.39 146.62 145.60 119.53 106.19 124.93 98.74
S & P TRUCKS & PARTS 100.00 96.67 108.33 92.41 76.47 89.60 124.97 125.98 106.78 94.53 96.27 92.32
</TABLE>
* $100 INVESTED ON 12/17/97 IN STOCK OR ON 11/30/97
IN INDEX - INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JULY 31.
18
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND DIRECTORS AND OFFICERS
The following table sets forth information as of September 1, 2000 with respect
to shares of each class of Common Stock beneficially owned by (i) each person or
group that is known to the Company to be the beneficial owner of more than 5% of
each class of outstanding Common Stock, (ii) each director and named executive
officer of the Company and (iii) all directors and executive officers of the
Company as a group. Unless otherwise specified, all shares are directly held. In
general, each share of Class A Common Stock is convertible into one share of
Class B Common Stock, and each share of Class B Common Stock is convertible into
one share of Class A Common Stock.
<TABLE>
<CAPTION>
Class B
Common
Class A Common Stock (1) Stock Combined (1)
-------------------------- ------------ -------------------------
Shares Owned Percent Shares Owned Shares Owned Percent
------------ --------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
Citicorp Venture Capital Ltd..... 3,607,343 18.2% 6,278,055 9,885,398 37.9%
399 Park Avenue
New York, NY 10043
MASG Disposition, Inc............ 3,025,391 15.3% -- 3,025,391 11.6%
275 Rex Boulevard
Auburn Hills, MI 48326
World Equity Partners, LP (2).... 1,680,000 8.5% -- 1,680,000 6.4%
399 Park Avenue
New York, NY 10043
Harold K. Sperlich (3)(4)........ 806,804 4.1% -- 806,804 3.1%
Thomas J. Snyder (3)(5).......... 430,340 2.2% -- 430,340 1.6%
J. Timothy Gargaro (3)........... -- -- -- -- --
Joseph P. Felicelli (3).......... 56,800 * -- 56,800 *
Richard L. Stanley (3)........... 140,640 * -- 140,640 *
James R. Gerrity (3)(6).......... 544,867 2.8% -- 544,867 2.1%
E.H. Billig (3)(7)............... 258,600 1.3% -- 258,600 1.0%
Richard M. Cashin, Jr.(3)(8)..... 320,297 1.6% -- 320,297 1.2%
Michael A. Delaney (3)(8)........ 80,171 * -- 80,171 *
Robert J. Schultz (3)............ 78,880 * -- 80,880 *
Susan E. Goldy (3)............... 58,180 * -- 58,180 *
All directors and executive
officers as a group
(15 persons) (3)............ 2,985,529 15.0% -- 2,985,529 11.4%
</TABLE>
_________
* Represents less than 1%
(1) Does not include up to 1,324,000 shares of Class A Common Stock that are
subject to stock option plans, except as noted in footnote (3) below, or
1,680,000 shares issuable upon exercise of warrants except that, in the
case of the warrants, with respect to World Equity Partners, L.P. such
1,680,000 shares are included.
(2) Represents warrants to acquire Class A Common Stock.
19
<PAGE>
(3) Common Stock and the percent of class listed as beneficially owned by the
Company's executive officers and directors include outstanding options to
purchase Common Stock which are exercisable within 60 days of November 1,
2000, as follows: Harold K. Sperlich - 8,340 shares; Thomas J. Snyder -
8,340 shares; J. Timothy Gargaro - 0 shares; Joseph P. Felicelli - 6,300
shares; Susan E. Goldy - 5,280 shares; James Gerrity - 1,600 shares; E.H.
Billig - 1,600 shares; Richard M. Cashin, Jr. - 1,600 shares; Michael A.
Delaney - 1,600 shares; Robert J. Schultz - 1,600 shares; Roderick English-
6,000 shares; David E. Stoll - 2,700 shares; Patrick C. Mobouck - 5,880
shares; Richard L. Stanley - 5,640 shares; and Allen R. Wilkie - 2,820
shares.
(4) Held as trustee under agreement dated February 4, 1985, as amended, with
Harold K. Sperlich, as Settlor.
(5) Includes 84,000 shares held by Daisy Farm Limited Partnership of which Mr.
Snyder is General Partner.
(6) Includes 486,237 shares and 57,030 shares, respectively, held by the James
R. Gerrity Living Trust and the Susan Gerrity Living Trust.
(7) Held by The Billig Family Limited Partnership.
(8) Does not include shares beneficially held by CVC, World Equity Partners,
L.P. or CCT Partners I, L.P. which may be deemed to be beneficially owned
by Messrs. Delaney and Cashin. Messrs. Delaney and Cashin disclaim
beneficial ownership of shares held by CVC or World Equity Partners, L.P.
________________________________________________________________________________
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
Harold K. Sperlich, Chairman of the Board of Directors. Mr. Sperlich is
described above as a nominee for director.
Thomas J. Snyder, President, Chief Executive Officer and Director. Mr. Snyder is
described above as a nominee for director.
J. Timothy Gargaro, Senior Vice President and Chief Financial Officer. Mr.
Gargaro joined Delco Remy in May 2000 from Lear Corporation. At Lear since 1993,
Mr. Gargaro held several senior level finance positions within the organization.
He served as Vice President of Finance for Lear's Ford and Chrysler divisions
and Chief Financial Officer of European Operations in Frankfurt, Germany. Prior
to Lear, he was the Chief Financial Officer of Ring Screw Works since 1989. Age:
46
Joseph P. Felicelli, Group Vice President, Aftermarket. Mr. Felicelli has been
Group Vice President since September 1997. Prior to joining the Company, Mr.
Felicelli served in various management positions for Cooper Industries. Age: 54
20
<PAGE>
Susan E. Goldy, Esquire, Senior Vice President and General Counsel. Ms. Goldy
has been Senior Vice President and General Counsel since February 2000. Prior to
that, she had been Vice President and General Counsel since 1997. Before joining
the Company, she was an associate, and since 1993, was a partner in the law firm
of Dechert. Age: 46
Roderick English, Senior Vice President, Human Resources and Communications. Mr.
English has been Senior Vice President of Human Resources and Communications
since November 1997. Prior to that Mr. English had been Senior Vice President of
Human Resources and Communications at Delco Remy America since the Company's
inception in 1994. Mr. English joined the Delco Remy Division of GM in 1976 and
became Plant Manager of plant 17 in 1992. Prior to that, Mr. English served as
Divisional Manager of Labor Relations since 1989. Age: 48
David E. Stoll, Vice President, Treasurer and Secretary. Mr. Stoll was Vice
President, Controller and Secretary since the Company's inception in 1994.
During fiscal year 2000, he was elected to the position of treasurer. Prior to
joining the Company, he was Vice President of Finance of Dyneer Corporation
since 1987 and, prior to that, served as corporate controller since 1973. Age:
58
Patrick C. Mobouck, Vice President-Managing Director, Europe. Mr. Mobouck has
been Vice President-Managing Director, Europe since July 1997. He has also been
Chairman of Autovill since August 1997. Before joining the Company, Mr. Mobouck
was with Monroe Auto Equipment since 1987, most recently as Managing Director-
Europe, Middle East and Africa. Age: 46
Richard L. Stanley, President, Delco Remy America. Mr. Stanley has been
President of Delco Remy America since November 1998. Prior to that, Mr. Stanley
had been Senior Vice President, Automotive Systems since the Company's inception
in 1994. Mr. Stanley joined the Delco Remy Division of GM in 1978, serving most
recently as Director of Customer Programs since 1992 and as European Chief
Engineer since 1988. Age 44
Allen R. Wilkie, Vice President and Operations Controller. Mr. Wilkie has been
Vice President and Operations Controller since June 2000 and Operations
Controller since March 1996. Prior to that, Mr. Wilkie served as Vice President,
Controller of American International, Inc. from March 1994 though March 1996.
Age 50
________________________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require the Company to
disclose late filings of stock transaction reports by its executive officers and
Directors. Based solely on a review of reports filed by the Company on these
individuals' behalf and written representations from them that no other reports
were required, all Section 16(a) filing requirements have been met during fiscal
year 2000 except that J. Michael Jarvis, Patrick C. Mobouck, Thomas R. Jennett,
Roderick
21
<PAGE>
English, Susan E. Goldy, Joseph P. Felicelli, Thomas J. Snyder, Harold K.
Sperlich, Richard L. Keister, Richard L. Stanley and Ralph E. McGee each filed a
late Form 5 with respect to each of fiscal years 1998 and 1999.
________________________________________________________________________________
EMPLOYMENT AGREEMENT
The Company has entered into an Employment Agreement with Thomas J. Snyder which
provides for his employment until 2001. Mr. Snyder's agreement will
automatically extend for successive additional 12-month periods after July 2001
until notice by either the Company or Mr. Snyder. Mr. Snyder receives an annual
base salary of $350,000, subject to merit increases as determined by the Board
of Directors, plus annual performance bonuses as determined by the Board of
Directors. The agreement provides that the executive may not engage in any
business competitive with the Company while employed by the Company and for a
period of one year thereafter.
SHAREHOLDERS AGREEMENT
CVC, World Equity Partners, L.P., MASG, Harold K. Sperlich, James R. Gerrity and
other parties named therein as management investors (together with Messrs.
Sperlich and Gerrity, the "Management Investors") (collectively the
"Investors"), entered the Shareholders Agreement containing certain agreements
among such shareholders with respect to the capital stock and corporate
governance of the Company.
Pursuant to the Shareholders Agreement, the Investors agreed to vote their
shares in favor of the Board of Directors of the Company being composed of seven
directors as follows: Harold K. Sperlich (so long as he continues to serve as
chairman of the Board of Directors); one individual nominated by MASG; two
individuals nominated by CVC; James R. Gerrity (so long as he continues to serve
as an officer or a consultant to the Company); Thomas J. Snyder (so long as he
continues to serve as President of the Company); and one independent director.
So long as CVC owns at least 7% of the outstanding shares of Class A and Class B
Common Stock, the Investors have agreed to vote their shares in favor of any
proposal by CVC to remove directors nominated by CVC or to fill directorships
vacated by directors nominated by CVC. So long as MASG owns at least 7% of the
outstanding shares of Class A and Class B Common Stock, the Investors have
agreed to vote their shares in favor of any proposal by MASG to remove directors
nominated by MASG or to fill directorships vacated by directors nominated by
MASG.
The Investors beneficially own over 50% of the outstanding shares of Class A
Common Stock and, pursuant to the foregoing described provisions, are able to
elect the entire Board of Directors of the Company.
The Shareholders Agreement also provides for certain restrictions on transfer by
Management Investors, including, subject to certain exemptions, the right of the
Company to repurchase shares
22
<PAGE>
held by Management Investors upon termination of employment prior to certain
dates determined by the date on which each Management Investor purchased shares,
in each case at a formula price, and the grant of a right of first refusal in
favor of the Company in the event a Management Investor elects to transfer such
Management Investor's shares of Class A and Class B Common Stock.
________________________________________________________________________________
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries. To the Company's knowledge,
there were no other relationships involving members of the Compensation
Committee requiring disclosure in this section of this Proxy Statement.
OTHER BUSINESS
The Company is not aware of any other matters that will be presented for
shareholder action at the Annual Meeting. If other matters are properly
introduced, the person named in the accompanying proxy will vote the shares they
represent in accordance with their judgment.
By Order of the Board of Directors
/s/ David E. Stoll
David E. Stoll
Secretary
November 17, 2000
23
<PAGE>
DELCO REMY INTERNATIONAL, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 15, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of DELCO
REMY INTERNATIONAL, INC., a Delaware corporation, does hereby constitute and
appoint David E. Stoll and Susan E. Goldy, or any one of them, with full power
to act alone and to designate substitutes, the true and lawful attorneys and
proxies of the undersigned for and in the name and stead of the undersigned, to
vote all shares of Class A Common Stock of Delco Remy International, Inc., which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders to be held at the University Place Conference Center &
Hotel, 850 West Michigan St., Indianapolis, Indiana 46202-5198, on December 15,
2000 at 11:00 a.m., and at any and all adjournments and postponements thereof,
as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 1, ITEM 2, ITEM 3, AND ITEM
4.
Please mark your votes as in this example. [X]
ITEM 1. ELECTION OF DIRECTORS VOTE FOR ALL* WITHHELD FOR ALL
[ ] [ ]
Nominees: Harold K. Sperlich
Thomas J. Snyder
E. H. Billig
Richard M. Cashin, Jr.
Michael A. Delaney
James R. Gerrity
Robert J. Schultz
* To withhold authority to vote for one or more nominee(s), write the name(s) of
the nominee(s) below:
--------------------------------------------------------------------------------
ITEM 2. RATIFICATION OF INDEPENDENT ACCOUNTANTS FOR AGAINST
[ ] [ ]
ITEM 3. INCREASE THE NUMBER OF SHARES IN THE 1997 STOCK-BASED INCENTIVE
COMPENSATION PLAN FOR AGAINST
[ ] [ ]
ITEM 4. INCREASE THE NUMBER OF SHARES IN THE 1997 NON-QUALIFIED STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS FOR AGAINST
[ ] [ ]
ITEM 5. OTHER MATTERS
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting or at any adjournments thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ITEM 1,
ITEM 2, ITEM 3 AND ITEM 4 AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT TO
ITEM 5.
NOTE: PLEASE DATE THIS PROXY, SIGN YOUR NAME EXACTLY AS IT APPEARS HEREON, AND
RETURN PROMPTLY USING THE ENCLOSED POSTAGE PAID ENVELOPE. JOINT OWNERS SHOULD
EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
Signature(s) __________________________________________ Date _____________
