SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DECORATOR INDUSTRIES, INC.
--------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-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.
<PAGE>
DECORATOR INDUSTRIES, INC.
10011 Pines Boulevard
Pembroke Pines, FL 33024
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD JUNE 11, 1999
TO THE STOCKHOLDERS OF DECORATOR INDUSTRIES, INC.
Notice is hereby given that the annual meeting of the stockholders of
Decorator Industries, Inc. will be held on the 40th Floor, One Oxford Centre,
Pittsburgh, Pennsylvania, on June 11, 1999 at 9:30 A.M., local time, for the
purpose of:
(a) Electing two directors.
(b) Transacting such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors fixed the close of business on April 14, 1999 as
the record date for the determination of stockholders entitled to notice of and
to vote at the annual meeting.
A copy of the Company's annual report to stockholders for the fiscal
year ended January 2, 1999 is furnished herewith.
PLEASE SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES. YOUR PROMPT
COMPLIANCE WITH THIS REQUEST WILL BE APPRECIATED AND WILL ASSIST IN OBTAINING A
QUORUM. YOUR PROXY MAY BE WITHDRAWN AT ANY TIME PRIOR TO ITS EXERCISE BY GIVING
NOTICE TO THE UNDERSIGNED.
By Order of the Board of Directors
JEROME B. LIEBER
Secretary
May 7, 1999
<PAGE>
PROXY STATEMENT
DECORATOR INDUSTRIES, INC.
10011 Pines Boulevard
Pembroke Pines, FL 33024
May 7, 1999
This statement is furnished in connection with the solicitation of
proxies to be used at the annual meeting of stockholders of Decorator
Industries, Inc. (the Company), to be held June 11, 1999 at the place and time
and for the purposes set forth in the foregoing Notice of Annual Meeting, and at
any adjournment thereof. This proxy statement and the enclosed form of proxy and
annual report for 1998 were mailed to stockholders on or about May 7, 1999.
Proxies in the form enclosed are solicited on behalf of the Board of
Directors of the Company. The cost of preparing, assembling and mailing the
notice of annual meeting, proxy statement and form of proxy is to be borne by
the Company. In addition to the solicitation of proxies by use of the mails,
directors, officers or other employees of the Company may solicit proxies
personally or by telephone or telegraph and the Company may request certain
persons holding stock in their names or in the names of their nominees to obtain
proxies from and send proxy material to the principals and will reimburse such
persons for their expenses in so doing.
The accompanying proxy may be revoked by the stockholder at any time
prior to its use by giving notice of such revocation either personally or in
writing to Jerome B. Lieber, Secretary of the Company, 40th Floor, One Oxford
Centre, Pittsburgh, PA 15219. Unless the proxy shall have been properly revoked,
the shares represented by proxies in the enclosed form will be voted. Each such
proxy will be voted as directed, but if no direction is indicated, it will be
voted FOR the election of the Board of Directors nominees named below, either by
the same number of votes being cast for each nominee or cumulatively, in the
discretion of the named proxies.
Only holders of record of the Company's Common Stock, par value $.20
per share (Common Stock), at the close of business on April 14, 1999 will be
entitled to vote at the meeting. As of April 14, 1999, there were 3,427,980
shares of Common Stock outstanding, the holders of which are entitled to one
vote per share, except for cumulative voting in the election of directors, as
explained below.
A quorum for the transaction of business at the annual meeting will
require the presence, in person or by proxy, of stockholders entitled to cast at
least a majority of the total number of votes entitled to be cast on a
particular matter to be acted upon at the meeting. Directors will be elected at
the meeting by a plurality of the votes cast. Abstentions and broker non-votes
are counted as shares present for determination of a quorum but are not counted
as affirmative or negative votes and are not counted in determining the number
of votes cast on any matter.
Stockholders are entitled to cumulative voting in the election of
directors, which means that a stockholder is entitled to a number of votes equal
to the number of shares held by such stockholder multiplied by the number of
directors to be elected, and such stockholder may cast all of such votes for one
nominee or divide them between the two nominees.
ELECTION OF DIRECTORS
The Board of Directors consists of three classes of directors with
staggered terms. A purpose of the meeting is the election of two directors to
serve for a term of three years. The last two columns of the tables below give
information regarding the Common Stock beneficially owned by the nominee or
director as of the close of business on April 14, 1999. The percentages in the
last column were computed by dividing the number of shares beneficially owned by
the total of the number of shares of Common Stock outstanding and the number of
shares of Common Stock, if any, which the named nominee or director was entitled
to acquire within 60 days of April 14, 1999 through the exercise of stock
options.
1
<PAGE>
Nominees for Election as Directors
Information regarding the nominees for election as directors is set
forth below:
<TABLE>
<CAPTION>
Common Shares Percent
Director Beneficially of
Name Age Principal Occupation Since Owned Class
---- --- -------------------- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Michael K. Solomon 49 Vice President, Treasurer 1987 96,267(1) 2.77%
and Chief Financial Officer
of the Company
Jerome B. Lieber 78 Senior Counsel - 1961 13,706(2)(3) --
Klett Lieber Rooney & Schorling,
a Professional Corporation,
Attorneys at Law
</TABLE>
(1) Includes 42,828 optioned shares which may be acquired within 60
days.
(2) Includes 5,041 shares held in a charitable trust as to which Mr.
Lieber disclaims beneficial ownership.
(3) Excludes shares held for his account in the Trust established under
the Company's Stock Plan for Non-Employee Directors (The Trust).
Mr. Solomon has been Vice President of the Company since November 1994
and Treasurer and Chief Financial Officer of the Company since 1985.
Mr. Lieber has been Secretary of the Company since 1961. He is a Senior
Counsel to the law firm of Klett Lieber Rooney & Schorling, a Professional
Corporation, Pittsburgh, Pennsylvania, which serves as general counsel to the
Company. Mr. Lieber previously had been a senior partner in that firm.
The nomination of the above persons for the office of director
originated with the present Board of Directors. Such persons have advised the
Company that they are willing to serve as directors for the term for which they
are standing for election. If at the time of the meeting either of the nominees
should be unable or unwilling to serve as a director for any reason, it is
intended that the enclosed proxy will be voted for the election of such person,
if any, as is designated by the Board of Directors to replace such nominee,
unless the proxy withholds authority to vote for nominees.
The Board of Directors recommends a vote FOR the foregoing nominees.
Directors Whose Terms Continue After the Meeting
Information regarding the directors whose terms of office continue
after the annual meeting is set forth below:
<TABLE>
<CAPTION>
Present Common Shares Percent
Director Term Beneficially of
Name Age Principal Occupation Since Expires Owned Class
---- --- -------------------- ----- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
William A. Bassett 62 Chairman of the Board, 1980 2001 345,855(1) 9.72%
President and Chief Executive
Officer of the Company
William A. Bassett as
Trustee for the Trust 12,855(2) --
William H. Allen, Jr. 63 Vice Chairman of the Board, 1995 2001 5,000(3) --
NationsBank N.A. (South)
Thomas L. Dusthimer 64 Consultant to and Director of 1997 2001 1,250(3) --
Key Bank Elkhart
Joseph N. Ellis 70 Management Consultant 1993 2000 2,500(3) --
Ellen Downey 46 Management Consultant 1997 2000 1,562(3) --
</TABLE>
(1) Includes 127,913 optioned shares which may be acquired within 60
days.
(2) Mr. Bassett disclaims beneficial ownership of these shares.
(3) Excludes shares held in the Trust for his or her account.
William A. Bassett has been President and a director of the Company
since 1980, Chief Executive Officer since February 1993 and Chairman of the
Board since January 1994.
William H. Allen, Jr. has been a director of the Company since 1995. He
has been Vice Chairman of the Board of NationsBank N.A. (South) since 1996 and
previously served as Chairman of the Board and Chief Executive Officer of
Intercontinental Bank. Mr. Allen is also a director of American Bankers
Insurance Group and Winsloew Furniture, Inc.
Thomas L. Dusthimer has been a director of the Company since 1997.
Since 1992 he has served as a consultant to and director of Key Bank, Elkhart.
From 1973 until his retirement in 1992, Mr. Dusthimer served in various
executive positions, including President, Chief Executive Officer and Chairman,
with Ameritrust Indiana Corporation and Ameritrust National Bank.
Joseph N. Ellis has been a director of the Company since 1993. He
founded La Salle-Deitch Co., Inc., a distributor of products for the
2
<PAGE>
manufactured housing and recreational vehicle industry, in 1963 and served as
its President, Chief Executive Officer and Chairman from 1971 until his
retirement in 1992.
Ellen Downey has been a director of the Company since 1997. She was
employed by Ryder System, Inc. in various financial positions from 1978 to 1991
and from 1991 to 1993 served as Vice President and Treasurer of that company. At
April 14, 1999, the officers and directors of the Company as a group had sole or
shared voting or investment power as to 308,255 shares of the Company's Common
Stock, which together with 170,740 optioned shares that could be acquired within
60 days after April 14, 1999, would constitute 13.3% of the total shares then
outstanding.
Certain Transactions
In November 1998, the Company bought 25,000 shares of the Company's
Common Stock from the President, William A. Bassett, for $212,500 to aid Mr.
Bassett in the payment of taxes resulting from the exercise of stock options.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid a fee of
$10,000 per year for their services as directors. The fee is paid quarterly in
shares of the Company's Common Stock valued at their closing price on the
American Stock Exchange on the third business day following the release of sales
and earnings for the preceding fiscal year. Under the Company's Stock Plan for
Non-Employee Directors, such directors may elect to defer receipt of their
shares, until after they leave the Board, by having them delivered to the trust
established under the Plan.
PRINCIPAL STOCKHOLDERS
See Directors Whose Terms Continues After the Meeting above for the
stockholding of William A. Bassett, Chairman of the Board, President and Chief
Executive Officer of the Company.
FMR Corp. of Boston, Massachusetts, has furnished the Company a copy of
its Schedule 13G dated February 1, 1999 in which it reported that as of December
31, 1998 Fidelity Management & Research Company, a wholly-owned subsidiary of
FMR Corp. and a registered investment adviser, had sole investment power with
respect to 377,915 shares (11.01%) of the Company's Common Stock.
First Manhattan Co. of New York, New York has furnished the Company a
copy of its Schedule 13G dated February 11, 1999 in which it reported beneficial
ownership of a total of 252,570 shares (7.36%) of the Company's Common Stock
including sole power to vote and dispose of 7,812 shares, shared power to vote
237,462 shares and shared power to dispose of 244,758 shares. First Manhattan is
a registered broker-dealer and investment adviser.
Heartland Advisors, Inc. of Milwaukee, Wisconsin, a registered
investment adviser, has furnished the Company a copy of its Schedule 13G dated
January 13, 1999 in which it reported that it had sole voting and dispositive
power with respect to 312,500 shares (9.11%) of the Company's Common Stock.
EXECUTIVE COMPENSATION
Employment Agreement
The Company has an employment agreement with William A. Bassett which
will expire July 1, 2004 and provides for an annual salary of not less than
$214,200.
Annual Compensation and Stock Options
The following table shows the compensation of the named executive
officers of the Company for each of the last three fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------ ------------
Name and Fiscal Optioned All Other
Principal Position Year Salary($)(1) Bonus ($) Other($)(2) Shares(#) Compensation($)(3)
- ------------------ ---- ------------ --------- ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
William A. Bassett 1998 262,000 127,000 89,977 31,250(4) 36,745
Chairman of the Board, 1997 249,712 123,000 87,723 -- 34,745
President and Chief 1996 236,156 156,000 * 52,083(4) 34,745
Executive Officer
Michael K. Solomon 1998 114,650 24,000 * 12,500(5) 34,447
Vice President, Treasurer 1997 112,370 25,550 * -- --
and Chief Financial Officer 1996 107,000 28,940 27,106 20,832(4) --
</TABLE>
(1) The fiscal year 1997 was a 53-week fiscal period.
(2) Medical/dental reimbursement plan payments, country club
memberships, personal use of Company vehicles, and payments made in
accordance with Company policy for disqualifying sales of Common
Stock acquired upon the exercise of a qualified stock option. For
1998 and 1997, payments to Mr. Bassett for such sales were $86,106
and $84,289, respectively. These payments provided net benefits to
the company of $16,359 for 1998 and $16,383 for 1997. For 1996,
payment to Mr. Solomon for such sales was $18,059, which provided a
net benefit
3
<PAGE>
to the Company of $11,919. An asterisk indicates that the total of
other annual compensation for that year was less than 10% of salary
and bonus for that year.
(3) Premiums paid by the Company on life and long-term disability
insurance policies and Company contributions to the 401(k)
Retirement Savings Plan.
(4) As adjusted for the four-for-three stock split in June 1996 and
the five-for-four stock splits in June 1997 and July 1998.
The Company's medical and dental reimbursement plan provides
reimbursement to the corporate and certain divisional officers of the Company
and their dependents (as defined in Section 152 of the Internal Revenue Code)
for their medical and dental expenses. Benefits under the plan are limited to
10% of the participants compensation during the plan year. The plan also
prohibits any participant from receiving double reimbursement; i.e., if a
participant receives reimbursement from another source, he or she must remit to
the Company benefits received under the plan.
On September 1, 1998 the Company began a 401(k) Retirement Savings Plan
available to all eligible employees. To be eligible for the plan, the employee
must be at least 21 years of age and have completed one year of employment.
Eligible employees may contribute up to 15% of their earnings with a maximum of
$10,000 for 1998 based on the Internal Revenue Service annual contribution
limit. The Company will match 25% of the first 4% of the employees contributions
up to 1% of the employees earnings. Contributions are invested at the direction
of the employee in one or more funds. Company contributions begin to vest after
three years.
The Company's 1984 Incentive Stock Option Plan, which expired February
22, 1994, authorized the granting to key employees of options to purchase up to
804,976 shares (as adjusted for stock splits) of the Company's Common Stock. The
purchase price of optioned shares is the fair market value of the Common Stock
on the date of grant, and the maximum term of the options is ten years; in the
case of options granted to employees who owned more than 10% of the outstanding
Common Stock, however, the purchase price was 110% of the fair market value of
the Common Stock on the date of grant and the term of the options is five years.
The number of optioned shares and the purchase price per share are subject to
adjustment for stock splits, stock dividends, reclassifications and the like.
On April 3, 1995 the Board of Directors adopted, and on June 5, 1995
the stockholders approved, the Company's 1995 Incentive Stock Option Plan (the
1995 Plan) which has a term of ten years. The 1995 Plan authorizes the issuance
of up to 520,830 shares (as adjusted for stock splits) of Common Stock pursuant
to stock options granted to key employees of the Company. The purchase price of
optioned shares must be the fair market value of the Common Stock on the date of
grant, and the maximum term of the options is ten years; in the case of options
granted to employees who own more than 10% of the outstanding Common Stock,
however, the purchase price must be 110% of the fair market value of the Common
Stock on the date of grant and the term of the option cannot exceed five years.
The number of shares that may be issued under the 1995 Plan, the number of
optioned shares and the purchase price per share are subject to adjustment for
stock splits, stock dividends, reclassifications and the like.
The following table sets forth information concerning the exercise of
stock options during fiscal 1998 by the named executive officers and the value
of their unexercised, in-the-money stock options at the end of that fiscal year
(January 2, 1999). All options outstanding at January 2, 1999, except for those
granted after the fiscal year 1995, were exercisable at any time prior to their
respective expiration dates.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Shares Acquired Value Optioned Shares Options at
Name on Exercise Realized($) at 1/2/99(#) 1/2/99($)(1)
- ---- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
William A. Bassett 25,000(2) 198,245 147,913(3) 765,481
35,416(4) 32,029
Michael K. Solomon 10,000(2) 70,300 50,828(3) 241,364
14,166(4) 12,812
</TABLE>
(1) Assumes a market value of $7.875 per share, which was the last
reported sale price on the American Stock Exchange on December 31,
1998.
(2) As adjusted for the five-for-four stock split in July 1998.
(3) Exercisable.
(4) Unexercisable.
Board of Directors Report On Executive Compensation
The Board of Directors sets and approves the salaries of the executive
officers of the Company on an annual basis. In determining the salaries, the
Board considers the size of the Company, its performance during the previous
fiscal year, the responsibilities and performance of the executive officer, and
such other factors as the directors may wish to consider. No pre-determined
formula or guidelines are used, and no specific weight is given to any one
factor.
The Board has also granted stock options to executive officers and
other key employees as a means of further motivating them to exert their best
efforts on behalf of the Company.
The salary of Mr. Bassett, Chief Executive Officer of the Company, for
the fiscal year 1998 was determined by the Board of Directors upon consideration
of his and the Company's performance during the previous fiscal year, the
responsibilities of that office, and Mr. Bassetts contributions to the growth
and development of the Company. No specific weight was given to any one of the
factors considered.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
William A. Bassett William H. Allen, Jr. Joseph N. Ellis
Michael K. Solomon Jerome B. Lieber Ellen Downey Thomas L. Dusthimer
</TABLE>
4
<PAGE>
PERFORMANCE GRAPH
Set forth below are a graph and table which compare the value for the
five calendar years ended December 31, 1998 of $100 invested at the close of
trading on December 31, 1993, in each of the three investment alternatives: (a)
the Company's Common Stock, (b) the Russell 2000 Index, and (c) the S & P 500
Index. The graph has been prepared assuming the reinvestment of all cash
dividends paid during the period. The Company is not able to identify a peer
group for comparison purposes.
<TABLE>
<CAPTION>
12/93 12/94 12/95 12/96 12/97 12/98
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Decorator Industries(TM) 100 87 99 194 203 223
S & P 500 100 101 139 171 229 294
Russell 2000 100 98 126 147 180 179
</TABLE>
5
<PAGE>
DISCRETIONARY AUTHORITY
At the time of mailing copies of this proxy statement to stockholders,
the election of directors was the only matter known by Management that will be
presented for action at the annual meeting of stockholders. Should any other
matters come before the meeting, action may be taken thereon pursuant to proxies
in the form enclosed, which confer discretionary authority upon the persons
named therein or their substitutes with respect to any such business which may
properly come before the meeting.
CONCERNING THE AUDITORS
Louis Plung & Company are the independent public accountants of the
Company. Representatives of such firm are expected to be in attendance at the
annual meeting and will have the opportunity to make a statement if they desire
to do so, and they are expected to be available to respond to appropriate
questions.
OTHER INFORMATION
The Board of Directors has no nominating, compensation or similar
committee other than the Stock Option Committee. The Boards Audit Committee is
composed of Joseph N. Ellis, Ellen Downey and Thomas L. Dusthimer. The Audit
Committee reviews the overall plan of the annual independent audit, the
financial statements, the scope of audit procedures, the performance of the
Company's independent accountants and internal auditors, and the auditors
evaluation of internal controls.
During the fiscal year 1998, the Board of Directors held five meetings,
the Audit Committee held two meetings, and the Stock Option Committee held one
meeting.
Shareholder proposals intended to be presented at the annual meeting in
the year 2000 must be received by the Company prior to January 10, 2000 to be
considered for inclusion in the Company's proxy statement and form of proxy for
that meeting.
By Order of the Board of Directors
JEROME B. LIEBER
Secretary
<PAGE>
DECORATOR INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 11, 1999
The undersigned hereby appoints Joseph N. Ellis, Ellen Downey and Thomas
Dusthimer, and each of them (with full power to act without the others and with
full power of substitution), the attorney and proxy of the undersigned to attend
the Annual Meeting of the Stockholders of Decorator Industries, Inc., to be held
on the 40th Floor, One Oxford Centre, Pittsburgh, Pennsylvania 15219, at 9:30
A.M., E.D.S.T., on June 11, 1999, and any adjournment thereof, and to vote the
number of shares of Common Stock of the Company which the undersigned is
entitled to vote with all the power the undersigned would possess if personally
present.
The proxies are directed to vote as set forth herein. If no direction is
indicated, the shares represented by this proxy will be voted FOR the election
of the nominees named herein, either by the same number of votes being cast for
each nominee or cumulatively, in the discretion of the named proxies. If either
of the named nominees is unavailable for election, such shares may be voted for
such substitute nominee as may be designated by the Board of Directors.
The Solicitation of This Proxy is Made on Behalf of The Board of Directors.
Please Sign and Date This Proxy on the Reverse Side and Return it in the
Enclosed Envelope.
(continued on reverse side)
- --------------------------------------------------------------------------------
^FOLD AND DETACH HERE^
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[X] Please mark
your votes as
indicated in
this example
1. ELECTION OF DIRECTORS
FOR WITHHOLD The Board recommends a vote FOR the nominees listed below.
all nominees AUTHORITY
named herein to vote for Nominees: Michael K. Solomon and Jerome B. Lieber
all nominees
Instruction: To withhold authority to vote for either individual nominee,
[ ] [ ] strike through that nominee's name above.
2.
In their discretion, upon such other matters as The undersigned hereby acknowledges receipt of the Annual Report for
may properly come before the meeting. the fiscal year ended January 2, 1999 and the notice of Annual
Meeting and Proxy Statement for the 1999 Annual Meeting of
Stockholders.
_______________________________________________
Please sign exactly as name appears hereon. If signing in a
fiduciary or representative capacity, please give full title as such.
If shares are registered in more than one name, all holders must
sign. If signature is for a corporation please sign full corporate
name by authorized officer.
Dated:_________________________________, 1999
--------------------------------------------
--------------------------------------------
Signature(s) of Stockholder(s)
- -----------------------------------------------------------------------------------------------------------------------------------
^FOLD AND DETACH HERE^
(LOGO)
DECORATOR INDUSTRIES, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 11, 1999
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE,
DATE AND SIGN THE ABOVE PROXY CARD AND RETURN
IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
</TABLE>
