SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
DOUGLAS & LOMASON COMPANY
(Name of Registrant as Specified in Its Charter)
DOUGLAS & LOMASON COMPANY
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
______________________________________________________________________
(2) Aggregate number of securities to which transactions applies: ________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:* _________________________________
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
________________
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid: _____________________________________________
(2) Form, schedule or registration statement no.: _______________________
(3) Filing party: _______________________________________________________
(4) Date filed: _________________________________________________________
<PAGE>
DOUGLAS & LOMASON COMPANY
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 1996
To the Shareholders of
Douglas & Lomason Company:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Douglas & Lomason Company will be held on Friday, the 26th day of April, 1996,
at 11:00 A.M., Local Time, at The Hotel Baronette, 27790 Novi Road, Novi,
Michigan, for the following purposes:
1. To elect one director of the Company;
2. To approve a proposal to amend the Company's 1990 Stock Option Plan to
increase the number of shares of the Company's Common Stock which may
be issued thereunder; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 12, 1996
as the record date for the meeting and only shareholders of record at that
time will be entitled to notice of and to vote at the meeting or any
adjournments thereof. Shareholders who are unable to attend the meeting in
person, as well as shareholders who plan to attend the meeting, are requested
to date, sign and mail the enclosed proxy promptly. If you are present at the
meeting and desire to vote in person, you may revoke your proxy.
By Order of the Board of Directors,
VERNE C. HAMPTON II
Secretary
March 27, 1996
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF DOUGLAS & LOMASON COMPANY
April 26, 1996
To the Shareholders of
Douglas & Lomason Company:
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Douglas & Lomason Company (hereinafter
referred to as the "Company") from the holders of the Company's Common Stock
to be used at the Annual Meeting of Shareholders to be held on Friday, the
26th day of April, 1996, at 11:00 A.M., Local Time, at The Hotel Baronette,
27790 Novi Road, Novi, Michigan, and at any adjournments thereof. The
approximate date on which this Proxy Statement and the enclosed form of proxy
are being sent to shareholders is March 27, 1996. The address of the principal
corporate offices of the Company is 24600 Hallwood Court, Farmington Hills,
Michigan 48335-1671.
Any proxy given pursuant to this solicitation may be revoked by notice
in writing to the Company prior to voting. Unless the proxy is revoked, the
shares represented thereby will be voted at the Annual Meeting or any
adjournments thereof. The giving of the proxy does not affect the right to
vote in person should the shareholder attend the meeting.
The Board of Directors, in accordance with the By-Laws, has fixed the
close of business on March 12, 1996 as the record date for determining the
shareholders entitled to notice of and to vote at the Annual Meeting of
Shareholders or any adjournments thereof. At the close of business on such
date the outstanding number of voting securities of the Company was 4,243,021
shares of Common Stock, each of which is entitled to one vote. All votes will
be tabulated by two officers of the Company who will serve as inspectors of
election. Abstentions and broker non-votes are each included in the
determination of the number of shares present for purposes of a quorum.
Abstentions are counted in tabulations of the votes cast on proposals
presented to shareholders and have the same effect as votes against a
proposal, whereas broker non-votes are not counted for purposes of determining
whether a proposal has been approved. Directors are elected by a plurality of
the votes properly cast at the meeting.
SECURITY OWNERSHIP
Management
The following table sets forth, as of February 15, 1996, the number of
shares of the Company's Common Stock beneficially owned by each director, each
executive officer named in the Summary Compensation Table and all directors
and named executive officers as a group.
<TABLE>
<CAPTION>
Name of Individual Number of Percent of
or Group Shares(1)(2) Class
------------------ ------------ ----------
<S> <C> <C>
James E. George ............................... 1,167 *
Verne C. Hampton II ........................... 1,500 *
James J. Hoey ................................. 22,708 *
Dale A. Johnson ............................... 1,867 *
Harry A. Lomason II ........................... 624,192(3) 14.7
Charles R. Moon ............................... 1,000 *
Roger H. Morelli .............................. 5,129 *
James B. Nicholson ............................ 1,867 *
Gary A. Pniewski .............................. 3,000 *
Dan D. Smith .................................. 3,529 *
Gary T. Walther ............................... 8,100(4) *
All Directors and Executive Officers as a Group
(11 persons named above) .................... 674,059 15.9
<FN>
* Less than one percent
1
<PAGE>
(1) Includes shares which the following executive officers have the right to
acquire upon the exercise of stock options as of February 15, 1996, or at
any time within 90 days thereafter: James J. Hoey -- 7,500 shares; Harry
A. Lomason II -- 8,000 shares; Roger H. Morelli -- 3,000 shares; Gary A.
Pniewski -- 2,000 shares; and Dan D. Smith -- 3,000 shares. Also includes
shares held in the officers' accounts in the Company's 401(k) Plan.
(2) Excludes the following shares where delivery is deferred under the terms
of the Directors Stock Plan: Messrs. Hampton and Walther -- 667 shares
each and Mr. Moon -- 333 shares.
(3) Includes 299,551 shares held in various trusts of which Mr. Lomason serves
as Trustee, in several custody accounts in which he serves as Custodian,
and in an estate of which he serves as Co-Executor.
(4) Includes 7,500 shares held in a trust of which Mr. Walther serves as a
Co-Trustee.
</TABLE>
Certain Beneficial Owners
The following table sets forth the persons known by the Company to own
of record or beneficially, as of February 15, 1996, five percent or more of
the outstanding Common Stock of the Company:
<TABLE>
<CAPTION>
Name and Address Number of Percent of
of Person Shares Class
---------------- --------- ----------
<S> <C> <C>
Harry A. Lomason II
24600 Hallwood Court
Farmington Hills, Michigan 48335 . 624,192(1) 14.7
Pioneer Management Corporation
60 State Street
Boston, Massachusetts 02109 ...... 400,000(2) 9.4
Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606 .......... 373,000(2)(3) 8.8
Jane L. Agostinelli
3800 Camp Creek Parkway
Atlanta, Georgia 30331 ........... 286,677(4) 6.8
Namba Press Works Co., Ltd.
8-3-8 Kojima-Ogawa
Kurashiki, Okayama 711 Japan ..... 285,000 6.7
Anne L. Bray
3800 Camp Creek Parkway
Atlanta, Georgia 30331 ........... 275,840(5) 6.5
<FN>
(1) Includes 299,551 shares held in various trusts of which Mr. Lomason serves
as Trustee, in several custody accounts in which he serves as Custodian,
and in an estate of which he serves as Co-Executor. Also includes 8,000
shares which Mr. Lomason has the right to acquire upon the exercise of
stock options.
(2) Based on information as of December 31, 1995 set forth in a Schedule 13G
filed with the Securities and Exchange Commission.
(3) Includes 300,000 shares held by Wanger Asset Management, L.P. as investment
advisor to Acorn Investment Trust, Series Designated Acorn Fund.
(4) Includes 18,681 shares held in various trusts of which Mrs. Agostinelli
serves as Trustee and in several custody accounts in which she serves as
Custodian.
(5) Includes seven shares held in a custody account of which Mrs. Bray serves
as Custodian.
</TABLE>
2
<PAGE>
ELECTION OF DIRECTORS
The members of the Board of Directors are divided into three classes,
each class to be as nearly equal in number as possible, with each class to
serve a three-year term. The term of Verne C. Hampton II will expire at the
1996 Annual Meeting of Shareholders. The Board of Directors has nominated Mr.
Hampton for reelection as a director to serve until the 1999 Annual Meeting of
Shareholders. Charles R. Moon, whose term as a director will end at the 1996
Annual Meeting of Shareholders, has been elected Director Emeritus.
The proposed nominee for reelection as a director is willing to be
elected. If the nominee at the time of election is unable to serve, or is
otherwise unavailable for election, and if another nominee is designated, the
proxies shall have discretionary authority to vote or refrain from voting in
accordance with their judgment on such other nominee. However, if a nominee is
substituted by management, the proxies intend to vote for such nominee. It is
not anticipated that the nominee will be unable to serve as a director.
INFORMATION ABOUT DIRECTORS AND NOMINEE FOR DIRECTOR
The following information is furnished with respect to each person who
is presently a director of the Company whose term of office will continue
after the Annual Meeting of Shareholders, as well as the person who has been
nominated for reelection as a director.
<TABLE>
<CAPTION>
Year in which
Principal Occupation Has Term or
and Directorships Served as Proposed
Name and Age of in other Publicly Director Term of Office
Director Owned Companies(2) Since will Expire
--------------- -------------------- -------- --------------
<S> <S> <C> <C> <C>
James E. George (67) .................. General Partner, JDX Ltd., Former Vice
President of Becton Dickinson and Co. 1993 1997
(1) Verne C. Hampton II (62) .............. Senior Partner, Dickinson, Wright,
Moon, Van Dusen & Freeman(3);
Corporate Secretary of the Company .. 1994 1999
Dale A. Johnson (58) .................. Retired, Former Chairman and Chief
Executive Officer, SPX Corporation.
Director of MCN Corporation ......... 1990 1998
Harry A. Lomason II (61) ................ Chairman of the Board, President and
Chief Executive Officer of the
Company. Director of The Amerisure
Companies ........................... 1974 1998
James B. Nicholson (52) ............... President and Chief Executive Officer,
PVS Chemicals, Inc.; Vice Chairman of
the Board of the Company. Director of
The Amerisure Companies, Handleman
Company and North American Mortgage
Company ............................. 1985 1997
Gary T. Walther (58) ................... Senior Managing Director, EVEREN
Securities, Inc. (formerly named
Kemper Securities, Inc.)(4) ......... 1982 1998
<FN>
(1) Nominated for reelection as a director.
(2) Each of the directors has had the same principal occupation during the
past five years with the exception of Mr. George who held various
executive positions with Becton Dickinson & Co. from 1963 to 1993 and
served as President and Chief Executive Officer of Lumex, Inc. from 1994
to 1995; and Mr. Johnson who held various other executive positions with
SPX Corporation.
3
<PAGE>
(3) This law firm performs legal services for the Company.
(4) This investment banking firm performs investment advisory services for the
Company.
</TABLE>
Meetings and Committees
The Board of Directors held five meetings during 1995.
The Company has standing Audit and Compensation Committees of the Board
of Directors. The Company has no Nominating Committee and the functions of a
Nominating Committee are performed by the Board of Directors.
The members of the Audit Committee are James B. Nicholson, Chairman, and
Dale A. Johnson. The Audit Committee, which met two times during 1995,
reviews, acts, and reports to the Board of Directors with respect to various
auditing and accounting matters, including the selection of the Company's
independent public accountants, the scope of audit procedures, the nature of
services to be performed for the Company, and the fees to be paid to the
independent public accountants.
The members of the Compensation Committee are James B. Nicholson,
Chairman, and James E. George. This Committee, which met two times during 1995,
reviews and recommends to the Board of Directors the compensation of officers
of the Company.
The Board of Directors will consider persons recommended by shareholders
as potential nominees for election as directors. A shareholder of the Company
may nominate persons for election to the Board of Directors of the Company if
such shareholder submits such nomination, together with certain related
information required by the Company's By-Laws, in writing to the Board of
Directors in care of the Secretary of the Company not less than sixty days nor
more than ninety days prior to the anniversary date of the immediately
preceding Annual Meeting of Shareholders.
Compensation of Directors
Non-employee directors received in 1995 a retainer at the annual rate of
$16,000 until April 1, 1995 and at the annual rate of $20,000 thereafter plus
reimbursement for travel expenses to attend meetings of the Board of
Directors. Members of the Audit and Compensation Committees received $500 for
each meeting of the Committee attended.
Commencing on July 1, 1995, non-employee directors receive 25% (and at
the election of the director, up to 50%) of their annual retainer in Company
Common Stock in lieu of cash pursuant to the Directors Stock Plan. Directors
may elect to defer the delivery of shares under the Plan.
Under the Company's Deferred Compensation Plan for Non-Employee
Directors, a director may elect to defer all or any portion of his retainer
fee or committee fees, which are payable in cash. Deferred amounts under this
Plan earn interest at a rate equivalent to eighty percent of prime.
COMPENSATION COMMITTEE REPORT
The Company's compensation program for officers is administered by the
Compensation Committee of the Board of Directors, which is composed of two
non-employee directors.
Overall Officer Compensation Policy
The Company's compensation policy for officers is designed to support
the overall objective of enhancing value for shareholders by attracting,
developing, rewarding, and retaining highly qualified and productive
individuals; relating compensation to both Company and individual performance;
ensuring compensation levels that are externally competitive and internally
equitable; and encouraging management stock ownership to enhance growth in
shareholder value.
The key elements of the Company's officer compensation consist of base
salary, bonus award and stock options. The Compensation Committee's policies
with respect to each of these elements, including the basis for the
compensation awarded to Mr. Lomason, the Company's chief executive officer,
are discussed below. In
4
<PAGE>
addition, while the elements of compensation described below are considered
separately, the Compensation Committee takes into account the full
compensation package afforded by the Company to the individual, including
pension benefits, supplemental retirement benefits, severance plans,
insurance and other benefits.
In 1994, an independent compensation and benefits consulting firm
("Consulting Firm") was retained by the Compensation Committee to determine
the competitiveness of the Company's compensation levels for its officer
positions relative to marketplace base salary and total cash compensation
(salary plus annual bonus) practices and to assist the Compensation Committee
to develop a market-driven salary structure for Company officer positions.
Stock Ownership Requirements
As a means to develop more director, officer and management ownership in
the Company, the Board of Directors adopted Stock Ownership Guidelines for
directors, officers and designated executive and division managers in 1994. As
a part thereof, the Board also adopted a Stock Purchase Loan Plan to assist
officers and designated executive and division managers in acquiring stock to
meet the Stock Ownership Guidelines. The Guidelines establish various target
stock ownership levels, depending upon the person's position in the Company,
which the person is expected to achieve within five years from the adoption of
the Guidelines.
Base Salary
The Compensation Committee reviews each officer's salary annually. In
determining appropriate salary levels, consideration is given to scope of
responsibility, experience, Company and individual performance as well as pay
practices of other companies relating to executives with similar
responsibility.
The Company endeavors to pay officer salaries in line with competitive
market levels. In assisting the Compensation Committee as to base salary, the
Consulting Firm provided the Compensation Committee information as to median
and seventy-fifth percentile marketplace data for positions at
comparably-sized manufacturing companies similar to those at the Company.
With respect to the base salary of Mr. Lomason in 1995, the Compensation
Committee took into account a comparison of base salaries of chief executive
officers of peer companies, the Company's financial position, the performance
of the Company's Common Stock and the assessment by the Compensation Committee
of Mr. Lomason's individual performance. The Compensation Committee also took
into account the longevity of Mr. Lomason's service to the Company and its
belief that Mr. Lomason is an excellent representative of the Company to the
public by virtue of his stature in the community and the industry. Mr. Lomason
was granted a base salary of $358,000 for 1995 an increase of 7.4% over his
$333,333 base salary for 1994.
Bonus Awards
The Company's officers may be considered for annual cash bonuses which
may be awarded to recognize and reward corporate and individual performance
based on various performance measures. The performance measure for 1995 was
based on the Company's return on equity with earnings calculated on a pre-tax,
pre-interest and pre-bonus accrual basis. The amount an individual officer may
be awarded is directly dependent upon the officer's position, responsibility
and ability to impact the Company's financial success. No bonuses were awarded
to officers for 1995.
Stock Options
Under the Company's 1990 Stock Option Plan, which was approved by
shareholders, stock options are granted from time to time to the Company's
officers and key associates. The number of options granted is determined by
the subjective evaluation of the person's ability to influence the Company's
long-term growth and profitability. During 1995 there were no options granted
under the 1990 Stock Option Plan.
Compensation Committee
JAMES B. NICHOLSON,
Chairman
JAMES E. GEORGE
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the Chief
Executive Officer and the four most highly compensated executive officers of
the Company whose total compensation exceeded $100,000 during 1995.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation(1)
-----------------------------------------
All Other
Name and Annual
Principal Position Year Salary Bonus Compensation
------------------ ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Harry A. Lomason II(2) 1995 $358,000 $ 0 $25,614
Chairman of the Board, President 1994 333,333 122,500 9,843
and Chief Executive Officer 1993 283,333 0 7,338
James J. Hoey 1995 230,667 0 10,185
Senior Vice President 1994 219,333 78,400 6,985
and Chief Financial Officer 1993 203,333 0 6,050
Roger H. Morelli 1995 171,667 0 5,587
Senior Vice President -- Manufacturing 1994 148,333 57,750 4,032
1993 111,000 0 2,776
Gary A. Pniewski(3) 1995 145,666 0 3,205
Vice President -- Seating and Decorative Trim 1994 137,042 35,750 4,756
Engineering 1993 -- -- --
Dan D. Smith 1995 145,333 0 5,319
Vice President -- Cost Analysis and Information 1994 130,000 42,000 2,272
Technology 1993 105,000 0 1,692
<FN>
(1) The aggregate amount of perquisites and other personal benefits for any
named executive did not exceed $50,000 or 10% of the total of annual
salary and bonus for any such named executive, and is, therefore, not
reflected in the table.
(2) In December 1992, a trust established by Mr. Lomason and his wife entered
into an agreement with the Company whereby the Company, with the approval
of the Compensation Committee of the Board of Directors, agreed to make
advances of a portion of the premiums payable on a split dollar life
insurance policy purchased by the trust on the joint lives of Mr. and Mrs.
Lomason. The Company is entitled to reimbursement of the amounts advanced,
without interest, and the advances are secured by a collateral assignment
of the policy to the Company. During 1995, the Company advanced $118,352
toward the trust's payment of premiums.
(3) Mr. Pniewski joined the Company on January 11, 1994.
</TABLE>
6
<PAGE>
Option Grants During 1995
During 1995 there were no stock options granted under the Company's 1990
Stock Option Plan.
Aggregated Option Exercises During 1995 and 1995 Year-End Option Values
The following table sets forth certain information on stock options
exercised during 1995 by the executive officers named in the Summary
Compensation Table along with the number and dollar value of options remaining
unexercised at December 31, 1995 and the value of such options at December 31,
1995.
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Shares Value Unexercised Options In-the-Money Stock Options
Acquired Realized at December 31, 1995 at December 31, 1995
on at --------------------------- ---------------------------
Name Exercise Exercise Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harry A. Lomason II.. 7,500 $67,598 8,000 0 0 0
James J. Hoey........ 6,000 52,998 7,500 0 0 0
Roger H. Morelli..... 0 0 3,000 0 0 0
Gary A. Pniewski..... 0 0 2,000 0 0 0
Dan D. Smith......... 0 0 3,000 0 0 0
</TABLE>
Retirement Plan
The Retirement Plan for Salaried Employees of the Company, a defined
benefit actuarial plan, provides generally for benefits upon retirement at age
65. Remuneration covered by the Plan is base salary paid to the associate,
exclusive of overtime, commissions and bonuses. Benefits are integrated with
federal social security benefits. The following tabulation illustrates the
maximum annual benefits payable under the Plan in 1995 to associates in
various earnings classifications upon retirement at age 65 and reflects the
integration with federal social security benefits in accordance with the terms
of the Plan.
<TABLE>
<CAPTION>
Average
Annual Years of Service at Age 65
Salary -------------------------------------------------------------------
at Age 65 10 15 20 25 30 35 40
- ---------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 25,000 $ 3,625 $ 5,438 $ 7,250 $ 9,063 $10,875 $12,688 $14,500
50,000 7,852 11,778 15,704 19,630 23,556 27,482 31,408
75,000 12,102 18,153 24,204 30,255 36,306 42,357 48,408
100,000 16,352 24,528 32,704 40,880 49,056 57,232 65,408
125,000 20,602 30,903 41,204 51,505 61,806 72,107 82,408
150,000 24,852 37,278 49,704 62,130 74,556 86,982 99,408
250,000 24,852 37,278 49,704 62,130 74,556 86,982 99,408
350,000 24,852 37,278 49,704 62,130 74,556 86,982 99,408
400,000 24,852 37,278 49,704 62,130 74,556 86,982 99,408
</TABLE>
The amounts shown reflect the $150,000 Internal Revenue Service
compensation limit effective January 1, 1995.
As of December 31, 1995, the number of years of service under the
Retirement Plan for the officers named in the Summary Compensation Table was as
follows: Harry A. Lomason II--34; James J. Hoey--28; Roger H. Morelli--29; Gary
A. Pniewski--1; and Dan D. Smith--23. As of December 31, 1995, the estimated
annual payment under the Plan for service accrued prior to 1994 would be based
on an average base salary of $202,140 for Mr. Lomason and $177,000 for Mr.
Hoey. For service accrued after 1994, the payment would be based on an average
of $150,000 for both Messrs. Lomason and Hoey. The payment under the Plan for
Mr. Morelli, Mr. Smith and Mr. Pniewski would be based on an average base
salary of $122,600, $116,600 and $147,000, respectively.
7
<PAGE>
Performance Graph
The following graph compares the change in the Company's cumulative
total shareholder return on its Common Stock with the Dow Jones Industrial
Average and the Dow Jones Auto Parts Sub-Index.
[ GRAPH ]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Douglas & Lomason Company 100.0 168.90 334.08 265.48 243.30 178.57
Dow Jones Industrial Average 100.0 124.33 133.44 156.05 163.91 224.47
Dow Jones Auto Parts Sub-Index 100.0 122.81 157.54 206.16 181.01 220.90
<FN>
Assuming $100 Invested on December 31, 1990 with Dividends Reinvested
</TABLE>
PROPOSAL TO AMEND THE 1990 STOCK OPTION PLAN
The Board of Directors of the Company has adopted, subject to
shareholder approval, an amendment to the 1990 Stock Option Plan (the "Plan"),
to make available an additional 200,000 shares of the Company's Common Stock
for issuance upon the exercise of options granted thereunder. The Plan was
previously approved by shareholders at the Annual Meeting in April 1990.
As of March 1, 1995, options have been exercised or are outstanding for
149,950 of the 150,000 shares of Common Stock reserved for issuance under the
Plan.
The Company has elected to continue issuing options pursuant to the Plan
rather than initiating a new plan. Of the total shares currently authorized
for issuance pursuant to the Plan, options for only 50 shares remain to be
granted. In the opinion of the Board of Directors, this number is insufficient
for the future needs of the Company. The Board of Directors believes that its
continued ability to grant options will be of assistance in attracting and
retaining highly qualified associates to the benefit of the Company and its
shareholders.
Summary of Plan
The following is a summary of the prinicipal provisions of the Plan:
Administration. The Plan is administered by the Compensation Committee
of the Board of Directors of the Company comprised of directors who are not
eligible to participate in the Plan. The Committee makes determinations with
respect to the officers and other key executive associates of the Company or
subsidiaries (corporations of which at least fifty percent of the stock is
owned by the Company) who shall participate in the Plan and the extent of
their participation. In making such determinations, the Committee considers
the
8
<PAGE>
position and responsibilities of the associate, the nature and value to
the Company of his or her services and accomplishments, the present and
potential contribution of the associate to the success of the Company, and
such other factors as the Committee may deem relevant.
Shares. The shares covered by the Plan may be either authorized and
unissued shares or issued shares which have been reacquired by the Company.
Option Agreement. Each option granted under the Plan is evidenced by an
agreement in such form as the Committee shall from time to time approve, which
agreement must comply with and be subject to certain conditions set forth in
the Plan.
Option Price. The option price shall not be less than the full fair
market value of the shares of Common Stock at the time the option is granted
except in the case of an option granted to a 10% shareholder where the option
price shall be equal to 110% of fair market value. Fair market value is
defined as the closing price of the shares on the NASDAQ National Market
System.
Duration and Exercise of Options. The duration of each option will be
determined by the Committee, except that the maximum duration may not exceed
ten years from the date of grant and five years from the date of grant as to
an option granted to a 10% shareholder. No option will be exercisable prior to
the expiration of six months from the date of grant. The Committee determines
at the time of grant whether the option will be exercisable in full or in
cumulative installments.
Except as hereinafter provided, an option may be exercised by an
optionee only while such optionee is in the employ of the Company or a
subsidiary. In the event that the employment of an optionee to whom an option
has been granted under the Plan shall terminate (except as set forth below)
such option may be exercised, to the extent that the option was exercisable on
the date of termination of employment, only until the earlier of three (3)
months after such termination or the original expiration date of the option;
provided, however, that if termination of employment results from retirement
at normal retirement age, death or total and permanent disability, such three
(3) month period shall be extended to twelve (12) months; and provided,
further, that any option held by an optionee whose employment shall be
terminated either (i) for cause or (ii) voluntarily by the optionee and
without the consent of the Company (which consent shall be assumed in the case
of retirement at normal retirement age but not in the case of early
retirement) shall, to the extent not theretofore exercised, forthwith
terminate.
Payment of Option Price. The option price shall be paid in cash or
through the delivery of previously owned shares of the Company's Common Stock
or by a combination of cash and Common Stock.
Adjustments. The Committee shall make appropriate adjustments in the
number of shares of Common Stock for which options may be granted or which may
be issued under the Plan and the price per share of each option if there is
any change in the Common Stock as a result of a stock dividend, stock split,
recapitalization or otherwise.
Termination of Plan and Amendments. An option may not be granted
pursuant to the Plan after February 19, 2000. The Board of Directors may from
time to time terminate the Plan or amend the Plan subject to shareholder
approval to the extent necessary to satisfy the requirements of Rule 16b-3
under the Securities Exchange Act of 1934, or any successor rule.
Tax Aspects. The Company intends for options granted under the Plan to
qualify as incentive stock options under the Internal Revenue Code. The
exercise of an incentive stock option will not result in income to the
optionee if the optionee (a) does not dispose of the shares within two years
after the date of grant or one year after exercise and (b) is an associate
from the date of the grant until three months before the exercise. If these
requirements are met, the basis of the shares upon later disposition will be
the option price. Any gain will be taxed to the optionee as long-term capital
gain and the Company will not be entitled to a deduction. The excess of the
market value on the exercise date over the option price is an item of tax
preference, potentially subject to the alternative minimum tax. If the
optionee disposes of the shares prior to the expiration of either of the
holding periods in (a) above, the optionee will generally recognize
compensation
9
<PAGE>
income and the Company will be entitled to a deduction equal to the
fair market value of the shares on the exercise date minus the option
price. Any gain in excess of the compensation income portion will be treated
as long-term or short-term capital gain.
Under the terms of the Plan the aggregate market value (determined at
the time the option is granted) of the stock with respect to which incentive
stock options are exercisable for the first time in any year by any optionee
may not exceed $100,000.
On March 20, 1996 the closing price of the Common Stock of the Company
on the NASDAQ National Market System was $12-1/8.
Requisite Vote
The affirmative vote of a majority of the votes cast by holders of the
shares of the Company's Common Stock who are present in person or represented
by proxy and entitled to vote at the Annual Meeting will be required for
approval of the amendment to the 1990 Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE AMENDMENT TO THE 1990
STOCK OPTION PLAN.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP has been selected by the Board of
Directors of the Company as independent public accountants to audit the
Company's books for the year 1996. Representatives of KPMG Peat Marwick LLP
will be present at the Annual Meeting of Shareholders, will have the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions by shareholders.
SHAREHOLDER PROPOSALS
Pursuant to the General Rules under the Securities Exchange Act of 1934,
proposals of shareholders intended to be presented at the 1997 Annual Meeting
of Shareholders must be received by management of the Company at the corporate
offices on or before November 26, 1996.
MISCELLANEOUS
It is not expected that any other matters will be brought before the
meeting. However, if any other matters are presented, it is the intention of
the persons named in the proxy to vote the proxy in accordance with their best
judgment.
The entire cost of preparing and mailing the proxy material will be
borne by the Company. Solicitation of proxies will be made by mail,
personally, or by telephone or telegraph, by officers and associates of the
Company. The Company will request brokerage houses, banks and other
custodians, nominees and fiduciaries to forward soliciting material to the
shareholders, and the Company will reimburse such institutions for
out-of-pocket expenses.
By Order of the Board of Directors,
VERNE C. HAMPTON II
Secretary
March 27, 1996
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[Form of Proxy -- Front]
DOUGLAS & LOMASON COMPANY
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 26, 1996
The undersigned hereby appoints James E. George and Harry A. Lomason II,
or any one of them, with power of substitution in each, proxies to vote all
Common Stock of the undersigned in Douglas & Lomason Company at the Annual
Meeting of Shareholders to be held on Friday, April 26, 1996, and at all
adjournments thereof.
1. ELECTION OF [ ] FOR nominee listed below [ ] WITHHOLD AUTHORITY
DIRECTOR to vote for nominee listed
below.
Verne C. Hampton II
2. Approve the Amendment to the 1990 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, authorization to vote upon such other business as may
properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THE PROXIES ARE APPOINTED TO VOTE
FOR THE ELECTION OF DIRECTOR AND FOR THE PROPOSAL
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
[Form of Proxy -- Back]
(continued from other side)
Mark box at right if you plan to attend the Annual Meeting of Shareholders.[ ]
Please be sure to sign and date
this proxy.
--------------------------------
Signature of Shareholder
--------------------------------
Co-owner sign here
------------------------- , 1996
Date
Signatures should be exactly as
addressed. When signing as
Attorney, Executor,
Administrator, Personal
Representative, Trustee or
Guardian, please give your full
title as such.
If stock is held in the name of more than one person, each
person whose name appears as an owner must sign this proxy.
