<PAGE>
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 Commision 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
LoJack Corporation
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(Name of Registrant as Specified In Its Charter)
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(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), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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 of which
the filing fee is calculated and state how it was determined):
---------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
5) Total fee paid:
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[ ] 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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<PAGE>
LOJACK CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 17, 1996
You are hereby notified that the annual meeting of stockholders of LoJack
Corporation (the "Company") will be held on the 17th day of July, 1996 at
10:00 a.m. at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts, for the following purposes:
1. To consider and act upon a proposal to fix the number of directors of
the Company at six (6) and to elect six (6) directors for the ensuing
year.
2. To consider and act upon such other business as may properly come before
the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 22, 1996 as
the record date for the Meeting. Only stockholders on the record date are
entitled to notice of and to vote at the Meeting and at any adjournment
thereof.
By order of the Board of Directors,
THOMAS A. WOOTERS, Clerk
June 6, 1996
IMPORTANT: IN ORDER TO SECURE A QUORUM AND TO AVOID THE EXPENSE OF ADDITIONAL
PROXY SOLICITATION, PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
EVEN IF YOU PLAN TO ATTEND THE MEETING PERSONALLY. YOUR COOPERATION IS GREATLY
APPRECIATED.
<PAGE>
LOJACK CORPORATION
EXECUTIVE OFFICES
333 ELM STREET
DEDHAM, MASSACHUSETTS 02029
PROXY STATEMENT
SOLICITATION AND VOTING OF PROXIES
This proxy statement and the accompanying proxy form are being mailed by
LoJack Corporation (the "Company") to the holders of record of the Company's
outstanding shares of Common Stock, $.01 par value ("Common Stock"),
commencing on or about June 6, 1996. The accompanying proxy is solicited by
the Board of Directors of the Company for use at the annual meeting of
stockholders to be held on July 17, 1996 (the "Meeting") and at any
adjournment thereof. The cost of solicitation of proxies will be borne by the
Company. Directors, officers and employees may assist in the solicitation of
proxies by mail, telephone, telegraph, telefax, telex, in person or otherwise,
without additional compensation.
When a proxy is returned, prior to or at the Meeting, properly signed, the
shares represented thereby will be voted by the proxies named in accordance
with the stockholder's instructions indicated on the proxy card. You are urged
to specify your choices on the enclosed proxy card. If the proxy card is
signed and returned without specifying choices, the shares will be voted FOR
the election of directors as set forth in this proxy statement and in the
discretion of the proxies as to other matters that may properly come before
the Meeting. Sending in a proxy will not affect a stockholder's right to
attend the Meeting and vote in person. A proxy may be revoked by notice in
writing delivered to the Clerk of the Company at any time prior to its use, by
a written revocation submitted to the Clerk of the Company at the Meeting, by
a duly-executed proxy bearing a later date, or by voting in person by ballot
at the Meeting. A stockholder's attendance at the Meeting will not by itself
revoke a proxy.
VOTING SECURITIES AND RECORD DATE
The only outstanding class of stock of the Company is its Common Stock. Each
share of Common Stock is entitled to one vote per share. The Board of
Directors has fixed May 22, 1996 as the record date for the Meeting. Only
stockholders of record on the record date are entitled to notice of and to
vote at the Meeting and any adjournment thereof. On May 22, 1996, there were
issued and outstanding 21,941,891 shares of Common Stock.
The Company's Articles of Organization and By-laws provide that a quorum
shall consist of the representation in person or by proxy at the Meeting of
stockholders entitled to vote fifty-one percent (51%) in interest of the votes
that are entitled to be cast at the Meeting. The election of directors is by
plurality of the votes cast at the Meeting either in person or by proxy. The
approval of a majority of
the votes properly cast at the Meeting, either in person or by proxy, is
required for the approval of any other business which may properly be brought
before the Meeting or any adjournment thereof.
1
<PAGE>
With regard to the election of directors, votes may be left blank, cast in
favor or withheld; votes that are left blank will be counted in favor of the
election of the directors named on the proxy card. Votes that are withheld
will have the effect of a negative vote. Broker non-votes (i.e., shares held
by a broker or nominee which are represented at the Meeting, but with respect
to which the broker or nominee is not empowered to vote on a particular
proposal) will be counted in determining a quorum for each proposal. However,
broker non-votes will be treated as unvoted shares and, accordingly, will not
be counted in determining the outcome of any proposal which requires the
affirmative vote of a majority of the votes cast.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth certain information as of May 13, 1996 with
respect to the voting securities of the Company owned by (1) any person
(including any "group" as that term is defined in section 13(d)(3) of the
Securities Exchange Act of 1934) who is known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of a class of
voting securities of the Company, (2) each director or nominee for director of
the Company, (3) each of the executive officers named in the Summary
Compensation Table, and (4) all directors and executive officers of the
Company as a group. In accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, a person is deemed to be the beneficial owner, for
purposes of this table, of any voting securities of the Company if he or she
has or shares voting power or investment power with respect to such securities
or has the right to acquire beneficial ownership thereof at any time within 60
days of May 13, 1996. As used herein "voting power" is the power to vote or
direct the voting of shares, and "investment power" is the power to dispose of
or direct the disposition of shares. Except as indicated in the notes
following the table below, each person named has sole voting and investment
power with respect to the shares listed as being beneficially owned by such
person.
<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES
NAME OF AND NATURE OF PERCENTAGE OF
BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
---------------- ------------------ -------------
<S> <C> <C>
The Capital Group Companies, Inc. 2,208,500(1) 10.1%
333 South Hope Street
Los Angeles, CA 90071
Leon G. Cooperman 1,137,200(2) 5.2
c/o Omega Advisors, Inc.
88 Pine Street
Wall Street Plaza--31st Floor
New York, NY 10005
C. Michael Daley 997,148(3) 4.4
James A. Daley 9,500(4) *
Lee T. Sprague 227,634(5) 1.0
Harold W. Shad, III 157,427(6) *
Robert J. Murray 20,000(7) *
Larry C. Renfro 8,000(8) *
Joseph F. Abely 259,450(9) 1.2
David W. Manly 0 *
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES
NAME OF AND NATURE OF PERCENTAGE OF
BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
---------------- ------------------ -------------
<S> <C> <C>
William R. Duvall 189,750(10) *
Peter J. Conner 240,750(11) 1.1
All executive officers and directors 2,109,659(12) 9.0
as a group (10 persons)
</TABLE>
- ---------------------
* Less than one percent (1%) of the outstanding Common Stock.
(1) According to a report filed with the SEC on Amendment No. 5 to Schedule
13G, dated April 9, 1996, respectively, Capital Guardian Trust Company and
Capital Research and Management Company, operating subsidiaries of The
Capital Group Companies, Inc., exercised as of March 29, 1996, investment
discretion with respect to 1,214,700 and 993,800 shares, respectively. The
Capital Group Companies, Inc. disclaims beneficial ownership as to
2,208,500 shares.
(2) According to a report filed on Schedule 13D, dated April 9, 1996, and
Amendment No. 1 thereto, dated April 10, 1996, Leon G. Cooperman is the
managing general partner of Omega Capital Partners, L.P., Omega
Institutional Partners, L.P., and Omega Equity Partners, L.P. and is the
President and majority stockholder of Omega Advisors, Inc., investment
advisor to Omega Overseas Partners, Ltd. and Omega Partners II, Ltd., and
investment manager to certain unrelated third parties. Mr. Cooperman
exercises sole voting and sole investment power with respect to 928,400
shares and shared voting and investment power with respect to 208,800
shares.
(3) Includes (i) 23,809 shares held jointly with spouse, (ii) 8,167 shares
held by spouse as to which beneficial ownership is disclaimed, (iii) 3,000
shares held as custodian under the Massachusetts Uniform Transfer to
Minors Act as to which beneficial ownership is disclaimed and (iv) options
currently exercisable to purchase 840,250 shares.
(4) Includes 9,500 shares subject to currently exercisable options.
(5) Includes 5,000 shares held by spouse as to which beneficial ownership is
disclaimed and 9,500 shares subject to currently exercisable options.
(6) Includes (i) 52,565 shares held by spouse as to which beneficial ownership
is disclaimed, (ii) 35,797 shares held by controlled corporations, (iii)
9,000 shares held by a retirement account, and (iv) 9,500 shares subject
to currently exercisable options.
(7) Includes 10,500 shares held jointly with spouse and 9,500 shares subject
to currently exercisable options.
(8) Included 8,000 shares subject to currently exercisable options.
(9) Includes (i) 200 shares held by spouse as to which beneficial ownership is
disclaimed, (ii) 1,000 shares held jointly with spouse, and (iii) 233,250
shares subject to currently exercisable options.
(10) Includes 179,250 shares subject to currently exercisable options.
(11) Includes 227,750 shares subject to currently exercisable options.
(12) Includes 1,526,500 shares subject to currently exercisable options. See
footnotes (3) through (11).
3
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires directors,
executive officers and persons who own more than 10% of the outstanding Common
Stock of the Company to file with the Securities and Exchange Commission
("SEC") and NASDAQ reports of ownership and changes in ownership of voting
securities of the Company and to furnish copies of such reports to the
Company. Based solely on review of the copies of such reports furnished to the
Company or written representations from certain persons that no reports were
required for those persons, the Company believes that all Section 16(a) filing
requirements were satisfied in a timely fashion during the fiscal year ended
February 29, 1996, except for the following: Peter J. Conner made one late
filing, reporting the exercise of an option to purchase 12,000 shares of
Common Stock and the concurrent sale of the shares of Common Stock acquired
upon such exercise; James A. Daley made one late filing, reporting the sale of
47,619 shares of Common Stock; and David Manly made one late filing, reporting
the termination of three options to purchase 22,500, 30,000 and 40,000 shares
of Common Stock, respectively. In addition, C. Michael Daley made one late
filing, reporting the receipt by him and his spouse of a gift of 1,500 shares
of Common Stock each during the fiscal year ended February 28, 1994.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
One of the purposes of the Meeting is to fix the number of directors of the
Company at six (6) and to elect six (6) directors to serve until the next
annual meeting of stockholders and until their successors shall have been duly
elected and qualified. It is intended that the proxies solicited by the Board
of Directors will be voted in favor of the six (6) nominees named below unless
otherwise specified on the proxy form. All of the nominees are currently
members of the Board. There are no family relationships between any nominees,
directors or executive officers of the Company except that Mr. James A. Daley
and Mr. C. Michael Daley are brothers.
The Board knows of no reason why any of the nominees will be unavailable or
unable to serve as a director, but in such event, proxies solicited hereby
will be voted for the election of another person or persons to be designated
by the Board of Directors.
The following information is furnished with respect to the persons nominated
for election as directors:
<TABLE>
<CAPTION>
PRESENT PRINCIPAL EMPLOYER
NAME AGE AND PRIOR BUSINESS EXPERIENCE
---- --- -----------------------------
<S> <C> <C>
C. Michael Daley 60 Mr. C. Michael Daley has served as Chairman of the Board,
Chief Executive Officer and Treasurer of the Company since
July 1986. Mr. Daley was also President of the Company from
July 1986 to January 11, 1996. Mr. Daley has been a director
of the Company since 1981. Prior to July 1986, he was Presi-
dent and a principal of Daley Care Management Company, a
company engaged in the health care business.
James A. Daley 55 Mr. James A. Daley has served as a director of the Company
since 1985. Mr. Daley is President and a principal of Daley
Hotel Group, Inc., and several affiliated entities, all of
Boston, Massachusetts, which are in the hotel and restaurant
business.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL EMPLOYER
NAME AGE AND PRIOR BUSINESS EXPERIENCE
---- --- -----------------------------
<S> <C> <C>
Harold W. Shad, III 49 Mr. Shad has served as a director of the Company since July
1988. Until May 1990, Mr. Shad was president of Recovery
Systems, Inc., the Company's former Florida distributor. Mr.
Shad has been involved in the automotive sales and leasing
business in Florida since 1974. From 1984 to the present, he
has been owner, President and Chief Executive Officer of
Mike Shad Ford of Jacksonville, Florida. Mr. Shad is a
director of the National Automobile Dealers Association,
representing Florida. Mr. Shad is also a past Chairman of
the Ford Motor Company's National Dealer Counsel.
Lee T. Sprague 56 Mrs. Sprague has served as a director of the Company since
1981. Mrs. Sprague has been a private investor for more than
the past five years. Mrs. Sprague also serves on the boards
of various private, educational and charitable institutions.
Robert J. Murray 54 Mr. Murray has served as a director of the Company since
1992. Mr. Murray has been Chairman of the Board, President
and Chief Operating Officer of New England Business
Services, Inc. since December 13, 1995. From January 1991 to
December 1995, Mr. Murray was Executive Vice President,
North Atlantic Group, of the Gillette Company. Prior to
January 1991, Mr. Murray served as Chairman of the Board of
Management of Braun AG, a Gillette subsidiary headquartered
in Germany. He has also held a variety of other management
positions since joining Gillette in 1961. Mr. Murray also
serves on the Board of Directors of Fleet Bank of
Massachusetts, Connecticut and Rhode Island, Allmerica
Financial Operation and North American Mortgage Company.
Larry C. Renfro 42 Mr. Renfro was first elected as a director on May 4, 1993 to
fill a vacancy on the Board. Since 1990, Mr. Renfro has held
the office of Vice President, Financial Services and has
served as a member of the Operating Committee of Allmerica
Financial. From 1989 to 1990, he was Executive Vice
President of State Street Bank and Trust Company. From 1988
to 1989, he was Chairman of Boston Financial Data Services,
Inc., a subsidiary of State Street Bank and Trust Company.
</TABLE>
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES NAMED
ABOVE.
BOARD OF DIRECTORS
Meetings of the Board of Directors and Committees
The Board of Directors met six times during the fiscal year ended February
29, 1996. The Board of Directors has standing Audit and Compensation
Committees. The Board does not have a nominating committee. All of the
directors attended 75% or more of the aggregate number of meetings of the
Board of Directors and the committees of which he or she was a member in 1996.
The Compensation Committee, which currently consists of Mrs. Sprague and
Messrs. Murray and Shad, reviews the Company's compensation philosophy and
programs and exercises authority with respect to the payment of compensation
to directors and officers and the administration of the stock incentive plans
of the Company. The Compensation Committee met two times during the fiscal
year ended February 29, 1996.
The Audit Committee, which consists of Messrs. James Daley, Shad and Renfro,
recommends the selection of and confers with the Company's independent
accountants regarding the scope and adequacy of annual audits; reviews reports
from the independent accountants; and meets with such
5
<PAGE>
independent accountants and with the Company's financial personnel to review
the adequacy of the
Company's accounting principles, financial controls and policies. The Audit
Committee met one time during the fiscal year ended February 29, 1996.
Compensation of Directors
Pursuant to the Directors' Compensation Plan, in addition to stock options
granted as described below, each director is entitled to an annual stipend of
$6,500 (based on a minimum of four directors meetings a year and for directors
elected between annual meeting dates, prorated based upon the term of
service), an attendance fee for each Board meeting of $600 and reimbursement
of travel and hotel expenses (for out-of-state directors only) not to exceed
$1,000 per meeting.
Non-employee directors (currently five persons) are eligible to receive Non-
Employee Director Options under the Company's Restated and Amended Stock
Incentive Plan (the "Stock Incentive Plan"). The provisions for Non-Employee
Director Options under the Stock Incentive Plan are designed to be a "formula
plan" under applicable rules promulgated by the Securities and Exchange
Commission ("SEC") and are administered by the Board of Directors. Pursuant to
the Stock Incentive Plan, on the third business day following the annual
meeting of stockholders on July 20, 1994, an option to purchase 10,000 shares
of Common Stock was granted to each non-employee director re-elected at such
meeting at an exercise price of $7.375 per share, the fair market value on the
date of grant. Thereafter, on the third business day following an annual
meeting of stockholders, each eligible non-employee director elected or re-
elected at such meeting receives an option grant to purchase 5,000 shares of
Common Stock at an exercise price equal to the fair market value of the
Company's Common Stock on that date. Pursuant to the Stock Incentive Plan, an
option to purchase 5,000 shares of Common Stock was granted to each non-
employee director re-elected at the annual meeting of stockholders on July 19,
1995 at an exercise price of $12.375 per share, the fair market value on the
date of grant. Any non-employee director elected other than at an annual
meeting of stockholders will be granted a Non-Employee Director Option to
purchase 1,250 shares of Common Stock for each partial or complete fiscal
quarter remaining until the next annual meeting of stockholders. There are
210,000 shares of Common Stock authorized for awards as Non-Employee Director
Options and to date the Company has issued Non-Employee Director Options to
purchase 75,000 shares of Common Stock.
Non-Employee Director Options are nonqualified stock options under the Stock
Incentive Plan. The exercise price of shares subject to Non-Employee Director
Options shall be equal to the fair market value of Common Stock on the date of
grant. Non-Employee Director Options have a term of ten years and become
exercisable in two annual installments beginning at the next annual meeting of
stockholders after the date of grant, subject to becoming fully exercisable if
a "Change in Control," as described in the Stock Incentive Plan, occurs or as
otherwise provided in the terms of the option.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table and notes present the compensation paid by the Company
to its Chief Executive Officer and the Company's four most highly compensated
executive officers other than the Chief Executive Officer for each of the last
three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR (1) SALARY ($) BONUS ($) ($)(2) (#)(3) ($)(4)
------------------ -------- ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Daley 1996 $302,884(7) $150,000 0 125,000 $3,696
(Chairman, Chief 1995 272,115 125,125 0 125,000 2,310
Executive
Officer and Treasurer) 1994 249,327 87,500 $214,583 125,000 2,249
Joseph F. Abely 1996 153,533(7) 78,750 0 40,000 3,696
(President and Chief 1995 138,752 48,780 0 40,000 2,310
Operating Officer) (5) 1994 133,456 40,203 0 45,000 2,249
William R. Duvall 1996 119,378(7) 49,510 0 40,000 3,696
(Senior Vice President, 1995 110,716 33,363 0 40,000 1,076
Operations and Technical 1994 105,527 32,080 0 45,000 1,553
Development)
Peter J. Conner 1996 93,448(7) 32,244 0 40,000 3,696
(Vice President, 1995 88,190 22,146 0 40,000 2,310
Government Relations) 1994 84,823 17,035 0 45,000 2,107
David W. Manly 1996 88,023 0 0 40,000 0
(Former Vice President, 1995 117,587 41,339 0 40,000 1,300
Sales and Marketing) (6) 1994 113,097 34,070 0 45,000 1,300
</TABLE>
- ---------------------
(1) The Company's fiscal year ends on the last day of February.
(2) Represents payment of the balance of accrued but unpaid salary due to Mr.
Daley for services rendered from January 1987 to August 1988. As of
February 28, 1994, all amounts due to Mr. Daley for accrued but unpaid
salary for the period from January 1987 to August 1988 were paid.
(3) Options represent the right to purchase shares of Common Stock at a fixed
price per share (fair market value) in accordance with vesting schedules
applicable to each option. Certain options become immediately and fully
exercisable upon a "Change in Control." A "Change in Control" occurs if
the Company (i) ceases operations; (ii) merges or consolidates with
another entity and is not the surviving entity; (iii) sells or otherwise
transfers substantially all of its operating assets; or (iv) if more than
fifty percent (50%) of the capital stock of the Company is transferred in
a single transaction or in a series of related transactions other than a
public offering of stock of the Company.
(4) Represents the Company's match of the employee's contribution to the
401(k) plan.
(5) Mr. Abely was appointed President and Chief Operating Officer on January
11, 1996. Previously, he was Senior Vice President and Chief Financial
Officer.
(6) Mr. Manly resigned as an officer of the Corporation on October 31, 1995.
(7) Reflects 53 pay periods during the year.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows all options granted to each of the named executive
officers of the Company during the fiscal year ended February 29, 1996 and the
potential value at stock price appreciation rates of 5% and 10% over the ten-
year term of the options. The 5% and 10% rates of appreciation are required to
be disclosed by the Securities and Exchange Commission ("SEC") and are not
intended to forecast possible future actual appreciation, if any, in the
Company's stock prices. The Company did not use an alternative present value
formula permitted by the SEC because the Company is not aware of any such
formula that can determine with reasonable accuracy the present value based on
future unknown or volatile factors.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE
UNDERLYING GRANTED TO APPRECIATION
OPTIONS EMPLOYEES EXERCISE OR FOR OPTION TERM(3)
GRANTED IN FISCAL BASE PRICE EXPIRATION -----------------------
NAME (#)(1) YEAR (2)($/SH) DATE 5%($) 10%($)
---- ---------- ---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
C. Michael Daley 125,000 25% $8.375 4/15/05 $658,374 $1,668,449
Joseph F. Abely 40,000 8 8.375 4/15/05 210,680 533,904
David W. Manly (4) 40,000 8 8.375 4/15/05 210,680 533,904
William R. Duvall 40,000 8 8.375 4/15/05 210,680 533,904
Peter J. Conner 40,000 8 8.375 4/15/05 210,680 533,904
</TABLE>
- ---------------------
(1) These Senior Management Options become exercisable in four equal
installments on February 29, 1996, February 28, 1997, February 28, 1998
and February 28, 1999. These options are subject to earlier vesting upon a
"Change in Control" (see Summary Compensation Table Note (3)). Options may
be exercised by the employee only during the term of employment and are
not assignable other than by will, by the laws of descent and distribution
or pursuant to a qualified domestic relations order. Upon the death of the
optionee, the estate or other beneficiary may exercise the options for a
period of up to twelve months, but prior to expiration.
(2) The exercise price per share is the market price of the underlying Common
Stock on the date of grant.
(3) The values shown are based on the indicated assumed annual rates of
appreciation, compounded annually. Actual gains realized, if any, on stock
option exercises and Common Stock holdings are dependent on the future
performance of the Common Stock and overall stock market conditions. There
can be no assurance that the values shown in this table will be achieved.
(4) Mr. Manly resigned as an officer of the Corporation on October 31, 1995.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#) FY-END ($)(2)
------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Daley 50,000 $ 362,500 840,250 187,500 $6,210,780 $552,734
Joseph F. Abely 80,000 745,650 273,750 61,250 1,877,234 183,828
William R. Duvall 67,000 676,956 179,250 61,250 1,209,796 183,828
Peter J. Conner 52,000 417,173 227,750 61,250 1,622,046 183,028
David W. Manly(3) 226,500 2,310,306 0 0 0 0
</TABLE>
- ---------------------
(1) Value realized equals fair market value on the date of exercise, less the
exercise price, times the number of shares acquired without deducting
taxes or commissions paid by employee.
(2) Value of unexercised options equals fair market value of the shares
underlying in-the-money options at February 29, 1996 ($10.50 per share),
less exercise price, times the number of options outstanding.
(3) Mr. Manly resigned as an officer of the corporation on October 31, 1995.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this proxy statement, in whole or in part, the following
report and the stock performance graph contained elsewhere herein shall not be
incorporated by reference into any such filings nor shall they be deemed to be
soliciting material or deemed filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or under the
Securities Exchange Act of 1934, as amended.
9
<PAGE>
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee")
consists of Lee T. Sprague, Robert J. Murray and Harold W. Shad, III, three
non-employee directors. The Committee is responsible for reviewing the
Company's compensation philosophy and programs and exercises oversight with
respect to the payment of annual salary, bonuses, and stock-based incentives
(currently stock options) to directors and officers and also exercises
authority with respect to the administration of the stock incentive plans of
the Company.
COMPENSATION PHILOSOPHY AND PRACTICE
The Committee believes that leadership and motivation of the Company's
employees is critical to the continued success of the Company. In support of
this philosophy, the Committee structures its compensation programs to achieve
the following objectives:
. offer compensation opportunities that attract and retain exceptionally
talented individuals; motivate individuals to perform at their highest
levels; reward achievements that further the business strategy of the
Company.
. link a significant portion of an executive's total compensation to the
annual and long term financial performance of the Company as well as to
the creation of stockholder value.
. encourage executives to manage from the perspective of persons with
ownership interests in the Company.
Each year the Committee conducts a full review of the Company's executive
compensation program. In fiscal 1996, the Company retained an independent
consultant to review the current executive compensation practices of the
Company, to assess the competitive level of the executive compensation and to
recommend objective performance measures to use in awarding bonus
compensation. The Committee expects to periodically retain independent
consultants in the future to further assist with developing, maintaining and
structuring the Company's executive compensation programs.
Based upon the findings of the independent consultant and its own
deliberations, the Committee believes that the Company's executive
compensation practices provide an overall level of compensation that is
competitive with the level of compensation of companies of similar size,
complexity, revenues and growth potential, and that its executive compensation
practices also recognize the caliber, level of experience and performance of
the Company's management.
The Committee recently reviewed the performance standards by which it
determines annual bonus awards. These performance standards are based on a
combination of Company results and individual achievements, except for C.
Michael Daley whose award is determined completely by reference to corporate
results. In reviewing the performance of executive officers whose compensation
is detailed in this proxy statement (other than Mr. Daley), the Committee also
takes into account the
views of Mr. Daley, the Company's Chief Executive Officer. The Committee
determines and recommends to the Board the compensation of the Chief Executive
Officer without his participation.
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EXECUTIVE OFFICER COMPENSATION PROGRAM
BASE SALARY. Base salary compensation is generally set within the ranges of
salaries of executive officers with comparable qualifications, experience and
responsibilities at other companies of similar size, complexity, revenues and
growth potential taking into account the caliber and level of experience of
management. In addition, consideration is given to other factors, including an
officer's contribution to the Company as a whole. Over the past three years,
increases in base salary have generally been modest. Mr. Abely's base salary
was increased to $175,000 on January 11, 1996 to reflects his promotion to
President and Chief Operating Officer.
ANNUAL BONUS COMPENSATION. The Company's executive officers are eligible for
an annual cash bonus. Early in the fiscal year, the Committee establishes
individual and Company performance standards. Executive officers are assigned
target bonus levels. In fiscal 1996, the corporate performance standards were
based on growth in revenues, growth in net earnings and market penetration.
The Committee also considered individual achievements in areas such as
departmental performance and leadership of special projects. Over the past
three fiscal years, the Committee has awarded cash bonuses to its executive
officers.
The awards for each year are generally declared during the first quarter of
the following fiscal year and are paid during that fiscal year. The Committee
has allocated more for bonuses in fiscal 1996 than in fiscal 1995 because the
Company has had an excellent year in which, among other things, it had record
sales growth and profits, expanded the use of the Company's technology into
new jurisdictions, and reduced the manufactured and installed cost of the
Company's products.
MANAGEMENT STOCK OWNERSHIP. Under the Stock Incentive Plan, stock options
may be granted to the executive officers, officers and other key employees of
the Company. The Committee believes that it is important for the Company's
executive officers to hold significant levels of stock ownership in order to
align the interests and objectives of the executive officers with those of the
Company's other stockholders. Furthermore, the Committee believes stock option
grants pursuant to the Stock Incentive Plan provide incentives for improving
the long-term performance of the Company and help retain superior talent in
the Company's senior management. The Committee awards stock options and
determines the size of stock option awards based on similar factors as are
used to determine the base salaries and annual bonus amounts, including
comparative compensation data.
On May 20, 1996, the Committee granted 182,500 Senior Management Options to
purchase Common Stock at $12.875 per share, as follows: Joseph F. Abely,
William R. Duvall, and Peter J. Conner, 30,000 each; and other key managers,
92,500 in the aggregate. The Committee considers these option grants
reflective of the excellent performance of senior management during fiscal
1996 as measured by the corporate and individual performance standards and
consistent with the intent and purposes of the Company's compensation
philosophy. The Chief Executive Officer was also granted Senior Management
Options, as discussed below.
CHIEF EXECUTIVE OFFICER COMPENSATION
In determining the compensation of the Company's Chairman and Chief
Executive Officer, C. Michael Daley, the Committee considered the demonstrated
leadership he brings to the Company and
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the excellent performance of the Company during the past fiscal year as
measured against the Company performance standards established by the
Committee. In light of these factors, Mr. Daley's salary was also increased to
$325,500, effective April 1, 1996. Based on the Company's achievements in
fiscal 1996 as measured by its growth in revenues, growth in net earnings and
market penetration, the Board approved, based on the Committee's
recommendation, a bonus of 150,000 to be paid in the first quarter of fiscal
1997 and the Committee granted Mr. Daley a Senior Management Option to
purchase 125,000 shares of the Company's Common Stock on the same terms as the
grants of Senior Management Options to other executive officers.
The Compensation Committee
Lee T. Sprague
Robert J. Murray
Harold W. Shad, III
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STOCK PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
cumulative stockholder return on the Company's Common Stock to the NASDAQ
Market Index and a company-selected peer group index, which includes Code
Alarm, Inc., Audiovox Corp., and Cincinnati Microwave, Inc., over a five-year
period beginning February 28, 1991 and ending February 29, 1996. The peer
group index was formed on a weighted average basis based on market
capitalizations. Cumulative total return is measured assuming an initial
investment of $100 and reinvestment of dividends.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG LOJACK, PEER GROUP AND NASDAQ MARKET
<CAPTION>
Measurement period PEER NASDAQ
(Fiscal Year Covered) LOJACK GROUP MARKET
- --------------------- -------- -------- --------
<S> <C> <C> <C>
Measurement PT -
1991 $100 $100 $100
FYE 1992 $ 75 $127.43 $110.51
FYE 1993 $144.23 $209.31 $110.69
FYE 1994 $226.92 $513.41 $141.04
FYE 1995 $226.92 $288.67 $134.65
FYE 1996 $307.69 $180.7 $185.93
</TABLE>
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DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the Company's 1997
annual meeting of stockholders must be received at the executive offices of
the Company not later than February 6, 1997 in order to be considered for
inclusion in the Company's proxy statement and form of proxy for that meeting.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company has selected Deloitte & Touche LLP as its independent certified
public accountants for the current fiscal year. The firm and its predecessor
have audited the Company's financial statements annually since 1985.
Representatives of Deloitte & Touche LLP are expected to be present at the
Meeting, will have the opportunity to make a statement, if they so desire, and
are expected to be available to respond to appropriate questions from the
stockholders.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended
February 29, 1996 is being furnished to stockholders of record on May 22,
1996. The Annual Report to Stockholders does not constitute a part of the
proxy soliciting material.
OTHER MATTERS
As of the date of this proxy statement, management of the Company knows of
no matter not specifically referred to above as to which any action is
expected to be taken at the Meeting. The persons named in the enclosed form of
proxy, or their substitutes, will vote the proxies, insofar as the same are
not limited to the contrary, in regard to such other matters and the
transaction of such other business as may properly be brought before the
Meeting, in their best judgement.
By order of the Board of Directors,
THOMAS A. WOOTERS, Clerk
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PROXY LOJACK CORPORATION PROXY
Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders
July 17, 1996
The undersigned hereby appoints C. Michael Daley and Joseph F. Abely (or
either of them) as proxies, each with full power of substitution, to vote all
shares of LoJack Corporation owned by the undersigned on May 22, 1996 at the
Annual Meeting of Stockholders of LoJack Corporation, to be held July 17, 1996
at 10:00 a.m. at the Sheraton Tara Hotel, 37 Forbes Road, Braintree,
Massachusetts, and at any adjournments thereof, hereby revoking any proxy
heretofore given, upon the matters and proposals set forth in the Notice of
Annual Meeting and Proxy Statement dated June 6, 1996, copies of which have been
received by the undersigned. The undersigned instructs such proxies to vote as
follows:
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR" all the nominees in Item 1 and in the discretion
of the proxies on Item 2 on the reverse.
SEE REVERSE SIDE
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A [X] Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
<TABLE>
<CAPTION>
FOR all WITHHOLD AUTHORITY
nominees to vote for all nominees
<S> <C> <C> <C> <C>
1. Election
of [_] [_] Nominees: C. Michael Daley 2. In their discretion upon such
Directors James A. Daley other business as may properly
Harold W. Shad, III come before the meeting or any
Lee T. Sprague adjournment thereof.
Robert J. Murray
Larry C. Renfro Please mark, date, sign and
return in the enclosed
envelope.
</TABLE>
Instructions: To withhold authority to vote for any
individual nominee, write that nominee's name in the
space provided below.
____________________________________________________
SIGNATURE ___________________________________ DATE ___________________________
SIGNATURE ___________________________________ DATE ___________________________
Signature if held jointly
Note: Sign exactly as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If more than one name is shown, including in the case of joint
tenants, each party should sign.
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