<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LoJack Corporation
- --------------------------------------------------------------------------------
(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
[ ] $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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[ ] Fee paid previously by written preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
LOJACK CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 16, 1997
You are hereby notified that the annual meeting of stockholders of LoJack
Corporation (the "Company") will be held on the 16th day of July, 1997 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 seven (7) and to elect seven (7) directors for the
ensuing year.
2. To consider and act upon a proposal to ratify the adoption by the Board
of Directors of an amendment to the Company's Restated and Amended Stock
Incentive Plan (the "Amended Plan") to provide for an increase of
150,000 in the number of shares of Common Stock authorized for issuance
under the Plan to employees who are not eligible to receive Senior
Management Options.
3. 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 21, 1997 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 3, 1997
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 3, 1997. 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 16, 1997 (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, FOR proposal
2, 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 21, 1997 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 21, 1997, there were
issued and outstanding 18,931,841 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 adoption of the proposal to ratify the
adoption by the Board of Directors of an amendment to the Company's Restated
<PAGE>
and Amended Stock Incentive Plan (the "Plan") and for the approval of any
other business which may properly be brought before the Meeting or any
adjournment thereof.
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. Abstentions may be specified on all
proposals other than the election of directors and will be counted as present
for purposes of the proposal on which the abstention is noted. Because the
proposal to ratify the amendment to the Company's Plan requires the approval
of a majority of the votes properly cast at the Meeting, either in person or
by proxy, abstentions 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 21, 1997 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 21, 1997. 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. 2,649,700(1) 14.00%
333 South Hope Street
Los Angeles, CA 90071
Leon G. Cooperman 1,318,400(2) 6.96%
c/o Omega Advisors, Inc.
88 Pine Street
Wall Street Plaza--31st Floor
New York, NY 10005
C. Michael Daley 1,113,944(3) 5.60%
James A. Daley 17,000(4) *
Lee T. Sprague 233,634(5) 1.24%
</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>
Harold W. Shad, III 130,130(6) *
Robert J. Murray 37,500(7) *
Larry C. Renfro 17,000(8) *
Joseph F. Abely 318,200(9) 1.66%
Kevin M. Mullins 10,625(10) *
William R. Duvall 216,500(11) 1.13%
Peter J. Conner 279,500(12) 1.46%
Harvey Rosenthal 0 *
All executive officers and directors 2,374,033(13) 11.44%
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. 6 to Schedule
13G, dated February 12, 1997, Capital Guardian Trust Company and Capital
Research and Management Company, operating subsidiaries of The Capital
Group Companies, Inc., exercised as of February 12, 1997, investment
discretion with respect to 1,404,700 and 1,245,000 shares, respectively.
The Capital Group Companies, Inc. disclaims beneficial ownership as to
2,649,700 shares.
(2) According to a report filed on Amendment No. 2 to Schedule 13G, dated
January 7, 1997, Leon G. Cooperman is the managing member of Omega
Associates, L.L.C. (which is the sole general partner of Omega Capital
Partners, L.P., Omega Institutional Partners, L.P., and Omega Equity
Partners, L.P.), 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 1,057,100 shares and shared voting and investment power
with respect to 261,300 shares.
(3) Includes (i) 23,809 shares held jointly with spouse, (ii) 5,167 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 965,250 shares.
(4) Includes 17,000 shares subject to currently exercisable options.
(5) Includes 5,000 shares held by spouse as to which beneficial ownership is
disclaimed and 17,000 shares subject to currently exercisable options.
(6) Includes (i) 52,565 shares held by spouse as to which beneficial ownership
is disclaimed, (ii) 9,000 shares held by a retirement account, (iii) 1,000
shares held by controlled corporations, and (iv) 17,000 shares subject to
currently exercisable options.
(7) Includes 20,500 shares held jointly with spouse and 17,000 shares subject
to currently exercisable options.
(8) Includes 17,000 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) 292,000
shares subject to currently exercisable options.
(10) Includes 10,625 shares subject to currently exercisable options.
(11) Includes 200,000 shares subject to currently exercisable options.
(12) Includes 266,500 shares subject to currently exercisable options.
(13) Includes 1,819,375 shares subject to currently exercisable options. See
footnotes (3) through (12).
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 28, 1997, except for the following: Kevin M. Mullins made two late
filings, reporting his executive officer status and initial ownership
information at such time and reporting his receipt of a grant of options to
purchase 2,500 shares of Common Stock; each of Joseph F. Abely, Peter Conner,
William R. Duvall and C. Michael Daley made one late filing, reporting their
receipt of a grant of options to purchase 30,000 shares, 30,000 shares, 30,000
shares and 125,000 shares of Common Stock, respectively; and each of James A.
Daley, Robert J. Murray, Larry C. Renfro, Harold W. Shad, III and Lee T.
Sprague made one late filing, reporting their receipt of a grant of options to
each purchase 5,000 shares of Common Stock and Harold W. Shad, III made one
late filing, reporting the disposition of beneficial ownership of 35,797
shares of Common Stock.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
One of the purposes of the Meeting is to fix the number of directors of the
Company at seven (7) and to elect seven (7) 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 seven (7) nominees named below
unless otherwise specified on the proxy form. All of the nominees other than
Mr. Rosenthal 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 56 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 50 Mr. Shad has served as a director of the Company since July
1988. From 1984 to April 1997 Mr. Shad was the owner, Presi-
dent and Chief Executive Officer of Mike Shad Ford, Inc. and
Mike Shad Chrysler, Plymouth, Jeep, Eagle, Inc. of Jackson-
ville, Florida. Since April 1997, Mr. Shad has continued to
serve as President of Mike Shad Ford, Inc. and Mike Shad
Chrysler, Plymouth, Jeep, Eagle, Inc. of Jacksonville, Flor-
ida. Mr. Shad is a director of the National Automobile Deal-
ers Association, representing Florida. Mr. Shad is a past
Chairman of the Ford Motor Company's National Dealer Coun-
sel.
Lee T. Sprague 57 Mrs. Sprague has served as a director of the Company since
1981. Mrs. Sprague has been a private investor for more than
the past six years. Mrs. Sprague also serves on the boards
of various private, educational and charitable institutions.
Robert J. Murray 55 Mr. Murray has served as a director of the Company since
1992. Mr. Murray has been Chairman of the Board, President
and Chief Executive Officer of New England Business Servic-
es, Inc. since December 13, 1995. From January 1991 to De-
cember 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 Manage-
ment of Braun AG, a Gillette subsidiary headquartered in
Germany. He has also held a variety of other management po-
sitions in Gillette since 1961. Mr. Murray also serves on
the Board of Directors of Fleet National Bank, Allmerica Fi-
nancial Corporation, North American Mortgage Company and
Hannaford Bros. Co.
Larry C. Renfro 43 Mr. Renfro has served as a director of the Company since
1993. 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.
Harvey Rosenthal 54 From 1994 to 1996, Mr. Rosenthal held the offices of Presi-
dent and Chief Operating Officer and was a member of the
Board of Directors of Melville Corporation. From 1984 to
1994, Mr. Rosenthal was the President and Chief Executive
Officer of the CVS Division of Melville Corporation. From
1969-1984, Mr. Rosenthal held various executive positions in
merchandising, marketing and operations at the CVS Division
of Melville Corporation. Mr. Rosenthal also serves on the
Board of Directors of CVS Corporation and Cosmetic Centers,
Inc. He also serves on the Board of Trustees of EQ Advisors
Trust and is a trustee of the Dana-Farber Cancer Institute.
</TABLE>
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES NAMED
ABOVE.
5
<PAGE>
BOARD OF DIRECTORS
Meetings of the Board of Directors and Committees
The Board of Directors met five times during the fiscal year ended February
28, 1997. 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 1997.
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 28, 1997.
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 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 28, 1997.
Compensation of Directors
Each director of the Company, in addition to stock options granted as
described below, is entitled to an annual stipend at the rate 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. Pursuant to a vote of the Board of Directors, after the 1997 annual
meeting of stockholders, the rate of the annual stipend and the attendance fee
will be adjusted upward to $8,000 and $800, respectively. In addition, the
Chairman of the Audit Committee and the Chairman of the Compensation Committee
will be entitled to an additional $500 stipend per year.
Non-employee directors (currently six persons) are eligible to receive Non-
Employee Director Options under the Amended Plan. The provisions for Non-
Employee Director Options under the Amended 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 Amended 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 Amended Plan, an option to purchase 5,000
shares of Common Stock was granted to each non-employee director re-elected at
the
6
<PAGE>
annual meeting of stockholders on July 19, 1995 and July 17, 1996, at an
exercise price of $12.375 per share and $9.625 per share, respectively, the
fair market value on the date of each grant. Any non-employee director elected
other than at an annual meeting of stockholders will be granted a Non-Employee
Director Option to purchase 1,250 shares of Common Stock for each partial or
complete fiscal quarter remaining until the next annual meeting of
stockholders. There are 210,000 shares of Common Stock authorized for awards
as Non-Employee Director Options and to date the Company has issued Non-
Employee Director Options to purchase 100,000 shares of Common Stock.
Non-Employee Director Options are nonqualified stock options under the
Amended Plan. The exercise price of shares subject to Non-Employee Director
Options shall be equal to the fair market value of Common Stock on the date of
grant. Non-Employee Director Options have a term of ten years and become
exercisable in two annual installments beginning at the next annual meeting of
stockholders after the date of grant, subject to becoming fully exercisable if
a "Change in Control," as described in the Amended Plan, occurs or as
otherwise provided in the terms of the option.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table and notes present the compensation paid by the Company
to its Chief Executive Officer and the Company's four most highly compensated
executive officers other than the Chief Executive Officer for each of the last
three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME AND ------------------------------- OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR (1) SALARY ($) BONUS ($) (#)(2) ($)(3)
------------------ -------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
C. Michael Daley 1997 $322,596 $162,500 125,000 $3,600
(Chairman, Chief 1996 302,884(6) 150,000 125,000 3,696
Executive
Officer and Treasurer) 1995 272,115 125,125 125,000 2,310
Joseph F. Abely 1997 176,316 90,000 30,000 3,600
(President and Chief 1996 153,533(6) 78,750 40,000 3,696
Operating Officer) (4) 1995 138,752 48,780 40,000 2,310
William R. Duvall 1997 125,277 62,000 30,000 3,600
(Senior Vice President, 1996 119,378(6) 49,510 40,000 3,696
Operations and Technical 1995 110,716 33,363 40,000 1,076
Development)
Peter J. Conner 1997 95,146 40,000 30,000 3,042
(Vice President, 1996 93,448(6) 32,244 40,000 3,696
Government Relations) 1995 88,190 22,146 40,000 2,310
Kevin M. Mullins 1997 118,808 40,000 2,500 0
(Vice President, 1996 8,308(5) 2,500 40,000 0
Sales and Marketing)
</TABLE>
- ---------------------
(1) The Company's fiscal year ends on the last day of February.
(2) 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.
(3) Represents the Company's match of the employee's contribution to the
401(k) plan.
(4) Mr. Abely was appointed President and Chief Operating Officer on January
11, 1996. Previously, he was Senior Vice President and Chief Financial
Officer.
(5) Mr. Mullins was hired as of January 29, 1996.
(6) Reflects 53 pay periods during the year.
8
<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 28, 1997 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 32.0% $12.875 5/20/06 $1,012,127 $2,564,929
Joseph F. Abely 30,000 7.7 12.875 5/20/06 242,910 615,583
William R. Duvall 30,000 7.7 12.875 5/20/06 242,910 615,583
Peter J. Conner 30,000 7.7 12.875 5/20/06 242,910 615,583
Kevin W. Mullins 2,500 0.6 12.875 5/20/06 20,243 51,299
</TABLE>
- ---------------------
(1) These Senior Management Options become exercisable in four equal
installments commencing on February 28, 1997, February 28, 1998, February
28, 1999, and February 29, 2000. These options are subject to earlier
vesting upon a "Change in Control" (see Summary Compensation Table Note
(2)). Options may be exercised by the employee only during the term of
employment and are not assignable other than by will, by the laws of
descent and distribution or pursuant to a qualified domestic relations
order. Upon the death of the optionee, the estate or other beneficiary may
exercise the options for a period of up to twelve months, but prior to
expiration.
(2) The exercise price per share is the market price of the underlying Common
Stock on the date of grant.
(3) The values shown are based on the indicated assumed annual rates of
appreciation, compounded annually. Actual gains realized, if any, on stock
option exercises and Common Stock holdings are dependent on the future
performance of the Common Stock and overall stock market conditions. There
can be no assurance that the values shown in this table will be achieved.
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table sets forth information with respect to the named
executive officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#) FY-END ($)(2)
------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Daley 0 $ 0 965,250 187,500 $6,308,154 $199,219
Joseph F. Abely 20,000 205,858 292,000 52,500 1,918,688 63,750
William R. Duvall 18,000 132,750 200,000 52,500 1,121,288 63,750
Peter J. Conner 0 0 266,500 52,500 1,669,875 63,750
Kevin M. Mullins 0 0 10,625 31,875 6,250 18,750
</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 28, 1997 ($10.25 per share),
less exercise price, times the number of options outstanding.
10
<PAGE>
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.
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.
11
<PAGE>
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.
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 (other than for Mr. Daley) have generally been
modest. Mr. Abely's base salary was increased to $175,000 on January 11, 1996
to reflect 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 1997, the corporate performance standards were
based on growth in revenues, growth in pre-tax earnings and market
penetration. The Committee also considered individual achievements in areas
such as departmental performance and leadership of special projects. Over the
past four fiscal years, the Committee has awarded cash bonuses to its
executive officers.
The awards for each year are generally declared and paid during the first
quarter of the following fiscal year and are paid during that fiscal year. The
Committee recommended, and the Board approved, allocating $232,000 for bonus
compensation to the executive management group (other than to Mr. Daley) for
fiscal 1997, which has been allocated and was paid in the first quarter of
fiscal 1998. The Committee has allocated more for bonuses in fiscal 1997 than
in fiscal 1996 because the Company has had an excellent year in which, among
other things, it had record sales growth and operating 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 Amended 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 Amended 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 March 19, 1997, the Committee granted 250,000 Senior Management Options
to purchase Common Stock at $9.75 per share, as follows: Joseph F. Abely
35,000, William R. Duvall, Peter J.
12
<PAGE>
Conner and Kevin M. Mullins, 30,000 each. The Committee considers these option
grants reflective of the excellent performance of senior management during
fiscal 1997 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 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 $350,000, effective April 1, 1997.
Based on the Company's achievements in fiscal 1997 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 $162,500 to be
paid in the first quarter of fiscal 1998 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
13
<PAGE>
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 29, 1992 and ending February 28, 1997. 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. Subsequent to February 28,
1997, Cincinnati Microwave, Inc. sold substantially all of its assets in a
bankruptcy liquidation sale and on April 9, 1997, its common stock was
delisted from NASDAQ trading. In addition, on April 24, 1997, Code Alarm,
Inc.'s common stock was delisted from NASDAQ trading.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
COMPANY 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
LO-JACK CORP. 100 192.31 302.56 302.56 430.77 420.51
PEER GROUP 100 393.33 819.99 380.00 280.00 153.52
BROAD MARKET 100 100.16 127.62 121.85 168.25 201.94
</TABLE>
14
<PAGE>
DESCRIPTION OF RESTATED AND AMENDED STOCK INCENTIVE PLAN
GENERAL. The Company's original Stock Incentive Plan was adopted by the
Board of Directors in May 1989 and approved by the Company's stockholders in
July 1989 and initially provided for 350,000 shares of Common Stock to be
available for issuance upon exercise of options. In January 1992, the Board of
Directors voted to amend, subject to stockholder approval, and, in July 1992,
the stockholders approved amendments to, the original Stock Incentive Plan to
provide for a new category of stock options designated as "Senior Management
Options" and to increase the total number of shares issuable upon the exercise
of options pursuant to the original Stock Incentive Plan by 2,414,135, which
shares are available for issuance upon exercise of Senior Management Options.
In March 1994, the Board of Directors voted to amend, subject to stockholder
approval, and, in July 1994, the Stockholders approved the amendments to the
original Stock Option Plan to increase the number of shares issuable upon the
exercise of options granted to employees who are not eligible to receive
Senior Management Options by 150,000, to permit the grant of stock options to
consultants, to give the Board of Directors flexibility in the event of a
merger, consolidation or liquidation of the Company or sale of all or
substantially all of the Company's assets ("Section 6(g) Event") with respect
to the exercisability of options then outstanding, and to provide for the
grant of options to purchase up to 210,000 shares of Common Stock to non-
employee directors under "formula plan" provisions ("Non-Employee Director
Options"). In May 1995, the Board of Directors voted to amend, subject to
stockholder approval, and, in July 1995, the stockholders approved amendments
to the Restated and Amended Stock Incentive Plan to increase the number of
shares of Common Stock issuable upon the exercise of options granted to
employees who are eligible to receive Senior Management Options by 1,000,000
and to permit the Compensation Committee to issue Senior Management Options as
incentive stock options, nonqualified stock options, or a combination thereof.
RECENT AMENDMENT. On May 21, 1997, the Compensation Committee recommended
and the Board of Directors of the Company approved the following amendment to
the Amended Plan: an increase of 150,000 in the number of shares issuable upon
the exercise of options granted to employees who are not eligible to receive
Senior Management Options. A complete copy of the Amended Plan may be obtained
from the Company, upon written request, without charge.
The Board of Directors believes that the use of long-term stock incentives
is the most effective tool to motivate and retain key management, other
employees, non-employee directors and consultants of the Company and to
provide such persons with an additional incentive to promote the long-term
interests and financial success of the Company. The purpose of the Amended
Plan is to benefit the Company through the retention and motivation of its
employees by offering such individuals an opportunity to become owners of the
Common Stock of the Company with an additional incentive to advance the best
interests of the Company by increasing their proprietary interest in the
success of the Company.
STOCK OPTION FEATURES. Options may take the form of incentive stock options
("ISO's") qualified under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") or non-qualified stock options ("NQSO's"), including
Senior Management Options and Non-Employee Director Options. Only non-employee
directors of the Company are eligible to receive Non-Employee Director Options
under the Amended Plan. In the event an option expires or is terminated or
cancelled, the
15
<PAGE>
shares of Common Stock allocable to the unexercised portion of such option may
again be subject to an option under the Amended Plan.
There are approximately 375 employees potentially eligible to receive
options relating to the additional 150,000 shares authorized under the Amended
Plan. As of February 28, 1997, ISO's to purchase 286,000 shares of Common
Stock were outstanding and 49,700 shares of Common Stock were available for
future grant (other than in respect of Senior Management Options). The terms
and conditions applicable to each option granted under the Amended Plan (other
than to Non-Employee Director Options) will be subject to the Amended Plan and
determined by the Committee at the time of grant of each option, and may vary
with each option granted. Each option (other than to Non-Employee Director
Option) is exercisable over a period, determined by the Compensation Committee
of the Board in its discretion, of up to ten years from the date of grant. No
stock option can be exercised earlier than one year from the date of grant.
The price of a share of Common Stock purchasable upon exercise of options
granted under the Amended plan may not be less than the fair market value of a
share of Common Stock on the date such option is granted. The shares purchased
upon the exercise of an option are to be paid in cash or, with prior consent
of the Committee, through the delivery of other shares of the Company's Common
Stock with a value equal to the total exercise price, or with money loaned by
the Company to the optionee in compliance with applicable law and on terms and
conditions to be determined by the Company, or with a combination of the
foregoing.
An option is not transferable except by will or the laws of descent and
distribution or in the case of NQSO's pursuant to a qualified domestic
relations order. If the employment or service of an optionee terminates for
any reason of death, disability or retirement, the optionee may, within the
three-month period following such termination, exercise his options to the
extent he was entitled to exercise such options at the date of termination. If
an optionee dies while employed or terminates employment by reason of
disability or retirement, the options may be exercised within one year after
the optionee's death by the person or persons to whom the optionee's rights
pass or within one year after the optionee's death by the person or persons to
whom the optionee's rights pass or within one year after the optionee's
disability or retirement by the optionee. In no other case may the options be
exercised later than the expiration date specified in the option grant.
The Amended Plan permits an optionee, with the consent of the Committee, to
pay any income tax incurred by the optionee upon exercise of an option with
shares of the Company's Common Stock otherwise issuable to the optionee. The
number of shares issued to the optionee is thereby reduced, and the Company
pays the taxes of the optionee with cash.
CHANGE OF CONTROL. Senior Management Options, Non-Employee Director Options
and such other options as may be designated by the Committee from time to time
become immediately and fully exercisable upon a "change of control." A "change
of 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.
ADMINISTRATION OF THE AMENDED PLAN. The Amended Plan and the granting of
options (other than Non-Employee Direction Options) thereunder will be
administered by the Committee. The
16
<PAGE>
Committee has the power to determine which persons (other than non-employee
directors) will receive options under the Amended Plan. No ISO's will be
granted under the Amended Plan subsequent to May 10, 1999. Non-Employee
Director Options will be administered by the Board of Directors.
NON-EMPLOYEE DIRECTOR OPTIONS. All non-employee directors (currently five
persons) are eligible to receive Non-Employee Director Options under the
Amended Plan. The provisions for Non-Employee Director Options under the
Amended Plan are designed to be a "formula plan" under applicable rules
promulgated by the Securities and Exchange Commission ("SEC") and will be
administered by the Board of Directors. On the third day following an annual
meeting of stockholders, each eligible non-employee director shall receive an
annual option grant to purchase 5,000 shares of Common Stock. Any non-employee
director elected other than at an annual meeting of stockholders will be
granted Non-Employee Director Options to purchase 1,250 shares of Common Stock
for each partial or complete fiscal quarter remaining until the next annual
meeting of stockholders.
Non-Employee Director options will be NQSO's under the Amended Plan. Except
as otherwise provided in the Amended Plan, the Non-Employee Director Options
have substantially the same features as NQSO's and will be issued under and
subject to the provisions of the Amended Plan, as more fully describe herein.
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 will be granted for 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 of control," described above, occurs or as otherwise provided in the
terms of the option.
SECTION 6(G) EVENT. In the event of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares
of Common Stock are exchanged for securities, cash or other property of any
other corporation or business entity or in the event of a liquidation of the
Company, the Board of Directors of the Company, or the Board of Directors of
any corporation assuming the obligations of the Company may, in its
discretion, take any one or more of the following actions, as to outstanding
options: (i) provide that such options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof); (ii) upon written notice to the optionees, provide that
all unexercised options will terminate immediately prior to the consummation
of such transaction unless exercised by the optionee within a specified period
following the date of such notice; (iii) in the event of a merger under the
terms of which holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment for each share surrendered in the merger
(the "Merger Price"), make or provide for a cash payment to the optionees
equal to the difference between (A) the Merger Price times the number of
shares of Common Stock subject to such outstanding options (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such outstanding options in exchange for the termination
of such options; and (iv) provide that all or any outstanding options shall
become exercisable in full immediately prior to such event; provided that any
action taken by the Board of Directors in connection with a Section 6(g) Event
shall be in compliance with the applicable rules promulgated by the SEC
applicable to stock option plans intended to be qualified for exemption from
liability under Section 16 (b) of the Securities Exchange Act of 1934.
AMENDMENTS. The Board may at any time amend or terminate the Amended Plan
and change its terms and conditions, except that, without stockholder
approval, no such amendment may: (a)
17
<PAGE>
increase the maximum number of shares as to which awards may be granted under
the Amended Plan (except for adjustments to reflect stock dividends or other
recapitalizations affecting the number or kind of outstanding shares); (b)
materially increase the benefits accruing to Amended Plan participants; (c)
materially change the requirements as to eligibility for participation in the
Amended Plan; or (d) remove the administration of the Amended Plan from the
Committee provided under the Plan or render any member of the Committee
eligible to receive an award (other than Non-Employee Director Options) under
the Amended Plan. In 1992, the Board of Directors voted to amend the Amended
Plan to eliminate therefrom the provisions relating to the granting of stock
appreciation rights and the limited stock appreciation rights and to provide
for the grant of Senior Management Options. No stock appreciation or limited
stock appreciation rights were ever offered pursuant to the Amended Plan.
ACCOUNTING EFFECTS. Under current accounting rules, neither the grant nor
exercise of options under the Amended Plan is expected to result in any charge
to the earnings of the Company. Options with variable exercise prices or at an
exercise price less the fair market value on the date of grant may result in
charges to earnings under certain circumstances.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a brief summary of
certain Federal income tax consequences of option grants and exercises under
the Amended Plan based upon the Federal income tax laws in effect on the date
hereof. This summary is not intended to be exhaustive and does not describe
state or local tax consequences.
1. Incentive Stock Options. The grant of incentive stock options to an
employee does not result in any income tax consequences. The exercise of an
incentive stock option does not result in any income tax consequences to the
employee if the incentive stock option is exercised by the employee during his
employment with the Company, or within a specified period after termination of
employment due to death or retirement for age or disability under then
established rules of the Company. However, the excess of the fair market value
of the shares of stock as of the date of exercise over the option prices is a
tax preference item for purposes of determining an employee's alternative
minimum tax. An employee who sells shares acquired pursuant to the exercise of
an incentive stock option after the expiration of (i) two years from the date
of grant of the incentive stock option, and (ii) one year after the transfer
of the shares to him (the "Waiting Period") will generally recognize long term
capital gain or loss on the sale.
An employee who disposes of his incentive stock option shares prior to the
expiration of the Waiting Period (an "Early Disposition") generally will
recognize ordinary income in the year of sale in an amount equal to the
excess, if any, of (a) the lesser of (i) the fair market value of the shares
as of the date of exercise or (ii) the amount realized on the sale, over (b)
the option price. Any additional amount realized on an Early Disposition
should be treated as capital gain to the employee, short or long term,
depending on the employee's holding period for the shares. If the shares are
sold for less than the option price, the employee will not recognize any
ordinary income but will recognize a capital loss, short or long term,
depending on the holding period.
The Company will not be entitled to a deduction as a result of the grant of
an incentive stock option, the exercise of an incentive stock option, or the
sale of incentive stock option shares after the Waiting Period. If an employee
disposes of his incentive stock option shares in an Early Disposition, the
Company will be entitle to deduct the amount or ordinary income recognized by
the employee.
18
<PAGE>
2. Non-Qualified Stock Options. The grant of non-qualified stock options
under the Amended Plan will not result in the recognition of any taxable
income by the participants. A participant will recognize income on the date of
exercise of the non-qualified stock option equal to the difference between (i)
the fair market value on that date of the shares acquired, and (ii) the
exercise price. The tax basis of these shares for purpose of a subsequent sale
includes the option price paid and the ordinary income reported on exercise of
the option. The income reportable on exercise of the option by an employee is
subject to federal and state income and employment tax withholding.
Generally, the Company will be entitled to a deduction in the amount
reportable as income by the participant on the exercise of a non-qualified
stock option.
PROPOSAL NO. 2--RATIFICATION OF ADOPTION OF AN INCREASE IN SHARES AVAILABLE
FOR ISSUANCE UNDER THE AMENDED PLAN
Proposal No. 2 requests that the stockholders ratify adoption by the Board
of Directors of an amendment to the Amended Plan increasing the number of
shares of Common Stock by 150,000 which are available for stock option grants
to employees who are not eligible to receive Senior Management Options.
The value and number of options which will be granted to employees who are
not eligible to receive Senior Management Options, as a result of the 150,000
increase in shares authorized under the Amended Plan, is not determinable.
Such option grants are subject to the discretion of the Committee.
Approval of the provisions of the Amended Plan described in Proposal No. 2
requires the affirmative vote of the holders of a majority of the shares of
the Company's voting securities, voting as a single class, present or
represented by proxy and entitled to vote at the Meeting.
PROPOSAL NO. 2 HAS BEEN UNANIMOUSLY APPROVED BY THE BOARD OF DIRECTORS,
WHICH RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ITS ADOPTION.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the Company's 1998
annual meeting of stockholders must be received at the executive offices of
the Company not later than February 3, 1998 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.
19
<PAGE>
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended
February 28, 1997 is being furnished to stockholders of record on May 21,
1997. 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
20
<PAGE>
- --------------------------------------------------------------------------------
PROXY LOJACK CORPORATION PROXY
Proxy Solicited by the Board oF Directors for the Annual Meeting of Stockholders
July 16, 1997
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 21, 1997 at the
Annual Meeting of Stockholders of LoJack Corporation, to be held on July 16,
1997 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 3, 1997, 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 PROPOSAL 1, "FOR" PROPOSAL 2
AND IN THE DISCRETION OF THE PROXIES ON PROPOSAL 3 ON THE REVERSE.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Please mark your
A [X] votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
FOR all WITHHOLD AUTHORITY
nominees to vote for all nominees
1. ELECTION FOR AGAINST ABSTAIN
OF [ ] [ ] NOMINEES: C. Michael Daley 2. To ratify the adoption by the [ ] [ ] [ ]
DIRECTORS James A. Daley Board of Directors of an amendment to the Company's
Harold W. Shad, III Restated and Amended Stock Incentive Plan (the
Instructions: To withhold authority to vote Lee T. Sprague "Amended Plan") to provide for an increase of
for any individual nominee, write that nominee's Robert J. Murray 150,000 in the number of shares of Common Stock
name in the space provided below. Larry C. Renfro authorized for issuance under the Plan to employees
Harvey Rosenthal who are not eligible to receive Senior Management
________________________________________________ Options.
3. In their discretion upon such other business as may
properly come before the meeting or any adjournment
thereof.
PLEASE MARK, DATE, SIGN AND RETURN IN THE ENCLOSED
ENVELOPE.
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.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
