<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] 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)
LoJack Corporation
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
LoJack Corporation
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 19, 2000
You are hereby notified that the annual meeting of stockholders of LoJack
Corporation (the "Company") will be held on the 19th day of July, 2000 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 26, 2000 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 7, 2000
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 7, 2000. 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 19, 2000 (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 26, 2000 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 26, 2000, there were
issued and outstanding 16,080,981 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.
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.
<PAGE>
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. 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 26, 2000 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 in this proxy statement, and (4) all directors, nominees
for director and executive officers of the Company as a group. In accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, 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 26,
2000. 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 Shares and Percentage
Name of Nature of of Common
Beneficial Owner Beneficial Ownership Stock
---------------- -------------------- ----------
<S> <C> <C>
Capital Guardian Trust Company 1,992,270(1) 12.38%
11100 Santa Monica Boulevard
Los Angeles, CA 90025-3384
Leon G. Cooperman 1,601,900(2) 9.96%
c/o Omega Advisors, Inc.
88 Pine Street
Wall Street Plaza--31st Floor
New York, NY 10005
C. Michael Daley 1,401,749(3) 8.72%
James A. Daley 57,000(4) *
Lee T. Sprague 253,134(5) 1.57%
Robert J. Murray 62,500(6) *
Larry C. Renfro 66,500(7) *
Joseph F. Abely 412,950(8) 2.57%
Kevin M. Mullins 85,000(9) *
William R. Duvall 264,500(10) 1.64%
Peter J. Conner 351,500(11) 2.19%
Harvey Rosenthal 17,000(12) *
All executive officers and directors as a 2,987,833(13) 18.58%
group (10 persons)
</TABLE>
---------------------
* Less than one percent (1%) of the outstanding Common Stock.
2
<PAGE>
(1) According to a report filed with the SEC on Amendment No. 3 to Schedule
13G, dated February 10, 2000, Capital Guardian Trust Company exercised
sole voting power with respect to 1,427,570 shares and sole investment
power with respect to 1,992,270 shares. Capital Guardian Trust Company
disclaims beneficial ownership as to 1,992,270 shares.
(2) According to a report filed with the SEC on Amendment No. 3 to Schedule
13G, dated February 8, 2000, 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
Capital Investors, L.P.), the President and majority stockholder of
Omega Advisors, Inc., investment manager to Omega Overseas Partners,
Ltd. and investment advisor to a limited number of institutional
clients. Mr. Cooperman exercises sole voting and sole investment power
with respect to 1,148,900 shares and shared voting and investment power
with respect to 453,000 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)
8,600 shares held as custodian under the Massachusetts Uniform Transfer
to Minors Act as to which beneficial ownership is disclaimed and (iv)
1,110,750 shares issuable upon exercise of certain options which options
are currently exercisable or become exercisable within 60 days of May
26, 2000 ("Currently Exercisable Options").
(4) Includes 32,000 shares issuable upon exercise of Currently Exercisable
Options.
(5) Includes 5,000 shares held by spouse as to which beneficial ownership is
disclaimed and 27,500 shares issuable upon exercise of Currently
Exercisable Options.
(6) Includes 45,000 shares held jointly with spouse and 17,500 shares
issuable upon exercise of Currently Exercisable Options.
(7) Included 32,000 shares issuable upon exercise of Currently Exercisable
Options.
(8) Includes (i) 200 shares held by spouse as to which beneficial ownership
is disclaimed, (ii) 1,000 shares held jointly with spouse, and (iii)
367,750 shares issuable upon exercise of Currently Exercisable Options.
(9) Includes 85,000 shares issuable upon exercise of Currently Exercisable
Options.
(10) Includes 264,500 shares issuable upon exercise of Currently Exercisable
Options.
(11) Includes 351,500 shares issuable upon exercise of Currently Exercisable
Options.
(12) Includes 12,500 shares issuable upon exercise of Currently Exercisable
Options.
(13) Includes 2,301,000 shares issuable upon exercise of 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 29, 2000.
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 63 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
President and a principal of Daley Care Management Company,
a company engaged in the health care business.
James A. Daley 59 Mr. James A. Daley has served as a director of the Company
since 1985 and is a private investor. Until 1999, Mr. Daley
was President and a principal of Daley Hotel Group, Inc.,
and several affiliated entities, all of Boston,
Massachusetts, which were in the hotel and restaurant
business.
Lee T. Sprague 59 Mrs. Sprague has served as a director of the Company since
1981. Mrs. Sprague has been a private investor for more than
the past eight years. Mrs. Sprague also serves on the boards
of various private, educational and charitable institutions.
Robert J. Murray 58 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 Service,
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 in Gillette since 1961. Mr. Murray also serves on
the Board of Directors of, Allmerica Financial Corporation
and Hannaford Bros. Co.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
Larry C. Renfro 46 Mr. Renfro has served as a director of the Company since
1993. Mr. Renfro is currently the President and Chief
Executive Officer of NewRiver Investor Communications, Inc.
From 1997 to 1999, Mr. Renfro was the Chief Executive
Officer of LCR Financial Group, Inc. From 1990 to 1997, Mr.
Renfro held the office of Vice President, Financial Services
and 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. Mr. Renfro serves on the Board of Directors for
NewRiver Investor Communications, Inc.
Harvey Rosenthal 57 Mr. Rosenthal has served as a director of the Company since
1997. Now retired, Mr. Rosenthal held the offices of
President and Chief Operating Officer and was a member of
the Board of Directors of Melville Corporation (now known as
CVS Corporation) from 1994 to 1996. From 1984 to 1994, Mr.
Rosenthal was the President and Chief Executive Officer of
the CVS Division of Melville Corporation. Mr. Rosenthal also
serves on the Board of Directors of Schein Pharmaceutical,
Inc. and on the Board of Trustees of EQ Advisors Trust.
</TABLE>
The Board of Directors 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 5 times during the fiscal year ended February 29,
2000 and acted twice by written consent. 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 on which they served
during the fiscal year ended February 29, 2000.
The Compensation Committee, which currently consists of Mrs. Sprague and
Messrs. Murray and Renfro, 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 three times during the fiscal
year ended February 29, 2000.
The Audit Committee, which consists of Messrs. James Daley and Rosenthal,
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 did not meet formally during the fiscal year ended February 29,
2000.
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 $12,000
(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 $1,000 and reimbursement
of travel and hotel expenses (for out-of-state directors only). In addition,
the Chairman of the Audit Committee and the Chairman of the Compensation
Committee are entitled to an additional $1,000 stipend per year.
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 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 $6.875
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, July 17, 1996, July 16, 1997, July 15, 1998 and
July 21, 1999 at an exercise price of $12.375 per share, $9.625 per share,
$15.00 per share, $13.625 per share, and $10.250 per share, respectively, the
fair market value on the date of each grant. Any non-employee director elected
other than at an annual meeting of stockholders
6
<PAGE>
will be granted a Non-Employee Director Option to purchase 1,250 shares of
Common Stock for each partial or complete fiscal quarter remaining until the
next annual meeting of stockholders. There are 310,000 shares of Common Stock
authorized for awards as Non-Employee Director Options and to date the Company
has issued Non-Employee Director Options to purchase 195,000 shares of Common
Stock.
Non-Employee Director Options are nonqualified stock options under the Stock
Incentive Plan. The exercise price of shares subject to Non-Employee Director
Options shall be equal to the fair market value of Common Stock on the date of
grant. Non-Employee Director Options have a term of ten years and become
exercisable in two annual installments beginning at the next annual meeting of
stockholders after the date of grant, subject to becoming fully exercisable if
a "Change in Control," as described in the Stock Incentive Plan, occurs or as
otherwise provided in the terms of the option.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table and notes present the compensation paid by the Company
to its Chief Executive Officer and the Company's four most highly compensated
executive officers other than the Chief Executive Officer for each of the last
three fiscal years.
<TABLE>
<CAPTION>
Long-Term
Compensation
--------------
Annual Compensation
------------------------- Securities All Other
Name and Fiscal Salary Bonus Underlying Compensation
Principal Position Year(1) ($) ($) Options (#)(2) ($)(3)
------------------ ------- ------ ----- -------------- ------------
<S> <C> <C> <C> <C> <C>
C. Michael Daley 2000 $396,230 $125,000 100,000 $9,600
(Chairman, Chief
Executive 1999 372,404 175,000 125,000 10,000
Officer and Treasurer) 1998 347,499 175,000 125,000 3,799
Joseph F. Abely 2000 $212,105 $ 70,000 30,000 $9,600
(President and 1999 199,184 90,000 40,000 10,000
Chief Operating Officer) 1998 186,153 92,500 35,000 3,799
William R. Duvall 2000 $149,950 $ 55,000 20,000 $9,600
(Senior Vice President, 1999 141,211 63,000 30,000 10,000
Operations and Technical
Development) 1998 133,115 65,000 30,000 3,503
Peter J. Conner 2000 $107,952 $ 35,000 20,000 $9,056
(Vice President, 1999 104,463 42,500 30,000 8,882
Government Relations) 1998 99,226 42,500 30,000 3,287
Kevin M. Mullins 2000 $135,443 $ 45,000 20,000 $2,600
(Vice President, 1999 126,492 54,000 30,000 2,650
Sales and Marketing) 1998 119,077 50,500 30,000 1,040
</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.
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, 2000 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 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
Percent of Value at Assumed
Number of Total Annual Rates of
Securities Options Stock Price
Underlying Granted to Exercise or Appreciation
Options Employees Base Price for Option Term(3)
Granted in Fiscal per share Expiration ---------------------
(#)(1) Year ($/Sh)(2) Date 5% ($) 10% ($)
---------- ---------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Daley 100,000 27.78% $7.625 4/8/2009 $ 479,532 $ 1,215,229
Joseph F. Abely 30,000 8.33% 7.625 4/8/2009 143,860 364,569
William R. Duvall 20,000 5.56% 7.625 4/8/2009 95,906 243,045
Peter J. Conner 20,000 5.56% 7.625 4/8/2009 95,906 243,045
Kevin W. Mullins 20,000 5.56% 7.625 4/8/2009 95,906 243,045
</TABLE>
---------------------
(1) These Senior Management Options become exercisable in four equal
installments commencing on 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.
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
Shares Value Options at FY-End (#) Options at FY-End ($)(2)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Daley 50,000 $216,368 1,110,750 168,750 $2,422,109 0
Joseph F. Abely 0 0 367,750 51,250 900,563 0
William R. Duvall 0 0 264,500 47,500 485,438 0
Peter J. Conner 0 0 351,500 45,000 875,250 0
Kevin M. Mullins 0 0 85,000 37,500 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, 2000 ($7.0625 per share),
which was the last trading day of the Company's fiscal year, less
exercise price, times the number of options outstanding.
Change in Control Arrangements
The Company has entered into agreements with each named executive officer
providing for certain benefits in the event of a change in control of the
Company. A change in control includes, among other events and subject to
certain exceptions, the acquisition by any person of beneficial ownership of
35% or more of the outstanding common stock. If a tender offer or exchange
offer is made for more than 35% of the outstanding common stock, the named
executive officer has agreed not to leave the employ of the Company, except in
the case of disability or retirement, and to continue to render services to
the Company until such offer has been abandoned or terminated or a change in
control has occurred.
With respect to Messrs. Daley and Abely, if, within 24 months after a change
in control of the Company, the named executive officer's employment is
terminated (1) by the Company other than for disability or retirement or (2)
by the named executive officer for any reason (as defined in the agreement),
the Company has agreed to pay the named executive officer, in addition to
salary, benefits and awards accrued through the date of termination, an amount
equal to 1.5 times the sum of the named executive officer's then current
annualized base salary, plus the highest actual bonus earned during any of the
three most recent fiscal years ending on or before the date of the change in
control. The Company has also agreed to provide the named executive officer
with benefits under all employee welfare benefit plans, or equivalent
benefits, for up to 30 months following such termination. The Company must
give 90 day advance notice of termination to the named executive officer
unless such termination is for cause.
With respect to the other named executive officers, if, within 24 months
after a change in control of the Company, the named executive officer's
employment is terminated (1) by the Company other than for cause (as defined
in the agreement), disability or retirement or (2) by the named executive
officer for good reason (as defined in the agreement), the Company has agreed
to pay the named
9
<PAGE>
executive officer, in addition to salary, benefits and awards accrued through
the date of termination, an amount equal to 1.5 times the sum of the named
executive officer's then current annualized base salary, plus the highest
actual bonus earned during any of the three most recent fiscal years ending on
or before the date of the change in control. The Company has also agreed to
provide the named executive officer with benefits under all employee welfare
benefit plans, or equivalent benefits, for up to 30 months following such
termination. The Company must give 90 day advance notice of termination to the
named executive officer unless such termination is for cause.
Each change in control agreement continues in effect until February 28,
2004; provided, however, that the agreement continues in effect for 24 months
following a change in control that occurs during the term of the agreement.
Except as otherwise provided in the change in control agreement, the Company
and each named executive officer may terminate the named executive officer's
employment at any time. Each change in control agreement terminates if either
party terminates the named executive officer's employment before a change in
control.
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 Larry C. Renfro, 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 1997, 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
11
<PAGE>
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.
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 2000, 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 five 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 $205,000 for bonus
compensation to the executive management group (other than to Mr. Daley) for
fiscal 2000, which has been allocated and was paid in the first quarter of
fiscal 2001. The Committee has allocated less for bonuses in fiscal 2000 than
in fiscal 1999 because growth in sales and profits did not match expectations.
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 March 24, 2000, the Committee granted 95,000 Senior Management Options to
purchase Common Stock at $7.125 per share, as follows: Joseph F. Abely,
30,000, William R. Duvall, 25,000, Peter J. Conner and Kevin M. Mullins,
20,000 each. The Committee considers these option grants reflective of the
performance of senior management during fiscal 2000 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.
12
<PAGE>
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 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 $415,000, effective April 1, 2000. Based on the
Company's performance in fiscal 2000 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 $125,000 to be paid in the first
quarter of fiscal 2001 and the Committee granted Mr. Daley a Senior Management
Option to purchase 50,000 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
Larry C. Renfro
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, consisting of Audiovox
Corp., over a five-year period beginning February 28, 1995 and ending February
29, 2000. 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.
[Chart appears here]
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
<TABLE>
<CAPTION>
-------------------------FISCAL YEAR ENDING--------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY/INDEX/MARKET 2/28/1995 2/29/1996 2/28/1997 2/27/1998 2/26/1999 2/29/2000
Lo-Jack Corp 100.00 142.37 138.98 165.25 122.03 94.92
Customer Selected Stock List 100.00 73.68 93.85 97.36 93.85 851.67
NASDAQ Market Index 100.00 138.08 165.74 225.41 291.27 565.81
</TABLE>
14
<PAGE>
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the Company's 2001
annual meeting of stockholders must be received at the executive offices of
the Company not later than February 1, 2001 in order to be considered for
inclusion in the Company's proxy statement and form of proxy for that meeting.
ANNUAL REPORT
The Company's Annual Report to Stockholders, including financial statements,
for the fiscal year ended February 29, 2000 is being furnished to stockholders
of record of the Company concurrently with this proxy statement. The Annual
Report to Stockholders does not, however, 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 judgment.
By order of the Board of Directors,
THOMAS A. WOOTERS,
Clerk
15
<PAGE>
PROXY LOJACK CORPORATION PROXY
Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders
July 19, 2000
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 26, 2000 at the
Annual Meeting of Stockholders of LoJack Corporation, to be held on July 19,
2000 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 of Stockholders and Proxy Statement dated June 7, 2000, 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 and in the
discretion of the proxies on Proposal 2 on the reverse.
SEE REVERSE SIDE
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
LOJACK CORPORATION
JULY 19, 2000
!Please Detach and Mail in the Envelope Provided!
[X] PLEASE MARK YOUR
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 [_] [_] NOMINEES: C. Michael Daley
of James A. Daley
Directors Lee T. Sprague
Robert J. Murray
Instructions: To withhold authority to vote for any Larry C. Renfro
individual nominee, write that nominee's name in the Harvey Rosenthal
space provided below.
---------------------------------------------------
2. 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.
