<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Cade Industries, Inc.
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(Name of Registrant As Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
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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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[ ] 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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<PAGE> 2
CADE INDUSTRIES, INC.
5640 ENTERPRISE DRIVE
P.O. BOX 23094
LANSING, MICHIGAN 48909
(517) 394-1333
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Cade Industries, Inc.
will be held at the Sheraton Lansing Hotel, 925 South Creyts Road, Lansing,
Michigan on Wednesday, May 8, 1996 at 10:00 a.m. (Eastern Time) for the
following purposes:
(1) to elect seven directors; and
(2) to transact such other business as may properly come
before the meeting and any adjournment thereof.
The Board of Directors has established the close of business
on March 15, 1996 as the record date for determining the shareholders entitled
to notice of and to vote at the meeting or any adjournment thereof; only
shareholders of record at the close of business on that date will be entitled
to vote.
A proxy, which is solicited on behalf of the Board of
Directors, is enclosed, together with a return envelope which requires no
postage if mailed in the United States. The affirmative vote of a plurality of
the votes cast by the outstanding shares represented at the meeting and
entitled to vote, a quorum being present, is required for the election of
directors.
It is important that your shares be represented at the
meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
INDICATE YOUR VOTING DIRECTIONS, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN
THE ENCLOSED POSTPAID ENVELOPE. IF YOU LATER DESIRE TO REVOKE YOUR PROXY, YOU
MAY DO SO AT ANY TIME BEFORE THE VOTING BY GIVING WRITTEN NOTICE OF REVOCATION
TO THE COMPANY'S SECRETARY, OR BY GIVING ORAL NOTICE TO THE PRESIDING OFFICER
DURING THE MEETING.
A copy of the 1995 Annual Report to Shareholders and a Proxy
Statement accompany this Notice.
Persons attending the annual meeting are cordially invited to
join a tour of the Company's facilities immediately following the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Conrad G. Goodkind
Secretary
Lansing, Michigan
March 26, 1996
<PAGE> 3
PROXY STATEMENT
CADE INDUSTRIES, INC.
5640 ENTERPRISE DRIVE
P.O. BOX 23094
LANSING, MICHIGAN 48909
(517) 394-1333
SOLICITATION AND VOTING
The enclosed proxy is solicited by the Board of Directors of
Cade Industries, Inc. ("Cade" or the "Company") for use at the Annual Meeting
of Shareholders to be held on May 8, 1996. All properly executed proxies will
be voted at the meeting. A proxy may be revoked at any time prior to its
exercise by giving written notice of revocation to the Company's Secretary, or
by giving oral notice to the presiding officer during the meeting.
Each shareholder of record at the close of business on March
15, 1996, will be entitled to one vote for each share registered in such
shareholder's name. At that date there were outstanding 21,886,350 shares of
common stock, the Company's only class of stock outstanding.
The expense of printing and mailing proxy material, including
forwarding expense to beneficial owners of stock held in the name of another,
will be borne by the Company. No solicitation other than by mail is
contemplated, except that officers or employees of the Company may solicit the
return of proxies from certain shareholders by telephone.
This Proxy Statement is being mailed to shareholders
commencing on or about March 26, 1996. A copy of the 1995 Annual Report to
Shareholders, including financial statements, is enclosed herewith.
PRINCIPAL SECURITY HOLDERS AND
SECURITY HOLDINGS OF MANAGEMENT
The following table shows the beneficial ownership of the
outstanding common stock of the Company as of February 26, 1996 by each person
known to the Company to own beneficially more than 5% of such stock
outstanding, each director and nominee, each executive officer named in the
Summary Compensation Table below and all directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
Number of Shares and
Nature of Beneficial Percent
Name Ownership (1)(2) of Class
---- ---------------- --------
<S> <C> <C>
Advent International Corporation (3) 1,227,761 (4) 5.6%
Molly F. Cade (5) 5,292,162 (6) 24.1%
Conrad G. Goodkind 285,000 1.3%
William T. Gross 55,000 (7) *
Richard A. Lund 162,000 *
Terrell L. Ruhlman 220,000 (8) 1.0%
John W. Sandford 73,000 (9) *
Edward B. Stephens 67,100 (10) *
Steven M. Tadler (11) 50,000 -
Trigran Investments, Inc. (12) 1,298,200 5.9%
All directors and executive officers as a group 6,215,712 27.7%
(9 persons)
</TABLE>
- ------------------------
*Less than 1.0%
<PAGE> 4
(1) Except as otherwise indicated, the specified persons have sole voting
and investment power as to all of the shares indicated.
(2) Includes the following shares which may be acquired by the exercise of
options: 50,000 as to Ms. Cade, Mr. Goodkind, Mr. Gross, Mr.
Sandford and Mr. Tadler; 160,000 as to Mr. Lund; 100,000 as to Mr.
Ruhlman; 59,000 as to Mr. Stephens; and 580,450 as to all directors
and executive officers as a group.
(3) The business address of Advent International Corporation is 101
Federal Street, Boston, Massachusetts 02110.
(4) All shares are held of record by the following venture capital funds
managed by Advent International Corporation in the amounts indicated:
Adhill Limited Partnership, 219,207 shares; Adventact Limited
Partnership, 272,016 shares; Adval Limited Partnership, 196,413
shares; Advent International Technology Fund L.P., 73,694 shares;
Adwest Limited Partnership, 219,207 shares; Hong Kong Venture
Investment Trust, 122,686 shares; Innovent Capital, Ltd., 99,568
shares; and Transtech Investment I, Ltd., 24,970 shares.
(5) Ms. Cade's business address is 5640 Enterprise Drive, P.O. Box 23094,
Lansing, Michigan 48909.
(6) Includes 2,200 shares held by Ms. Cade as custodian for minor children
and 16,200 shares held by her spouse.
(7) Held as trustee of a trust controlled by Mr. Gross.
(8) Voting and dispositive power shared with spouse as to 20,000 shares.
(9) Record ownership held by family trust controlled by Mr. Sandford.
(10) Voting and dispositive power shared with spouse as to 6,100 shares
and with parent as to 2,000 shares.
(11) Mr. Tadler is Senior Vice President of Advent International
Corporation. Mr. Tadler disclaims beneficial ownership of any of the
shares held indirectly by Advent International Corporation. See Note
4 above.
(12) The business address of Trigran Investments, Inc. is 155 Pfingsten
Road, Suite 360, Deerfield, Illinois 60015.
The above beneficial ownership information is based upon
information furnished by the specified persons and determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934 as required for
purposes of this Proxy Statement, which is not necessarily the same as
beneficial ownership for other purposes, and includes shares as to which
beneficial ownership may be disclaimed.
2
<PAGE> 5
ELECTION OF DIRECTORS
The Company's Bylaws provide for the election of directors at
each Annual Meeting of Shareholders to hold office until the next succeeding
Annual Meeting and until their successors are elected.
Shares represented by the enclosed proxy will be voted for the
nominees named below, unless otherwise specified on the proxy. If any of the
nominees should decline or be unable to act as a director, which is not
anticipated, the proxies may be voted for a substitute nominee designated by
the Board of Directors. In no event may the proxies be voted for more than
seven nominees.
NOMINEES:
<TABLE>
<CAPTION>
PRINCIPAL DIRECTOR
NAME AGE OCCUPATION SINCE
- ---- --- ---------- -----
<S> <C> <C> <C>
Molly F. Cade (2) 46 Educator 1986
Conrad G. Goodkind (1)(2)(3) 51 Partner, Quarles & Brady 1989
(law firm)
William T. Gross (1)(4) 66 Consultant 1992
Richard A. Lund (4) 44 President and Chief Operating 1991
Officer of the Company
Terrell L. Ruhlman (1)(4) 69 Chairman of the Board and Chief 1987
Executive Officer of the Company
John W. Sandford (2)(4) 61 President and Chief Executive 1990
Officer, Rolls-Royce North America
(manufacturer of aircraft engines)
Steven M. Tadler (1) 36 Senior Vice President, 1995
Advent International Corporation
(venture capital investment firm)
</TABLE>
- ------------------------------
(1) Member of the Audit Committee, which met once in 1995. The Audit
Committee annually considers the report and recommendations of the
Company's independent public accountants and is available for
additional meetings upon request of such accountants. The Audit
Committee's functions also include making recommendations to the Board
of Directors regarding the engagement or retention of such
accountants, directing the activities of and considering the reports
and recommendations of the Company's principal accounting officer,
adoption of accounting methods and procedures, public disclosures
required for compliance with securities laws and other matters
relating to the Company's financial accounting.
(2) Mr. Goodkind is the Chair and Ms. Cade and Mr. Sandford are members of
the Compensation Committee, which met two times in 1995. The
Compensation Committee meets to consider and make recommendations to
the Board of Directors with respect to salaries, bonuses and benefit
plans for officers and other salaried employees.
(3) Mr. Goodkind serves as Secretary of the Company.
3
<PAGE> 6
(4) Member of the Strategic Planning Committee, a joint Board of
Directors/Management committee which reviews the Company's strategic
direction and makes recommendations to the Board of Directors. The
Committee met once in 1995.
The Board of Directors held five meetings during 1995. Each director
attended 75% or more of the total of all meetings of the Board and any committee
on which he or she served during the year. The Board of Directors currently
maintains an Audit Committee, a Compensation Committee and a Strategic Planning
Committee. The Board has not appointed a Nominating Committee.
The principal occupation of each director during the past five years
was that shown in the above table, except that: (1) Mr. Gross served as a
consultant to Douglas Aircraft Company (manufacturer of commercial and military
aircraft) from October 1989 until October 1992; (2) Mr. Lund was President of
the Company's Auto-Air Composites, Inc. subsidiary from January 1989 to
November 1994 and was elected President and Chief Operating Officer of the
Company in April 1990; (3) Mr. Ruhlman was a consultant to, and Director of,
Sonitrol Corporation (manufacturer of electronic security systems) from 1983 to
1992 and was Chairman of Cade's Executive Committee from 1989 to 1990, after
which he became the Chief Executive Officer of the Company; Mr. Ruhlman also is
a director of EI Environmental Engineering Concepts Ltd. (manufacturer of
industrial misting systems); (4) Mr. Sandford was Managing Director,
Rolls-Royce Aerospace Group and Rolls-Royce plc from January 1993 to January
1995 and is currently a Director of Rolls- Royce plc and several other
privately held entities; and (5) Mr. Tadler was a Vice President of Advent
International Corporation from May 1989 to January 1993.
COMPENSATION OF DIRECTORS
The Company pays directors who are not full-time employees of the
Company $10,000 per year, and pays non-employee members of the Audit and
Strategic Planning Committees an additional $5,000 per year for service on such
committees. It is the Company's policy to grant each new director an option to
purchase 50,000 shares of the Company's common stock at an exercise price equal
to the then fair market value thereof. On February 13, 1995, in connection
with his appointment as a director, the Company granted to Philip I. Wolf an
option to purchase 50,000 shares of the Company's common stock at an exercise
price of $.6875 per share. On May 2, 1995, in connection with his election as
director to succeed Mr. Wolf, the Company granted Steven M. Tadler an option to
purchase 50,000 shares of the Company's common stock at an exercise price of
$.7188 per share. All options may be exercised only for so long as the
optionee remains a director of the Company and for one year thereafter, but in
no event more than ten years after the date of grant. Mr. Goodkind is a
partner in the law firm of Quarles & Brady, general counsel to the Company,
which performed legal services for the Company in 1995 and is expected to do so
in 1996.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
Set forth below is a table summarizing the compensation of the
Company's Chief Executive Officer, its President and Chief Operating Officer
and its Vice President, Chief Financial Officer and Treasurer ("Named Executive
Officers") for each of the three preceding fiscal years. No other executive
officer received salary and bonus in excess of $100,000 during fiscal 1995.
Although the Company maintains certain stock option plans, it has no other
long-term incentive plan. The Company has not issued, and there are not
outstanding, any restricted stock awards or stock appreciation rights.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term
Compensation
---------------------
Awards
---------------------------------------------------------------
Other
Annual Securities Underlying
Fiscal Compen Options/SARs All Other
Name and Principal Position Year Salary Bonus (1) -sation (No. of Shares) Compensation
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Terrell L. Ruhlman 1995 $ 75,000(2) $ 0 (3) 0 $ 0
Chairman of the Board and 1994 $ 75,000(2) $ 0 (3) 100,000(4) $ 0
Chief Executive Officer 1993 $ 75,000(2) $ 0 (3) 0 $ 0
Richard A. Lund 1995 $165,333 $ 9,920 (3) 25,000 $ 8,076 (5)
President and 1994 $157,417 $20,464 (3) 100,000(4) $ 8,020 (6)
Chief Operating Officer 1993 $152,250 $ 0 (3) 0 $ 9,136 (7)
Edward B. Stephens 1995 $ 95,480 $ 5,729 (3) 20,000 $ 5,157 (8)
Vice President, Chief Financial 1994 $ 91,750 $11,928 (3) 25,000 $ 522 (9)
Officer and Treasurer 1993 $ 89,318 $ 0 (3) 0 $ 6,285(10)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents bonus earned in the current fiscal year, but paid in the
succeeding fiscal year.
(2) Includes $10,000 received for serving as a director.
(3) Personal benefits in an aggregate amount less than 10% of the total of
annual salary and bonus.
(4) Includes an option to purchase 50,000 shares granted to the executive
in his capacity as a director.
(5) 401(k) matching contribution of $7,500; term life insurance premium
of $576.
(6) 401(k) matching contribution of $7,612; term life insurance premium
of $408.
(7) 401(k) matching contribution of $8,728; term life insurance premium
of $408.
(8) 401(k) matching contribution of $4,635; term life insurance premium
of $522.
(9) Term life insurance premium of $522.
(10) 401(k) matching contribution of $5,763; term life insurance premium of
$522.
5
<PAGE> 8
OPTION/SAR GRANTS
The following table sets forth certain information regarding stock
option grants to each Named Executive Officer during the fiscal year ended
December 31, 1995.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Individual Appreciation for
Grants Option Term
- ------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price
Name Granted(#) Fiscal Year ($/Sh) Expiration Date 5% 10%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Terrell L. Ruhlman --- --- --- --- --- ---
Richard A. Lund 25,000 12.7% $.71875 5-1-2005 $11,300 $28,638
Edward B. Stephens 20,000 10.2% $.71875 5-1-2005 $ 9,040 $22,910
- ------------------------------------------------------------------------------------------------------------
</TABLE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUES
The table below sets forth information regarding the number and value
of unexercised options held by the Company's Named Executive Officers as of
December 31, 1995. No Named Executive Officer exercised options during 1995.
The Company has no outstanding SARs.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
FISCAL YEAR END OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------
Number of Securities
Underlying
Unexercised Value of Unexercised
Options/SARs In-the-Money Options/SARs
at Fiscal Year End at Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Terrell L. Ruhlman 100,000/0 $0 / $0
Richard A. Lund 153,000/57,000 $0 / $0
Edward B. Stephens 55,000/35,000 $0 / $0
- ----------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Richard A. Lund entered into an employment agreement with the Company
dated as of May 2, 1995 pursuant to which he continued to be retained to act as
the Company's President and Chief Operating Officer and to act in such other
capacities as directed by the Company's Board of Directors until his
resignation or termination by the Board of Directors. The agreement provides
for an initial annual base salary of $168,000 per year (to be reviewed
annually by the Board of Directors), a bonus not to exceed 50% of base salary
and certain other benefits. The Company must continue to pay benefits for six
months after Mr. Lund resigns or for one year if terminated by the Company
without cause. Compensation ceases upon termination for cause or six months
after death or disability. In the event Mr. Lund's employment terminates
within one year after a change in control of the Company, the Company shall pay
him an amount equal to his compensation for the preceding year.
Edward B. Stephens, who joined the Company in July 1989, serves the
Company as Vice President, Chief Financial Officer and Treasurer pursuant to an
agreement with the Company terminable by the Company for cause at any time or
for any reason upon six months' written notice. The agreement originally
provided for an annual salary of $75,000 plus discretionary bonuses and certain
medical, dental and life insurance benefits. Under a 1991 amendment to this
agreement, Mr. Stephens would be entitled to a payment equal to his
compensation from the Company in the preceding year in the event his employment
by the Company is terminated for any reason within one year of a change of
control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is composed of
Molly F. Cade, Conrad G. Goodkind and John W. Sandford. Mr. Goodkind is the
Secretary of the Company.
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total shareholder
return on the Company's common stock to the cumulative total return of (i) the
Standard & Poors 500 Stock Index and (ii) the Value Line Aerospace/Defense
Industry Index through December 31, 1995. The graph is generated by assuming
that $100 was invested at the close of trading on the last trading day of 1990
in each of Cade common stock, the Standard & Poors 500 and the
Aerospace/Defense Industry Index, and that all dividends were reinvested.
<TABLE>
<CAPTION>
Measurement Period Cade Indus- Standard & Aero-
(Fiscal Year Covered) tries Poors 500 space/Defense
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 135.00 130.55 114.01
1992 65.00 140.72 130.63
1993 57.50 154.91 170.59
1994 52.50 157.39 180.76
1995 50.00 216.42 288.53
</TABLE>
7
<PAGE> 10
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Company's Compensation Committee is composed of three
non-employee Directors. The Compensation Committee, which met twice in 1995,
reviews and approves adjustments to executive compensation. The Company's
policy with respect to compensation of its executive officers is to provide
benefits which are fair and which provide incentives to maximize performance.
A significant portion of each full-time executive officer's potential
compensation is linked to overall Company performance.
The Company's Chief Executive Officer ("CEO") is not a
full-time employee of the Company. The CEO's compensation is primarily based
on a subjective determination by the Committee of the amount necessary to
ensure the continued availability of his experience and knowledge, which is of
substantial value to the Company. This amount is a function, in part, of the
amount of time which the Committee and the CEO believe will be required to be
devoted during the succeeding year and the difficulty of the issues with which
he is expected to deal during that year. The CEO's compensation was reviewed,
but left unchanged, in May 1995. The Committee believed that the CEO would be
required to devote less than one-half of his time to the Company's business
during 1995, but that he would be required to deal with issues related to
integration of a major, recently acquired subsidiary and with performance
problems at another subsidiary.
Compensation of the Company's full-time executive officers is
composed of a base salary, a cash bonus and stock option grants. The
compensation is reviewed by the Committee in May of each year and changes, if
any, typically are effective immediately. The base salary is determined
subjectively by the Committee without formal guidelines, but taking into
account (without applying any specific weights) the officer's then existing
base compensation, increases in prior years, the Company's revenue and earnings
performance for the preceding fiscal year and compensation trends among other
manufacturing and similarly sized companies.
Cash bonuses are awarded on the basis of the Company's
earnings and other performance criteria for the preceding fiscal year in
relation to performance targets previously established by the Committee for
such year and subject to a maximum total bonus expressed as a percentage of
base compensation. The Committee annually establishes a minimum earnings
target and an aggressive earnings target. If the minimum earnings target is
not achieved, the executive is not entitled to any bonus. If the aggressive
earnings target is achieved, the executive is entitled to the maximum bonus,
subject to any additional performance criteria that may be imposed. The
maximum bonus for each recipient is established each year on the same basis as
base salary, but may not exceed 50% of base salary.
Stock option grants are designed to provide incentives for key
employees both as a reward for good performance and as a benefit that increases
in value as the Company's stock price rises. Individual grants are made by the
Committee from time to time on the basis of a subjective evaluation, without
formal guidelines, of the recipient's individual contribution to the Company's
earnings performance in the preceding year and, to a lesser extent, of such
recipient's total compensation for such year.
The 1995 compensation of the Company's Chief Operating Officer
("COO") was reviewed in May 1995. At that time, the COO's annual base
compensation rate was increased 5% from $160,000 to $168,000. Although the
Company's net income in 1994 was a modest $159,000, it was an improvement over
the Company's $689,000 net loss in 1993. The Committee believed that the COO's
performance was very good in light of the continuing depressed conditions in
the aerospace industry during the preceding year. This increase in
compensation was based on the Committee's subjective evaluation of the COO's
successful integration of the Company's new Pollux subsidiary, his effective
management of the Company's cost containment program and, to a lesser extent,
industry data showing that average expected merit increases for executives of
manufacturing companies ranged from a low of 3.3% in the aerospace industry to
a high of 5.0% in the computer industry.
The COO was eligible to receive a bonus in 1995 of up to 50%
of 1994 base salary pursuant to the Company's previously established
performance-based formula. The COO's bonus paid in 1995 was calculated in
accordance with such formula, and was $20,464, or approximately 13.0% of 1994
base salary. In May 1995, a new formula was established for determination of
the cash bonus payable in respect of the
8
<PAGE> 11
Company's performance in fiscal 1995. The maximum bonus was set at 50% of the
COO's base compensation, which is consistent with the Company's past practice.
If the Company's after-tax consolidated earnings fail to exceed the minimum
earnings target, the amount of the COO's bonus will be zero. If the Company's
after-tax consolidated earnings exceed the minimum earnings target, the COO is
entitled to a bonus which is calculated pursuant to a performance-based formula
weighted as follows: after-tax consolidated earnings, 70%; a targeted maximum
amount of accounts receivable, measured by the number of days of sales, 10%;
rate of inventory turnover, 10%; and rate of working capital turnover, 10%.
Section 162(m) of the Internal Revenue Code, added by the
Omnibus Budget Reconciliation Act of 1993, generally disallows a tax deduction
to public companies for compensation over $1,000,000 paid to the corporation's
chief executive officer and the other proxy-named executive officers.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. Cade's executive compensation program,
as presently constructed, is not likely to generate non- deductible
compensation in excess of these limits. The Committee will continue to review
these evolving tax regulations as they apply to Cade's executive compensation
program. It is the Committee's intent to preserve the deductibility of
executive compensation to the extent reasonably practicable and to the extent
consistent with its other compensation objectives.
Compensation Committee
Conrad G. Goodkind, Chair Molly F. Cade John W. Sandford
AUDIT MATTERS
Effective May 1, 1995, the Company dismissed Ernst & Young,
LLP, which previously was engaged as the principal accountant to audit the
Company's financial statements. The reports of Ernst & Young, LLP on the
financial statements of the Company during the two years prior to the dismissal
did not contain any adverse opinion or a disclaimer of opinion, and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
The decision to change independent accountants was recommended
and approved by the Audit Committee of the Company's Board of Directors.
During the Company's two most recent fiscal years prior to the
dismissal of Ernst & Young, LLP and the subsequent interim period ending May
1, 1995, there had not been any disagreements with Ernst & Young, LLP on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Ernst & Young, LLP, would have caused it to make a reference to
the subject matter of the disagreements in connection with its reports.
Effective May 2, 1995, the Company engaged Deloitte & Touche
LLP as its principal accountant to audit the Company's financial statements.
The Company intends that Deloitte & Touche LLP will audit the Company's
financial statements for the fiscal year ending December 31, 1996.
Representatives of Deloitte & Touche LLP will be present at the shareholders'
meeting to respond to appropriate questions and to make a statement, if they so
desire.
9
<PAGE> 12
VOTING PROCEDURES
The seven nominees receiving the highest number of affirmative
votes (whether or not a majority) cast by the outstanding shares represented at
the meeting and entitled to vote, a quorum being present, shall be elected as
directors. Abstentions and broker non-votes are not considered to be votes
cast under applicable state law and the Company's Articles of Incorporation and
Bylaws. Only affirmative votes are relevant in the election of directors.
The votes will be counted by the Company's transfer agent,
Firstar Trust Company, and certified to the Company in writing.
OTHER MATTERS
At the date of this Proxy Statement, the Company has not been
informed and is not aware that any other matters will be brought before the
meeting. However, proxies may be voted with discretionary authority with
respect to any other matters that may properly be presented to the meeting.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later
than November 27, 1996 in order to be considered for inclusion in next year's
Annual Meeting Proxy Statement.
CADE INDUSTRIES, INC.
Conrad G. Goodkind
Secretary
Lansing, Michigan
March 26, 1996
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT TO
THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K AND FINANCIAL STATEMENTS
AND SCHEDULES THERETO FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 WILL BE
PROVIDED WITHOUT CHARGE TO EACH RECORD OR BENEFICIAL OWNER OF THE COMPANY'S
COMMON SHARES AS OF THE RECORD DATE FOR THE ANNUAL MEETING, ON THE WRITTEN
REQUEST OF SUCH PERSON DIRECTED TO: SHERYL A. MULL, SHAREHOLDER RELATIONS,
CADE INDUSTRIES, INC., 5640 ENTERPRISE DRIVE, P.O. BOX 23094, LANSING, MICHIGAN
48909.
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CADE INDUSTRIES, INC.
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Molly F. Cade and Terrell L. Ruhlman, and each
or either of them, proxies, with full power of substitution, to vote all shares
of stock which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of Cade Industries, Inc. to be held at the Sheraton Lansing Hotel,
925 South Creyts Road, Lansing, Michigan, on May 8, 1996 at 10:00 a.m.
(Eastern Time), or at any adjournment thereof, as follows, hereby revoking any
proxy previously given:
<TABLE>
<S> <C> <C>
(1)ELECTION OF DIRECTORS: [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as specified to the to vote for all nominees listed below
contrary below) for terms expiring
in 1997
</TABLE>
MOLLY F. CADE, CONRAD G. GOODKIND, WILLIAM T. GROSS, RICHARD A. LUND,
TERRELL L. RUHLMAN, JOHN W. SANDFORD, STEVEN M. TADLER
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name on the following line)
(2)In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof; all as set out in the Notice and Proxy
Statement relating to the meeting, receipt of which is hereby acknowledged.
(Continued and to be signed on reverse side)
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" EACH OF THE NOMINEES LISTED IN PROPOSAL (1) AS RECOMMENDED BY THE
BOARD OF DIRECTORS.
Dated: , 1996
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(Please sign exactly as name appears at left)
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(If stock is owned by more than one person,
all owners must sign. Persons signing as
executors, administrators, trustees or in
similar capacities must so indicate.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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