DEVON GROUP, INC. 281 Tresser Blvd., Suite 501, Stamford, Connecticut
06901
June 19, 1995
Dear Stockholder:
You are cordially invited to attend our Annual Meeting of
Stockholders which will be held on Tuesday, July 25, 1995, at
10:00 A.M. (local time) at The Rockefeller Center Club, 30
Rockefeller Plaza, The Radio City Suite, 64th Floor, New York,
New York.
In addition to the specific matters to be acted upon, there
will be a presentation by management of the Company and an
opportunity for questions of general interest to the stockholders.
Important information is contained in the accompanying Proxy
Statement and Annual Report to Stockholders for the fiscal year
ended March 31, 1995.
Regardless of the number of shares you own, it is important
that they are represented and voted at the meeting, whether or not
you plan to attend. Accordingly, you are requested to mark, sign,
date, and return the enclosed Proxy Card in the envelope provided
at your earliest convenience.
Sincerely,
Marne Obernauer, Jr.
Chairman of the Board
<PAGE>
DEVON GROUP, INC.
281 Tresser Boulevard, Suite 501
Stamford, Connecticut 06901-3227
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 25, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
(the "Annual Meeting") of Devon Group, Inc., a Delaware corporation
(the "Corporation"), will be held at The Rockefeller Center Club,
30 Rockefeller Plaza, The Radio City Suite, 64th Floor, New York,
New York, on July 25, 1995, at 10:00 A.M., local time, for the
following purposes:
1. to elect a Board of seven (7) directors for the ensuing
year and until their respective successors have been duly
elected and qualified;
2. to approve the 1995 Non-Qualified Stock Option Plan for
360,000 shares of the Corporation's Common Stock;
3. to ratify the selection of the firm of KPMG Peat Marwick
LLP as auditors for the Corporation for the fiscal year ending
March 31, 1996; and
4. to transact such other business as may properly be brought
before the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on June 9,
1995, as the record date for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting.
Accordingly, only stockholders of record on that date will be entitled
to vote. A list of such stockholders will be available at the time
and place of the Annual Meeting and, during the ten (10) days prior to
the Annual Meeting, at the Corporation's office at 281 Tresser
Boulevard, Suite 501, Stamford, Connecticut.
Please vote, sign, date, and return the enclosed Proxy Card in the
accompanying envelope at your earliest convenience. If you return
your Proxy Card, you may nevertheless attend the Annual Meeting and
vote your shares in person.
By Order of the Board of Directors,
Robert A. Frasco
Secretary
Stamford, Connecticut
June 19, 1995
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
VOTE, SIGN, DATE, AND PROMPTLY RETURN THE ENCLOSED PROXY CARD FOR
WHICH A STAMPED RETURN ENVELOPE IS PROVIDED.
<PAGE>
DEVON GROUP, INC.
281 Tresser Boulevard, Suite 501
Stamford, Connecticut 06901-3227
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JULY 25, 1995
The accompanying proxy, first being mailed to stockholders on or
about June 19, 1995, is solicited by the Board of Directors of Devon
Group, Inc., a Delaware corporation (the "Corporation"), for use at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held
on July 25, 1995, and at any adjournments thereof, notice of which is
attached hereto.
Shares represented by a duly executed Proxy Card in the form
enclosed herewith received by the Corporation prior to the Annual
Meeting will be voted at the Annual Meeting in accordance with the
choices specified by the stockholder. If no choice is specified, the
shares will be voted FOR the election of the nominees for director
named below and FOR the proposals referred to in items 2 and 3 in the
Notice of Annual Meeting of Stockholders and described in this Proxy
Statement.
Any stockholder may revoke a proxy at any time prior to its
exercise by delivering a later dated proxy or a written notice of
revocation to the Secretary of the Corporation at the address of the
Corporation set forth above or by voting in person at the Annual
Meeting. If a stockholder does not plan to attend the Annual Meeting,
any proxy or notice should be returned for receipt by the Corporation
not later than the close of business on July 21, 1995, the Friday
preceding the Annual Meeting. The persons named as proxies on the
Proxy Card are officers of the Corporation.
The cost of solicitation will be borne by the Corporation,
including expenses in connection with preparing, assembling, and
mailing this Proxy Statement. Such solicitation will be made by mail
and may also be made by the Corporation's officers or employees
personally or by telephone or telecopy. In addition, the Corporation
has engaged the services of Morrow & Co. to assist in the distribution
of proxies for a fee of approximately $1,500 plus expenses.
The Board of Directors has fixed the close of business on June 9,
1995, as the record date for the Annual Meeting. On that date the
Corporation had outstanding 7,278,817 shares of Common Stock. Only
holders of Common Stock of record at the close of business on June 9,
1995, will be entitled to vote at the Annual Meeting or any
adjournments thereof, and each stockholder will be entitled to one
vote for each share held, which may be given in person or by proxy
authorized in writing.
No business other than that set forth in this Proxy Statement and
the accompanying Notice of Annual Meeting is expected to come before
the Annual Meeting. However, should any other matters requiring a
vote of stockholders arise, including a question of adjourning the
Annual Meeting, the persons named in the accompanying proxy will vote
thereon according to their best judgment in the interest of the
Corporation.
The mailing address of the Corporation's principal executive
office is 281 Tresser Boulevard, Suite 501, Stamford, Connecticut
06901-3227.
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth the holdings of those persons known
to the Corporation to own beneficially 5% or more of the
Corporation's Common Stock as of May 26, 1995. Unless otherwise
indicated, the named person has sole voting and dispositive power
with respect to the shares beneficially owned. This information is
based in part on records of the Corporation and in part on
information received from the respective security holders.
<TABLE>
<CAPTION>
Name and Address Number of Percent
of Beneficial Owner Shares Owned of Class
<S> <C> <C>
Marne Obernauer, Jr. (1)...................902,999 12.41
c/o Devon Group, Inc.
450 Park Avenue
New York, New York 10022
Fidelity Management & Research Company.....901,850 12.39
82 Devonshire Street
Boston, Massachusetts 02109
Neumeier Investment Counsel................434,725 5.97
26435 Carmel Rancho Boulevard
Carmel, California 93923
First Pacific Advisors, Inc................384,800 5.29
11400 West Olympic Boulevard
Los Angeles, California 90064
(1) Includes an aggregate of 12,000 shares held by Mr. Obernauer, Jr.
as trustee, for trusts created for the benefit of his two sons, a
niece, and a nephew, over which Mr. Obernauer, Jr. has voting and
investment power.
</TABLE>
ELECTION OF DIRECTORS
Seven directors, all of whom are presently directors of the
Corporation, are to be elected at the Annual Meeting, to serve until
the 1996 Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified. The persons named
as proxies in the accompanying Proxy Card, who have been
designated by management, intend to vote, unless otherwise instructed
in such Proxy Card, FOR the nominees listed below; that is, for the
election of Messrs. Obernauer, Jr., Blank, Dinzole, Gisel, Harrington,
Obernauer, and Palmer. If any of these nominees should be unable to
serve, the proxies will vote for the election of such other person or
persons as shall be determined in accordance with their best judgment.
Information Pertaining to Nominees
The following table sets forth the name and the age of each
nominee, the principal occupation of each nominee during the past
five years, and any other directorships held by each nominee in any
company subject to the reporting requirements of the Securities
Exchange Act of 1934 or in any company registered as an investment
company under the Investment Company Act of 1940.
<PAGE>
Director Principal Occupation and
Nominees Age Since Other Directorships Held
Marne Obernauer, Jr....52 1977 Chairman of the Board of Directors
and Chief Executive Officer of the
Corporation since June 1986;
Mr. Obernauer, Jr. is the son of
Mr. Obernauer.
Robert S. Blank........54 1992 Partner of Whitcom Partners since
January 1973; a director of Toll
Brothers, Inc.
John W. Dinzole........67 1969 President and Chief Operating
Officer of the Corporation since
June 1986; Chairman of Black Dot
Graphics, Inc. (a subsidiary of
the Corporation) since October
1992; Chairman and Chief Executive
Officer of Black Dot Graphics,
Inc. from 1969 to October 1992.
William G. Gisel.......79 1982 Retired Chairman, President, and
Chief Executive Officer of Bell
Aerospace Textron, a division of
Textron Inc.; a director of
Niagara Share Corp.
Thomas J. Harrington...55 1990 President and Chief Executive
Officer of Spectrum Capital, Ltd.
since July 1985.
Marne Obernauer........76 1971 Chairman of the Executive
Committee of the Board of
Directors of the Corporation since
June 1986; Chairman of the Board
of Directors of BDH Inc., the
parent of Beverage Distributors
Corporation, a former division of
the Corporation, since June 1986.
Edward L. Palmer.......77 1982 Retired Chairman of the Executive
Committee and Director of Citicorp
and Citibank, N.A.; a director of
Holmes Protection Group, Inc.,
Lanxide Corporation, Phoenix Group
of Funds, and SunResorts Ltd.,
N.V.
The Board of Directors recommends that stockholders vote FOR the
election of each of the seven nominees.
Operation of the Board of Directors
The Board of Directors of the Corporation held four meetings in
fiscal 1995. Each director attended at least 75 percent of all
regular meetings of the Board of Directors and meetings held by all
committees of the Board on which he served during fiscal 1995.
Each director who is not also an employee of the Corporation
receives an annual director's fee of $16,000. In addition, for each
day that a meeting of the Board of Directors or any committee thereof
is held, each director receives a fee of $1,000 for attendance at such
meeting, and an additional $250 for each meeting in excess of one held
on the same day.
The members of the Corporation's Audit Committee are Messrs.
Harrington, Blank, and Gisel. The principal functions of the Audit
Committee are to ascertain the existence of an effective accounting,
budgeting, and internal control system, to review both the independent
and internal audit functions, and to be available to meet with the
independent auditors to resolve problems, if any, that may arise in
connection with audits or otherwise. The Audit Committee held three
meetings during fiscal 1995.
The members of the Corporation's Compensation Committee are Messrs.
Gisel, Blank, and Palmer. The principal functions of the Compensation
Committee are to fix the compensation of senior officers of the
Corporation and subsidiaries and to establish, modify, and maintain the
retirement, incentive, and stock option plans of the Corporation and
its subsidiaries. The Compensation Committee held two meetings during
fiscal 1995.
<PAGE>
The members of the Corporation's Executive Committee are Messrs.
Obernauer, Harrington, and Obernauer, Jr. The principal functions of
the Executive Committee are to act on behalf of the Board of Directors
with respect to such matters as the Board of Directors may
specifically designate and to have such powers as the Board of
Directors may specifically delegate from time to time. The
Executive Committee held two meetings during fiscal 1995.
The Corporation has no Nominating Committee.
The following table sets forth the amount and percentage of Common
Stock of the Corporation beneficially owned as of May 26, 1995, by the
Chief Executive Officer, and the other four most highly compensated
executive officers (the "Named Executives"), and by each director and
all directors and executive officers as a group. Unless otherwise
indicated, the named individuals have sole voting and dispositive
power with respect to the shares of Common Stock.
<TABLE>
<CAPTION>
Common Stock
Amount and
Nature of
Beneficial Percent
Name Ownership of Class
<S> <C> <C>
Robert S. Blank.............................. 5,000 *
John W. Dinzole.............................. 200,500(1) 2.75
Howard A. Fiedler............................ 146,393(2) 2.01
Terence M. Flynn............................. 233,868(3) 3.21
William G. Gisel............................. 3,000 *
Thomas J. Harrington......................... 7,000 *
Bruce K. Koch................................ 12,000 *
Marne Obernauer.............................. 328,000(4) 4.51
Marne Obernauer, Jr.......................... 902,999(5) 12.41
Edward L. Palmer............................. 87,999 1.21
Total of all Directors and Executive Officers
(14 Individuals)............................ 2,031,688 27.91
* Less than 1%
(1) Held in a trust of which Mr. Dinzole is a beneficiary and the
trustee.
(2) Excludes 1,500 shares held by Mr. Fiedler's wife, in which
Mr. Fiedler disclaims all beneficial interest.
(3) Includes 182,159 shares held by a corporation of which Mr.
Flynn is the sole shareholder.
(4) Excludes 5,000 shares held by Mr. Obernauer's wife, in which
Mr. Obernauer disclaims all beneficial interest, and includes
28,000 shares held in a charitable remainder trust in which
Mr. Obernauer retains a life interest.
(5) Includes an aggregate of 12,000 shares held by Mr. Obernauer,
Jr., as trustee, for trusts created for the benefit of his
two sons, a niece, and a nephew, over which Mr. Obernauer,
Jr. has voting and investment power.
</TABLE>
<PAGE>
REMUNERATION OF EXECUTIVE OFFICERS
Compensation Committee Report
As members of the Compensation Committee, it is our duty to set the
base salary compensation for the executive officers and to administer
the annual bonus plan of the Corporation (the "Corporate Bonus Plan")
and the bonus plans of its subsidiaries (the "Subsidiary Bonus
Plans"). As part of this process, we annually review the compensation
levels of senior management, evaluate the performance of senior
management, and consider management succession and related matters.
We take into account how total compensation compares to compensation
paid by similar companies as well as the Corporation's performance.
The compensation policy of the Corporation for its key executives
is established by the Compensation Committee. A significant portion of
the annual compensation of such executives relates to and is
contingent upon the performance of the Corporation. Under the various
bonus plans, bonuses are paid based on the performance of the
subsidiary to which the officer is assigned, or, in the case of
Messrs. Obernauer, Jr., Dinzole, and Koch, the performance of the
Corporation on a consolidated basis. For fiscal 1995 maximum annual
bonus compensation amounted to 100% of base salary for executives in
the Corporate Bonus Plan. Executives participating in the Subsidiary
Bonus Plans are not subject to individual maximums. The maximum earned
bonus that may be paid in any one year in any of the plans is 50% of a
participant's base salary (not including carryovers). The remaining
earned but unpaid bonus amount is paid to participants in equal
installments at the end of each of the succeeding three fiscal years.
In the case of a termination of employment, such carryover amounts may
or may not be paid depending upon the circumstances of the
termination.
The Corporation's performance, or that of a subsidiary, for
purposes of compensation decisions is measured under the annual bonus
plan against goals established and approved by the Compensation
Committee. The Corporate Bonus Plan goals specify targeted levels of
return on equity, and Subsidiary Bonus Plan goals are based on
targeted levels of income before interest and taxes combined with
targets related to return on capital employed.
Executives of the Corporation and its subsidiaries are also
eligible to receive stock options under the Corporation's Non-
Qualified Stock Option Plan (the "NSO Plan") and its
1993 Non-Qualified Stock Option Plan (the "1993 NSO Plan").
The primary purposes of the NSO Plan and the 1993 NSO Plan are:
(a) to enable executives to acquire shares of the
Corporation's Common Stock pursuant to the terms of these Plans,
thereby increasing their personal involvement and interest in the
Corporation; (b) to enable the Corporation to attract and retain the
services of key employees necessary to the growth and development of
the Corporation; and (c) to provide a means of rewarding outstanding
performance. The NSO Plan and the 1993 NSO Plan are administered by
the Compensation Committee (the NSO Plan may also be administered by
the Board of Directors), which is authorized to designate the
optionees, exercise prices, exercise periods, and dates of grants.
The exercise price may not be less than 100% of the fair market value of
the Common Stock on the date of grant. There were no options granted
in fiscal 1995. The Corporation also maintains insurance, Section
401(k), profit sharing, and other retirement plans for its employees.
Mr. Obernauer, Jr.'s base salary for fiscal 1995 was based upon
his continuing employment agreement with the Corporation entered into
December 30, 1982 (the "Employment Agreement") which provides, among
other things, for annual increases to be determined by the Board of
Directors in its sole discretion. Mr. Obernauer, Jr.'s base salary
was increased to $315,000 effective August 1, 1994. In granting the
5.70% increase ($17,000), the Compensation Committee considered such
factors as salaries paid to other similarly situated CEOs and the
Corporation's current performance trends. The perquisites and other
benefits received by Mr. Obernauer, Jr. are provided pursuant to his
Employment Agreement and are consistent with those provided other
similarly situated CEOs.
<PAGE>
No member of the Compensation Committee is a former or current
officer or employee of the Corporation or any of its subsidiaries.
Compensation Committee
William G. Gisel, Chairman
Robert S. Blank
Edward L. Palmer
May 26, 1995
<PAGE>
Summary Compensation Table
Set forth below is information with respect to the remuneration
paid by the Corporation and its subsidiaries during the fiscal years
ended March 31, 1995, 1994, and 1993, to the Named Executives.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Fiscal Salary Bonus Compensation Award(s) Option/SARSs Payouts Compensation
Position Year ($) ($) ($) (1) ($) (#) ($) ($) (3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Marne 1995 309,333 309,333 - - - - 7,371
Obernauer, 1994 292,667 292,667 - - - - 18,209
Jr. 1993 277,333 221,866 - - - - 17,402
Chairman
and CEO
John W. 1995 326,667 326,667 105,700(2) - - - 10,824
Dinzole 1994 317,666 317,666 105,700(2) - - - 14,703
President 1993 308,000 246,400 79,275(2) - - - 14,716
and COO
Bruce K. 1995 201,333 201,333 - - - - 7,337
Koch 1994 190,667 190,667 - - 35,000 - 10,145
Exec. V.P. 1993 181,000 144,800 - - - - 9,729
Operations
and Finance
and CFO
Howard A. 1995 190,000 300,000 - - - - 10,797
Fiedler 1994 185,000 290,000 - - 35,000 - 13,320
CEO, Black 1993 185,000 220,000 - - - - 13,528
Dot
Graphics,
Inc.
Terence M. 1995 209,463 115,400 70,000(2) - - - 5,828
Flynn 1994 198,660 102,250 70,000(2) - - - 5,828
President, 1993 191,667 89,000 46,667(2) - - - 5,828
Portal
Publications,
Ltd.
(1)Perquisites do not exceed the lesser of either $50,000 or 10% of total
salary and bonus.
(2)Reflects amounts received pursuant to the Corporation's Executive
Retirement Compensation Plan.
(3)Includes amounts allocated during fiscal 1995 by the Corporation
under the Black Dot Graphics, Inc. Profit Sharing and Savings Plan
as follows: Messrs. Obernauer, Jr. $7,371, Dinzole $10,824,
Koch $7,337, and Fiedler $10,797. Also includes $5,828 of premiums
paid by the Corporation for term life insurance on the life of Mr. Flynn.
</TABLE>
<PAGE>
Option Grants in Last Fiscal Year
There were no options granted under the NSO Plan or the 1993 NSO
Plan in fiscal 1995.
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-end
Option Values
The following table sets forth for each of the Named Executives,
any stock options exercised pursuant to the NSO Plan and 1993 NSO
Plan, the net value realized upon exercise (closing price on the date
of exercise minus exercise price), the number of options held at
fiscal year end, and the aggregate value of in-the-money options held
at fiscal year end (based on year-end closing price minus exercise
price).
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Acquired Value Unexercised Options In-the-Money Options
on Exercise Realized at Fiscal Year-end at Fiscal Year-end
Name (#) ($) (#)($)
(Exercisable/Unexercisable) (Exercisable/Unexercisable)
<S> <C> <C> <C> <C>
Marne Obernauer, Jr. - - - -
John W. Dinzole - - - -
Bruce K. Koch 12,000 165,000 23,500/59,500 435,875/999,875
Howard A. Fiedler - - 3,500/31,500 42,875/385,875
Terence M. Flynn - - - -
</TABLE>
Executive Retirement Compensation Plan
The Corporation's Executive Retirement Compensation Plan (the
"Retirement Plan") is a noncontributory and unfunded defined benefit
plan which is not subject to the requirements of the Employee
Retirement Income Security Act of 1974. Eligibility for and level of
participation in the Retirement Plan is at the sole discretion of the
Compensation Committee of the Board of Directors. Retirement contracts
entered into with each participant in the Retirement Plan establish
the amounts to be allocated annually to such participant's retirement
compensation account. Such amounts are determined separately for each
participant. Each retirement account accrues interest at the rate of
6% per annum and establishes the benefit levels which such participant
will be eligible to receive upon retirement at age 65. Benefits are
paid for the life of the participant if such participant shall have
remained in the employ of the Corporation until age 65. Since the
Retirement Plan is not funded, these allocated amounts are currently
expensed but not paid. If a participant retires or dies or his
retirement contract is otherwise terminated before he reaches age 65,
a benefit equal to the value at such date of all allocations to his
retirement compensation account becomes payable to the participant or
his designated beneficiary in 120 monthly installments.
<PAGE>
The following table reflects amounts expensed (but not paid) by the
Corporation during fiscal 1995, estimated annual benefits at March 31,
1995 (assuming employment until age 65 and based upon current bonus
level, limited to 50% of salary), and credited years of service for
each of the Named Executives:
Estimated Years
Fiscal 1995 Annual Benefits of
Amounts Expensed at Age 65 Service
Marne Obernauer, Jr.... $76,491 $221,081 21
John W. Dinzole........ 57,054 105,700 26
Howard A. Fiedler...... 28,845 70,000 26
Terence M. Flynn....... 38,329 70,000 25
Bruce K. Koch.......... - - 17
Total of all Named Executives $200,719 $466,781
As required by the Retirement Plan, Messrs. Dinzole and Flynn
receive annual payments under the Retirement Plan in the amounts of
$105,700 and $70,000, respectively.
Executive Agreements
The Corporation (or a subsidiary of the Corporation) has entered
into separate employment agreements with each of Messrs. Obernauer,
Jr., Dinzole, Fiedler, Flynn, and Koch. Set forth below is a
description of the principal terms of the employment agreements with
each Named Executive.
The Corporation agrees to employ the Named Executive unless and
until the Corporation shall give him written notice of termination at
least one year prior to an anniversary date defined in the agreement.
The Named Executive agrees to serve the Corporation in such executive
capacities as may be determined by the Board of Directors and shall
devote his full time to the affairs of the Corporation. The Named
Executive receives a base compensation amount, which may be increased
by the Board of Directors, and an incentive bonus in accordance with
existing plans. The employment agreements for Messrs. Obernauer, Jr.,
Dinzole, and Flynn provide for their participation in the Corporation's
Executive Retirement Compensation Plan. Each employment agreement
gives the Named Executive the right to receive benefits under any other
incentive, retirement, group life, health, or accident insurance,
hospitalization, or other benefit plan which may be in effect at the
Corporation. The Corporation is also obligated to supply an automobile
to Messrs. Obernauer, Jr., Dinzole, and Flynn and to reimburse them for
all business expenses incurred in connection with the performance of
their duties. Each employment agreement may be terminated by the
Corporation for any illness or incapacity of the Named Executive
extending beyond a six-month period by giving him thirty days notice of
termination at the expiration of the six-month period and at any time
prior to his return to employment and performance of his full duties
thereunder. Each employment agreement will also terminate upon
the Named Executive's death, and the Corporation retains
the right to terminate the Named Executive's employment for cause (as
described therein) at any time.
<PAGE>
PERFORMANCE GRAPH
The following line graph compares, over a five-year period, the
cumulative return, calculated on a dividend reinvested basis, on a
$100.00 investment on April 1, 1990 in the Corporation's Common Stock,
the S & P 500 market index, and a Corporation-chosen peer group. The
Corporation's fiscal year ends on March 31.
3/31/91 3/31/92 3/31/93 3/31/94 3/31/95
Devon Group, Inc. $ 42.22 $ 63.33 $162.22 $164.44 $257.78
S & P 500 $114.72 $127.31 $146.65 $148.79 $171.48
Peer Group* $111.36 $116.83 $130.36 $142.46 $141.37
*The companies that comprise the Corporation-chosen peer group are
Banta Corporation, Cadmus Communications Corporation, R.R. Donnelley &
Sons Company, Gibson Greetings, Inc., and Graphic Industries, Inc., all
of which are engaged in businesses similar to that of the Corporation.
<PAGE>
APPROVAL OF THE 1995 NON-QUALIFIED STOCK OPTION PLAN
Proposed Action
The Board of Directors proposes that the stockholders approve the
1995 Non-Qualified Stock Option Plan (the "1995 NSO Plan") which was
adopted by the Board of Directors on May 2, 1995, subject to such
approval of the stockholders.
The 1995 NSO Plan
Purposes. The purposes of the 1995 NSO Plan are (a) to further the
growth and success of the Corporation and its subsidiaries by
enabling directors and employees of the Corporation to acquire shares
of its Common Stock, thereby increasing their personal involvement
and interest in the Corporation, (b) to enable the Corporation to
attract and retain the services of its directors, employees, and
officers necessary for the growth and development of the Corporation,
and (c) to provide a means of rewarding outstanding performance.
Shares Subject to Purchase Upon Exercise of Options; Changes in
Corporate Structure. The total number of shares of Common Stock
issuable upon the exercise of options which may be granted pursuant to
the 1995 NSO Plan will be 360,000. In the event of a stock dividend,
stock split, or other change in the corporate structure of the
Corporation affecting the Common Stock, an appropriate adjustment
shall be made in the number of shares subject to the 1995 NSO Plan and
the number and option price of shares subject to options granted
thereunder to reflect the effects of such stock dividend, stock split,
or other change in corporate structure. The 1995 NSO Plan will
terminate on, and no option may be granted under the 1995 NSO Plan
after, July 24, 2005. Shares of Common Stock issuable upon exercise of
options granted which have expired or been terminated are available
for the granting of other options pursuant to the 1995 NSO Plan. As of
May 26, 1995, the market value of the 360,000 shares issuable under
the 1995 NSO Plan would have been $9,720,000, based on the closing
price of the Common Stock as reported by NASDAQ for that day.
Administration of 1995 NSO Plan. The 1995 NSO Plan will be
administered by a committee (the "Committee") of two or more directors
appointed by the Board of Directors. The Committee will have sole
authority to determine which eligible individuals shall receive
options, the time at which options shall be granted, the terms of such
options, including price, the acceleration of the exercise date of any
options, and the number of shares of Common Stock to be optioned. The
1995 NSO Plan may be terminated at any time by the Board of Directors,
but such action will not affect options previously granted.
Eligible Persons. As of July 25, 1995 approximately 1,900 employees
and all directors of the Corporation who are not on the Committee will
be eligible to receive options pursuant to the 1995 NSO Plan. More than
one option may be granted to any one person and may be outstanding at
any time.
Option Price. The price of shares which may be purchased upon
exercise of an option granted under the 1995 NSO Plan is determined
by the Committee. In no event shall such option price be less than
100% of the fair market value of the shares of Common Stock subject
to the option on the date the option is granted.
Exercise of Options. Options granted pursuant to the 1995 NSO Plan
are exercisable at such price and at such times as are set forth in
the option agreement between the Corporation and the option holder.
The term of each option is for a period not exceeding 10 years from the
date of grant. The 1995 NSO Plan does not permit options to be assigned or
transferred except by will or by operation of the laws of descent and
distribution and requires that, during the lifetime of the option
holder, options be exercised only by such option holder. Options
granted pursuant to the 1995 NSO Plan are evidenced by option
agreements (which need not be identical) in such form as the
Committee may from time to time approve. Upon exercise of an option,
payment in full of the purchase price thereof in cash in the form of
a certified check or, at the discretion of the Committee, in
equivalently valued shares of Common Stock (or a combination of both
cash and shares) is required before the option shares are delivered.
<PAGE>
Amendment. The Board of Directors at any time may terminate or
amend the 1995 NSO Plan provided that such termination or amendment:
(a) be approved by the holders of shares representing a majority of
the voting power of the Corporation's Common Stock entitled to vote
thereon if such approval is required by law or is necessary to
comply with regulations promulgated by the Securities and Exchange
Commission under Section 16(b) of the Securities and Exchange Act of
1934 and (b) not adversely affect any option theretofore granted but
not exercised under the 1995 NSO Plan without the consent of the
holder of such option.
Federal Income Tax Consequences. Under the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations promulgated
thereunder, options granted pursuant to the 1995 NSO Plan and shares
of Common Stock acquired upon the exercise of such options will
generally be treated for Federal income tax purposes as follows:
1. A person who is granted an option pursuant to the 1995 NSO
Plan (an "Optionee") will not realize taxable income upon the grant
of such option.
2. Generally, an Optionee who is not an officer, a director, or
a 10% stockholder of the Corporation will realize ordinary income
upon the exercise of the option in an amount equal to the excess, if
any, of the fair market value of the shares of Common Stock acquired
by him (determined as of the exercise date) over the option exercise
price. The Optionee's basis in the shares so acquired will be equal
to the option exercise price increased by the amount of income
realized by him.
3. An Optionee who is an officer, a director, or a 10%
stockholder of the Corporation will be taxed upon the exercise of his
option at the same time and in the same manner as any other Optionee (as
described in Paragraph 2 above) unless the sale by him of any shares
of Common Stock so acquired within six months after such exercise
could subject him to liability under Section 16(b) of the Securities
Exchange Act of 1934, as amended. Even though the acquisition of
shares upon exercise of an option will generally be exempt from
Section 16(b), such potential liability may, for example, exist if
the subsequent sale of such shares could be matched
under Section 16(b) with any purchase of other shares before the
exercise of the option. If such potential liability exists, the
Optionee will not realize ordinary income until the expiration of
such six-month period or the first day on which the sale of such
shares at a profit would not subject him to such potential
liability, whichever occurs first. Notwithstanding the foregoing,
the Optionee may elect to be taxed immediately upon exercise of the
option. The amount of ordinary income so realized will be equal to
the excess, if any, of the fair market value of the shares acquired
by him upon the exercise of the option (determined as of the time
that he is taxable) over the option exercise price.
4. The Corporation will generally be entitled to a tax
deduction in the year in which an Optionee realizes ordinary income
from the exercise of an option. The amount of any such tax
deduction will be equal to the amount of ordinary income realized by
the Optionee.
5. If an Optionee disposes of any shares of Common Stock
acquired by him pursuant to the exercise of an option, the
difference between the proceeds of the disposition and the
Optionee's basis in the shares will represent capital gain or loss
to the Optionee (assuming the Optionee held the shares as a capital
asset). Such capital gain or loss will be long-term if the Common
Stock was held by the Optionee for more than one year.
<PAGE>
6. Under certain circumstances, an Optionee may be permitted to
pay all or a portion of the option exercise price by surrendering
shares of Common Stock already owned by him. Such payment will be
treated by the Internal Revenue Service as two transactions. First,
the Optionee will be treated as having exchanged, in a tax-free
transaction, the shares already owned by him for a comparable number
of new shares, and these new shares will retain the basis and
holding period of the shares so exchanged. Second, the Optionee
will realize ordinary income in an amount equal to the fair market
value of the remainder of the new shares (less any cash paid
therefor), and these remaining new shares will have a basis equal to
their fair market value as of the exercise date and a holding period
that begins on such date.
The 1995 NSO Plan is not an employee benefit plan which is
subject to the provisions of the Employee Retirement Income Security
Act of 1974, and the provisions of Section 401(a) of the Code are
not applicable to the 1995 NSO Plan.
A majority of the votes cast at the Annual Meeting will be
required for approval of this proposal.
The Board of Directors recommends that stockholders vote FOR
approval of the 1995 Non-Qualified Stock Option Plan.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Corporation has selected KPMG Peat
Marwick LLP as the firm of independent auditors to audit the accounts
of the Corporation and its subsidiaries for the fiscal year ending
March 31, 1996. This firm, which has acted as auditors for the
Corporation since 1970, expects to have a representative at the
Annual Meeting who will have the opportunity to make a statement, and
who will be available to answer appropriate questions. If the
stockholders do not ratify the selection of KPMG Peat Marwick LLP,
the Board of Directors will reconsider its selection. A majority of
the votes cast at the Annual Meeting will be required for
ratification.
The Board of Directors recommends that stockholders vote FOR
the ratification of the selection of KPMG Peat Marwick LLP.
STOCKHOLDERS' PROPOSALS
The Corporation will consider including a stockholder's proposal
for action at its 1996 Annual Meeting of Stockholders in the proxy
material to be mailed to its stockholders in connection with that
Meeting if such proposal is received at the principal office of the
Corporation no later than February 27, 1996. In order to curtail
controversy as to the date on which a proposal was received by the
Corporation, it is suggested that proponents submit their proposals
by certified mail, return receipt requested. There were no proposals
received by the Corporation for the 1995 Annual Meeting.
By Order of the Board of Directors,
Robert A. Frasco
Secretary
June 19, 1995
<PAGE>
DEVON GROUP, INC.
281 Tresser Blvd., Suite 501
Stamford, Connecticut 06901-3227
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
CORPORATION
The undersigned hereby appoints Robert H. Donovan, Robert A.
Frasco, and Bruce K. Koch as Proxies, each with the power to
appoint his substitute, and hereby authorizes each of them
separately without the other to represent and to vote as designated
below, all the shares of common stock of Devon Group, Inc. held of
record by the undersigned on June 9, 1995, at the annual meeting of
stockholders to be held at The Rockefeller Center Club, 30
Rockefeller Plaza, The Radio City Suite, 64th Floor, New York, New
York, on July 25, 1995 at 10:00 A.M., local time, and at any
adjournment thereof.
(Continued and to be signed and dated on reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR
DIRECTOR AND FOR ITEMS 2 AND 3.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all nominees listed below
below)
Marne Obernauer, Jr., Robert S. Blank, John W. Dinzole,
William G. Gisel, Thomas J. Harrington, Marne Obernauer, and
Edward L. Palmer.
Instruction: To withhold authority to vote for any individual
nominee write that nominee's name on the space provided below
2. Approval of the 1995 Non-Qualified Stock Option Plan for 360,000
shares of Common Stock
For Against Abstain
3. Ratification of the selection of KPMG Peat Marwick LLP as auditors
for the fiscal year ending March 31, 1996
For Against Abstain
4. Upon such other business as may properly come before the meeting.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as
such. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Dated: , 1995
Signature
Signature if held jointly
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
