<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
HASTINGS MANUFACTURING COMPANY
(Name of Registrant as Specified in its Charter)
_____________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the file fee is calculated and state how it was determined):
-----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number or the form or schedule
and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
HASTINGS MANUFACTURING COMPANY
325 North Hanover
Hastings, Michigan 49058
Telephone No. (616) 945-2491
Facsimile No. (616) 945-4667
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1997
__________________________________________________________________________
You are cordially invited to attend the annual shareholder meeting of
Hastings Manufacturing Company, a Michigan corporation ("Hastings"), to be
held at its principal office located at 325 North Hanover, Hastings,
Michigan, on Tuesday, the 6th day of May, 1997, at 9:00 a.m., local time,
for the following purposes:
1. To elect three (3) directors for three-year terms expiring in
2000.
2. To transact any other business that may properly come before
the meeting and any adjournment thereof.
Only shareholders of record at the close of business on March 21,
1997, are entitled to notice of and to vote at the Annual Meeting of
Shareholders and any adjournments thereof.
Your attention is directed to the enclosed Proxy Statement and Proxy.
The annual report of Hastings for the year ended December 31, 1996, is also
enclosed.
ALL SHAREHOLDERS ARE URGED TO COMPLETE, DATE, SIGN AND RETURN PROMPTLY
THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE. IF YOU ATTEND THE MEETING
AND VOTE IN PERSON, THIS PROXY WILL NOT BE USED.
By Order of the Board of Directors
/s/MONTY C. BENNETT
MONTY C. BENNETT
Secretary
April 11, 1997
<PAGE>
HASTINGS MANUFACTURING COMPANY
325 North Hanover
Hastings, Michigan 49058
Telephone No. (616) 945-2491
Facsimile No. (616) 945-4667
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1997
PROXY STATEMENT
INTRODUCTION
This Proxy Statement and the enclosed Proxy are being furnished to
holders of Common Stock, $2 par value per share ("Common Stock"), of
Hastings Manufacturing Company ("Hastings" or the "Company") in connection
with the solicitation of proxies by the Board of Directors of Hastings for
use at the Annual Meeting of Shareholders and any adjournment thereof. The
Annual Meeting will be held at 9:00 a.m., local time, on May 6, 1997, at
the principal office of Hastings located at 325 North Hanover, Hastings,
Michigan, for the purposes set forth in the accompanying "Notice of Annual
Meeting of Shareholders."
If a Proxy in the enclosed form is properly executed and returned to
Hastings, the shares of Common Stock represented by the Proxy will be voted
in accordance with the wishes specified on the Proxy. If no choice is
specified, the designated proxies will vote the shares represented by the
Proxy for the election of the three director nominees named in this Proxy
Statement and in accordance with their best judgment with respect to any
other matter that may properly come before the meeting and any adjournment
thereof.
Any shareholder who executes and delivers a Proxy may revoke it at any
time before it is voted at the Annual Meeting by giving notice in writing
directed to the Secretary of Hastings at the address set forth above, by
submitting a Proxy bearing a later date or by attending the meeting and
voting in person. A shareholder's attendance at the Annual Meeting will
not, by itself, revoke that shareholder's proxy.
This Proxy Statement is being mailed to shareholders of Hastings on or
about April 11, 1997.
ELECTION OF DIRECTORS
The Board of Directors has nominated the following persons for
election to the Board of Directors for three-year terms expiring at the
Annual Meeting of Shareholders in 2000 or until their successors are
elected and qualified:
Mark R.S. Johnson Dale W. Koop Douglas A. DeCamp
-1-
<PAGE>
Five other directors are serving terms that will expire in 1998 and
1999. The designated proxies intend to vote for the election of the three
nominees named above. Each of the nominees has consented to being named in
this Proxy Statement and to serve as a director if elected. If any nominee
should become unable or unwilling to serve, which is not contemplated, the
incumbent Board of Directors may or may not select a substitute nominee.
If a substitute nominee is selected, the shares represented by a Proxy will
be voted for the election of the substitute nominee. If a substitute
nominee is not selected, the shares represented by a Proxy will be voted
for the election of the remaining nominees. Proxies will not be voted for
more than the number of nominees named in this Proxy Statement.
A plurality of votes cast by the holders of shares of Common Stock
present in person or by proxy at the Annual Meeting and voting on the
election of directors is required to elect directors. For the purpose of
counting votes on the election of directors, abstentions, broker non-votes
and other shares not voted will not be counted as shares voted on the
election and the number of votes of which a plurality is required will be
reduced by the number of shares not voted.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR ALL NOMINEES AS DIRECTORS
VOTING SECURITIES
The Board of Directors fixed the close of business on Friday, March
21, 1997, as the record date for the determination of the shareholders
entitled to notice of and to vote at the Annual Meeting of Shareholders to
be held May 6, 1997, and any adjournments thereof.
At the close of business on March 21, 1997, 390,903 shares of Common
Stock were issued and outstanding. Each share of Common Stock issued and
outstanding on the record date entitles its holder to one vote in person or
by proxy on each matter presented for shareholder action.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following persons beneficially owned more than five percent of
the outstanding shares of Hastings Common Stock as of March 21, 1997:
-2-
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF NATURE OF PERCENT OF
OF BENEFICIAL BENEFICIAL BENEFICIAL OUTSTANDING
OWNER OF COMMON STOCK OWNERSHIP OWNERSHIP SHARES
- --------------------- --------- --------- -----------
<S> <C> <C> <C>
Stephen I. Johnson 640 shares Sole voting and investment power 0.16%
907 West Madison 117,345 shares<F1> Shared voting and investment power 30.02%
Hastings, MI 49058
The Stephen I. Johnson -0- shares Sole voting and investment power --
Family Group <F2> 177,747 shares Shared voting and investment power 45.47%
c/o Stephen I. Johnson
907 West Madison
Hastings, MI 49058
Dimensional Fund 27,900 shares Sole voting and investment power 7.14%
Advisors, Inc. <F3> -0- shares Shared voting and investment power --
1299 Ocean Ave.
Suite 650
Santa Monica, CA 90401
Amici Associates and 35,600 shares Sole voting and investment power 9.10%
The Collectors' Fund <F4> -0- shares Shared voting and investment power --
100 Park Avenue
New York, New York 10017
Mark R. S. Johnson <F5> 26,726 shares Sole voting and investment power 6.84%
c/o Hastings Mfg. Co. -0- shares Shared voting and investment power --
325 North Hanover
Hastings, MI 49058
<FN>
_______________________________________
<F1> This number does not include 14,111 shares held by Mr. Johnson
and two other persons as co-trustees of a testamentary trust established by
Mr. Johnson's father. This number includes shares held by the Stephen I.
Johnson Trust, the Isabel Sage Johnson Trust, the Anna M. Johnson Trust and
the Aben E. Johnson Trust, each for which Mr. Johnson is a trustee and
shares held by SAMCO, Inc., of which Mr. Johnson is the majority
shareholder.
<F2> On October 26, 1982, the Stephen I. Johnson Family Group
("Family Group") filed a report on Schedule 13D (the "Schedule 13D") with
the Securities and Exchange Commission and the American Stock Exchange in
connection with a tender offer which terminated in January of 1983.
Amendment No. 2 to the Schedule 13D was filed with the Securities and
Exchange Commission on or about April 1, 1993, reaffirming the Family
-3-
<PAGE>
Group's mutual belief that it is in the best interests of Hastings and its
shareholders that Hastings remain an independently owned corporation. The
Family Group consists primarily of family members and close relatives of
Stephen I. Johnson. The Schedule 13D, as amended, contains a Shareholder
Letter of Intent signed by all Family Group members. The Shareholder
Letter of Intent states that Family Group members believe it is in the best
interests of Hastings, its shareholders, its employees and the local
community that Hastings remain an independently owned corporation and
further states that Family Group members intend to oppose any takeover
attempt that would result in Hastings no longer remaining an independently
owned corporation and which is not in the best interest of Hastings, its
shareholders, its employees or the local community. Family Group members
and trusts for which such persons have or share voting power hold an
aggregate of approximately 177,747 shares representing approximately 45% of
the outstanding shares of Hastings Common Stock as of March 21, 1997.
<F3> Based on information set forth in a report on Schedule 13G dated
February 5, 1997. Dimensional Fund Advisors Inc. ("Dimensional"), a
registered investment advisor, has informed Hastings that all of the shares
that it is deemed to beneficially own are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
serves as investment manager. Dimensional disclaims beneficial ownership
of all such shares and, to the knowledge of Dimensional, none of its
investment advisory clients owns more than 5% of the class.
<F4> Based on information set forth in a report on Schedule 13D dated
February 21, 1991 as amended by amendments dated April 8, 1991 and December
6, 1995.
<F5> This number does not include shares held by SAMCO, Inc., of which
Mr. Johnson is a vice president, secretary and minority shareholder.
</FN>
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of shares of
Common Stock, held as of March 21, 1997, by each director, each nominee for
election as director, each of the named executive officers (as defined in
the Summary Compensation Table) and by all directors and executive officers
of the Company as a group:
-4-
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF PERCENT OF
NAME OF BENEFICIAL NATURE OF OUTSTANDING
BENEFICIAL OWNER OWNERSHIP BENEFICIAL OWNERSHIP SHARES
- ---------------- --------- -------------------- -----------
<S> <C> <C> <C>
Mark R. S. Johnson 26,726 shares<F1> Sole voting and investment power 6.83%
-0- shares Shared voting and investment power --
Andrew F. Johnson 7,383 shares Sole voting and investment power 1.89%
3,717 shares<F2> Shared voting and investment 0.95%
William R. Cook 800 shares Sole voting and investment power 0.20%
-0- shares Shared voting and investment power --
Richard L. Foster -0- shares Sole voting and investment power --
100 shares Shared voting and investment power 0.03%
Monty C. Bennett 575 shares Sole voting and investment power 0.15%
-0- shares Shared voting and investment power --
Dale W. Koop 575 shares Sole voting and investment power 0.15%
-0- shares Shared voting and investment power --
Neil A. Gardner -0- shares Sole voting and investment power --
10 shares Shared voting and investment power .003%
Douglas A. DeCamp 1,000 shares Sole voting and investment power 0.26%
-0- shares Shared voting and investment power --
All directors and 38,009 shares Sole voting and investment power 9.72%
executive officers 3,827 shares Shared voting and investment power 0.98%
as group
<FN>
_____________________
<F1> This number does not include shares held by SAMCO, Inc., of which
Mr. Johnson is a vice president, secretary and minority shareholder.
<F2> This number includes 2,017 shares held by Mr. Johnson's spouse in
trust for the benefit of their daughter, as well as 1,700 shares held by
Mr. Johnson's spouse individually. Mr. Johnson disclaims beneficial
ownership of those shares. This number does not include shares held by
SAMCO, Inc., of which Mr. Johnson is a vice president, treasurer and
minority shareholder.
</FN>
</TABLE>
-5-
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table shows certain information concerning each
director, nominee for director and executive officer, supplied by them as
of December 31, 1996:
<TABLE>
NOMINEES TO BE ELECTED FOR THREE-YEAR
TERMS EXPIRING IN 2000
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE OR EMPLOYMENT <F1> SINCE <F2>
- ------------ ------------------ ----------
<S> <C> <C>
Mark R. S. Johnson Co-CEO/President-Marketing (since 1994) 1977
Age 49 and Executive Vice President-Marketing
(1986-1994) of Hastings
Dale W. Koop Vice President-Engineering of Hastings 1982
Age 58 (since 1982)
Douglas A. DeCamp President/CEO FHI, Inc. (formerly Flexfab, Inc.), 1984
Age 59 a producer of aircraft hosing and
fiberglass products (since 1984)
</TABLE>
<TABLE>
INCUMBENT DIRECTORS
TERMS EXPIRING IN 1999
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE OR EMPLOYMENT <F1> SINCE <F2>
- ------------ ------------------ ----------
<S> <C> <C>
Andrew F. Johnson Co-CEO/President-Operations 1977
Age 47 (since 1994)
and Executive Vice President-Operations
(1986-1994) of Hastings
William R. Cook President of Pidgas, Inc. 1977
Age 55 Hastings, Michigan
(since 1975)
Monty C. Bennett Vice President-Employee Relations 1982
Age 59 (since 1986) and Secretary
(since 1982) of Hastings
Richard L. Foster Retired; Production Control Manager of 1984
Age 69 Hastings (1987-1988)
</TABLE>
-6-
<PAGE>
<TABLE>
INCUMBENT DIRECTORS
TERMS EXPIRING IN 1998
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE OR EMPLOYMENT <F1> SINCE <F2>
- ------------ ------------------ ----------
<S> <C> <C>
Neil A. Gardner Vice President of Hastings City Bank, 1983
Age 50 Hastings, Michigan, a financial institution
(since 1976)
</TABLE>
<TABLE>
EXECUTIVE OFFICERS
WHO ARE NOT DIRECTORS
<CAPTION>
NAME AND AGE POSITIONS WITH HASTINGS
- ------------ -----------------------
<S> <C>
Thomas J. Bellgraph Vice President - Finance
Age 45 (since January 1996) and Treasurer (since 1986)
<FN>
_____________________
<F1> Except as noted, each person listed above has been engaged in
the same principal occupation for more than five years.
<F2> No director or nominee for director is the director of any
company that has a class of equity securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934 or is subject to
Section 15(d) of that Act or any company registered as an investment
company under the Investment Company Act of 1940.
</FN>
</TABLE>
There are no family relationships (closer than first cousin)
between any of the above-named persons, except that Mark R. S. Johnson and
Andrew F. Johnson are brothers.
ORGANIZATION OF THE BOARD OF DIRECTORS
The Hastings Board of Directors does not have a standing
committee for nominating individuals for election as directors. The
Hastings Board of Directors selects its nominees for election to the new
Board of Directors at its first meeting each year in either January or
February. The Hastings Board of Directors will consider nominees
recommended by shareholders provided that such nominations are sent to the
Secretary of Hastings on or prior to December 1 of the year preceding the
-7-
<PAGE>
Annual Meeting of Shareholders. Any such nominations should be in writing
and state the name, age and address of the nominee, his or her educational
and employment background, his or her present employment and a full and
complete statement as to the qualifications of the nominee to serve as a
director. The Board of Directors will not consider any nomination which
does not provide this information. If a shareholder intends to make a
nomination at the Annual Meeting of Shareholders, he or she must deliver a
notice to the Secretary of the corporation setting forth certain
information concerning the proposed nominee, as described in Hastings'
Bylaws, at least 120 days prior to the date of the notice of the meeting.
The Hastings Board of Directors has a standing Audit Committee
composed of William R. Cook (Chairman), Neil A. Gardner, Mark R. S.
Johnson, Douglas A. DeCamp and Richard L. Foster. The function of the
Audit Committee is to recommend independent auditors to the Board of
Directors for the annual audit of Hastings and its subsidiaries and to
discuss the results of the audit with the independent auditors. The Audit
Committee is responsible for causing suitable examinations of the financial
records and operations of Hastings and its subsidiaries to be performed by
the internal auditor and for reviewing internal controls to insure the
objectivity of Hastings' financial statements. During 1996, the Audit
Committee met twice.
The Hastings Board of Directors has a standing Compensation
Committee composed of the following outside directors: William R. Cook,
Douglas A. DeCamp and Neil A. Gardner. The function of the Compensation
Committee is to determine if director and officer compensation by
Hastings is comparable to industry standards and to make appropriate
recommendations to the Board of Directors. The Compensation Committee
met in 1995 to consider 1996 director and officer compensation and,
due to the recent restructuring, postponed its 1996 meeting until
the first quarter of 1997.
On December 12, 1995 the Board of Directors established a
Strategic Planning Committee. The function of the Strategic Planning
Committee is to consider and develop strategic policies and proposals
intended to enhance shareholder value in the long or short term and to make
recommendations to the Board of Directors with respect to any such policy
or proposal. The Committee has discretionary authority to review and
negotiate any sale or merger proposal received by Hastings and to make
recommendations to the Board of Directors with respect to any such
proposal. The members of the Committee may only consist of members of the
Board of Directors who are not and have not for a five-year period been
officers or employees of Hastings. The current members of the Committee
are William R. Cook, Richard L. Foster and Neil A. Gardner. The Committee
met five times in 1996.
During 1996, there were seven meetings of the Board of Directors.
All incumbent directors attended at least 75% of the aggregate number of
-8-
<PAGE>
meetings of the Board of Directors and meetings of Committees on which they
served during the year.
COMPENSATION OF DIRECTORS
All directors who are not full-time employees of Hastings are
paid a fee of $500 for each regular or special meeting of the Board of
Directors and $500 for each committee meeting attended by the director.
Directors who are full-time employees do not receive additional
compensation.
EXECUTIVE COMPENSATION
Compensation on an accrual basis during 1996, 1995 and 1994, for
the Co-Chief Executive Officers of Hastings and for the four most highly
compensated executive officers, other than the Co-Chief Executive Officers,
who earned over $100,000 in salary and bonus in 1996 (the "named executive
officers") is set forth together with certain other information in the
following table. The executive officers of Hastings are appointed annually
by and serve at the pleasure of the Board of Directors.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------ -------------------
RESTRICTED
NAME AND PRINCIPAL STOCK ALL OTHER
POSITION YEAR SALARY BONUS AWARDS<F1> COMPENSATION<F2>
------------------ ---- ------ ----- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Mark R.S. Johnson 1996 $192,000 -0- -0- $9,266
Co-Chief Executive Officer 1995 192,000 -0- -0- 9,254
President-Marketing 1994 191,379 -0- -0- 9,266
Andrew F. Johnson 1996 $192,000 -0- -0- 11,010
Co-Chief Executive Officer 1995 192,000 -0- -0- 10,944
President-Operations 1994 191,379 -0- -0- 10,956
Dale W. Koop 1996 101,610 -0- -0- 9,981
Vice President- 1995 100,080 -0- -0- 9,865
Engineering 1994 99,674 -0- -0- 10,933
<FN>
______________
<F1> No shares of restricted stock vested in 1996 because the
performance goals were not met.
-9-
<PAGE>
<F2> All other compensation includes: (a) Company matching
contributions under the Hastings Savings Plan; (b) Company
profit-sharing contributions to the Hastings Savings Plan;
and (c) amounts allocated to use of a Company automobile.
The amounts included for each factor in 1996 are:
(A) (B) (C)
Mark R. S. Johnson $1,520 $7,746 -0-
Andrew F. Johnson $3,264 $7,746 -0-
Dale W. Koop $2,280 $5,004 $2,697
</FN>
</TABLE>
DEFERRED COMPENSATION
On June 1, 1986, Hastings adopted a defined contribution 401(k)
profit-sharing plan known as the Hastings Savings Plan. This plan is
administered by Hastings and is available to all salaried employees.
Individual accounts are maintained for contributions made on behalf of each
employee and each employee has a choice of investment options as to the
balance in his or her account. There are four types of contributions to
the plan: (1) an employee can make a voluntary contribution of the
employee's compensation which is deducted by Hastings from the employee's
normal compensation (legal limitations may restrict the maximum voluntary
contribution by an employee in any year); (2) Hastings makes matching
contributions equal to 40 percent of the amount of an employee's voluntary
contribution, but only on the first 6 percent of an employee's
compensation; (3) annually, from net profits, Hastings contributes for each
employee an amount equal to 3 percent of the employee's compensation, plus
1 percent of the employee's compensation in excess of 50 percent of the
social security wage base, plus 2 percent of the employee's compensation in
excess of 75 percent of the social security wage base; and (4) Hastings may
make discretionary contributions, from net profits, which are allocated
among the participants based on the employee's annual compensation compared
to total annual compensation of all employees. Benefits are payable at age
65 (normal retirement) or upon total disability, death or early
employment termination. There are vesting requirements for Hastings'
profit-sharing and discretionary contributions (but not for an employee's
voluntary or Hastings' matching contributions). For employees who became
participants prior to January 1, 1989, the vesting schedule is 40 percent
vesting after 4 years of service, with 100 percent vesting after 5 years of
service. For employees who became participants on or after January 1,
1989, the vesting schedule is 100 percent after 5 years of service.
-10-
<PAGE>
STOCK PERFORMANCE
The following graph compares the cumulative total shareholder
return on Hastings Common Stock to the AMEX Market Index and Peer Group
Index. The AMEX Market Index is a broad equity market index published by
the American Stock Exchange. The Peer Group Index is based upon the
cumulative total shareholder return on the common stock issued by the
selected companies in the automotive parts and accessories industry
identified in Note (1) below. The returns of each member of the Peer Group
are weighted according to the respective issuer stock market capitalization
at the beginning of each period for which a return is indicated. Both
indices assume dividend reinvestment. Cumulative total return is measured
by dividing (i) the sum of (a) the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment, and (b) the difference
between the share price at the end and the beginning of the measurement
period, by (ii) the share price at the beginning of the measurement period.
The information in this Section entitled "Stock Performance" is not
incorporated by reference in the Company's Annual Report on Form 10-K or in
any other filings under the Securities Exchange Act of 1934.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
[PERFORMANCE GRAPH]
(Assumes $100 Invested on January 1, 1992 and Reinvestment of Dividends)
The table below shows dollar values for cumulative total
shareholder return plotted in the graph above.
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Hastings $100.00 91.77 90.10 64.45 62.33 75.92
AMEX Market Index $100.00 101.37 120.44 106.39 137.13 144.70
Peer Group Index $100.00 142.48 200.80 173.29 185.01 233.16
-11-
<PAGE>
<FN>
_________________________
<F1> The companies used to create the Peer Group Index are as
follows: Aftermarket Tech Corporation; Air Sensors Inc.; Amerigon Inc.;
Arvin Industries Inc.; Barnes Group Inc.; Bonded Motors Inc.; Borg Warner
Automotive; Boyds Wheels Inc.; Breed Technologies Inc.; Code-Alarm Inc.;
Collins Industries Inc.; Colonels International Inc.; Crager Industries
Inc.; Dana Corporation; Defiance Inc.; Deflecta-Shield Corporation; Desc
S.A.; Detroit Diesel Corporation; Donaldson Co., Inc.; Durakon Industries
Inc.; Eaton Corporation; Echlin Inc.; Edelbrock Corp.; Excel Industries
Inc.; Federal-Mogul Corporation; Gentex Corporation; Glas-Aire Industries;
Harvard Industries Inc.; Hastings Manufacturing Company; Hilite Industries
Inc.; Jason Inc.; JPE Inc.; Kysor Industrial Corporation; Lund
International Holdings; Magna International Inc.; Mascotech Inc.; Memtec
Ltd.; Modine Manufacturing Co.; Monro Muffler Brake Inc.; Motorcar Parts &
Accessories Inc.; O'Gara Company; Orbital Engine Corporation Ltd.; R&B
Inc.; Redlaw Industries Inc.; RT Industries Inc.; Safety Components
International; Schawk Inc.; Simpson Industries Inc.; Smith AO Inc.; Sparton
Corporation; SPX Corporation; SRS Labs Inc.; Standard Motor Products Inc.;
Standard Products Co.; Stant Corporation; Superior Industries
International; Tesma International; Top Source Technologies Inc.; Transpro
Inc.; TRW, Inc.; Universal Manufacturing Inc.; Valley Forge Corporation;
Wescast Industries Inc.; Westinghouse Air Brake; Williams Controls Inc.;
Wynn's International Inc.
</FN>
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION (2)
The Company's executive compensation policy is formulated and
recommended to the Board by the Compensation Committee of the Board of
Directors. The Compensation Committee also administers the Company's
compensation plans. The Compensation Committee evaluates annual salaries
and incentive compensation plans for the executive officers and recommends
the salaries and compensation to the Board. The Board of Directors makes
the final decision on whether to adopt the Compensation Committee's
recommendations.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
The Compensation Committee's executive compensation philosophy is
intended to provide competitive levels of compensation, "tie" or "couple"
officers' compensation with the achievement of the Company's performance
objectives, reward good corporate performance, recognize individual
achievement and allow the Company to attract and retain quality executive
officers. The Compensation Committee's compensation policy provides that a
significant portion of the annual compensation of each executive officer
must relate to, and be contingent upon, the performance of the Company.
-12-
<PAGE>
The Compensation Committee believes that this policy enhances shareholder
value by rewarding executive officers for profitable growth of the Company.
Section 162(m) of the Internal Revenue Code includes potential
limitations on the deductibility of compensation in excess of $1 million
paid to certain executive officers. The Company has examined its executive
compensation policies in light of Section 162(m) and will continue to
assess the impact of Section 162(m) and take action to assure that
appropriate levels of deductibility are maintained. It is not expected
that any portion of the Company's deduction for employee remunerations will
be disallowed in 1997.
Compensation for executive officers, including the Co-Chief Executive
Officers, is comprised of three primary components: base salary, an annual
incentive bonus and awards of restricted stock. Executive officers also
receive various fringe benefits that are offered to other employees
including health and life insurance benefits and Company contributions to
their Hastings Savings Plan accounts.
BASE SALARY
The Company seeks to attract and retain executives by providing base
salaries that are generally competitive with salaries paid for comparable
positions with companies of similar general type and size in the
marketplace. The Company obtains comparable salary information through
various surveys. The skill and experience required by the position, job
performance, accountability, length of service and current economic
conditions also affect what an officer earns as a base salary.
In general, the Company reviews the base salary of executive officers
on an annual basis. Annual salary adjustments are determined by evaluating
comparable salaries for executives at other companies, the job performance
of the officer and any increase in responsibilities of the officer.
ANNUAL CASH INCENTIVE BONUS
The Company's executive officers may receive an annual cash incentive
bonus which is based on the Company's operating performance and consolidated
net income before income tax expense.
RESTRICTED STOCK PLAN
The Company also provides executive officers and certain other key
employees of the Company with incentives to increase the long-term
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profitability of the Company by a restricted stock plan that was
established in 1990 (the "Restricted Stock Plan"). The Compensation
Committee believes that the Restricted Stock Plan helps to align the
interests of the Company's executive officers and key employees with those
of the Company and its shareholders by encouraging and promoting stock
ownership by management. The Compensation Committee believes that the
Restricted Stock Plan will result in better long-term performance for the
Company and its shareholders. The Company currently has no target
ownership level for equity holdings by officers.
The Restricted Stock Plan is administered by a committee (the "RSP
Committee"), consisting of three outside directors who are not eligible to
participate in the Restricted Stock Plan. Every award of Common Stock
under the Restricted Stock Plan will be subject to two types of
restriction. The first restriction is based on a continuation of
employment for five years (except in the case of retirement with prior
approval, death or disability); otherwise, the recipient forfeits the
unvested portion of any restricted stock held by him or her. Second, a
portion of each award of restricted stock is also tied to achievement of
certain performance goals established by the RSP Committee. The
performance goals may be company-wide, subsidiary-wide or division-wide or
tailored to the individual recipient. The performance goals have generally
been based on the annual net income per share performance of the Company.
If the Company meets or exceeds the performance goals for a particular
year, then the recipient will become the owner of 20% of his or her
restricted stock award. If the Company (or the individual, if applicable)
fails to meet the performance goals, then the recipient will forfeit all
interest in 20% of his or her restricted stock award. In other words, as
long as the Company (or the individual, if applicable) meets the
performance goals, then the recipient may keep the shares of stock awarded
to him or her under the Plan.
All recommendations of the Compensation Committee relating to 1996
compensation were unanimously approved by the Board of Directors without
modification.
Respectfully submitted,
William R. Cook
Douglas A. DeCamp
Neil A. Gardner
________________
(2) The information in this Section entitled "Compensation Committee
Report on Executive Compensation" is not incorporated by reference in the
Company's Annual Report on Form 10-K or in any other filing under the
Securities Exchange Act of 1934.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors were members of the Compensation Committee
during 1996: William R. Cook; Douglas A. DeCamp; and Neil A. Gardner.
During 1996 Andrew F. Johnson, Co-CEO and President-Operations of Hastings,
served as a director of Hastings City Bank, of which Neil A. Gardner is a
Vice President.
INDEPENDENT AUDITORS
The Board of Directors has selected the firm of BDO Seidman, LLP,
Grand Rapids, Michigan, as independent auditors to audit the consolidated
financial statements of Hastings and its subsidiaries for the fiscal year
ending December 31, 1996. BDO Seidman has served as independent auditors
for Hastings since August 18, 1971. A representative of BDO Seidman is
expected to attend the Annual Meeting of Shareholders on May 6, 1997. The
representative will have an opportunity to make a statement if he or she so
desires and is expected to be available to respond to appropriate questions
from shareholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
Hastings' directors and officers and individuals who beneficially own more
than 10 percent of the outstanding shares of Hastings Common Stock to file
reports with the Securities and Exchange Commission concerning their
beneficial ownership and changes in their ownership of shares of Hastings
Common Stock. Such persons are required by Securities and Exchange
Commission regulations to furnish to Hastings copies of all Section 16(a)
reports they file. Based on its review of the copies of such reports
received by it or written representations from certain reporting persons
that no Forms 5 were required for those persons, Hastings believes that,
from January 1 through December 31, 1996, all Section 16 reporting and
filing requirements were fulfilled.
SHAREHOLDER PROPOSALS
Any proposal that a Hastings shareholder intends to present at the
Annual Meeting of Shareholders to be held in 1998 must be received by
Hastings at its principal office not later than December 12, 1997, to be
considered for inclusion in its proxy statement and form of proxy relating
to that meeting. Proposals of shareholders should be made in accordance
with Securities and Exchange Commission Rule 14a-8.
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<PAGE>
OTHER BUSINESS
The Hastings Board of Directors is not aware of any other matters that
may be presented to the shareholders for formal action at the meeting. If,
however, any other matters properly come before the meeting or any
adjournment thereof, it is the intention of the persons named in the
enclosed Proxy to vote such Proxy in accordance with their best judgment on
such matters.
SOLICITATION OF PROXIES
The cost of soliciting Proxies will be borne by Hastings.
Solicitation of Proxies will be made initially by mail. Directors,
officers and employees of Hastings may solicit, without additional
compensation, Proxies in person or by telephone, telegram or oral
communication. In addition, banks, brokerage firms and other custodians,
nominees and fiduciaries may communicate with and forward soliciting
materials to beneficial owners of shares held by them to obtain
authorization for execution of Proxies and may be reimbursed by Hastings
for reasonable expenses incurred in sending proxy materials to those
beneficial holders.
It is important that your shares be represented at the meeting. To
assure your representation, please complete, date, sign and return promptly
your proxy in the enclosed postage prepaid envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/MONTY C. BENNETT
MONTY C. BENNETT
Secretary
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<PAGE>
PROXY PROXY
HASTINGS MANUFACTURING COMPANY
325 NORTH HANOVER
HASTINGS, MICHIGAN 49058
TELEPHONE NO. (616) 945-2491
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints Thomas J. Bellgraph and
Andrew F. Johnson, and each of them, each with full power of substitution,
proxies to represent the shareholder listed on the reverse side of this
Proxy and to vote all shares of Common Stock of Hastings Manufacturing
Company that the shareholder would be entitled to vote on all matters which
come before the Annual Meeting of Shareholders to be held at the principal
office of Hastings Manufacturing Company in the City of Hastings, Michigan,
on Tuesday, May 6, 1997, at 9 a.m. local time, and any adjournment of that
meeting.
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES
NAMED ON THIS PROXY AS DIRECTORS. THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED IN THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS THAT
MAY COME BEFORE THE MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
<PAGE>
HASTINGS MANUFACTURING COMPANY
1. ELECTION OF DIRECTORS Nominees: FOR WITHHELD FOR ALL
Douglas A. DeCamp, Mark R.S. Johnson, EXCEPT THOSE
Dale W. Koop. INDICATED
(INSTRUCTION: TO WITHHOLD AUTHORITY
TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THAT NOMINEE'S NAME
ABOVE) [ ] [ ] [ ]
Your Board of Directors Recommends that You Vote "FOR" All Nominees
IF ANY NOMINEE IS UNABLE OR UNWILLING TO SERVE AS A DIRECTOR AT THE
TIME OF THE ANNUAL MEETING OF SHAREHOLDERS, EACH PROXY MAY BE VOTED FOR ANY
SUBSTITUTE NOMINEE DESIGNATED BY THE PRESENT BOARD OF DIRECTORS. FURTHER,
THE PROXIES NAMED HEREIN SHALL HAVE DISCRETIONARY AUTHORITY TO VOTE ON
OTHER MATTERS, NOT PRESENTLY KNOWN, THAT MAY COME BEFORE THE MEETING OR ANY
ADJOURNMENTS THEREOF. RECEIPT OF THE NOTICE OF ANNUAL MEETING AND PROXY
STATEMENT DATED APRIL 11, 1997, IS ACKNOWLEDGED.
Dated: ____________________, 1997
X____________________________________________
X____________________________________________
Signature of Shareholder(s)
IMPORTANT -- Please sign exactly as your
name(s) appears on this Proxy. When signing
on behalf of a corporation, partnership,
estate or trust, indicate title or capacity
of person signing. IF SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD SIGN.
