<PAGE> 1
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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted 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
McClain Industries, Inc.
- --------------------------------------------------------------------------------
(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)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously 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:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
================================================================================
MCCLAIN
INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 2000
================================================================================
<PAGE> 3
MCCLAIN INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 2000
To Our Shareholders:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders to be held at the Sterling Inn, 34911 Van Dyke Road, Sterling
Heights, Michigan, on Friday, May 5, 2000, at 10:00 a.m., local time. At the
Annual Meeting, you will be asked:
(1) To elect a Board of four Directors to serve until the next
annual meeting of shareholders or until their successors are
elected and qualified; and
(2) To transact other business which may properly come before the
Annual Meeting.
This Proxy Statement contains information relevant to the 2000 Annual
Meeting. Only our shareholders of record at the close of business on March 17,
2000, are entitled to notice of, and to vote at, the Annual Meeting.
YOUR VOTE IS IMPORTANT. Whether or not you expect to attend the Annual
Meeting, please sign, date, and mark the enclosed proxy and return it as soon as
possible in the postage-paid envelope provided. If you wish to vote in
accordance with recommendations of the Board of Directors, you need only sign,
date and return the proxy. If you send in your proxy and subsequently decide to
attend the Annual Meeting, you may withdraw your proxy and vote your shares.
Thank you for your continued support and endorsement of McClain
Industries. We look forward to continuing our history of building long-term
value for you and our other Shareholders.
Sincerely,
CARL JAWORSKI
Secretary
Dated: March 29, 2000
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL
MEETING IN PERSON. HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE
MEETING, YOU ARE ENCOURAGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID ENVELOPE PROVIDED FOR THAT
PURPOSE.
<PAGE> 4
MCCLAIN INDUSTRIES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 2000
PROXIES AND SOLICITATIONS
This Proxy Statement is being mailed to the holders of shares of common
stock of McClain Industries, Inc. in connection with our 2000 Annual Meeting of
Shareholders. The purpose of this Proxy Statement is to solicit your approval of
the election of the nominees for the Board of Directors. If your proxy is
received in time for the Annual Meeting, your shares will be voted in accordance
with the instructions, if any, contained in your executed proxy. If you do not
give instructions, your proxy will be voted for all nominees for the Board. You
may revoke an executed proxy at any time before it is exercised. You may revoke
your proxy either by submitting to our corporate Secretary a written notice of
revocation bearing a date later than the date of your proxy any time prior to
the start of the Annual Meeting, or by attending the Annual Meeting and voting
in person (although attending the Annual Meeting will not by itself revoke a
proxy).
Our directors, officers and employees may solicit proxies by personal
interview, telephone, telegram and mail. Arrangements may also be made with
brokerage houses or other custodians, nominees and fiduciaries to forward
solicitation material to our shareholders, and we may reimburse them for
reasonable out-of-pocket expenses incurred in forwarding such material, which we
anticipate will not exceed $1,000. We will bear the cost of all proxy
solicitation.
Our executive offices are located at 6200 Elmridge Road, Sterling
Heights, Michigan 48310. This Proxy Statement is dated March 29, 2000. It is
first being mailed to shareholders on or about March 29, 2000.
TIME AND PLACE OF MEETING
The Annual Meeting will be held at the Sterling Inn, 34911 Van Dyke
Road, Sterling Heights, Michigan, on Friday, May 5, 2000, at 10:00 a.m., local
time.
YOUR VOTING RIGHTS AND PRINCIPAL SHAREHOLDERS
Only holders of record of shares of common stock at the close of
business on March 17, 2000 are entitled to notice of, and to vote at, the Annual
Meeting or at any adjournment. On March 17, 2000, we had 4,638,759 shares of
common stock outstanding, which were held by 201 holders of record. Each
outstanding share of common stock entitles the record holder to one vote. You
can only vote your shares at the Annual Meeting if you are present or if you are
represented by proxy. In order for business to be conducted at the Annual
Meeting, we must have a quorum. There will be a quorum if shareholders who own a
majority of the outstanding shares entitled to vote are present at the Annual
Meeting, either in person or by proxy.
Information concerning our principal shareholders is discussed under
"Security Ownership of Certain Beneficial Owners and Management."
1
<PAGE> 5
QUESTIONS CONCERNING THIS PROXY STATEMENT OR THE ANNUAL MEETING
If you have any questions about this Proxy Statement or the Annual
Meeting, please call Carl Jaworski at (810) 264-3611.
MATTERS TO COME BEFORE THE MEETING
ELECTION OF DIRECTORS
The only matter expected to be considered at the Annual Meeting will be
the election of directors. Our Bylaws provide for seven positions on the Board
of Directors. We propose that only four of these positions be filled by persons
nominated to the Board of Directors at the Annual Meeting. We believe that the
functions of the Board can be served adequately by four directors. We do not
anticipate filling the remaining three positions; however, shareholders
attending the Annual Meeting may nominate and elect persons to fill the three
vacancies. Proxies may not be voted for more than four persons. Each director
will be elected by a plurality of the votes cast at the Annual Meeting.
Therefore, abstentions and broker non-votes will have no effect on the election
of directors. Proxies will be tabulated by our transfer agent. The Inspector of
Elections appointed at the Annual Meeting will then combine the proxy votes with
the votes cast at the Annual Meeting. Each director elected at the Annual
Meeting will serve for a term commencing on the date of the Annual Meeting and
continuing until the next annual meeting of shareholders or until his or her
successor is elected and qualified. Unless otherwise instructed, proxies will be
voted in favor of the election of the four nominees listed below.
If any of the persons nominated are unavailable to serve, then a valid
proxy may be voted for the election of any other person whom the proxyholder
deems advisable in accordance with their best judgment. We have no knowledge
that any of the nominees will be unavailable to serve. In any event, the
enclosed proxy can be voted for only the four persons named in this Proxy
Statement or their substitutes.
Below is a list of the nominees with a description of their principal
occupation for the past five years. Each nominee presently serves on our Board
of Directors and has served continuously from the date of his election to the
present time.
KENNETH D. MCCLAIN, age 58, is Chairman of the Board, Chief Executive
Officer and President. He has been a director and officer since our inception in
March 1968. He also serves as an officer and a director of our subsidiaries.
ROBERT W. MCCLAIN, age 63, is Senior Vice President and Assistant
Secretary. He has been a director and officer since our inception in March 1968.
He also serves as an officer of several of our subsidiaries. Mr. Robert McClain
and Mr. Kenneth McClain are brothers.
RAYMOND ELLIOTT, age 65, has been a director since August 1990. He is
currently President of Hartland Insurance Group, Inc. From January 1, 1997 to
October 2, 1998, he was Vice President of First of America Insurance Group (now
National City). Prior to that he was President of Elliott & Sons Insurance
Agency, Inc. and Michigan Benefit Plans Insurance Agency, Inc. since 1967, and
was a director of both such companies through December 1996. Mr. Elliott also
serves on the Board of Governors of the Michigan Automobile Insurance Placement
Facility and as an advisory director of the Boys and Girls Club of Troy, a
charitable organization located in Troy, Michigan.
2
<PAGE> 6
WALTER J. KIRCHBERGER, age 65, has been a director since November 3,
1995. Mr. Kirchberger is First Vice President - Research of PaineWebber
Incorporated, and has served in such capacity for more than 25 years. He also
serves as a director of Simpson Industries, Inc.
To the best of our knowledge, there are no material proceedings to
which any nominee is a party, or has a material interest, adverse to McClain
Industries. To the best of our knowledge, there have been no events under any
bankruptcy act, no criminal proceedings and no judgments or injunctions that are
material to the evaluation of the ability or integrity of any nominee during the
past five years.
THE BOARD AND ITS COMMITTEES
Our Board of Directors met five times during our last fiscal year ended
September 30, 1999. All of our directors attended each of those meetings.
Our Bylaws authorize the Board to form committees and to delegate some
of its responsibilities to those committees. The Board establishes the functions
of each committee and the standards for membership. In addition, the Board
appoints the members for each committee. The Board has three standing
committees: the Audit Committee, the Compensation Committee, and the Executive
Committee.
THE AUDIT COMMITTEE was established to:
- annually recommend to the Board a firm of independent public
accountants to be our auditors
- review the scope of the annual audit with the auditors in
advance of the audit
- generally review the results of the audit and the adequacy
of our accounting, financial and operating controls
- review our accounting and reporting principles, policies and
practices
- perform other duties which the Board may delegate to it
The current members of the Audit Committee are Messrs. Raymond Elliott,
Kenneth D. McClain and Walter J. Kirchberger. The Audit Committee did not hold
any formal meeting during the 1998-99 fiscal year. The activities of the Audit
Committee were conducted during meetings of the full Board.
THE COMPENSATION COMMITTEE was established to:
- review the compensation (including salaries, bonuses and
stock options) of our officers
- perform other duties which the Board may delegated to it
The current members of the Compensation Committee are Messrs. Raymond
Elliott and Walter J. Kirchberger. The Compensation Committee held one meeting
during the 1998-99 fiscal year. See "Report of the Compensation Committee on
Executive Compensation".
3
<PAGE> 7
THE EXECUTIVE COMMITTEE was established to manage generally the
day-to-day business and affairs between regular Board meetings. The Executive
Committee may not, without the prior approval of the Board acting as a whole:
- amend our Articles of Incorporation
- amend our Bylaws
- adopt an agreement of merger or consolidation
- recommend to the shareholders the sale, lease or exchange of
all or substantially all of our property and assets
- recommend to the shareholders a dissolution or a revocation
of a dissolution
- fill vacancies on the Board
- fix compensation of the directors for serving on the Board
or on a committee of the Board
- declare dividends or authorize the issuance of stock
- approve or take any action with respect to any related party
transaction involving McClain Industries
All actions taken by the Executive Committee must be promptly reported
to the Board as a whole and are subject to ratification, revision and alteration
by the Board, except that no rights of third persons created in reliance on
authorized acts of the Executive Committee can be affected by any such revision
or alteration. The current members of the Executive Committee are Messrs.
Kenneth D. McClain and Robert W. McClain. The Executive Committee did not hold
any formal meetings during the 1998-99 fiscal year.
The Board of Directors has adopted a policy requiring review of related
party transactions by disinterested directors on a transaction by transaction
basis.
The Board of Directors does not have a standing committee responsible
for nominating individuals to become directors.
DIRECTORS' COMPENSATION
Directors who are also our employees do not receive compensation for
serving on the Board of Directors or on the Board's committees. Directors who
are not our employees are entitled to a quarterly retainer fee of $4,000, a
$1,000 fee for each regular or special meeting of the Board and a $1,000 fee for
each committee meeting attended on a day other than a regular or special Board
meeting date. These fees may not increase more than once annually. A
non-employee director may elect to receive his fees either in cash or in shares
of common stock pursuant to our 1999 Retainer Stock Plan for Non-Employee
Directors which replaced our 1989 Retainer Stock Plan.
To participate in the 1999 Retainer Stock Plan, a non-employee director
must elect, thirty days prior to the date his fees are paid, the percentage, if
any, of his fees he wishes to receive in the form of
4
<PAGE> 8
shares of common stock. The number of shares of common stock to be issued to an
eligible director is determined by dividing (i) the dollar amount of the
percentage of fees he elects to receive in common stock, by (ii) the "fair
market value" of common stock on the day prior to the date the common stock is
issued. The term "fair market value" means the closing sale price per share of
common stock on the day prior to the date of issuance as quoted on NASDAQ
National Market, or if no sale takes place on that day, the average of the
closing bid and asked prices for the common stock on that day as quoted on
NASDAQ National Market. Any fractional share of common stock derived from such
calculation is paid in cash.
The aggregate fair market value of the shares of common stock issued to
any non-employee director in a given year cannot exceed 100% of the director's
fees. During the 1998-99 fiscal year, 3,187 shares of common stock were issued
under the 1989 Retainer Stock Plan and 2,927 shares of common stock were issued
under the 1999 Retainer Stock Plan.
EXECUTIVE OFFICERS
The persons listed below are our current executive officers. Each is
annually appointed by, and serves at the pleasure of, the Board.
<TABLE>
<CAPTION>
APPROXIMATE DATE
NAME AGE OFFICE SERVICE BEGAN
---- --- ------ -------------
<S> <C> <C> <C>
Kenneth D. McClain(1) 58 Chairman of the Board, Chief 3/68
Executive Officer and President
Robert W. McClain(1) 63 Senior Vice President, Assistant 3/68
Secretary
Carl Jaworski 56 Secretary 10/72
Mark Mikelait 38 Treasurer 5/97
</TABLE>
Each of the executive officers has been continuously employed by us for
more than five (5) years serving in the capacities and since the date reflected
above.
To our knowledge, there are no material proceedings to which any
officer is a party, or has a material interest, adverse to McClain Industries.
To our knowledge, there have been no events under any bankruptcy act, no
criminal proceedings and no judgments or injunctions that are material to the
evaluation of the ability or integrity of any executive officer during the past
five years.
EXECUTIVE COMPENSATION
The following tables set forth all cash compensation paid to our Chief
Executive Officer and our other executive officers whose total annual salary and
bonus exceeded $100,000 during the last three fiscal years.
- -------------------
(1) Kenneth D. McClain and Robert W. McClain are brothers.
5
<PAGE> 9
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
===============================================================================================
Annual Compensation Long Term Compensation
------------------- ----------------------
Name and Fiscal Salary Securities underlying
Principal Position Year Amount($) Options/SARs(#)
- ------------------ ---- --------- ---------------
<S> <C> <C> <C>
Kenneth D. McClain, 1999 $275,000 25,000
President/CEO 1998 $263,031 ---
1997 $226,885 ---
Robert W. McClain, 1999 $143,751 25,000
Senior Vice President
1998 $125,004 ---
1997 $183,335 ---
Carl Jaworski, Secretary 1999 $108,750 5,000
1998 $104,631 5,000
1997 $102,894 ---
Mark S. Mikelait, 1999 $126,250 5,000
Treasurer
1998 $101,250 10,000
1997 --- ---
===============================================================================================
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
========================================================================================================================
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ------------------------------------------------------------------------------------------------------------------------
Name Number of Percent of Exercise of Expiration 5% ($) 10% ($)
securities total base price date
underlying options/ ($/Sh)
option/SARs SARs granted
granted (#) to employees
in fiscal
year
(a) (b) (c) (d) (e) (f) (g)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth D. McClain 25,000 19.23% $5.50 5-6-04 $22,035 $63,814
- ------------------------------------------------------------------------------------------------------------------------
Robert W. McClain 20,000 15.38% $5.50 5-6-04 $17,628 $51,051
- ------------------------------------------------------------------------------------------------------------------------
Carl Jaworski 5,000 3.84% $5.50 12-15-03 $7,598 $25,244
- ------------------------------------------------------------------------------------------------------------------------
Mark S. Mikelait 5,000 3.84% $5.50 12-15-03 $7,598 $25,244
========================================================================================================================
</TABLE>
6
<PAGE> 10
AGGREGATED OPTION/SAR EXERCISES AND
FISCAL YEAR-END OPTION/SAR VALUES TABLE
<TABLE>
<CAPTION>
================================================================================================================================
Shares
Acquired on
Exercise Value of Unexercised
In 1998-99 Value No. of Unexercised Options/SARs at In-The-Money Options/SARs at
Fiscal Year Realized(1) 1998-99 Fiscal Year-End(2) 1998-99 Fiscal Year-End(1)
-----------------------------------------------------------------------
Not Not
Exercisable Exercisable Exercisable Exercisable
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth D. McClain -0- -0- 13,333 25,000 $0 $0
- -------------------------------------------------------------------------------------------------------------------------------
Robert W. McClain -0- -0- 6,666 20,000 $0 $0
- -------------------------------------------------------------------------------------------------------------------------------
Carl Jaworski -0- -0- 1,666 8,334 $0 $0
- -------------------------------------------------------------------------------------------------------------------------------
Mark S. Mikelait -0- -0- 7,333 11,667 $0 $0
===============================================================================================================================
</TABLE>
(1) Value based on the closing market price per share of our common stock
on September 30, 1999 which was $4.375.
(2) Includes (a) stock options granted on January 16, 1995 pursuant to our
1989 Incentive Stock Plan with an exercise price of $7.31 per share and
which expired on January 15, 2000, (b) stock options granted on
December 16, 1998 pursuant to our 1989 Incentive Stock Plan with an
exercise price of $5.50 per share and which expire on December 5, 2003,
and (c) stock options granted on May 7, 1999 pursuant to our 1999
Incentive Stock Plan, with an exercise price of $5.50 per share and
which expire on May 6, 2004.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Our executive compensation program is administered by the Board's
Compensation Committee which is comprised of independent directors, Messrs.
Raymond Elliott and Walter J. Kirchberger. The program supports our commitment
to providing superior shareholder value. It is designed to attract and retain
high-quality executives, to encourage them to make career commitments to us, and
to accomplish our short and long term objectives. The Compensation Committee
attempts to structure our compensation program so that it will reward our top
executives with bonuses and stock and option awards upon attainment of specified
goals and objectives while striving to maintain salaries at reasonably
competitive levels. The Compensation Committee reviews the compensation
(including salaries, bonuses and stock options) of our key executive officers
and performs such other duties as may be delegated to it by the Board of
Directors. The Compensation Committee held one formal meeting during the 1998-99
fiscal year
In reviewing the compensation to be paid to our executive officers
during the 1998-99 fiscal year, the Compensation Committee sought to ensure that
executive officers were rewarded for long-term strategic management, for
increasing the share value of our common stock, and for achieving internal goals
established by the Board of Directors.
The key components of executive officer compensation are salary,
bonuses and stock awards. Salary is generally based on factors such as an
individual officer's level of responsibility, prior years' compensation,
comparison to compensation of our other officers, and compensation provided at
7
<PAGE> 11
competitive companies and companies of similar size. Bonuses and stock awards
are intended to reward exceptional performances. Stock awards are also intended
to increase an officer's interest in our long-term success as measured by the
market and book value of the common stock. Stock awards may be granted to our
officers and directors and to certain employees who have managerial or
supervisory responsibilities under the Incentive Stock Plan. Stock awards may be
stock options, stock appreciation rights or restricted share rights. Eleven (11)
key employees, including two executive officers, received stock options under
the Incentive Stock Plan for their performance during the 1998-99 fiscal year.
The Compensation Committee generally reviews our financial and
operating performance for the preceding fiscal year when audited financial
statements become available, usually in the first or second quarter of the
following fiscal year. In line with this practice, the Compensation Committee
reviewed our financial results for the 1998-99 fiscal year and the first quarter
of the fiscal year ending September 30, 2000. The Compensation Committee
observed that our sales increased approximately 20.7% over the 1997-98 fiscal
year; our gross profit as a percentage of net sales decreased from approximately
17.82% for the 1997-98 fiscal year to 17.6% for the 1998-99 fiscal year; and our
net income per share increased to $0.90 for the 1998-99 fiscal year from $0.72
for the 1997-98 fiscal year. After reviewing the individual performance of our
Chief Executive Officer and the goals set for the Company in the 1999-2000
fiscal year at its February 2000 meeting, the Compensation Committee decided to
defer any decisions regarding compensation increases for executive officers
until after it has the opportunity to review a proposed incentive program for
certain members of the Company's management team.
Submitted by:
Raymond Elliott Walter Kirchberger
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Raymond Elliott and Walter J. Kirchberger are not currently,
and have never been, officers or employees of McClain Industries or any of our
subsidiaries. Mr. Elliott is a principal officer of Hartland Insurance Group,
Inc. which provided insurance to us during the 1998-99 fiscal year. Hartland
Insurance Group sold us insurance with premiums aggregating approximately $1.0
million during the 1998-99 fiscal year, for which Mr. Elliott received fees and
commissions in the approximate amount of $117,500. We believe that Mr. Elliott's
ability to make fair compensation decisions was not compromised by our
relationship with Hartland Insurance Group. None of our executive officers
served as a director, executive officer or compensation committee member of
another entity which had an executive officer who served as a Compensation
Committee member or as a member of our Board of Directors during the last fiscal
year.
8
<PAGE> 12
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return on the common stock against the cumulative
total return of the NASDAQ Market Index, the NASDAQ Trucking and Transportation
Index, and the published MG Industry Group 626 (Metals Fabrication), for the
five (5) fiscal years beginning October 1, 1994 and ending September 30, 1999.
This line graph assumes a $100 investment on October 1, 1994 with dividend
reinvestment.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG MCCLAIN INDUSTRIES, INC.
NASDAQ MARKET INDEX AND MG GROUP INDEX
[PERFORMANCE GRAPH]
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY PEER GROUP AND BROAD MARKET
<TABLE>
<CAPTION>
------------FISCAL YEAR ENDING------------
COMPANY/INDEX/MARKET 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
McClain Industries 100.00 83.33 69.70 59.85 42.42 53.03
Metals Fabrication 100.00 115.49 136.78 197.15 145.11 194.25
NASDAQ Market Index 100.00 121.41 141.75 192.67 200.23 323.92
NASDAQ Trucking & Transportation Index 100.00 111.40 115.20 162.38 120.98 140.79
</TABLE>
9
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table describes, as of March 2, 2000, certain information
regarding the beneficial ownership of common stock, of:
- each person known to us to be the beneficial owner of more
than five percent (5%) of the common stock
- each of our directors
- each of our executive officers listed in the Summary
Compensation Table
- all of our executive officers and directors as a group,
based upon information available
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OUTSTANDING
OF BENEFICIAL OWNER OWNERSHIP(1) SHARES(2)
- ------------------- ------------ ---------
<S> <C> <C>
Kenneth D. McClain 1,415,474(3) 30.72%
6200 Elmridge Road
Sterling Heights, MI 48310
Robert W. McClain 996,094(4) 21.62%
6200 Elmridge Road
Sterling Heights, MI 48310
June McClain 337,178 7.32%
6200 Elmridge Road
Sterling Heights, MI 48310
Robert J. Gordon, Trustee(5) 894,833 19.4%
One Woodward Ave., Ste. 2400
Detroit, MI 48226
Lisa McClain Pfeil 305,098(6) 6.62%
6200 Elmridge Road
Sterling Heights, MI 48310
Raymond Elliott 23,499 0.51%
290 Town Center
P.O. Box 890
Troy, Michigan 48084
Walter Kirchberger 8,725 0.19%
2301 West Big Beaver Rd., Suite 800
Troy, Michigan 48084
Carl Jaworski 119,491 2.59%
6200 Elmridge Road
Sterling Heights, MI 48310
Mark S. Mikelait 17,332 0.38%
500 Sherman Street
Galion, OH 44833
</TABLE>
10
<PAGE> 14
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OUTSTANDING
OF BENEFICIAL OWNER OWNERSHIP(1) SHARES(2)
- ------------------- ------------ ---------
<S> <C> <C>
All current executive officers and 2,580,615(7) 56.01%
Directors as a group (6 persons)
</TABLE>
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any shares that such person has a right to acquire within
60 days.
(2) Based on 4,607,577 shares of common stock issued and outstanding as of
March 2, 2000. In addition, for purposes of computing the percentage of
outstanding shares held by each person or group of persons named above,
any security that such person or persons has or have the right to
acquire within 60 days is also deemed to be outstanding, but is not
deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.
(3) Includes 2,430 shares of common stock owned by Kenneth D. McClain's
wife. Mr. McClain disclaims beneficial ownership of these shares.
(4) Includes 337,178 shares of common stock owned by Robert W. McClain's
wife. Mr. McClain disclaims beneficial ownership of these shares.
(5) These shares are held in 18 trusts of which Mr. Gordon is the trustee.
The beneficiaries of these trusts are the children, grandchildren and
other relatives of Messrs. Kenneth D. McClain and Robert W. McClain.
(6) All of the shares beneficially owned by Mrs. Pfeil are held of record
in irrevocable trusts for her benefit. Mrs. Pfeil is the daughter of
Kenneth D. McClain.
(7) Includes 32,331 shares which executive officers and directors have the
right to acquire pursuant to stock options exercisable within 60 days.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We lease one of our facilities from the siblings of Messrs. Kenneth and
Robert McClain. We believe that the terms and conditions of this lease are
comparable to those available from an unrelated party with respect to similar
facilities.
We had sales of approximately $231,000 in the 1998-99 fiscal year to
McClain Leasing Corporation, an entity controlled by certain of our officers and
directors.
The Hartland Insurance Group, Inc. provided insurance to us during the
1998-99 fiscal year. Hartland Insurance Group sold us insurance with premiums
aggregating approximately $1.0 million during the 1998-99 fiscal year, for which
Mr. Elliot received fees and commissions in the approximate amount of $117,500.
See "Compensation Committee Interlocks and Insider Participation".
11
<PAGE> 15
GENERAL INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS
The Board selected Rehmann Robson P.C. as our independent public
accountants for the 1998-99 fiscal year. Representatives of Rehmann Robson P.C.
are expected to be present at the Annual Meeting, and will have the opportunity
to make a statement if they wish to do so and to respond to any questions you
may have. We expect that Rehmann Robson P.C. will also serve as our independent
public accountants during the fiscal year ending September 30, 2000.
SHAREHOLDER PROPOSALS
If you wish to submit a shareholder proposal to be included in the
proxy materials for the 2001 Annual Meeting of Shareholders, you must comply
with the federal securities laws. In addition, you must submit your proposal to
us at our offices at 6200 Elmridge Road, Sterling Heights, Michigan 48310, not
later than December 1, 2000. Shareholder proposals should be addressed to our
Secretary.
OTHER MATTERS
We have mailed our 1999 Annual Report to you with this Proxy Statement,
or it has been mailed to you previously.
We do not know of any matters that will be presented for consideration
at the Annual Meeting other than those stated in this Notice of Annual Meeting
and Proxy Statement. However, if any other matters do properly come before the
Annual Meeting, the person or persons named in the enclosed proxy will vote your
proxy in accordance with their best judgment regarding such matters, including
the election of a director other than a nominee listed in this Proxy Statement
(should a nominee be unavailable to serve) and other matters incident to the
conduct of the Annual Meeting.
INSTRUCTIONS
If you will not be attending the Annual Meeting, please date, sign and
return the enclosed proxy in the enclosed postage-paid envelope. So that quorum
at the Annual Meeting may be assured, it is important that you promptly execute
and return the proxy to us. If you have any questions, please call Carl
Jaworski at (810) 264-3611.
By Order of the Board of Directors
Carl Jaworski
Secretary
Dated: March 31, 2000
12
<PAGE> 16
REVOCABLE PROXY
MCCLAIN INDUSTRIES, INC.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 2000
The giving of this proxy does not affect the right of the undersigned
shareholder to vote in person should the undersigned shareholder attend the
Annual Meeting. This Proxy may be revoked at anytime.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE WITH RESPECT TO
THE NOMINEES, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED.
1. ELECTION OF DIRECTORS FOR WITHHELD FOR ALL EXCEPT
Nominees are: [ ] [ ] [ ]
KENNETH D. MCCLAIN ROBERT W. MCCLAIN
WALTER J. KIRCHBERGER RAYMOND ELLIOTT
INSTRUCTION: TO VOTE FOR ALL OF THE NOMINEES, PUT AN X IN THE BOX MARKED "FOR".
TO WITHHOLD YOUR VOTE FOR ALL OF THE NOMINEES, PUT AN X IN THE BOX MARKED
"WITHHELD". TO VOTE FOR SOME BUT NOT ALL OF THE NOMINEES, PUT AN X IN THE BOX
MARKED "FOR ALL EXCEPT" AND LIST ON THE LINE BELOW ONLY THOSE NOMINEES FOR WHOM
YOUR VOTE IS WITHHELD.
- -------------------------------------------------------------------------------
2. OTHER BUSINESS
The appointed proxies are authorized to vote upon all matters incidental to the
conduct of the Annual Meeting and such other business as may properly come
before the Annual Meeting in accordance with their best judgement.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, personal representative, trustee or in some other
representative capacity, please sign name and give full title. 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.
Please be sure to sign and date this Proxy in the box below.
--------------------
Date
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Stockholder sign above Co-holder (if any) sign above
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
MCCLAIN INDUSTRIES, INC.
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The shareholder appoints KENNETH D. MCCLAIN, ROBERT W. MCCLAIN, RAYMOND
ELLIOTT and WALTER J. KIRCHBERGER, or any one of them, as attorneys and proxies
of the shareholder, with full power of substitution, to vote on behalf of the
shareholder and in his or her name and stead, all shares of the common stock of
McClain Industries, Inc. which the shareholder would be entitled to vote if
personally present at the Company's Annual Meeting of Shareholders to be held
at the Sterling Inn, Concord Room, 34911 Van Dyke Road, Sterling Heights,
Michigan, on Friday, May 5, 2000, and at any adjournments.
The shareholder acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement dated March 29, 2000.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE
