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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.142-11(c) or
Section 240.14a-12
Excel Industries, Inc.
(Name of Registrant as Specified In Its Charter)
Excel Industries, Inc.
(Name of Person(s) Filing proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
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:[FN]1
__________________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________________
<FN1> Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] 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 of Schedule and the
date of its filing.
1) Amount Previously Paid:
_________________________________________________________________
2) For, Schedule or Registration Statement No.:
_________________________________________________________________
3) Filing party:
_________________________________________________________________
4) Date filed:
_________________________________________________________________
<PAGE>
NOTICE AND PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
EXCEL INDUSTRIES, INC.
Notice of Annual Meeting
To the Shareholders of Excel Industries, Inc.:
You are hereby notified that the Annual Meeting of
Shareholders of Excel Industries, Inc., an Indiana corporation,
will be held at the Weston Hotel & Convention Center,
2725 Cassopolis Street, Elkhart, Indiana, on Thursday, May 5, 1994
at 10:00 a.m. (Eastern Standard Time) for the following purposes:
1. To elect six (6) directors for a term of one year.
2. To consider and act upon a proposal to approve the Excel
Industries, Inc. 1994 Stock Compensation Plan.
3. To ratify the appointment of Price Waterhouse as
independent auditors for the current fiscal year ending
December 31, 1994.
4. To transact such other business as may properly come
before the meeting.
The shareholders of record at the close of business on March
11, 1994, are entitled to notice of and to vote at the meeting in
person. PLEASE MARK, SIGN AND DATE THE ACCOMPANYING PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. If you
attend the meeting, you may, if you so desire, withdraw your proxy
and vote in person.
Joseph A. Robinson
Secretary
Elkhart, Indiana
March 28, 1994
<PAGE>
1994 PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
All shareholders of record on March 11, 1994, are entitled to
vote at the Annual Meeting to be held at the Weston Hotel &
Convention Center, 2725 Cassopolis Street, Elkhart, Indiana, on the
fifth day of May, 1994 at 10:00 a.m. (Eastern Standard Time). All
shareholders unable to attend such meeting who wish to vote their
shares upon the business to be transacted at such meeting are
requested to mark, sign and date the accompanying form of proxy and
return it in the addressed, postage-paid envelope enclosed for your
convenience. The proxy is revocable by you at any time before it
is voted, and the signing of such proxy will not affect your right
to vote in person if you attend the meeting. All proxies returned,
and not so revoked, will be voted in accordance with their terms.
As stated in the Notice, the matters to be considered at the
meeting are the election of six directors, the approval of the
Excel Industries, Inc. 1994 Stock Compensation Plan, ratification
of the appointment of independent auditors, and the transaction of
such other business as may properly come before the meeting.
The solicitation of the accompanying form of proxy is made on
behalf of the Board of Directors of the Corporation. The expense
of the solicitation of the proxies for this meeting will be borne
by the Corporation. The solicitation will be made through the use
of the mails and by personal solicitation through regular employees
of the Corporation who will not be additionally compensated
therefor.
The mailing address of the principal executive offices of the
Corporation is Excel Industries, Inc., 1120 North Main Street, P.O.
Box 3118, Elkhart, Indiana 46515-3118. This Proxy Statement and
the enclosed form of proxy were first sent or given to shareholders
on approximately March 28, 1994.
OUTSTANDING SHARES
As of February 15, 1994, the Corporation had 10,577,936 common
shares, without par value, issued and outstanding. Each
shareholder is entitled to one vote upon any proposal submitted to
the meeting for each share standing of record in his name on
March 11, 1994.
PRINCIPAL SHAREHOLDERS
Set forth below is certain information concerning the only
persons known to the Corporation, as of February 15, 1994, to
beneficially own 5% or more of the Corporation's outstanding common
shares. The percentages set forth for the Convertible Note Holders
in the column entitled "Percent of Class" are calculated by
dividing the number of common shares listed for each Convertible
Note Holder in the "Amount and Nature of Beneficial Ownership"
column by the sum of (i) 10,577, 936 common shares outstanding on
February 15, 1994, and (ii) the number of common shares which the
particular Convertible Note Holder has a right to acquire. The
percentages therefore represent the maximum percentage of
outstanding common shares that a particular Convertible Note Holder
would own if only that Convertible Note Holder, and no other, had
converted the convertible notes held by it. The percentages set
forth for the Common Shareholders are calculated assuming no
conversion of any of the Convertible Notes. Accordingly, all of
the percentages in this column, including in particular the
percentages applicable to shareholders which do not hold any
convertible notes, are higher than they would be if some or all of
the outstanding convertible notes of the Corporation had been
converted.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
<S> <C>
COMMON SHAREHOLDERS
Ford Motor Company 1,509,927 shares<FN1,FN3> 14.3%
The American Road
P.O. Box 1899
Dearborn, MI 48121
Ford Motor Company Fund 1,047,201 shares<FN2,FN3> 9.9%
The American Road
P.O. Box 1899
Dearborn, MI 48121
J.P. Morgan & Co.,
Incorporated 1,210,000 shares<FN4> 11.4%
23 Wall Street
New York, NY 10015
NBD Bancorp, Inc. 626,806 shares<FN5> 5.9%
611 Woodward Avenue
Detroit, MI 48226
CONVERTIBLE NOTE HOLDERS
CIGNA Corporation 821,535 shares<FN6> 7.2%
One Liberty Place
Philadelphia, PA 19101
CIGNA Mezzanine Partners
II, L.P. 693,308 shares<FN7> 6.2%
900 Cottage Grove Road
Bloomfield, CT 06002
Textron Investment
Management Company, Inc. 756,773 shares<FN8> 6.7%
40 Westminster Street
Providence, RI 02903
<FN>
<FN1>Ford Motor Company ("Ford") has sole voting and investment
power over the shares listed.
<FN2>In a Schedule 13D dated January 20, 1994 and delivered to
the Company, the Ford Motor Company Fund (the "Ford Fund")
disclosed that it had acquired beneficial ownership of 1,047,201
common shares. The Ford Fund has sole voting and investment power
over such shares.
<FN3>On March 24, 1994, Ford and the Ford Fund sold all of
their common shares of the Company. Because such sale was
consummated after the record date for the Annual Meeting, under
Indiana law Ford and the Ford Fund have the right to vote such
shares at the Annual Meeting.
<FN4>In a Schedule 13G dated December 31, 1993 and filed with
the Securities and Exchange Commission (the "Commission"), J.P.
Morgan & Co., Incorporated ("Morgan") disclosed that it and its
subsidiaries had acquired beneficial ownership of 1,210,000 common
shares. Morgan has the sole power to dispose of all such shares
and sole power to vote 881,400 of such shares.
<FN5>In a Schedule 13G dated February 11, 1994 and delivered to
the Company, NBD Bancorp, Inc. ("NBD") disclosed that it had
acquired beneficial ownership of 626,806 common shares. NBD has
sole voting power with respect to 610,656 of such shares, sole
investment power with respect to 601,806 of such shares, and shared
investment power with respect to 25,000 of such shares.
<FN6>Represents (i) 820,238 common shares which may be acquired
on conversion of the convertible notes of the Corporation owned by
Connecticut General Life Insurance Company ("CGLIC") (703,061
shares) and Life Insurance Company of North America (117,177
shares), two subsidiaries of CIGNA Corporation (collectively
"CIGNA") and (ii) 1,297 common shares indirectly owned by CGLIC.
CIGNA will have sole voting and investment power over any shares
acquired upon conversion of such convertible notes. CIGNA
disclaims beneficial ownership of the shares indirectly owned by
CGLIC, but may be deemed to have shared voting and investment power
with respect to such shares.
<FN7>Represents common shares which may be acquired on
conversion of convertible notes owned by CIGNA Mezzanine Partners
II, L.P. ("CMP"). CIGNA is the ultimate parent of the general
partner of CMP. CMP will have sole voting and investment power
over any shares acquired upon conversion of such convertible notes.
<FN8>Represents common shares which may be acquired on
conversion of convertible notes owned by The Paul Revere Life
Insurance Company (227,032 shares), The Paul Revere Protective Life
Insurance Company (90,812 shares), Balboa Insurance Company (60,542
shares) and the Textron Collective Inv. Trust Fund B (378,387
shares), all of which are affiliates of Textron, Inc., the parent
company of Textron Investment Management Company, Inc. ("TIMC").
TIMC is an investment adviser and will have sole voting and
investment power over any shares acquired upon conversion of such
convertible notes.
</FN>
</TABLE>
ELECTION OF DIRECTORS
Effective March 25, 1994, the Board of Directors of the
Corporation fixed the number of members of the Board at six (6).
Six persons, all of whom are members of the present Board, are
nominees for election at the Annual Meeting as directors to hold
office until the next Annual Meeting or until their successors have
been elected. If the enclosed proxy is duly executed and received
in time for the meeting and if no contrary specification is made as
provided therein, it is the intention of the persons named therein
to vote the shares represented thereby for those six persons. The
six persons elected will comprise the entire membership of the
Board of Directors of the Corporation. There will not be
cumulative voting for the election of directors. If any nominee
shall be unable to serve, an event which the Board of Directors
does not anticipate, the proxy shall be voted for the person
designated by the Board to replace such nominee.
With respect to each of such nominees, the following
information is furnished:
JAMES J. LOHMAN, 52, has been the Chairman of the Board of
Directors since 1985 and Chief Executive Officer since 1983. He
joined the Company in 1964, was Group Vice president from 1978 to
1981 and was President from 1981 to 1992. He has been a director
of the Company since 1978.
JAMES O. FUTTERKNECHT, JR., 47, joined the Company in 1970,
was Vice President-Corporate Sales from 1976 until 1984, was Vice
President-Automotive Products from 1984 until 1987, was Vice
President-Automotive Sales and Engineering from 1987 to 1990 and
was Executive Vice President from 1990 to 1992. He was elected as
President and Chief Operating Officer and was appointed as a
director in 1992.
JOSEPH A. ROBINSON, 55, joined the Company as Secretary,
Treasurer and Chief Financial Officer in December 1991, and was
appointed as a director in 1992. Prior to that time, he was
employed by The Standard Products Co., a manufacturer of automotive
parts, as Vice President from 1990 to 1991 and as Vice President-
Finance from 1976 to 1990.
DR. JOHN G. KEANE, 63, has been a director since September
1992. He has been Dean and Professor of Strategic Management of
the College of Business Administration of the University of Notre
Dame since 1989. From 1984 to 1989, Dr. Keane was the director of
the United States Census Bureau.
JAMES K. SOMMER, 61, has been a director since 1989. Mr.
Sommer has been a member of the law firm of Sommer & Barnard, PC,
Indianapolis, Indiana, since 1969.
RALPH R. WHITNEY, JR., 59, has been a director since 1983 and
was Chairman of the Board from 1983 to 1985. Mr. Whitney has been
a principal of Hammond, Kennedy, Whitney & Co., a New York, New
York financial intermediary and private investment banking firm,
since 1971. Mr. Whitney is also a director of Adage, Inc., IFR
Systems, Inc., Selas Corporation of America, Baldwin Technologies,
Inc. and Keene Corporation.
COMPENSATION OF DIRECTORS
Directors of the Corporation who are not officers receive
$16,000 per year payable quarterly plus $1,000 per board and $600
per committee meeting attended. In addition, such directors
receive $500 per day while working on special assignments.
Directors who are officers of the Corporation receive no fees for
serving as directors.
BOARD MEETINGS AND COMMITTEES
The Board of Directors met seven times in 1993. The Board has
an audit committee and a compensation committee, but does not have
a nominating committee.
The purpose and functions of the audit committee are to
recommend the engagement or discharge of independent auditors; to
review year-end financial statements prior to issuance; to review
the services from time to time being performed by the independent
auditors, including non-audit services; and to make appropriate
reports and recommendations to the Board of Directors. Messrs.
Whitney, Sommer and Keane are the members of the audit committee.
The audit committee met three times during the year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Whitney and Sommer are members of the compensation
committee. The compensation committee formulates executive
compensation policy for the Company, and determines, subject to
Board review and approval, the compensation of all executive
officers. In addition, if the 1994 Stock Compensation Plan is
adopted, the Committee will be charged with its administration.
The compensation committee met one time in 1993.
The law firm of Sommer & Barnard, PC, of which Mr. Sommer is
a member, serves as legal counsel for the Corporation.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 15, 1994,
information regarding the beneficial ownership of common shares of
the Corporation by each director of the Corporation, each of the
executive officers named in the Summary Compensation Table below,
and by all directors and executive officers as group.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Class
<S> <C>
James J. Lohman 187,369<FN1> 1.8%
James O. Futterknecht, Jr. 33,354 *
Joseph A. Robinson 203 *
John G. Keane 500 *
James K. Sommer 3,501 *
Ralph R. Whitney, Jr. 20,000 *
Louis R. Csokasy 11,718<FN2> *
James E. Crawford 5,872<FN3>
All Executive Officers and
Directors as a Group (eleven
persons) 282,382<FN4> 2.7%
*Less than one percent
<FN>
<FN1>Includes 64,494 shares owned by Mr. Lohman's wife, and
6,000 shares owned by Mr. Lohman's child. Mr. Lohman disclaims
beneficial ownership of shares owned by his wife and child.
<FN2>Includes 2,000 shares owned by Mr. Csokasy's minor child,
as to which Mr. Csokasy disclaims beneficial ownership.
<FN3>Includes 457 shares owned by Mr. Crawford's wife, as to
which Mr. Crawford disclaims beneficial ownership. Also includes
275 shares held for Mr. Crawford's account in the Corporation's
Employee Stock Purchase Plan.
<FN4>Includes shares owned by spouses and minor children,
whether or not beneficial ownership is disclaimed, and 19,250
shares subject to options held by an executive officer.
</FN>
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table shows the compensation for the past three
years of each of the Corporation's five most highly compensated
executive officers, including the Chief Executive Officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Name and Other Annual All Other
Principal Position Year Salary($) Bonus($) Compensation($)<FN>1 Compensation($)<FN2>
<S> <S> <C> <C> <C> <C>
James J. Lohman 1993 328,000 307,500 4,730 5,396
Chairman of the 1992 298,000 205,397 4,581 5,237
Board and CEO 1991 276,000 -0- 3,195 2,543
James O. 1993 270,000 258,125 2,455 5,396
Futterknecht, Jr. 1992 214,000 147,498 1,696 5,237
President and Chief 1991 180,000 -0- 912 2,543
Operating Officer
Joseph A. Robinson<FN3> 1993 160,000 100,000 2,462 5,302
Secretary, Treasurer 1992 135,500 62,033 9,259 -0-
and CFO 1991 11,250 -0- -0- -0-
Louis R. Csokasy 1993 133,000 83,125 2,217 4,440
Vice-President 1992 121,000 55,600 1,293 4,848
Engineering and 1991 112,000 -0- 1,364 1,760
Quality
James E. Crawford 1993 131,000 81,875 2,497 4,380
Vice President - 1992 121,000 55,600 2,718 4,848
Product Development 1991 116,000 -0- 1,940 1,847
and Value Engineering
<FN>
<FN1>Represents reimbursements to the named executive officers
for payment of income taxes.
<FN2>Represents contributions by the Corporation to the
accounts of each of the named executive officers in the
Corporation's deferred compensation and savings plan.
<FN3>Mr. Robinson joined the Corporation in December 1991.
</FN>
</TABLE>
Pension Plan
Set forth below is a table showing the estimated annual
benefits payable upon normal retirement under the Corporation's
pension plan (the "Pension Plan") for various compensation and
years-of-service classifications, assuming the current maximum FICA
wage base of $60,600 remains unchanged.
<TABLE>
<CAPTION>
Final Avg. Credited Years of Service
Earnings
15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 8,373 $11,164 $13,955 $16,746 $19,537
$100,000 $18,373 $25,164 $31,455 $37,746 $44,037
$150,000<FN1> $29,373 $39,164 $48,955 $58,746 $68,537
<FN>
<FN1> Effective January 1, 1994, this is the maximum amount of final
average annual earnings upon which benefits may be computed
under the Employee Retirement Income Security Act of 1974, as
amended by the Omnibus Budget Reconciliation Act of 1993. As
of December 31, 1993, Messrs. Lohman and Futterknecht had
accrued benefits in excess of those permitted to be accrued
under current law. On retirement, Messrs. Lohman and
Futterknecht will be entitled to receive benefits equal to the
greater of (i) the benefits they had accrued as of December
31, 1993, or (ii) benefits calculated using $150,000 as the
maximum final annual average earnings and their credited years
of service at retirement.
</FN>
</TABLE>
Benefits under the Pension Plan are, subject to certain
limitations, equal to the number of years of credited service times
the sum of .75% of final average earnings and .65% of final average
earnings in excess of the "breakpoint." The term "breakpoint" is
defined as an annual amount equal to 36% of the maximum FICA wage
base in effect for the preceding year. Final average earnings are
generally defined as a participant's average annual earnings for
the five consecutive calendar years of highest earnings during the
15 years prior to the earlier of retirement or termination of
employment. Such earnings include the salaries and bonuses
reported in the Summary Compensation Table. The benefits are not
subject to any deduction for Social Security or other offset
amounts. The credited years of service for the individuals listed
in the Summary Compensation Table are as follows: Mr. Lohman - 19;
Mr. Futterknecht - 23; Mr. Robinson - 1; Mr. Csokasy - 21; and
Mr. Crawford - 15.
DEFERRED COMPENSATION PLANS
To supplement the benefits under the Pension Plan for its
senior executive officers, the Corporation has adopted its 1989
Deferred Compensation Plan (as amended, the "1989 Plan"). Messrs.
Lohman, Futterknecht and Crawford are participants in the 1989
Plan.
A participant in the 1989 Plan retiring at age 62 or later
will receive a benefit of monthly payments for life, commencing at
retirement, with a minimum of 120 monthly payments assured. Each
monthly payment will be equal to one-twelfth of 75% (85% for all
persons who were participants prior to December 1, 1993) of the
participant's three-year final average base salary (not including
bonuses), offset by (i) the participant's Pension Plan benefits,
adjusted for commencement at age 62, payable for life, and (ii) 50%
of the participant's primary Social Security benefit payable at age
62 (whether or not commencement at age 62 is actually elected) and
(iii) with respect to individuals who first become participants on
or after December 1, 1993, by the amount of any benefits payable
from any other employer's qualified defined benefit plan or any
other plan supplementing such a plan. A participant is entitled to
elect early retirement under the 1989 Plan. Benefits for early
retirees are calculated in the same manner as for retirement at age
62, except (i) the percentage of the three-year final average base
salary is reduced by one-quarter of one percent for each month
retirement occurs prior to age 62, (ii) the offset for pension plan
benefits is adjusted downward to the amount payable to the retiree
in the event immediate commencement (payable for life) is elected
(whether or not actually elected), and (iii) there is no offset for
Social Security until the participant reaches age 62. Payments to
early retirees commence on the later of the date of retirement or
the date the participant attains age 55. If a participant dies
before retirement, his or her designated beneficiary is entitled to
120 monthly payments determined as if the participant elected
retirement on the day before death, except that payment of benefits
commences immediately regardless of the participant's age at death.
Effective October 1, 1991, the Corporation entered into a
Supplemental Deferred Compensation Agreement (the "Supplemental
Plan") with James J. Lohman. The Supplemental Plan augments the
benefits to be received under the 1989 Plan in certain
circumstances. Under the Supplemental Plan, Mr. Lohman is entitled
to receive, commencing on the date he begins receiving benefits
under the 1989 Plan and continuing until his benefits under the
1989 Plan cease, an amount equal to the reduction in his benefits
under the 1989 Plan resulting from his retirement before attaining
age 62. The Supplemental Plan also provides for payment of
benefits to Mr. Lohman, prior to attaining age 55, if he retires by
reason of illness, from the date of his retirement until he begins
receiving benefits under the 1989 plan (which will occur at the
earlier of his attaining age 55 or his death). The amount of the
benefits to be paid is equal to the amount of benefits which Mr.
Lohman would be entitled to receive under the 1989 Plan upon
retirement at age 55 (based on his average base salary at the time
of retirement) reduced by one-quarter of one percent for each month
retirement occurs prior to age 55. "Illness" means a physical
condition verified in writing by a physician and determined by Mr.
Lohman, in good faith, to render him unable to perform his duties
in a manner consistent with his past services to the Corporation.
The Corporation has established the Excel Industries, Inc.
Executive Compensation Trust (the "Compensation Trust") as a
depository arrangement whereby the Corporation sets aside cash and
other assets to be accumulated and distributed to participants in
the 1989 Plan and the Supplemental Plan as benefits thereunder
become payable. The Compensation Trust is not intended to and does
not fund the 1989 Plan and the Supplemental Plan. The assets held
in the Compensation Trust are at all times subject to the claims of
the Corporation's creditors. The Compensation Trust may be revoked
by the Corporation's Board of Directors at any time prior to a
"Change in Control" (as defined below) of the Corporation. After
a Change in Control or a failure of the Corporation, after 30 days
written notice, to pay benefits under the 1989 Plan or the
Supplemental Plan, the Compensation Trust becomes irrevocable and
the Corporation generally may not recover any part of the corpus or
income of the Compensation Trust for any purpose other than
providing payments to participants in the 1989 Plan and the
Supplemental Plan, and administering the Compensation Trust.
A "Change in Control" occurs under the Compensation Trust
agreement upon the happening of any of the following: (i) the
consummation of a merger or consolidation of the Corporation with
any other entity resulting in holders of the Corporation's voting
capital stock receiving less than fifty percent of the voting
capital stock of the surviving entity; (ii) the sale, lease,
exchange or transfer of all or substantially all of the
Corporation's assets; (iii) the approval by the Corporation's
shareholders of any plan or proposal for the liquidation or
dissolution of the Corporation; (iv) the acquisition by any person,
other than a Trustee of any employee benefit plan of the
Corporation, after the execution of the Compensation Trust
agreement of thirty-five percent or more of the outstanding voting
power of the Corporation's securities; or (v) a change in a
majority of the directors of the Corporation in any period of less
than two years, not counting persons elected or nominated by a vote
of two-thirds of the directors in office at the beginning of such
period or whose election or nomination was previously so approved.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the
Company (the "Committee") formulates executive compensation policy
for the Company and determines, subject to Board review and
approval, the compensation of all executive officers of the
Company, including the Chief Executive Officer and the other
executive officers named above. The Committee is comprised of
nonemployee directors.
BROAD POLICY CONSIDERATIONS. Before making any determinations
as to 1993 executive compensation, the Committee concluded that the
following broad compensation policies should be followed:
1. Executive compensation must be competitive. This policy
was considered to be critical in order for the Company to attract
and retain qualified management personnel.
2. Executive compensation should be based upon Company
performance with emphasis on shareholder return.
3. The setting of executive compensation needs to be fair
and needs to take into account the business reality that there are
significant factors affecting Company performance which are outside
of management's control.
4. Executive compensation ought to be incentive based.
There should be opportunities for substantial bonuses based upon
Company performance.
COMPENSATION PROGRAMS. The Committee recognized that such
policy considerations were consistent with the policies the Board
as a whole had applied in setting then existent compensation as
evidenced, in part, by the Company's existing Incentive
Compensation Plan (the "Incentive Plan"). The Committee concluded
that the Incentive Plan should be continued as a complement to base
salaries. The Committee also carried forward the Company's
historic practice of primarily focusing on cash compensation in the
forms of salary and bonuses rather than opportunities for
additional equity participation such as stock options, a carry over
from the equity participation of management in the acquisition
company which was merged into the Company in 1983. During the
course of the year, the Committee recognized that management
changes and additions may have obsoleted that restrictive focus,
and in December 1993, recommended adoption of the 1994 Stock
Compensation Plan. However, for 1993, the compensation programs
remained limited to cash compensation in the form of salary,
bonuses and deferred compensation.
BASE SALARY. In determining 1993 base salaries for
executives, emphasis was placed on a comparison of each
individual's salary to the salaries received by individuals in
similar positions in other companies of comparable size and line of
business based upon available salary survey information and other
published materials. The Committee also considered the
recommendations of the Chief Executive Officer as to salaries other
than his own. Individual performances as well as the Company's
performance compared to financial objectives also were considered.
INCENTIVE COMPENSATION. Bonus opportunities as a percentage
of gross salary were established for four levels of employees. The
Committee determined that the bonus formula under the existing
Incentive Plan should be continued. Under the Incentive Plan, a
target after-tax return on shareholders' equity was established as
the return required in order for employees to achieve 100 percent
of their respective bonus opportunities. In considering the
reasonableness of such targeted return on shareholders' equity,
available information regarding the median return on equity
achieved by Fortune 500 companies in the motor vehicle and parts
business during the years 1988 through 1991 had been considered by
the Board. The Board also took into account the average return on
equity which had been achieved over a five-year period by a leading
competitor. In determining not to revise the targeted return on
equity in the Incentive Plan, the Committee reviewed a three year
summary reflecting the return on average shareholder equity for
eight companies in addition to the Company. In the event a return
on shareholders' equity in excess of the targeted return is
achieved, higher bonuses, up to a maximum of 150 percent of the
bonus opportunities can be earned. Thus, consistent with the
policy of emphasizing incentives/rewards based upon performance,
relatively high potential bonuses, taken as a percentage of total
compensation, can be and were awarded to employees covered by the
Plan.
DEFERRED COMPENSATION. The policy which the Board has applied
with regard to deferred compensation is to have a competitive plan
designed to encourage key employees to remain with the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION. The compensation of the
Chief Executive Officer essentially reflects consideration and
application of the same policies and factors described above. In
particular, as to Mr. Lohman, consideration was given to the
leadership skills consistently demonstrated by him; the responsi-
bilities imposed on him; and a comparison of his compensation to
the compensation paid to chief executive officers of similarly
situated companies. Mr. Lohman's bonus was based upon the after
tax return on equity of the Company during 1993 as compared to the
target return set forth in the Incentive Plan.
OTHER. The Committee believes that, other than tax-favored
compensation such as incentive stock options, executive
compensation should be structured and limited to the extent
necessary to preserve the tax deductibility of the compensation
paid by the Company (except in extraordinary or unforeseen
circumstances). The 1994 Stock Compensation Plan has been
structured to meet that goal with respect to any options granted
under such plan.
MEMBERS OF THE COMPENSATION COMMITTEE:
James K. Sommer
Ralph R. Whitney, Jr.
Performance Graph
The following graph compares the cumulative total shareholder
return on the Corporation's common shares, with the cumulative
total return of companies on the Standard & Poor's 500 Stock Index
and the cumulative total return on the common stock of two peer
groups of automotive parts manufacturers. Peer Group No. 1,
information for which appeared in the performance graph in the
Company's proxy statement for the 1993 annual meeting of
shareholders, includes the following companies: Allen Group,
Amcast Industrial Corporation, Automotive Industries, Inc.,
Donnelly Corporation, Douglas & Lomason Company, Modine
Manufacturing Company, and The Standard Products Co. Peer Group
No. 2 includes the companies included in Peer Group No. 1 and the
following additional companies: Cooper Tire & Rubber, Dana Corp.,
Echlin, Inc., Genuine Parts, Goodyear Tire & Rubber, Johnson
Controls Corporation, Masco Corp., Snap-on Tools, and Timken Co.
The Company believes that Peer Group No. 2, because of its broader
base, is a better comparison of performance in the automotive parts
industry and is less likely to be distorted by the extraordinary
performance of one or two companies.
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
Excel $100.00 $ 85.41 $ 88.75 $ 69.31 $161.06 $175.76
S&P500 100.00 131.69 127.60 166.47 179.15 197.21
Peer
Group #1 100.00 92.03 78.38 132.93 182.12 257.36
Peer
Group #2 100.00 98.72 78.61 120.66 154.35 189.67
ASSUMES $100 INVESTED ON DECEMBER 31, 1988
TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
NOTE: TOTAL RETURNS BASED ON MARKET CAPITALIZATION
</TABLE>
APPROVAL OF 1994 STOCK COMPENSATION PLAN
The Board of Directors of the company has adopted, subject to
shareholder approval, a new 1994 Stock Compensation Plan (the "Plan").
The purpose of the Plan is to enhance the ability of the Company to
attract and retain qualified personnel. The Board of Directors believes
that as a result of the incentive and equity interest created and
encouraged by the Plan, participants in the Plan will have an increased
stake in the prosperity of the Company and an increased identity of
interest with the Company's shareholders, and will be encouraged thereby
to exert maximum effort towards the successful operation of the Company.
The full text of the Plan is set forth in the Appendix to this
Proxy Statement. The major provisions of the Plan include the
following:
(i) A maximum of 500,000 common shares are reserved for issuance
under the Plan, subject to adjustment in the event of stock
dividends, stock splits or similar changes in the outstanding
common shares. The number of shares reserved for issuance under
the Plan is equal to approximately 4.7% of the number of common
shares outstanding as of February 15, 1994.
(ii) The participants in the Plan (the "Participants") will be
selected by the compensation committee from among the officers and
other key employees of the Company who are full-time employees of
the Company or one of its subsidiaries. In selecting Participants,
the compensation committee will take into account the duties of the
employee and the present and potential contributions of the
employee to the success of the Company. Approximately 90 persons
are eligible to become Participants, including the executive
officers named in the Summary Compensation Table above. In
addition, non-employee directors will be granted options as
described in paragraph (ix) below.
(iii) The Plan will be administered by the compensation committee
of the Board of Directors. The compensation committee has complete
authority to prescribe rules and regulations for the administration
of the Plan. All decisions, interpretations, determinations or
actions taken by the compensation committee are final and binding
upon the employees of the Company.
(iv) The Plan will terminate on December 16, 2003, unless sooner
terminated by the Board of Directors. Options or performance units
outstanding on the date of termination of the Plan will remain in
effect until exercised or expired in accordance with their
respective terms.
(v) The maximum number of common shares for which options may be
granted to any individual Participant during the term of the Plan
is one hundred thousand (100,000).
(vi) The compensation committee has complete discretion to select
Participants to receive options under the Plan, to determine the
number of common shares subject to options granted to a Participant
under the Plan, the exercise price of such options, all other terms
and conditions of such options, and whether such options will be
incentive stock options ("ISOs") within the meaning of Section 422
of the Internal Revenue Code, as amended (the "Code"). The terms
of ISOs are subject to certain restrictions described in paragraph
(vii) below.
(vii) The exercise price of ISOs may not be less than one hundred
percent (100%) of the fair market value of common shares on the
date of grant. The aggregate fair market value of the common
shares (as of the time of grant) for which ISOs are exercisable by
a Participant for the first time during any calendar year under the
Plan or any other plan of the Company or its subsidiaries may not
exceed One Hundred Thousand Dollars ($100,000.00). An ISO granted
under the Plan may not be exercised after termination of the
employment of the Participant by the Company or a subsidiary of the
Company, except in the event of retirement, disability or death.
ISOs may be exercised up to three (3) months after termination of
employment by reason of retirement, partial disability or death and
up to twelve (12) months after termination of employment by reason
of permanent and total disability. ISOs are not transferable
during the lifetime of the Participant.
(viii) No option granted to a Participant under the Plan may be
exercised prior to one year from the date it is granted. Options
will be exercisable for ten (10) years from the date of grant, or
such shorter period as the terms of the option provide.
(ix) Non-employee directors will be granted options ("Director
Options") to purchase one thousand (1,000) common shares upon first
being elected to the Board of Directors, and will be granted
Director Options to purchase an additional one thousand (1,000)
common shares on the date of each subsequent annual meeting of
shareholders at which the non-employee director is re-elected,
commencing with the Annual Meeting. The exercise price of
Director Options will be the fair market value of the common shares
on the date of grant. Each Director Option expires at the earlier
of one year after termination of the director's Board membership or
ten years after the date of grant.
(x) The compensation committee has complete discretion to select
Participants to be granted performance units under the Plan.
Performance units may be granted either in the form of cash units,
in share units which are equal in value to one common share, or a
combination of cash units and share units. The compensation
committee will establish the performance goals to be attained in
respect of performance units, the various percentages of
performance unit value to be distributed on attainment, in whole or
in part, of the performance goals and such other performance unit
terms, conditions and restrictions as the compensation committee
deems appropriate. The committee will determine whether payment
with respect to performance units will be made in the form of cash,
common shares, or a combination thereof.
(xi) The exercise price of options granted under the Plan may be
paid in cash, in common shares valued at fair market value on the
last trading day preceding the date of exercise, or in a
combination of cash and common shares.
(xii) A Participant may satisfy withholding tax requirements by
electing, subject to the approval of the compensation committee, to
have the Company withhold common shares having a value equal to the
amount required to be held.
FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY AND OPTIONEES
Incentive Stock Options. ISOs granted under the Plan will, in
general, be subject to the following federal income tax treatment:
(i) The grant of an ISO will give rise to no federal income tax
consequences to either the Company or the Participant.
(ii) A Participant's exercise of an ISO will result in no federal
income tax consequences to the Company.
(iii) A Participant's exercise of an ISO will not result in
ordinary federal taxable income to the Participant, but may result
in the imposition of or an increase in alternative minimum tax.
If common shares acquired upon exercise of an ISO are not disposed
of within the same taxable year of the ISO exercise, the excess of
the fair market value of the common shares at the time the ISO is
exercised over the option price is included in the Participant's
computation of alternative minimum taxable income.
(iv) If common shares acquired upon the exercise of an ISO are
disposed of within two years of the date of the option grant, or
within one year of the date of the option exercise, the Participant
will realize ordinary federal taxable income at the time of the
disposition to the extent that the fair market value of the common
shares at the time of exercise exceeded the option price, but not
in an amount greater than the excess, if any, of the amount
realized on the disposition over the option price. Short-term or
long-term capital gain will be realized by the Participant at the
time of such a disposition to the extent that the amount of
proceeds from the sale exceeds the fair market value at the time of
the exercise of the ISO. Short-term or long-term capital loss will
be realized by the Participant at the time of such a disposition to
the extent that the option price exceeds the amount of proceeds
from the sale. If a disposition is made as described in this
section, the Company will be entitled to a federal income tax
deduction in the taxable year in which the disposition is made in
an amount equal to the amount of ordinary federal taxable income
realized by the Participant.
(v) If common shares acquired upon the exercise of an ISO are
disposed of after the later of two years from the date of the
option grant or one year from the date of the option exercise, the
Participant will realize long-term capital gain or loss in an
amount equal to the difference between the amount realized by the
participant on the disposition and the Participant's federal income
tax basis in the common shares, usually the option price. In such
event, the Company will not be entitled to any federal income tax
deduction with respect to the ISO.
Non-Statutory Options. Options (including Director Options)
granted under the Plan which do not qualify as ISOs ("Non-Statutory
Options") will, in general, be subject to the following federal income
tax treatment:
(i) The grant of a Non-Statutory Option will give rise to no
federal income tax consequences to either the Company or the
Participant.
(ii) The exercise of a Non-Statutory Option will generally result
in ordinary federal taxable income to the Participant in an amount
equal to the excess of the fair market value of the shares at the
time of exercise over the option price. A deduction from federal
taxable income will be allowed to the Company in an amount equal to
the amount of ordinary income recognized by the Participant,
provided the Company deducts and withholds all appropriate federal
withholding tax.
(iii) Upon a subsequent disposition of shares, a Participant will
recognize a short-term or long-term capital gain (or loss) equal to
the difference between the amount received and the tax basis of the
common shares, usually fair market value at the time of exercise.
The federal income tax consequences described in this section are based
on laws and regulations in effect on February 15, 1994, and future
changes in those laws and regulations may affect the tax consequences
described herein. No discussion of state income tax treatment has been
included.
MARKET PRICE OF COMMON SHARES
On March 22, 1994, the last reported sale price for the common
shares on the American Stock Exchange was $19.50.
OPTIONS TO BE GRANTED
It is not possible to determine the amount of options or
performance units to be granted under the Plan to any current executive
officer, director or employee, or to current executive officers or
current directors as a group. No options were granted in 1993 under the
Company's 1984 Incentive Stock Option Plan.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of shareholders holding a majority of the
common shares present or represented at the Annual Meeting is required
to approve the 1994 Stock Compensation Plan. Abstentions will therefore
have the effect of negative votes.
The Board of Directors recommends a vote FOR approval of the 1994
Stock Compensation Plan. If the enclosed proxy is duly executed and
received in time for the meeting and if no contrary specification is
made as provided therein, it is the intention of the persons named
therein to vote the shares represented thereby for approval of the Plan.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Corporation has appointed Price
Waterhouse as independent auditors to examine the financial statements
of the Corporation and its subsidiaries for the current fiscal year
ending December 31, 1994. Although there is no requirement that such
appointment be submitted to a vote of the shareholders, the Board of
Directors feels that the shareholders should be afforded the opportunity
to ratify the appointment. If the shareholders do not ratify the
appointment, the Board of Directors, in its discretion and without
further vote of the shareholders, will select another firm to serve as
independent auditors for the current fiscal year.
Price Waterhouse has served as independent auditors for the
Corporation and its subsidiaries continuously since 1955 and is
considered by the Board of Directors to be well qualified. The Board of
Directors therefore recommends a vote FOR ratification of the
appointment of Price Waterhouse, and if the enclosed proxy is duly
executed and received in time for the meeting and if no contrary
specification is made as provided therein, it is the intention of the
persons named therein to vote the shares represented thereby for
ratification of such appointment.
A representative of Price Waterhouse is expected to be present at
the shareholder meeting and will have the opportunity to make a
statement if he desires to do so. Price Waterhouse has indicated that
it presently does not intend to make a statement but that its
representative will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
November 28, 1994 is the date by which shareholder proposals
intended to be presented at the 1995 annual meeting must be received by
the Corporation to be considered for inclusion in the proxy materials
relating to that meeting.
OTHER MATTERS
The Annual Meeting is called for the purposes set forth in the
"Notice of Annual Meeting." The Board of Directors has not been
informed of any matters other than those stated in the Notice that are
to be presented at the meeting. If any other business is brought before
the meeting, the persons named in the attached proxy will vote according
to their discretion.
BY ORDER OF THE BOARD OF DIRECTORS.
______________________________
Joseph A. Robinson
Secretary
IMPORTANT:
Please immediately mark, sign, date and return your Proxy in the
enclosed stamped, addressed envelope. If you attend the meeting and if
you so desire, you may withdraw your Proxy and vote in person. THANK
YOU FOR ACTING PROMPTLY.
<PAGE>
APPENDIX
EXCEL INDUSTRIES, INC.
1994 STOCK COMPENSATION PLAN
ARTICLE I
GENERAL
Section 1.1. Purpose. The purpose of the 1994 Stock Compensation
Plan (the "Plan") of Excel Industries, Inc. (the "Company") is to
enhance the ability of the Company to attract and retain qualified
personnel who, as a result of the incentive and equity interest created
and encouraged by the Plan, will have an increased stake in the
prosperity of the Company and an increased identity of interest with the
Company's shareholders, and will be encouraged thereby to exert maximum
effort towards the successful operation of the Company.
Section 1.2. Definitions. Whenever used herein, the following
terms shall have the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board,
which shall consist of not less than three persons appointed
by the Board from among those Board members who are not
employees of the Company or any of its subsidiaries, and who
are "disinterested persons" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934.
(d) "Common Shares" means the shares of common stock of the
Company or such other securities into which such shares of
common stock may be changed pursuant to Section 1.5 hereof.
(e) "Director Options" means options granted to non-employee
directors.
(f) "Fair Market Value" means, as to any date, the closing price
per Common Share on the principal exchange on which the Common
Shares are traded at such date(or in the event there are no
sales, then the average of the bid and asked prices per Common
Share).
(g) "Incentive Stock Option" means an incentive stock option
within the meaning of Section 422 of the Code.
(h) "Non-statutory Options" means a stock option which is not an
Incentive Stock Option.
(i) "Participant" means a person selected by the Committee to
participate in the Plan pursuant to Section 1.6 hereof.
Section 1.3. Administration. The Plan shall be administered by
the Committee. Members of the Committee are not eligible to be granted
any options or performance units under the Plan, except Director
Options. Subject to the foregoing and the other terms and provisions of
this Plan, the Committee shall determine the participants in the Plan
and the terms and provisions of each option or performance unit granted
under the Plan, including the number of shares subject to such options
or performance units. The Committee may from time to time prescribe
rules and regulations for the administration of the Plan, and shall
decide any questions arising with respect to options or performance
units granted under the Plan. All decisions, interpretations,
determinations or actions taken by the Committee with regard to such
questions shall be final and binding upon the employees of the Company.
The Committee from time to time, and whenever requested, shall report to
the Board on the administration of the Plan and any action taken in
connection therewith.
Section 1.4. Aggregate Number of Common Shares Which May be
Issued. The aggregate number of Common Shares which may be issued as a
result of the exercise of options granted under the Plan or as a result
of attainment of performance goals pursuant to performance units granted
under the Plan, is five hundred thousand (500,000). In the event any
option expires, terminates or is canceled for any reason prior to
exercise, the shares subject to such option shall again become available
for issuance under the Plan.
Section 1.5. Adjustments. If any stock dividend is declared on
the Common Shares, or if the Common Shares are subdivided, consolidated,
or changed to other securities of the Company, or in the event of any
like adjustment or change in the Company's capitalization, then in each
such event, Common Shares subject to options or performance units then
in effect under the Plan, Common Shares reserved for issuance under the
Plan with respect to options or performance units which may thereafter
be granted under the Plan shall, if the occurrence of the event would
have resulted in a change in the number and/or kind of such shares had
they been outstanding, be similarly adjusted in number and/or kind, with
the nature and extent of such adjustments to be determined by treating
such shares as being outstanding at the time of and immediately prior to
the occurrence of the event and the purchase price to be paid for such
shares subject to options then in effect shall be appropriately changed
to give effect to any such adjustment.
Section 1.6. Participants. The participants in the Plan shall be
selected by the Committee from among the officers and other key
employees of the Company who are full-time employees of the Company or
one of its subsidiaries (as defined in Section 424(f) of the Code). The
Committee shall take into account the duties of the employee, the
present and potential contributions of the employee to the success of
the Company, and such other factors that the Committee, in its
discretion, considers to be reasonable and appropriate in light of the
purposes of the Plan.
Section 1.7. Term of Plan. The Plan shall terminate on the
earlier of (a) ten (10) years from the date of adoption of the Plan by
the Board or (b) such earlier date as the Board may determine. Options
or performance units outstanding at the date of termination of the Plan
shall remain in effect until exercised or expired.
Section 1.8. Restrictions on Transferability of Common Shares.
The Committee may impose such restrictions as it may deem advisable on
Common Shares acquired on exercise of an option granted under the Plan
or on attainment of performance goals pursuant to performance units
granted under the Plan. In addition, unless the Common Shares so
acquired are registered under the Securities Act of 1933, the transfer
of the Common Shares shall be subject to the restrictions on transfer
imposed under federal and applicable state securities laws, and
certificates representing such Common Shares shall bear a legend to that
effect
Section 1.9. Restriction on Tandem Options. In no event may the
exercise of an option (whether an Incentive Stock Option or a Non-
statutory Option) granted under the Plan affect the right of a
Participant to exercise any other option granted under the Plan.
Section 1.10. Maximum Number of Common Shares Subject to Options
Granted to an Individual Participant. The maximum number of Common
Shares for which options may be granted to any individual Participant
during the term of the Plan is one hundred thousand (100,000).
ARTICLE II
INCENTIVE STOCK OPTIONS
Section 2.1. Grant of Options. Subject to the provisions of this
Plan, the Committee may grant Incentive Stock Options to purchase Common
Shares to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete
discretion to determine the number of shares subject to Incentive Stock
Options granted, and the terms and conditions of such Incentive Stock
Options.
Section 2.2. Option Agreement. Each Incentive Option shall be
evidenced by an option agreement that shall state that the option is an
Incentive Stock Option, and specify the option price, the terms of the
option, the number of Common Shares subject to the option, and such
other provisions as the Committee shall determine. The provisions of
this Plan shall be expressly incorporated in the terms and provisions of
the option agreement. In the event of any inconsistency between the
provisions of this Plan and the other provisions of the option
agreement, the provisions of this Plan shall govern.
Section 2.3. Option Price. The option price per Common Share to
be paid upon the exercise of any Incentive Stock Option, as determined
by the Committee, shall be not less than Fair Market Value at the time
the option is granted provided, however, that with respect to Incentive
Stock Options granted to any Participant, who at the time of grant owns
shares possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Participant's employer
corporation or its parent or subsidiaries under the attribution rules
set forth in Section 424(d) of the Code (a "10% Owner Participant") the
option price per Common Share shall be at least one hundred ten percent
(110%) of Fair Market Value at the time of grant.
Section 2.4. Term of Option. Unless the terms of an Incentive
Stock Option provide a shorter term, or as hereinafter provided, each
Incentive Stock Option shall be exercisable no later than ten (10) years
from the date it is granted. Any Incentive Stock Option granted to a
10% Owner Participant shall be exercisable no later than five (5) years
from the date it is granted. The Committee, in its sole discretion,
will determine the vesting schedule of each Incentive Stock Option
granted under this Plan; provided, however, that no Incentive Stock
Option may be exercised prior to one year from the date it is granted.
Except as otherwise provided herein, no Incentive Stock Option may be
exercised unless the Participant is at the time of such exercise in the
employ of the Company or of a subsidiary thereof and shall have been
continuously so employed since the granting of the Participant's option.
Military, sick leave or other bona fide leave of absence not exceeding
ninety (90) days (or longer if the Participant's right to re-employment
is guaranteed by statute or by contract) shall not be considered an
interruption of employment for purposes of the Plan.
Section 2.5. Limitation on Granting of Options. The Committee
shall not grant Incentive Stock Options to a Participant if the
aggregate Fair Market Value (determined at the time the option is
granted) with respect to which Incentive Stock Options are exercisable
for the first time by the Participant during any calendar year (under
all option plans of the Participant's employer corporation and its
parent and subsidiary corporations) shall exceed One Hundred Thousand
Dollars ($100,000).
Section 2.6. Termination of Employment. An Incentive Stock Option
granted under the Plan may not be exercised after the Participant ceases
to be employed by the Company or a subsidiary thereof except as
hereinafter provided if such cessation of employment is on account of
death, normal retirement, early retirement, or disability. An
uninterrupted transfer of employment to or between the Company and/or
any parent or subsidiary thereof shall not be considered to be a
cessation of employment.
Section 2.7. Retirement and Partial Disability of Participant. In
the event of the normal retirement, early retirement or disability
(other than permanent and total disability within the meaning of Section
22(e)(3) of the Code) of a Participant, an Incentive Stock Option may be
exercised for a period of three months after cessation of the employment
of the Participant, or the balance of the term of the Incentive Stock
Option, whichever is shorter. The Participant may exercise the
Incentive Stock Option for the number of Common Shares with respect to
which the Incentive Stock Option has become exercisable by its terms and
any such additional number of Common Shares subject to the Incentive
Stock Option as the Committee may authorize.
Section 2.8. Death of Participant. In the event of the death of a
Participant while in the employ of the Company or a subsidiary thereof,
the Incentive Stock Options theretofore granted to the Participant shall
become immediately exercisable, whether or not theretofore exercisable,
and shall be exercisable for a period of three months after the date of
death or for the balance of the term of the Incentive Stock Option,
whichever is shorter, by the executor or administrator of the
Participant's estate or by such person or persons as shall have acquired
the Participant's rights under the Incentive Stock Option by will or by
the laws of descent and distribution.
Section 2.9. Permanent and Total Disability of Participant. In
the event the Participant becomes permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Code) while in the employ
of the Company or a subsidiary thereof, the Incentive Stock Options
theretofore granted to the Participant shall become immediately
exercisable, whether or not theretofore exercisable, and shall be
exercisable for a period of one year after the Participant's cessation
of employment or for the balance of the term of the Incentive Stock
Option, whichever is shorter.
Section 2.10. Nonassignability. Each Incentive Stock Option shall
by its terms provide that it is not transferable by the Participant
other than by will or the laws of descent and distribution and that it
is exercisable during the Participant's lifetime, only by the
Participant or by the Participant's duly authorized legal representative
if the Participant is unable to exercise the Incentive Stock Option as a
result of the Participant's disability, but only if, and to the extent,
permitted by Section 422 of the Code.
ARTICLE III
NON-STATUTORY OPTIONS
Section 3.1. Grant of Options. Subject to the provisions of this
Plan, the Committee may grant Non-statutory Options to purchase Common
Shares to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete
discretion to determine the number of shares subject to Non-statutory
Options granted and the terms and conditions of such Non-statutory
Options.
Section 3.2. Option Agreement. Each Non-statutory Option shall be
evidenced by an option agreement that shall state that the Non-statutory
Option is not an Incentive Stock Option and shall specify the option
price of the Non-statutory Option, the number of Common Shares subject
to the Non-statutory Option, and such other provisions as the Committee
shall determine. The provisions of this Plan shall be expressly
incorporated in the terms and provisions of the option agreement. In
the event of any inconsistency between the provisions of this Plan and
the other provisions of the option agreement, the provisions of this
Plan shall govern.
Section 3.3. Term of Option. No Non-statutory Option may be
exercised prior to one year from the date it is granted. Unless the
terms of a Non-statutory Option provide a shorter term, each Non-
statutory Option shall be exercisable no later than ten (10) years from
the date it is granted.
ARTICLE IV
DIRECTOR OPTIONS
Section 4.1. Grant and Eligibility.
(a) Initial Grant. Director Options for the purchase of one
thousand (1,000) Common Shares will be granted to each non-employee
director upon first being elected to the Board. This grant may be
awarded to a non-employee director only once.
(b) Subsequent Grants. On the date of the Company's annual
meeting in each year, commencing with the 1994 annual meeting,
Director Options for the purchase of one thousand (1,000) Common
Shares shall be granted to each non-employee director re-elected at
such meeting.
Section 4.2. Director Option Agreement. Each Director Option
shall be evidenced by a Director Option Agreement that shall specify the
option price of the Director Option, the term of the Director Option,
the number of Common Shares subject to the Director Option, and such
other provisions as the Committee shall determine. The provisions of
this Plan shall be expressly incorporated in the terms and provisions of
the Director Option Agreement. In the event of any inconsistency
between the provisions of this Plan and the other provisions of the
Director Option Agreement, the provisions of this Plan shall govern.
Section 4.3. Tax Status. The Director Options shall not be
Incentive Stock Options and the Director Option Agreement shall so
state.
Section 4.4. Option Price. The option price per Common Share to
be paid upon exercise of a Director Option shall be Fair Market Value on
the date of grant of the Director Option.
Section 4.5. Term of Option. Each Director Option shall expire
one year following the termination of the director's Board membership
for any reason, but in no event may any Director Option be exercised
after the tenth anniversary of the date of grant.
Section 4.6. Miscellaneous Provisions. Except as otherwise
provided in this Article IV, Director Options shall be governed by the
remaining provisions of this Plan applicable to Non-statutory Options.
Section 4.7. Amendment of Article IV. The provisions of this
Article IV may not be amended more than once every six months, other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, or the rules thereunder.
ARTICLE V
PERFORMANCE UNITS
Section 5.1. Performance Units. Performance units may be granted
subject to such terms and conditions as the Committee in its discretion
shall determine. Performance units may be granted either in the form of
cash units, in share units which are equal in value to one Common Share
or a combination thereof. The Committee shall establish the performance
goals to be attained in respect of the performance units, the various
percentages of performance unit value to be distributed upon attainment,
in whole or in part, of the performance goals and such other performance
unit terms, conditions and restrictions as the Committee shall deem
appropriate. As soon as practicable after the termination of the
performance period, the Committee shall determine the payment, if any,
which is due on the performance unit in accordance with the terms
thereof. The Committee shall determine, among other things, whether the
payment shall be made in the form of cash or Common Shares, or a
combination thereof.
ARTICLE VI
AMENDMENT AND OTHER PROVISIONS
Section 6.1. Method of Exercise. Exercise of an option granted
under the Plan shall be by the execution by the person entitled at the
time to exercise the option of a written notice of such exercise and
delivery thereof to the Company, which notice shall specify the number
of shares being purchased. In the case of the exercise of an option,
such notice shall be accompanied by payment in full of the option price
of the Common Shares. Payment of the option price with respect to any
stock option may be made in cash, in Common Shares valued at the Fair
Market Value on the last trading day preceding the date on which the
option is exercised or in a combination of cash and Common Shares. Upon
receipt of such notice and payment, the Company will promptly issue and
deliver its certificate for the number of Common Shares being purchased
pursuant to exercise of the option. No person, estate or other entity
shall have any of the rights of a shareholder with reference to Common
Shares subject to an option until a certificate or certificates for the
shares have been delivered.
Section 6.2. Amendment, Modification and Termination of the Plan.
Subject to Section 4.7 hereof and the last sentence of this Section 6.2,
the Board may at any time terminate, and from time to time may amend or
modify the Plan; provided, however that the approval of the shareholders
of the Company shall be required to amend or modify the Plan to:
(a) materially increase the benefits accruing to Participants;
(b) materially increase the number of Common Shares which may be
issued under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan.
No amendment, modification or termination of the Plan shall in any
manner adversely affect the rights of a Participant under any option
previously granted under the Plan, without the consent of the
Participant.
Section 6.3. Rights of Employees. Nothing in this Plan limits in
any way the right of the Company or its subsidiaries to terminate any
Participant's employment at any time, nor confers upon any Participant
any right to continue in the employ of the Company or its subsidiaries.
No employee shall have a right to be selected as a Participant.
Section 6.4. Dissolution, Merger and Consolidation. Upon a
dissolution or a liquidation of the Company, each Participant shall have
the right to exercise any unexercised options, whether or not
theretofore exercisable, during a period of thirty (30) days next
preceding the date of such dissolution or liquidation. In the event of
a merger or consolidation in which Common Shares may be exchanged for
securities of another publicly held entity, each participant shall be
offered a firm commitment whereby such entity will tender to the
Participant new options in such entity, with terms and conditions, both
as to number of shares and otherwise, which, to the extent permitted by
applicable law, will substantially preserve to the Participant the
rights and benefits of the options outstanding hereunder. With respect
to any merger or consolidation in which the Common Shares are exchanged
for (a) cash, (b) securities of an entity that is not publicly held, or
(c) a combination of (a) and (b), options then in effect shall become
immediately exercisable, whether or not theretofore exercisable, during
a period of thirty (30) days next preceding the date of consummation of
the merger or consolidation.
Section 6.5. Tax Withholding. The Company, as appropriate, shall
have the right to deduct from all payments any Federal, state or local
taxes required by law to be withheld with respect to such payments.
With respect to withholding required upon the exercise of Non-statutory
Options, or upon payment in Common Shares with respect to performance
units, Participants may elect, subject to the approval of the Committee,
to satisfy the withholding required, in whole or in part, by having the
Company withhold Common Shares having a value equal to the amount
required to be withheld. The value of the shares to be withheld is to
be based on the Fair Market Value on the date that the amount of tax to
be withheld is to be determined. All elections shall be irrevocable and
shall be made in writing, signed by the Participant, and shall satisfy
such other requirements as the Committee shall deem appropriate.
Section 6.6. Requirements of Law. The granting of options or
performance units, and the issuance of Common Shares with respect to an
exercise of an option or with respect to a performance unit award, shall
be subject to all applicable laws, rules and regulations, including
federal and applicable state securities laws, and to such approvals by
any governmental agencies or national securities exchanges as may be
required.
Section 6.7. Governing Law. The Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the
laws of the State of Indiana.
<PAGE>
PROXY EXCEL INDUSTRIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
May 5, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints James J.
Lohman and Ralph R. Whitney, Jr., and each of them, proxies with
full power of substitution to vote for the undersigned all shares
of common stock of Excel Industries, Inc. which the undersigned
would be entitled to vote if personally present at the annual
meeting of shareholders to be held on May 5, 1994, at 10:00 a.m.
(Eastern Standard Time) and at any adjournment thereof, upon the
matters described in the accompanying Proxy Statement and upon
any other business that may properly come before the meeting or
any adjournment thereof. Said proxies are directed to vote or
refrain from voting as checked below upon the matters listed
below, and otherwise in their discretion.
The Board of Directors Recommends a vote "FOR all nominees" in
Item 1 and "FOR" Items 2 and 3.
Item 1. Election of Directors
Nominees:
James O. Futterknecht, Jr., John G. Keane, James J.
Lohman, Joseph A. Robinson, James K. Sommer and Ralph
R. Whitney, Jr.
( ) FOR all nominees listed above, except authority is
withheld to vote for the following nominee or
nominees, if any:
( ) WITHHOLD AUTHORITY to vote for all nominees listed
above.
Item 2. Approval of the Excel Industries, Inc. 1994 Stock
Compensation Plan
( ) FOR ( ) AGAINST ( ) ABSTAIN
Item 3. Ratification of Price Waterhouse as independent auditors
for the current fiscal year ending December 31, 1994.
( ) FOR ( ) AGAINST ( ) ABSTAIN
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY
THE SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES"
IN ITEM 1 AND "FOR" IN ITEMS 2 AND 3.
Account Number: _______________
Date
Number of Shares: _____________
Signature
Signature
Please date this Proxy and sign exactly as your name or names
appear above and return in the enclosed envelope. If acting as
executor, administrator, trustee, guardian, etc., you should so
indicate when signing. If the signer is a corporation, please
sign the full corporate name, by duly authorized officer. If
shares are held jointly, each shareholder named should sign.
