<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 Quality Hotel City Centre, 300 South Main
Street, Elkhart, Indiana, on Thursday, April 20, 1995 at 10:00 a.m.
(Eastern Standard Time) for the following purposes:
1. To elect seven (7) directors for a term of one
year.
2. To ratify the appointment of Price Waterhouse as
independent auditors for the current fiscal year
ending December 30, 1995.
3. To transact such other business as may properly
come before the meeting.
The shareholders of record at the close of business on
February 24, 1995, 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 14, 1995
<PAGE>
<PAGE>
1995 PROXY STATEMENT
Annual Meeting of Shareholders
All shareholders of record on February 24, 1995, are entitled
to vote at the Annual Meeting to be held at the Quality Hotel City
Centre, 300 South Main Street, Elkhart, Indiana, on the twentieth
day of April, 1995 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 seven directors, 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 14, 1995.
Outstanding Shares
As of February 15, 1995, the Corporation had outstanding
10,679,524 common shares, without par value. Each shareholder is
entitled to one vote upon any proposal submitted to the meeting for
each share standing of record in his name on February 24, 1995.
Principal Shareholders
Set forth below is certain information concerning the only
persons known to the Corporation, as of February 15, 1995, 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) 10,679,524 common shares outstanding on
February 15, 1995, 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
Common Shareholders
<S> <C> <C>
J.P. Morgan & Co.,
Incorporated 1,038,600 shares<F1> 9.7%
23 Wall Street
New York, NY 10015
Farmers Group, Inc. 912,600 shares<F2> 8.5%
4680 Wilshire Boulevard
Los Angeles, CA 90010
NBD Bancorp, Inc. 782,507 shares<F3> 7.3%
611 Woodward Avenue
Detroit, MI 48226
The Capital Group
Companies, Inc. 539,000 shares<F4> 5.0%
333 South Hope Street
Los Angeles, CA 90071
Convertible Note Holders
CIGNA Corporation 821,535 shares<F5> 7.2%
One Liberty Place
Philadelphia, PA 19101
CIGNA Mezzanine Partners
II, L.P. 693,308 shares<F6> 6.2%
900 Cottage Grove Road
Bloomfield, CT 06002
Paul Revere Investment
Management Company 756,773 shares<F7> 6.7%
40 Westminster Street
Providence, RI 02903
<FN>
<F1>In a Schedule 13G 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 1,038,600 common shares. Morgan has the
sole power to dispose of all such shares and sole power to vote
664,600 of such shares.
<F2>In a Schedule 13G dated February 9, 1995, and delivered to
the Corporation, B.A.T. Industries p.l.c. ("BAT") disclosed that
Farmers Group, Inc. ("FGI") had acquired beneficial ownership of
912,600 common shares through subsidiaries of FGI, by insurance
exchanges for which FGI acts as attorney-in-fact or by benefit
plans for employees of FGI and its subsidiaries for which FGI has
investment discretion. FGI, which is an insurance company and an
indirect, wholly owned subsidiary of BAT, has shared voting and
shared dispositive power with respect to all of such shares.
<F3>In a Schedule 13G dated February 9, 1994 and filed with the
Commission, NBD Bancorp, Inc. ("NBD") disclosed that it had
acquired beneficial ownership of 782,507 common shares. NBD has
sole voting power with respect to 764,357 of such shares, sole
investment power with respect to 756,507 of such shares, and shared
investment power with respect to 25,000 of such shares.
<F4>In a Schedule 13G dated February 8, 1995 and delivered to the
Corporation, The Capital Group Companies, Inc. ("CGC") disclosed
that Capital Guardian Trust Company ("CGTC"), a subsidiary of CGC,
had acquired beneficial ownership of 589,000 common shares. CGTC
has sole investment power with respect to all of such shares, and
sole voting power with respect to 389,000 of such shares.
<F5>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.
<F6>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.
<F7>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 The
Paul Revere Investment Management Company ("PRIMCO"). PRIMCO 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
Seven 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
seven persons. The seven 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, 53, 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., 48, 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, 56, 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, 64, has been a director since 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.
Richard A. Place, 60, has been a director since August 1994.
Mr. Place is retired. From 1960 to 1991 Mr. Place was an executive
of Ford Motor Company. From 1991 to 1994 he was an executive
adviser to Mazda Research & Development of North America, Inc.
James K. Sommer, 62, 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., 60, 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 & Company, Inc., 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
$18,000 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. Non-
employee directors are also granted options to purchase 1,000
common shares, at the fair market value on the date of grant, upon
their initial election or appointment and annually upon reelection.
The options expire at the earlier of one year after termination of
the director's Board membership or ten years after the date of
grant. 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 1994. 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.
The law firm of Sommer & Barnard, PC, of which Mr. Sommer is
a member, serves as legal counsel for the Corporation.
Compensation Committee Interlocks and Insider Participation
Messrs. Place and Keane are the 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. The compensation committee administers the Corporation's
1994 Stock Compensation Plan. The compensation committee met two
times in 1994.
Mr. Whitney, who served on the compensation committee during
1994, is the Chief Executive Officer of each of Control Devices,
Inc., Holbrook-Patterson, Inc. and Maine Rubber Company, three
privately held industrial companies. Mr. Lohman is a director and
a member of the compensation committee of Control Devices, Inc. and
is a director of Holbrook-Patterson, Inc. Mr. Futterknecht is a
director of Maine Rubber Company.
Security Ownership of Management
The following table sets forth, as of February 15, 1995,
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 a group.
<TABLE>
<CAPTION>
Name of Beneficial Owner Amount and Nature of Percent
Beneficial Ownership of Class
<S> <C> <C>
James J. Lohman 181,369<F1> 1.7%
James O. Futterknecht, Jr. 33,354 *
Joseph A. Robinson 2,434<F2> *
John G. Keane 1,500<F3> *
Richard A. Place 2,000<F4> *
James K. Sommer 4,501<F5> *
Ralph R. Whitney, Jr. 21,000<F6> *
Louis R. Csokasy 11,718<F7> *
James E. Crawford 5,877<F8> *
All Executive Officers and
Directors as a Group (twelve
persons) 280,754<F9> 2.6%
*Less than one percent
<FN>
<F1>Includes 60,020 shares owned by Mr. Lohman's wife.
Mr. Lohman disclaims beneficial ownership of shares owned by his
wife. Also includes 8,849 shares owned by Mr. Lohman's family
foundation, with respect to which Mr. Lohman has the power to vote
and the power of disposition.
<F2>Includes 384 shares held for Mr. Robinson's account in the
Corporation's Employee Stock Purchase Plan.
<F3>Includes 1,000 shares subject to an option held by Dr. Keane.
<F4>Includes 1,000 shares held by a trust with respect to which
Mr. Place has the power to vote and to direct the disposition, and
1,000 shares subject to an option held by Mr. Place.
<F5>Includes 1,000 shares subject to an option held by
Mr. Sommer.
<F6>Includes 1,000 shares subject to an option held by
Mr. Whitney.
<F7>Includes 1,000 shares owned by Mr. Csokasy's minor child, as
to which Mr. Csokasy disclaims beneficial ownership.
<F8>Includes 457 shares owned by Mr. Crawford's wife, as to which
Mr. Crawford disclaims beneficial ownership. Also includes 280
shares held for Mr. Crawford's account in the Corporation's
Employee Stock Purchase Plan.
<F9>Includes shares owned by spouses and minor children, whether
or not beneficial ownership is disclaimed, and 19,750 shares
subject to options held by an executive officer and directors.
</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>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
Other Annual All Other
Name and Compensa- Compensa-
Principal Position Year Salary($) Bonus($) tion($)<F1> tion($)<F2>
<S> <C> <C> <C> <C> <C>
James J. Lohman 1994 345,000 284,625 4,806 4,500
Chairman of the 1993 328,000 307,500 4,730 5,396
Board and CEO 1992 298,000 205,397 4,581 5,237
James O. 1994 286,000 235,950 1,823 4,500
Futterknecht, Jr. 1993 270,000 258,125 2,455 5,396
President and Chief 1992 214,000 147,498 1,696 5,237
Operating Officer
Joseph A. Robinson 1994 169,000 92,950 3,097 4,500
Secretary, Treasurer 1993 160,000 100,000 2,462 5,302
and CFO 1992 135,500 62,033 9,259 -0-
Louis R. Csokasy 1994 142,000 79,875 2,675 4,500
Vice President 1993 133,000 83,1215 2,217 4,440
and Managing Director, 1992 121,000 55,600 1,293 4,848
Automotive Window and
Door Systems
James E. Crawford 1994 139,000 78,188 3,240 4,500
Vice President and 1993 131,000 81,875 2,497 4,380
Managing Director, 1992 121,000 55,600 2,718 4,848
Value Management and
Product Research and
Development
<FN>
<F1>Represents reimbursements to the named executive officers
for payment of income taxes.
<F2>Represents contributions by the Corporation to the accounts
of each of the named executive officers in the Corporation's deferred
compensation and savings plan.
</FN>
</TABLE>
Options
The following table shows the options to purchase common
shares granted to the named executive officers in 1994 pursuant to
the Corporation's 1994 Stock Compensation Plan.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Number of
Securities % of Total
Underlying Options Granted
Options to Employees in Exercise Expiration
Name Granted (#) Fiscal Year (%) Price ($) Date
<S> <C> <C> <C> <C>
James J. Lohman 20,000<F1> 7.27 18.125 5-4-2004
James O.
Futterknecht, Jr. 20,000<F1> 7.27 18.125 5-4-2004
Joseph A.
Robinson 13,000<F1> 4.73 18.125 5-4-2004
Louis R. Csokasy 11,000<F1> 4.00 18.125 5-4-2004
James E. Crawford 11,000<F1> 4.00 18.125 5-4-2004
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Option Term
5%($) 10%($)
<S> <C> <C>
James J. Lohman 228,000 577,760
James O.
Futterknecht, Jr. 228,000 577,760
Joseph A.
Robinson 148,200 375,544
Louis R. Csokasy 125,400 317,768
James E. Crawford 125,400 317,678
<FN>
<F1>Options become exercisable in 25% increments on May 5, 1995;
May 5, 1996; May 5, 1997; and May 5, 1998. Options are Incentive
Stock Options under Section 422 of the Internal Revenue Code.
</FN>
</TABLE>
The following table shows the number and value of options held
by the named executive officers as of December 31, 1994.
<TABLE>
FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised
Options at Fiscal
Year-End<F1>
Name Exercisable/Unexercisable
<S> <C>
James J. Lohman 0/20,000
James O. Futterknecht, Jr. 0/20,000
Joseph A. Robinson 0/13,000
Louis R. Csokasy 0/11,000
James E. Crawford 0/11,000
<FN>
<F1>The exercise price of the options shown exceeded the fair
market value of the underlying common shares at December 31, 1994.
</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 $61,200 remains unchanged.
<TABLE>
<CAPTION>
Final Avg. Credited Years of Service
Earnings
15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 8,352 $11,136 $13,920 $16,704 $19,588
$100,000 $18,352 $25,136 $31,420 $37,704 $44,088
$150,000<F1>$29,352 $39,136 $48,920 $58,704 $68,588
<FN>
<F1> 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 - 20;
Mr. Futterknecht - 24; Mr. Robinson - 2; Mr. Csokasy - 22; and
Mr. Crawford - 16.
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, Robinson, Csokasy 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
Corporation (the "Committee") formulates executive compensation
policy for the Corporation and determines, subject to board review
and approval, the compensation of all executive officers named
above. The Committee is comprised of nonemployee directors.
Broad Policy Considerations. In the determination of 1994
executive compensation, the following broad compensation policies
were followed:
1. Executive compensation must be competitive. This policy
was considered to be critical in order for the Corporation to
attract and retain qualified management personnel.
2. Executive compensation should be based upon Corporation
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 Corporation 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
Corporation performance.
5. An effective executive compensation plan requires a long-
term incentive element as well as short-term incentive elements.
Compensation Programs. The short-term components of the
Corporation's executive compensation programs consist of base
salary and bonuses under the Corporation's Incentive Compensation
Plan (the "Cash Incentive Plan"). The existing Cash Incentive Plan
was formulated and established by the Board of Directors of the
Corporation in 1992 and has since been continued as a complement to
base salaries. As set forth below, the Cash Incentive Plan is
tailored to fit the second and fourth goals listed above since
bonuses thereunder are calculated based on a targeted after-tax
return on shareholders' equity and since relatively high potential
bonuses, taken as a percentage of total compensation, can be earned
under the Plan. In 1993 and 1994, the Board of Directors and
shareholders of the Corporation, respectively, approved and adopted
the 1994 Stock Compensation Plan (the "Stock Incentive Plan") as
recommended by the Committee. The Stock Incentive Plan provides
the long-term incentive component of the executive compensation
programs of the Corporation in accordance with the fifth goal
enumerated above.
Base Salary. In determining 1994 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 Corporation's
performance compared to financial objectives also were considered.
Cash Incentive Compensation. Under the Cash Incentive Plan,
bonus opportunities as a percentage of gross salary have been
established for four levels of employees and a target after-tax
return on shareholders' equity has been established as the return
required in order for employees to achieve 100 percent of their
respective bonus opportunities. At the time the Board established
such targeted return on shareholders' equity, consideration was
given to available information regarding the median return on
equity achieved by Fortune 500 companies in the motor vehicle and
parts businesses. 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 Cash Incentive Plan, the Committee has
continued to review the return on average shareholder equity
achieved by other companies. 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 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.
Stock Incentive Compensation. The Committee made a broad
based award of incentive stock options in 1994. Insofar as
executive compensation is concerned, this represented a departure
from the Corporation's historic practice of primarily focusing on
cash compensation in the form of salaries and bonuses, a practice
which stemmed from the equity participation of management in the
acquisition company which was merged into the Corporation in 1983.
The Committee recognized that management changes and additions had
obsoleted that restrictive focus and felt it should reactivate, as
part of the Corporation's executive compensation structure, the
long-term incentive stimulus which flows from equity participation
or from an opportunity to obtain equity participation. Since stock
option values are dependent upon the long-term growth of the
Corporation's stock price, the Committee believed that the grant of
stock options was the appropriate way in which to add a long-term
incentive element to the Corporation's executive compensation
programs.
The stock options authorized and granted by the Committee were
ten-year options which vest in equal parts over a four-year period
commencing on the first anniversary date of the option grants.
Executive officer stock option awards were primarily based on the
respective levels of position and responsibility of the individuals
to whom the options were awarded. As with the determination of
base salaries, the Committee also considered the recommendations of
the Chief Executive Officer.
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 Corporation.
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
responsibilities 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 Corporation during 1994 as
compared to the target return set forth in the Cash Incentive Plan.
The stock option awarded to Mr. Lohman was reflective of his
position and responsibility as the chief executive officer of the
Corporation.
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 Corporation (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:
Richard A. Place
John G. Keane
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 a peer group
of automotive parts manufacturers. The peer group includes the
following companies: Allen Group, Amcast Industrial Corporation,
Automotive Industries, Inc., Cooper Tire & Rubber, Dana Corp.,
Donnelly Corporation, Douglas & Lomason Company, Echlin, Inc.,
Genuine Parts, Goodyear Tire & Rubber, Johnson Controls
Corporation, MascoTech, Modine Manufacturing Company, Snap-on
Tools, The Standard Products Co., and Timken Co.
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Excel $100.00 $103.91 $81.14 $188.56 $205.78 $159.16
S&P500 $100.00 $96.89 $126.42 $136.05 $149.76 $151.74
Peer $100.00 $80.98 $125.61 $162.83 $204.64 $176.52
Group
ASSUMES $100 INVESTED ON DECEMBER 31, 1989
TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS
NOTE: TOTAL RETURNS BASED ON MARKET CAPITALIZATION
</TABLE>
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 30, 1995. 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 14, 1995 is the date by which shareholder proposals
intended to be presented at the 1996 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>
<PAGE>
PROXY EXCEL INDUSTRIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 20, 1995
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 common
shares 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 April 20, 1995, 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" Item 2.
Item 1. Election of Directors
Nominees:
James O. Futterknecht, Jr., John G. Keane, James J.
Lohman, Richard A. Place, 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. 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 ITEM 2.
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.
</LIVE>
