<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
DURAKON INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
DURAKON INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
DURAKON INDUSTRIES, INC.
2101 N. LAPEER ROAD
LAPEER, MI 48446
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 1995
------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Durakon
Industries, Inc. (the "Company") will be held at the Company's corporate
headquarters located at 2101 N. Lapeer Road, Lapeer, Michigan 48446, on Tuesday,
May 16, 1995, at 2:00 p.m. local time, for the purposes of:
1. Electing six directors to serve until the 1996 Annual Meeting of
Shareholders; and
2. Transacting such other business as may properly come before the
meeting or any adjournment thereof.
You are invited to attend the meeting. However, if you do not expect to
attend in person, you are urged to sign and return immediately the enclosed
proxy which is solicited by the Board of Directors. A postage-paid envelope is
enclosed for your use in returning the proxy. The proxy is revocable and will
not affect your right to vote in person if you attend the meeting.
By Order of the Board of
Directors,
THOMAS A. GALAS
Secretary
Lapeer, Michigan
April 14, 1995
<PAGE> 3
DURAKON INDUSTRIES, INC.
2101 N. LAPEER ROAD
LAPEER, MI 48446
PROXY STATEMENT
ANNUAL MEETING TO BE HELD MAY 16, 1995
------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Durakon Industries, Inc., a Michigan
corporation (the "Company"), to be used at the Annual Meeting of Shareholders of
the Company to be held on Tuesday, May 16, 1995, or at any adjournments or
postponements thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders and in this Proxy Statement. The expenses of
soliciting proxies will be paid by the Company. This Proxy Statement and the
enclosed form of proxy will first be sent or given to shareholders on or about
April 14, 1995.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the Annual Meeting, a written
notice of revocation bearing a later date than the proxy, (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Company at or before the Annual Meeting, or (iii) attending the Annual
Meeting and voting in person (although attendance at the Annual Meeting will not
in and of itself constitute a revocation of a proxy). Any written notice
revoking a proxy should be sent to the Secretary of the Company at the Company's
corporate headquarters.
The Annual Report to Shareholders for the year ended December 31, 1994 is
enclosed herewith.
Only shareholders of record at the close of business on March 21, 1995 will
be entitled to vote at the meeting or any adjournment thereof. Each holder of
the 6,520,292 issued and outstanding shares of the Company's common stock,
without par value (the "Common Stock"), is entitled to one vote per share.
Shares cannot be voted at the meeting unless the holder is present in person or
represented by proxy. Shares may not be voted cumulatively for the election of
directors.
MATTERS TO COME BEFORE THE MEETING
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, each to hold office
until the next Annual Meeting of Shareholders and until his successor has been
elected and qualified. The nominees named below have been selected by the Board
of Directors of the Company. If, due to circumstances not now foreseen, any of
the nominees named below will not be available for election, the proxies will be
voted for such other person or persons as the Board of Directors may select.
Proxies solicited by the Board of Directors will be voted in favor of the six
nominees, unless a shareholder indicates otherwise on the proxy. The six
nominees receiving the greatest number of votes cast at the meeting or its
adjournment shall be elected. Abstentions, withheld votes and broker non-votes
will not be deemed votes cast in determining which nominees receive the greatest
number of votes cast.
The following table sets forth the name, age, position with the Company,
principal occupation, term of service and beneficial ownership of Common Stock
with respect to the six individuals who are nominees for election at the Annual
Meeting. The following table also sets forth the name and beneficial ownership
of Common Stock with respect to each executive officer of the Company named in
the Summary Compensation
1
<PAGE> 4
Table below and all directors and executive officers of the Company as a group.
Each of the nominees listed below was elected to his current term as a director
at the last Annual Meeting of Shareholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF
POSITIONS AND OFFICES FIRST MARCH 21, 1995
WITH THE COMPANY AND ELECTED -----------------------
OTHER PRINCIPAL AS A NUMBER PERCENT
NAME AND AGE OCCUPATIONS DIRECTOR OF SHARES OF CLASS
- ---------------------------- ------------------------------------ -------- --------- --------
<S> <C> <C> <C> <C>
-- NOMINEES FOR ELECTION AS DIRECTORS --
Phillip Wm. Fisher, 44...... Chairman of the Board of the Company 1991 10,528(1) 0.2%
and private investor (Detroit, MI)
Richard J. Jacob, 75........ President, Richard J. Jacob & 1993 1,000 0.0%
Associates, consulting firm
(Dayton, OH)
Wesley W. Lang, Jr., 37..... Principal, Weiss, Peck & Greer, LLC, 1991 15,651(2) 0.2%
an investment management firm
(New York, NY)
Robert M. Teeter, 56........ President, Coldwater Corporation 1991 104,000(3) 1.6%
(Ann Arbor, MI)
William Webster, 69......... President and Chief Executive 1991 90,000(4) 1.4%
Officer
of the Company
David W. Wright, 54......... President, Wright Ventures, Inc., 1980 3,500 0.1%
a private investment firm
(Grand Blanc, MI)
-- OTHER EXECUTIVE OFFICERS --
Wayne W. Blizman............................................................. 12,666(5) 0.2%
Thomas A. Galas.............................................................. 20,000(6) 0.3%
Douglas Henry................................................................ 3,334(7) 0.1%
James P. Kelly............................................................... 17,000(8) 0.3%
Philip B. Storm.............................................................. 10,000(9) 0.2%
All directors and executive officers as a group (eleven persons)............. 287,679(10) 4.3%
</TABLE>
- ---------------
(1) Includes 10,528 shares owned by a partnership in which Mr. Fisher is a
partner. Does not include 1,488,000 shares owned by Martinique Hotel, Inc.,
a Delaware corporation, of which Mr. Fisher is a Vice President, director
and minority shareholder and of which several members of Mr. Fisher's
family are directors, officers, and shareholders. Mr. Fisher disclaims
beneficial ownership of such shares.
(2) Does not include 531,000 shares owned by WPG Corporate Development
Associates III, L.P., a Delaware limited partnership ("CDA III"), or
133,282 shares owned by WPG Corporate Development Associates III
(Overseas), a Cayman Islands corporation ("CDA III Overseas") as to which
Mr. Lang disclaims beneficial ownership. Mr. Lang is a principal of Weiss,
Peck and Greer, LLC, and a general partner of WPG CDA III, L.P., a Delaware
limited partnership ("WPG CDA III"), and WPG CDA III (Overseas), L.P., a
Delaware limited partnership ("WPG CDA III Overseas"). WPG CDA III is the
sole general partner of CDA III and WPG CDA III Overseas serves as the sole
independent investment advisor to CDA III Overseas.
(3) Includes 100,000 shares which Mr. Teeter has the right to acquire within
the next 60 days pursuant to the exercise of stock options.
(4) Includes 90,000 shares which Mr. Webster has the right to acquire within
the next 60 days pursuant to the exercise of stock options.
(5) Includes 6,666 shares which Mr. Blizman has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
2
<PAGE> 5
(6) Includes 20,000 shares which Mr. Galas has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(7) Includes 3,334 shares which Mr. Henry has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(8) Includes 15,000 shares which Mr. Kelly has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(9) Includes 10,000 shares which Mr. Storm has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(10) Includes 245,000 shares which all directors and executive officers as a
group have the right to acquire within the next 60 days pursuant to the
exercise of stock options.
OTHER INFORMATION RELATING TO DIRECTORS
Mr. Fisher was elected Chairman of the Board of the Company in March 1993
and was Secretary of the Company from April 1991 to March 1993. Mr. Fisher has
been a private investor for longer than the past five years.
Mr. Jacob retired as Chief Executive Officer of Dayco Corporation in 1987.
He also serves as a Director of First Federal of Michigan Corporation.
Mr. Lang is principal of Weiss, Peck and Greer, LLC, an investment
management firm located in New York, New York, and has been associated with that
firm since 1985. Mr. Lang is also a Director of Nu-West Industries, Inc., a
publicly-owned company located in Englewood, Colorado, principally involved in
the fertilizer industry.
Mr. Teeter has been President of Coldwater Corporation, a corporate and
public planning company, since February, 1988. From December 1966 to February
1988 he was President of Market Opinion Research, Inc. He also serves as a
Director of Browning-Ferris Industries, Inc., Detroit & Canada Tunnel
Corporation and United Parcel Service.
Mr. Webster was elected President and Chief Executive Officer of the
Company in April 1991. Prior to that time, he worked as an independent business
consultant from 1986 to 1988 and from 1989 to 1991. Mr. Webster also served as
the President and Chief Executive Officer of Anchor Swan Corporation, a
manufacturer and marketer of hose and coupled hose assemblies based in Columbus,
Ohio, from 1988 to 1989. From 1979 to 1985, Mr. Webster served as the President
and Chief Executive Officer of Moog Automotive, Inc., a St. Louis, Missouri,
manufacturer of steering, suspension, and temperature control products. For many
years prior to 1979, Mr. Webster was Vice President and Group Executive of
Federal Mogul Corporation, a Southfield, Michigan based manufacturer and
marketer of automotive, aerospace and industrial components for O.E.M.'s and the
aftermarket. Mr. Webster also serves as a Director of Zollner Industries, Inc.,
a manufacturer of automotive components based in Milwaukee, Wisconsin.
Mr. Wright has served as President of Wright Ventures, Inc., a private
investment firm, since February 1994, and has been President and a Director of
Blain Buick/GMC, Inc., an automotive dealership, since February 1990. He served
in several executive management positions with the Company from 1980 through
August 1986 and from March 1989 to February 1990. From September 1986 to October
1988, he was President of The Colonels, Inc., an Owosso, Michigan manufacturer
of plastic body parts for the automotive aftermarket. Mr. Wright also serves as
a Director of Republic Bank -- Flint, Michigan.
The Board of Directors is responsible for the overall affairs of the
Company. To assist it in carrying out its duties, the Board has delegated
certain authority to standing executive, audit and compensation committees.
Members of each standing committee are appointed by the Board of Directors at
its first meeting following each annual meeting of shareholders.
The Executive Committee consists of Messrs. Fisher, Lang and Webster. The
Executive Committee meets on call and has authority to act on most matters
during the intervals between Board meetings.
3
<PAGE> 6
The Audit Committee consists of Messrs. Lang and Wright. The Audit
Committee recommends to the Board the nomination of independent auditors,
reviews with the independent auditors the scope and results of the audit
engagement and any non-audit services to be performed by the independent
auditors, and evaluates the independence of the independent auditors and their
fees for audit and non-audit services.
The Compensation Committee consists of Messrs. Fisher, Lang and Wright. The
Compensation Committee recommends to the Board the nomination of officers and
directors of the Company, reviews and recommends to the Board the salaries and
bonuses of officers and remuneration of directors, and provides recommendations
regarding other personnel matters. In addition, the Compensation Committee acts
as the Company's Stock Option Committee and administers the 1988 Stock Option
Plan. In its capacity as a nominating committee, the Compensation Committee will
consider nominees for directors recommended by shareholders. Shareholders
desiring to recommend nominees for directors for the 1996 Annual Meeting should
submit such recommendations to the Chairman of the Board at the Company's
corporate headquarters no later than December 16, 1995.
During fiscal 1994, the Board met a total of five times and the Audit and
Compensation Committees each met twice. The Executive Committee engaged in
informal discussions in lieu of meetings in 1994. Each director attended at
least 75% of the total number of meetings of the Board and of any committees on
which he served during the period in which he served as a director or a member
of any such committee.
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of March 21, 1995,
concerning those persons who are known by management of the Company to be
beneficial owners of more than 5% of the Company's outstanding Common Stock (as
provided to the Company by such persons).
<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS SHARES OF COMMON STOCK OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
- ---------------------------------------------------------------- ---------------------- -------
<S> <C> <C>
Martinique Hotel, Inc........................................... 1,488,000(1) 22.8%
2700 Fisher Building
Detroit, Michigan 48202
WPG Corporate Development Associates III, L.P................... 531,300(2) 8.1%
One New York Plaza
New York, New York 10004
NBD Bancorp Inc................................................. 523,550(3) 8.0%
611 Woodward Avenue
Detroit, MI 48226
FMR Corp........................................................ 363,800(3) 5.6%
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ---------------
(1) Based on information contained in a Schedule 13D filed with the Securities
and Exchange Commission on April 23, 1991.
(2) Based on information contained in an amendment to Schedule 13D filed with
the Securities and Exchange Commission on May 4, 1994. Does not include
133,282 shares of Common Stock beneficially owned by CDA III Overseas. As
reported in the Schedule 13D, Philip Greer, Steven N. Hutchinson and Wesley
W. Lang, Jr., a director of the Company, may be deemed to be the beneficial
owners of the shares of Common Stock held by CDA III by reason of their
status as managing general partners of WPG CDA III, which is the sole
general partner of CDA III, and which may be deemed to beneficially own the
shares owned by CDA III. As also reported in the Schedule 13D, Mr. Greer,
Mr. Hutchinson and Mr. Lang may, by virtue of their status as managing
general partners of WPG CDA III Overseas, which
4
<PAGE> 7
is the sole independent investment advisor of CDA III Overseas, be deemed
to be the beneficial owners of 133,282 shares of Common Stock,
constituting 2.0% of the outstanding Common Stock, owned by CDA 111
Overseas. Mr. Greer, Mr. Hutchinson and Mr. Lang disclaim beneficial
ownership of such 133,282 shares in such Schedule 13D.
(3) Based on information contained in a Schedule 13G of such person as received
by the Company.
EXECUTIVE OFFICERS
The persons listed below are the executive officers of the Company.
<TABLE>
<CAPTION>
NAME AND AGE OFFICES AND LENGTH OF SERVICE
- ------------------------------ -------------------------------------------------------------
<S> <C>
Phillip Wm. Fisher, 44........ Chairman of the Board since March 1993.
William Webster, 69........... President and Chief Executive Officer since April 1991.
Thomas A. Galas, 48........... Senior Vice President -- Finance and Administration and Chief
Financial Officer since July 1991 and Secretary since March
1993.
Douglas Henry, 46............. Vice President -- Operations since October 1992.
Wayne W. Blizman, 55.......... Vice President -- Corporate Planning and Business Development
since October 1992.
Philip B. Storm, 48........... Senior Vice President -- Sales and Marketing since February
1994.
James P. Kelly, 62............ President of Jerr-Dan Corporation, a wholly-owned subsidiary
of the Company, since October 1991.
</TABLE>
All the executive officers of the Company serve at the pleasure of the
Board of Directors.
For additional information concerning Messrs. Fisher and Webster, see
"Matters to Come Before the Meeting -- Election of Directors."
Prior to joining the Company in July 1991, Mr. Galas was Vice President of
Finance for Williams Holdings PLC North American Paint Group. From July 1985 to
March 1989, Mr. Galas was the Controller of Southern Operations for The Nekoosa
Papers subsidiary of the Great Northern Nekoosa Corporation.
Mr. Henry joined the Company in August 1989 as Director of Operations, and
continued in this position until he was elected Vice President -- Operations in
October 1992. Prior to joining the Company, Mr. Henry was Vice President of GMD,
Inc., a national education and consulting firm on business and computer
strategies and systems.
Prior to joining the Company in October 1992, Mr. Blizman was an
independent consultant. From 1986 to 1989, Mr. Blizman was Planning Manager of
the Components Group for Federal-Mogul Corporation.
Prior to joining the Company in February 1994, Mr. Storm was Senior Vice
President and General Manager of the Distribution Division of Freudenberg-NOK
General Partnership, a supplier of sealing devices to the automotive industry
headquartered in Plymouth, Michigan. From 1987 to 1991, Mr. Storm was President
of the Transmission Products Group of the Equion Corporation. He has also served
in senior management positions at Federal-Mogul Corporation and in sales and
marketing positions at Ford Motor Company.
Prior to joining the Company in October 1991, Mr. Kelly was Vice President
of Reengineering and Marketing for Regal Plastics. From 1986 to 1989, Mr. Kelly
was Vice President of Sheller-Globe Corp. -- Interior Trim Systems.
5
<PAGE> 8
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table sets forth information for each of the fiscal years
ended December 31, 1994, 1993 and 1992 concerning the compensation of the
Company's Chief Executive Officer and of each of the Company's other four most
highly compensated executive officers whose total annual salary and bonus
exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- AWARDS
NAME AND OTHER ANNUAL ------------ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION OPTIONS COMPENSATION(2)
- ----------------------------- ---- -------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
William Webster.............. 1994 $202,000 $100,000 $ 23,525(3) -- $ 7,027
President and Chief 1993 201,477 88,255 23,561(3) -- 2,249
Executive Officer 1992 200,000 110,000 442,199(3)(4) -- 6,759
Thomas A. Galas.............. 1994 137,871 48,065 5,456(5) -- 5,853
Senior Vice President -- 1993 131,154 40,200 4,480(5) -- 2,055
Finance and Administration, 1992 125,000 46,000 5,395(5) 20,000 5,048
Chief Financial Officer and
Secretary
Douglas Henry................ 1994 116,904 35,000 46,108(6) -- 5,098
Vice President -- 1993 111,923 33,000 39,774(7)(8) -- 1,617
Operations 1992 107,000 27,500 5,034(7) 10,000 4,049
Philip B. Storm(9)........... 1994 159,231 25,000 70,617(10) 20,000 2,146
Vice President -- 1993 -- -- -- -- --
Sales and Marketing 1992 -- -- -- -- --
James P. Kelly............... 1994 149,519 84,225 2,925(5) -- 6,002
President of Jerr-Dan 1993 124,616 67,100 3,510(5) -- 2,142
Corporation, a wholly- 1992 100,000 60,000 15,650(5)(11) 15,000 2,000
owned subsidiary of the
Company
</TABLE>
- ---------------
(1) Except as noted, includes the bonus accrued in the year indicated, which
was paid in the following year.
(2) Consists only of the Company's 401(k) contributions.
(3) Includes amounts relating to use of company-owned automobile and
reimbursement of lodging, medical and other expenses.
(4) Includes gain on exercise of stock options of $420,000.
(5) Includes use of company-owned automobile.
(6) Includes gain on exercise of stock options of $17,498, reimbursement of
moving expenses of $26,904 and amounts relating to use of a company-owned
automobile.
(7) Includes reimbursement of lodging expenses and use of company-owned
automobile.
(8) Includes gain on exercise of stock options of $17,498 and reimbursement of
moving expenses of $16,865.
(9) Not employed with Company during 1993 or 1992.
(10) Including signing bonus of $20,000, reimbursement of moving expenses of
$49,326 and amounts relating to use of a company-owned automobile.
(11) Includes reimbursement of taxes, moving and other expenses of $11,392.
6
<PAGE> 9
OPTION GRANTS IN FISCAL YEAR
The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 1994 to each of the
executive officers of the Company named in the Summary Compensation Table above:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------- ANNUAL RATES OF
PERCENTAGE OF STOCK
TOTAL PRICE APPRECIATION
OPTIONS AT END OF TEN-YEAR
GRANTED TO PER SHARE OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
- -------------------------------- ------- ------------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
William Webster................. -- -- -- -- -- --
Thomas A. Galas................. -- -- -- -- -- --
Douglas Henry................... -- -- -- -- -- --
Philip B. Storm................. 20,000(1) 100% $ 16.25 02/07/04 $204,425 $518,050
James P. Kelly.................. -- -- -- -- -- --
</TABLE>
- ---------------
(1) One-fourth of the option is exercisable immediately, and the balance becomes
exercisable in equal parts on the first, second and third anniversaries of
the grant date.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth information concerning each exercise of
stock options during the fiscal year ended December 31, 1994 by each of the
executive officers named in the Summary Compensation Table above and the value
of unexercised options held by such persons as of December 31, 1994:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR END FISCAL YEAR END
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
- ------------------------------------------ --------------- -------- --------------- ---------------
<S> <C> <C> <C> <C>
William Webster........................... -- -- 60,000/ $840,000/
30,000 $420,000
Thomas A. Galas........................... -- -- 20,000/ $210,000/
0 0
Douglas Henry............................. 3,333 $ 17,498 3,334/ $16,670/
0 0
Philip B. Storm........................... -- -- 5,000/ $5,000/
15,000 $15,000
James P. Kelly............................ -- -- 15,000/ $131,250/
0 0
</TABLE>
- ---------------
(1) Based on the December 30, 1994 closing price on the NASDAQ Stock Market of
$17.25 per share.
COMPENSATION OF DIRECTORS
Under the Company's standard arrangements, each director who is not an
officer of or consultant to the Company receives a director's fee in the amount
of $3,500 per meeting attended. Officers of and consultants to
7
<PAGE> 10
the Company do not receive any additional compensation for services as a
director. For information concerning Mr. Teeter's compensation, see "Certain
Transactions with Management."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1994, Messrs. Fisher, Lang and
Wright served as members of the Company's Compensation Committee. Mr. Fisher has
been Chairman of the Board of the Company since March 1993 and was Secretary of
the Company from April 1991 until March 1993. Mr. Wright served in several
executive management positions with the Company from 1980 through August 1986
and from March 1989 to February 1990. Mr. Lang has never been an officer or
employee of the Company or any of its subsidiaries.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Compensation Committee's overall compensation policy
applicable to the Company's executive officers is to provide a compensation
program that is intended to attract and retain qualified executives for the
Company and to provide them with incentives to achieve Company goals and
increase shareholder value. The Compensation Committee implements this policy
through establishing salaries and bonuses and granting stock options. The
Compensation Committee's current policy is not to provide significant pension or
other retirement benefits for the Company's employees.
SALARIES. The Compensation Committee's policy is to provide salaries that
are generally similar to those of similar executive officers in similar
companies. The Compensation Committee determines comparable salaries through
discussions with candidates for such positions, Company research and the
research of independent consultants concerning the salaries paid by the
Company's competitors.
BONUSES. The Compensation Committee's policy is to provide a significant
portion of executive officers' total compensation through annual bonuses to
provide them with incentives to achieve the Company's financial and operational
goals and increase shareholder value. The Company's bonus arrangements for its
five highest paid executive officers are intended to make a major portion of
each executive officer's compensation dependent on the Company's overall
performance. The bonuses for the Company's five highest paid executive officers
are also intended to identify and give priority to the Company's goals by tying
compensation to the Company's business plans. Such bonuses are also intended to
link executive compensation to shareholder value and to encourage the executives
to act as a team. Bonuses are also intended to recognize the executive's
individual contributions to the Company.
For the fiscal year ended December 31, 1994, the Company's five highest
paid executives could have received a potential bonus of up to the following
percentages of their salaries: Mr. Webster -- 55%; Mr. Galas -- 37%; Mr. Henry
- -- 37%; Mr. Storm -- 55%; and Mr. Kelly -- 67%. Such bonuses are based on the
Company's 1994 operating income, and are adjusted for such unusual items of
income or expense as the Compensation Committee determines, compared to budgeted
operating income; strategic and operational accomplishments, not directly based
on the Company's financial condition or results of operations; and the Company's
Compensation Committee's discretionary evaluation of the individual executive's
performance during the year.
STOCK OPTIONS. The Compensation Committee's policy is to award stock
options to the Company's officers in amounts reflecting the participant's
position and ability to influence the Company's overall performance. Options are
intended to provide participants with an increased incentive to make
contributions to the long-term performance and growth of the Company, to join
the interests of participants with the interests of shareholders of the Company
and to attract and retain qualified employees. The Compensation Committee's
policy has been to grant options with a term of ten years to provide a long-term
incentive and to fix the exercise price of the options at the fair market value
of the underlying shares on the date of grant. Such options only have value if
the price of the underlying shares increases.
1994 COMPENSATION DECISIONS REGARDING WILLIAM WEBSTER. Mr. Webster, the
Company's Chief Executive Officer, is employed pursuant to an employment
agreement dated April 1, 1993, which expires on
8
<PAGE> 11
March 31, 1996. Pursuant to that employment agreement, Mr. Webster receives an
annual salary of $202,000. The Compensation Committee approved a $100,000 bonus
for Mr. Webster for calendar 1994. The bonus was based on attainment of 1994
budget objectives for revenues and earnings, progress toward long-term strategic
goals and the development and retention of a qualified management team. Mr.
Webster did not participate in the approval of his own compensation, but did
participate in the discussion of the Company's performance for 1994.
By the Compensation Committee
Phillip Wm. Fisher
Wesley W. Lang, Jr.
David W. Wright
PERFORMANCE GRAPH
The following line graph compares for the fiscal years ended December 31,
1990, 1991, 1992, 1993 and 1994 (i) the yearly cumulative total shareholder
return (i.e., the change in share price plus the cumulative amount of dividends,
assuming dividend reinvestment, divided by the initial share price, expressed as
a percentage) on the Company's Common Stock, with (ii) the cumulative total
return of the NASDAQ Stock Market Composite Index, and (iii) the cumulative
total return on NASDAQ stocks within SIC codes 3070-3079 (plastic products) and
3710-3719 (motor vehicles and equipment) (assuming dividend reinvestment;
weighted based on market capitalization).
COMPARISON OF CUMULATIVE TOTAL RETURNS
AMONG DURAKON INDUSTRIES, INC.
NASDAQ MARKET AVERAGE AND NASDAQ PEER GROUP
<TABLE>
<CAPTION>
DURAKON IN-
MEASUREMENT PERIOD DUSTRIES, NASDAQ MARKET NASDAQ PEER
(FISCAL YEAR COVERED) INC. AVERAGE GROUP
<S> <C> <C> <C>
12/29/89 100.0 100.0 100.0
12/31/90 34.6 84.9 74.1
12/31/91 60.6 136.3 102.5
12/31/92 200.0 158.6 140.0
12/31/93 267.3 180.9 179.4
12/30/94 265.4 176.9 164.6
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") initial reports of ownership and reports of
9
<PAGE> 12
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than ten percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
CERTAIN TRANSACTIONS WITH MANAGEMENT
In August 1991, the Company entered into a consulting agreement with
Coldwater Corporation, a Michigan corporation, of which Robert M. Teeter is
President and sole shareholder. That agreement has been renewed annually.
Pursuant to such agreement, Coldwater Corporation receives an annual fee of
$50,000. Such fee is in lieu of, and not in addition to, director's fees to
which Mr. Teeter would otherwise be entitled.
AUDITORS
The Board of Directors has selected Coopers & Lybrand LLP to serve as the
Company's independent auditors for fiscal 1995. Coopers & Lybrand LLP has served
in such capacity since 1991. Representatives from Coopers & Lybrand LLP will be
present at the Annual Meeting of Shareholders, will have an opportunity to make
a statement if they wish, and will be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1996 Annual Meeting
which are eligible for inclusion in the Company's proxy statement for that
meeting under the applicable rules of the SEC must be received by the Company no
later than December 16, 1995. Such proposals should be addressed to the
Secretary at the Company's corporate headquarters.
GENERAL
At the date of this Proxy Statement, management is not aware of any matters
to be presented for action at the meeting other than those described above.
However, if any other matters should come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote in accordance
with their judgment on such matters.
By Order of the Board of Directors,
THOMAS A. GALAS
Secretary
Lapeer, Michigan
April 14, 1995
10
<PAGE> 13
DURAKON INDUSTRIES, INC.
The undersigned hereby appoints Phillip Wm. Fisher and William Webster,
or either of them, as his, her or its proxies and attorneys-in-fact to
vote at Durakon Industries, Inc.'s Annual Meeting of Shareholders on
May 16, 1995 and any adjournments or postponements thereof on matters which
may properly come before the Annual Meeting, in accordance with and as more
fully described in the Notice of Meeting and the Proxy Statement, receipt
of which is acknowledged.
(To be Signed on Reverse Side)
SEE REVERSE
SIDE
- -------------------------------------------------------------------------------
<TABLE>
<S><C>
/X/ PLEASE MARK VOTES AS
IN THIS EXAMPLE
NOMINEES: Phillip Wm. Fisher,
FOR WITHHOLD Richard J. Jacob,
1.) Election of Wesley W. Lang Jr.,
Directors / / / / Robert M. Teether,
William Webster,
For, except vote withheld from the following nominee(s): David W. Wright
_______________________________________________________
SIGNATURE(S) ______________________________________ DATE _________________ The proxies will vote your shares in accordance
with your directions on this card and in their
NOTE: Please sign exactly as name appears hereon. When shares asre held by discretion with respect to any other matters
joint tenants, both should signing as attorney, executor, administrator, trustee which may properly come before the meeting. If
or guardian, please give full title as such. If a corporation, please sign in you do not indicate your choice on this card,
full corporate name by president or other authorized officer. If a partnership, the proxies will vote your shares FOR the
please sign in partnership name by authorized person. nominees for director set forth.
</TABLE>
