<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 21, 1996
------------------
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 21, 1996, at 2:00 p.m. local time, for the purposes of:
1. Electing seven directors to serve until the 1997 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 19, 1996
<PAGE> 3
DURAKON INDUSTRIES, INC.
2101 N. LAPEER ROAD
LAPEER, MI 48446
PROXY STATEMENT
ANNUAL MEETING TO BE HELD MAY 21, 1996
------------------
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 21, 1996, 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 19, 1996.
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, 1995 is
enclosed herewith.
Only shareholders of record at the close of business on April 1, 1996 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
Seven 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 seven nominees, unless a shareholder indicates otherwise on the proxy. The
seven 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 seven 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 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, except that
1
<PAGE> 4
Mr. Kelly was appointed by the Board of Directors to fill a vacancy in May 1995
and Mr. Aronow was appointed by the Board of Directors to fill a vacancy in July
1995.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF
POSITIONS AND OFFICES FIRST APRIL 1, 1996
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 --
David S. Aronow, 50......... President, Arco Alloys Corp., 1995 0 0.0%
manufacturer of zinc alloys
(Detroit, MI)
Phillip Wm. Fisher, 45...... Private investor (Detroit, MI) 1991 10,528(1) 0.2%
Richard J. Jacob, 76........ President, Richard J. Jacob & 1993 4,500 0.1%
Associates, consulting firm
(Dayton, OH)
James P. Kelly, 63.......... Former President of the Company 1995 15,000(2) 0.2%
Wesley W. Lang, Jr., 38..... Principal, Weiss, Peck & Greer, 1991 15,651(3) 0.2%
LLC, an investment management firm
(New York, NY)
Robert M. Teeter, 57........ President, Coldwater Corporation 1991 104,000(4) 1.6%
(Ann Arbor, MI)
David W. Wright, 55......... President of Durakon Industries, 1980 3,500 0.1%
Inc.
-- OTHER EXECUTIVE OFFICER --
Thomas A. Galas......................................................... 30,000(5) 0.5%
All directors and executive officers as a group (eight persons)......... 183,179(6) 2.7%
</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) Includes 15,000 shares which Mr. Kelly has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(3) Does not include 479,300 shares owned by WPG Corporate Development
Associates III, L.P., a Delaware limited partnership ("CDA III"), or 112,700
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.
(4) Includes 100,000 shares which Mr. Teeter has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(5) Includes 30,000 shares which Mr. Galas has the right to acquire within the
next 60 days pursuant to the exercise of stock options.
(6) Includes 145,000 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.
2
<PAGE> 5
OTHER INFORMATION RELATING TO DIRECTORS
Mr. Aronow has served as the President of Arco Alloys Corp., a manufacturer
of zinc alloys located in Detroit, Michigan, for longer than the past five
years.
Mr. Fisher was elected Chairman of the Board of the Company in March 1993
and served in that capacity until May, 1995. Mr. Fisher was also 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. Aronow and Mr. Fisher are brothers-in-law.
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. Kelly joined the Company in October 1991 as President of the Company's
Jerr-Dan Corporation subsidiary, and became President and Chief Executive
Officer in the Company in May 1995. Due to health reasons, Mr. Kelly resigned as
President and Chief Executive Officer of the Company in April 1996 and now
serves as a consultant to the Company. Prior to joining the Company, 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.
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 Chyron Corporation, a producer
of video graphics.
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. Wright has served as President of Durakon Industries, Inc., with
responsibility for the Company's pickup truck accessories business, since April
1996. He served as the President of the Marketing Division of Durakon from April
1995 through March 1996, and prior to that time served as President of Wright
Ventures, Inc., a private investment firm, from February 1994 through March
1995, and as President and a Director of Blain Buick/GMC, Inc., an automotive
dealership, from February 1990 through January 1994. 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. Aronow, Fisher, Kelly, Lang and
Teeter. The Executive Committee meets on call and has authority to act on most
matters during the intervals between Board meetings.
The Audit Committee consists of Messrs. Aronow and Lang. 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 and Lang. 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 1997 Annual Meeting should
submit such
3
<PAGE> 6
recommendations to the Chairman of the Board at the Company's corporate
headquarters no later than December 21, 1996.
During fiscal 1995, the Board met a total of six times and the Audit and
Compensation Committees each met twice. The Executive Committee met twice and
also engaged in informal discussions in lieu of meetings in 1995. With the
exception of Mr. Jacob, who was ill during a portion of 1995, 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 April 1, 1996,
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>
NAME AND ADDRESS SHARES OF COMMON STOCK PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ---------------------------------------------------------------- ---------------------- --------
<S> <C> <C>
Martinique Hotel, Inc........................................... 1,488,000(1) 22.8%
2700 Fisher Building
Detroit, Michigan 48202
FMR Corp........................................................ 651,800(3) 10.0%
82 Devonshire Street
Boston, Massachusetts 02109
NBD Bancorp Inc................................................. 558,900(3) 8.6%
611 Woodward Avenue
Detroit, Michigan 48226
WPG Corporate Development Associates III, L.P................... 479,300(2) 7.4%
One New York Plaza
New York, New York 10004
Lazard Freres & Co. LLC......................................... 476,300(3) 7.3%
30 Rockefeller Plaza
New York, NY
Ryback Management Company....................................... 374,900 5.7%
7711 Carondelet Avenue
Box 16900
St. Louis, Missouri 63105
</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 February 2, 1995. Does not include
112,700 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 is the sole independent
investment advisor of CDA III Overseas, be deemed to be the beneficial
owners of 112,700 shares of Common Stock, constituting 1.7% of the
outstanding Common Stock, owned by CDA III Overseas.
(3) Based on information contained in a Schedule 13G of such person as received
by the Company.
4
<PAGE> 7
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>
David W. Wright, 55......... President of Durakon Industries, Inc. since April 1996.
Thomas A. Galas, 49......... Senior Vice President -- Finance and Administration and Chief
Financial Officer since July 1991 and Secretary since March
1993.
</TABLE>
The executive officers of the Company serve at the pleasure of the Board of
Directors.
For additional information concerning Mr. Wright, 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.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table sets forth information for each of the fiscal years
ended December 31, 1995, 1994 and 1993 concerning the compensation of the
individuals (James P. Kelly and William Webster) who served as the Company's
Chief Executive Officer in 1995 and of each of the Company's other executive
officers.
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>
David W. Wright......... 1995 $109,615 $ 75,000 $ 25,707(3) 50,000 --
President of Durakon 1994(4) -- -- -- -- --
Industries, Inc. 1993(4) -- -- -- -- --
Thomas A. Galas......... 1995 138,000 45,540 24,742(3) 30,000 $ 5,373
Senior Vice
President -- 1994 137,871 48,065 5,456(5) -- 5,853
Finance and 1993 131,154 40,200 4,480(5) -- 2,055
Administration, Chief
Financial Officer and
Secretary
James P. Kelly.......... 1995 182,308 92,500 67,345(6) 150,000 5,174
Chief Executive
Officer 1994 149,519 84,225 2,925(5) -- 6,002
of the Company after 1993 124,616 67,100 3,510(5) -- 2,142
May 1995
William Webster......... 1995 202,000 -- 28,758(7) 4,999
Chief Executive
Officer 1994 202,000 100,000 23,525(7) -- 7,027
of the Company until 1993 201,477 88,255 23,561(7) -- 2,249
May 1995
</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 country club fees and dues, related taxes and use of Company-owned
automobile.
5
<PAGE> 8
(4) Not employed with Company during 1994 or 1993.
(5) Includes use of Company-owned automobile.
(6) Includes reimbursement of moving expenses and related taxes of $62,095 and
use of Company-owned automobile.
(7) Includes amounts relating to use of company-owned automobile and
reimbursement of lodging, medical and other expenses.
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, 1995 to each of the
executive officers of the Company named in the Summary Compensation Table above:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZED
---------------------------------------------------- VALUE AT ASSUMED
PERCENTAGE ANNUAL RATES OF STOCK
OF TOTAL PRICE APPRECIATION
OPTIONS AT END OF TEN-YEAR
GRANTED TO PER SHARE OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ------------------------
NAMES GRANTED FISCAL YEAR PRICE DATE 5% 10%
- -------------------------- ------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
David W. Wright........... 50,000(1) 21.7% $ 16.00 05/16/06 $ 503,116 $1,274,994
Thomas A. Galas........... 30,000(2) 13.1% $ 16.00 05/16/06 $ 301,869 $ 764,996
James P. Kelly............ 150,000(3) 65.2% $ 16.00 05/16/06 $1,509,347 $3,824,982
William Webster........... -- -- -- -- -- --
</TABLE>
- ---------------
(1) The option becomes exercisable in equal parts on the first, second, third,
fourth and fifth anniversaries of the grant date.
(2) One third of the option became exercisable on the grant date, and the
balance becomes exercisable in equal parts on the first and second
anniversaries of the grant date.
(3) The option becomes exercisable in equal parts on the first, second, third
and fourth anniversaries of the grant date.
6
<PAGE> 9
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, 1995 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, 1995:
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>
David W. Wright.................... -- -- 0/ 0/
50,000 0
Thomas A. Galas.................... -- -- 30,000/ $115,000/
20,000 0
James P. Kelly..................... -- -- 15,000/ $60,000/
150,000 0
William Webster.................... -- -- 90,000/ $832,500/
0 0
</TABLE>
- ---------------
(1) Based on the December 31, 1995 closing price on the Nasdaq Stock Market of
$12.50 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 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, 1995, Messrs. Fisher and Lang
served as members of the Company's Compensation Committee. Neither Mr. Fisher
nor Mr. Lang has ever been an 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
7
<PAGE> 10
financial and operational goals and increase shareholder value. The Company's
bonus arrangements for its officers are intended to make a major portion of each
officer's compensation dependent on the Company's overall performance. The
bonuses for the Company's 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, 1995, the Company's highest paid
executives could have received a potential bonus of up to the following
percentages of their salaries: Mr. Galas -- 33%; Mr. Kelly -- 50%; and Mr.
Wright -- 50%. Such bonuses are based on the Compensation Committee's
discretionary evaluation of the individual executive's performance for the year,
the Company's financial condition, strategic and operational accomplishments and
operating income. While the Company's operating income for 1995 was lower than
for 1994 and did not meet management's expectations, such performance resulted
in part from strategic decisions to restructure the Company and invest in
facilities, tools and training to improve the Company's long-term prospects.
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.
1995 COMPENSATION DECISIONS REGARDING JAMES P. KELLY AND WILLIAM
WEBSTER. Mr. Kelly was named the Company's President and Chief Executive Officer
in May 1995 and served in that capacity for the balance of the year. Mr. Kelly's
annual salary during 1995 in those positions was $202,500. The Compensation
Committee approved a bonus of $92,500 for Mr. Kelly for 1995, primarily in
recognition of the progress made by the Company under his leadership in
improving the Company's bedliner operations. Mr. Kelly and the Company were not
parties to a formal employment agreement.
Mr. Webster, the Company's Chairman and until May 1995 its President and
Chief Executive Officer, was employed pursuant to an employment agreement dated
April 1, 1993, which expired on March 31, 1996. Pursuant to that employment
agreement, Mr. Webster received an annual salary of $202,000.
Mr. Kelly and Mr. Webster did not participate in the approval of their own
compensation, but Mr. Kelly did participate in the discussion of the Company's
performance for 1995.
By the Compensation Committee
Phillip Wm. Fisher
Wesley W. Lang, Jr.
8
<PAGE> 11
PERFORMANCE GRAPH
The following line graph compares for the fiscal years ended December 31,
1991, 1992, 1993, 1994 and 1995 (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. AVG. GROUP
<S> <C> <C> <C>
12/30/90 100.0 100.0 100.0
12/31/91 175.0 160.5 138.3
12/31/92 577.8 186.8 188.9
12/31/93 772.2 214.5 242.0
12/30/94 766.7 209.7 221.9
12/29/95 555.6 296.6 217.2
</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
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, 1995 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
9
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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 1997 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1997 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 20, 1996. 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 19, 1996
10
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<TABLE>
<S><C>
PLEASE MARK
/X/ VOTES AS IN THIS
EXAMPLE
NOMINEES: David Aronow, Phillip Wm. Fisher,
FOR WITHHOLD Richard J. Jacob, James P. Kelly,
1. Election of Wesley W. Lang Jr., Robert M. Teeter,
Directors / / / / David W. Wright
For, except vote withheld from the following nominees(s):
- --------------------------------------------------------------------
The proxies will vote your shares in
accordance with your directions on this
SIGNATURES(S)_______________________________________________________DATE_____________ card and in their discretion with respect
NOTE: Please sign exactly as name appears hereon. When shares are held by joint to any other matters which may properly
tenants, both should sign. When signing as attorney, executor, administrator, trustee come before the meeting. If you do not
or guardian, please give full title as such. If a corporation, please sign in full indicate your choice on this card, the
corporate name by president or other authorized officer. If a partnership, please proxies will will vote your shares FOR
sign in partnership name by authorized person. nominees for director set forth.
- -----------------------------------------------------------------------------------------------------------------------------------
DURAKON INDUSTRIES, INC.
The undersigned hereby appoints Phillip Wm. Fisher and David W. Wright, 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 21, 1996 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>
