SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) of Rule 14a-12
O'SULLIVAN CORPORATION
(Name of Registrant as Specified In Its Charter)
C. Bryant Nickerson
Treasurer, CFO and Secretary
O'Sullivan Corporation
1944 Valley Avenue
Winchester, Virginia 22601
(703) 667-6666
(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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March 29, 1996
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held Tuesday, April 30, 1996
To The Holders of O'Sullivan Corporation Common Stock:
Notice is hereby given that the annual meeting of stockholders of
O'Sullivan Corporation will be held on Tuesday, April 30, 1996, at 11:00
a.m., at the Winchester Country Club, 1300 Senseny Road, City of Winchester,
Virginia for the purpose of:
(a) Election of directors for the ensuing year;
(b) Approval of the appointment of Yount, Hyde & Barbour, P.C.,
of Winchester, Virginia, as auditors for the 1996 fiscal year; and
(c) Transaction of such other business as may properly come before the
meeting.
Enclosed you will find a proxy form, a proxy statement, and the 1995
annual report.
Only stockholders of record at the close of business on March 8, 1996,
will be entitled to vote at the meeting.
The Board of Directors would like to have as many stockholders as
possible attend the meeting in person. However, whether or not you plan to
be present, please date, sign, and mail the enclosed proxy promptly in the
enclosed stamped return envelope.
Also, if you plan to attend the meeting in person this year, please
complete and return the enclosed Annual Meeting Registration card so that
we may better plan the necessary arrangements for the meeting.
/s/ C. Bryant Nickerson
---------------------------
C. BRYANT NICKERSON
Treasurer, CFO & Secretary
1
March 29, 1996
O'Sullivan Corporation
1944 Valley Avenue
Winchester, Virginia 22601
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1996
The enclosed proxy is solicited by and on behalf of the Board of
Directors of O'Sullivan Corporation (the "Company") for the 1996 annual
meeting of stockholders of the Company scheduled for April 30, 1996, or any
adjournments thereof, for the purposes set forth in the attached notice of
annual meeting. This proxy statement and enclosed proxy are being mailed
to stockholders on or about March 29, 1996.
Any stockholder executing a proxy may revoke it at any time before it is
voted by delivering another proxy or written notice of revocation to the
Company's Secretary. The giving of this proxy will not affect the right of
the stockholder to attend the meeting and vote in person. However,
attendance at the meeting will not, without notice of revocation, revoke a
proxy for the meeting.
Each holder of record of the Common Stock of the Company, $1.00 par value
(the "Common Stock"), at the close of business on March 8, 1996, will be
entitled to one vote for each share registered in his name on each matter
brought before the meeting. At the close of business on March 8, 1996,
16,424,602 shares of the Common Stock were outstanding and entitled to
vote.
The enclosed proxy, if executed and not revoked, will be voted for the
election of the nominees for director named herein and for the appointment
of Yount, Hyde & Barbour, P.C. as auditors, unless it contains specific
instructions to the contrary, in which event it will be voted in accordance
with such instructions. At this time, no matters other than those
specified are expected to come before the meeting. If any other matters
are properly presented to the meeting for action, the proxy holders will
vote the proxies, which confer discretionary authority to vote on such
matters, in accordance with their best judgment.
2
Except for the election of directors, action on a matter submitted to the
stockholders at the meeting will be approved if a quorum is present at the
meeting and the votes cast in favor of the action exceed the votes cast
against it. With respect to the election of directors, the nine nominees
receiving the greatest number of votes cast for the election of directors
will be elected, assuming a quorum is present at the meeting. Presence in
person or by proxy of the holders of a majority of the outstanding shares
of Common Stock entitled to vote at the meeting will constitute a quorum.
Shares for which the holder has elected to abstain or to withhold the
proxies' authority to vote (including broker non-votes) on a matter will
count toward a quorum but will have no effect on the action taken with
respect to such matter.
In addition to the solicitation of proxies by mail, the Company's
officers and regular employees may solicit proxies by telephone, facsimile
transmission or personal interview. The Company will bear the cost of all
solicitation.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as to the beneficial
ownership of the Company's Common Stock by any person known to the Company
to be the beneficial owner of more than five percent of such stock as of
January 31, 1996. To the best knowledge of the Company, the persons named
in the table have sole voting and investment powers with respect to shares
shown as owned by them.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
Arthur H. Bryant II 2,706,595 16.5%
P. O. Box 2929
Alexandria, VA 22313
Magalen O. Bryant 1,013,511 6.2%
Locust Hill Farm
Middleburg, VA 22117
ITEM ONE-ELECTION OF DIRECTORS
A board of nine directors of the Company is to be elected at the meeting
to serve until the next annual meeting or until their successors are
elected. Each of the nominees listed below is presently a director of the
Company, and each was elected by the stockholders at the last annual
meeting for a term expiring at the 1996 annual meeting.
Each director nominee has agreed to serve if elected. If any nominee is
unable or unavailable to serve, a circumstance which is not expected, the
proxy may be voted for the election of other persons that may be nominated
during the meeting, except that any proxy that is marked to withhold
authority to vote for election of directors will not be voted for any
nominee.
3
The names of the nominees and certain information concerning their
business experience and other matters are set forth below.
NAME, AGE, COMPANY POSITIONS, DIRECTOR COMMON STOCK PERCENT
PRINCIPAL OCCUPATION AND SINCE BENEFICIALLY OF CLASS
DIRECTORSHIPS IN PUBLIC OWNED AS OF
CORPORATIONS 1/31/96
John J. Armstrong, 71 1986(1) 136,941(2)(4) 0.8%
Palm City, FL,
Private Investor;
Former President of the
Company, 1971-1975
C. Hugh Bloom, Jr., 62 1990 14,403(4) 0.1%
Easton, PA,
Vice President, C.F. Martin & Co., Inc.
Arthur H. Bryant, II, 53 1967 2,706,595(2)(3) 16.5%
Alexandria, VA, (4)
Chairman of the Board and
Chairman and Chief Executive Officer of the
Company 1986-1995
Magalen O. Bryant, 67 1982 1,013,511(4) 6.2%
Middleburg, VA,
Private Investor; Director, Carlisle
Companies, Incorporated and Dover Corporation
Robert L. Burrus, Jr., 61 1995 11,000(4) 0.1%
Richmond, VA,
Partner; McGuire, Woods, Battle
& Boothe, L.L.P., a law firm
retained by the Company for a number
of years; Director, CSX Corporation, Concepts
Direct, Inc., Heilig-Meyers Company,
S & K Famous Brands, Inc.
Max C. Chapman, Jr., 52 1989 138,002(4) 0.8%
Scarborough, NY,
Chairman, Nomura Securities
International, Inc.; Director,
The Nomura Securities Co., Ltd.
James T. Holland, 55 1984 127,675(2)(4) 0.8%
Winchester, VA,
President and Chief Executive Officer
of the Company since 1995;
President and Chief Operating
Officer 1986-1995; Executive Vice
President, 1984-1986;Vice President
and Treasurer,1979-1984
R. Michael McCullough 57 1995 10,000(4) 0.1%
McLean, VA,
Senior Chairman,
Booz Allen & Hamilton,
a Delaware Corporation
4
Stephen P. Munn, 53 1995 10,000(4) 0.1%
Syracuse, NY,
Chairman, and CEO
Carlisle Companies Incorporated
Director, Carlisle Companies
Incorporated and International Imaging
Materials Inc.
All Executive Officers and Directors as a
group (18 persons) 4,442,334(2)(3) 27.0%
(4)
In addition to the officers-directors listed above the remaining officers
named in the summary compensation table had the following beneficial
ownership of shares at January 31, 1996:
COMMON STOCK
BENEFICIALLY
OWNED AS OF PERCENT
NAME AND TITLE 1/31/96 OF CLASS
John S. Campbell,
Vice President 33,553(4) 0.2%
Michael J. Meissner,
Vice President 39,462(4) 0.2%
Robert C. Westfall,
Vice President 19,656(4) 0.1%
C. Bryant Nickerson,
Treasurer, CFO & Secretary 24,416(4) 0.2%
(1) Mr. Armstrong previously served as a director of the Company for
the period 1971 to 1983.
(2) Includes the following shares held by the spouses, children or
associates of the following directors, which shares may be deemed held
subject to shared investment and voting powers: John J. Armstrong,
12,497 shares; James T. Holland, 9,244 shares; Arthur H. Bryant II,
11,466 shares.
(3) Includes 1,429,860 shares held by the Bryant Foundation, of which Mr.
Bryant is President and a Trustee.
(4) Includes the following shares for which options, which are exercisable,
are held under the Company's Incentive Stock Option Plan: James T.
Holland, 35,660 shares; all Officers and Directors as a group, 241,395
shares; John S. Campbell, 33,402 shares; C. Bryant Nickerson, 24,066
shares; Robert C. Westfall, 12,000 shares; Michael J. Meissner, 3,000
shares. Also includes for each director (other than Mr. Holland) 10,000
shares for which options are held under the Company's 1995 Outside
Directors Stock Option Plan.
5
Under the securities laws of the United States, the Company's directors,
its officers, and any persons holding ten percent or more of the Company's
Common Stock are required to report their ownership of the Common Stock and
any changes in that ownership to the Securities and Exchange Commission
("Commission") and the American Stock Exchange. Specific due dates for
these reports are established by the Commission, and the Company is
required to report in this proxy statement any failure to file by these
dates during 1995. During the year, one officer, Michael J. Meissner,
failed to report a gift of 1,242 shares of stock that he made in September,
1995. There were no other known failures of any officer or director to
file in a timely manner the required filings. In making this statement,
the Company has relied on the written representations of its incumbent
directors and officers and copies of the reports that they have filed with
the Commission.
COMMITTEES OF THE BOARD OF DIRECTORS
AND MEETING ATTENDANCE
During 1995, there were four regular quarterly board meetings held and
all of the incumbent board members attended at least 75% of the meetings of
the board and any committees on which they served, except for Mr. Bloom,
who was unable to attend one regularly scheduled meeting of the Audit
Committee.
The Company has an Audit Committee which consists of Messrs. Burrus,
McCullough and Bloom and Mrs. M.O.Bryant. All members of the Audit Committee
are outside directors. Mr. Burrus serves as Chairman of the Audit
Committee. The Committee met two times during 1995. The principal
responsibilities of the Audit Committee are to direct the activity of the
external audit functions, recommend the selection of external auditors to
the board, provide for the continuing review of the underlying internal
controls of the Company, and review published financial reports of the
Company.
There is a Compensation and Stock Option Committee of the board which
consists of Messrs. Armstrong, A.H. Bryant, Chapman and Munn. All members
of the Compensation and Stock Option Committee are outside directors. Mr.
Armstrong serves as Chairman of this Committee. The Committee met one time
during 1995. The Committee is responsible for administering the Company's
stock incentive programs and for reviewing and making recommendations to the
board with respect to compensation of officers and directors. The Committee
also determines the key employees who should receive options and the number
of shares to be granted under options.
There is a Nominating Committee of the board which consists of Messrs. A.
H.Bryant, Chapman and Holland and Mrs. M.O. Bryant. All members of the
Nominating Committee are outside directors except Mr. Holland. Mr. Chapman
serves as Chairman of this Committee. The Nominating Committee, if so
requested by the board, recommends to the board candidates for election as
directors. The Committee did not meet in 1995. The Nominating Committee
will consider nominations from stockholders. Any stockholder who wishes to
make a nomination for a director must advise the Secretary of the Company
in writing, mailed no later than ten days before the date of the
stockholders' meeting, of the name, address and business background of the
nominee.
6
COMPENSATION OF DIRECTORS
A fee of $2,500 per quarter is currently paid to each outside director as
a retainer. An additional $2,250 attendance fee is paid to each outside
director for regular directors' meetings which are held four times a year.
Outside directors who are committee members are paid $500 for each meeting
attended. All expenses in attending meetings are normally borne by the
directors.
MANAGEMENT REMUNERATION
Summary Compensation Table
The following table provides certain information concerning annual and
long-term compensation paid to or accrued on behalf of the President and
Chief Executive Officer of the Company and the four other most highly
compensated executive officers (the "Named Executive Officers") for the
years 1995, 1994, and 1993.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
- ---------------------------------------------- ---------- -------------------
Name and Principal Options All Other
Occupation Year Salary($) Bonus($) (#) Compensation($)(A)
James T. 1995 $329,400 $187,244 15,000 $80,268
Holland 1994 306,400 - - - - 74,908
President & CEO 1993 306,400 - - - - 49,958
John S. 1995 $181,000 $133,868 12,000 $13,109
Campbell 1994 171,000 52,606 - - 12,670
Vice President 1993 156,000 88,000 - - 12,855
Michael J. 1995 $175,000 $ 75,000 3,000 $18,231
Meissner 1994 - - - - - - - -
Vice President 1993 - - - - - - - -
C. Bryant 1995 $136,000 $ 52,861 9,500 $12,578
Nickerson 1994 126,000 30,000 - - 13,074
Treas.,CFO & Sec. 1993 121,000 - - - - 11,352
Robert C. 1995 $131,000 $ 55,252 7,000 $18,897
Westfall 1994 126,000 13,554 - - 17,229
Vice President 1993 106,000 - - - - 16,029
(A) The "All Other Compensation" column includes amounts accrued under the
Company's Deferred Compensation Program, split dollar life insurance
premiums paid by the Company and Company contributions to the Company's
Retirement Savings Plan. These amounts reflected in the table for 1995
are as follows:
7
Name Deferred Split Retirement
Compensation Dollar Savings Plan
Accrual Premium Contribution
James T. Holland $70,622 $ 2,146 $ 7,500
John S. Campbell $ 5,609 $ - - $ 7,500
Michael J. Meissner $13,731 $ - - $ 4,500
C. Bryant Nickerson $ 6,048 $ - - $ 6,530
Robert C. Westfall $ 9,453 $ 2,451 $ 6,993
Deferred Compensation Program
Since 1985, the Company has had a deferred compensation program for key
employees of the Company. Under this program, the Company has agreed to
pay to each covered employee a certain sum annually for fifteen years upon
his retirement or, in the event of his death, to his designated
beneficiary. The annual amount payable to each of the Named Executive
Officers upon retirement at age 65 is as follows: Mr. Holland, $150,000,
Mr. Campbell, $30,000, Mr. Westfall, $30,000, Mr. Meissner, $30,000 and Mr.
Nickerson,$30,000. A benefit is also paid if the employee terminates
employment (other than by the executive's voluntary action or discharge for
cause) after at least 10 years of employment with the Company. The program
also provides that benefits in specified amounts may be paid to executives
who retire after reaching the age of 50 and completing at least 20 years of
service with the Company. In that event, the amount of the benefit depends
on the employee's years of service with the Company (with the full benefit
paid only if the employee has completed 25 years of service).
The Company has purchased individual life insurance contracts with
respect to each employee covered by this program. The Company is the owner
and beneficiary of these insurance contracts. The employees are general
creditors of the Company with respect to these benefits.
Split-Dollar Life Insurance
In 1979, the Company initiated a split-dollar insurance program for
certain key employees. The face amount of each policy is $100,000. The
premium is split between the Company and the employee. No portion of the
premium is expensed for financial reporting purposes since the Company will
recoup its cost in full.
Retirement Savings Plan
On January 31, 1989, the Board of Directors approved a trusteed
Retirement Savings Plan (the "Plan"), effective March 1, 1989, that covers
all employees of the Company and its subsidiaries whose employment is not
governed by the terms of a collective bargaining agreement between employee
representatives and the Company or its subsidiaries. It is the current
intent of the Company to contribute three percent (3%) of a participant's
annual compensation to the Plan without an employee contribution being
required, and to make an additional matching contribution of up to two
percent (2%) of annual compensation if the participant contributes an equal
amount.
8
During 1995, total Company contributions to this Plan for salaried
employees consisted of a normal Plan contribution of 3% of eligible
participants' annual compensation plus an additional matching contribution
of up to 2% of the participant's annual compensation.
Stock Option Plans
The Company maintains the 1985 and 1995 Incentive Stock Option Plans.
The following tables provide information with respect to stock options that
were granted to and exercised by the Named Executive Officers under the
Stock Option Plans.
OPTIONS GRANTED IN LAST FISCAL YEAR
POTENTIAL
PERCENTAGE REALIZABLE
OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES
GRANTED TO EXERCISE OF STOCK PRICE
OPTIONS EMPLOYEES OR BASE APPRECIATION FOR
GRANTED IN FISCAL PRICE EXPIRATION OPTION TERMS(2)
NAME (#)(1) YEAR ($/SHARE) DATE 5% 10%
- ------------------- ------- --------- --------- ---------- -------- --------
James T. Holland 15,000 15% $10.31 4-24-05 $ 97,282 $246,532
President, CEO
John S. Campbell 12,000 12% $10.31 4-24-05 $ 77,826 $197,226
Vice President
Michael J. Meissner 3,000 3% $10.31 4-24-05 $ 19,456 $ 48,306
Vice President
C. Bryant Nickerson 9,500 9% $10.31 4-24-05 $ 61,612 $156,137
Treasurer, CFO &
Secretary
Robert C. Westfall 7,000 7% $10.31 4-24-05 $ 45,398 $115,048
Vice President
(1) The options were exercisable as of 4-25-95.
(2) These options were granted for a ten-year term. The amounts disclosed
as the potential realizable value are the result of calculations at
the 5% and 10% assumed rates of appreciation permitted by the
Securities and Exchange Commission. These amounts are not intended to
forecast potential future appreciation of the Company's common stock
price. The amounts disclosed are based on assumed rates of
appreciation in the value of the Company's common stock over a ten-
year period.
9
OPTIONS EXERCISED IN LAST FISCAL YEAR
SHARES ACQUIRED VALUE
ON EXERCISE REALIZED
NAME (#)(1) ($)(2)
- ---------------------- ---------------- ----------------
James T. Holland 9,568 $ 1,128
President, CEO
John S. Campbell - - $ - -
Vice President
Michael J. Meissner - - $ - -
Vice President
C. Bryant Nickerson - - $ - -
Treasurer, CFO & Secretary
Robert C. Westfall 7,656 $11,921
Vice President
(1) Upon the exercise of an option, the optionee must pay the exercise
price in cash or stock.
(2) Represents the difference between the fair market value of the common
stock underlying the option and the exercise price at exercise.
Stock Option Holdings
The following table provides information concerning the number and value
of unexercised stock options held as of December 31, 1995 by the Named
Executive Officers.
LAST FISCAL YEAR END OPTION VALUES
Number Of Value Of
Unexercised Unexercised In-
Options The-Money Options
At FY-End At FY-End
Name Exercisable Exercisable
- ---------------------------- ------------ ------------
James T. Holland
President & CEO 35,660 $ 22,844
C. Bryant Nickerson
Treasurer, CFO & Secretary 24,066 $ 14,075
John S. Campbell
Vice President 33,402 $ 17,601
Michael J. Meissner
Vice President 3,000 $ 188
Robert C. Westfall
Vice President 12,000 $ 438
10
Report of Compensation and Stock Option Committee on Executive Compensation
The Compensation and Stock Option Committee of the board has provided
the following report on executive compensation:
The Compensation and Stock Option Committee is composed of Directors who
are not employees of the Company. The Committee reviews and recommends to
the Board of Directors the implementation of a compensation structure that is
intended to enhance the profitability of the Company. The compensation of the
senior executives is structured as a combination of salary, annual bonuses
dependent on profitability, stock options and a deferred compensation
program. This compensation structure is intended to align the financial
interests of the Company's senior executives with those of the Company's
shareholders.
At the beginning of the 1995 fiscal year, the Committee reviewed
proposals submitted by the President for annual salaries and bonuses for the
senior executives. The Committee determined the amount of the salary and
projected bonus to be paid to each senior executive for the year based on
management's recommendations and subjective factors. In making its
determination, the Committee reviewed information from the Wyatt Company
survey of plastics and allied products companies' executive compensation, as
well as compensation data of the companies in the peer group used for
purposes of the Company's April 1995 proxy statement (the domestic OEM
automotive industry), to the extent such data was available from the
companies' proxy statements. Based on this data, the salaries and bonuses of
the Company's executive officers were generally competitive with compensation
of similar officers of the companies in the Wyatt survey and the Company's
peer group. The 1995 salary and projected bonus for each senior executive
was set at a level consistent with the Company's historical practice and in
amounts considered appropriate, taking into account this competitive data,
the past performance of the executive and the efforts required of the
executive in a very competitive business environment. In addition, the
Committee took into consideration the Company's profitability in 1994 and
the Company's projections of increased profitability in 1995.
The 1995 bonus program for the President was structured to give the
President the opportunity to receive a bonus based on the Company's 1995 net
profit before bonuses and income taxes ("PBIT"). Target bonuses were
established for the other senior executives who are responsible for overall
management of the Company, based in part on the Company's attainment of the
PBIT goals and in part on an evaluation of the executive's attainment of
personal goals and objectives, as determined by the President. The bonuses
for the senior executives who are directly responsible for divisions of the
Company were based on the PBIT of their divisions and in most cases were
subject to an evaluation of the executive's attainment of personal goals and
objectives, as determined by the President.
The Committee grants long-term incentive compensation in the form of
stock options. The Committee considers stock options to be an important
means of compensating executives for their efforts and ensuring that the
executives maintain their incentive to increase the profitability of the
Company and the value of the Company's stock. All stock options under the
Company's Stock Option Plan are granted with an exercise price equal to the
fair market value of the Company's stock on the date of grant. Stock options
therefore provide value to executives only when shareholders benefit from
stock price appreciation. The Committee selects the key employees who are to
11
receive stock options and determines the number of shares with respect to
which each option is granted. The Committee's decisions on individual awards
of stock options are based on recommendations of management and on
assessments as to the employee's contributions to the profitability of the
Company and the employee's potential for continuing to make such
contributions. During 1995, stock options were granted to key employees,
including the executive officers.
The Company maintains a deferred compensation program that provides
benefits in specified amounts to the executive officers upon their retirement
at age 65 or death, or upon their termination of employment (other than by
the executive's voluntary action or discharge for cause) after at least ten
years of employment with the Company. The program also provides that
benefits in specified amounts may be paid to executives who retire after
reaching age 50 and completing at least 20 years of service with the Company.
The deferred compensation program is intended to provide executives with an
additional incentive to remain with the Company.
Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes
a $1,000,000 limit on the amount of compensation that will be deductible by
the Company each year with respect to each of the chief executive officer and
the four other most highly compensated executive officers. The compensation
level of the Company's executives is well below this $1,000,000 limit. The
Company's Stock Option Plan is structured to be able to comply with the
exemption from the Section 162(m) limitation as a performance-based plan.
When setting compensation, the Committee takes into account the
complexity of the Company's business and the need for strong, involved
management. The Committee also takes into account the substantial changes
that have taken place in the Company's business and business environment
during recent years and the special efforts made by senior management to
continue the Company's profitability despite significant economic pressures
and competition.
The foregoing report was furnished by the Compensation Committee,
consisting of Messrs. Armstrong (Chairman), Bryant, Chapman and Munn.
COMPARATIVE PERFORMANCE
The following graph compares the yearly percentage change in the
cumulative total stockholder return of the Company's common stock against
the cumulative total return of (i) the S&P Composite 500 Stock Index, (ii)
a group of public companies used in last year's proxy statement (the Old
Peer Group) and (iii) the S&P Chemicals (Specialty) Index. The Old Peer
Group includes the following public companies which supply products to the
domestic OEM automotive industry: Donnelly Corporation; Gencorp, Inc.;
Larrizza Industries; The Standard Products Company; and Trinova
Corporation. Automotive Industries Holdings, Inc. is omitted from this
group because its stock is no longer publicly traded. The Company believes
that its business is now more comparable to the business of the companies
in the S&P Chemicals (Specialty) Index than to the business of the
companies in the Old Peer Group because of the sale of the Company's
Gulfstream Division in 1994. The Company therefore intends to use the S&P
Chemicals (Specialty) Index, rather than the Old Peer Group, for comparison
purposes in its future proxy statements.
12
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
O'SULLIVAN CORPORATION, S&P 500, OLD PEER GROUP AND S&P CHEMICALS-SPECIALTY
MEASURED PERIOD O'SULLIVAN OLD PEER S&P CHEMICALS-
(FISCAL YEAR COVERED) CORPORATION S&P 500 GROUP SPECIALTY
- --------------------- ----------- ------- -------- --------------
DECEMBER 1990 100.00 100.00 100.00 100.00
DECEMBER 1991 107.93 130.47 142.98 141.17
DECEMBER 1992 131.83 140.41 171.42 149.56
DECEMBER 1993 126.62 154.56 246.25 170.53
DECEMBER 1994 135.71 156.60 206.33 148.87
DECEMBER 1995 154.47 214.86 204.94 195.67
CERTAIN TRANSACTIONS
The Company leases office space in Bloomfield Hills, Michigan from
Devon Associates, a partnership in which Michael J. Meissner, an
executive officer of the Company, owns a 50% interest. The lease has a
two-year term ending January 1, 1997 and provides for lease payments of
$69,290 over the entire term of the lease.
ITEM TWO-SELECTION OF AUDITORS
Yount, Hyde & Barbour, P.C., a firm of certified public accountants in
Winchester, Virginia, has served as auditors of the Company for several
years. The Board of Directors recommends their appointment for the 1996
fiscal year and will ask the stockholders to approve such an appointment.
Representatives of the auditing firm are expected to be present at the
stockholders' meeting and will have the opportunity to make a statement if
they desire to do so and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder desiring to make a proposal to be acted upon at the 1997
Annual Meeting tentatively scheduled for Tuesday, April 29, 1997, must
present such proposal to the Company at its principal office in Winchester,
Virginia not later than December 1, 1996, in order for the proposal to be
considered for inclusion in the Company's proxy statement. Additionally,
any stockholder who wishes to make a proposal from the floor at the 1996
stockholders' meeting must advise the Secretary of the Company in writing,
mailed no later than April 15, 1996, of the nature of the proposal.
MISCELLANEOUS
The annual report to stockholders, containing financial statements and
pertinent footnotes thereto, is included with the mailing of this proxy
statement.
/s/ C. Bryant Nickerson
-----------------------
C. BRYANT NICKERSON
Treasurer, CFO & Secretary
13
[FRONT]
PROXY COMMON STOCK
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF O'SULLIVAN CORPORATION
The undersigned hereby appoints A.H. Bryant II, and J.T.Holland and
each or any of them, proxy for the undersigned, with power of
substitution, to vote with the same force and effect as the undersigned
at the annual meeting of the stockholders of O'Sullivan Corporation on
April 30, 1996 and any adjournment thereof. The matters to be voted upon
at this stockholders' meeting are listed on the other side. PLEASE READ
EACH ITEM CAREFULLY.
The proxy may be revoked at any time before it is voted, and the giving of
this proxy will not affect the right of the stockholder to attend the
meeting and vote in person. This proxy will be voted as specified and in
the absence of direction will be voted FOR each of the matters listed.
The management does not know any other matters which will be presented for
action at the meeting, but the persons named in the proxy intend to vote or
act with respect to any other proposal which may be presented for action
according to their judgement in light of conditions then prevailing.
CONTINUED ON OTHER SIDE
[BACK]
THE MATTERS TO BE VOTED UPON ARE: ####
A. The election of directors for the ensuing year:
[ ] For all nominees listed below
J.J. Armstrong C.H. Bloom, Jr. A.H. Bryant II M.O. Bryant
R.L. Burrus, Jr. M.C. Chapman, Jr. J.T. Holland R.M. McCullough
S.P. Munn
[ ] For all nominees listed above except as marked to the contrary
below (Instruction: to withhold authority to vote for any
individual nominee, write the nominee's name in the space provided
below.)
_________________________________________________________________
[ ] Withhold authority to vote for all nominees listed above.
B. Approval of the appointment of Yount, Hyde & Barbour, P.C. of
Winchester, Virginia as auditors for the company for the ensuing year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
C. Upon such other matters as may properly come before the meeting.
------------------------ ---------
SIGNATURE DATE
------------------------ ---------
SIGNATURE DATE
Please sign, exactly as name appears above, date and return this proxy
using the enclosed envelope. When shares are owned by joint tenants, both
should sign. When signing as attorney, as executor, administrator, trustee
or guardian, please give full title as such.
