<PAGE> 1
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 sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Arrow Automotive Industries, Inc.
(Name of Registrant as Specified In Its Charter)
[ ]
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] 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
ARROW AUTOMOTIVE INDUSTRIES, INC.
3 SPEEN STREET
FRAMINGHAM, MASSACHUSETTS 01701
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
Framingham, Massachusetts
October 22, 1997
The 1997 Annual Meeting of Stockholders of Arrow Automotive Industries,
Inc. (the "Company") will be held at the offices of Burns & Levinson LLP, 125
Summer Street, Boston, Massachusetts 02110, on Thursday November 13, 1997 at
10:00 a.m. for the following purposes:
1. To elect directors of the Company;
2. To approve the selection of the accounting firm of Ernst & Young
LLP as auditors of the Company for the current fiscal year; and
3. To consider and act upon any matters incidental to the foregoing,
and to transact such other business as may properly come before the
meeting.
The Board of Directors has designated the close of business on October 14,
1997, as the record date for the determination of stockholders entitled to
receive notice of and to vote at the meeting.
LAWRENCE M. LEVINSON
Clerk
A copy of the Annual Report of the Company for the fiscal year ended June
28, 1997, is being mailed to stockholders herewith. The Annual Report should not
be considered a part of the attached proxy materials.
<PAGE> 3
ARROW AUTOMOTIVE INDUSTRIES, INC.
PROXY STATEMENT
FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS
This statement is furnished to the stockholders of Arrow Automotive
Industries, Inc. (hereinafter, the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company to be used at
the 1997 Annual Meeting of Stockholders, and any adjournment of that meeting.
The Annual Meeting of Stockholders will be held at the offices of Burns &
Levinson LLP, 125 Summer Street, Boston, Massachusetts 02110, on Thursday,
November 13, 1997, at 10:00 a.m. Each proxy delivered pursuant to this
solicitation is revocable at any time before it is voted, at the option of the
person executing such proxy, by notifying the Company in writing, by submitting
a later dated proxy or by personal vote at the meeting. This proxy statement is
being mailed to stockholders on or about October 22, 1997.
At the close of business on October 14, 1997, the Company had 2,873,083
outstanding shares of Common Stock. Each share of outstanding Common Stock is
entitled to one vote. Only holders of Common Stock of record on the books of the
Company at the close of business on October 14, 1997, are entitled to receive
notice of and to vote at the 1997 Annual Meeting of Stockholders. The Company's
by-laws require that the holders of a majority of the shares of the Company's
Common Stock then outstanding and entitled to vote be present in person or
represented by proxy at the meeting in order to constitute a quorum for the
transaction of business. Each nominee for director receiving a plurality of
votes will be elected as a director. Abstentions from voting on a matter by a
stockholder present in person or by proxy and broker "non-votes" will not be
counted in determining the number of shares voted for the election of directors
or any other matter, but will be counted for purposes of attaining a quorum.
PART I: MATTERS TO BE SUBMITTED FOR STOCKHOLDER CONSIDERATION
ELECTION OF DIRECTORS
(NOTICE ITEM NO. 1)
The Board of Directors has fixed the total number of directors at ten,
consisting of two classes of three directors each and one class of four
directors. Each director of the Company is elected for a term of three years,
with the terms of office of each class ending in successive years. The terms of
office of Jim L. Osment, James F. Fagan and Winthrop P. Rockefeller expire
effective as of the date of the 1997 Annual Meeting of Stockholders. At the
meeting, the persons named in the accompanying proxy intend to vote for the
re-election of Messrs. Osment, Fagan and Rockefeller for a three-year term
expiring on the date of the 2000 Annual Meeting of Stockholders, unless
authority to do so is withheld. All of the nominees are presently members of the
Board of Directors. Each of the aforesaid nominees has communicated to the
Company his consent to being named in this proxy statement and to serve as a
director if elected. Although the Board of Directors has no reason to believe
that any of the nominees will be unable to serve as a director if elected, in
the event of such inability, the proxy holders shall have the right to either
vote for such substitute, if any, as the present Board of Directors may
designate, or to fix the number of directors at such lesser number as will equal
the number of nominees that are able to serve.
The Board of Directors recommends that the stockholders vote for the
election of all nominees for directors.
<PAGE> 4
SELECTION OF AUDITORS
(NOTICE ITEM NO. 2)
The accounting firm of Ernst & Young LLP has been selected by the Board of
Directors to audit the books, records and accounts of the Company for the
current fiscal year, and the stockholders will be asked at the meeting to
approve this selection. A representative of Ernst & Young LLP is expected to be
present at the Annual Meeting of Stockholders. The Ernst & Young LLP
representative will be provided an opportunity to make a statement if he or she
so desires, and will be available to respond to appropriate questions.
The Board of Directors recommends that the stockholders vote to approve the
selection of this firm.
PART II: ADDITIONAL INFORMATION
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following chart shows, as of October 14, 1997, (i) those stockholders
who each owned beneficially more than five (5%) percent of the outstanding
Common Stock of the Company (the one class of the Company's voting securities),
(ii) the beneficial ownership of each such principal stockholder, each director,
each nominee for director, the chief executive officer and each of the other
four most highly compensated executive officers of the Company (each a "Named
Executive Officer"), and (iii) the beneficial ownership of all directors and
executive officers of the Company as a group (which group consisted of 15
members as of October 14, 1997):
<TABLE>
<CAPTION>
AMOUNT AND
NAME OF BENEFICIAL OWNER NATURE OF PERCENTAGE
(ADDRESS IS SHOWN ONLY FOR BENEFICIAL BENEFICIALLY
PRINCIPAL STOCKHOLDERS) OWNERSHIP(1) OWNED
- - -------------------------------------------------------------- ------------ ----------
<S> <C> <C>
Lawrence M. Levinson.......................................... 1,385,555(2) 48.23%
c/o Burns & Levinson LLP
125 Summer Street
Boston, Massachusetts
(Director)
Mary S. Holzwasser............................................ 536,567(3) 18.68%
25 Wachusett Road
Chestnut Hill, Massachusetts
(Director)
Mary S. Holzwasser, Joseph Segal and Lawrence M. Levinson, as
Trustees of the Trust u/w/o Albert S. Holzwasser.............. 526,567(2)(3)(4) 18.33%
c/o Arrow Automotive Industries, Inc.
3 Speen Street
Framingham, Massachusetts
Harry A. Holzwasser........................................... 176,979 6.16%
6961 Lake Estates Court
Boca Raton, Florida
(Director and Named Executive Officer)
Dimensional Fund Advisors, Inc................................ 170,900(5) 5.95%
1229 Ocean Avenue
Santa Monica, California
Jim L. Osment................................................. 55,000(6) 1.9%
(Director and Named Executive Officer)
Joel D. Holzwasser............................................ 27,210(7) *
(Director)
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND
NAME OF BENEFICIAL OWNER NATURE OF PERCENTAGE
(ADDRESS IS SHOWN ONLY FOR BENEFICIAL BENEFICIALLY
PRINCIPAL STOCKHOLDERS) OWNERSHIP(1) OWNED
- - -------------------------------------------------------------- ------------ ----------
<S> <C> <C>
Robert A. Holzwasser.......................................... 27,210(7) *
(Director and Named Executive Officer)
James F. Fagan................................................ 14,500(8) *
(Director and Named Executive Officer)
Alan Steinert, Jr. ........................................... 100 *
(Director)
Stephen D. Hoane.............................................. 0 *
(Named Executive Officer)
Winthrop P. Rockefeller....................................... 0 *
(Director)
Marvin Almy................................................... 0 *
(Director)
------------ ----------
All directors and executive officers of the Company as a group
(15 persons)................................................ 1,722,360(9) 58.32%
</TABLE>
- - ---------------
* Represents beneficial ownership of less than one percent of the Company's
outstanding shares of Common Stock.
(1) Shares are considered beneficially owned, for purposes of this table only,
if held by the person indicated as beneficial owner, or if such person,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares the power to vote, to direct the
voting and/or to dispose or direct the disposition of such security, or if
the person has the right to acquire beneficial ownership within sixty (60)
days, unless otherwise indicated in the following footnotes. All shares
listed in the above table represent shares owned directly, unless otherwise
stated in a footnote.
(2) Includes the following:
(a) 840,988 shares held as Trustee under the Arrow Automotive Industries,
Inc. Voting Trust Agreement dated March 28, 1990, as amended, between
Mary S. Holzwasser and Mr. Levinson (the "Voting Trust Agreement"),
pursuant to which the Trustee has sole voting and dispositive power
with respect to all shares subject thereto. The term of the Voting
Trust Agreement expires on March 28, 1998, subject to earlier
termination by the Trustee in his sole discretion.
(b) 526,567 shares held by the Trust u/w/o Albert S. Holzwasser (see Note 4
below), of which Mr. Levinson is one of three Trustees. The Trustees,
acting by majority vote, have voting and dispositive power with respect
to the shares held by the Trust.
(c) 10,000 shares held by the Mary S. Holzwasser Charitable Trust (the
"Charitable Trust") under a Declaration of Trust dated August 23, 1979,
of which Mr. Levinson is a co-Trustee with Mary S. Holzwasser. Mr.
Levinson and Mrs. Holzwasser, as co-Trustees, have voting and
dispositive power with respect to the shares subject to the Charitable
Trust. The term of the Charitable Trust is perpetual unless terminated
by the Trustees.
(3) Includes the following:
(a) 526,567 shares held by the Trust u/w/o Albert S. Holzwasser (see Note 4
below), of which Mrs. Holzwasser is one of three Trustees. The
Trustees, acting by majority vote, have voting and dispositive power
with respect to the shares held by the Trust. The term of the Trust
expires on the date of the death of Mrs. Holzwasser.
3
<PAGE> 6
(b) 10,000 shares held by the Mary S. Holzwasser Charitable Trust (the
"Charitable Trust") under a Declaration of Trust dated August 23, 1979,
of which Mrs. Holzwasser is a co-Trustee with Lawrence M. Levinson. Mr.
Levinson and Mrs. Holzwasser, as co-Trustees, have voting and
dispositive power with respect to the shares subject to the Charitable
Trust. The term of the Charitable Trust is perpetual unless terminated
by the Trustees.
In addition to the foregoing, Mary S. Holzwasser (i) is the sole beneficiary of
the Voting Trust Agreement described in Note 2(a) above, and upon expiration of
said Voting Trust Agreement on March 28, 1998 (assuming no extension) she will
obtain voting and dispositive power with respect to the shares subject thereto;
and (ii) has entered into a Pledge Agreement with Harry A. Holzwasser, pursuant
to which she received a pledge of and security interest in 100,000 shares of the
Common Stock of the Company held by Mr. Holzwasser to secure certain
indebtedness of Mr. Holzwasser to Mrs. Holzwasser. If the Voting Trust Agreement
were to expire and an event of default were to occur under the Pledge Agreement
at a time when Mrs. Holzwasser was living and still a Trustee under the Trust
u/w/o Albert S. Holzwasser and the Mary S. Holzwasser Charitable Trust, Mrs.
Holzwasser could, by exercise of her rights under the Pledge Agreement, acquire
beneficial ownership of up to 1,477,555 shares of the Common Stock of the
Company, representing approximately 51.43% of the presently issued and
outstanding Common Stock of the Company.
(4) The principal beneficial interest in the Trust u/w/o Albert S. Holzwasser is
held by Mary S. Holzwasser during her lifetime, and thereafter by Harry A.
Holzwasser, Mary Sue Rosenthal and Jo-Ann Cohn. Mary Sue Rosenthal and
Jo-Ann Cohn are the adult daughters of Mary S. Holzwasser. The Trustees,
acting by majority vote, have voting and dispositive power with respect to
the subject shares. The term of the Trust expires on the date of the death
of Mrs. Holzwasser.
(5) As reported in the Schedule 13G filed with the Securities and Exchange
Commission by Dimensional Fund Advisors Inc. ("Dimensional") on or about
February 5, 1997. Dimensional, a registered investment advisor, has advised
the Company that it holds these shares in the portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or in
series of the DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles
for qualified employee benefit plans, all of which Dimensional serves as
investment manager. Dimensional has further advised the Company that it
disclaims beneficial ownership of such shares.
(6) Includes presently exercisable options to purchase 25,000 shares under the
Company's 1993 Incentive Stock Option Plan.
(7) Includes presently exercisable options to purchase 8,500 shares under the
Company's 1993 Incentive Stock Option Plan.
(8) Includes presently exercisable options to purchase 12,500 shares under the
Company's 1993 Incentive Stock Option Plan.
(9) Includes presently exercisable options to purchase a total of 80,000 shares
under the Company's 1993 Incentive Stock Option Plan.
4
<PAGE> 7
BOARD OF DIRECTORS
The following table sets forth certain information concerning each director
whose term is continuing and each director nominated for election or
re-election. The principal occupation of each director, except as otherwise
indicated in the table, has remained unchanged during the past five years.
<TABLE>
<CAPTION>
YEAR FIRST
DIRECTORS CONTINUING FOR TERMS ELECTED TERM
EXPIRING IN 1998 OR 1999 AGE DIRECTOR EXPIRING
- - -------------------------------------------- --- ---------- --------
<S> <C> <C> <C> <C>
Mary S. Holzwasser(1).................................................. 85 1945 1998
Investor; Formerly an Officer of the
Company
Harry A. Holzwasser(2)................................................. 73 1948 1998
Chairman of the Board of the Company
Lawrence M. Levinson(3)................................................ 79 1971 1998
Clerk of the Company; Partner at Burns &
Levinson LLP, Attorneys, Boston,
Massachusetts
Marvin Almy(4)......................................................... 52 1997 1998
Self Employed Marketing Consultant in the
Automotive Aftermarket Industry (March
1996 - present); President of the
Association of Automotive Aftermarket
Distributors (August 1985 - December,
1995)
Alan Steinert, Jr.(5).................................................. 61 1983 1999
Chief of Staff, Executive Office of Health
and Human Services, Commonwealth of
Massachusetts (October, 1995 - present)
Under Secretary, Executive Office of
Environmental Affairs of the Commonwealth
of Massachusetts (May 1993 - October,
1995); President, The Eastern Company
(1986 - November, 1991)
Robert A. Holzwasser(2)................................................ 43 1983 1999
Vice President -- Engineering Operations
and Product Development of the Company
Joel D. Holzwasser(2).................................................. 41 1984 1999
Vice President -- Advertising and Public
Relations of the Company
<CAPTION>
NOMINEES FOR TERM
EXPIRING IN 2000
- - --------------------------------------------
<S> <C> <C> <C> <C>
Jim L. Osment.......................................................... 58 1989 1997
President and Chief Executive Officer of
the Company
James F. Fagan......................................................... 49 1989 1997
Executive Vice President, Treasurer and
Chief Financial Officer of the Company
Winthrop P. Rockefeller................................................ 49 1993 1997
Lieutenant Governor of the State of
Arkansas (January, 1997 - present);
Chairman of the Board and Chief Executive
Officer of Winrock Farms, Inc.
</TABLE>
- - ---------------
(1) Mary S. Holzwasser is the widow of Albert S. Holzwasser, the founder of the
Company.
5
<PAGE> 8
(2) Harry A. Holzwasser is the father of Robert A. Holzwasser and Joel D.
Holzwasser, and the son of the late Albert S. Holzwasser, the founder of the
Company.
(3) Lawrence M. Levinson is also a director of Independent Bank Corp. and
Sonesta International Hotels Corporation.
(4) In June, 1997, the Board of Directors voted to (a) amend the Company's
By-Laws to increase the maximum number of Directors from nine (9) to ten
(10); (b) increase the number of Directors in the class whose term expires
on the date of the 1998 Annual Meeting of Shareholders from three (3) to
four (4); and (c) elect Marvin Almy as a Director of the Company to serve as
the fourth Director in the class of Directors whose term expires on the date
of the 1998 Annual Meeting of Stockholders.
(5) Mr. Steinert is also a director of Fantom Technologies Inc.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Company has a standing Executive Committee, Audit Committee and
Compensation, Bonus and Stock Option Plan Committee of the Board of Directors.
There are no nominating or similar committees of the Board of Directors.
The Executive Committee is comprised of Lawrence M. Levinson (Chairman),
Harry A. Holzwasser and Jim L. Osment. The Executive Committee possesses, with
certain exceptions, all of the power and authority of the Board of Directors in
the management and direction of the business, property and affairs of the
Company. The Executive Committee had no meetings and took no actions by
unanimous written consent during fiscal 1997.
The Audit Committee consists of Alan Steinert, Jr. (Chairman), Lawrence M.
Levinson and Winthrop P. Rockefeller. The function of the Audit Committee is to
make recommendations to the Board regarding the engagement of independent public
accountants, to review and approve the scope of the audit and the fees and other
arrangements with respect to such services, to review with the independent
public accountants the results of the audit engagement, and to generally review
the adequacy of the Company's accounting systems and internal controls. There
were four (4) meetings of the Audit Committee during the 1997 fiscal year.
The Compensation, Bonus and Stock Option Plan Committee consists of
Lawrence M. Levinson (Chairman), Winthrop P. Rockefeller and Alan Steinert, Jr.
The function of this Committee is to review and make recommendations to the
Board with respect to compensation and bonuses for officers of the Company, and
to administer the Company's 1993 Incentive Stock Option Plan. The Compensation,
Bonus and Stock Option Plan Committee held no meetings and took no actions by
unanimous written consent during the 1997 fiscal year.
The Board of Directors held ten (10) meetings during the 1997 fiscal year,
and took two actions by unanimous written consent. Each of the directors
attended at least 75% of the total number of meetings of the Board of Directors
and the committees on which he or she served during fiscal 1997, except for
Winthrop P. Rockefeller and Mary S. Holzwasser who attended 57% and 50%,
respectively, of the meetings of the Board of Directors and the committees on
which they served.
6
<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information concerning each
executive officer of the Company. The term of office of each executive officer
extends until the first meeting of the Board of Directors following the Annual
Meeting of Stockholders and thereafter until the executive officer's successor
is duly chosen and qualified, or until the executive officer's earlier
resignation, death, removal from office or disqualification.
<TABLE>
<CAPTION>
NAME OF EXECUTIVE OFFICER EXECUTIVE OFFICE HELD AGE
- - ------------------------------------------ ------------------------------------------ ----
<S> <C> <C>
Harry A. Holzwasser(1).................... Chairman of the Board 73
Jim L. Osment(1).......................... President and Chief Executive Officer 58
James F. Fagan(1)......................... Executive Vice President, Treasurer and 49
Chief Financial Officer
Robert A. Holzwasser(1)................... Vice President -- Engineering Operations 43
and Product Development
Joel D. Holzwasser(1)..................... Vice President -- Advertising and Public 41
Relations
Charles W. DeVore(2)...................... Vice President -- Corporate Administration 56
Kathaleen M. Carroll-Coelho(3)............ Vice President and Controller 42
W. Harold Henderson(4).................... Vice President -- Manufacturing 57
Terry Reynolds(5)......................... Vice President -- Human Resources 52
Stephen D. Hoane(6)....................... Vice President -- Sales 47
</TABLE>
- - ---------------
(1) Harry A. Holzwasser, Robert A. Holzwasser, Joel D. Holzwasser, Jim L. Osment
and James F. Fagan are also directors of the Company. Reference is made to
the section entitled "Board of Directors" for further information concerning
their background.
(2) Mr. DeVore was elected a vice president of the Company in April, 1989.
(3) Mrs. Carroll-Coelho was elected a vice president of the Company in June,
1990.
(4) Mr. Henderson was elected a vice president of the Company in July, 1990.
(5) Mr. Reynolds was elected a vice president of the Company in December, 1993,
after serving as Director of Human Resources for Manufacturing Operations of
the Company from December, 1990 to December, 1993.
(6) Mr. Hoane was elected a vice president of the Company in September, 1995.
Prior to September, 1995, Mr. Hoane served as Corporate Director of Sales
for Crane Technologies from February, 1995 to September, 1995, and as the
National Sales Manager of the Company from July, 1994 to February, 1995 and
Regional Sales Manager of the Company from May, 1991 to July, 1994.
7
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company for the
1995-1997 fiscal years to the Company's Chief Executive Officer and each of the
other four most highly paid executive officers of the Company (each a "Named
Executive Officer").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION
-------------------------- AWARDS
OTHER ----------------------- PAYOUTS
ANNUAL RESTRICTED SECURITIES -------
COMPEN- STOCK UNDERLYING LTIP ALL OTHER
SALARY BONUS SATION AWARD(S) OPTIONS/ PAYOUTS COMPENSA-
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) SARS(#) ($) TION ($)
- - -------------------------------- ----- -------- ----- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jim L. Osment, Chief............ 1997 $224,135 -- $ 795 (1) -- -- -- $ 1,665(1)(2)
Executive Officer 1996 $244,231 -- $ 724 (1) -- -- -- $ 1,625(1)(2)
and President 1995 $247,116 -- $ 619 (1) -- -- -- $ 1,565(1)(2)
Harry A. Holzwasser............. 1997 $357,945 -- $3,175 (1) -- -- -- $ 4,485(1)
Chairman of the Board 1996 $396,157 -- $3,640 (1) -- -- -- $ 5,141(1)
1995 $400,836 -- $3,055 (1) -- -- -- $ 4,583(1)
James F. Fagan.................. 1997 $161,689 -- $ 259 (1) -- -- -- $ 710(1)(2)
Executive Vice President, 1996 $175,846 -- $ 254 (1) -- -- -- $ 848(1)(2)
Treasurer and Chief 1995 $177,924 -- $ 121 (1) -- -- -- $ 704(1)(2)
Financial Officer
Robert A. Holzwasser............ 1997 $108,382 -- $ 95 (1) -- -- -- $ 565(1)(2)
Vice President -- 1996 $117,872 -- $ 95 (1) -- -- -- $ 499(1)(2)
Engineering Operations 1995 $118,372 -- $ 84 (1) -- -- -- $ 498(1)(2)
And Product Development
Stephen D. Hoane................ 1997 $103,301 -- -- -- -- -- $ 389(2)
Vice President -- Sales 1996 $ 92,664 -- -- -- -- -- $ 172(2)
1995 $ 39,019 -- -- -- -- -- $ 127(2)
</TABLE>
- - ---------------
(1) The Company has Executive Life Insurance Agreements with certain of the
Named Executive Officers, which agreements are funded by so-called
"split-dollar" life insurance policies on the lives of the participating
executive officers. These agreements, in conjunction with the Company's
group life insurance plan, are intended to provide the named executives with
the same life insurance benefit currently provided to all executive
employees of the Company (i.e. three times salary, not to exceed $625,000).
The Company is the sole owner of the life insurance policies funding these
agreements, and all proceeds therefrom in excess of the executive's death
benefit are payable to the Company. The death benefit payable with respect
to each executive is limited in all events to that portion of the proceeds
of the life insurance policy payable to his beneficiaries by the insurance
company under the terms of the policy, and the Company is under no
obligation to maintain these policies in effect or to purchase replacement
policies in the event of their cancellation. The Executive Life Insurance
Agreements require that the executive pay that portion of the premiums on
the underlying insurance policies which is equal to the cost of one-year
term insurance or an equivalent amount, and that the Company pay the balance
of such premiums. During each of the last three fiscal years, the Company
has reimbursed each of the participating executives for that portion of the
premium required to be paid by them, grossed-up to cover the executive's tax
liability for such reimbursement. Included in the Summary Compensation Table
under the heading "All Other Compensation" are the amounts reimbursed to
certain of the Named Executive Officers for their portion of the premiums,
and included in said table under the heading "Other
8
<PAGE> 11
Annual Compensation" are the amounts of the gross-ups paid to certain of the
Named Executive Officers to cover their tax liability in respect of such
reimbursements.
(2) The Company maintains a 401(k) plan for its employees, including the Named
Executive Officers. Under the plan, the Company makes matching contributions
to the employees in an amount equal to 10% of elective deferrals that an
employee makes, provided that no match is available for 401(k) deferrals
that exceed 4% of the employee's compensation and further provided that all
matching contributions meet a certain non-discrimination test. Included in
the Summary Compensation Table under the heading "All Other Compensation"
are the amounts of the Company's matching contributions made under the plan
for the 1995, 1996 and 1997 fiscal years on behalf of the Named Executive
Officers.
COMPENSATION OF DIRECTORS
Lawrence M. Levinson, Winthrop P. Rockefeller and Alan Steinert, Jr. each
received a $10,000 director's fee for fiscal 1997. Neither Mrs. Holzwasser nor
any director who is also an employee of the Company is paid any fees or other
remuneration for service on the Board of Directors or any board committee.
EMPLOYMENT CONTRACTS
In May, 1991, the Company entered into five-year employment agreements with
Jim L. Osment and James F. Fagan. In May, 1994, these agreements were amended to
extend the term until June, 1999, and to increase their respective minimum
annual salaries from $200,000 to $250,000 for Mr. Osment and from $150,000 to
$180,000 for Mr. Fagan. Upon termination of either Mr. Osment's or Mr. Fagan's
employment due to mental or physical disability or illness, the Company is
obligated to continue to pay them their respective base salaries until they
become eligible to receive benefits under a Company maintained disability
insurance plan, or if they are not participants in or otherwise not eligible to
receive benefits under a Company maintained disability insurance plan, for a
period of three (3) months following the date of such termination. Upon
termination of either Mr. Osment's or Mr. Fagan's employment agreement as a
result of a change of control which is not approved by the Board of Directors,
the Company is obligated to (i) continue any fringe benefits for the remainder
of the term of the employment agreement, which include pension or profit sharing
plans and any accident or health insurance plans; and (ii) pay the employee an
amount equal to three times the average annual compensation paid to him for the
previous five taxable years of the Company, less the sum of the present value of
any fringe benefits provided pursuant to the foregoing clause (i) plus one
dollar. The Company has a right to terminate these agreements for "proper
cause," as defined in the agreements, in which event the employee would not be
entitled to receive any further compensation or benefits under the agreements,
except for compensation then due and payable but remaining unpaid. These
agreements also contain non-competition and confidentiality commitments.
In June, 1993, the Company entered into an employment agreement with Harry
A. Holzwasser for an initial term ending in June, 1998, which term was to be
automatically extended for an unlimited number of successive terms of one year
each unless and until terminated by the Company by giving written notice not
less than 6 months prior to the end of the initial term or any one year
continuation. The agreement was amended in August, 1995 to limit the number of
successive one-year terms following the initial term for which the agreement may
be extended to two, and to require that Mr. Holzwasser serve in a consulting
capacity to the Company at the Company's request for a period of five (5) years
following the expiration of his employment with the Company. This agreement, as
amended, provides for a minimum annual salary of $405,000 throughout the term of
his employment, and an annual amount equal to 50% of this minimum annual salary
for a period of five years following the expiration of the term of his
employment. The Company has a right to terminate this agreement for "proper
cause," as defined in the agreement, in which event Mr. Holzwasser would not be
entitled to receive any further compensation or benefits under the agreement,
except for
9
<PAGE> 12
compensation then due and payable but remaining unpaid. In the event of his
total disability during the initial term or any continuation of the term of his
employment under the agreement, the Company is obligated to pay Mr. Holzwasser
an annual amount equal to 50% of his minimum annual salary (less the amount of
any proceeds received by him under any disability insurance policy maintained by
the Company) commencing on the date of total disability and continuing for the
duration of such total disability but not for more than five years. In the event
of Mr. Holzwasser's death during the initial term or any continuation of the
term of his employment under this agreement, the Company is obligated to pay to
Carole Holzwasser, Mr. Holzwasser's wife, an annual amount equal to 50% of his
minimum annual salary commencing on the date of his death and continuing for a
period of five years, less the time, if any, Mr. Holzwasser was disabled. This
agreement also contains non-competition and confidentiality commitments.
In June, 1996, Messrs. Osment, Fagan and Holzwasser agreed to a ten percent
reduction in their respective base salaries. In June, 1997, Mr. Holzwasser
agreed to further reduce his base salary to fifty percent of his contract amount
(i.e. from a contract amount of $405,000 per annum to $202,250 per annum); Mr.
Osment agreed to further reduce his base salary by an additional ten percent of
the previously reduced amount, representing a total reduction of nineteen
percent of his contract amount (i.e. from a contract amount of $250,000 per
annum to $202,500 per annum); and Mr. Fagan agreed to further reduce his base
salary by an additional five percent of his previously reduced amount,
representing a total reduction of fourteen and one-half percent of his contract
amount (i.e. from a contract amount of $180,000 per annum to $153,900 per
annum). The foregoing salary reductions were all voluntary, and Messrs. Osment,
Fagan and Holzwasser have the right on a prospective basis to restore their
salaries to their respective contract rates at any time.
PENSION PLANS
The Company has Supplemental Benefit Agreements with two Named Executive
Officers, Messrs. Osment and Fagan. These agreements provide that in the event
of the death, retirement, termination of employment following a change of
control or other termination of the executive's employment by the executive or
by the Company for any reason (with or without cause), except by reason of
criminal or dishonest acts or acts of moral turpitude by the executive, the
Company shall pay to the executive officer or his beneficiaries until his death
or for a period of ten years, whichever is longer, an annual amount equal to 50%
of the executive officer's average annual base salary (exclusive of bonuses and
other benefits) during the last 36 months of his employment with the Company. No
termination or retirement benefits are payable to the executive officer under
the agreement unless his retirement or termination of employment occurs after
the later of the executive officer's 55th birthday or the date on which the
executive officer has been continuously employed by the Company for a period of
15 years, except in the event of the executive's death or a change of control of
the Company. The Supplemental Benefit Agreements also contain non-competition
and confidentiality commitments by the executive officer. The Company's
obligations under the Supplemental Benefit Agreements are limited in all events
to an amount not greater than the benefits available to the Company under life
insurance policies carried by the Company on the life of such executive officer
to fund such obligations, less the aggregate net outlay by the Company on such
policies. The estimated annual benefits payable under the Supplemental Benefit
Agreements are illustrated in the table below, assuming the stated compensation
levels. The benefits under the Supplemental Benefit Agreements are not offset by
Social Security benefits.
10
<PAGE> 13
PENSION PLAN TABLE
<TABLE>
<CAPTION>
FINAL 3-YEAR AVERAGE ESTIMATED ANNUAL
BASE SALARY BENEFIT
--------------------------------------------- ----------------
<S> <C>
$150,000................................ $ 75,000
175,000................................ 87,500
200,000................................ 100,000
225,000................................ 112,500
250,000................................ 125,000
275,000................................ 137,500
300,000................................ 150,000
</TABLE>
The compensation on which the benefits under the Supplemental Benefit
Agreements are based is the amount reported in the salary column of the Summary
Compensation Table. Mr. Osment is 58 years old and has been an employee of the
Company for more than fifteen years, and therefore has met the service and age
requirements under his Supplemental Benefit Agreement. Mr. Fagan is 49 years old
and has been an employee of the Company for approximately fourteen years.
STOCK OPTIONS
During the 1997 fiscal year, no stock options were granted to or exercised
by the Named Executive Officers. The following table provides information as to
the value of unexercised options held as of June 28, 1997 by named executives.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)
------------- ----------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE(1)
- - ------------------------------------------ --------------- ----------- ------------- ----------------
<S> <C> <C> <C> <C>
Jim L. Osment............................. -- -- 25,000/0 --
Harry A. Holzwasser....................... -- -- 0/0 --
James F. Fagan............................ -- -- 12,500/0 --
Robert A. Holzwasser...................... -- -- 8,500/0 --
Stephen D. Hoane.......................... -- -- 0/0 --
</TABLE>
- - ---------------
(1) The exercise price of the options was greater than the closing price of the
Company's common stock on June 28, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following non-employee directors served on the Compensation, Bonus and
Stock Option Plan Committee (the "Committee") of the Company during fiscal 1997:
Lawrence M. Levinson, Alan Steinert, Jr. and Winthrop P. Rockefeller.
11
<PAGE> 14
Mr. Levinson, a director and the Clerk of the Company, is a partner of the
law firm of Burns & Levinson LLP, counsel for the Company. During the 1997
fiscal year, Burns & Levinson LLP received legal fees from the Company not
exceeding five (5%) percent of the firm's gross revenues.
REPORT OF THE COMPENSATION, BONUS AND
STOCK OPTION PLAN COMMITTEE OF THE
BOARD OF DIRECTORS REGARDING EXECUTIVE COMPENSATION
The compensation policies and practices of the Company applicable to its
executive officers (including the Chief Executive Officer) are established by
the Compensation, Bonus and Stock Option Plan Committee of the Board of
Directors (the "Committee"), working in conjunction with senior management and
the full Board of Directors. The Committee is composed entirely of individuals
who are outside directors.
COMPENSATION PHILOSOPHY
The Committee periodically reviews and approves, with any modifications it
deems appropriate, recommendations developed and submitted by senior management
regarding the salaries and other compensation to be paid to all executive
officers. In making decisions regarding the compensation of executive officers,
the Committee strives to create compensation packages that will attract and
retain qualified executives and motivate those individuals to perform to the
full extent of their abilities, while at the same time recognizing and promoting
the financial interests of the Company's stockholders.
The Company's executive compensation packages generally consist of base
salary, long-term incentive compensation in the form of stock options granted
under the Company's incentive stock option plan, and participation in various
Company sponsored benefit plans including the Supplemental Benefit Plan,
Executive Life Insurance Plan, 401K Plan and Medical Insurance Plan. The Company
has entered into employment contracts with certain of its executive officers
(including the Chief Executive Officer) which the Committee and the Board of
Directors feel are particularly key to the success of the Company going forward
(as described above under the caption "Employment Contracts").
SALARIES AND BONUSES
In determining whether the base salary of any executive officer should be
adjusted in any fiscal year or whether any executive should receive a bonus or
bonuses in any fiscal year, and the amounts of such adjustments or bonuses, if
any, the Committee considers all relevant information, including both objective
and subjective factors. The factors typically considered include the individual
performance of the executive relative to specific goals established by senior
management for that executive, the Chief Executive Officer's and other senior
management's perception and evaluation of such individual's performance, any
changes or increases in the responsibilities assigned to the individual, the
performance of the operations directed by such individual (both operationally
and financially), increases in cost of living, and the financial performance of
the Company as a whole.
In fiscal 1997, one executive received a performance based increase in his
base salary. Except for this salary increase, none of the executive officers
received any bonuses or any increases in their respective base salaries during
fiscal 1997.
In May, 1995, all of the executives (including those with employment
contracts) agreed to a ten percent reduction in their base salaries pending
improvement of the Company's operating results as part of a Company-wide cost
reduction program implemented in the fourth quarter of the 1995 fiscal year to
mitigate the effects of the decline in sales experienced by the Company in the
third and fourth quarters of the 1995
12
<PAGE> 15
fiscal year. In light of the improvement in operating results achieved by the
Company in the first quarter of fiscal 1996, the base salaries of the executives
were restored to prior levels in November, 1995. In June, 1996, however, the
executives again agreed to a ten percent reduction in their respective base
salaries as a result of the poor operating results achieved by the Company in
the third and fourth quarters of fiscal 1996. In June, 1997, the executives
agreed to further reduce their respective base salaries by an additional five
percent of the previously reduced amount, except for Harry A. Holzwasser and Jim
L. Osment (Chairman and Chief Executive Officer of the Company, respectively)
who agreed to larger reductions. Specifically, Mr. Holzwasser agreed to reduce
his base salary by fifty percent of his contract amount (i.e., from $405,000 per
annum to $202,250 per annum). Mr. Osment's salary reduction is discussed below
under the caption "Compensation of Chief Executive Officer." The foregoing
reductions remain in effect as of the date hereof. Messrs. Holzwasser, Osment
and Fagan have the right on a prospective basis to restore their salaries to
their respective contract rates at any time.
INCENTIVE COMPENSATION
Most of the executives hold stock options granted under the Company's
incentive stock option plan. Stock options are intended to serve as long-term
incentive compensation. The value of compensation provided to executive officers
of the Company in the form of stock options granted under the Company's
stockholder approved incentive stock option plans is directly tied to the future
performance of the Company's stock. Options granted under these plans have an
exercise price equal to the market price of the Company's stock on the date of
grant. Accordingly, these options have no value unless subsequent to the date of
grant there is appreciation in the market price of the Company's stock. Because
of the direct relationship between the value of these options to their
recipients and the Company's stock price, the granting of stock options has the
effect of aligning the interests of the Company's executives with those of its
stockholders. No new stock options were granted to executives during the 1997
fiscal year.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
In May, 1994, the Company agreed to an amendment of its employment
agreement with Jim L. Osment, President and Chief Executive Officer of the
Company, extending the term of the agreement until June 26, 1999, and increasing
his base salary from $200,000 per annum to $250,000 per annum. Prior to May,
1994, Mr. Osment had not received an increase in his base salary since the date
of his election as President and Chief Executive officer in June, 1990. The
Committee approved this amendment and salary increase based on Mr. Osment's
contributions and leadership role in the restructuring and turn-around of the
Company implemented since his election in 1990, as well as his consistent
commitment to and continuing development of programs for the long-term success
of the Company. Since Mr. Osment assumed the position of President and Chief
Executive Officer of the Company, he has overseen and directed the development
and implementation of innovative programs in the areas of purchasing,
manufacturing, customer service, sales and marketing. During the period from
June, 1990 through the end of fiscal 1994, the Company increased sales levels,
returned to profitability and increased stockholders' equity. These results were
achieved during a period of difficult economic conditions in the automotive
aftermarket, and led to a substantial increase in stockholder value.
Mr. Osment did not receive any bonuses or any increases in his base salary
during fiscal 1997. In May, 1995, Mr. Osment voluntarily reduced his base salary
by ten percent pending improvement of the Company's operating results as part of
the Company-wide cost reduction program implemented in the fourth quarter
described above. His base salary was restored to its prior level in November,
1995, due to the improvement in operating results achieved by the Company during
the first quarter of fiscal 1996. However, because of the poor operating results
experienced by the Company in the third and fourth quarters of fiscal 1996, Mr.
Osment
13
<PAGE> 16
agreed again to reduce his base salary by ten percent in June, 1996, pending
improvement of the Company's operating results. In June, 1997, Mr. Osment agreed
to further reduce his base salary by an additional ten percent of the previously
reduced amount, representing a total reduction of nineteen percent of his
contract amount (i.e. from a contract amount of $250,000 per annum to a reduced
amount of $202,500 per annum). The foregoing reduction remains in effect as of
the date hereof.
In January, 1993, Mr. Osment was granted an option to purchase 25,000
shares at a price of $6.625 per share under the Company's 1993 Incentive Stock
Option Plan in recognition of his continued importance to the success of the
Company and his accomplishments to date in reducing operating expenses,
reorganizing the Company's sales force and returning the Company to
profitability. This option expires in January, 1998. As noted above, the value
of this option to Mr. Osment is completely dependent on the performance of the
Company's stock price subsequent to the date of grant. Mr. Osment has not
received any additional stock options subsequent to the January, 1993 grant.
COMPENSATION, BONUS AND STOCK
OPTION PLAN COMMITTEE
Lawrence M. Levinson, Chairman
Alan Steinert, Jr.
Winthrop P. Rockefeller
14
<PAGE> 17
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total return to the Company's
stockholders during the five-year period ended June 28, 1997, compared to an
overall stock market index (Dow Jones Equity Market Index) and the Company's
peer group index (Dow Jones Automobile Parts and Equipment excluding Tire and
Rubber Makers Index) during the same period, in each case assuming reinvestment
of dividends.
<TABLE>
<CAPTION>
Automobile Parts
&
Equipment|Excluding
Measurement Period 'Arrow Automotive Dow Jones Equity Tire and Rubber
(Fiscal Year Covered) Industries, Inc.' Market Makers
<S> <C> <C> <C>
6/27/92 100 100 100
6/26/93 90.91 115.2 128.55
6/25/94 101.82 116.76 130.96
6/24/95 85.45 148.89 145.79
6/29/96 78.18 187.62 171.83
6/28/97 44.55 249.88 209.38
</TABLE>
The stock performance graph assumes $100 was invested on June 27, 1992.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During the 1997 fiscal year, Burns & Levinson LLP, counsel for the Company,
of which firm Lawrence M. Levinson, a director and the Clerk of the Company, is
a partner, received legal fees from the Company not exceeding five (5%) percent
of the firm's gross revenues.
The Company formerly leased property in Hudson, Massachusetts, from the
Holzwasser Realty Trust, a beneficial interest in which is owned by Harry A.
Holzwasser, the children of Harry A. Holzwasser and the children and
grandchildren of Mary S. Holzwasser. This property was vacated in 1981 following
the shutdown of the plant. It appears that the Company may have been responsible
for the release of hazardous waste at the Hudson site. Under the terms of the
lease between the Company and the Holzwasser Realty Trust, the Company is
responsible for all clean-up costs and other liabilities incurred as a result of
its introduction of hazardous waste at said property. To date, the Company has
incurred expenses of approximately $1,036,000 in connection with the Hudson site
for environmental testing and remedial measures for the clean-up of the site. A
groundwater treatment system has been installed at this site. It is anticipated
that the operating costs of the groundwater treatment system will be between
$30,000 and $40,000 per year and that the system will be operational for up to
an additional twenty (20) years. Treatment or removal of contaminated soil may
also be required. It is also possible that the groundwater treatment system may
be enhanced at some future date to address low levels of contaminants which have
been detected at an abutting property. The Company is
15
<PAGE> 18
currently pursuing claims against its insurance carriers for reimbursement of
the costs and expenses incurred by the Company in connection with the
environmental clean-up and testing at this site.
During fiscal 1983, Harry A. Holzwasser, Chairman of the Board and a
director of the Company, borrowed $58,800 from the Company pursuant to a
non-interest bearing demand promissory note, which (as of October 7, 1997) had
an outstanding balance of $53,800. During fiscal 1985, Mr. Holzwasser borrowed
$450,000 from the Company under a demand promissory note bearing interest at a
rate equal to the Company's average borrowing rate, which (as of October 7,
1997) had an outstanding principal balance of $297,297 with accrued interest of
$14,863. The largest aggregate amount outstanding under these two loans at any
time during the 1997 fiscal year (including all principal and accrued interest)
was $382,317.
During the period from fiscal 1985 through fiscal 1990, James F. Fagan,
Executive Vice President, Treasurer, Chief Financial Officer and a director of
the Company, borrowed a total of $57,500 from the Company under a series of
demand promissory notes bearing interest at a rate equal to the Company's
average borrowing rate. As of October 7, 1997, these notes had an aggregate
principal balance of $41,180 and accrued interest of approximately $30,777. The
largest aggregate amount outstanding under these loans at any time during the
1997 fiscal year (including all principal and accrued interest) was $72,936.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires officers and
directors of the Company and persons who own more than ten percent of a
registered class of the Company's equity securities (collectively, "Reporting
Persons") to file reports of ownership and changes in ownership of the Company's
Common Stock with the Securities and Exchange Commission, and to furnish the
Company with copies of all such reports. Based solely on its review of the
copies of such reports furnished to the Company by such Reporting Persons or on
the written representations of such Reporting Persons that no reports were
required, the Company believes that during the fiscal year ended June 28, 1997,
all of the Reporting Persons complied with their Section 16(a) filing
requirements with respect to their ownership of the Company's Common Stock.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must comply with Rule 14a-8 of the Securities and
Exchange Commission issued under the Securities and Exchange Act of 1934, and
must be received at the corporate headquarters of the Company not later than
June 24, 1998.
OTHER MATTERS
The Board of Directors knows of no matters, other than those discussed in
Part I above, which are to be brought before this meeting. However, if any
matter not now known is presented at the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote said proxy in accordance
with their judgment on such matter.
16
<PAGE> 19
The Company will bear the cost of solicitation of proxies. Solicitation of
proxies by mail may be followed by telephone or other personal solicitation of
certain stockholders by officers or other employees of the Company.
By order of the Board of Directors
LAWRENCE M. LEVINSON
Clerk
October 22, 1997.
If you do not expect to be present at this meeting and wish your stock to
be voted, you are requested to date, sign and mail promptly the enclosed proxy
which is being solicited on behalf of the Board of Directors. A return envelope,
which requires no postage, is enclosed for this purpose.
ANY STOCKHOLDER MAY REVOKE HIS OR HER PROXY AT ANY TIME
BEFORE IT HAS BEEN EXERCISED
17
<PAGE> 20
ARROW AUTOMOTIVE INDUSTRIES, INC.
PROXY FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 13, 1997
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received notice of meeting and proxy statement of the
Board of Directors, hereby appoint(s) Lawrence M. Levinson and Harry A.
Holzwasser, and each of them acting singly, attorneys or attorney of the
undersigned (with full power of substitution in them and in each of them) for
and in the name(s) of the undersigned to attend the 1997 Annual Meeting of
Stockholders of Arrow Automotive Industries, Inc., to be held at the offices of
Burns & Levinson LLP, 125 Summer Street, Boston, Massachusetts 02110, on
Thursday, November 13, 1997, at 10:00 a.m., and any adjournment or adjournments
thereof, and there to vote and act in regard to all matters which may properly
come before said meeting (except those matters as to which authority is
hereinafter withheld) upon and in respect to all shares of Common Stock of said
corporation upon or in respect of which the undersigned would be entitled to
vote or act, and with all powers the undersigned would possess if personally
present, and especially (but without limiting the general authorization and
power hereby given) to vote and act as directed by the undersigned on the
reverse side of this proxy card. THE BOARD OF DIRECTORS FAVORS THE PROPOSALS SET
FORTH ON THE REVERSE. IF NO INSTRUCTIONS ARE INDICATED, THE UNDERSIGNED'S VOTE
WILL BE CAST IN THE ELECTION OF DIRECTORS FOR THE NOMINEES LISTED IN THE PROXY
STATEMENT AND WILL BE CAST FOR PROPOSAL (2) ON THE REVERSE. Attendance of the
undersigned at said meeting or at any adjournment or adjournments thereof will
not be deemed to revoke this proxy unless the undersigned shall affirmatively
indicate thereat his intention to vote said shares in person.
(To Be Signed On Reverse Side)
<PAGE> 21
A [X] Please mark you
votes as in this
example.
<TABLE>
<CAPTION>
<S> <C>
FOR WITHHELD
all From all
1. ELECTION nominees nominees FOR AGAINST ABSTAIN
OF [ ] [ ] Nominees: James F. Fagan 2. Proposal to ratify and approve the [ ] [ ] [ ]
DIRECTORS Jim L. Osment selection of the firm of Ernst &
Winthrop P. Young LLP as auditors of the
[ ] For, except vote withheld from Rockefeller Corporation.
the following nominee(s)
______________________________ The undersigned hereby confer(s) upon said attorneys and
______________________________ proxies, and each of them, discretionary authority to vote
(a) upon any other matters or proposals not known at the time
of the solicitation of this proxy which may properly come
before the meeting, and (b) with respect to the selection of
directors in the event of any unforeseen emergency.
Mark here for address change and note at left [ ]
Please mark, sign, date and return this proxy card promptly
using the enclosed envelope.
</TABLE>
SIGNATURE(S) ________________________________________ DATE _________________1997
Note: In signing, please write name exactly as appearing on imprint. For stock
held jointly, each owner should personally sign. For stock held by a
corporation, affix corporate seal. If a fiduciary capacity is attributed
to the undersigned in the imprint hereon, this proxy is signed by the
undersigned in that capacity.
