<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 [ ]
Filed by a party other than the registrant [X]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Com-
mission 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
DONNELLY CORPORATION
-------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
DONNELLY CORPORATION
-------------------------------------------------------------------------------
(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:
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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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<PAGE> 2
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 20, 1995
[DONNELLY LOGO]
DONNELLY CORPORATION
HOLLAND, MICHIGAN
<PAGE> 3
DONNELLY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Donnelly Corporation will be held at
the Holiday Inn, 650 East 24th Street, Holland, Michigan, on Friday, October 20,
1995, at 9:15 A.M., local time, to elect ten (10) directors as set forth in the
Proxy Statement and to transact such other business as may properly come before
the meeting or at any adjournment thereof.
Shareholders of record at the close of business September 1, 1995 will be
entitled to vote at the meeting or any adjournment thereof.
Whether or not you expect to be present in person at this meeting, you are
urged to sign the enclosed Proxy and return it promptly in the enclosed
envelope. If you do attend the meeting and wish to vote in person, you may do so
even though you have submitted a Proxy.
Dated: September 11, 1995
Holland, Michigan
Maryam Komejan, Corporate Secretary
<PAGE> 4
Dated: September 11, 1995
DONNELLY CORPORATION
414 EAST FORTIETH STREET
HOLLAND, MICHIGAN 49423
-------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 20, 1995
-------------------------
SOLICITATION OF PROXIES FOR ANNUAL MEETING
This Proxy Statement is furnished to the Shareholders of Donnelly
Corporation in connection with the solicitation by the Board of Directors of
proxies to be used at the Annual Meeting of Shareholders which will be held at
the Holiday Inn, 650 East 24th Street, Holland, Michigan, October 20, 1995, at
9:15 A.M., local time. The Annual Meeting is being held to elect ten (10)
directors and to transact such other business as may properly come before the
meeting or any adjournment thereof.
If a proxy in the form distributed by the Company's Board of Directors is
properly executed and returned to the Company, the shares represented by the
proxy will be voted at the Annual Meeting of Shareholders and at any adjournment
of that meeting. Where shareholders specify a choice, the proxy will be voted as
specified. If no choice is specified, the shares represented by the proxy will
be voted FOR the nominees named by the Board of Directors as set forth in this
Proxy Statement.
A proxy may be revoked prior to its exercise by delivering a written notice
of revocation to the secretary of the Company, executing and delivering a proxy
of later date, or attending the meeting and voting in person. Attendance at the
meeting does not automatically act to revoke a proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On September 1, 1995, the record date for determination of shareholders
entitled to vote at the Annual Meeting, there were outstanding 4,184,587 shares
of Class A Common Stock of the Company, each having one vote per share and
3,582,915 shares of Class B Common Stock each having ten (10) votes per share.
The shares of Class B Common Stock are limited in their transferability but are
convertible on a share for share basis into Class A Common Stock. Holders of
shares of Class A Common Stock, as a class, are entitled to elect one-quarter
(rounded up) of the directors to be elected at each meeting held for the
election of directors. Holders of Class B Common Stock elect, as a class, the
directors not elected by the shares of Class A Common Stock. Holders of shares
of Class B Common Stock have cumulative voting rights in the election of
directors. See "Nominees for Election as Directors." Shares cannot be voted
unless the shareholder is present at the meeting or is represented by proxy.
<PAGE> 5
The following table sets forth as of September 1, 1995, information
concerning persons known to management who may be deemed to be beneficial owners
of more than 5% of either class of the Company's common stock. Other stock
ownership information is also set forth as of September 1, 1995.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF PERCENT OF
NAME AND ADDRESS OF OF BENEFICIAL EACH CLASS COMMON
BENEFICIAL OWNER OWNERSHIP OF STOCK EQUITY
------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NBD Bank, N.A.................. 321,746(1) 502,310(1) 7.7% 14.0% 10.6%
200 Ottawa Avenue
Grand Rapids, Michigan 49503
Putnam Investments, Inc........ 321,450(2) -- 7.7 -- 4.1
One Post Office Square
Boston, Massachusetts 02109
Anne H. Copps.................. 38,188(3) 196,476(3) * 5.5 3.0
414 East Fortieth Street
Holland, Michigan 49423
Bernard P. Donnelly, Jr........ 17,066(4) 425,970(4) * 11.9 5.7
414 East Fortieth Street
Holland, Michigan 49423
Virginia N. Donnelly........... 17,066(4) 425,970(4) * 11.9 5.7
414 East Fortieth Street
Holland, Michigan 49423
Katherine S. Donnelly.......... 179,930(5) 251,903(5) 4.3 7.0 5.6
414 East Fortieth Street
Holland, Michigan 49423
Jane H. Krahmer................ 96,925(6) 289,883(6) 2.3 8.1 5.0
414 East Fortieth Street
Holland, Michigan 49423
Gerald T. McNeive.............. 46,582(7) 267,165(7) 1.0(9) 7.5 4.0(9)
414 East Fortieth Street
Holland, Michigan 49423
Louise H. McNeive.............. 46,582(7) 267,165(7) 1.0(9) 7.5 4.0(9)
414 East Fortieth Street
Holland, Michigan 49423
Marie Josephte Martineau....... 19,466 215,810 * 6.0 3.0
414 East Fortieth Street
Holland, Michigan 49423
Fernande M. Pruden............. 177,076(8) 239,469(8) 3.9(9) 6.7 5.4(9)
414 East Fortieth Street
Holland, Michigan 49423
Rudolph B. Pruden.............. 177,076(8) 239,469(8) 3.9(9) 6.7 5.4(9)
414 East Fortieth Street
Holland, Michigan 49423
</TABLE>
--------------------------------------------------------------------------------
* Denotes ownership of less than one percent.
For purposes of the following notes, shares of Class A Common Stock are referred
to as "A Shares" and shares of Class B Common Stock are referred to as "B
Shares."
(1) Includes (i) 62,187 B Shares held by NBD Bank, N.A., (the "Bank") as
co-trustee of the Robert M. Leonard Trust, 35,000 B Shares as co-trustee of
the B.P. Donnelly Descendants Trust, 94,062 B Shares as co-trustee of the
John Donnelly Residual Trust and 311,061 B Shares held in two trusts for
which the Bank serves as sole trustee, (ii) 305,660 A Shares held by
Trussal & Co. acting as a nominee of the Bank as follows: 2,000 shares in
the Robert M. Leonard Trust, 14,285 shares in the B.P. Donnelly Descendants
Trust and 67,187 shares in the John Donnelly Residual Trust, for all of
which trusts the Bank serves as
2
<PAGE> 6
co-trustee and 222,187 shares held in two trusts for which the Bank serves
as sole trustee and (iii) 16,087 shares held by the Bank as trustee,
co-trustee, custodian, or agent of other trusts.
(2) In a Schedule 13G dated January 26, 1994 and delivered to the Company,
Putnam Investments, Inc. ("Putnam") disclosed on behalf of its investment
management subsidiaries that they had acquired beneficial ownership of
321,450 A Shares. Putnam has the sole power to dispose of all of such
shares, and shared power to vote 105,650 of such shares.
(3) Includes 38,188 A Shares and 196,476 B Shares owned by a trust of which Anne
H. Copps is trustee.
(4) Includes 39,280 A Shares and 425,970 B Shares owned by two trusts of which
Bernard P. Donnelly, Jr. and Virginia N. Donnelly (husband and wife) are
co-trustees.
(5) Includes 67,187 A Shares and 94,062 B Shares held in the John Donnelly
Residual Trust for which Katherine S. Donnelly is a co-trustee.
(6) Includes 9,775 A Shares and 13,125 B Shares owned by Mrs. Krahmer's husband,
C. Alan Krahmer, as to which she disclaims beneficial ownership.
(7) Includes (i) 28,396 A Shares and 243,104 B Shares owned by Louise H.
McNeive, (ii) stock options exercisable within 60 days for 1,000 A Shares,
7,812 A Shares and 10,937 B Shares owned by her husband, Gerald T. McNeive,
a director of the Company and (iii) 9,374 A Shares and 13,124 B Shares as
to which Louise H. McNeive is custodian for her children, and as to which
Gerald T. McNeive disclaims beneficial ownership.
(8) Includes (i) 163,897 A Shares and 226,038 B Shares owned by Fernande Pruden
and her retirement plans and (ii) stock options exercisable within 60 days
for 1,000 A Shares, 12,179 A Shares and 13,431 B Shares owned by Rudolph
Pruden and his retirement plans. Rudolph Pruden is Fernande Pruden's
husband and a director of the Company. Fernande Pruden and Rudolph Pruden
each disclaim beneficial ownership of the other's shares.
(9) Calculated based on the number of shares outstanding plus 410,700 shares
with respect to which officers and directors have the right to acquire
beneficial ownership under stock options exercisable within 60 days.
Five of the Company's directors, B. Patrick Donnelly, III, Joan E. Donnelly,
Leonard, McNeive and Pruden are all descendants of, or are married to
descendants of, Bernard P. Donnelly, Sr., the Company's founder, and each
represents one of five family groups of such descendants (the "Donnelly
Family"). John F. Donnelly, Jr., a Senior Vice President of the Company, is also
a descendant of Bernard P. Donnelly and is the brother of Ms. Donnelly. Each
family group has the ability to elect at least one director if they act together
and cumulate the votes of the Class B Common Stock. The Company does not know of
a family group taking such action. Members of the Donnelly Family own
approximately 99% of the Class B Common Stock and approximately 32% of the Class
A Common Stock of the Company. These shareholders therefore possess
approximately 92% of the voting power of the Company and approximately 32% of
the voting power of the Class A Common Stock. Members of the Donnelly Family may
transfer shares of Class B Common Stock among themselves, enabling them to
retain voting control of the Company for an extended period. Given the voting
control of the Donnelly Family, the Donnelly Family could, if all or part of the
family took a united position in response to attempts to acquire control of the
Company through tender offers or proxy contests, effectively block any such
attempts. There is no assurance that any united action would be taken.
3
<PAGE> 7
NOMINEES FOR ELECTION AS DIRECTORS
All ten directors of the Company are up for re-election at the Annual
Meeting, each to serve until the 1996 annual meeting of shareholders or until
his or her successor is elected or his or her earlier resignation or removal.
Three of the directors will be elected exclusively by the holders of the Class A
Common Stock voting as a class, and the other seven directors will be elected by
the holders of the Class B Common Stock voting as a class. Holders of shares of
Class B Common Stock have cumulative voting rights in the election of directors.
Cumulative voting rights of the Class B Common Stock entitle the holders thereof
to spread their votes equally among all nominees for which they are entitled to
vote or to cumulate those votes for one or any number of the nominees for which
they are entitled to vote. If a holder of Class B Common Stock does not indicate
on the proxy card that he or she desires to cumulate votes, the proxies will
spread the votes equally among all nominees. The Board of Directors has
nominated the persons set forth below for election to the Company's Board of
Directors at the annual meeting.
Holders of Class A Common Stock should complete the accompanying WHITE
PROXY and holders of Class B Common Stock should complete the accompanying
YELLOW PROXY (and carefully review the instructions accompanying the yellow
proxy regarding cumulative voting). Unless otherwise directed by a shareholder's
proxy, it is intended that the votes cast upon exercise of proxies in the form
accompanying this statement will be in favor of electing as directors for the
ensuing year the nominees set forth below, all of whom are presently serving as
directors.
A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Corporation. As such, the three individuals who
receive the greatest number of votes cast by the holders of the Class A Common
Stock, voting as a class, will be elected as directors and the seven individuals
who receive the greatest number of votes cast by the holders of Class B Common
Stock, voting as a class, will be elected as directors. Shares not voted at the
meeting, whether by abstention, broker non-vote, or otherwise, will not be
treated as votes cast at the meeting. Votes cast at the meeting and submitted by
proxy will be tabulated by the Corporation's transfer agent. If any nominee
becomes unavailable for election due to circumstances not now known, the
accompanying proxy will be voted for such other person to become a director as
the Board of Directors so elects. The Board of Directors recommends a vote FOR
the election of all persons nominated by the Board.
4
<PAGE> 8
The content of the following table is based upon information furnished to
the Company by the nominees.
<TABLE>
<CAPTION>
YEAR AMOUNT AND
FIRST NATURE OF PERCENT OF PERCENT OF
BECAME A BENEFICIAL EACH CLASS COMMON
NAME AGE DIRECTOR OWNERSHIP OF STOCK EQUITY(2)
------------------------------------------------------------------------------------------------------------------------
CLASS A(1) CLASS B CLASS A(2) CLASS B
<S> <C> <C> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION BY HOLDERS
OF CLASS A COMMON STOCK
R. Eugene Goodson, Ph.D(a,f,g).... 60 1993 1,500 -- *% --% *%
Donald R. Uhlmann, Ph.D(f,g)...... 58 1978 12,250 -- * -- *
Glenn M. Walters(b,e,f,g)......... 71 1982 9,000 -- * -- *
NOMINEES FOR ELECTION BY HOLDERS
OF CLASS B COMMON STOCK
J. Dwane Baumgardner, Ph.D. ...... 55 1982 69,771 -- 1.5 -- *
Arnold F. Brookstone(a,b,d,e)..... 65 1976 20,000 -- * -- *
B. Patrick Donnelly,
III(b,c,d,e).................... 50 1980 46,684(3) 112,783(3) 1.0 3.1 2.1
Joan E. Donnelly(b,c,d,e)......... 47 1987 104,299(4) 146,068(4) 2.3 4.1 3.2
Thomas E. Leonard(a,c,d,f,g)...... 65 1967 8,000(5) 127,459(5) * 3.6 1.7
Gerald T. McNeive(c,d,f,g)........ 53 1980 46,582(6) 267,165(6) 1.0 7.5 4.0
Rudolph B. Pruden(b,c,d,e)........ 65 1984 177,076(7) 239,469(7) 3.9 6.7 5.4
------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Denotes ownership of less than one percent.
(a) Member Audit Committee
(b) Member Compensation Committee
(c) Member Stock Option Committee
(d) Member Finance Committee
(e) Member Human Resource Committee
(f) Member Strategic Plan Committee
(g) Member Technology Committee
For purposes of the following notes, shares of Class A Common Stock are referred
to as "A Shares" and shares of Class B Common Stock are referred to as "B
Shares."
(1) Includes the following number of shares with respect to which the Directors
have the right to acquire beneficial ownership under stock options
exercisable in 60 days: Dr. Uhlmann -- 12,250; Mr. Walters -- 6,000; Dr.
Baumgardner -- 59,750; Mr. Brookstone -- 13,500; Dr. Goodson, Ms. Donnelly
and Messrs. Donnelly, Leonard, McNeive, Pruden -- 1,000 shares.
(2) Calculated based on the number of shares outstanding plus 410,700 shares
with respect to which officers and directors have the right to acquire
beneficial ownership under stock options exercisable within 60 days.
(3) Includes (i) 3,000 A Shares owned jointly with Mr. Donnelly's wife,
Jacqueline K. Donnelly, (ii) 625 A Shares and 1,875 B Shares owned by
Jacqueline K. Donnelly, (iii) 2,562 A Shares and 86 B Shares owned by Mr.
Donnelly as custodian for his children, (iv) 10,074 A Shares and 14,104 B
Shares held in trust for the benefit of a niece and a nephew, for which Mr.
Donnelly is a co-trustee and (v) 14,285 A Shares and 35,000 B Shares held
in trust for the benefit of Mr. Donnelly and his brothers and sisters, for
which Mr. Donnelly is a co-trustee.
(4) Includes (i) 943 A Shares and 1,321 B Shares owned by Joan E. Donnelly's
husband, David K. Taylor as to which Ms. Donnelly disclaims beneficial
ownership, (ii) 1,562 A Shares and 2,186 B Shares held by Ms. Donnelly as
custodian for her children and (iii) 76,250 A Shares and 106,750 B Shares
held in trust as to which Ms. Donnelly is the trustee.
(5) Includes (i) 2,000 A Shares and 62,187 B Shares held by the Robert M.
Leonard Trust, for which Mr. Leonard is a co-trustee and (ii) 9,272 B
Shares owned by Mr. Leonard's wife, Ann N. Leonard, as to which Mr. Leonard
disclaims beneficial ownership.
(6) See Note 7 under the caption "Voting Securities and Principal Holders
Thereof."
(7) See Note 8 under the caption "Voting Securities and Principal Holders
Thereof."
5
<PAGE> 9
Dr. Goodson has been Chairman of the Board of Directors and Chief Executive
Officer of Oshkosh Truck Corporation, a manufacturer of specialized trucks and
transport equipment, since 1990.
Dr. Uhlmann has been a Professor of Engineering and Chairman of the
Department of Material Science and Engineering at the University of Arizona
since 1986.
Mr. Walters has been engaged in management consulting since mid-1982. Prior
to that time, he was President and Chief Operating Officer of Herman Miller,
Inc., an office furniture manufacturer. Mr. Walters is a director of X-Rite,
Incorporated.
Dr. Baumgardner joined the Company in 1969 and has been Chief Executive
Officer since 1982, Chairman of the Board since 1986, and President since 1994.
Dr. Baumgardner is a director of SL Industries, Inc.
Mr. Brookstone has been Chief Financial and Planning Officer of Stone
Container Corporation, a major paper and packaging manufacturer, for over 5
years. He was named Executive Vice President of that company in 1991 and was
previously a Senior Vice President for more than 5 years. He is a director of
MFRI, Inc., Rembrandt Family of Mutual & Money Market Funds, and
Stone-Consolidated, Inc.
Mr. B. Patrick Donnelly, III, now a private investor, was Production
Manager of Technical Auto Parts Inc., an automotive parts supplier, from October
1993 through June 1995. From July through December 1992 he was Vice President of
Donnelly-Cooper Industries, Inc., a company engaged in production powder coating
of manufactured components. From 1989 through 1992 he was President of that
company. Donnelly-Cooper Industries, Inc., which emerged from Chapter 11
proceedings in July, 1992, is not affiliated with the Company. Mr. Donnelly is a
director of Ottawa Financial Corporation.
Ms. Donnelly has been Executive Director of Tohono Chul Park, a non-profit
desert preserve and museum, since May 1995. From 1984 to 1995, she was a
shareholder and Vice President of Tizzard, Knuttinen, Donnelly & Wright, P.C.,
certified public accountants.
Mr. Leonard has been President of Henry C. Grebe & Co., Inc. and Grebe
Yacht Sales, Inc., since 1972. The companies are currently engaged in commercial
boat storage and real estate management.
Mr. McNeive was appointed Senior Vice President -- Finance and Chief
Financial Officer for Laclede Gas Co., a natural gas distributor, in September
1995. From January, 1994 until his most recent appointment he was Vice President
-- Associate General Counsel, from September 1992 through 1993 he was Assistant
Vice President -- Associate General Counsel, and from 1986 through 1992 he was
associate general counsel of that company.
Mr. Pruden retired in January 1995 from the National Oceanic and
Atmospheric Administration (NOAA), an agency of the United States Department of
Commerce. His last position, which he held since 1985, was as chief of the
audits and internal control branch in the office of the controller.
Certain of the directors are related to each other. See "Voting Securities
and Principal Holders Thereof."
The Board of Directors, which had 11 meetings in the last fiscal year, has
several committees including standing Audit, Compensation and Stock Option
Committees. The responsibilities of the Audit Committee, which met four times
during the last fiscal year, include making recommendations on the choice of
independent public accountants, reviewing financial statements and meeting with
such accountants, internal auditors and management. The Compensation Committee's
responsibilities include making recommendations to the Board with respect to
executive compensation and fringe benefits. The Compensation Committee met four
times during the last fiscal year. A separate Stock Option Committee makes final
determinations with respect to the award of stock options. The Stock Option
Committee met two times in the last fiscal year. The Company has no nominating
committee. All directors, except Dr. Uhlmann, attended at least three-fourths of
the aggregate number of meetings of the Board and Board committees which they
were eligible to attend. Dr. Uhlmann attended approximately 64% of the Board and
Committee meetings which he was eligible to attend.
6
<PAGE> 10
COMPENSATION OF DIRECTORS
Retirement Plan for Outside Directors. The Board of Directors of the
Company adopted a retirement plan for directors of the Company who are not
employees of the Company (the "Retirement Plan for Outside Directors"). This
plan provides directors who are not employees of the Company ("outside
directors") with a retirement benefit based on their years of service as a
director of the Company and their annual directors' fees at the time of their
retirement from the Board of Directors. The retirement benefits begin after an
outside director retires from the Board or reaches age 70, whichever date is
later, and continues for a period equal to his or her length of service on the
Board or 20 years, whichever period is shorter. The annual benefits under the
plan are equal to the annual directors' fees at the time of the outside
director's retirement and are payable in quarterly installments.
The retirement plan for outside directors is not a qualified plan under the
Internal Revenue Code and is not funded. Payments under the plan will be made
from the general assets of the Company.
Director Compensation. The directors of the Company, other than salaried
employees of the Company, receive an annual fee of $15,000, $1,000 per meeting
of the Board of Directors and $800 per meeting of committees thereof which they
attend. Chairs of committees receive an additional $400 per committee meeting
they attend. All directors are reimbursed for out-of-pocket expenses incurred in
attending such meetings. In August of each year, non-employee directors are
granted options to purchase 500 shares of the Company's Class A Common Stock.
These options, which are exercisable at the closing market price on the date of
grant, vest after one year and are then exercisable for ten years. Directors who
are employees of the Company are not compensated for their service on the Board.
COMPENSATION OF EXECUTIVE OFFICERS
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee"),
comprised of B. Patrick Donnelly, III, Arnold F. Brookstone, Joan E. Donnelly,
Rudolph B. Pruden, and Glenn M. Walters, is responsible for the establishment of
the level and manner of compensation of the Company's six executive officers
("Executive Officers"). The Committee adheres to the compensation policies and
practices of the Company utilized in establishing the compensation of all
employees. This is reflective of the Company's long time commitment to the
participative management process and the resulting emphasis on the collective
efforts and achievements of all employees of the Company.
Compensation Philosophy. The Company's and the Committee's approach to
compensation is to further the Company's goal of empowering its employees,
working individually and as a team, to achieve personal and collective goals.
The Company's compensation policies are intended to reward the achievement of
annual and long-term goals, both personal and corporate, as well as to encourage
future excellent performance.
Compensation Policies and Programs. For fiscal year 1995, the Company's
compensation programs consisted of cash compensation (including salary and
bonus), stock and stock based performance unit plans, and defined benefit
retirement plans. Each year the Company utilizes external wage surveys to
determine the total compensation levels of employees performing similar roles
with organizations of similar size and like function. These pay ranges are then
used to establish a base level of compensation and amounts that may be paid
under performance standards. The composite performance standards are comprised
of financial performance standards as well as non-financial goals. Financial
performance standards measure levels of return on assets, improvements in
earnings per share and pre-tax income. The performance of Dr. Baumgardner and
Mr. Jellison was measured against Company-wide standards, while the performance
of certain other executive officers was measured by specific business
performance as well as Company-wide standards. The Committee combines these
standards of performance with the achievement of nonfinancial goals to compile a
composite performance rating for the past year. This overall rating is then used
to establish the salary for the next year as well as annual incentive payments
for the prior year's performance. The salaries of the Company's executive
officers, including the chief executive officer, for fiscal 1995 were therefore
based, in large part, on the performance of the Company during fiscal 1994.
7
<PAGE> 11
The Company also rewards performance under the Donnelly Scanlon Plan. Under
this Plan most employees of the Company, including the executive officers, have
the opportunity to earn a monthly bonus based on profits as a financial
incentive. All participating employees receive the same rate of bonus relative
to their respective salary or base pay. During the last fiscal year, bonuses
earned under the Donnelly Scanlon Plan amounted to approximately 1% of base pay
for all employees.
The Company believes stock options and stock ownership contribute to the
aligning of employee's interests with those of shareholders. The Company's 1987
Stock Option Plan encourages stock ownership by employees by authorizing the
grant of stock options to certain employees of the Company. In addition to stock
options for certain key executives, the Company also utilizes "performance unit"
grants, the value of which is directly tied to stock price appreciation. In
determining the size of individual option and performance unit grants, the
Committee evaluates each employee's job responsibilities, competitive market
practices, as well as the anticipated potential that individual has in
contributing to the success of the Company. The Company also encourages stock
ownership through participation in the Company's Employees' Stock Purchase Plan.
This plan, available to most employees of the Company, permits employees to
purchase shares of the Company's common stock at a discount (up to 10%) from the
market price of such shares.
The Committee continues to review the limitations on the deductibility for
certain compensation paid to executive officers whose annual compensation
exceeds $1,000,000, as imposed by sec. 162(m) of the Internal Revenue Code. To
date, no officer has exceeded that level.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF
DONNELLY CORPORATION
B. Patrick Donnelly, III Arnold F. Brookstone
Joan E. Donnelly Rudolph B. Pruden
Glenn M. Walters
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation paid
by the Company to its Chief Executive Officer and each of the Company's four
most highly compensated executive officers (collectively referred to as the
"Named Executives") for services rendered to the Company during fiscal 1995,
1994 and 1993.
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------
-------------------------------- STOCK OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) (NO. OF SHARES)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. Dwane Baumgardner,............................. 1995 $ 394,416(3) $ 4,022 10,000
Chairman of the Board, Chief Executive Officer 1994 447,905 8,242 9,500
and President 1993 382,714 7,781 9,000
John F. Donnelly, Jr.,............................ 1995 299,410 2,235 6,250
Senior Vice President 1994 240,073 4,421 5,750
1993 193,325 4,047 5,000
Bob J. Tennison,.................................. 1995 190,201 558 6,250
Senior Vice President
James A. Knister,................................. 1995 187,702(3) 1,972 4,000
Senior Vice President 1994 220,257 4,066 5,000
1993 198,788 4,064 5,000
William R. Jellison,.............................. 1995 150,657 1,298 3,500
Vice President and Chief Financial Officer 1994 129,710 2,399 2,500
1993 122,701 2,557 2,500
All Executive Officers as a Group (six persons)... 1995 1,347,928 11,159 32,500
-------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes cash compensation plus compensation earned during the fiscal years
ended in the respective years under the Company's 401(k) Savings Plan.
(2) Donnelly Scanlon Bonus. The Company pays a monthly formula-based bonus from
net income to most employees, including executive officers. During the last
fiscal year the Donnelly Scanlon Bonus amounted to approximately 1% of base
pay for all employees.
(3) Decrease in compensation is due to a change in the timing of annual
incentive payout.
Option Grants in Last Fiscal Year. Shown below is information on grants of
stock options pursuant to the Company's 1987 Stock Option Plan (the "Option
Plan") during the 1995 fiscal year to the Named Executives. Under the Option
Plan key employees and certain non-employee directors may be granted options
9
<PAGE> 13
to purchase the Company's Class A Common Stock. 812,500 shares of Class A Common
Stock are reserved for issuance pursuant to the Option Plan.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NO. OF OPTIONS STOCK PRICE
SHARES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(3)
OPTIONS IN FISCAL PRICE EXPIRATION --------------------
NAME GRANTED(1) YEAR (2) DATE 5% 10%
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. Dwane Baumgardner.............. 10,000 14% $17.00 8-19-04 $106,912 $270,936
John F. Donnelly, Jr.............. 6,250 9% $17.00 8-19-04 66,820 169,335
Bob J. Tennison................... 6,250 9% $17.00 8-19-04 66,820 169,335
James A. Knister.................. 4,000 6% $17.00 8-19-04 42,765 108,374
William R. Jellison............... 3,500 5% $17.00 8-19-04 37,419 94,828
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options become exercisable one year after date of grant.
(2) The exercise price equals the closing market price of the Company's Class A
Common Stock on the date of grant. The exercise price may be paid in cash
and/or in shares of the Company's Class A Common Stock.
(3) These amounts are based on assumed rates of appreciation only. Actual gains,
if any, on stock option exercises will be dependent on overall market
conditions and on the future performance of the Company's Class A Common
Stock. There can be no assurance that the amounts reflected in this table
will be realized.
Fiscal Year-End Options Values. Shown below is information with respect to
unexercised options to purchase shares of the Company's Class A Common Stock
granted under the Option Plan to the Executive Officers and held by them at July
1, 1995. None of the Named Executives exercised any stock options during fiscal
1995.
<TABLE>
<CAPTION>
NO. OF SHARES SUBJECT TO VALUE OF UNEXERCISED
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS AT
AT JULY 1, 1995 JULY 1, 1995(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J. Dwane Baumgardner........................... 49,750 10,000 $ 192,156 $ 0
John F. Donnelly, Jr........................... 24,500 6,250 83,119 0
Bob J. Tennison................................ 0 6,250 0 0
James A. Knister............................... 28,875 5,000 116,059 0
William R. Jellison............................ 6,875 3,500 10,484 0
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The value of unexercised options reflects the increase in market value of
the Company Class A Common Stock from the date of grant through July 1,
1995 (when the closing price of the Company's Class A Common Stock was
$16.125 per share.) Value actually realized upon exercise by the Executive
Officers will depend on the value of the Company's Class A Common Stock at
the time of exercise.
10
<PAGE> 14
Long-Term Incentive Plans -- Awards in Last Fiscal Year. Set forth below is
information on the award of benefits under the Company's Executive Compensation
Plan during fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE OR
SHARES, UNITS OTHER PERIOD UNIT
NAME OR OTHER RIGHTS(1) MATURATION OR PAYOUT
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
J. Dwane Baumgardner...................................... 10,000 5 years
John F. Donnelly, Jr...................................... 0 N/A
Bob J. Tennison........................................... 0 N/A
James A. Knister.......................................... 0 N/A
William R. Jellison....................................... 0 N/A
-------------------------------------------------------------------------------------------------------
</TABLE>
(1) Each unit entitles the recipient to a cash payment equal to the five-year
cumulative appreciation in the price of the Company's Class A Common Stock.
Payment is due within four months after the expiration of the five year
performance period.
Pension Plan Table. The following table shows the estimated annual benefits
payable upon normal retirement to persons in specified compensation and years of
service classifications under the Company's defined benefit plan and the
Company's Supplemental Retirement Plan (the "Supplemental Plan"). The
Supplemental Plan provides additional benefits only to those employees whose
projected retirement benefits under the Company's defined benefit plan are
restricted by the Internal Revenue Code (the "Code"). The Code limits
compensation that may be considered for qualified pension plan purposes and also
limits annual benefits that may be paid under qualified plans. The Supplemental
Plan is designed to provide participants with benefits, on a nonqualified basis,
so that their total retirement benefits under the Company's pension plan and the
Supplemental Plan will be equal to the benefits they would have received under
the Company's pension plan if the limitations of the Code did not apply.
<TABLE>
<CAPTION>
BENEFITS BASED UPON YEARS OF
SERVICE AT NORMAL RETIREMENT AGE(2)(3)
--------------------------------------------
FINAL AVERAGE 10 20 30 35
ANNUAL COMPENSATION(1) YEARS YEARS YEARS YEARS
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$120,000............................................ $ 16,000 $ 31,000 $ 47,000 $ 55,000
160,000............................................ 22,000 44,000 66,000 77,000
200,000............................................ 28,000 56,000 84,000 98,000
240,000............................................ 34,000 69,000 103,000 120,000
280,000............................................ 41,000 81,000 122,000 142,000
320,000............................................ 47,000 93,000 140,000 164,000
360,000............................................ 53,000 106,000 159,000 185,000
400,000............................................ 59,000 118,000 177,000 207,000
----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The final average annual compensation is determined under the defined
benefit plan and the Supplemental Plan by the average of the five highest
consecutive years of annual compensation (including salary and bonus
payments as referenced in the Summary Compensation Table) during the last
ten years of employment, subject to a maximum of $150,000 for 1995, for
computing benefits under the Company's defined benefit plan.
(2) The Named Executives have credited years of service under the defined
benefit plan and the Supplemental Plan as follows: J. Dwane Baumgardner --
26 years; John F. Donnelly, Jr. -- 18 years; Bob J. Tennison -- 1 year;
James A. Knister -- 27 years; William R. Jellison -- 15 years.
(3) Amounts in excess of $120,000, as limited by Section 415 of the Code, would
be paid pursuant to the Supplemental Plan. Benefits shown in the table are
computed as a straight life annuity beginning at age 63 and are not subject
to any deduction for social security benefits or other offset amounts.
11
<PAGE> 15
The Company provides group health and life insurance benefits and
supplemental unemployment benefits to its regular employees, including executive
officers. The Company also maintains a salary savings plan in
which all regular employees of the Company are eligible to participate but to
which the Company does not contribute.
Security Ownership of Management. The following table shows, as of
September 1, 1995, the number of shares beneficially owned by each of the Named
Executives identified in the executive compensation tables of this proxy
statement and by all Directors and Executive Officers as a group. Except as
described in notes following the table, the following persons have sole voting
and dispositive power as to all of their respective shares.
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND PERCENT OF OF
NATURE OF EACH CLASS COMMON
NAME BENEFICIAL OWNERSHIP OF STOCK EQUITY(1)
-------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A(1) CLASS B
======== ======== ========== =======
<S> <C> <C> <C> <C> <C>
J. Dwane Baumgardner..................... 69,771 -- 1.5% --% *%
John F. Donnelly, Jr..................... 62,839(2) 54,498(2) 1.3 1.5 1.5
Bob J. Tennison.......................... 6,250 -- * -- *
James A. Knister......................... 36,987(3) 5,407(3) * * *
William R. Jellison...................... 24,149(4) -- * -- *
All Executive Officers and Directors
as a Group (15 persons)................ 586,808 933,338 12.8 26.0 19.6
--------------------------------------------------------------------------------------------------------
</TABLE>
* Denotes ownership of less than one percent.
(1) Includes 410,700 shares with respect to which officers and directors have
the right to acquire beneficial ownership under stock options exercisable
within 60 days.
(2) Includes (i) 781 A Shares and 1,093 B Shares owned by his wife, Banba
Donnelly, as to which Mr. Donnelly disclaims beneficial ownership, (ii)
1,562 A Shares and 1,093 B Shares owned by Mr. Donnelly as custodian for
his children and (iii) 10,074 A Shares and 14,104 B Shares held in trust
for the benefit of a niece and a nephew, for which Mr. Donnelly is a
co-trustee.
(3) Includes 4,112 A Shares and 5,407 B Shares owned jointly with Mr. Knister's
wife, Nancy Knister.
(4) Includes (i) 10,774 A Shares owned jointly with Mr. Jellison's wife, Joanne
Jellison, (ii) 2,500 A Shares owned jointly with Mr. Jellison's mother,
Lorraine Jellison, and (iii) 500 A Shares held in trust as to which Mr.
Jellison is the trustee.
12
<PAGE> 16
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock with the cumulative total return of the S&P
500 Total Return Index and the Dow Jones Automobile Parts Index for the period
commencing June 30, 1990 and ending July 1, 1995. The graph assumes the
investment of $100 on June 30, 1990 in the Company's Common Stock, the S&P 500
Total Return Index and the Dow Jones Automobile Auto Parts Index with dividends
reinvested.
COMPARISON OF FIVE YEAR TOTAL RETURNS
AMONG THE DONNELLY CORPORATION, S&P 500 TOTAL RETURN
INDEX & DOW JONES AUTOMOBILE PARTS INDEX
YEAR ENDING JUNE 30,
<TABLE>
<CAPTION>
S&P 500 TO- DOW JONES
MEASUREMENT PERIOD DONNELLY TAL RETURN AUTOMOBILE
(FISCAL YEAR COVERED) CORPORATION INDEX PAR TS INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 117 107 110
1992 242 122 177
1993 258 138 218
1994 208 140 203
1995 217 176 231
</TABLE>
CERTAIN TRANSACTIONS
Pursuant to a 1972 agreement (the "1972 Agreement") between the Company and
five principal shareholders, the Company agreed to purchase, upon the death of
any of those shareholders, an amount of the Company's 7 1/2% preferred stock,
$10 par value per share, equal to the lesser of $200,000 or the total estate tax
and cost of administration of the shareholder's estate. The purchase price for
the 7 1/2% preferred stock is $10 per share, its par value. The 1972 Agreement
remains in effect with one shareholder, Bernard P. Donnelly, Jr., who owns
40,000 shares of the 7 1/2% preferred stock and who also owns more than 5% of
the common equity of the Company. See "Voting Securities and Principal Holders
Thereof."
The holders of the Company's Class B Common Stock also own shares of
Donnelly Export Corporation, a shareholder Domestic International Sales
Corporation under the Internal Revenue Code which has been designed to reduce
the income tax liability of the Company. The shares of Donnelly Export
Corporation are owned entirely by the holders of the Class B Common Stock of the
Company. The holders of Class B Common Stock hold, for each 35 such shares, four
shares of common stock of Donnelly Export Corporation. Donnelly Export
Corporation does not provide the holders of Class B Common Stock any financial
advantage over holders of the Class A Common Stock. The shareholders of Donnelly
Export Corporation are not entitled to vote on issues voted upon by the
Company's shareholders.
13
<PAGE> 17
RELATIONS WITH INDEPENDENT PUBLIC ACCOUNTANTS
The combined consolidated financial statements of the Company have been
examined by BDO Seidman, LLP, independent certified public accountants. A
representative of BDO Seidman is expected to be present at the annual meeting
with the opportunity to make a statement, if desired, and will be available to
respond to appropriate questions. The Company's Audit Committee selected the
Company's auditors for the fiscal year in the spring of this past year. It is
expected that this practice will change this year with the selection of the
Company's auditors being made before spring of this year.
SHAREHOLDER PROPOSALS -- 1996 ANNUAL MEETING
Any proposal of a shareholder intended to be presented for action at the
next annual meeting of the Company must be received by the Company at 414 East
Fortieth Street, Holland, Michigan 49423-5368, not later than May 14, 1996, if
the shareholder wishes the proposal to be included in the Company's proxy
materials for that meeting.
AVAILABILITY OF 10-K ANNUAL REPORT
The annual report on Form 10-K to the Securities and Exchange Commission
will be provided free to shareholders upon written request. Write Ms. Maryam
Komejan, Vice President and Corporate Secretary, Donnelly Corporation, 414 East
Fortieth Street, Holland, Michigan 49423-5368.
COMPLIANCE WITH SECTION 16 REPORTING REQUIREMENTS
Section 16(a) of the Exchange Act requires directors and executive officers
to file reports of ownership and changes of ownership of shares of the Company's
Common Stock with the Securities and Exchange Commission, and applicable
regulations require them to furnish the Company with copies of all Section 16(a)
reports they file. Based on a review of such reports received by it, or written
representations from certain reporting persons, the Company is not aware of any
failure to timely file such reports.
MISCELLANEOUS
The management is not aware of any other matter to be presented for action
at the meeting. However, if any such other matter is properly presented for
action, it is the intention of the persons named in the accompanying forms of
proxy to vote thereon in accordance with their best judgment.
The cost of soliciting proxies in the accompanying forms will be borne by
the Company. In addition to solicitation by mail, proxies may be solicited in
person, or by telephone or telegraph, by some regular employees of the Company.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
September 11, 1995.
J. Dwane Baumgardner
CHAIRMAN OF THE BOARD
14
<PAGE> 18
--------------------------------------------------------------------------------
An annual report to shareholders for the year ended July 1, 1995 containing
certified financial statements is being mailed to the shareholders with these
materials.
--------------------------------------------------------------------------------
<PAGE> 19
DONNELLY CORPORATION
414 EAST FORTIETH STREET, HOLLAND, MICHIGAN 49423-5368
PROXY - CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J. Dwane Baumgardner and Maryam Komejan
as Proxies, each with the power to appoint their substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Class A Common Stock of Donnelly Corporation held of record by the
undersigned on September 1, 1995, at the annual meeting of shareholders to be
held October 20, 1995, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1.
(Continued and to be signed and dated on the Reverse Side.)
DONNELLY CORPORATION
P.O. BOX 11041
NEW YORK, N.Y. 10203-0041
--------------------------------------------------------------------------------
_______
|_______|
<TABLE>
<S><C>
1. Directors to be elected by holders of Class A Common Stock
/X/ FOR all nominees listed below /X/ WITHHOLD AUTHORITY to vote for all /X/ EXCEPTIONS
nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE MARK THE "EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THE
NOMINEE'S NAME IN THE LIST BELOW.)
R. Eugene Goodson, Donald R. Uhlmann, Glenn M. Walters
2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
Change of address and [ X ]
or comments, mark here
Please sign exactly as name appears below. When shares are held
by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign in full corporate name by president
or other authorized officer. If a partnership, please sign in partnership
name by authorized person.
DATED: __________________________________________________________, 1995
_______________________________________________________________________
Signature
_______________________________________________________________________
Signature if held jointly
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
<PAGE> 20
DONNELLY CORPORATION
414 EAST FORTIETH STREET, HOLLAND, MICHIGAN 49423-5368
PROXY - CLASS B COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J. Dwane Baumgardner and Maryam Komejan
as Proxies, each with the power to appoint their substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Class B Common Stock of Donnelly Corporation held of record by the
undersigned on September 1, 1995, at the annual meeting of shareholders to be
held October 20, 1995, and at any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1.
(Continued and to be signed and dated on the Reverse Side.)
DONNELLY CORPORATION
P.O. BOX 11041
NEW YORK, N.Y. 10203-0041
--------------------------------------------------------------------------------
_______
|_______|
<TABLE>
<S><C>
1. Directors to be elected by holders of Class B Common Stock
Holders of Class B Common Stock have 10 votes per share and have the right to cumulate their votes in the election of
directors to be elected by that class. (See enclosed instructions.) PLEASE VOTE EITHER IN SUBSECTION A OR SUBSECTION B,
BUT NOT BOTH.
A. NON-CUMULATIVE VOTING
If desired, a holder may vote for or against all nominees by checking one of the boxes below.
/X/ FOR all nominees listed below /X/ WITHHOLD AUTHORITY to vote for all /X/ EXCEPTIONS
(except as marked to the contrary below) nominees listed below
(INSTRUCTION: IF NOT CUMULATING YOUR VOTES, TO WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE, STRIKE THAT NOMINEE'S NAME FROM THE LIST
BELOW.)
J. Baumgardner, A. Brookstone, B. P. Donnelly, J. Donnelly, T. Leonard, G. McNeive, R. Pruden
B. CUMULATIVE VOTING (DO NOT VOTE HERE IF YOU HAVE ALREADY VOTED IN SUBSECTION A.)
To cumulate votes, write in the number of votes you wish to Change of address and
cast for a nominee opposite his or her name. or comments, mark here /X/
____ J. Baumgardner ____ B.P. Donnelly ____ T. Leonard ____ R. Pruden
____ A. Brookstone ____ J. Donnelly ____ G. McNeive
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears below. When shares are
held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name
by authorized person.
DATED: ________________________________________________, 1995
_____________________________________________________________
Signature
_____________________________________________________________
Signature if held jointly
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
<PAGE> 21
INSTRUCTIONS FOR VOTING OF CLASS B COMMON STOCK
Holders of the Class B Common Stock of Donnelly Corporation have 10 votes
per share and also have the right to cumulate their votes in the election of
directors to be elected by that class. At the 1995 Annual Meeting, the Class B
Common Stock will elect 7 directors. The right to cumulate votes means that
holders of Class B Common Stock, instead of spreading their votes equally among
all 7 nominees, may cast all of their votes for 1 nominee or otherwise cast the
votes on a disproportionate basis among the nominees.
A holder's total number of votes is equal to the number of shares of Class
B Common Stock held times 10 times 7. For example, if a holder owns 500 shares,
his or her total number of votes in the election of directors will be 35,000.
These votes may be distributed among the nominees however the holder desires.
For example, again assuming 35,000 votes (based upon ownership of 500 shares), a
holder may cast all 35,000 votes for one nominee, cast the votes in some other
combination disproportionately among the nominees or cast a blanket vote for all
nominees (in which case each nominee would get 5,000 votes).
The enclosed yellow proxy explains what a holder must do in order to
cumulate votes and also what a holder must do to simply vote for all the
nominees or to withhold authority for all the nominees. The proxy permits a
holder to either vote without cumulating votes or to cumulate votes.
