<PAGE>
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
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Donnelly Corporation
------------------------------------------------------------------------
(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 Filing 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:
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(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:
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(5) Total fee paid:
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[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[Donnelly Corporation Logo]
- -------------------------------------------------------------------------------
PRINCIPAL CORPORATE OFFICES: PLACE OF MEETING:
49 West Third Street Holiday Inn
Holland, Michigan 49423-2813 650 East 24th Street
Holland, Michigan 49423
October 1, 1999
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on November 5, 1999
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, November
5, 1999, 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.
The Board of Directors has fixed the close of business on September 3, 1999
as the record date for the Annual Meeting. Only shareholders of record at that
time are entitled to vote at the Annual Meeting or any adjournment or
postponement thereof.
It is important that your shares be represented at the Annual Meeting, even
if you cannot attend the Annual Meeting and vote your shares in person.
Shareholders of record can vote their shares by marking your votes on the
enclosed proxy card, signing, dating and mailing the proxy card in the
enclosed envelope, which requires no postage if mailed in the United States.
The return of the enclosed proxy will not affect your right to vote if you
attend the Annual Meeting in person, as your proxy is revocable at your
option.
By Order of the Board of Directors,
/s/ Maryam Komejan
Maryam Komejan
Secretary
<PAGE>
Dated: October 1, 1999
DONNELLY CORPORATION
49 West Third Street
Holland, Michigan 49423
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To be held on November 5, 1999
----------------
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 (the "Annual
Meeting") which will be held at the Holiday Inn, 650 East 24th Street,
Holland, Michigan, November 5, 1999, at 9:15 a.m., local time. The Annual
Meeting is being held to elect ten directors and to transact such other
business as may properly come before the meeting or at 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. 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 Company's transfer agent.
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 3, 1999, the record date for determination of shareholders
entitled to vote at the Annual Meeting, there were outstanding 5,976,279
shares of Class A Common Stock of the Company, each having one vote per share
and 4,158,502 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>
The following table sets forth as of September 3, 1999 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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF EACH COMMON
BENEFICIAL OWNER OWNERSHIP CLASS OF STOCK EQUITY
- --------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B
--------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Bank One Corporation.... 388,972(1) 592,385(1) 6.5% 14.2% 9.7%
200 Ottawa Avenue
Grand Rapids, Michigan
49503
Dimensional Fund
Advisors Inc........... 408,875(2) -- 6.8 -- 4.0
1299 Ocean Avenue, 11th
Floor
Santa Monica, California
90401
Heartland Advisors,
Inc.................... 1,038,400(3) -- 17.4 -- 10.2
790 North Milwaukee
Street
Milwaukee, Wisconsin
53202
Investment Counselors of
Maryland, Inc........... 410,900(4) -- 6.9 -- 4.1
803 Cathedral Street
Baltimore, Maryland
21201
Putnam Investments,
Inc.................... 401,812(5) -- 6.7 -- 4.0
One Post Office Square
Boston, Massachusetts
02109
Anne H. Copps........... 4,000(6) 240,962(6) * 5.8 2.4
49 West Third Street
Holland, Michigan 49423
Bernard P. Donnelly,
Jr..................... 10,542(7) 433,546(7) * 10.4 4.4
49 West Third Street
Holland, Michigan 49423
Virginia N. Donnelly.... 10,542(7) 433,546(7) * 10.4 4.4
49 West Third Street
Holland, Michigan 49423
Katherine S. Donnelly... 224,911(8) 314,878(8) 3.8 7.6 5.3
49 West Third Street
Holland, Michigan 49423
Charles A. Krahmer...... 112,079(9) 363,353(9) 1.9 8.7 4.7
49 West Third Street
Holland, Michigan 49423
Jane H. Krahmer......... 112,079(9) 363,353(9) 1.9 8.7 4.7
49 West Third Street
Holland, Michigan 49423
Gerald T. McNeive, Jr... 58,584(10) 319,390(10) *(12) 7.7 3.7(12)
49 West Third Street
Holland, Michigan 49423
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF EACH COMMON
BENEFICIAL OWNER OWNERSHIP CLASS OF STOCK EQUITY
- ---------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Louise H. McNeive....... 58,584(10) 319,390(10) *(12) 7.7 3.7(12)
49 West Third Street
Holland, Michigan 49423
Marie Josephte
Martineau.............. 17,176 269,762 * 6.5 2.8
49 West Third Street
Holland, Michigan 49423
Fernande M. Pruden...... 224,709(11) 299,335(11) 3.5(12) 7.2 5.2(12)
49 West Third Street
Holland, Michigan 49423
Rudolph B. Pruden....... 224,709(11) 299,335(11) 3.5(12) 7.2 5.2(12)
49 West Third 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) 42,233 B Shares held by Bank One Corporation (the "Bank") as
co-trustee of the Robert M. Leonard Trust, 43,750 B Shares as co-trustee
of the B.P. Donnelly Descendants Trust, 117,577 B Shares as co-trustee of
the John Donnelly Residual Trust and 388,825 B Shares held in two trusts
for which the Bank serves as sole trustee, (ii) 376,682 A Shares held by
Strafe & Co. acting as a nominee of the Bank as follows: 17,593 shares in
the B.P. Donnelly Descendants Trust and 83,983 shares in the John Donnelly
Residual Trust, for all of which trusts the Bank serves as co-trustee and
275,106 shares held in two trusts for which the Bank serves as sole
trustee and (iii) 12,290 A Shares held by the Bank as trustee, co-trustee,
custodian, or agent of other trusts.
(2) In a Schedule 13G, dated February 11, 1999, and delivered to the Company,
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 408,875 A Shares, all
of which shares are held in 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 disclaims beneficial ownership of all such shares.
(3) In a Schedule 13G, dated January 13, 1999, and delivered to the Company,
Heartland Advisors, Inc. ("Heartland") disclosed on behalf of its
investment advisory clients that they had acquired beneficial ownership of
1,038,400 A Shares. Heartland has the sole power to dispose of all of such
shares, and sole power to vote 625,200 of such shares.
(4) In a Schedule 13G, filed February 16, 1999, and delivered to the Company,
Investment Counselors of Maryland, Inc. ("Investment Counselors")
disclosed on behalf of its investment advisory clients that it had
acquired beneficial ownership of 410,900 A Shares. Investment Counselors
has the sole power to dispose of and to vote all of such shares.
(5) 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 it had acquired beneficial ownership of
401,812 A Shares. Putnam has the sole power to dispose of all of such
shares, and shared power to vote 132,062 of such shares.
3
<PAGE>
(6) Includes 4,000 A Shares and 240,962 B Shares owned by a trust of which
Anne H. Copps is trustee.
(7) Includes 10,542 A Shares and 433,546 B Shares owned by two trusts of
which Bernard P. Donnelly, Jr. and Virginia N. Donnelly (husband and
wife) are co-trustees.
(8) Includes 83,983 A Shares and 117,577 B Shares held in the John Donnelly
Residual Trust for which Katherine S. Donnelly is a co-trustee.
(9) Includes 112,079 A Shares and 363,353 B Shares owned by two trusts of
which Charles A. Krahmer and Jane H. Krahmer (husband and wife) are co-
trustees.
(10) Includes (i) 43,368 A Shares and 302,986 B Shares owned by two trusts of
which Gerald T. McNeive, Jr. and Louise H. McNeive (husband and wife) are
co-trustees, (ii) stock options exercisable within 60 days for 3,500 A
Shares owned by Gerald T. McNeive, Jr., a director of the Company and
(iii) 11,716 A Shares and 16,404 B Shares as to which Louise H. McNeive
is custodian for her children, and as to which Gerald T. McNeive, Jr.
disclaims beneficial ownership.
(11) Includes (i) 205,192 A Shares and 282,547 B Shares owned by Fernande M.
Pruden and her retirement plans and (ii) stock options exercisable within
60 days for 3,500 A Shares and 16,017 A Shares and 16,788 B Shares owned
by Rudolph B. Pruden and his retirement plans. Rudolph B. Pruden is
Fernande M. Pruden's husband and a director of the Company. Fernande M.
Pruden and Rudolph B. Pruden each disclaim beneficial ownership of the
other's shares.
(12) Calculated based on the number of shares outstanding plus 441,135 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., the Chief Operating Officer of the Company's
European Operations, is also a descendant of Bernard P. Donnelly and is the
brother of Ms. Donnelly. Each of four family groups 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 27% of the Class A Common Stock of the Company.
These shareholders therefore possess approximately 90% of the voting power of
the Company and approximately 27% 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.
NOMINEES FOR ELECTION AS DIRECTORS
The Company's Board of Directors is currently composed of ten members. All
nominees are currently directors of the Company and are up for re-election at
the Annual Meeting, each to serve until the 2000 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.
4
<PAGE>
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 Company. 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. 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.
The content of the following table is based upon information as of September
3, 1999 furnished to the Company by the nominees.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
YEAR FIRST OF PERCENT OF
BECAME A BENEFICIAL PERCENT OF EACH COMMON
NAME AGE DIRECTOR OWNERSHIP CLASS 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
John A. Borden
(a,b,e,f,g)............ 65 1996 1,625 -- *% -- % *%
R. Eugene Goodson, Ph.D
(a,f,g)................ 64 1993 4,125 -- * -- *
Donald R. Uhlmann, Ph.D
(f,g).................. 62 1978 15,562 -- * -- *
NOMINEES FOR ELECTION BY
HOLDERS
OF CLASS B COMMON STOCK
J. Dwane Baumgardner,
Ph.D................... 59 1982 184,167 -- 2.9 -- 1.8
Arnold F. Brookstone
(a,b,d,e).............. 69 1976 27,250 -- * -- *
B. Patrick Donnelly, III
(b,c,d,e).............. 54 1980 46,295(3) 135,240(3) * 3.3 1.8
Joan E. Donnelly
(b,c,d,e).............. 51 1987 69,081(4) 93,625(4) 1.1 2.3 1.6
Thomas E. Leonard
(c,d,f,g).............. 69 1967 9,750(5) 123,823(5) * 3.0 1.3
Gerald T. McNeive, Jr.
(c,d,f,g).............. 57 1980 58,584(6) 319,390(6) * 7.7 3.7
Rudolph B. Pruden
(b,c,d,e).............. 69 1984 224,709(7) 299,335(7) 3.5 7.2 5.2
</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 Planning 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: Mr. Borden--1,000; Dr. Baumgardner--
131,438; all other Directors--3,500.
5
<PAGE>
(2) Calculated based on the number of shares outstanding plus 441,135 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) 250 A Shares and 6,500 B Shares owned jointly with Mr.
Donnelly's wife, Jacqueline K. Donnelly, (ii) 1,406 A Shares and 2,343 B
Shares owned by Jacqueline K. Donnelly, (iii) 4,624 A Shares and 5,500 B
Shares held in trust for the benefit of his children, for which Mr.
Donnelly is a trustee, and (iv) 17,593 A Shares and 43,750 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) 1,178 A Shares and 1,651 B Shares owned by Joan E. Donnelly's
husband, David K. Taylor as to which Ms. Donnelly disclaims beneficial
ownership, and (ii) 1,952 A Shares and 2,732 B Shares held by Ms. Donnelly
as custodian for her children.
(5) Includes (i) 42,233 B Shares held by the Robert M. Leonard Trust, for
which Mr. Leonard is a co-trustee, and (ii) 11,590 B Shares owned by Mr.
Leonard's wife, Ann N. Leonard, as to which Mr. Leonard disclaims
beneficial ownership.
(6) See Note 10 under the caption "Voting Securities and Principal Holders
Thereof."
(7) See Note 11 under the caption "Voting Securities and Principal Holders
Thereof."
Mr. Borden has been a consultant with FTD (Florist Transworld Delivery
Inc.), a worldwide communications and financial service organization, since
January 1996. From 1988 until his retirement in December 1995, he was
Executive Vice President and Chief Executive Officer of that company.
Dr. Goodson has been an Adjunct Professor at the University of Michigan's
School of Business since September 1998. From October 1997 to September 1998,
he was a consultant with Oshkosh Truck Corporation, a manufacturer of
specialized trucks and transport equipment; from 1990 until his retirement in
October 1997, he was Chairman of the Board of Directors and Chief Executive
Officer of that company.
Dr. Uhlmann has been a Professor of Materials Science and Engineering and of
Optical Science at the University of Arizona since 1986. From 1986 until 1998,
he served as Chairman of the Materials Science and Engineering Department.
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. and Wescast
Industries, Inc.
Mr. Brookstone served as Executive Vice President and Chief Financial and
Planning Officer of Stone Container Corporation, an international pulp and
paper company, until his retirement in January 1996. Mr. Brookstone serves on
a number of Boards of Directors including Abitibi-Consolidated Inc.; MFRI,
Inc.; and is also a director of several privately held companies. In addition,
he is the Chairman of the Board of Trustees of the ABN AMRO Family of Mutual
and Money Market Funds.
Mr. B. Patrick Donnelly, III, has been President of Productive Solutions,
LLC, a business consulting firm, since May 1998. From November 1995 to April
1998 he was Plant Manager of Ran Enterprises, an automotive parts supplier;
from October 1993 through June 1995 he was Production Manager of Technical
Auto Parts Inc., an automotive parts supplier. 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 served as President of Henry C. Grebe & Co., Inc. and Grebe
Yacht Sales, Inc., a ship repair and storage business which was recently
engaged in land development, until his retirement in February 1998.
6
<PAGE>
Mr. McNeive was appointed Senior Vice President of Finance and General
Counsel for Laclede Gas Co., a natural gas distributor, in March 1998. From
September 1995 through February 1998 he was Senior Vice President of Finance
and Chief Financial Officer; from 1994 through August 1995 he was Vice
President-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 had 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 six 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 six times
during the last fiscal year, include making recommendations on the choice of
independent public accountants, reviewing financial statements and meeting
with 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 three 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 attended at least three-
fourths of the aggregate number of meetings of the Board and Board committees
that they were eligible to attend.
COMPENSATION OF DIRECTORS
Retirement Plan for Outside Directors. On September 21, 1992 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 the annual directors' retainer 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. The annual benefits under the plan are equal to
the annual directors' fees at the time of their retirement from the Board and
are payable in quarterly installments. Alternatively, a director may request a
lump-sum distribution. Effective August 21, 1998, the Board of Directors
amended the Retirement Plan for Outside Directors to provide that retirement
benefits continue for a period equal to the length of service on the Board
through 1998 or 35 years, whichever period is shorter, to provide that
directors joining the Board of Directors after 1997 will not be eligible to
participate in the plan and to provide that current directors who are
participating in the plan will not receive credit for years of service after
1998.
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 retainer fee of $20,000, an annual
retainer fee of $1,000 for each committee of which they are a member, $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
respective committee meeting they chair.
Director fees may be voluntarily deferred under an unfunded deferred
director fee plan. Directors who are not employees of the Company are also
granted stock options under the Company's Non-employee Director Stock Option
Plan. Pursuant to the Plan, options are granted on the second Wednesday of
each August for 500 shares of Class A Common Stock. The exercise price of
these nonqualified options equals the fair market value of the Company's Class
A Common Stock on the date of grant. During fiscal 1999, options covering an
aggregate of 4,500 shares were granted to the Company's non-employee directors
at an exercise price per share of $15.875. Effective October 16, 1998,
shareholders approved an amendment to the Non-employee Director Stock Option
Plan to provide that options of 2,000 shares of Class A Common Stock be
granted each year to directors who are not employees of the Company.
7
<PAGE>
All directors are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors and of committees thereof.
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 in fiscal 1999 of, B. Patrick Donnelly, III, chair of the Committee,
John A. Borden, Arnold F. Brookstone, Joan E. Donnelly, and Rudolph B. Pruden,
is responsible for the establishment of the level and manner of compensation
of the Company's executive officers ("Executive Officers"). The Committee sets
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 policy and practice 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 excellent performance.
Compensation Policies and Programs. For fiscal year 1999, the Company's
compensation programs consisted of cash compensation (including salary and
bonus), stock options, defined contribution 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,
Messrs. Reed and Scaffede was measured against company-wide standards, while
the performance of Mr. Donnelly was measured primarily by the Company's
European operations business performance and Mr. Viola was measured primarily
by the Company's North American automotive operations business performance.
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 1999 were therefore based, in large part, on the
performance of the Company during fiscal 1998.
Dr. Baumgardner's total compensation, including base salary, annual
incentive award target, and stock options, is reviewed based on compensation
for like sized companies in similar industries. It is further measured based
on comparative performance of those comparison companies and the performance
of Donnelly Corporation. A target of approximately seventy percent of Dr.
Baumgardner's annual income is in the form of an annual incentive award which
is based solely on company performance. This year, due to overall Company
performance, that target was not achieved.
The Company believes stock options and stock ownership contribute to the
aligning of employees' interests with those of shareholders. The Company's
Stock Option Plans encourage stock ownership by employees by authorizing the
grant of stock options to certain employees of the Company. In determining the
size of individual option 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 15% discount from the market price of such shares.
8
<PAGE>
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 (S) 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, Chair
John A. Borden Arnold F. Brookstone
Joan E. Donnelly Rudolph B. Pruden
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 1999, 1998 and
1997.
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------
STOCK
NAME AND PRINCIPAL OTHER ANNUAL OPTIONS ALL OTHER
POSITION YEAR SALARY(1) BONUS(2) COMPENSATION (3) (#) COMPENSATION(4)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. Dwane Baumgardner,
Ph.D.,................. 1999 $442,311 $ 0 -- 19,000 $6,636
Chairman of the Board, 1998 400,005 0 -- 31,500 4,385
Chief Executive Officer
and 1997 400,280 198,320 -- 18,750 4,114
President
John F. Donnelly, Jr.,.. 1999 271,842 127,875 -- 10,000 3,074
Chief Operating
Officer, 1998 220,002 55,000 -- 11,000 1,030
European Operations 1997 220,002 86,847 -- 6,250 713
Donn J. Viola,.......... 1999 331,940 219,300 -- 13,000 4,213
Chief Operating
Officer, 1998 330,013 292,000 -- 22,000 2,435
North America
Operations 1997 296,478 264,493 -- 12,500 2,401
Scott E. Reed, (5)...... 1999 231,649 140,938 $125,000(6) 15,000 2,677
Senior Vice President
and 1998 -- -- -- -- --
Chief Financial Officer 1997 -- -- -- -- --
Russell B. Scaffede,.... 1999 255,294 130,688 -- 4,500 2,850
Senior Vice President 1998 187,790 115,000 -- 7,500 842
1997 180,003 91,606 -- 4,688 842
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Includes cash compensation plus compensation deferred during the fiscal
years ended in the respective years under the Company's 401(k) Savings
Plan and Deferred Compensation Plan.
(2) Represents amounts paid under the Donnelly Scanlon Bonus and earned under
the Executive Compensation Plan for performance during that year.
(3) Donnelly has concluded that the aggregate amount of perquisites and other
personal benefits paid in such period did not exceed the lesser of 10% of
such officer's total annual salary and bonus for each of 1999, 1998 and
1997, respectively, or $50,000. Such perquisites have not been included in
the table.
9
<PAGE>
(4) Amounts shown represents flex dollar credits allocated by the Company for
the purchase of term life insurance for the benefit of each named
executive officer. Amounts shown for 1999 also include Company matching
contributions under the Company's 401(k) Savings Plan as follows: J.
Dwane Baumgardner--$1,798; John F. Donnelly, Jr.--$1,785; Donn J. Viola--
$1,699; Scott E. Reed--$1,785; Russell B. Scaffede--$1,655.
(5) Mr. Reed joined the Company on September 1, 1998.
(6) Represents amount paid as a signing bonus.
Option Grants in Last Fiscal Year. Shown below is information on grants of
stock options pursuant to the Company's 1997 Stock Option Plan (the "Option
Plan") during the 1999 fiscal year to the Named Executives.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
% OF TOTAL RATES OF
NUMBER OPTIONS STOCK PRICE
OF 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.... 19,000 16% $17.50 8-21-08 $209,107 $529,919
John F. Donnelly, Jr.... 10,000 9% $17.50 8-21-08 110,057 278,905
Donn J. Viola........... 13,000 11% $17.50 8-21-08 143,074 362,576
Scott E. Reed........... 15,000 13% $14.93 9-01-08 140,912 357,098
Russell B. Scaffede..... 4,500 4% $17.50 8-21-08 49,525 125,507
- -------------------------------------------------------------------------------------
</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.
Aggregated Stock Option Exercises in Fiscal 1999 and 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 Named Executives and held by them at July 3, 1999. Options
representing 12,500 shares of Class A Common Stock were exercised during
fiscal 1999.
<TABLE>
<CAPTION>
NUMBER OF SHARES SUBJECT
TO UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-
HELD AT THE-MONEY OPTIONS AT
SHARES JULY 3, 1999 JULY 3, 1999(1)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. Dwane Baumgardner.... 12,500 $90,531 112,438 19,000 $225,988 $ 0
John F. Donnelly, Jr.... 54,751 10,000 125,845 0
Donn J. Viola........... 34,500 13,000 44,375 0
Scott E. Reed........... 0 15,000 0 0
Russell B. Scaffede..... 12,188 4,500 9,142 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 3,
1999 (when the closing price of the Company's Class A Common Stock was
$16.25 per share.) Value actually realized upon exercise by the Named
Executives will depend on the value of the Company's Class A Common Stock
at the time of exercise.
10
<PAGE>
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....................................... $15,000 $31,000 $46,000 $54,000
200,000........................................ 28,000 56,000 83,000 97,000
280,000........................................ 40,000 80,000 121,000 141,000
360,000........................................ 53,000 105,000 158,000 184,000
440,000........................................ 65,000 130,000 195,000 228,000
520,000........................................ 77,000 155,000 232,000 271,000
600,000........................................ 90,000 180,000 269,000 314,000
- --------------------------------------------------------------------------------
</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 $160,000 for 1998, 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--
30 years; John F. Donnelly, Jr.--22 years; Donn J. Viola--3 years; Scott
E. Reed--0 years; Russell B. Scaffede--4 years.
(3) Amounts in excess of $130,000, 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 66 and are
not subject to any deduction for social security benefits or other offset
amounts.
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 401(k) salary savings plan in
which all regular employees of the Company are eligible to participate and to
which the Company provides matching contributions of 25% on up to 5% of
eligible compensation.
Security Ownership of Management. The following table shows, as of September
3, 1999, 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.
11
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL PERCENT OF EACH COMMON
NAME OWNERSHIP CLASS OF STOCK EQUITY
- --------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B
------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
J. Dwane Baumgardner...... 184,167 -- 2.9% -- % 1.8%
John F. Donnelly, Jr...... 106,537(2) 110,471(2) 1.7 2.7 2.1
Donn J. Viola............. 47,500 -- * -- *
Scott E. Reed............. 19,208 -- * -- *
Russell B. Scaffede....... 16,688 -- * -- *
All Executive Officers and
Directors as a Group (17
persons)................. 920,329 1,081,884 14.3 26.0 19.8
- --------------------------------------------------------------------------------
</TABLE>
* Denotes ownership of less than one percent.
(1) Calculated based on the number of shares outstanding plus 441,135 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) 976 A Shares and 1,366 B Shares owned by his wife, Banba
Donnelly, as to which Mr. Donnelly disclaims beneficial ownership, and
(ii) 1,952 A Shares and 1,366 B Shares owned by Mr. Donnelly as custodian
for his children.
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
Russell 2000 Index, S&P 500 Total Return Index and the Dow Jones Automobile
Parts Index for the period commencing June 30, 1994 and ending June 30, 1999.
The graph assumes the investment of $100 on June 30, 1994 in the Company's
Common Stock, the Russell 2000 Index, S&P 500 Total Return Index and the Dow
Jones Automobile Auto Parts Index with dividends reinvested.
The Standard & Poor's 500 Total Return Index, which is dominated by very
large capitalization stocks, has been used in previous proxy statements. In
future proxy statements, the Russell 2000 Index, which represents smaller
capitalization stocks, will be presented because the Company believes that the
Russell 2000 Index provides a more appropriate comparison to the Company.
12
<PAGE>
COMPARISON OF FIVE YEAR TOTAL RETURNS
AMONG THE DONNELLY CORPORATION, RUSSELL 2000 INDEX,
S&P 500 TOTAL RETURN INDEX & DOW JONES AUTOMOTIVE PARTS INDEX
YEAR ENDING JUNE 30,
[Performance Graph appears here]
1994 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------
Donnelly Corporation $100 $105 $107 $142 $149 $141
- -------------------------------------------------------------------------------
Dow Jones Automobile Parts Index 100 113 131 161 188 176
- -------------------------------------------------------------------------------
S&P 500 Total Return Index 100 126 159 214 279 342
- -------------------------------------------------------------------------------
Russell 2000 Index 100 120 149 173 202 205
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 every 175 such
shares, 16 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>
RELATIONS WITH INDEPENDENT PUBLIC ACCOUNTANTS
The combined consolidated financial statements of the Company have been
audited 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. It is anticipated that the Company's Audit
Committee will select the Company's auditors before the end of this calendar
year.
SHAREHOLDER PROPOSALS -- 2000 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 49 West
Third Street, Holland, Michigan 49423-2813, not later than December 3, 1999 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. All requests for
such reports should be directed to Ms. Maryam Komejan, Senior Vice President
and Corporate Secretary, Donnelly Corporation, 49 West Third Street, Holland,
Michigan 49423-2813.
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.
October 1, 1999.
J. Dwane Baumgardner
CHAIRMAN OF THE BOARD
14
<PAGE>
- --------------------------------------------------------------------------------
An annual report to shareholders for the year ended July 3, 1999 containing
certified financial statements is being mailed to the shareholders with these
materials.
- --------------------------------------------------------------------------------
<PAGE>
DONNELLY CORPORATION
49 WEST THIRD STREET, HOLLAND, MICHIGAN 49423-2813
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 3 , 1999, at the annual meeting of shareholders to be held November
5, 1999, 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
1. Directors to be elected by holders of Class A Common Stock
FOR ALL NOMINEES LISTED BELOW
WITHHOLD AUTHORITY TO VOTE
EXCEPTIONS
for all nominees listed below
X X X
(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.)
John A. Borden, R. Eugene Goodson, Donald R. Uhlmann
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: __________________________________________________________________ , 1999
- --------------------------------------------------------------------------------
Signature
- --------------------------------------------------------------------------------
Signature if held jointly
VOTES MUST BE INDICATED
X
(X) IN BLACK OR BLUE INK.
- --------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
DONNELLY CORPORATION
49 WEST THIRD STREET, HOLLAND, MICHIGAN 49423-2813
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 3, 1999, at the annual meeting of shareholders to be held November 5,
1999, 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
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.
FOR ALL NOMINEES LISTED BELOW
WITHHOLD AUTHORITY TO VOTE
EXCEPTIONS
for all 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.)
X X X
J. Baumgardner, A. Brookstone, B. P. Donnelly, J. Donnelly, T. Leonard, G.
McNeive, Jr., 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 cast for a nominee opposite his or her name.
J. Baumgardner B.P. Donnelly T. Leonard R. Pruden
A. Brookstone J. Donnelly G. McNeive, Jr.
2. In their discretion, the Proxies CHANGE OF ADDRESS AND
are authorized to vote upon such X
other business as may properly OR COMMENTS, MARK
come before the meeting. 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: __________________________________________________________________ , 1999
- --------------------------------------------------------------------------------
Signature
- --------------------------------------------------------------------------------
Signature if held jointly
X
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK.
- --------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
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 1999 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 one 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.