<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Larizza Industries, Inc.
-------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Larizza Industries, Inc.
-------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $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*:
----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
*Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] 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 the 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
[LOGO]
LARIZZA INDUSTRIES, INC.
201 West Big Beaver Road
Suite 1040
Troy, Michigan 48084
(810) 689-5800
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Larizza Industries, Inc. (the "Company") to be held at its corporate
headquarters located at 201 West Big Beaver Road, Suite 1040, Troy, Michigan
48084, on May 31, 1994 at 10:00 A.M. The official Notice of the Annual Meeting,
Proxy Statement and form of proxy are enclosed with this letter.
The only proposal to be acted upon at the Meeting is the election of a
Board of six directors. The Board of Directors unanimously recommends a vote for
the Company's nominees.
We will appreciate the prompt return of your signed proxy; your vote is
important.
On behalf of the Board of Directors and management of the Company, thank
you for your cooperation and continued support.
Sincerely,
RONALD T. LARIZZA
President and Chief
Executive Officer
April 15, 1994
<PAGE> 3
LARIZZA INDUSTRIES, INC.
201 West Big Beaver Road
Suite 1040
Troy, Michigan 48084
(810) 689-5800
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 31, 1994
---------------------
To the Shareholders of Larizza Industries, Inc.:
The Annual Meeting of Shareholders of Larizza Industries, Inc. (the
"Company"), an Ohio corporation, will be held at its corporate headquarters
located at 201 West Big Beaver Road, Suite 1040, Troy, Michigan 48084, on May
31, 1994 at 10:00 A.M., Eastern Daylight Time, for the following purposes:
1. To elect a Board of six directors;
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on April 8, 1994 will be
entitled to vote at the Annual Meeting and at any adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting.
However, the Company urges you to assure your representation at the Annual
Meeting by signing and returning the enclosed proxy in the postage prepaid
envelope provided as promptly as possible. The giving of this proxy does not
affect your right to vote in person if you attend the Annual Meeting.
BY ORDER OF THE BOARD OF
DIRECTORS
RONALD T. LARIZZA
President and Chief
Executive Officer
April 15, 1994
<PAGE> 4
LARIZZA INDUSTRIES, INC.
201 West Big Beaver Road
Suite 1040
Troy, Michigan 48084
(810) 689-5800
-------------
PROXY STATEMENT
-------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 31, 1994
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors of Larizza
Industries, Inc. (the "Company") for use at the Annual Meeting of Shareholders
to be held at the Company's corporate offices, at 201 West Big Beaver Road,
Suite 1040, Troy, Michigan 48084, on Tuesday, May 31, 1994 at 10:00 A.M.
Eastern Daylight Time or any adjournment thereof (the "Meeting") for the
purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. This Proxy Statement and the accompanying form of proxy are
being mailed on or about April 15, 1994 to shareholders of record at the close
of business on April 8, 1994. The Company's Annual Report for the year ended
December 31, 1993 was previously mailed to shareholders or accompanies this
Proxy Statement. The Company will pay the cost of soliciting proxies,
including expenses for preparing and mailing proxy solicitation materials. In
addition to use of the mails, proxies may be solicited by certain officers,
directors and regular employees of the Company, without extra compensation, by
telephone, telegraph or personal interview.
VOTING, PROXIES AND REVOCABILITY
Shareholders of record at the close of business on April 8, 1994 are
entitled to one vote on each matter for each share of the Company's common
stock, no par value, held. As of the close of business on April 8, 1994 the
Company had 22,088,107 shares of its common stock outstanding.
A majority, or 11,044,054 shares of the Company's common stock, must be
represented at the Meeting in person or by proxy in order to constitute a
quorum for the transaction of business.
Proxies in the enclosed form which are returned in time for the Meeting
and executed in accordance with the instructions thereon will be voted as
specified therein. If no specification is made, the proxies will be voted FOR
the election as directors of the nominees listed below. Ronald T. Larizza, the
Company's President and Chief Executive Officer, currently has voting control
over 50.6% of the Company's outstanding common stock as of
<PAGE> 5
April 8, 1994. Mr. Larizza intends to attend the Meeting and vote these shares
FOR the election as directors of the nominees listed below; thus, a quorum and
election of the Company's nominees at the Meeting are assured.
A shareholder giving a proxy has the power to revoke it at any time
before it is exercised by filing with the Secretary of the Company at the
Company's principal executive offices, 201 West Big Beaver Road, Troy, Michigan
48084, either an instrument revoking the proxy or a duly executed proxy bearing
a later date. A proxy will be revoked automatically if the shareholder who
executed it is present at the Meeting and votes in person.
The Meeting may be adjourned, and additional proxies solicited, if at
the time of the Meeting the votes necessary to approve the proposed action have
not been obtained. Any adjournment of the Meeting will require the affirmative
vote of a majority of the common stock represented at the Meeting, in person or
by proxy, even if less than a quorum.
THE MANAGEMENT AND THE BOARD OF DIRECTORS OF THE COMPANY RECOMMEND A
VOTE FOR THE ELECTION OF THE COMPANY'S NOMINEES TO THE BOARD OF DIRECTORS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of April 8, 1994,
regarding the beneficial ownership of the Company's common stock by each
nominee to serve as a director of the Company, each person known to the Company
to own beneficially more than 5% of the Company's outstanding common stock,
each executive officer of the Company named in the Summary Compensation Table
below and all nominees to serve as directors and executive officers as a group:
<TABLE>
<CAPTION>
Percent of
Name of Number of Shares Outstanding
Beneficial Owner Beneficially Owned Common Stock
---------------- ------------------ ------------
<S> <C> <C>
Ronald T. Larizza (1) . . . . . . . . 11,182,083 (2)(3) 50.6%
Internationale Nederlanden
(U.S.) Capital Corporation (4) . . 5,176,900 (4) 23.4% (4)
Oppenheimer & Co., Inc. (5) . . . . . 47,243 (5) * (5)
Oppenheimer Horizon Partners, L.P. (6) 1,429,751 (6) 6.5% (6)
Oppenheimer Institutional Horizon
Partners, L.P. (7) . . . . . . . . 1,386,468 (7) 6.3% (7)
Oppenheimer International Horizon
Fund, Ltd. (8) . . . . . . . . . . 139,981 (8) * (8)
The & Trust (9) . . . . . . . . . . . 102,697 (9) * (9)
Edward L. Sawyer, Jr. (10) . . . . . 3,443,677 (3)(11) 15.6%
Edward W. Wells . . . . . . . . . . . 100,250 (12) *
Terence C. Seikel . . . . . . . . . . 100,000 *
Charles Fazio . . . . . . . . . . . . 100,000 *
Frank E. Blazey, Jr. . . . . . . . . 3,300 (13) *
Arthur L. Wiseley . . . . . . . . . . 0 *
All Directors and Executive Officers
as a Group (7 Persons) 11,485,633 52.0%
</TABLE>
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<PAGE> 6
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* Indicates an amount less than 1%.
(1) Business address is Larizza Industries, Inc., 201 West Big Beaver
Road, Suite 1040, Troy, Michigan 48084.
(2) Includes 7,738,406 shares owned by a trust; Mr. Larizza has the power
to vote these shares and to dispose of them.
(3) Includes 3,443,677 shares held by a voting trust (the "Voting Trust")
under the Voting Trust Agreement, dated as of December 20, 1991, among
Mr. Larizza, Mr. Sawyer, The Alexander Sawyer Trust under an
Irrevocable Trust Agreement dated July 21, 1987 (the "Alexander Sawyer
Trust") and the Company. Mr. Sawyer and the Alexander Sawyer Trust
contributed 3,243,677 and 200,000 shares, respectively, to the Voting
Trust. Mr. Larizza has the sole right to vote the shares held in the
Voting Trust and he must consent to any sale, transfer, pledge or
other disposition of such shares. The Voting Trust expires December
31, 1998, and its business address is Larizza Industries, Inc., 201
West Big Beaver Road, Suite 1040, Troy, Michigan 48084.
(4) Includes 5,176,900 shares that Internationale Nederlanden (U.S.)
Capital Corporation ("ING Capital") acquired as a result of the
conversion (the "Conversion") of $29,375,000 of term loans and the
related accrued interest into shares. ING Capital is a wholly-owned
subsidiary of Internationale Nederlanden (U.S.) Capital Holdings
Corporation ("U.S. Holdings"), which is a wholly-owned subsidiary of
Internationale Nederlanden Bank N.V. ("INB"), which is a wholly-owned
subsidiary of Internationale Nederlanden Groep N.V. ("Groep"); all of
the foregoing may be deemed the beneficial owner of the shares owned
by ING Capital. ING Capital's and U.S. Holdings' business address is
135 East 57th Street, New York, New York 10022, INB's business address
is De Amsterdamse Poort, 1102 MG, Amsterdam Zuid-Oost, The
Netherlands, and Groep's business address is Princes Irenstraat 5 g
1077 Wv Amsterdam, The Netherlands. The foregoing information is
based on a Schedule 13D Report, dated January 27, 1994, filed with the
Securities and Exchange Commission by ING Capital. ING Capital is
selling its shares pursuant to an underwritten public offering
registered with the Securities and Exchange Commission on Form S-1
(file no. 33-52641) (the "Registration Statement").
(5) Includes 47,243 shares that Oppenheimer & Co., Inc. ("Oppenheimer")
acquired as a result of the Conversion. Oppenheimer, a Delaware
corporation, is a wholly-owned subsidiary of Oppenheimer Holdings,
Inc. ("Holdings"), which is a wholly-owned subsidiary of Oppenheimer
Group, Inc. ("Group"), which is a wholly-owned subsidiary of
Oppenheimer & Co., L.P. ("Oppenheimer L.P."), the partnership
interests of which are owned by officers and employees of Oppenheimer;
all of the foregoing may be deemed the beneficial owner of the shares
owned by Oppenheimer.
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<PAGE> 7
Oppenheimer disclaims beneficial ownership of shares held by its
affiliates. Oppenheimer's, Holdings', Group's, Oppenheimer L.P.'s and
Oppenheimer's officers' and employees' business address is Oppenheimer
Tower, One World Financial Center, New York, New York 10281. The
foregoing information is based on information provided to the Company
by Oppenheimer. Oppenheimer is selling its shares pursuant to an
underwritten public offering registered with the Securities and
Exchange Commission pursuant to the Registration Statement.
(6) Includes 1,429,751 shares that Oppenheimer Horizon Partners, L.P., a
Delaware limited partnership ("Horizon"), acquired as a result of the
Conversion. Horizon is an investment partnership whose general
partner is an affiliate of Oppenheimer. Horizon's business address is
c/o Oppenheimer & Co., Inc., Oppenheimer Tower, One World Financial
Center, New York, New York 10281. Horizon disclaims beneficial
ownership of shares held by its affiliates. The foregoing is based on
information provided to the Company by Oppenheimer. Horizon is
selling its shares pursuant to an underwritten public offering
registered with the Securities and Exchange Commission pursuant to the
Registration Statement.
(7) Includes 1,386,468 shares that Oppenheimer Institutional Horizon
Partners, L.P., a Delaware limited partnership ("Institutional"),
acquired as a result of the Conversion. Institutional is an
investment partnership whose general partner is an affiliate of
Oppenheimer. Institutional's business address is c/o Oppenheimer &
Co., Inc., Oppenheimer Tower, One World Financial Center, New York,
New York 10281. Institutional disclaims beneficial ownership of
shares held by its affiliates. The foregoing is based on information
provided to the Company by Oppenheimer. Institutional is selling its
shares pursuant to an underwritten public offering registered with the
Securities and Exchange Commission pursuant to the Registration
Statement.
(8) Includes 139,981 shares that Oppenheimer International Horizon Fund,
Ltd., a British Virgin Islands corporation ("International"), acquired
as a result of the Conversion. International's investment advisor is
an affiliate of Oppenheimer. International's business address is c/o
CITCO, CITCO Building, Wickhams Cay, P.O. Box 662, Road Town, Tortola,
B.V.I. International disclaims beneficial ownership of shares held by
its affiliates. The foregoing is based on information provided to the
Company by Oppenheimer. International is selling its shares pursuant
to an underwritten public offering registered with the Securities and
Exchange Commission pursuant to the Registration Statement.
(9) Includes 102,697 shares that The & Trust, a charitable remainder trust
(the "Trust"), acquired as a result of the Conversion. The Trust
maintains a managed account at Oppenheimer, for which account
Oppenheimer is the investment advisor. The Trust's account address is
c/o Oppenheimer & Co., Inc., Oppenheimer Tower, One World Financial
Center, New York, New York 10281. The Trust disclaims beneficial
-4-
<PAGE> 8
ownership of shares held by Oppenheimer and its affiliates. The
foregoing is based on information provided to the Company by
Oppenheimer. The Trust is selling its shares pursuant to an
underwritten public offering registered with the Securities and
Exchange Commission pursuant to the Registration Statement.
(10) Business address is 1375 East 9th Street, Suite 2000, Cleveland, Ohio
44114.
(11) Includes 3,243,677 shares owned by Mr. Sawyer directly and 200,000
shares owned by the Alexander Sawyer Trust. Mr. Sawyer has the power
to approve or disapprove of any proposed transaction by the trustee of
the Alexander Sawyer Trust. All of these shares have been transferred
to the Voting Trust described in note 3.
(12) Includes 100,000 shares owned by Mr. Wells and his spouse as joint
tenants for which voting and investment powers are shared, and 250
shares owned by Mr. Wells's wife.
(13) Includes 1,000 shares owned by Mr. Blazey and his spouse as joint
tenants for which voting and investment powers are shared, and 2,000
shares owned by Mr. Blazey's wife.
Each of the Company's directors and officers has agreed not to offer,
sell or otherwise dispose of any shares of Common Stock for a period of 90 days
after the effective date of the Registration Statement without the prior
written consent of the representatives of the Underwriters in connection with
the public offering by ING Capital and Oppenheimer and their affiliates of
their shares.
I. ELECTION OF DIRECTORS
The Board of Directors proposes that the six persons named below as
nominees be elected as directors of the Company to serve until the next Annual
Meeting of Shareholders and until his successor is elected and qualified, or
until his death, resignation or removal. Mr. Larizza and Mr. Sawyer have been
directors of the Company since November 1982, Mr. Blazey, Mr. Wiseley and Mr.
Wells have been directors of the Company since July 1987 and Mr. Fazio has been
a director of the Company since December 1990.
If a quorum is present, the six nominees receiving the greatest number
of votes at the Meeting or its adjournment shall be elected. Withheld votes
and broker non-votes will not be deemed votes at the Meeting in determining
which nominees receive the greatest number of votes at the Meeting, but will be
counted for purposes of determining whether a quorum is present. The votes
cast pursuant to the accompanying proxy will be voted FOR the election of the
nominees listed below unless the giver of the proxy withholds authority to vote
for any one or more of such nominees.
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<PAGE> 9
The nominees listed below have consented to serve if elected. If any
nominee is unable or declines to serve, which is not expected, it is intended
that the proxies will be voted in accordance with the best judgment of the
proxy holders for another qualified person.
BIOGRAPHICAL INFORMATION
Nominees for Election as Directors
RONALD T. LARIZZA, 54, has served as President and Chief Executive
Officer of the Company since November 1982.
The Company has agreed to nominate Ronald T. Larizza for election as a
director of the Company at each Annual Meeting of Shareholders during the term
of his employment agreement and until five years after termination if Mr.
Larizza's employment with the Company is terminated other than as a result of
his death or disability. In addition, Mr. Larizza's employment agreement
requires him to be elected to the offices with the Company he currently holds.
See "Executive Compensation-Employment Contracts and Termination of Employment
and Change-in-Control Arrangements-Employment Agreement."
EDWARD L. SAWYER, JR., 60, has served as Chairman of the Board of the
Company since June 1987 and as Secretary of the Company since February 1991.
Mr. Sawyer is also a consultant to the Company. Mr. Sawyer has also been an
investor and a consultant for the past five years, including President of
Edgewater Financial Group, an investment and consulting company, since October
1990.
EDWARD W. WELLS, 41, has served as Vice President and Chief Operating
Officer of the Company since November 1989 and as Assistant Secretary of the
Company since June 1990. He joined the Company as Vice President of
Finance/Operations in March 1987.
CHARLES FAZIO, 67, has served as Chairman of the Board and Chief
Executive Officer of Fazio & Associates, Inc., a manufacturers' representative
for automobile parts companies, since 1980. Mr. Fazio served as President of
the Automotive Products Group, and beginning in 1975 as Corporate Vice
President of Operations, of Rockwell International, Inc., an aerospace,
aircraft, automotive and electronics manufacturing corporation, from 1971 until
1980.
FRANK E. BLAZEY, JR. (Brig. Gen., Rtd.), 69, served in the United
States Army from 1946 to 1975, attaining the rank of Brigadier General in 1970.
From December 1988 to the present, Mr. Blazey has served as a training,
personnel and special projects consultant to Conveyor Systems, Inc., a
manufacturer of automated material handling machines for the glass, beverage
and paper industries.
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<PAGE> 10
ARTHUR L. WISELEY, 70, has served as an independent consultant from
June 1987 to present. He served as Executive Director of Administration and
Minority Supplier Development of General Motors from June 1982 until his
retirement in June 1987.
The Company's Articles of Incorporation establish the minimum number
of directors at three and the maximum at fifteen, and, whenever there are nine
or more directors, divide the Board of Directors into three classes (as nearly
equal in number as possible). The Company proposes to add additional directors
after the 1994 Annual Meeting of Shareholders if qualified candidates can be
found and consent to serve. If the size of the Board is increased to nine
members, the Board will be classified and at the next annual meeting of
shareholders of the Company, will be elected to staggered, three-year terms.
Thus, directors would be serving staggered terms, with the term of one class
expiring each year. The Company's Articles of Incorporation also provide for
the removal of a director during his elected term only upon the vote of the
holders of two-thirds of the voting power entitled to elect a successor to the
director to be removed.
Other Executive Officer
TERENCE C. SEIKEL, 37, has served as Vice President of Finance of the
Company since November 1990, as Treasurer of the Company since May 1992, as
Assistant Secretary of the Company since June 1990 and as Chief Financial
Officer of the Company since November 1989. He previously served as Director
of Finance of the Company from June 1987 to November 1990.
Each of the Company's executive officers serves until the next annual
meeting of the Board of Directors and until his successor is elected and
qualified or until his death, resignation or removal.
Meetings and Committees of the Board of Directors
During 1993, the Board of Directors held one meeting, and took action
by unanimous written consent on six occasions.
The Board of Directors of the Company has an Executive Committee,
Compensation Committee and Audit Committee, but does not have a Nominating
Committee.
The Executive Committee, which held no meetings but took action by
unanimous written consent on one occasion during 1993, has the authority to
exercise all of the authority of the Board of Directors in the management of
the Company, except for the power to fill vacancies occurring in the Board of
Directors or in any committee during intervals between meetings of the Board of
Directors and subject to such limitations as are imposed by law. The Executive
Committee may also from time to time formulate and recommend to the Board of
Directors for approval general policies regarding the management of the
business and affairs of the Company. Ronald T. Larizza, Edward L. Sawyer, Jr.
and Edward W. Wells are the members of the Executive Committee.
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<PAGE> 11
The Compensation Committee, which held no meetings in 1993, but took
action by unanimous written consent on one occasion during 1993, has the
authority to determine the salaries, bonuses and other compensation of the
executive officers of the Company and its consolidated subsidiaries. It also
administers the Company's Stock Incentive Plan. Frank E. Blazey, Charles Fazio
and Arthur L. Wiseley are the members of the Compensation Committee.
The Audit Committee, which held one meeting in 1993, has the authority
to recommend to the Board of Directors the independent accountants to audit the
Company's financial statements, to meet with the independent accountants and
review the Company's financial statements, results of audits and fees charged.
Charles Fazio, Frank E. Blazey and Arthur L. Wiseley are the members of the
Audit Committee.
Executive Compensation
Summary Compensation Table
The following table sets forth information for each of the fiscal
years ended December 31, 1993, 1992 and 1991 concerning the compensation of the
Company's Chief Executive Officer and of each of the Company's other most
highly compensated executive officers whose total annual salary and bonus
exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
-----------------------------------------------
Other
Annual All Other
Compen- Compen-
Name and sation sation
Principal Position Year Salary ($) Bonus ($) ($) ($)
------------------ ---- ---------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
Ronald T. Larizza, President 1993 430,000 60,000 21,221(1) 39,505(2)
Chief Executive Officer and 1992 430,000 -0- -0- -0-
Director 1991 365,500 -0- -0- -0-
Edward W. Wells, Vice 1993 200,000 100,000 10,237(1) 12,924(2)
President, Chief Operating 1992 200,000 50,000 -0- -0-
Officer and Director 1991 200,000 25,000 -0- -0-
Terence C. Seikel, Vice 1993 150,000 60,000 6,116(1) 8,948(2)
President of Finance, Chief 1992 125,000 25,000 -0- -0-
Financial Officer and 1991 100,000 25,000 -0- -0-
Treasurer
</TABLE>
- ------------------------
(1) The amounts for 1993 represent the payments of amounts to Messrs. Larizza,
Wells and Seikel to pay the taxes on (i) the income resulting from the
Company's payment of insurance premiums on their behalf, as described in note
(2) below, and (ii) the tax reimbursement payments.
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<PAGE> 12
(2) The amount shown for 1993 represents total amounts paid in insurance
premiums for life insurance for Messrs. Larizza, Wells and Seikel in the fiscal
year ended December 31, 1993 pursuant to split dollar insurance arrangements
between each of them and the Company.
Compensation of Directors.
The Company compensates each director who is not an officer or employee
of the Company or any of its subsidiaries in cash in the amount of $1,500 for
attending each meeting of the Board of Directors and each meeting of any
committee thereof which does not occur on the same day as a Board meeting. In
addition, directors are reimbursed for any expenses incurred as a result of
meetings of the Board or any committee thereof.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
Employment Agreement. On March 10, 1994, the Company's Board of
Directors approved an Employment Agreement with Mr. Larizza. Pursuant to the
agreement, Mr. Larizza is employed as the President and Chief Executive Officer
of the Company, reporting to the Company's Board of Directors, for a term of
five years, unless earlier terminated as a result of Mr. Larizza's death or
disability or by either party upon thirty days notice. The term will be
automatically continuously renewed such that the remaining term of the
agreement will always be five years, unless earlier terminated as described
above.
Mr. Larizza's annual salary under the agreement is $500,000, and such
amount will be increased on January 1 each year during the term by the greater
of five percent and an amount determined by the Company's Compensation
Committee. Mr. Larizza will also receive a bonus each year in an amount equal
to the greater of one percent of the Company's consolidated operating income
and an amount determined by the Company's Compensation Committee. Mr. Larizza
is entitled to various fringe benefits under the agreement to the extent
applicable to similar executive officers of the Company. In addition, the
Company has also agreed to nominate, recommend and otherwise support Mr.
Larizza for election as a director of the Company at each shareholders' meeting
during the term of the agreement, and, if the agreement is terminated by the
Company or Mr. Larizza, during the five years after such termination (the
"Period").
If Mr. Larizza's employment is terminated as a result of Mr. Larizza's
death or disability, Mr. Larizza will be entitled to receive an amount equal to
the lesser of five years of his then current salary or $1 less than three times
his average annual salary and bonus over the prior five years, paid at the
times it would have otherwise been paid or in a discounted lump sum, at Mr.
Larizza's or his personal representative's discretion. If Mr. Larizza's
employment is terminated by notice from the Company or if Mr. Larizza
terminates his employment because the Company fails to comply with any term or
provision of the agreement, Mr. Larizza will be entitled to receive an
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<PAGE> 13
amount equal to $1 less than three times his average annual salary and bonus
over the prior five years, paid at the times it would have otherwise been paid
or in a discounted lump sum, at Mr. Larizza's discretion. If Mr. Larizza's
employment is terminated by Mr. Larizza other than as a result of the Company's
failure to comply with any term or provision of the agreement, Mr. Larizza will
not be entitled to receive any amount under the agreement as a result of such
termination.
Larizza Split-Dollar Agreement. The Company and Mr. Larizza have
entered into an agreement dated as of April 22, 1993, pursuant to which the
Company will pay the premiums relating to specified life insurance policies.
During the three-year term of the agreement, the Company will pay each premium
on the insurance policies and an amount necessary to pay the taxes incurred by
Mr. Larizza and the trust owning the policy as a result of the Company's
payments under the agreement. Such payments will continue after the term of
the agreement, at Mr. Larizza's request. Such payments will terminate if Mr.
Larizza's employment is terminated for cause.
During the term of the agreement, the Company has the right to recover
the premiums it has paid from the cash surrender proceeds or the death or
maturity benefit proceeds of the policies, if any. The Company's right to
recover such premiums lapses on the third anniversary date of the agreement if
Mr. Larizza provides substantial services to the Company until the earlier of
(i) the third anniversary of the agreement, (ii) Mr. Larizza's incapacity,
(iii) Mr. Larizza's involuntary termination of employment for a reason other
than cause, or (iv) termination of Mr. Larizza's employment because the Company
does not comply with any agreed upon terms or conditions of Mr. Larizza's
employment. The Company will pay to Mr. Larizza and the trust owning the
policy an amount sufficient to cover income taxes incurred as a result of such
lapse and such payment.
Wells and Seikel Split-Dollar Agreements. The Company has also entered
into Split-Dollar Agreements, dated as of April 22, 1993 and effective as of
January 29, 1993, with Messrs. Wells and Seikel, pursuant to which the Company
will pay the premiums relating to specified life insurance policies. During
the term of the agreements, the Company will pay each premium on the insurance
policies and an amount necessary to pay the taxes incurred by Messrs. Wells and
Seikel, respectively, as a result of the Company's payments under the
agreement. The Company is entitled to receive $300,000 and $250,000 from the
death proceeds of the policies if Mr. Wells or Mr. Seikel, respectively, dies
while the agreement is in force. In addition, if the policies are surrendered
during the term of the agreements, the Company would receive (i) 100% of the
policy's surrender value, if the policy is surrendered within two years of the
effective date of the agreement, (ii) 50% of the policy's surrender value, if
the policy is surrendered before three years after the effective date of the
agreement, (iii) 25% of the policy's surrender value, if the policy is
surrendered before four years after the effective date of the agreement, and
(iv) none of the policy's surrender value, if the policy is surrendered at
least four years after the effective date of the agreement.
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Either agreement will terminate on the earliest of (i) termination of
Mr. Wells' or Mr. Seikel's respective employment for cause, (ii) the date Mr.
Wells' or Mr. Seikel's respective employment is voluntarily terminated by the
employee, except after Mr. Larizza ceases to have a majority of the voting
power in the election of the Company's directors or as a result of the
employee's disability, (iii) the date of Mr. Wells' or Mr. Seikel's respective
death, and (iv) eleven years after the effective date of the agreement.
Compensation Committee Interlocks and Insider Participation.
During the year ended December 31, 1993, Messrs. Blazey, Fazio and
Wiseley served as the sole members of the Company's Compensation Committee.
None of the members of the Compensation Committee was, during the year ended
December 31, 1993, an officer or employee of the Company or any of its
subsidiaries, or a former officer of the Company or any of its subsidiaries.
Mr. Fazio has the following relationship with the Company. He is the
Chairman of the Board and Chief Executive Officer of Fazio & Associates, Inc.,
a manufacturers' representative for automobile parts companies, which earned
approximately $2,173,000 from the Company as sales commissions in 1993.
Board Compensation Committee Report on Executive Compensation
General. The Compensation Committee's overall compensation policy
applicable to the Company's executive officers is to provide a compensation
package that is intended to attract and retain qualified executives for the
Company and to provide them with incentives to achieve Company goals and
increase shareholder value. The Compensation Committee implements this policy
through salaries and bonuses. The Committee's policy is to compensate
executive officers in a manner that permits the Company to take any permitted
federal income tax deduction for such compensation, (i) by including a
provision in Mr. Larizza's employment agreement deferring any payment to Mr.
Larizza that would not be deductible by the Company for federal income tax
purposes, which amounts would not be payable until they are deductible by the
Company, and (ii) by complying with current treasury regulations exempting
deductions received upon exercise of stock options from the $1,000,000 cap on
executive compensation deductions under Section 162(m) of the Internal Revenue
Code of 1986, as amended.
Salaries. The Compensation Committee's policy is to provide salaries
that are comparable to those of similar executive officers in companies in the
automotive supply industry in order to attract and retain qualified executives
and that compensate employees for their individual contributions and
performance. The Compensation Committee determines comparable salaries through
its subjective evaluation of (i) its members' knowledge of salaries paid by
other companies, (ii) management's research regarding what is paid by other
companies deemed comparable (based primarily on the company's
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principal line of business and sales) to the Company and about which management
has information, (iii) its members' views of the experience and responsibility
of the executive, and (iv) management's recommendations. The Committee also
considers the Company's financial resources and sales and earnings prospects.
The Company's financial resources at the beginning of 1993 was one of the
factors causing the Committee not to recommend any salary increase for Messrs.
Larizza and Wells for 1993. No specific weight is given to any of these
factors, and the Committee does not collectively determine their relative
importance, although it agreed with management's recommendations for fiscal
1993 salaries. The Committee does not specifically target any particular level
in the range of salaries paid by other companies in determining what is
comparable. Based solely on information available to management regarding what
is paid by other companies deemed comparable to the Company, the Company
believes the salaries of its executive officers are at or near the median of
the range of salaries paid to similar executives in companies it deems
comparable.
Bonuses. The Compensation Committee's policy is to recommend annual
discretionary bonuses it deems appropriate to the Company's executive officers
in amounts based on the Compensation Committee's subjective evaluation of the
Company's performance and achievements (which in 1993 included record
earnings), the executive's individual performance and achievements during the
year, the executive's salary, bonuses paid in prior years, the Company's
financial resources and sales and earnings prospects and management's
recommendations. The Compensation Committee does not use any specific
weighting of these factors. These bonuses are intended to provide executive
officers with incentives to achieve the Company's financial and operational
goals, increase shareholder value and act as a team. The Company exceeded its
net income goal in 1993. Bonuses are also intended to recognize the
executive's individual contributions to the Company.
1993 Compensation Decisions Regarding Ronald T. Larizza. The
Compensation Committee recommended that Mr. Larizza's salary remain at $430,000
in 1993 based on its subjective evaluation of the factors described in
"Salaries" above, including the Committee's subjective evaluation of what is
appropriate for a chief executive officer with Mr. Larizza's experience and
responsibility, the Committee members' knowledge of compensation of executives
at other companies, the Company's financial resources at the beginning of 1993
and management's recommendation. Based solely on information available to
management regarding what is paid by other companies deemed comparable to the
Company, the Company believes that Mr. Larizza's 1993 salary is at or near the
median of the range of salaries paid to chief executive officers at companies
it deems comparable, and the salary recommended by the Committee agreed with
management's recommendation. The Compensation Committee also recommended that
Mr. Larizza receive a $60,000 bonus for 1993, based on its subjective
evaluation of the factors described in "Bonuses" above, including the Company's
1993 net income, which was the highest in the Company's history, Mr. Larizza's
1993 salary, which was not increased from his 1992 salary and
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was below his 1990 salary, the lack of any bonuses paid to Mr. Larizza in the
prior three years, its judgment of the Company's prospects and management's
recommendation.
In addition, during 1993, the Compensation Committee recommended that
the Company enter into split dollar insurance arrangements with its executive
officers, including Mr. Larizza. The arrangement primarily requires the
Company to pay the premiums, and Mr. Larizza's income taxes resulting from such
payments, on $2,000,000 of life insurance for Mr. Larizza's benefit. The
Company's right to recover such premiums from the proceeds of the policy
generally terminates after Mr. Larizza provides three years of service to the
Company, among other events. The Committee recommended approval of the
arrangement based on its subjective judgment that the amount and nature of the
benefit were appropriate given Mr. Larizza's position, the Company's return to
profitability, Mr. Larizza's other compensation, the cost of the arrangement to
the Company ("See Summary Compensation Table"), the additional incentive for
Mr. Larizza to continue to provide services to the Company, management's
recommendation and its desire to permit Mr. Larizza to focus his attention on
performing his duties to the Company, rather than on his estate planning.
By The Compensation Committee
Frank E. Blazey, Jr.
Charles Fazio
Arthur L. Wiseley
Performance Graph
The following line graph compares for the fiscal years ended December
31, 1989, 1990, 1991, 1992 and 1993 (i) the yearly cumulative total shareholder
return (i.e., the change in share price plus the cumulative amount of
dividends, assuming dividend reinvestment, divided by the initial share price,
expressed as the resulting value of a $100 investment) on the Company's common
stock, with (ii) the cumulative total return of the Russell 2000, and with
(iii) the cumulative total return of the Value Line Auto Parts: Original
Equipment Industry Index:
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Comparative Five-Year Total Returns*
Larizza Ind, Russell 2000, Peer Group
(Performance results through 12/31/93)
LII RUSSELL 2000 Peer Group
-------- ------------ ----------
1988 $100.00 $100.00 $100.00
1989 $ 24.56 $116.24 $ 98.53
1990 $ 10.53 $ 93.57 $ 90.72
1991 $ 14.04 $136.66 $116.00
1992 $ 35.09 $161.81 $174.46
1993 $110.53 $192.41 $237.66
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Assumes $100 invested at 12/31/88 in LII common stock, Russell 2000, and Peer
Group
* Cumulative total return assumes reinvestment of dividends.
**Value Line Auto Parts: Original Equipment
Certain Transactions
Notes Receivable From Messrs. Larizza and Sawyer. Mr. Larizza and Mr.
Sawyer, directors, executive officers and principal shareholders of the
Company, have notes payable to the Company. These notes were originally given
by Mr. Larizza and Mr. Sawyer when they were the sole shareholders of the
Company to repay amounts advanced by the Company to Mr. Larizza, Mr. Sawyer and
Trident Coatings, Inc. ("Trident"), a corporation wholly-owned by Mr. Larizza
and Mr. Sawyer, at various times prior to the Company's 1987 initial public
offering. The Company made these advances in order to induce Trident to
continue to provide manufacturing services to a former subsidiary of the
Company. During 1990 and 1991, the Company made certain non-interest bearing
personal loans (the "Loans") to Mr. Larizza and Mr. Sawyer. During 1992, the
Company made additional advances to Mr. Larizza and Mr. Sawyer, which totalled
$70,106 and $35,158, to pay certain of their personal loan obligations.
As of December 31, 1993, the Company, Mr. Larizza and Mr. Sawyer
replaced the then existing notes with new notes (the "New Notes"). Mr.
Larizza's and Mr. Sawyer's New Notes are in the principal amounts of $1,468,827
and $667,250, respectively, (the outstanding balances of their notes as of
December 31, 1993, including the Loans and advances made to Mr. Larizza and Mr.
Sawyer plus accrued interest through December 31, 1993),
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bear interest at 5.97% a year, and are payable in yearly installments of
$143,455.66 and $65,168.19, respectively, from December 31, 1996 through
December 31, 2005, with approximately $1,120,472 and $509,001, respectively, in
balloon payments due December 31, 2006, assuming no prepayments. The maximum
amount of indebtedness outstanding under the New Notes during 1993 was
approximately $2,136,077. As of March 1, 1994, the aggregate amount
outstanding under these New Notes was approximately $1,483,001 and $673,689 for
Mr. Larizza and Mr. Sawyer, respectively.
Sales Commissions to Mr. Fazio. See "Executive Compensation -
Compensation Committee Interlocks and Insider Participation" for a description
of sales commissions paid to Mr. Fazio, a director of the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1993 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with, except that (i)
one amended initial ownership report was filed late by Mr. Charles Fazio, and
(ii) one report, covering one transaction, was filed late by The Chicago-Tokyo
Bank.
II. OTHER MATTERS
Independent Public Accountants
KPMG Peat Marwick ("Peat Marwick") were the Company's independent public
accountants for the fiscal year ended December 31, 1993. The Company has not
yet completed its review of its accountants, and consequently no selection of
independent public accountants for the fiscal year ended December 31, 1994 has
yet been made. A representative of Peat Marwick is expected to be present at
the Meeting and will have the opportunity to make a statement if he desires to
do so. The representative will also be available to respond to appropriate
questions from shareholders.
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Shareholder Proposal Deadline
A shareholder proposal intended to be presented at the 1995 Annual
Meeting must be received by the Company on or before December 16, 1994 to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to that meeting. Such proposal should be addressed to Secretary,
Larizza Industries, Inc.
Other Business
The Company is not aware of any matters to be brought before the Meeting
except those set forth in the attached Notice of Annual Meeting of
Shareholders. However, if any other matters are properly presented at the
Meeting for action to be taken thereon, it is the intention of the proxy
holders named in the enclosed form of proxy and acting thereunder to vote on
such matters in their discretion in accordance with their best judgment.
Shareholders are urged to specify their choice on the matters to be
voted on at the Meeting and to date, sign and return the enclosed proxy in the
envelope provided. A prompt response is helpful and your cooperation will be
appreciated.
By order of the Board of Directors
RONALD T. LARIZZA
President and Chief
Executive Officer
Troy, Michigan
April 15, 1994
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FORM 10-K REPORT
IN ADDITION TO ITS ANNUAL REPORT TO SHAREHOLDERS, THE COMPANY FILES AN
ANNUAL REPORT WITH THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K.
SHAREHOLDERS MAY, WITHOUT CHARGE, OBTAIN A COPY WITHOUT EXHIBITS BY WRITING TO
THE COMPANY, ATTENTION: SHAREHOLDER RELATIONS, LARIZZA INDUSTRIES, INC., 201
WEST BIG BEAVER ROAD, SUITE 1040, TROY, MICHIGAN 48084.
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<S> <C>
LARIZZA INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 31, 1994
The undersigned hereby appoints Ronald T. Larizza, Edward L. Sawyer, Jr. and Terence C. Seikel, or any of them, as Proxies,
each with the power of substitution and resubstitution, to vote all shares of common stock which the undersigned would be entitled
to vote at the Annual Meeting of Shareholders to be held on May 31, 1994 or any adjournment thereof as specified below on the
matters described in the Company's Proxy Statement dated April 15, 1994.
1. ELECTION OF SIX DIRECTORS
/ / FOR ALL NOMINEES LISTED BELOW / / WITHHOLD AUTHORITY
(except as marked to the contrary below) (to vote for all nominees listed below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK SPACE NEXT TO THE NOMINEE'S NAME BELOW.)
<S> <C>
/ / Ronald T. Larizza / / Charles Fazio
/ / Edward L. Sawyer, Jr. / / Frank E. Blazey, Jr.
/ / Edward W. Wells / / Arthur L. Wiseley
2. In their discretion with respect to any other matters that may properly come before the meeting.
(Continued and to be signed on reverse side.)
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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 THE NOMINEES LISTED HEREON. IF ANY OTHER MATTERS ARE PROPERLY PRESENTED AT THE
MEETING FOR ACTION TO BE TAKEN THEREON, THIS PROXY WILL BE VOTED ON SUCH MATTERS BY THE PERSONS NAMED AS PROXIES HEREIN IN
ACCORDANCE WITH THEIR BEST JUDGMENT.
Dated , 1994
--------------------------------------
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Signature
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Signature if Held Jointly
(IMPORTANT: PLEASE SIGN NAME EXACTLY AS IT APPEARS HEREON
INDICATING, WHERE PROPER, OFFICIAL POSITION OR REPRESENTATIVE
PLEASE MARK, SIGN, DATE AND CAPACITY. IN CASE OF JOINT HOLDERS, BOTH SHOULD SIGN.)
RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE
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