SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
LUND INTERNATIONAL HOLDINGS, INC.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
LUND INTERNATIONAL HOLDINGS, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 13, 1997
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The annual meeting of stockholders of Lund International Holdings, Inc. (the
"Company") will be held at the offices of the Company, 911 Lund Boulevard,
Anoka, Minnesota, on Thursday, November 13, 1997 at 4:00 p.m. Central Daylight
Time, for the following purposes:
1. To set the number of members of the Board of Directors at seven (7).
2. To elect six directors of the Company for the ensuing year.
3. To vote on a proposal by the Board of Directors to amend the Company's
1992 Non-Employee Director Stock Option Plan.
4. To approve the selection by the Board of Directors of Coopers & Lybrand
L.L.P. as the Company's independent accountants for its 1998 fiscal
year.
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record shown on the books of the Company at the close of
business on September 26, 1997 will be entitled to vote at the meeting or any
adjournment thereof. Each stockholder is entitled to one vote per share on all
matters to be voted on at the meeting.
You are cordially invited to attend the meeting. Whether or not you plan to
attend the meeting, please sign, date and return your Proxy in the return
envelope provided as soon as possible. Your cooperation in promptly signing and
returning the Proxy will help avoid further solicitation expense to the Company.
This Notice, the Proxy Statement and the enclosed Proxy are sent to you by order
of the Board of Directors.
/S/ KATHY SMITH
KATHY R. SMITH
Corporate Secretary
Date: October 9, 1997
Anoka, Minnesota
<PAGE>
LUND INTERNATIONAL HOLDINGS, INC.
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 13, 1997
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INTRODUCTION
Your Proxy is solicited by the Board of Directors of Lund International
Holdings, Inc. (the "Company") for use at the Annual Meeting of Stockholders to
be held on November 13, 1997, at 4:00 p.m., Central Daylight Time, at the
offices of the Company, 911 Lund Boulevard, Anoka, Minnesota, and at any
adjournment thereof, for the purposes set forth in the attached Notice of Annual
Meeting.
The cost of soliciting Proxies, including preparing, assembling and mailing the
Proxies and soliciting material, will be borne by the Company. Directors,
officers and employees of the Company may, without compensation other than their
regular compensation, solicit Proxies personally or by telephone.
Any stockholder giving a Proxy may revoke it at any time prior to its use at the
Meeting by giving written notice of such revocation to the Secretary of the
Company. In the absence of such specification, the Proxies will be voted in
favor of the proposals set forth in the Notice of Annual Meeting and in favor of
the number and slate of directors proposed by the Board of Directors and listed
herein.
The mailing address of the Company's principal executive offices is 911 Lund
Boulevard, Anoka, Minnesota 55303. The Company expects this Proxy Statement and
the related Proxy and Notice of Annual Meeting will first be mailed to
stockholders on or about October 9, 1997.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed September 26, 1997 as the record
date for determining stockholders entitled to vote at the Annual Meeting. At the
close of business on September 26, 1997, 4,393,970 shares of the Company's
Common Stock were issued and outstanding. Such Common Stock is the only
outstanding class of stock in the Company. Each share of Common Stock is
entitled to one vote on each matter to be voted upon at the meeting. Holders of
the Common Stock are not entitled to cumulative voting rights in the election of
directors.
<PAGE>
The affirmative vote of a majority of the shares of Common Stock present, in
person or by proxy, and entitled to vote at the Annual Meeting, is required to
approve the matters mentioned in the foregoing Notice of Annual Meeting. Proxies
indicating abstention from a vote and broker non-votes will be counted toward
determining whether a quorum is present at the meeting; however, abstentions and
broker non-voters will not be counted toward determining if a majority of the
shares of Common Stock has voted affirmatively.
PRINCIPAL STOCKHOLDERS
The following table provides information concerning the only persons or entities
known to the Company to be beneficial owners of more than five percent (5%) of
the Company's outstanding Common Stock as of September 26, 1997:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership(1) Percent of Class
- ---------------- ----------------------- ----------------
<S> <C> <C>
LIH Holdings, LLC
767 Third Avenue
New York NY 10017 1,686,893(2) 38.4%
Old World Industries, Inc.
4065 Commercial Avenue
Northbrook IL 60062 656,300(3) 14.94%
Fidelity Management and
Research Company
82 Devonshire Street
Boston, MA 02109 220,000(4) 5.0%
</TABLE>
(1) Unless otherwise indicated, the person listed as the beneficial owner
of the shares has sole voting and sole investment power over the
shares.
(2) Based on a Schedule 13D filed with the Securities and Exchange
Commission.
(3) Based on a Schedule 13D filed with the Securities and Exchange
Commission by Old World Industries, Inc. and Frederic M. Schweiger on
behalf of themselves, J. Thomas Hurvis, Riaz H. Waraich, James A.
Bryan, and Mac M. Churchill.
(4) Based on a Schedule 13G filed with the Securities and Exchange
Commission by FMR Corp, and Arthur S. Loring on behalf of themselves,
Fidelity Management & Research Company and Fidelity Low-Priced Stock
Fund.
<PAGE>
MANAGEMENT STOCKHOLDINGS
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned by each director and nominee for director, each
executive officer named in the Summary Compensation Table and by all directors,
nominees and executive officers as a group, as of September 26, 1997:
Name of Persons or Amount and Nature of
Identity of Group Beneficial Ownership (1) Percent of Class
- ----------------- ------------------------ ----------------
David E. Dovenberg 10,300(2) **
James E. Haglund 34,000(3) **
Ira D. Kleinman 2,000(4) **
1,686,893(5) 38.4%
William J. McMahon 75,000(6) **
Robert R. Schoeberl 4,000(7) **
Dennis W. Vollmershausen 2,000(8) **
Harvey J. Wertheim 2,000(4) **
1,686,893(5) 38.4%
Charles R. Weaver, Jr. 8,000(9) **
Bradley W. Andress 10,000(10) **
Jay M. Allsup 33,000(11) **
William H. Toms 18,000(12) **
All directors, nominees and
executive officers as a group
(11 persons) 1,727,193(13) 39.3%
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** less than 1%
(1) See Note 1 to the preceding table.
(2) Includes options to purchase 8,000 shares of Common Stock, 2,000 of
which are exercisable at $16.00 per share, 2,000 of which are
exercisable at $20.625 per share, 2,000 of which are exercisable at
$13.50 per share and 2,000 which are exercisable at $11.25 per share.
(3) Includes options to purchase 8,000 shares of Common Stock, 2,000 of
which are exercisable at $11.625 per share, 2,000 of which are
exercisable at $16.00 per share, 2,000 of which are exercisable at
$20.625 per share and 2,000 of which are exercisable at $13.50.
(4) Consists of options to purchase 2,000 shares of Common Stock which are
exercisable at $13.875.
(5) Consists of shares owned by LIH Holdings, LLC, of which Messrs.
Kleinman and Wertheim are affiliates.
(6) Consists of options to purchase 75,000 shares of Common Stock which are
exercisable at $16.25 per share.
(7) Consists of options to purchase 4,000 shares of Common Stock, 2,000 of
which are exercisable at $11.50 per share and 2,000 of which are
exercisable at $11.25 per share.
(8) Consists of options to purchase 2,000 shares of Common Stock which are
exercisable at $14.00.
(9) Consists of options to purchase 8,000 shares of Common Stock, 2,000 of
which are exercisable at $11.625 per share, 2,000 of which are
exercisable at $16.00 per share, 2,000 of which are exercisable at
$20.625 per share and 2,000 of which are exercisable at $13.50 per
share.
<PAGE>
(10) Consists of options to purchase 10,000 shares of Common Stock which are
exercisable at $16.75 per share.
(11) Consists of options to purchase 18,000 shares of Common Stock, 4,500 of
which are exercisable at $16.25 per share and 13,500 of which are
exercisable at $16.00 per share and 15,000 shares which are subject to
forfeiture pursuant to his employment agreement.
(12) Consists of options to purchase 18,000 shares of Common Stock at $21.25
per share.
(13) Notes 2-12 are incorporated herein by reference.
ELECTION OF DIRECTORS
PROPOSAL 1.
The Bylaws of the Company provide that the number of directors shall be
determined by the stockholders at each annual meeting. The Board of Directors
recommends that the number of directors be set at seven (7). Each Proxy will be
voted for or against such number or not voted at all as directed in the Proxy.
The adoption of the resolution to set the number of directors requires the
affirmative vote of a majority of the shares represented in person or by proxy
at the meeting.
PROPOSAL 2.
In the election of directors, each Proxy will be voted for each of the nominees
listed herein unless the Proxy withholds a vote for one or more of the nominees.
Each person elected as a director shall serve for a term of one year and until
his successor is duly elected and qualified. All of the nominees are members of
the present Board of Directors. If any of the nominees should be unable to serve
as a director by reason of death, incapacity or other unexpected occurrence, the
Proxies solicited by the Board of Directors shall be voted by the proxy
representative for such substitute nominee as is selected by the Board or, in
the absence of such selection, for such fewer number of directors as results
from such death, incapacity or other unexpected occurrence. The election of each
nominee requires the affirmative vote of a majority of the shares represented in
person or by proxy at the meeting.
The Board of Directors has proposed a slate of six nominees. It intends to
identify a seventh nominee shortly and, through Board action, to elect such
person to the vacant director position. The composition of the Company's Board
of Directors is subject to a Governance Agreement, dated September 9, 1997
between the Company and LIH Holdings, LLC ("LIH"), which Agreement was entered
into by the Company in connection with the purchase by LIH of approximately 38%
of the Company's outstanding shares held by Allan W. Lund, the founder of the
Company, and members of his family. The Governance Agreement provides that the
Board of Directors shall consist of seven directors, consisting of two nominees
recommended by LIH (Messrs. Kleinman and Wertheim); the Company's Chief
Executive Officer (Mr. McMahon); two of the current independent directors
(Messrs. Dovenberg and Schoeberl); an additional independent director nominated
by a nominating committee consisting of Messrs. Kleinman, Wertheim and Schoeberl
(Mr. Vollmershausen); and an independent director to be nominated by a committee
consisting of Messrs. Schoeberl, Weaver and Kleinman. Messrs. Schoeberl, Weaver
and Kleinman have been interviewing candidates and are in the process of
finalizing a recommendation, but it is expected that such recommendation and
election will be made subsequent to the date of the Meeting.
<PAGE>
The following table provides certain information with respect to the nominees
for director.
<TABLE>
<CAPTION>
Current Position(s) Director Principal Occupation(s) During
Name of Nominee Age with Company Since The Past Five Years
- --------------- --- ------------ ----- -------------------
<S> <C> <C> <C> <C>
David E. Dovenberg 53 Director 1994 Chief Financial Officer of Universal
Hospital Services, a provider of movable
medical equipment through Pay-Per-Use
Equipment Management Programs, since May
1988.
Ira D. Kleinman 41 Director 1997 General Partner, Harvest Partners, Inc., a
private equity investment firm, since 1984.
William J. McMahon 51 President and Chief 1996 President and Chief Executive Officer of
Executive Officer Lund International Holdings and its
subsidiaries since 1994; Chief Operating
Officer of Anagram International, Inc., a
manufacturer and distributor consumer
products and industrial packaging, from 1991
until 1994; President and Chief Executive
Officer of Lund International Holdings, Inc.
from 1988 until 1991.
Robert R. Schoeberl 61 Director 1997 Retired executive of Montgomery Ward since
1994, where he spent 35 years. Member of
the Board of Directors of the Automotive
Foundation for the Aftermarket and member of
the Automotive Parts and Accessories
Association.
Dennis W. Vollmershausen 54 Director 1997 Chairman of the Board of London Machinery,
Inc., an equipment manufacturing company,
since 1990; Executive Vice President of
Champion Road Machinery, Ltd., a
construction company, from August 1996 to
June 1997 and, since June 1997, President
and Chief Executive Officer.
Harvey J. Wertheim 58 Director 1997 Managing General Partner of Harvest
Partners, Inc., a private equity investment
firm, since 1981.
</TABLE>
COMMITTEE AND BOARD MEETINGS
The Company's Board of Directors has an Audit Committee which reviews with the
Company's independent accountants the annual financial statements and the
results of the annual audit. The Audit Committee members currently are James E.
Haglund and David E. Dovenberg. The Audit Committee met one time during the
fiscal year ended June 30, 1997.
The Company's Board of Directors has a Compensation Committee which makes
recommendations to the Board of Directors as to (i) the salaries of certain
executive officers; (ii) bonuses and other incentive arrangements, and (iii)
options, pursuant to the Company's employee stock option plans. It also reviews
and approves, or makes recommendations to the Board of Directors on, any
proposed plan or program for the benefit of any of the Company's executive
officers. The Compensation Committee members currently are Robert R. Schoeberl,
Charles R. Weaver, Jr. and David E. Dovenberg. The Compensation Committee met
two times during the fiscal year ended June 30, 1996.
The Board does not have a nominating committee.
During fiscal 1997, the Board held eight meetings. Each incumbent director
attended 75% or more of the meetings of the Boards and of the meetings of
Committees of which he was a member.
<PAGE>
CERTAIN TRANSACTIONS
James E. Haglund, a director of the Company, has ownership interests in entities
from which the Company has purchased products manufactured for it. For the
fiscal year ended June 30, 1997, the total amount of such purchases was
approximately $1,460,998.
Messrs. Kleinman and Wertheim are affiliates of Harvest Partners, Inc., which
has entered into a Services Agreement with the Company, which provides that the
Company will pay Harvest for consulting services for the period ending June 30,
1998 in the aggregate amount of $112,500, provided that the Company's cumulative
earnings before interest, taxes, depreciation and amortization aggregates
$3,000,000 for such period.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive 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 ("SEC") initial reports of
ownership and changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than 10 percent stockholders are
required by SEC regulation to furnish the Company with all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representation that no other reports were
required, all Section 16(a) filing requirements applicable to officers,
directors and greater than ten percent stockholders were satisfied.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
The executive officers and key employees of the Company during fiscal 1997 were
as follows:
WILLIAM J. MCMAHON, 51, rejoined the Company in September 1994 as President and
Chief Executive Officer. From May 1991 to September 1994, Mr. McMahon served as
Chief Operating Officer for Anagram International, Inc., a manufacturer and
distributor of consumer products and industrial packaging. From 1988 to 1991,
Mr. McMahon was Chief Executive Officer and President of Lund International
Holdings, Inc.
JAY M. ALLSUP, 39, joined the Company in October 1993 as the Director of Finance
and was appointed Chief Financial Officer in June 1994. From April 1989 to
October 1993, he was the Chief Financial Officer and Treasurer of Standun, Inc.,
a manufacturing holding company.
BRADLEY W. ANDRESS, 43, joined the Company in October 1995 as Vice President of
Marketing. From August 1985 to October 1995, Mr. Andress held various positions,
including Vice President of Marketing and Vice President of Sales, at Plastics,
Inc. and Anchor-Hocking Plastics, which are divisions of the Newell Companies.
KATHY R. SMITH, 36, joined the Company in May 1989 and since April 1990 has
served as Executive Assistant to the Chief Executive Officer. Ms. Smith was
named Corporate Secretary and Investor Relations Manager of the Company in
February 1994.
<PAGE>
WILLIAM H. TOMS, 52, joined the Company in April 1995 as Vice President of
Operations. From 1983 to April 1995, Mr. Toms was the Vice President of
Operations for Anchor-Hocking Plastics, a manufacturer of household storage
containers and microwave cookware accessories and a division of the Newell
Companies.
STEPHEN S. TREICHEL, 54, joined the Company in October 1995 as Vice President of
Strategic and Human Information Systems. From 1993 to October 1995, Mr. Treichel
was the President of Process Management International, a management consulting
firm. From 1990 to 1993, he was a senior manager of strategic services at
McGladrey & Pullen, a CPA and consulting firm.
COMPENSATION OF EXECUTIVE OFFICERS
The following summary Compensation Table shows certain compensation information
for the Chief Executive Officer and other officers who received total annual
salary and bonuses in excess of $100,000 in fiscal 1997. This information
includes the dollar value of base salaries and bonus awards, number of shares of
restricted stock granted and certain other compensation, if any.
<TABLE>
<CAPTION>
Other Annual Restricted Securities All Other
Name and Principal Salary Bonus Compensation Stock Underlying Compensation
Position at 06/30/97 Year ($) ($) ($) Awards ($) Options/SARs(#) ($)
- -------------------- ---- --- --- --- ---------- --------------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Allan W. Lund 1997 100,000(1) -- -- -- -- 11,496(2)
Chairman of the Board 1996 100,000 -- -- -- -- 9,966(2)
1995 250,000 67,500(4) -- -- -- 8,668(2)
William J. McMahon 1997 180,000 -- -- -- -- 9,000(5)
President and Chief 1996 180,000 -- -- -- -- 1,800(5)
Executive Officer 1995 144,576(6) 65,060(4) -- -- 150,000 --
William H. Toms 1997 120,749 2,800(3) -- -- -- 6,037(7)
Vice President of 1996 115,000 -- -- -- -- 1,084(7)
Operations 1995 28,750(8) 7,762(4) -- -- 60,000 --
Bradley W. Andress 1997 119,000 4,500(3) -- -- -- --
Vice President of 1996 79,615(9) -- -- -- -- --
Marketing
Jay M. Allsup 1997 116,040 4,200(3) -- 55,781(10) -- 8,436(11)
Chief Financial Officer 1996 99,737 -- -- 54,000(10) -- 2,469(11)
1995 95,000 25,650(4) 10,000(12) 37,000(10) -- 3,832(11)
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</TABLE>
(1) Mr. Lund resigned from the Company in September 1997.
(2) The Company maintains life insurance policies on Mr. Lund, for which
the Company paid premiums of $60,000 in fiscal 1997, $180,000 in fiscal
1996, and $180,000 in fiscal 1995. Mr. Lund received a taxable benefit
of $11,496 in fiscal 1997, $9,966 in fiscal 1996, and $8,668 in fiscal
1995 as a result of such premium payments by the Company. The Company
has a right to recover all premiums paid on the policies, or the cash
value of the policies, whichever is lower, and has the right to recover
any interest earned in the event of the death of Mr. Lund.
(3) The bonus amounts shown were earned in fiscal 1997, but paid in fiscal
1998.
(4) The bonus amounts shown were earned in fiscal 1995, but paid in fiscal
1996.
(5) In fiscal 1997, a $9,000 payment was made by the Company on behalf of
Mr. McMahon to his 401(k) Plan. In fiscal 1996, a $1,800 payment was
made by the Company on behalf of Mr. McMahon to his 401(k) Plan.
(6) Mr. McMahon joined the Company in September 1994.
<PAGE>
(7) In fiscal 1997, a $6,037 payment was made by the Company on behalf of
Mr. Toms to his 401(k) Plan. In fiscal 1996, a $1,084 payment was made
by the Company on behalf of Mr. Toms to his 401(k) Plan.
(8) Mr. Toms joined the Company in April 1995.
(9) Mr. Andress joined the Company in October 1995.
(10) Mr. Allsup received a grant of 5,000 shares of Company Common Stock in
fiscal 1997, a grant of 3,000 shares of Company Common Stock in fiscal
1996, and a grant of 2,000 shares of Company Common Stock in fiscal
1995 with the aggregate market value shown in the table.
(11) In fiscal 1997, a $8,436 payment was made by the Company on behalf of
Mr. Allsup to his 401(k) Plan, in fiscal 1996, a $2,469 payment was
made by the Company on behalf of Mr. Allsup to his 401(k) Plan, and in
fiscal 1995, a $3,832 payment was made by the Company on behalf of Mr.
Allsup to his 401(k) Plan.
(12) In fiscal 1995, the Company reimbursed Mr. Allsup $10,000 in taxes paid
by Mr. Allsup with respect to moving expenses of $20,000 which the
Company paid to Mr. Allsup in fiscal 1993.
On September 9, 1997, Mr. Lund resigned as Chairman of the Board of Directors of
the Company and entered into a Severance and Noncompetition Agreement with the
Company. Pursuant to such Agreement, the Company paid Mr. Lund $600,000, as
follows: $150,000 as severance; $450,000 in consideration of Mr. Lund's agreeing
to certain nondisclosure and noncompetition provisions; and $50,000 as
consideration for a release by Mr. Lund of any claims he may have had against
the Company.
DIRECTOR COMPENSATION
All non-employee directors (with the exception of Messrs. Kleinman and Wertheim,
who receive only the reimbursement of their out-of-pocket expenses) receive
$1,500 per quarter, $500 per meeting attended in person, $100 per meeting
attended telephonically and $500 per committee meeting attended in person, in
addition to out-of-pocket expenses incurred on behalf of the Company. In
addition, pursuant to the Company's 1992 Non-Employee Director Stock Option
Plan, directors who are serving on the last day of a fiscal year receive options
to purchase 2,000 shares of Common Stock, at the fair market value on the date
of grant, up to a maximum of options to purchase 10,000 shares.
EMPLOYMENT AGREEMENTS
The Company has management agreements with William J. McMahon, Jay M. Allsup,
Bradley W. Andress, and William H. Toms. The agreements include certain
non-disclosure provisions and provide that if the Company terminates the
employee without cause, the employee is entitled to a payment equal to six
months' base salary. Mr. McMahon's compensation package is detailed in the
Compensation Committee Report, below.
Mr. Toms' compensation for fiscal 1997 consisted of a base salary of $120,750
and a short term bonus of $2,800. His base salary for fiscal 1998 is $120,750,
and he is eligible for a bonus of up to 30% of his base salary, subject to the
Company's performance. Mr. Toms has also been granted the option to purchase
60,000 shares of Lund Common Stock, which are subject to a vesting schedule.
Mr. Andress' compensation for fiscal 1997 included a base salary of $119,000 and
a short term bonus of $4,500. His base salary for fiscal 1998 is $119,000 and he
is eligible for a bonus of up to 30% of his base salary, subject to the
Company's performance. Mr. Andress has also been granted the option to purchase
50,000 shares of Lund Common Stock, which are subject to a vesting schedule.
<PAGE>
Mr. Allsup's compensation for fiscal 1997 included a base salary of $109,710 and
a short term bonus of $4,200. His base salary for fiscal 1998 is $109,710, and
he is eligible for a bonus of up to 30% of his base salary, subject to the
Company's performance. Mr. Allsup owns 20,000 shares of Common Stock with shares
being subject to forfeiture pursuant to his employment agreement. Mr. Allsup has
also been granted the option to purchase 30,000 shares of Lund Common Stock,
which are subject to a vesting schedule.
AGGREGATED OPTION EXERCISE IN LAST FISCAL YEAR AND
FISCAL YEAR ENDED OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised in-the-
Underlying Unexercised Money Options at
Shares Acquired Value Realized Options at Fiscal Year End (#) Fiscal Year-End ($)
Name on Exercise (#) ($) Exercised/Unexercisable Exercisable/Unexercisable(1)
- ---- --------------- --- ----------------------- ----------------------------
<S> <C> <C> <C> <C>
-- -- -- --
Allan W. Lund
William J. McMahon -- -- 75,000 exercisable *
75,000 unexercisable *
William H. Toms -- -- 18,000 exercisable *
42,000 unexercisable *
Bradley W. Andress -- -- 10,000 exercisable *
40,000 unexercisable *
Jay M. Allsup -- -- 18,000 exercisable *
12,000 unexercisable *
- --------------------------------------------------------------------------------
</TABLE>
(1) As of fiscal year-end, the difference between the exercise price of the
options and the value of the common stock underlying the option, as determined
using the closing sale price of the Company's common stock on June 30, 1997.
* None of such options were in-the-money.
There were no option or stock appreciation rights granted, or grants made under
long-term incentive plans, to the executive officers named in the compensation
table during fiscal 1997.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company's Board of Directors, which is
composed entirely of independent, outside directors, establishes the general
compensation policies of the Company and specific compensation for each
executive officer of the Company, and administers the Company's Stock Option
Program. The Compensation Committee's intent is to maintain compensation
packages for the executive officers of the Company sufficient to attract and
retain persons of exceptional quality, and to provide effective incentives to
motivate and reward Company executives for achieving the financial and strategic
goals of the Company essential to the Company's long-term success and to growth
in stockholder value.
Assessments of both individual and corporate performance influence executives'
compensation levels. This includes the ability to implement the Company's
business plans as well as to react to unanticipated external factors that can
have a significant impact on corporate performance. Compensation decisions for
all executives, including the Chief Executive Officer, are based on the same
criteria.
<PAGE>
There are three major current components of the Company's compensation program:
Base Salary, Short Term Incentive Awards and Long Term Incentive Compensation.
BASE SALARY
A competitive base salary is vital to support the philosophy of management
development and career orientation of executives and is consistent with the
long-term nature of the Company's business.
Salary levels and adjustments to salaries are a result of competitive
positioning (how the Company's salary structure for comparable positions
compares with that of other companies), individual annual reviews, as well as
business performance and general economic factors. There is no specific weighing
of these factors. The Compensation Committee believes that the base salaries of
the Company's executive officers are competitive. Executive officers receive an
annual performance review and, based upon such review, may receive an adjustment
in base salary.
SHORT TERM INCENTIVE AWARDS
Short term incentive awards to executives are granted in cash pursuant to the
Company's Short Term Incentive Plan, which recognizes each executive's
contributions to the business. The Short Term Incentive Plan, which is adopted
annually, sets profitability goals at both minimum and maximum levels.
In adopting the Short Term Incentive Plan, the Compensation Committee considers
several factors, including the Company's strong competitive position, the risks
and rewards inherent in expanding the Company's product offering and the
continued improvement in the Company's performance.
The specific bonus an executive receives is primarily dependent on overall
Company performance. While assessment of an individual's relative performance is
made annually based on a number of factors which include initiative, business
judgment, technical expertise and management skills, the Company's philosophy
has been that all executive officers should be focused on Company's performance,
not departmental performance. The Company believes qualities such as team
building, rather than particularism, should be rewarded and that this is best
accomplished by compensating individuals based primarily on overall Company
performance.
Subjective payments aggregating $17,260 were awarded to certain Company
executives under the Short Term Incentive Plan for fiscal 1997 based on
individual performance criteria even though the Company did not achieve the
threshold level for payment under the Plan. Mr. McMahon received no bonus for
fiscal 1997.
LONG TERM INCENTIVE PLAN
Aligning the interests of the Company's executive officers with those of the
stockholders is accomplished through longer term incentives directly related to
improvement in long-term stockholder value. The Compensation Committee believes
that it is important for the Company's executive officers to focus not just on
short term achievements, but on the long term financial health and development
of the Company. No new incentive stock options were awarded to Company
executives during fiscal 1997.
MR. MCMAHON'S FISCAL 1997 COMPENSATION
In keeping with its policy, the Compensation Committee reviewed the performance
of the Company's Chief Executive Officer for the 1997 fiscal year and agreed on
goals and directions for the current fiscal year. In accordance with the
Company's Short Term Incentive Plan, Mr. McMahon received no bonus for fiscal
1997. This is in keeping with the Company's philosophy on short-term incentive
awards and is reflective of the poorer financial results reported by the Company
for the current year. However, the Committee felt that Mr.
<PAGE>
McMahon's performance during fiscal 1997 was very good and concurred on the
goals he had established for the current fiscal year and the direction in which
he would be moving the Company. Mr. McMahon's annual base salary for fiscal 1997
was $180,000. During September 1997, the Compensation Committee recommended, and
the Board of Directors approved, the adjustment of Mr. McMahon's annual base
salary to $200,000 effective January 1, 1997. After reviewing local, regional
and national compensation ranges for Chief Executive Officers of similarly-sized
companies, the Compensation Committee determined that Mr. McMahon's base salary
remains competitive.
David E. Dovenberg
Robert R. Schoeberl
Charles R. Weaver, Jr.
SHARE INVESTMENT PERFORMANCE
The following graph shows changes over the past five-year period in the value of
$100 invested in (1) the Company's Common Stock; (2) The NASDAQ Index; and (3)
an industry group consisting of forty companies (including the Company) with the
same Standard Industrial Classification Code as the Company.
The year-end values of each investment are based on share price appreciated plus
dividends paid in cash, assuming the reinvestment of dividends. The calculations
exclude trading commissions and taxes.
<TABLE>
<CAPTION>
Fiscal Year Ending
1992 1993 1994 1995 1996 1997
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
The Company 100 211.36 290.91 368.18 245.45 204.55
NASDAQ Market Index 100 133.68 137.73 151.39 166.34 213.16
Industry Group 100 122.76 134.61 157.88 198.73 239.40
</TABLE>
<PAGE>
APPROVAL OF AMENDMENTS TO THE 1992
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
PROPOSAL 3.
The Board of Directors of the Company recommends the adoption of certain
Amendments (the "Amendments") to the Company's 1992 Non-Employee Director Stock
Option Plan (the "Plan"). The Amendments, as adopted by the Board of Directors
on September 16, 1997: (i) increase the number of shares for which options may
be granted under the Plan from 40,000 to 100,000; (ii) delete the maximum number
of options which may be granted to each participant (which currently is 10,000);
and (iii) add a provision allowing initial grants to new Board members to be set
by the Board of Directors.
The Plan was originally adopted by the Board of Directors in September 1992 and
by the stockholders of the Company in October 1992. The purpose of the Plan is
to attract and retain the best available persons for service as directors of the
Company and to provide additional incentive to the non-employee directors to
continue as a member of the Board of Directors by affording them an opportunity
to acquire a proprietary interest in the Company. Since the Plan has been
adopted, options to purchase an aggregate of 36,000 shares have been issued to
non-employee directors of the Company, at prices ranging from $5.50 to $20.625.
As the number of shares available under the Plan has been virtually exhausted,
the Board is recommending adoption of the Amendments.
A general description of the basic features of the Plan (as proposed to be
amended) is presented below, but this description is qualified in its entirety
by reference to the full text of the Plan.
* ADMINISTRATION. The Plan is administered by the Board. The Board may
authorize administration by a Compensation Committee thereof,
consisting of at least two members appointed by the Board, to
administer the Plan.
* ELIGIBILITY. Each member of the Board who: (i) has not, during the
immediately preceding twelve-month period, been an employee of the
Company or any subsidiary of the Company; and (ii) does not hold any
options to purchase shares of the Company, except for stock options
previously granted pursuant to the Plan, will automatically be eligible
for the Plan.
* GRANT. Subject to stockholder approval, each director who becomes a
director will be granted an option to purchase a number of shares
determined by the Board of Directors on the date such person becomes a
director. Additionally, each director who is a director on the last day
of the Company's fiscal year will be granted options to purchase Two
Thousand (2,000) shares on the last day of the Company's fiscal year.
* EXERCISABLITY AND VESTING. Each option granted to a director
immediately vests and is exercisable on the date it is granted.
* PRICE AND PAYMENT. The option price for all options granted under the
Plan will be 100% of the fair market value (as defined in the Plan) of
the shares on the date of grant of such option. The option price will
be payable at the time written notice is given to the Company. Payment
for shares issued upon exercise may consist of cash, check, exchange of
shares (by tendering to the Company shares previously owned by the
director which have a fair market value on the date of exercise equal
to the option price), or any combination thereof.
* TERM. The term of the Plan expires on May 31, 2002. Each option,
subject to the early termination provision of the Plan, expires five
years from the date of grant of such option.
<PAGE>
* EXERCISE OF OPTIONS. The exercise of any option may be contingent upon
receipt from the director of a representation that, at the time of such
exercise, it is the director's present intention to acquire the shares
for investment and not with a view to distribution thereof. The
director may only exercise options granted during a "window period"
which begins three days after public release by the Company of an
earnings release and terminates ten days thereafter.
* EARLY TERMINATION OF OPTIONS. If a director ceases to be a director of
the Company, the option may, within ninety days after such termination
and in accordance with the provisions of the Plan, be exercised to the
extent that such director was entitled to exercise such options on the
date of termination.
* NON-TRANSFERABILITY. No option granted under the Plan is transferable
by a director, other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code of 1986, as amended, or Title I of
the Employee Retirement Income Security Act or the rules thereunder.
During the lifetime of the director, the option is exercisable only by
the director.
* DILUTION OR OTHER ADJUSTMENTS. If there shall be any change in the
shares of the Company (as defined in the Plan), appropriate adjustments
shall be made. In the event of such changes, adjustments shall include,
where appropriate, changes in the aggregate number of shares subject to
the Plan and in the number of shares and the price per share subject to
outstanding options, in order to prevent dilution or enlargement of
option rights.
* CHANGE IN CONTROL OF THE COMPANY. In the event of a change of control
of the Company (as defined in the Plan), an option granted to a
director shall become fully exercisable if, within one year of such
change in control, the director shall cease for any reason to be a
member of the Board. Any exercise of any option permitted by the change
of control provisions must be made within ninety days of the director's
termination from the Board.
* AMENDMENT OR DISCONTINUANCE OF THE PLAN. The Board may amend or
discontinue the Plan at any time in accordance with the provisions of
the Plan; however, no amendment of the Plan shall, without stockholder
approval: (i) materially increase the benefits accruing to the
directors under the Plan; (ii) materially increase the number of shares
which may be issued under the Plan; or (iii) materially modify the
requirements as to the eligibility for participation in the Plan.
* RIGHT TO WITHHOLD. The Company is entitled to (i) withhold and deduct
from amounts which may be due and owing to the director from the
Company, or make other arrangements for the collection of, all amounts
necessary to satisfy all federal, state and local withholding and
employment-related tax requirements attributable to the grant or
exercise of an option or otherwise incurred with respect to an option,
or (ii) require the director promptly to remit the amount of such
withholding to the Company before taking any action with respect to the
exercise of any option or the issuance of the stock certificate to
either the director or any transferee.
* FEDERAL INCOME TAX CONSEQUENCES. A director will not be deemed to
receive any income at the time an option is granted, nor will the
Company be entitled to a deduction at that time. When any part of an
option is exercised, the director will be deemed to have received
compensation taxable as ordinary income in an amount equal to the
difference between the exercise price of the option and the fair market
value of the shares received on the exercise of the option. The Company
will be entitled to a tax deduction in an amount equal to the amount of
compensation taxable as ordinary income realized by the participant.
The foregoing summary of the Plan does not purport to be complete and is
qualified in its entirety by reference to the Plan itself. The full text of the
Plan will be provided to any stockholder who desires a copy, upon written
<PAGE>
request to Lund International Holdings, Inc. Attention: Kathy Smith, Corporate
Secretary, 911 Lund Boulevard, Anoka Minnesota, 55303.
The Board of Directors recommends that the stockholders approve the Amendments
to the 1992 Non-Employee Director Stock Option Plan. The affirmative vote of a
majority of the shares represented in person or by proxy at the Meeting is
required for approval of the Plan.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
PROPOSAL 4.
Subject to approval by the stockholders, the Board of Directors has selected the
firm of Coopers & Lybrand L.L.P. as the Company's independent accountants for
the current year. Coopers & Lybrand L.L.P. has served as the Company's
independent accountants since 1996.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
If the stockholders do not approve the selection of Coopers & Lybrand L.L.P. as
the Company's independent accountants, the selection of such auditors will be
reconsidered by the Board of Directors.
The Board of Directors recommends that the stockholders vote FOR the approval of
the selection of Coopers & Lybrand L.L.P. to serve as the Company's independent
accountants for the current fiscal year. The affirmative vote of a majority of
the shares represented in person or by proxy at the meeting is required for
approval.
STOCKHOLDER PROPOSALS
Any appropriate proposal submitted by a stockholder of the Company and intended
to be presented at the 1998 Annual Meeting must be received by the Company at
its office by June 2, 1998, to be considered for inclusion in the Company proxy
statement and related proxy for the 1998 Annual Meeting.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the meeting.
If any other matter does properly come before the meeting, the appointees named
in the Proxies will vote the Proxies in accordance with their best judgment.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1997, including financial statements, accompanies this Notice of Annual
Meeting and Proxy Statement. No portion of the Annual Report is incorporated
herein or is to be considered proxy soliciting material, except for such
financial statements.
<PAGE>
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1997, TO ANY STOCKHOLDER OF THE COMPANY
UPON WRITTEN REQUEST.
REQUESTS SHOULD BE SENT TO THE CORPORATE SECRETARY, LUND INTERNATIONAL HOLDINGS,
INC., 911 LUND BOULEVARD, ANOKA, MINNESOTA 55303.
Dated: October 9, 1997
Anoka, Minnesota
AMENDMENT NUMBER 1
TO
LUND INTERNATIONAL HOLDINGS, INC.
1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
WHEREAS, the Board of Directors at its meeting on September 16, 1997,
approved and adopted the following amendments to the Lund International
Holdings, Inc. 1992 Non-Employee Director Stock Option Plan (the "Plan"),
subject to approval by the stockholders of the Company;
NOW, THEREFORE, subject to such approval, the Plan is hereby amended as
follows:
1. The second sentence of Section 2 is hereby amended to read in its entirety
as follows: "Subject to the adjustment as provided in Section 12 hereof,
the maximum number of Shares for which options may be exercised under this
Plan shall be 100,000 Shares."
2. The second sentence of the first paragraph of Section 5 is hereby amended
to read in its entirety as follows: "Any person who becomes a Participant
subsequent to the Effective Date shall automatically be granted an option
to purchase Shares on the date such person first becomes a Participant in
such amount as may be determined by the Board of Directors."
3. The last sentence of the second paragraph of Section 5, which reads as
follows: "The total amount of options to be granted to each Participant
shall not exceed Ten Thousand (10,000) Shares," is hereby deleted.
4. In all other respects the Plan shall remain in full force and effect,
without modification or amendment.
5. The Company may, at its option, restate the Plan, incorporating the
foregoing amendments.
<PAGE>
APPENDIX TO LUND INTERNATIONAL HOLDINGS, INC. 1997 PROXY STATEMENT
LUND INTERNATIONAL HOLDINGS, INC.
1992 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
1. Purpose of Plan
This Plan shall be known as the "Lund International Holdings, Inc. 1992
Non-Employee Stock Option Plan" and is hereinafter referred to as the "Plan."
The purposes of the Plan are to attract and retain the best available persons
for service as directors of Lund International Holdings, Inc. (the "Company")
and to provide additional incentive to the non-employee directors to continue as
a member of the Board of Directors by affording them an opportunity to acquire a
proprietary interest in the Company. It is intended that these purposes be
effected through the granting of stock options as provided herein.
2. Stock Subject to Plan
The stock to be subject to options under the Plan shall be shares of the
Company's authorized Common Stock, par value of $.10 per share (the "Shares").
Subject to the adjustment as provided in Section 12 hereof, the maximum number
of Shares for which options may be exercised under this Plan shall be 40,000
Shares. Any Shares subject to an option under the Plan which, for any reason,
expires or is terminated unexercised as to such Shares, shall be available for
options thereafter granted during the term of the Plan and may be against
subjected to an option under the Plan.
3. Administration of Plan
The Plan shall be effective as of August 7, 1992, according to the terms and
conditions herein, and subject to subsequent approval by the shareholders of the
Company. The Plan shall be administered by the Board of Directors of the Company
(the "Board"). The Board may authorize the Compensation Committee thereof,
consisting of at least two (2) members appointed by the Board (the "Committee"),
to exercise the powers conferred on the Board under the Plan, other than the
power under Section 14 hereof to amend or terminate the Plan.
The interpretation and construction by the Board or Committee of any provisions
of the Plan or of any option granted hereunder shall be final. No member of the
Board or Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted hereunder.
<PAGE>
4. Eligibility
Each member of the Board who satisfies all of the following criteria shall
automatically be a participant (a "Participant") in the Plan:
(a) Such member is not, and has not during the immediately preceding 12-month
period been an employee of the Company or any subsidiary of the Company;
and
(b) Such member does not holder any options to purchase Shares of the Company,
except for stock options previously granted pursuant to the Plan.
5. Grant
Subject to Section 16 hereof, each Participant who is a member of the Company's
Board of Directors on the effective date of the Plan is hereby granted an option
to purchase Two Thousand (2,000) Shares. Any person who becomes a Participant
subsequent to the effective date shall automatically be granted an option to
purchase Two Thousand (2,000) Shares on the date such person first becomes a
Participant.
Additionally, each Participant who is a director on the last day of the
Company's fiscal year shall be granted options to purchase Two Thousand (2,000)
Shares on the last day of the Company's fiscal year. The total amount of options
to be granted to each Participant shall not exceed Ten Thousand (10,000) Shares.
6. Exercisability and Vesting
Unless otherwise provided herein, each option granted to a Participant shall
immediately vest and be exercisable on the date it is granted.
7. Price and Payment
The option price for all options granted under the Plan shall be 100% of the
fair market value of the Shares on the date of grant of such option. The "Fair
Market Value" on a specified date shall mean the average of the bid and asked
prices or the closing price, whichever is appropriate, at which a Share is trade
on the over-the-counter market, as reported in the National Association of
Securities Dealers Automated Quotation System, or the closing price for a Share
on the stock exchange, if any, on which Shares are primarily traded, but if no
Shares were traded on such dates, then on the last previous date on which a
Share was so traded or, if none of the above is applicable, the value of a Share
as established by the Board for such date using any reasonable method of
valuation. The option price shall be payable at the time written notice of
exercise is given to the Company. Payment for Shares issued upon exercise of an
option may consist of cash, check, exchange of Shares (by tendering to the
Company Shares previously owned by the Participant which have a Fair Market
Value on the date of exercise equal to the option price), or
<PAGE>
a combination thereof. Any Shares previously owned by the Participant which are
used as payment upon exercise of an option hereunder shall not be available for
issuance or reissuance, as the case may be, under the Plan.
8. Term
Each option and all rights and obligations thereunder shall, subject to the
provisions of Section 10 hereof, expire on that date which is five (5) years
from the date of grant of such option. Each option shall be evidenced by a stock
option agreement between the Company and the Participant to whom the option is
granted.
9. Exercise of Options
(a) The exercise of any option may be contingent upon receipt from the
Participant (or other person rightfully exercising the option) of a
representation that, at the time of such exercise, it is his or her present
intention to acquire the Shares received thereunder for investment and not
with a view to distribution thereof. Certificates for Shares so issued may
be restricted as to transfer upon advice of legal counsel that such
restriction is appropriate to comply with applicable securities laws.
(b) The Participant may only exercise options granted hereunder during a window
period which begins three (3) days after the public release by the Company
of an earnings release and shall terminate fifteen (15) days thereafter.
The Company may, in its sole discretion, defer the effectiveness of any
option exercised hereunder in order to permit registration or any exemption
from registration for such issuance of Shares for the purpose of compliance
with applicable federal and state securities laws.
(c) A Participant electing to exercise an option shall give written notice to
the Company of such election and of the number of Shares subject to such
exercise. The full purchase price of such Shares shall be tendered with
such notice of exercise. Until such person has been issued a certificate or
certificates for the Shares subject to such exercise, he or she shall
possess no rights as a shareholder with respect to such Shares.
10. Early Termination of Option
(a) If a Participant ceases to be a director of the Company due to death,
disability, voluntary retirement or the failure to be reelected while a
nominee of the Board of Directors, the option may, within ninety (90) days
after such Participant's death or termination as a director, be exercised
to the extent that such Participant was entitled to exercise such option on
the date of his or her death or termination, by the Participant or the
person or persons to whom such Participant's rights under the option shall
pass by will or by the applicable laws of descent and distribution, or his
or her personal representative, as may be appropriate, but in no case after
the expiration of the applicable term of the option.
<PAGE>
(b) If the Participant is removed from the position of director of the Company
due to any act of fraud or intentional misrepresentation, embezzlement,
misappropriation or conversion of assets or opportunities of the Company,
nonpayment of an obligation owed to the Company, or if a Participant makes
an unauthorized disclosure of any Company trade secret or confidential
information, engages in any conduct constituting unfair competition,
induces any Company customer to breach a contract with the Company, or
induces any principal for whom the Company acts as agent to terminate such
agency relationship, any outstanding options held by such person shall
automatically terminate and neither the Participant nor his or her estate
shall be entitled to exercise any option whatsoever.
(c) Nothing in the Plan or in any agreement hereunder shall confer on any
Participant any right to continue as a director of the Company or affect,
in any way, the right of the Company to terminate his or her service as a
director at any time.
11. Non-Transferability
No option granted under the Plan shall be transferable by a Participant, other
than by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code of 1986, as
amended, or Title I of the Employee Retirement Income Security Act or the rules
thereunder. During the lifetime of a Participant, the option shall be
exercisable only by a Participant.
12. Dilution or other Adjustments
If there shall be any change in the Shares of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend (of whatever
amount), stock split or other change in the corporate structure, appropriate
adjustments in the Plan and outstanding options shall be made by the Board. In
the event of any such changes, adjustments shall include, where appropriate,
changes in the aggregate number of Shares subject to the Plan and in the number
of Shares and the price per Share subject to outstanding options, in order to
prevent dilution or enlargement of option rights.
13. Change of Control of the Company
In the event of a Change in Control (as hereinafter defined), an option granted
to a Participant shall become fully exercisable if, within one year of such
Change in Control, such Participant shall cease for any reason to be a member of
the Board. Any exercise of an option permitted by these Change of Control
provisions must be made within ninety (90) days of the Participant's termination
as a director. A Change in Control shall be deemed to have occurred if (i) there
shall be consummated (x) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which the
Shares would be converted
<PAGE>
into cash, securities, or other property, other than a merger in which
shareholders of the Company immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (y) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, or (ii) the shareholders of the Company approve
any plan or proposal for the liquidation or dissolution of the Company; or (iii)
any person (as such term is used in Sections 13(d) or 14(d)(2) of the Securities
Exchange Act of 1934 (the "Act")) who does not presently beneficially own at
least 30% of the Company's outstanding Common Stock shall become the beneficial
owner (within the meaning of Rule 13d-3 under the 1934 Act) of 30% or more of
the Company's outstanding Common Stock; or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the entire Board of Directors shall cease for any reason to constitute a
majority thereof unless the election, or the nomination for election by the
Company's shareholders, of each new director was approved by the a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the period.
14. Amendment or Discontinuance of Plan
The Board may amend or discontinue the Plan at any time provided, however, that
the Plan may not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules thereunder. No amendment of the Plan shall,
without shareholder approval: (i) materially increase the benefits accruing to
Participants under the Plan; (ii) materially increase the number of Shares which
may be issued under the Plan; or (iii) materially modify the requirements as to
the eligibility for participation in the Plan. Provision (i) through (ii) of
this Section shall be interpreted in accordance with Section 16 of the 1934 Act
and the rules thereunder, as such section and rules are amended. Except as
provided in Section 10 hereof, the Board shall not alter or impair any option
granted under the Plan without the consent of the holder of the option.
15. Termination of Plan
Unless the Plan shall have been discontinued as provided in Section 14 hereof,
the Plan shall terminate on May 31, 2002. No option may be granted after such
date, but termination of the Plan shall not, without the consent of the
Optionee, alter or impair any rights of obligations under any option granted
prior to such termination.
16. Shareholder Approval
The Plan shall be null and void, and each option granted hereunder shall be null
and void, if this Plan is not approved prior to August 7, 1994 by shareholders
holding a majority of the Shares present (in person or by proxy) at a duty held
shareholders' meeting at which a quorum representing a majority of all
outstanding Shares is present (in person or by proxy).
<PAGE>
17. Right to Withhold
The Company in entitled to (a) withhold and deduct from amounts which may be due
and owing to the Participant from the Company, or make other arrangements for
the collection of, all amounts necessary to satisfy any and all federal, state
and local withholding and employment-related tax requirements attributable to
the grant or exercise of an option or otherwise incurred with respect to an
option, or (b) require the Participant promptly to remit the amount of such
withholding to the Company before taking any action with respect to the exercise
of an option or the issuance of any stock certificate to either the Participant
or any transferee.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
LUND INTERNATIONAL HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS, NOVEMBER 13, 1997
The undersigned hereby appoints Kathy R. Smith and Jay M. Allsup, or either of
them, the attorneys and proxies of the undersigned, with full power of
substitution, to attend the annual meeting of stockholders of Lund International
Holdings, Inc., a Delaware corporation, (hereinafter referred to as the
"Company"), to be held on Thursday, November 13, 1997 at 4:00 p.m., Central
Daylight Time, and any adjournment thereof, and thereat to vote the
undersigned's shares in the Company.
(Continued, and to be signed, on reverse side)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1-4.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE FOLLOWING PROPOSALS:
1. TO SET THE NUMBER OF DIRECTORS AT SEVEN (7):
FOR AGAINST ABSTAIN
--- ---- ----
2. ELECTION OF DIRECTORS: To elect Ira D. Kleinman, William J. McMahon, David
E. Dovenberg, Robert R. Schoeberl, Dennis W. Vollmershausen and Harvey J.
Wertheim.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to vote for
listed (except as AUTHORITY any individual nominee, write that nominee's name
marked to the to vote for all in the space provided below)
contrary) nominees listed
</TABLE>
3. TO AMEND THE COMPANY'S 1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN.
FOR AGAINST ABSTAIN
--- ---- ----
4. TO APPROVE THE SELECTION OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS.
FOR AGAINST ABSTAIN
--- ---- ----
In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before the
meeting.
The undersigned hereby acknowledges receipt of Notice of
said Annual Meeting and the accompanying Proxy Statement,
each dated October 9, 1997.
Please sign exactly as name appears hereon. 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:_________________________,1997
Signature
Signature if held jointly
Please mark, sign, date and return the Proxy Card promptly
using the enclosed envelope.
