<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Capital Directions, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
CAPITAL DIRECTIONS, INC.
322 South Jefferson Street, Mason, Michigan 48854 517-676-0500
________________________________________________________________________________
April 1, 1997
Dear Shareholder:
Capital Directions, Inc. invites you to attend the 1997 Annual Meeting of
Shareholders beginning at 6:30 p.m. with hors d'oeuvres and the formal meeting
commencing at 7:00 p.m. on Thursday, April 24, at the Eldorado Golf Course,
3750 West Howell Road, Mason, Michigan.
Please read the accompanying Notice of Annual Meeting and Proxy Statement for
information pertaining to the matters to be considered and acted upon at the
Annual Meeting.
We appreciate your continued interest in Capital Directions, Inc. and look
forward to seeing you at the Annual Meeting. Whether or not you are present,
it is important that your shares are represented. Accordingly, please sign,
date, and mail the enclosed Proxy promptly.
Sincerely,
Douglas W. Dancer
Douglas W. Dancer
Chairman of the Board
Timothy P. Gaylord
Timothy P. Gaylord
President and
Chief Executive Officer
<PAGE> 3
CAPITAL DIRECTIONS, INC.
322 South Jefferson Street, Mason, Michigan 48854 517-676-0500
________________________________________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1997
The Annual Meeting of Shareholders of Capital Directions, Inc. will begin at
7:00 p.m. on Thursday, April 24, 1997 at the Eldorado Golf Course, 3750 West
Howell Road, Mason, Michigan, for the following purposes:
(1) To elect a board of seven directors, each to hold office for a
term of one year and until a successor has been elected and
qualified; and
(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 March 3, 1997 will be
entitled to notice of and to vote at the Annual Meeting, or any adjournment
thereof.
All Shareholders are invited to attend the Annual Meeting. Please be sure to
mark, date, sign, and return the enclosed proxy card, whether or not you plan
to attend the meeting, so your shares will be voted. Any Shareholder present
at the meeting, may vote personally on all matters brought forward. In that
event, his or her Proxy will not be used.
BY ORDER OF THE BOARD OF DIRECTORS
George A. Sullivan
George A. Sullivan
Secretary
April 1, 1997
1
<PAGE> 4
CAPITAL DIRECTIONS, INC.
322 South Jefferson Street, Mason, Michigan 48854 517-676-0500
________________________________________________________________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, APRIL 24, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies, beginning March 21, 1997, by the Board of Directors of Capital
Directions, Inc. (the "Company"), to be voted at the Annual Meeting of
Shareholders of the Company, to be held at the Eldorado Golf Course, 3750 West
Howell Road, Mason, Michigan, on April 24, 1997 at 7:00 p.m. (the "Annual
Meeting").
If the form of Proxy accompanying this Proxy Statement is properly executed and
returned to the Company, the shares represented by the Proxy will be voted at
the Annual Meeting of Shareholders in accordance with the directions given in
such Proxy. If no choice is specified, the shares represented by the Proxy
will be voted for the election of directors listed as nominees in the Proxy and
in accordance with the best judgement of the Proxy holder with respect to any
other matter to come before the Shareholders at the Annual Meeting. A Proxy
may be revoked prior to its exercise by delivering a written notice of
revocation to the Secretary of the Company, executing a subsequent Proxy, or
attending the meeting and voting in person. Attendance at the Annual Meeting
does not, however, automatically serve to revoke the Proxy.
VOTING SECURITIES AND RECORD DATE
As of March 3, 1997, the record date for the Annual Meeting, the Company had
issued and outstanding 297,428 shares of Common Stock, par value $5.00 per
share ("Common Stock"), each outstanding share entitles the record holder
thereof one vote upon each matter to be voted upon at the meeting, or any
adjournment. The transaction of business at the Annual Meeting requires the
presence of a quorum, which will be established by the presence or
representation at the Annual Meeting of majority of the outstanding shares of
Common Stock entitled to vote. Directors are elected by a plurality of the
votes cast at the Annual Meeting. Thus, the seven nominees for election as
directors who receive the greatest number of votes cast will be elected
directors (see "(1) ELECTION OF DIRECTORS"). Therefore, broker non-votes on
shares as to which authority is withheld with respect to the election of
directors will be counted for quorum purposes, but since they are not votes
cast, will have no effect on the election of directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of March 3, 1997, as to
the Common Stock beneficially owned by each person known by the Company to be
the beneficial owner of more than five percent (5%) of the Common Stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Ownership of Class
--------------- ---------------------- ----------------------- --------
<S> <C> <C> <C>
Common Stock, June M. Oesterle Trust 26,720(1) 8.98%
$5 par value Lyle M. Oesterle Trust
1975 Okemos Rd.
Mason, MI 48854
Common Stock, Colin J. Fingerle Trust 17,638 5.93%
$5 par value 2505 Londonderry Rd.
Ann Arbor, MI 48104
</TABLE>
(1) Total of shares owned by both the June M. Oesterle Trust of which
June M. Oesterle is the sole Trustee and the Lyle M. Oesterle Trust of which
Lyle M. Oesterle, spouse of June M. Oesterle, is sole Trustee.
2
<PAGE> 5
(1) ELECTION OF DIRECTORS
Seven directors are proposed to be elected at the Annual Meeting to serve until
the next Annual Meeting and/or until their successors are elected. The Bylaws
of the Company permit the Board of Directors to establish the size of the Board
from seven to nine members. The present Board has fixed seven as the size of
the Board to be elected. The Proxies cannot be voted for a greater number of
persons than the number of nominees named.
In the event that any nominee is unable to serve, which is not now
contemplated, the Proxy holders, to the extent they have been granted authority
to vote in the election of directors, may or may not vote for a substitute
nominee. The nominees for directors are the persons named below, all of whom
are presently serving as directors of the Company. These persons, according to
the information supplied by them, owned beneficially, directly or indirectly,
the number of shares of Common Stock of the Company set forth opposite their
respective names. All information is presented as of March 3, 1997.
DIRECTORS
<TABLE>
<CAPTION> Amount and
Principal Occupation For Nature
Last Five Years Director of Beneficial Percent
Name Age Or More Since (1) Ownership (2) of Class
- -------------- --- ------------------------- --------- ------------- --------
<S> <C> <C> <C> <C> <C>
Gerald Ambrose 47 County Controller for the 1990 400 (3)
County of Ingham; Vice
Chairman of the Board,
Mason State Bank, and the
Company
Douglas W. Dancer 56 President, Dancer's Inc. 1986 7602 2.56
Department Stores; Chairman
of the Board, Mason State
Bank, and the Company
Paula Johnson 50 Realtor, Vision Real Estate 1996 100 (3)
Timothy P. Gaylord 42 President & Chief Executive 1995 2617 (3)
Officer of Mason State Bank
and the Company
Marvin B. Oesterle 45 Partner, Golden Acres Farms 1981 2540 (3)
and Oesterle Brothers
Seed Corn
Terry Shultis 61 Senior Management Advisor, 1980 1554 (3)
Retired President and Chief
Executive Officer of Mason
State Bank, Monex Financial
Services, Inc., and the Company
George A. Sullivan 64 Attorney; Secretary of the 1975 1060 (3)
Company
7 directors as a group 15873 5.34
</TABLE>
(1) Includes service as a director of the Company's wholly-owned subsidiary,
Mason State Bank (the "Bank"). The Company was organized in 1988 to act,
inter alia, as a holding company for Mason State Bank, and the Bank's
directors became directors of the Company.
(2) Includes shares owned by or jointly with spouse, or minor child, or other
relative residing in same household, or as trustee.
(3) Less than one percent.
3
<PAGE> 6
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a number of standing committees, including Audit and
Personnel.
The members of the Audit Committee include: George A. Sullivan, Chairman;
Marvin B. Oesterle; and Douglas W. Dancer, ex-officio. The Audit Committee,
which met three times during 1996, appoints, subject to approval by the Board
of Directors, the Bank's independent auditors and approves the program of
continuous internal audit and the scope of audit procedures. The committee
also reviews the accounting principles and the control procedures and practices
adopted by management, the services performed by the independent auditors, and
approves the fees paid to the independent auditors.
The members of the Personnel Committee include: Gerald Ambrose, Chairman;
Timothy P. Gaylord; Paula Johnson; and Douglas W. Dancer, ex-officio. This
committee met six times in 1996. The Bank's Personnel Committee approves the
officers' salary budget for the year and recommends changes in official
salaries and other benefits to the Bank's Board of Directors.
In 1996 there were a total of twelve regularly scheduled meetings of the Board
of Directors of the Company. Of the nominees for re-election as directors of
the Company, no director attended less than seventy-five percent of the
aggregate of the total number of meetings of the Board of Directors of the
Company held in 1996 and the total number of meetings held by all standing
committees of the Board on which they served.
Each director of the Company is entitled to receive an annual retainer of
$6,240. In lieu of payment of director fees, certain directors have elected to
participate in a deferred compensation plan adopted in 1986. The plan was
closed to new participants May 18, 1996. All of the directors, except Gerald
Ambrose, Paula Johnson, and Timothy P. Gaylord, have elected to participate in
the plan which provides for retirement and death benefits to be paid to the
participating directors or their beneficiaries over fifteen years. Deferred
director fees are used to purchase life insurance policies of which the Bank is
the owner and beneficiary. These life insurance policies are structured to
fully fund the Bank's obligation under the terms of the plan.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
First Elected as
an Officer of
Name (age) Position with the Company the Company
---------- ------------------------- -----------------
<S> <C> <C>
Douglas W. Dancer (56) Chairman 1988
George A. Sullivan (64) Secretary 1988
Robert G. Kennedy (50) Treasurer 1988
Timothy P. Gaylord (42) President & CEO 1995
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation paid by the Company and its
subsidiaries during the fiscal year ended December 31, 1996 to the Company's
Chief Executive Officer. There were no executive officers, other than the CEO,
whose combined salary and bonus exceeded $100,000.
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Name and All Other
Principal Position Year Salary ($) (1) Bonus ($) Options/SARs (#) (2) Compensation ($) (3)
- ------------------ ----- ------------- --------- -------------------- ---------------------
<S> <C> <C> <C> <C> <C>
Timothy P. Gaylord 1996 $91,240 $11,700 1,000 $7,256
President and CEO 1995 $75,322 $9,000 700 $4,941
</TABLE>
(1) Includes 1996 directors fees of $6,240 and 1995 directors fees of
$1,500.
(2) The amounts shown represent the number of shares covered by stock
options and stock appreciation rights granted under the Capital
Directions, Inc. Incentive Stock Option Plan as more fully described in
the Option/SAR Grants in Last Fiscal Year table set forth below.
(3) "All Other Compensation" is comprised of the following items:
The Bank is accustomed to awarding a longevity bonus to all employees
based on their salary and length of service at five year increments.
Mr. Gaylord received an award of $425 for five years of service and a
contribution by the Bank of $6,831 to the Bank's 401(k) Plan and a
contribution in 1995 to the Bank's 401(k) Plan of $4,941.
The following table presents information about stock options and tandem stock
appreciation rights ("SARs") granted to the named executive officer during 1996
under the Capital Directions, Inc. Incentive Stock Option Plan (the "Stock
Option Plan").
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options/SARs Exercise Price Appreciation
Underlying Granted to or Base for Option Term (2)
Options/SARs Employees Price Expiration
Name Granted (#) (1) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- --------------- -------------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
Timothy P. Gaylord 1,000 50 36.00 2/14/06 22,640 48,890
</TABLE>
(1) The amounts shown are shares of the Company's Common Stock and tandem
SARs covered by options granted under the Stock Option Plan. The
options and the SARs vest over 3 years, from the grant date of February
15, 1996 with one-third of the covered shares becoming part of the
exercisable portion each year. The SARs may be exercised only in
respect to up to 50 percent of the shares covered by the option,
and only for an amount of cash equal to the difference between the base
price shown and the market price of the Company's Common Stock at the
time of exercise. Exercise of an SAR cancels the option with respect
to the shares for which the SAR was exercised. The cash received may
be used only to pay the exercise price of the remaining portion of the
option.
(2) The potential realizable value is reported net of the option exercise
price and the SAR base price, but before income taxes associated with
exercise. These amounts represent assumed annual compounded rates of
appreciation of five percent and ten percent from the date of grant to
the end of the option and SAR. Actual gains, if any, on stock option
and SAR exercises are dependent on the future performance of the
Company's Common Stock, overall stock market conditions, and the
optionees' continued employment through the vesting period. The
amounts reflected in this table may not necessarily be achieved.
5
<PAGE> 8
The following table presents the number of shares covered by, and the value of,
unexercised options and SARs held by the named executive officer at December
31, 1996. No options or SARs were exercised by the named executive officer
during 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options/SARs Value of Unexercised In-the-Money
at FY-End (#) Options/SARs at FY-End ($) (1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------ ----------------------------- --------------------------------
<S> <C> <C>
Timothy P. Gaylord 0/1,700 0/20,525
</TABLE>
(1) The value shown is based upon the market bid price at December 31,
1996 of $43.75 net of the option exercise price and SAR base price.
EMPLOYMENT AGREEMENT
The Company has entered into an agreement with Mr. Gaylord relating to his
employment by the Company and the Bank. This agreement is summarized below.
This summary is not intended to be complete and is qualified in its entirety by
reference to the agreement.
The agreement among Mr. Gaylord, the Company, and the Bank (the "Agreement")
provides that Mr. Gaylord will be employed by the Company and the Bank as their
President and Chief Executive Officer from October 1, 1995 through September
30, 1997, subject to automatic renewal for one year periods unless terminated
in accordance with the Agreement. The Agreement provides an annual salary rate
for 1995 of $85,000, subject to adjustment by the Board of Directors in
subsequent years during the term of the Agreement. Mr. Gaylord is also
entitled to customary employee benefits and perquisites. The Agreement
provides that in the event of a change in control of the Company or the Bank,
if Mr. Gaylord's employment is involuntarily terminated, or if Mr. Gaylord's
status and compensation are reduced without cause within one year of the change
in control, Mr. Gaylord shall be entitled to payment of an amount equal to his
annual salary. The Agreement provides that the Company and the Bank may
terminate Mr. Gaylord's employment at any time for cause without further
obligation to compensate Mr. Gaylord. The Agreement broadly defines cause to
generally include, among other things, misfeasance, malfeasance, and
nonfeasance of Mr. Gaylord's duties and breach of the Agreement. The
Agreement further provides that Mr. Gaylord shall not, for a period of one year
after Mr. Gaylord's last day of employment, provide financial services or
otherwise compete with the business of the Company and the Bank in the City of
Mason, Michigan and a three mile radius surrounding it. Further, Mr. Gaylord
shall not during that one year period, solicit customers of the Bank and its
affiliates or solicit for hire any then current Bank or Company employees or
contact them for the purpose of inducing them to leave the Bank or Company.
The Agreement also requires Mr. Gaylord to maintain the confidentiality of
certain information and trade secrets of the Company and the Bank following the
termination of his employment.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Directors and officers of the Company and their associates were customers of,
and had transactions with, subsidiaries of the Company in the ordinary course
of business during 1996. All loans and commitments included in such
transactions were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not involve more
than the normal risk of collectibility or present other unfavorable features.
6
<PAGE> 9
TRANSACTION OF OTHER BUSINESS
The Board of Directors of the Company does not intend to bring any other
matters before the Annual Meeting. At the date of this Proxy Statement, the
Board is not aware of any matter other than the election of directors to be
presented for action by others or that any nominee named herein for election
to the Board of Directors will be unavailable. If any of the nominees listed
above is not available for election as a director, or if any other matters come
before the meeting or any adjournment thereof, it is intended that the shares
represented by Proxies given to the Board of Directors' designees will be voted
with respect thereto in accordance with the best judgement of the Proxies after
consultation with the Board of Directors.
RELATIONSHIP WITH INDEPENDENT ACCOUNT
For the year 1996, Crowe, Chizek and Company was engaged by the Board of
Directors to perform an audit of the Company's financial statements and has
been so engaged for the year 1997. A representative of Crowe Chizek will be
present at the meeting to make a statement if he or she desires and to respond
to appropriate questions. The Company periodically reviews bids from qualified
accounting firms.
ADDITIONAL INFORMATION
The cost of soliciting Proxies will be borne by the Company. In addition to
solicitation by mail, officers and regular employees of the Company and its
subsidiaries may solicit Proxies by telephone, telegraph, or in person. The
Company has retained the services of The Independent Election Corporation of
America to deliver Proxy materials to brokers, nominees, fiduciaries, and other
custodians for distribution to their beneficial owners, as well as the
solicitation of Proxies from these institutions. The cost of the solicitation
is expected to amount to approximately $2,500, plus reasonable out-of-pocket
expenses.
SHAREHOLDERS ARE URGED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS.
George A. Sullivan
George A. Sullivan
Secretary
April 1, 1997
7
<PAGE> 10
CAPITAL DIRECTIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald Ambrose and Marvin B. Oesterle, jointly
and severally, proxies, with full power of substitution, to vote all the shares
of capital stock of Capital Directions, Inc. which the undersigned may be
entitled to vote, at the Annual Meeting of Shareholders to be held at the
Eldorado Golf Course, 3750 West Howell Road, Mason, Michigan, at 7:00 p.m. on
April 24, 1997, or any adjournment thereof.
The proxies named on the reverse hereof are directed to vote as specified on
the reverse hereof or, if no specification is made, FOR all nominees named on
the reverse side and to vote IN ACCORDANCE WITH THEIR DISCRETION on such other
matters that may properly come before the meeting. The Board of Directors
recommends a vote FOR all Agenda items.
(TO BE SIGNED ON REVERSE SIDE.)
<TABLE>
<S><C>
1. ELECTION OF DIRECTORS
FOR WITHHELD
NOMINEES:
Gerald Ambrose Marvin B. Oesterle
Douglas W. Dancer Terry Shultis / / / /
Timothy P. Gaylord George A. Sullivan
Paula Johnson
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEES(S):
- -------------------------------------------------------------------------------
2. TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
FOR WITHHELD ABSTAIN
/ / / / / /
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH.
/ /
- ------------------------------------- -- -- --
SIGNATURE DATE
/ /
- ------------------------------------- -- -- --
SIGNATURE DATE
</TABLE>
