<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:
<TABLE>
<S> <C>
/ / 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
</TABLE>
DeVlieg-Bullard, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
DELVLIEG BULLARD INC.
(LOGO)
ONE GORHAM ISLAND
WESTPORT, CONNECTICUT 06880
(203) 221-8201
November 14, 1995
Dear Stockholder:
On behalf of the Board of Directors, I am pleased to extend to you an
invitation to attend the Annual Meeting of Stockholders of DeVlieg-Bullard,
Inc., to be held at the Sheraton Stamford Hotel, One First Stamford Place,
Stamford, Connecticut, on Wednesday, December 13, 1995, beginning at 10:00 a.m.,
E.S.T.
The notice of meeting and proxy statement on the following pages contain
information about the matters which are to be considered. During the meeting we
will also review operating results for the past year.
In order to ensure that your shares are voted, please complete, date, sign,
and return the enclosed proxy in the enclosed postage-paid envelope at your
earliest convenience. Every stockholder's vote is important.
We look forward to seeing you on Wednesday, December 13, 1995.
Sincerely,
/s/ William O. Thomas
WILLIAM O. THOMAS
President and Chief
Executive Officer
<PAGE> 3
DEVLIEG BULLARD INC.
(LOGO)
ONE GORHAM ISLAND
WESTPORT, CONNECTICUT 06880
(203) 221-8201
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
Notice is hereby given that the Annual Meeting of Stockholders of DeVlieg-
Bullard, Inc. (the "Company"), will be held at 10:00 a.m., local time, on
Wednesday, December 13, 1995, at the Sheraton Stamford Hotel, One First Stamford
Place, Stamford, Connecticut for the following purposes:
1. To elect eight (8) directors to hold office until the next Annual
Meeting and until their successors are elected and qualified;
2. To consider and act upon a proposal to amend the Company's 1989 Employee
Stock Plan to increase the number of shares issuable thereunder and
limit the amount of stock-based awards that may be granted to any single
officer or key employee; and
3. To transact such other business as may properly be brought before the
Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on November 1, 1995,
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting.
Your attention is directed to the Proxy Statement accompanying this notice
for a more complete statement regarding matters to be acted upon at the Annual
Meeting.
By the Order of the Board of
Directors
/s/ Sharon E. Huguet
Sharon E. Huguet, Secretary
Westport, Connecticut
November 14, 1995
YOUR REPRESENTATION AT THE ANNUAL MEETING IS IMPORTANT. TO ENSURE YOUR
REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY. SHOULD YOU DESIRE TO REVOKE
YOUR PROXY, YOU MAY DO SO AS PROVIDED IN THE ACCOMPANYING PROXY STATEMENT AT ANY
TIME BEFORE IT IS VOTED.
<PAGE> 4
DEVLIEG-BULLARD, INC.
ONE GORHAM ISLAND
WESTPORT, CONNECTICUT 06880
(203) 221-8201
---------------------
PROXY STATEMENT
---------------------
The accompanying proxy is solicited by the Board of Directors of
DeVlieg-Bullard, Inc. (the "Company"), for use at the Annual Meeting of
Stockholders and any adjournments thereof (the "Annual Meeting"), to be held on
December 13, 1995, notice of which is attached hereto.
The purposes of the Annual Meeting are to elect eight directors, to approve
certain amendments to the Company's 1989 Employee Stock Plan (the "1989 Plan")
and to transact such other business as may properly be brought before the Annual
Meeting or any adjournment thereof.
A stockholder who signs and returns a proxy may revoke the same at any time
before the authority granted thereby is exercised by attending the Annual
Meeting and electing to vote in person, by filing with the Secretary of the
Company a written revocation or by duly executing a proxy bearing a later date.
Unless so revoked, the shares represented by the proxy will be voted at the
Annual Meeting. Where a choice is specified on the proxy, the shares represented
thereby will be voted in accordance with such specifications.
The Board of Directors knows of no other matters which are to be brought to
a vote at the Annual Meeting. However, if any other matter does come before the
Annual Meeting, the persons appointed in the proxy or their substitutes will
vote in accordance with their best judgment on such matters.
The Board of Directors has fixed the close of business on November 1, 1995,
as the record date for the Annual Meeting. Only record holders of the Company's
common stock, par value $.01 per share (the "Common Stock"), at the close of
business on that date will be entitled to vote at the Annual Meeting. On the
record date, the Company had outstanding 12,250,000 shares of Common Stock.
Holders of the Common Stock will be entitled to one vote for each share of
Common Stock so held, which may be given in person or by proxy duly authorized
in writing.
The representation in person or by proxy of at least a majority of the
outstanding shares entitled to vote is necessary to provide a quorum at the
meeting. The directors shall be elected by a plurality of the votes cast in the
election by the holders of the Common Stock represented and entitled to vote at
the Annual Meeting. Any other matters submitted to the stockholders shall be
approved by the affirmative vote of a majority of the votes cast by the holders
of the Common Stock represented and entitled to vote at the Annual Meeting.
Abstentions and "non-votes" are counted as present in determining whether the
quorum requirement is satisfied. Abstentions will not be counted either for or
against the election of directors. With respect to the approval of the
amendments to the 1989 Plan, an abstention will have the same effect as a vote
against the amendments, as a majority of all shares represented and entitled to
vote is necessary for such approval. A "non-vote" occurs when a nominee holding
shares for a beneficial owner votes on one proposal, but does not vote on
another proposal because the nominee does not have discretionary voting power
and has not received instructions from the beneficial owner.
The cost of solicitation of proxies will be borne by the Company, including
expenses in connection with preparing, assembling and mailing this Proxy
Statement and the reasonable expenses of brokerage firms and others for
forwarding proxies and proxy material to the beneficial owners of Common Stock
of the Company. Such solicitation will be made by mail, and may also be made by
the Company's regular officers or employees personally or by telephone or
telegram.
This Proxy Statement and the Company's Annual Report to Stockholders have
been mailed on or about November 14, 1995 to all stockholders of record at the
close of business on November 1, 1995.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information furnished to the Company
as of November 1, 1995, with respect to any person known to the Company to be
the beneficial owner of more than 5% of the outstanding shares of the Common
Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
- --------------------------------- ---------- ---------
<S> <C> <C>
Stanwich Oil & Gas, Inc.(a) 4,591,000 (b) 37.5%
One Stamford Landing
Stamford, Connecticut
Quest Advisory Corp.(c) 770,000 6.3%
Quest Management Company
Charles M. Royce
1414 Avenue of the Americas
New York, New York
Heartland Advisors, Inc.(d) 1,200,000 9.8%
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
</TABLE>
- ---------------
(a) Charles E. Bradley, the Chairman of the Board and a Director of the Company,
and John G. Poole, a Director of the Company, own 49% and 29.8%,
respectively, of the common stock of Stanwich Oil & Gas, Inc. ("Stanwich
Oil & Gas"). Mr. Bradley is a director and officer and Mr. Poole is an
officer of Stanwich Oil & Gas. In addition, 21% is owned by an irrevocable
trust established for the benefit of Mr. Bradley's children.
(b) Of the shares of Common Stock beneficially owned by Stanwich Oil & Gas,
4,124,880 have been pledged to secure certain indebtedness of others.
(c) Quest Advisory Corp. ("Quest Corp."), Quest Management Company, a
Connecticut general partnership ("QMC"), and Charles M. Royce as a group
filed with the Securities and Exchange Commission on or about February 10,
1995, Amendment No. 2 to Schedule 13G. Quest Corp. and QMC are the
beneficial owners of 625,400 and 144,600 shares, respectively, of the
Common Stock of the Company and each has sole voting and dispositive power
of such shares. Mr. Royce may be deemed to be a controlling person of Quest
Corp. and QMC, and as such may be deemed to beneficially own the shares of
Common Stock of the Company beneficially owned by Quest Corp. and QMC. Mr.
Royce disclaims beneficial ownership of such shares.
(d) Based on information contained in Amendment No. 1 to Schedule 13G filed by
Heartland Advisors, Inc. with the Securities and Exchange Commission on or
about March 8, 1995.
PROPOSAL 1: ELECTION OF DIRECTORS
Directors are elected each year, to hold office until the next Annual
Meeting of Stockholders and until their successors are duly elected and
qualified. The Company's Bylaws provide for a minimum of three and a maximum of
twelve directors, the exact number to be set by the Board of Directors. The
current Board of Directors consists of eight members. All of the nominees to be
elected as directors at the Annual Meeting are currently directors of the
Company. All of the nominees were elected by the stockholders.
Unless contrary instructions are received, the enclosed proxy will be voted
in favor of the election as directors of the nominees listed below. Each nominee
has consented to be a candidate and to serve, if elected. While the Board has no
reason to believe that any nominee will be unable to accept nomination or
election as a director, if such an event should occur, the proxy will be voted
with discretionary authority for a substitute or substitutes as shall be
designated by the current Board of Directors.
2
<PAGE> 6
The following table contains certain information concerning the nominees
and regarding the beneficial ownership of the Common Stock by each director and
nominee, the executive officers of the Company and by all directors and
executive officers as a group. Except as otherwise indicated, each person has
sole voting and investment power over the shares of Common Stock listed as
beneficially owned by him.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
OWNED ON PERCENT
NOVEMBER 1, OF
NAME AGE POSITION 1995(A) CLASS
- ------------------------------ ---- -------------------------------- ------------ -------
<S> <C> <C> <C> <C>
Charles E. Bradley............ 66 Chairman and Director and 149,003(b) 1.2%
Nominee
William O. Thomas............. 54 President, Chief Executive 224,138 1.8
Officer and Director and Nominee
Lawrence M. Murray............ 53 Vice President, Chief Financial 86,795 *
Officer and Assistant
Secretary
Burton C. Borgelt............. 62 Director and Nominee 6,000 *
Thomas L. Cassidy............. 67 Director and Nominee 9,000 *
George A. Chandler............ 66 Director and Nominee 7,000 *
John R. Kennedy............... 65 Director and Nominee 9,000 *
John E. McConnaughy, Jr....... 66 Director and Nominee 5,000 *
John G. Poole................. 52 Director and Nominee 128,439(b)(c) 1.1
All directors and executive officers as a group (9 persons)............. 624,375 5.0%
</TABLE>
- ---------------
* Less than one percent.
(a) Includes the following shares which are not currently outstanding but which
the named individuals are entitled to acquire within 60 days of the date
hereby upon the exercise of options: William O. Thomas -- 145,000 shares;
Lawrence M. Murray -- 84,000 shares; Burton C. Borgelt -- 5,000 shares;
Thomas L. Cassidy -- 5,000 shares; George A. Chandler -- 5,000 shares; John
R. Kennedy -- 5,000 shares; John E. McConnaughy, Jr. -- 5,000 shares; all
directors and executive officers as a group (9 persons) -- 254,000 shares.
The shares described in this note are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned by
such persons individually and by the group, but are not deemed to be
outstanding for the purpose of computing the percentage of ownership of any
other person.
(b) Does not include 4,591,000 shares beneficially owned by Stanwich Oil & Gas.
Mr. Bradley and Mr. Poole own 49% and 29.8%, respectively, of the common
stock of Stanwich Oil & Gas. Mr. Bradley is a director and officer and Mr.
Poole is an officer of Stanwich Oil & Gas. In addition, 21% is owned by an
irrevocable trust established for the benefit of Mr. Bradley's children.
Does not include 1,500 shares beneficially owned by Stanwich Partners, Inc.
("Stanwich Partners"). Mr. Bradley and Mr. Poole are directors and officers
of Stanwich Partners and beneficially own 44.7% and 31.4%, respectively, of
the common stock of Stanwich Partners.
(c) In addition to the shares of Common Stock beneficially owned by Mr. Poole,
43,500 shares are owned by Mr. Poole's children and are maintained in
custodian accounts pursuant to the Uniform Gift to Minors Act. Mr. Poole
disclaims beneficial ownership of such shares.
3
<PAGE> 7
The following is a brief summary of the business experience of each of the
nominees:
CHARLES E. BRADLEY was named Chairman of the Board of the Company in
December 1989. Mr. Bradley was a co-founder of the Company in 1986 and has
served as a Director since that time. Mr. Bradley served as the Vice President
and Treasurer of the Company from 1986 through December 1989. Mr. Bradley was a
co-founder of Stanwich Partners in 1982 and has served as its President since
that time. Mr. Bradley served as Director and Vice President of DeVlieg, Inc.,
from 1987 to December 1989. Mr. Bradley is a Director of Consumer Portfolio
Services, Inc., General Housewares Corporation, Reunion Resources Company, The
Triangle Corporation, Texon Energy Corporation and several private companies.
Mr. Bradley is currently the Chairman of the Board of Chatwins Group, Inc. and
Consumer Portfolio Services, Inc., and is a Director, President and acting Chief
Financial Officer of Sanitas, Inc. He is a certified public accountant and
received his M.B.A. from New York University School of Business and his B.S.
from Yale University. See "Certain Legal Proceedings" and "Certain Relationships
and Related Transactions."
WILLIAM O. THOMAS has been a Director of the Company since 1986 and served
as its Chairman from 1986 to December 1989 and served as its Vice Chairman from
December 1989 until March 2, 1992. Effective March 2, 1992, Mr. Thomas was
elected President and Chief Executive Officer of the Company. Mr. Thomas served
as a Director and Vice President of DeVlieg, Inc., from 1987 to December 1989.
Mr. Thomas is a Director of Sanitas, Inc. Prior thereto, Mr. Thomas held several
management positions over a period of 16 years in the Plastic Group of General
Electric Company and was general manager of the Plastics Products Division of
Uniroyal. He received his B.S. from Purdue University. See "Certain Legal
Proceedings."
BURTON C. BORGELT was elected a Director of the Company in December 1989.
Mr. Borgelt has served as Chief Executive Officer of Dentsply International,
Inc., a dental supply company, from 1982 until 1993, and he resumed such
position in 1995. He has served as Chairman of the Board of Dentsply
International, Inc., since March 1989. Mr. Borgelt is a Director of Mellon Bank
Corporation, Mellon Bank, N.A. and The Quill Corporation. He serves as President
of the National Foundation of Dentistry for the Handicapped. Mr. Borgelt
attended the University of Toledo where he majored in marketing and finance.
THOMAS L. CASSIDY was elected a Director of the Company in February 1990.
Mr. Cassidy has been a Managing Director of Trust Company of the West since
1984. He is also a Senior Partner of TCW Capital. He is a director of Federal
Paper Board Company, Inc., Reunion Resources Company and Spartech Corporation.
Mr. Cassidy received his M.B.A. from the Wharton School of Business and his B.A.
from Georgetown University.
GEORGE A. CHANDLER was elected a Director of the Company in February 1990.
From 1990 to 1991, Mr. Chandler served as Chairman and Chief Executive Officer
of Advanced Aluminum Products, Inc. From 1985 to 1989, Mr. Chandler was
Chairman, President and Chief Executive Officer of Aqua Chem, Inc. Mr. Chandler
is presently on the Board of Directors of Kimmins Environmental Services Corp.,
The Allen Group and Cumberland Holdings, Inc. Mr. Chandler received his M.B.A.
from the Graduate School of Business Administration at Harvard University and
his B.A. from Princeton University.
JOHN R. KENNEDY was elected a Director of the Company in February 1990. Mr.
Kennedy is the President, Chief Executive Officer and a Director of Federal
Paper Board Company, Inc. He has been employed with Federal Paper Board since
1952 holding various management positions. He is a director of First Fidelity
Bancorporation, Magma Copper Company, American Maize Products Company and Chase
Brass Industries, Inc. Mr. Kennedy received his B.S. from Georgetown University.
JOHN E. MCCONNAUGHY, JR. was elected a Director of the Company in December
1989. Mr. McConnaughy is Chairman and CEO of JEMC Corporation. From 1969 to
1986, Mr. McConnaughy served as Chairman and CEO of Peabody International Corp.
("Peabody"). From 1981 to 1992, he served as Chairman and CEO of GEO
International Corporation when it was spun off from Peabody in 1981. Mr.
McConnaughy is a Director of Mego Corporation, Transact International, Inc.,
Pantapec International, Inc., Riddell Sports, Inc., Enviropur Waste Refining and
Technologies, Inc., Oxigene, Inc. and Wave Systems, Inc. See "Certain Legal
Proceedings."
4
<PAGE> 8
JOHN G. POOLE has served as a Director of the Company since 1986 and served
as its Vice President and Secretary from 1986 to December 1989. Mr. Poole served
as a Director and Secretary of DeVlieg, Inc., from 1987 to December 1989. Mr.
Poole was a co-founder of Stanwich Partners in 1982 and has served as its Vice
President since that time. From 1978 to 1982, he was with Dean Witter Reynolds,
Inc., as a Managing Director. Mr. Poole is also a Director of Chatwins Group,
Inc. and Consumer Portfolio Services, Inc., and a Director and Vice President of
Sanitas, Inc. Mr. Poole received his M.B.A. from the Wharton School of the
University of Pennsylvania and his B.A. from Brown University. See "Certain
Legal Proceedings" and "Certain Relationships and Related Transactions."
The Board of Directors has an Audit Committee for the purpose of meeting
with the independent public accountants of the Company; reviewing the audit
plan, the annual audit and any other reports or recommendations made by the
accountants; recommending whether the auditors should be continued as auditors
for the Company and if other auditors are to be selected recommending the
auditors to be selected; meeting with the Company's internal auditors, if any,
and reviewing with them and the Company's auditors the adequacy of the Company's
internal controls; and performing such other duties as shall be delegated by the
Board of Directors. Messrs. Borgelt, Chandler, Kennedy and McConnaughy comprise
the Audit Committee, which met once during the fiscal year ended July 31, 1995.
The Board of Directors has a Compensation Committee for the purpose of
recommending policies and plans concerning salaries, bonuses and other
compensation of the senior executives of the Company including reviewing the
salaries of senior executives and recommending bonuses and other forms of
additional compensation for them; establishing and reviewing policies regarding
management perquisites; administering the Company's stock-based award plans; and
performing such other duties as shall be delegated by the Board. Messrs.
Borgelt, Cassidy and Kennedy comprise the Compensation Committee, which met
twice during the fiscal year ended July 31, 1995. See "Executive Compensation
and Other Information -- Compensation Committee Report."
During the fiscal year ended July 31, 1995, the Board of Directors held six
meetings. All directors attended more than 75% of the aggregate number of
meetings of the Board and Committees of the Board on which they serve except
Messrs. Borgelt and McConnaughy. The Board of Directors does not have a
nominating committee.
A plurality of votes cast is necessary for the election of each nominee.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR ALL NOMINEES.
CERTAIN LEGAL PROCEEDINGS
From 1987 to December 1989, Messrs. Bradley, Poole and Thomas served as
directors and/or officers of DeVlieg, Inc. ("DeVlieg"). In March 1990, the
Company acquired from DeVlieg the businesses which constitute the Company's
Services Group. On August 5, 1991, DeVlieg filed a petition under Chapter 11 of
the U.S. Bankruptcy Code.
Mr. Bradley served as Chairman of the Board of Directors of U.S.
Metalsource, Inc. ("Metalsource") until January 1993. On August 12, 1991,
Metalsource filed a petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code.
From 1981 until his retirement in 1992, Mr. McConnaughy served as Chairman
and CEO of GEO International Corporation. On October 25, 1993, GEO International
Corporation filed a petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code.
In March 1992, a purported class action suit (the "Stockholders' Suit") was
filed in the United States District Court for the District of Connecticut (the
"Court") against the Company and named Messrs. Bradley and Poole, among others,
as additional defendants. The suit alleges violations of the federal securities
laws and state and federal common law in connection with alleged
misrepresentations and omissions made by the Company in connection with its
initial public offering in March 1990 and in certain reports later issued by the
Company. To date, the Court has not certified the class of plaintiffs in the
referenced action. In September 1994, the Court granted that portion of the
defendants' motion to dismiss certain parties to the suit based on a
5
<PAGE> 9
claim that any of them were secondarily liable for having aided and abetted an
alleged securities fraud violation based on Rule 10b-5 and Section 10(b) of the
Securities Exchange Act of 1934, as amended. The Court denied the remainder of
the motion to dismiss. The Company believes the allegations are without merit
and is defending the litigation vigorously.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission ("SEC"). Officers, directors and
greater than ten percent stockholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with during the period ended July 31, 1995, except Mr.
Thomas inadvertently failed to file a Form 4 to report his purchase of 3,500
shares of the Company's Common Stock.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation earned or paid to the
Company's executive officers (the "Named Executive Officers") for fiscal years
ended July 31, 1995, 1994 and 1993, respectively.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#)(1) ($)(2)
- ------------------------------------------ ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
1995 $252,000 (3) 50,000 $ 38,284
William O. Thomas......................... 1994 240,000 $ 75,000 100,000 26,511
President and Chief Executive Officer 1993 240,000 118,800 25,000 9,772
Lawrence M. Murray........................ 1995 145,000 (3) 30,000 25,108
Vice President, Chief Financial Officer 1994 140,000 30,000 40,000 23,786
and Assistant Secretary 1993 140,000 50,400 15,000 5,983
</TABLE>
- ---------------
(1) Number of stock options granted under the 1989 Plan. Although the 1989 Plan
permits grants of restricted stock and stock appreciation rights, no grants
of those incentives have been made.
(2) Represents the dollar amount of premiums and bonuses paid by the Company for
insurance policies in the amounts of $28,362, $24,761 and $7,523 on behalf
of Mr. Thomas, and $18,145, $22,036 and $4,650 on behalf of Mr. Murray, in
fiscal 1995, 1994 and 1993, respectively. The remainder represents (i)
contributions to the Company's Savings Plan (which is qualified under
Section 401(k) of the Internal Revenue Code of 1986, as amended) in the
amounts of $2,398, $1,750 and $2,249 for the account of Mr. Thomas, and
$1,853, $1,750 and $1,333 for Mr. Murray, in fiscal 1995, 1994 and 1993,
respectively and (ii) the personal use of a Company-leased automobile by
Messrs. Thomas and Murray valued at $7,524 and $5,110, respectively, during
fiscal 1995.
(3) The Compensation Committee of the Board of Directors had not determined the
annual bonuses for Messrs. Thomas and Murray for fiscal 1995 as of the date
of this proxy statement.
6
<PAGE> 10
OPTION GRANTS IN FISCAL 1995
The following table sets forth information with respect to stock options
granted to the Named Executive Officers during the fiscal year ended July 31,
1995.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
- -------------------------------------------------------------------------------------- AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ------------------
NAME GRANTED(#)(1) FISCAL 1995 ($/SHARE) DATE 5%($) 10%($)
- ------------------------------ -------------- ------------ --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
William O. Thomas............. 50,000 28.4% $ 1.625 12/14/04 $51,098 $129,492
Lawrence M. Murray............ 30,000 17.0 1.625 12/14/04 30,659 77,695
</TABLE>
- ---------------
(1) All stock options were granted under the Company's 1989 Plan at an exercise
price equal to the fair market value at the date of grant. Options granted
in fiscal 1995 are exercisable in installments of 30% at the end of the
first and second years from the date of grant and 40% at the end of the
third year, and have a term of ten years. Although the 1989 Plan allows the
grant of stock appreciation rights, no such rights have been granted to
date.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the SEC and, therefore, are not intended to
forecast possible future appreciation, if any, of the Company's Common
Stock price.
FISCAL 1995 YEAR-END OPTION VALUES
The following table sets forth certain information regarding unexercised
stock options granted by the Company to the Named Executive Officers and held by
them at July 31, 1995. Neither of the Named Executive Officers exercised any
stock options issued by the Company during fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
JULY 31, 1995(#) JULY 31, 1995($)(1)
----------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------- ------------ -------------- ------------ -------------
<S> <C> <C> <C> <C>
William O. Thomas.............................. 100,000 175,000 $ 0 $ 3,150
Lawrence M. Murray............................. 63,000 97,000 0 1,890
</TABLE>
- ---------------
(1) Based on the last reported sale price as reported on the Nasdaq Stock
Market's National Market on July 31, 1995.
The Company has not awarded stock appreciation rights to any employee and
has no long term incentive plans, as that term is defined in regulations
promulgated by the SEC. During the fiscal year ended July 31, 1995, the Company
did not adjust or amend the exercise price of stock options awarded the Named
Executive Officers, whether through amendment, cancellation or replacement
grants, or other means. The Company presently has no defined benefit or
actuarial plans covering either of the Named Executive Officers.
DIRECTOR COMPENSATION
The Company's directors receive an annual retainer of $12,000 and a fee of
$1,000 for each Board of Directors meeting attended, $1,000 for each committee
meeting attended on a day on which there is no regularly scheduled Board of
Directors meeting and are reimbursed for travel expenses associated with serving
as a director. Directors who are officers or employees of the Company or
officers of Stanwich Partners and directors who serve as consultants to the
Company receive no compensation for serving as members of the Board of
Directors. The aggregate amount of fees paid to the non-employee directors for
the 1995 fiscal year was $90,500.
Each director other than directors who have served as an employee of or
consultant to the Company or Stanwich Partners or its affiliates participate in
the Company's 1991 Stock Option Plan for Outside Directors
7
<PAGE> 11
(the "Outside Directors Plan"). A total of 50,000 shares of Common Stock are
reserved for issuance under the Outside Directors Plan. In 1991, each Outside
Director was granted an option to purchase 5,000 shares of Common Stock (an
aggregate of 25,000 shares) at $2.50 per share, the then fair market value of
the shares. Upon his initial election to the Board, each Outside Director will
be granted an option to purchase 5,000 shares at a price equal to the fair
market value as of the date of grant. Options granted under the Outside
Directors Plan vest one year after grant. The term of the options granted under
the Outside Directors Plan is ten years, unless the optionee ceases to be a
director, in which case the option expires three years following retirement or
disability, one year in the event of death and 90 days in the event the optionee
ceases to be a director for any other reason. There have been no exercises to
date of options granted under the Outside Directors Plan.
The Board of Directors may in the future adjust the compensation of
directors as it deems advisable and consistent with the best interests of the
Company's stockholders and the financial abilities of the Company.
CHANGE IN CONTROL PROVISIONS UNDER THE COMPANY'S STOCK OPTION PLANS
Under the Company's 1989 Plan and Outside Directors Plan, upon a Change in
Control (as defined in the 1989 Plan) any stock options which are not then
exercisable, will become fully exercisable and the value of all stock options
may, unless otherwise determined by the Committee, be cashed out on the basis of
the Change in Control Price (as defined in the 1989 Plan).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1995, the Board's Compensation Committee (the
"Committee") was composed of Messrs. Borgelt, Cassidy and Kennedy. None of these
persons has at any time been an officer or employee of the Company or any of its
subsidiaries. In addition, there are no relationships among the Company's
executive officers, members of the Committee or entities whose executives serve
on the Board or the Committee that require disclosure under applicable
regulations promulgated by the SEC.
COMPENSATION COMMITTEE REPORT
The Company's executive compensation program is administered by the
Committee, a committee of the Board of Directors composed of non-employee
directors of the Company. The Committee approves compensation actions involving
the senior management of the Company, including the Named Executive Officers.
The Committee approves long-term incentive awards for the Named Executive
Officers and other key employees of the Company, and reviews and administers the
incentive compensation, stock option and other compensation plans of the
Company. The members of the Committee met twice during fiscal year 1995.
Under the supervision of the Committee, the Company has developed and
implemented compensation policies, plans and programs which are intended to
enhance the profitability of the Company by aligning closely the financial
interests of the Company's senior management with those of its stockholders. In
establishing levels of annual salary, incentive bonus and equity incentives, the
Committee generally considers the following factors (i) the compensation
policies and practices of competitive businesses, (ii) the Company's
performance, growth and achievements, (iii) the level and degree of
responsibility of each officer, (iv) the individual and collective performance
and achievements of the Company's senior management, and (v) the level of
compensation and equity incentives which would be required to attract and retain
qualified and experienced senior management. In establishing levels of annual
salary, incentive bonuses and equity incentives for fiscal 1995, the Committee
utilized the services of Sibson & Company, a nationally recognized management
consulting firm. The Committee requested Sibson & Company to prepare a specific
analysis of compensation information of publicly held companies competing in a
range of industries with revenues similar to those of the Company. This analysis
was used by the Committee to obtain an overall perspective on compensation of
its senior management and to assist the Committee in structuring its
compensation policies to more closely align the interests of its senior
management with those of its stockholders and to provide appropriate incentives
for senior management to work towards the achievement of the Company's annual
performance targets.
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<PAGE> 12
Following is a discussion of each of the elements of the executive
compensation program along with a description of the decisions and actions taken
by the Committee with regard to fiscal 1995 compensation.
ANNUAL COMPENSATION
Annual total cash compensation for senior management consists of base
salary and an annual cash bonus. Setting of the annual salary in fiscal 1995 for
members of senior management was based on the recommendations of the Chief
Executive Officer and the Committee's review of the individual officer's
responsibilities and compensation in comparison to similarly sized companies.
Members of senior management, including the Named Executive Officers, are
eligible to receive annual cash bonuses pursuant to the Company's bonus plan,
the purpose of which is to motivate members of senior management to use their
best efforts to enhance stockholder value through growth of the Company's
earnings. The Committee uses a formula in order to determine annual cash bonuses
which is established at the beginning of the fiscal year. The formula places
substantial emphasis on the Company meeting various targeted levels of earnings,
with a lesser emphasis on individually tailored objectives that are
strategically or operationally important to the Company's business.
The base annual salary and annual cash bonus for William O. Thomas, the
Company's President and Chief Executive Officer, were determined utilizing the
methods and factors discussed above. Mr. Thomas' base annual salary of $252,000,
was based on the Committee's estimate of the current market rates for the
position and the Committee's appraisal of the programs instituted by Mr. Thomas
during his tenure. Mr. Thomas' cash bonus for fiscal 1995 had not been
determined by the Committee as of the date of this proxy statement but will be
based on the application of the bonus formula adopted by the Committee at the
beginning of fiscal 1995 and the Committee's subjective appraisal of initiatives
implemented by the Company during fiscal 1995 that may not have been reflected
in the application of the bonus formula.
LONG-TERM INCENTIVE PROGRAM
The long-term incentive program for senior management consists of stock
option awards granted pursuant to the 1989 Plan. The purpose of awarding equity
incentives under the 1989 Plan is to enable the Company to attract, retain and
motivate its employees by giving them the ability to participate in the
long-term growth of the Company. Stock option grants provide the right to
purchase shares of the Company's Common Stock at the fair market value on the
date of grant and have a ten-year term. Historically, options became exercisable
in five equal annual installments following the date of grant. Stock options
granted to senior management during fiscal 1994 and 1995 vest 30% at the end of
each of the first two years following grant and 40% at the end of the third
year.
The Committee has typically granted stock options to members of senior
management, including the Named Executive Officers, and other key employees
following a review of the Company's operating results for the prior fiscal year.
On December 14, 1994, the Committee granted to each of Messrs. Thomas and Murray
an option to purchase 50,000 and 30,000 shares of the Company's Common Stock,
respectively, at an exercise price equal to the closing price of the Company's
Common Stock on the Nasdaq Stock Market's National Market on the date of grant.
The options vest 30% at the end of each of the first two years following grant
and 40% at the end of the third year. In determining the number of shares
covered by each grant, the Committee considered competitive industry practices
and the likely effect on stockholder value of the programs implemented and
embarked upon by Mr. Thomas and his management team.
The tables set forth under "Executive Compensation and Other Information,"
and accompanying narrative and footnotes, reflect the decisions covered by the
above discussion.
FEDERAL INCOME TAX DEDUCTIBILITY LIMITATIONS
The Omnibus Budget Reconciliation Act ("OBRA") passed by Congress in 1993
imposes a $1,000,000 limit on the deductibility of certain compensation paid to
the Chief Executive Officer and other Named Executive Officers. Compensation
paid to these officers in excess of $1,000,000, that is not performance-based,
cannot be claimed by the Company as a tax deduction.
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<PAGE> 13
The Committee believes it is appropriate to take into account the
$1,000,000 limit on the deductibility of executive compensation and to seek, to
the greatest extent possible, to qualify executive compensation awards as
performance-based compensation excluded from the $1,000,000 OBRA limitation.
Stock options and SARs awarded under the 1989 Plan through the present date will
qualify as performance-based compensation under OBRA and future awards of stock
options and SARs under the Stock Incentive Plan will qualify as
performance-based compensation if stockholders approve the proposed amendments
to the 1989 Plan.
None of the Named Executive Officers received compensation in fiscal 1995
that would exceed the $1,000,000 OBRA limitation.
It is the Committee's intention to continue to utilize to the greatest
extent possible performance-based compensation, which should minimize the effect
of OBRA on the Company. However, the Committee believes that its primary
responsibility is to provide a compensation program that will attract, retain
and reward the executive talent necessary to maximize the return to
stockholders.
Burton C. Borgelt Thomas L. Cassidy John R. Kennedy
10
<PAGE> 14
STOCKHOLDER RETURN PERFORMANCE GRAPH
(GRAPH)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DEVLIEG- PEER GROUP NASDAQ MARKET
(FISCAL YEAR COVERED) BULLARD, INC. INDEX INDEX
<S> <C> <C> <C>
JULY 1990 100 100 100
JULY 1991 64 91 100
JULY 1992 30 98 103
JULY 1993 32 105 128
JULY 1994 28 107 139
JULY 1995 29 136 171
</TABLE>
The above graph compares the total return on investment (change in year-end
stock price plus reinvested dividends) of the Common Stock of the Company with
that of the Nasdaq Market Index and Media General Financial Services Industry
Group (Machinery -- Light Equipment) (the "Peer Group Index"). The cumulative
performance assumes that $100 was invested on August 1, 1990 in each of the
Company's Common Stock, the Nasdaq Market Index and the Peer Group Index and the
reinvestment of dividends.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH STANWICH PARTNERS
Effective July 1, 1995, the Company amended a consulting agreement with
Stanwich Partners dated April 3, 1986, as amended, pursuant to which Stanwich
Partners renders executive consulting services, consisting of general
management, finance and business investment services, as requested by the
President of the Company, up to a maximum of 20 hours per week. The term of the
amended consulting agreement expires in July 1998. The consulting agreement
provides for an annual fee, payable monthly, of $261,000 for each of the fiscal
years ending July 31, 1996, 1997 and 1998. Aggregate consulting fees paid to
Stanwich Partners were $261,000 in each of fiscal years 1995, 1994 and 1993. At
July 31, 1995, the Company had prepaid consulting fees to Stanwich Partners of
$109,000. In fiscal 1995, the Company paid to Stanwich Partners an aggregate of
$180,000 for additional services in connection with the Company's acquisition of
(i) certain assets of Cushman Industries, Inc., in September 1994, (ii) certain
assets of Mideastern, Inc., in November 1994 and (iii) all of the outstanding
capital stock of H.B. Industries, Inc., in January 1995. In fiscal 1993, the
Company paid to Stanwich Partners an aggregate of $164,000 for additional
services in connection with the sale of the Company's Penberthy subsidiary in
November 1992 and the acquisition of certain assets of Brown & Sharpe
Manufacturing Company in March 1993. In fiscal 1995, 1994 and 1993, the Company
reimbursed Stanwich Partners for an additional $7,000, $7,000 and $15,000,
respectively, for travel expenses incurred by Stanwich Partners on behalf of the
Company.
11
<PAGE> 15
TRANSACTIONS WITH D.V. ASSOCIATES, L.P.
Pursuant to a license agreement (the "License Agreement") dated March 22,
1990 between the Company and D.V. Associates, L.P., a Delaware limited
partnership, the Company licenses certain trade names, trademarks and trademark
registrations (the "Trademarks"). The License Agreement requires annual payments
of $300,000 payable monthly. The Company has the option to purchase the
Trademarks for $3,000,000. Mr. Bradley and Mr. Poole have a 15.5% and 4.5%
limited partnership interest in D.V. Associates, L.P., respectively.
TRANSACTIONS WITH HOLDERS OF SUBORDINATED DEBENTURES AND JUNIOR SUBORDINATED
DEBENTURES
In October 1995, the Company acquired all of the outstanding stock of The
National Acme Company (the "Acquisition"). In connection with the Acquisition,
the Company refinanced its senior credit facility and entered into a new senior
credit facility consisting of a $25 million revolving credit facility and a $5
million term loan (the "Refinancing"). As part of the Refinancing, the holders
of the Company's $12 million principal amount of subordinated debentures (the
"Subordinated Debentures"), issued pursuant to the terms of an Investment
Agreement dated May 25, 1994 (the "Investment Agreement"), among the Company,
Allied Investment Corporation, Allied Investment Corporation II, Allied Capital
Corporation II (collectively "Allied") and certain other persons, agreed to
release their security interest in the Company's assets. CPS Holdings, Inc.
("Holdings") pledged 600,000 shares of the common stock of Consumer Portfolio
Services, Inc. ("CPSI") to secure the Subordinated Debentures (the "Pledge")
pursuant to the terms and conditions of a Credit Support Agreement dated October
23, 1995, between the Company and Holdings. Pursuant to the Credit Support
Agreement, the Company is obligated to pay Holdings $90,000 annually for so long
as the Pledge is in effect, payable in equal monthly installments of $7,500. Mr.
Bradley is the President and a director of Holdings and beneficially owns
approximately 34% of the outstanding common stock of Holdings, and he is the
Chairman of the Board of CPSI and beneficially owns approximately 5% of the
outstanding common stock of CPSI. Mr. Poole is a Vice President, Secretary and
director of Holdings and is a director of CPSI.
The consummation of the Acquisition and the Refinancing required the
consent of the holders of the Subordinated Debentures. Due to the inability of
the Company to obtain the consent of Allied to the Acquisition and the
Refinancing on mutually agreeable terms, Messrs. Bradley and Poole loaned the
Company $2.5 million and $1.5 million, respectively, in exchange for certain
junior subordinated debentures (the "Junior Subordinated Debentures") to repay
the principal amount of the Subordinated Debentures owed Allied. Interest on the
Junior Subordinated Debentures accrues at a rate of 14.5% per annum, with
interest payable at 11.0% per annum on a quarterly basis. The Junior
Subordinated Debentures mature upon the earlier of June 30, 2001, or 30 days
after the Subordinated Debentures are repaid in full.
In connection with the repayment of Allied and the issuance of the Junior
Subordinated Debentures, Allied surrendered to the Company certain Class A Stock
Purchase Warrants representing the right to acquire 83,333 shares of the
Company's Common Stock, and the Company issued new Class A Stock Purchase
Warrants (the "Substitution Warrants") to Messrs. Bradley and Poole representing
the right to acquire 52,083 and 31,250 shares of the Company's Common Stock,
respectively, on the same terms and conditions as the warrants surrendered by
Allied. The Substitution Warrants may be exercised at any time in whole or in
part from and after May 25, 1996, and shall expire the later of three years from
the date of final payment of the Subordinated Debentures or May 25, 2004.
In addition, the Company issued Class A Stock Purchase Warrants to acquire
500,000 shares of the Company's Common Stock ("Class A Warrants") and Class C
Stock Purchase Warrants to acquire 750,000 shares of the Company's Common Stock,
subject to reduction in certain circumstances ("Class C Warrants") to the
holders of the Subordinated Debentures and Messrs. Bradley and Poole pro rata
based on the principal amount of the Subordinated Debentures and Junior
Subordinated Debentures held by such persons. Based on such allocation, Messrs.
Bradley and Poole received 104,166 and 62,500 of such Class A Warrants,
respectively, and 156,250 and 93,750 of such Class C Warrants, respectively. The
Class A Warrants and Class C Warrants have an exercise price of $0.01 per share
and are subject to certain anti-dilution protection, and the holders thereof are
entitled to certain registration rights with respect to the Company's Common
12
<PAGE> 16
Stock. The Class A Warrants may be exercised at any time in whole or in part
from and after October 23, 1997, and shall expire the later of three years from
the date of final payment of the Subordinated Debentures or May 25, 2004. The
Class C Warrants may be exercised at any time after October 31, 1998, subject to
earlier exercise upon a sale of the Company, and expire on the later of three
years after the payment of the Subordinated Debentures or May 25, 2004. The
number of shares of the Company's Common Stock which the holders of the Class C
Warrants have the right to acquire may be reduced based on the Company attaining
earnings levels, as defined in the First Amendment to Investment Agreement dated
October 23, 1995.
POLICY OF THE COMPANY
The Board of Directors adopted a policy which provides that any transaction
between the Company and any of its officers, directors or five percent
stockholders, or affiliates thereof, must be on terms no less favorable than
those which would be obtained from unaffiliated parties and must be approved by
a majority of the disinterested members of the Company's Board of Directors.
Transactions in the ordinary course of business, consistent with past practices
and which do not exceed $100,000, are permitted without prior approval and are
reported to the Board of Directors quarterly.
PROPOSAL 2: SECOND AMENDMENT OF 1989 EMPLOYEE STOCK PLAN
The Company's 1989 Plan was originally adopted by the Company's
stockholders in December 1989 and was first amended in December 1993 to increase
the number of authorized shares of Common Stock reserved for issuance thereunder
from 575,000 to 1,000,000. At November 1, 1995 there were approximately 86,000
shares of Common Stock available for issuance under the 1989 Plan.
The Committee reviewed the Company's stock-based incentive compensation
plans and concluded that the number of shares available under the 1989 Plan did
not authorize a sufficient number of shares to provide flexibility with respect
to stock-based compensation or to establish appropriate long-term incentives to
achieve Company objectives. The Committee and the Board of Directors believe
that a key element of officer and key employee compensation is stock-based
incentive compensation particularly through the award of stock options.
Stock-based compensation advances the interests of the Company by encouraging,
and providing for, the acquisition of equity interests in the Company by
officers and key employees, thereby providing substantial motivation for
superior performance and aligning their interests with those of the Company's
stockholders. In order to provide the Company with greater flexibility to adapt
to changing economic and competitive conditions, and to implement long range
goals and expansion plans through stock-based compensation strategies which will
attract and retain those employees who are important to the long-term success of
the Company, the Board of Directors proposed the adoption, subject to
stockholder approval, of a second amendment to the 1989 Plan to (i) increase the
number of shares of Common Stock authorized for issuance under the plan by
300,000 and (ii) impose a limit on the number of shares under stock-based awards
that may be issued to any individual under the plan to 100,000 per year (the
"Amendments"). The Board of Directors believes that approval of the Amendments
is essential to further the long-term stability and financial success of the
Company by attracting, motivating and retaining qualified employees through the
use of stock incentives.
Under OBRA, compensation expense with respect to stock options, SARs and
other stock-based awards having an exercise price that is greater than or equal
to the fair market value of the underlying stock at the time of grant are exempt
from the $1,000,000 limitation on deductibility if, among other things, the
options or SARs are granted pursuant to a plan approved by stockholders which
contains a per person limit on the number of shares underlying stock-based
awards which may be granted during a specific period to a particular executive.
If the Amendments are approved by stockholders, it is anticipated that awards of
such stock-based compensation to Named Officers will not be subject to the
limitations of OBRA.
SUMMARY OF THE AMENDMENTS
The Board of Directors has approved and recommends that the stockholders
approve the Amendments. The Amendments increase the number of shares of Common
Stock which may be issued upon the exercise of
13
<PAGE> 17
options or for issuance of SARs, restricted stock awards, or other stock-based
awards by 300,000 shares. As amended, the 1989 Plan will continue to provide for
appropriate adjustment in the number of shares in the event of a stock dividend,
recapitalization, merger or the like.
In order to exclude the value of stock options and SARs from the
limitations on the federal tax deductibility of compensation paid to certain
executive officers, OBRA and applicable temporary regulations thereunder require
that the plan under which such stock awards are granted must be approved by
stockholders and contain a per person limitation on the number of options or
SARs which may be granted during a specific period to any particular executive.
Accordingly, if the stockholders approve the Amendments, the number of options
and SARs that could be granted to any individual under the 1989 Plan, would not
exceed 100,000 shares during any fiscal year.
SUMMARY OF MATERIAL PROVISIONS OF THE PLAN
The major features of the 1989 Plan, as proposed to be amended, are
summarized below, but this is only a summary and is qualified in its entirety by
reference to the actual text. Capitalized terms not otherwise defined herein
have the meanings given them in the 1989 Plan.
Stock Subject to the Plan. The Company has reserved 1,300,000 shares for
issuance under the 1989 Plan. If shares subject to an option under the 1989 Plan
cease to be subject to such option, or if shares awarded under the 1989 Plan are
forfeited, or if an award under the 1989 Plan shall terminate without a payment
being made to the participant in the form of Common Stock, such shares will
again be available for future distribution under the 1989 Plan. The exercise
price for incentive stock options must be not less than 100% of fair market
value on the date of grant (110% if granted to persons owning more than 10% of
the outstanding voting stock) and the exercise price for non-qualified stock
options must be not less than 85% of fair market value on the date of grant.
Awards under the Plan. Awards under the 1989 Plan may be made to key
employees, including the Named Executive Officers, of the Company, but may not
be granted to any director who is a member of the Committee (as defined in the
1989 Plan) or to any other director unless the director is also a regular
employee of the Company. The 1989 Plan imposes no limit on the number of
officers and other key employees to whom awards may be made. The purpose of the
1989 Plan is to provide flexibility in the award of stock-based incentive
compensation. Awards to any individual may not exceed 100,000 shares during a
fiscal year.
Administration. The 1989 Plan is administered by the Committee, which
currently consists of Messrs. Borgelt, Cassidy and Kennedy. The Committee has
the authority to grant any or all of the following type of awards under the 1989
Plan, (i) stock options, (ii) SARs, (iii) restricted stock, (iv) deferred stock,
(v) stock purchase rights, or (vi) other stock-based awards. Incentive stock
options and non-qualified stock options may be granted for such number of shares
as the Committee will determine and may be granted alone, in conjunction with,
or in tandem with, either other awards under the 1989 Plan or cash awards
outside the 1989 Plan, or both. Stock options are exercisable at such times and
subject to such terms and conditions as the Committee may determine and over a
term determined by the Committee, which term will be no more than ten years
after the date of grant (five years in the case of incentive stock options for
certain 10% stockholders).
Change in Control Provisions. If there is a change in control or a
potential change in control (as defined in the 1989 Plan), SARs and limited SARs
outstanding for at least six months, and any stock options which are not then
exercisable will become fully exercisable and vested. Stock options, SARs,
limited SARs and other stock-based awards, will, unless otherwise determined by
the Committee in its sole discretion, be cashed out on the basis of the change
in control price, as defined in the 1989 Plan.
If approved by the Company's stockholders, the Amendments will be effective
as of the date of such adoption and approval. The 1989 Plan may be amended by
the Board of Directors, except that the Board may not, without the approval of
the Company's stockholders, increase the number of shares available for
distribution, change the pricing rule applicable for stock options or stock
purchase rights, change the class of employees eligible to receive awards under
the 1989 Plan or extend the term of any option award.
A complete copy of the Amendments is attached as Exhibit A to this Proxy
Statement.
14
<PAGE> 18
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENTS.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Price Waterhouse to
serve as independent accountants for the current fiscal year. Such firm has
served as the Company's independent accountants since 1986. Representatives of
Price Waterhouse are expected to be present at the Annual Meeting and will be
given the opportunity to make a statement if they desire to do so and to respond
to appropriate questions.
STOCKHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING OF STOCKHOLDERS
Stockholders intending to submit proposals for presentation at the next
Annual Meeting of Stockholders of the Company and inclusion in the proxy
statement and form of proxy for such meeting should forward such proposals to
Sharon E. Huguet, Secretary, DeVlieg-Bullard, Inc., One Gorham Island, Westport,
Connecticut 06880. Proposals must be in writing and must be received by the
Company prior to August 20, 1995. Proposals should be sent to the Company by
certified mail, return receipt requested.
ADDITIONAL INFORMATION
THE ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED JULY 31, 1995, IS
BEING MAILED TO ALL STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING.
ADDITIONAL INFORMATION IS CONTAINED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K
WHICH WAS FILED WITH THE SEC ON SEPTEMBER 21, 1995. THE COMPANY WILL FURNISH
WITHOUT CHARGE TO ANY STOCKHOLDER A COPY OF ITS ANNUAL REPORT ON FORM 10-K, UPON
WRITTEN REQUEST TO SHARON E. HUGUET, SECRETARY, DEVLIEG-BULLARD, INC., ONE
GORHAM ISLAND, WESTPORT, CONNECTICUT 06880.
15
<PAGE> 19
EXHIBIT A
SECOND AMENDMENT TO THE DEVLIEG-BULLARD, INC.
1989 EMPLOYEE STOCK PLAN
WHEREAS, the stockholders of DeVlieg-Bullard, Inc. (the "Company") adopted
the 1989 Employee Stock Plan (the "1989 Plan") in December 1989;
WHEREAS, pursuant to Section 12 of the 1989 Plan, the Company's Board of
Directors and stockholders have retained the right to amend the 1989 Plan;
WHEREAS, the stockholders of the Company approved a first amendment to the
1989 Plan in December 1993; and
WHEREAS, the Company's Board of Directors now proposes to the stockholders
a second amendment to the 1989 Plan.
NOW, THEREFORE, IN CONSIDERATION of the premises and by resolution of the
Company's Board of Directors, the 1989 Plan is hereby amended as follows,
subject to approval by the stockholders of the Company:
1. The first sentence of the first paragraph of Section 3 is amended to
read as follows:
"The total number of shares of Stock reserved and available for
distribution under the Plan shall be 1,300,000 shares."
2. The third paragraph of Section 3 of the Plan is hereby amended by adding
the following sentence at the end of such paragraph:
"The maximum number of shares that may be awarded to any participant
under Section 4 of this Plan will be adjusted in the same manner as the
number of shares subject to outstanding Options."
3. Section 4 of the Plan is hereby amended by adding the following sentence
at the end of such Section 4:
"No officer or key employee shall be eligible to receive awards relative
to shares of Stock which exceed 100,000 shares in any fiscal year."
4. This Amendment shall be effective upon its approval by the Company's
stockholders.
A-1
<PAGE> 20
EXHIBIT B
PROXY
DeVlieg-Bullard, Inc.
This Proxy is solicited on behalf of the Board of Directors for the
Annual Meeting of Stockholders to be held on December 13, 1995
The undersigned hereby appoints William O. Thomas, Lawrence M. Murray, and
each of them, attorneys and proxies with full power of substitution to vote in
the name of and as proxy for the undersigned all the shares of common stock of
DeVlieg-Bullard, Inc. (the "Company") held of record by the undersigned on
November 1, 1995, at the Annual Meeting of Stockholders of the Company to be
held at 10:00 a.m., local time, on Wednesday, December 13, 1995, at the
Sheraton Stamford Hotel, One First Stamford Place, Stamford, Connecticut, and
at any adjournment thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/X/ Please mark votes as in this example.
PROPERLY EXECUTED PROXIES WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED. IF NO SUCH DIRECTIONS ARE GIVEN, SUCH PROXIES WILL BE VOTED FOR
THE ELECTION AS DIRECTORS OF THE NOMINEES REFERRED TO IN PROPOSAL 1 AND FOR
PROPOSAL 2.
1. To elect the following nominees as directors to serve until the next Annual
Meeting of Stockholders and until their successors are elected and qualified:
Nominees: Burton C. Borgelt; Charles E. Bradley; Thomas L. Cassidy; George
A. Chandler; John R. Kennedy; John E. McConnaughy, Jr.; John G. Poole; and
William O. Thomas:
/ / FOR ALL NOMINEES / / WITHHOLD AUTHORITY FROM ALL NOMINEES
- -------------------------------------------------------------------------------
To withhold authority to vote for any individual nominee, write that nominee's
name in the space provided above.
2. Proposal to amend the DeVlieg-Bullard 1989 Employee Stock Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to consider and take action
upon such other matters as may properly come before the meeting or any
adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
(When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If stockholder is a corporation, corporate name
should be signed by an authorized officer and the
corporate seal affixed. If stockholder is a
partnership, please sign in partnership name by
authorized persons. For joint accounts, each
joint owner should sign.)
The undersigned revokes any prior proxies to vote
the shares covered by this proxy.
Signature: Date
-------------------- ------------
Signature: Date
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PLEASE SIGN, DATE, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED REPLY ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
