<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
AUTOCAM CORPORATION
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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 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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
AUTOCAM LOGO
AUTOCAM CORPORATION
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 21, 1997
The Annual Meeting of the Shareholders of Autocam Corporation, a Michigan
corporation, will be held on Tuesday, October 21, 1997 at 4:00 p.m. at
Rembrandt's At Bridgewater, 333 Bridge Street, N.W., Grand Rapids, Michigan
49504 for the following purposes:
1. To elect two members of the Board of Directors whose terms expire at the
Annual Meeting and one member whose position has been created to
commence at the Annual Meeting.
2. To consider and act upon the ratification of the selection of Deloitte &
Touche LLP as independent auditors for the Company for the fiscal year
ending June 30, 1998.
3. To approve the Amended Autocam Corporation 1991 Incentive Stock Option
Plan increasing the shares reserved thereunder to 750,000 shares and
making all employees eligible for awards under the Plan.
4. 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 September 1, 1997, are
entitled to notice of and to vote at the meeting or any adjournment or
adjournments thereof.
By Order of the Board of Directors
WARREN A. VELTMAN, Secretary
Grand Rapids, Michigan
September 18, 1997
EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE
EXECUTE THE ENCLOSED PROXY AND MAIL IT PROMPTLY. SHOULD YOU ATTEND THE
MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS
ENCLOSED FOR YOUR CONVENIENCE.
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<PAGE> 3
AUTOCAM CORPORATION
- --------------------------------------------------------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 21, 1997
This Proxy Statement is being furnished to you by the Board of Directors of
Autocam Corporation, a Michigan corporation (the "Company"), of 4070 East Paris
Avenue, Kentwood, Michigan 49512 (Tel. No. 616-698-0707), in connection with the
Annual Meeting of Shareholders of the Company to be held on Tuesday, October 21,
1997, at 4:00 p.m. at Rembrandt's At Bridgewater, 333 Bridge Street, N.W., Grand
Rapids, Michigan 49504.
The solicitation of proxies is made primarily by this statement which is
first being mailed to shareholders on approximately September 18, 1997. If it is
necessary to assure adequate representation at the meeting, the Board of
Directors shall, if it deems it advisable, make a further solicitation by mail,
telephone, telegraph and/or personal interview. Any such solicitation will be
made by the officers or regular employees of the Company and its subsidiaries
and will be limited in extent. The total expense of soliciting proxies will be
borne by the Company. The Company may also reimburse brokers, dealers, banks,
voting trustees or other record holders for postage and other reasonable
expenses of forwarding proxy material to their principals who beneficially own
shares of the Company's stock.
The shares represented by your proxy will be voted if the proxy is duly
signed and returned prior to the meeting. You may revoke your proxy at any time
before it is exercised, provided that prior to exercise of the proxy, the
Secretary of the Company receives written notice of such revocation or such
revocation is made in open meeting.
The Board of Directors has fixed the close of business on September 1,
1997, as the record date for the determination of shareholders entitled to
notice of and to vote at said meeting. As of September 1, 1997, the Company's
outstanding voting securities consisted of 5,726,762 shares of common stock,
without par value. The common stock is entitled to one vote for each share on
each proposal and each director and there are no cumulative voting rights for
the election of directors. A majority of shares must be present in person or by
proxy in order to have a quorum and to conduct business at the meeting. The only
persons known by the Company to own five percent (5%) or more of the Company's
outstanding common stock are described in the section on "Principal
Shareholders" below. John C. Kennedy, beneficial owner of 59.3% of the Company's
outstanding common stock, intends to vote in favor of all directors and all
proposals identified in this Proxy Statement and, thus, election of all
directors and passage of all proposals is assured.
ELECTION OF DIRECTORS
The Board of Directors presently consists of six members. The terms of the
two existing directors in Class III, John C. Kennedy and Kenneth K. Rieth,
expire at this Annual Meeting. They have agreed to stand for reelection and
serve if elected. The Board of Directors has expanded the size of the Board by
adding one member to Class III. Mark J. Bissell has been nominated to fill this
newly created position and has agreed to stand for election at the meeting and
to serve if elected. In the event any nominee withdraws his name, which is not
now anticipated, the persons named as proxies reserve full discretion to vote
for such other person or
1
<PAGE> 4
persons as may be nominated. However, if a nominee is substituted by management,
the proxies intend to vote for such nominee.
Although it has no present plans to do so, the bylaws of the Company permit
the Board of Directors to further increase its number and to fill the vacancies
thus created. However, the persons named in the enclosed proxy cannot vote the
proxy for more than three members of the Board.
The Articles of Incorporation of the Company provide that the Directors are
elected by classes, indicated by the table below, with terms expiring upon
election of their successors at the Annual Meeting of Shareholders following the
close of the Company's fiscal years 1997, 1998 and 1999, respectively. Thus, one
class of directors, consisting of two or three members, as the case may be, are
elected each year to serve for a three-year term.
The table below identifies and provides certain information regarding each
of the existing directors and nominees and the class to which each Director is
now elected or is proposed to be elected at this meeting. The table below also
identifies and provides certain information regarding the executive officers and
certain key employees of the Company. The Company pays each director who is not
an employee a fee of $10,000 per year.
NOMINEES AS DIRECTORS
Class III -- Nominated for election at the meeting to serve until the
Annual Meeting of Shareholders in 2000 and until their successors are elected:
<TABLE>
<CAPTION>
PRINCIPAL HAS SERVED AS
NAME OCCUPATION AGE DIRECTOR SINCE
---- ---------- --- --------------
<S> <C> <C> <C>
John C. Kennedy................... President, Chief Executive Officer of 39 April 1988
Company
Kenneth K. Rieth(2)............... President, Chief Executive Officer of 38 October 1991
Riviera Tool Company
Mark J. Bissell................... President, Chief Executive Officer of 40 Nominee
BISSELL Inc.
</TABLE>
John C. Kennedy has been a Director and President of the Company since its
inception in April 1988. Mr. Kennedy graduated with a Bachelor of Science degree
in Accounting and Finance from the University of Detroit in 1979.
Kenneth K. Rieth is a principal owner and for the past five years has been
a director and the President and Chief Executive Officer of Riviera Tool Company
(f/k/a Riviera Die & Tool, Inc.), a Michigan corporation engaged in the
manufacture of sheet metal stamping dies for the automotive industry.
Mark J. Bissell has been President and Chief Executive Officer since April
1996, and President and Chief Operating Officer from January 1994 to March 1996
of BISSELL Inc., a manufacturer of floor care cleaning products including carpet
vacuums, cleaners and sweepers. For more than two years prior to that, he served
as a Senior Vice President of BISSELL Inc., and as the General Manager of the
BISSELL Homecare Division.
2
<PAGE> 5
DIRECTORS WHOSE TERMS CONTINUE BEYOND THE ANNUAL MEETING
Class I -- To serve until the Annual Meeting of Shareholders in 1998 and
until their successors are elected:
<TABLE>
<CAPTION>
PRINCIPAL HAS SERVED AS
NAME OCCUPATION AGE DIRECTOR SINCE
---- ---------- --- --------------
<S> <C> <C> <C>
Warren A. Veltman................. Secretary, Treasurer, Chief Financial 36 October 1991
Officer of Company
Robert L. Hooker(1)............... President, Mazda Great Lakes 67 January 1992
</TABLE>
Warren A. Veltman has been with the Company since November 1990 as the
Chief Financial Officer and Secretary/Treasurer since August 1991. Mr. Veltman
graduated in 1983 with a Bachelor of Business Administration degree from the
University of Michigan.
Robert L. Hooker has been President of Mazda Great Lakes, a Michigan
corporation engaged in the distribution of automobiles and related products, for
more than five years. Mr. Hooker serves as a director of Old Kent Bank and Trust
Company, a Michigan state banking corporation.
Class II -- To serve until the Annual Meeting of Shareholders in 1999 and
until their successors are elected:
<TABLE>
<CAPTION>
PRINCIPAL HAS SERVED AS
NAME OCCUPATION AGE DIRECTOR SINCE
---- ---------- --- --------------
<S> <C> <C> <C>
David J. Wagner(1)(2)............. Chairman, President, Chief Executive 43 October 1991
Officer of Old Kent Financial
Corporation
Kim Korth(1)...................... President, International Resource 42 August 1997
Network, Inc.
</TABLE>
David J. Wagner has been Chairman since November 1995 and President and
Chief Executive Officer since March 1995 and was President since March, 1994 of
Old Kent Financial Corporation, a Michigan state bank holding company, and was
Chief Executive Officer of Old Kent Bank and Trust Company for more than the
preceding five years.
Kim Korth has been the owner and President of International Resource
Network, Inc. an automotive consulting and market research firm, for more than
five years.
- ---------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
KEY EMPLOYEES
<TABLE>
<CAPTION>
NAME POSITION WITH COMPANY AGE
---- --------------------- ---
<S> <C> <C>
Edward W. Hekman................................ Manager of Corporate Planning 41
Thomas K. O'Mara................................ Sales and Marketing Manager 36
</TABLE>
Edward W. Hekman has been with the Company since 1988 and has served as the
Company's Manager of Corporate Planning since March of 1997. He served as the
Company's New Process Development Manager from September 1995 to February 1997
and from June 1990 to September 1993. He also served as the Company's
Engineering Manager form September 1993 until August 1995. Mr. Hekman received a
Bachelor of Science in Mechanical Engineering from General Motors Institute in
1978 and a Master's degree in
3
<PAGE> 6
Business Administration from Harvard University in 1980 and was registered with
the State of Michigan as a Professional Engineer in 1984. Mr. Hekman is employed
by the Company pursuant to a ten year employment agreement which terminates on
August 31, 2001.
Thomas K. O'Mara has been with the Company since November 1989 as the Sales
and Marketing Manager. Mr. O'Mara graduated in 1982 with a Bachelor of Science
degree in Marketing from Central Michigan University.
BOARD MEETINGS AND COMMITTEES
The Directors had four meetings during the past fiscal year and acted by
unanimous written consent once. No director attended less than 75% of directors
meetings, including appropriate committee meetings.
The Board of Directors has an audit committee which is responsible for
approving the services performed by the Company's independent public accountants
and reviewing and evaluating the Company's accounting principles, reporting
practices and systems of internal control. The current members of the committee
are Messrs. Rieth and Wagner. The committee held two meetings during the last
fiscal year.
The Board of Directors has a compensation committee which has the
responsibility of determining executive compensation and granting options
pursuant to the Company's 1991 incentive stock option plan. This committee
consisted of Messrs. Kennedy, Wagner, Hooker and Myers during fiscal 1997 with
Mr. Kennedy having resigned prior to its last meeting. The committee met three
times during the fiscal year.
The Company has no nominating committee the functions of which are
performed by the Board of Directors.
4
<PAGE> 7
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock by the persons who beneficially own more
than 5% of its Common Stock, by each Director, Director Nominee and Executive
Officer, and by all officers and directors and director nominees of the Company
as a group, as of September 1, 1997.
<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS(1)
---------------- ------------------ ----------
<S> <C> <C>
John C. Kennedy(2)(3)............................ 3,397,835 59.3
Warren A. Veltman(2)(4).......................... 27,253 *
Robert L. Hooker(5).............................. 2,835 *
David J. Wagner.................................. 578 *
Kenneth K. Rieth................................. 1,912 *
Kim Korth........................................ 0 *
Mark J. Bissell.................................. 0 *
FMR Corporation(6)............................... 533,382 9.3
All officers and directors and nominees as a
group (7 persons)(2)(4)(5)..................... 3,430,413 59.9
</TABLE>
- ---------------
(1) An asterisk indicates beneficial ownership of less than 1% of the Class.
(2) Includes shares allocated to the individual accounts within the Company's
401(k) plan.
(3) The business address for Mr. Kennedy is 4070 East Paris Avenue, Kentwood,
Michigan 49512.
(4) Includes 24,885 shares of Common Stock which Mr. Veltman has the right to
acquire within 60 days of September 1, 1997 through the exercise of stock
options, 1,890 of which are contingent on approval of the proposal to amend
the 1991 Incentive Stock Option Plan to reserve additional shares for
issuance. Total also includes 955 shares owned by Mr. Veltman's spouse and
over which she exercises sole voting control. For purposes of calculating
the percentage of outstanding shares owned by Mr. Veltman and the group,
these shares are deemed to be owned by Mr. Veltman.
(5) Includes 780 shares over which Mr. Hooker has voting control in a fiduciary
capacity. For purposes of calculating the percentage of outstanding shares
owned by Mr. Hooker and the group, these shares are deemed to be owned by
Mr. Hooker.
(6) The business address for FMR Corporation is 82 Devonshire Street, Boston,
Massachusetts, 02109-3614.
5
<PAGE> 8
COMPENSATION COMMITTEE REPORT
The Company's compensation program for officers is administered by the
Compensation Committee of the Board of Directors which is currently composed of
Ms. Korth and Messrs. Hooker and Wagner.
Overall Officer Compensation Policy
The Company's compensation policy for executive officers is designed to
support the overall objective of enhancing value for shareholders by attracting,
developing, rewarding, and retaining highly qualified and productive
individuals; relating compensation to both Company and individual performance;
and ensuring compensation levels that are externally competitive and internally
equitable. To that end the committee had an executive compensation review
performed in January 1997 by an independent compensation consultant, Watson
Wyatt Worldwide. In short, the report concluded that compensation to the
Company's top executives "appears to be appropriate" with the absence of
long-term incentive compensation resulting in "lower total direct compensation
... than would be expected."
The key elements of the Company's officer compensation consist of base
salary, a maximum formula bonus for Mr. Kennedy, the Company's chief executive
officer, and a discretionary bonus and stock options for Mr. Veltman, the
Company's chief financial officer. The Compensation Committee's policies with
respect to each of these elements, including the bases for the compensation
awarded to Mr. Kennedy are discussed below. In addition, while the elements of
compensation described below are considered separately, the Compensation
Committee takes into account the full compensation package afforded by the
Company to the individual, including insurance and other benefits.
Base Salary
The Committee reviews each officer's salary annually. In determining
appropriate salary levels, consideration is given to scope of responsibility,
experience, Company and individual performance as well as pay practices of other
companies relating to executives with similar responsibility.
With respect to the base salary of Mr. Kennedy in 1997, the Compensation
Committee took into account a comparison of base salaries of chief executive
officers of peer companies known to the members of the Committee, the Company's
continued financial success, and the assessment by the Compensation Committee of
Mr. Kennedy's individual performance. The Compensation Committee also took into
account the longevity of Mr. Kennedy's service to the Company and its belief
that Mr. Kennedy is an excellent representative of the Company to the public by
virtue of his stature in the community and the industry. Mr. Kennedy's base
salary was established by the Board of Directors in September 1991 and has been
continued since then. This base compensation consists of a regular payroll
payment of $150,000 per year and a split dollar arrangement for payment of
premiums on four (4) life insurance policies owned by Mr. Kennedy. Mr. Kennedy
pays the Company the portion of the premiums equal to the price of an equivalent
amount of term insurance. The benefit to Mr. Kennedy of premiums paid by the
Company is the interest-free use of the non-term portion of the premium. Such
benefit was estimated at $80,776 as the present value of the interest payments
not required to be made assuming Mr. Kennedy would not repay the non-term
portion until age 65, discounted at a market rate of 8.0%. (See Summary
Compensation Table, below). The Company has a lien on the cash value and
proceeds of each policy equal to the premium paid by the Company. This lien
amounted to $713,103 at June 30, 1997 and is carried as an officer receivable on
the books of the Company.
Bonus Awards
The Company's officers may be considered for annual cash bonuses which are
awarded to recognize and reward corporate and individual performance based on
meeting specified goals and objectives. The plan in
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<PAGE> 9
effect for 1997 for Mr. Kennedy provides that a bonus, not exceeding 3 1/2% of
the Company's Income from Operations before such bonus expense, will be awarded.
This formula was established by the Board of Directors in 1991 and has been
continued. In awarding a bonus to Mr. Kennedy, the board reviews compensation
levels and financial results available to it for chief executive officers for
similarly sized companies as well as those located near the Company's
headquarters. Mr. Kennedy sets Mr. Veltman's bonus based on his review of
corporate and Mr. Veltman's individual performance as well as the performance
bonus the management team awards to employees of the Company generally other
than Messrs. Veltman and Kennedy.
Stock Options
Under the Company's 1991 Incentive Stock Option Plan, which was approved by
the shareholders, stock options are granted to the Company's key employees
including Mr. Veltman. The number of options granted is determined by the
subjective evaluation of the person's ability to influence the Company's
long-term growth and profitability.
Stock options are granted with an exercise price equal to the market price
of the Common Stock on the date of grant. In fiscal 1997, 9,450 new options were
granted to Mr. Veltman. Since the value of an option bears a direct relationship
to the Company's stock price, it is an effective incentive for employees to
create value for shareholders. The Committee therefore views stock options as an
important component of its compensation policy and supports the proposal to
increase the available shares under the plan and to include Messrs. Kennedy and
Hekman as eligible participants as discussed under the Proposal to Amend the
1991 Incentive Stock Option Plan, below.
COMPENSATION COMMITTEE MEMBERS:
Robert L. Hooker
David J. Wagner
Kim Korth
7
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth the total compensation earned by each
executive officer during the fiscal years ended June 30, 1997, 1996, and 1995
for services rendered to the Company in all capacities during such years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
--------------------------------------- AWARDS
NAME AND OTHER -------------
PRINCIPAL POSITION ANNUAL STOCK ALL OTHER
AT JUNE 30, 1997 YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) COMPENSATION($)(2)(3)
------------------ ---- --------- -------- --------------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
John C. Kennedy........ 1997 150,000 202,557 6,136 82,776
Chairman, President 1996 150,000 205,047 6,136 0 82,090
and Chief Executive 1995 150,000 202,200 6,136 0 86,451
Officer(4)
Warren A. Veltman...... 1997 75,000 86,686 0 9,450 15,639
Secretary, Treasurer 1996 75,000 76,400 0 0 13,495
and Chief Financial 1995 66,923 71,200 0 0 10,926
Officer(5)
</TABLE>
- ---------------
(1) Does not include any value that might be attributable to job-related
personal benefits, the amount of which did not exceed the lesser of 10% of
annual salary plus bonus or $50,000 for each executive officer.
(2) Represents the benefit of the interest-free use of the non-term portion of
the premium paid by the Company on insurance policies owned by the
individual under Split Dollar arrangements. Such benefit was estimated as
the present value of the interest payments which are not required to be made
assuming the executive would not repay the non-term portion until age 65,
discounted at a market rate of 8.0%. The portion of such premiums equal to
the price of equivalent amounts of term insurance are paid to the Company by
Messrs. Kennedy and Veltman, respectively.
(3) Includes $2,000 and $1,000 for Messrs. Kennedy and Veltman contributed by
the Company during fiscal 1997 and 1996, respectively, to the 401(k) plan
maintained by the Company for its employees generally.
(4) Mr. Kennedy's current base compensation is $150,000 per annum. He is also
entitled to receive annual bonus compensation not greater than 3 1/2% of the
Company's Income from Operations prior to such bonus calculation.
(5) Mr. Veltman's current base compensation is $75,000 per annum. Options issued
to Mr. Veltman during fiscal 1997 are contingent on the approval of the
proposal to amend the 1991 Incentive Stock Option Plan to reserve additional
shares for issuance.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------------------------------- REALIZABLE VALUE
PERCENT OF AT ASSUMED
TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS/SARS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OF OPTION TERM
OPTIONS/SARS IN FISCAL BASE ----------------
GRANTED(#) YEAR PRICE($/SH) EXPIRATION DATE 5%($) 10%($)
------------ ------------ ----------- --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Warren A. Velman..... 9,450 4.7% $9.29 October 24, 2006 55,211 139,915
</TABLE>
8
<PAGE> 11
Option Values at Fiscal Year End
The following table provides information on the value of options held by
each of the executive officers of the Company at June 30, 1997 measured in terms
of the closing price of the Company's common stock on that day. There were no
options exercised by any officer during the year.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
JUNE 30, 1997 (#) JUNE 30, 1997
------------------------------ ------------------------------
NAME EXERCISABLE(1) UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE
---- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Warren A. Veltman....................... 24,885 9,765 $112,729 $27,367
</TABLE>
- ---------------
(1) Includes 4,095 options which Mr. Veltman may exercise within sixty days of
September 1, 1997, 1890 of which are contingent on the approval of the
proposal to amend the 1991 Incentive Stock Option Plan to reserve additional
shares for issuance.
Compensation Committee Interlocks and Insider Participation
Mr. Kennedy serves as President of the Company and Chief Executive Officer
and serves on the Board of Directors of Riviera Tool Company, where Mr. Rieth is
president, CEO and also on the Board of Directors.
The Company has entered into three Stock Redemption Agreements
("Agreements") dated as of November 6, 1992, September 20, 1993, and August 1,
1996 with John C. Kennedy and Nancy G. Kennedy, his wife, in their individual
capacities and as Co-Trustees of the John C. Kennedy Living Trust u/a dated
February 14, 1986, as amended. The Agreements provide that upon the death of the
last to die of John C. Kennedy and Nancy G. Kennedy, the Company shall redeem up
to $18,000,000 of Common Stock in a redemption under Section 303 of the Internal
Revenue Code of 1986, as amended, in order to pay estate and inheritance taxes,
and funeral and administrative expenses of the estate. It is the Company's
belief that these arrangements will avoid a potentially significant market price
impact that could result from the Kennedy estates needing to sell Company stock
in order to pay death taxes and expenses. Pursuant to the Agreements, the
Company maintains some life insurance policies in order to fund its obligations.
The Company leases certain real property and equipment from its majority
shareholder. At the beginning of fiscal year 1994, all such leases were on a
month-to-month basis. Effective May, 1994, the Company and its majority
shareholder executed a long-term lease covering the equipment. The lease expires
May 31, 2001 and grants the Company an option to purchase the equipment at the
expiration of the term. Total lease expense for all items leased from the
majority shareholder was $351,000 for fiscal year 1997.
The Company leases a building at 4060 East Paris Avenue, S.E. in Grand
Rapids, Michigan adjacent to its primary facility, with approximately 100,000
square feet suitable for industrial use. Kenneth K. Rieth, directly or
indirectly through his spouse, owns a fifty percent (50%) interest in such
building. The lease expires in March of 2005 and contains an option to purchase
the facility for a fixed price of $3,125,000 at the expiration of the lease.
Rent under the lease is fixed at $25,000 per month for its entire term but will
be adjusted to reflect changes in the interest rate charged by the landlord's
mortgage lender. Currently, that rate is fixed until the year 2000. The Company
pays all taxes, maintenance, insurance and utilities. The Company subleases
approximately 75,000 square feet of this building on a month-to-month basis to
Conway Products Corporation ("Conway"), which is 100% owned by Mr. Kennedy, at a
monthly rental charge, plus occupancy expense, taxes, utilities and insurance of
approximately $259,632 in the aggregate during fiscal 1997.
9
<PAGE> 12
The Company leases an aircraft for use in its business activities. From
time to time Mr. Kennedy used the aircraft for personal use and paid the Company
for the variable costs of operating the aircraft incurred by the Company. This
reimbursement totaled $7,761 during fiscal year 1997.
On May 12, 1995, the Company obtained an equipment loan from Old Kent Bank,
a division of Old Kent Financial Corporation of which Mr. Wagner is President
and Chief Executive Officer. At the end of fiscal 1997, the principal balance of
the note was $1,958,330, which amount was secured by certain equipment of the
Company. The Company pays this obligation in monthly installments of $41,660
plus interest of 8.35% per annum.
On June 27, 1997 the Company entered into a credit agreement with its
primary commercial lender, Comerica Bank, which included an unsecured
$10,000,000 term loan payable in monthly installments of $138,889 principal plus
interest of 7.76% per annum. Old Kent Bank has purchased a participation in this
term loan from Comerica Bank in the original principal amount of $4,000,000 all
of which was outstanding at the end of fiscal 1997.
The Company has utilized and expects to continue utilizing the consulting
services of International Resource Network, Inc. where Ms. Korth is President.
During fiscal 1997, the Company incurred $98,420 in expense for such services.
The Company believes that all of the transactions described above were at
rents, prices and terms which were no less favorable to the Company than would
have been available in similar transactions with unaffiliated third parties. The
policy of the Company is that proposed transactions with affiliates of the
Company must have the prior approval of a majority of the disinterested members
of the Board of Directors and, as in prior transactions, will be made on terms
no less favorable to the Company than could be obtained from unaffiliated
parties.
10
<PAGE> 13
PERFORMANCE GRAPH
The following graph compares the cumulative total return of the Company's
Common Stock, for periods subsequent to June 30, 1992, with the Standard &
Poor's 500 Composite Index and an index of peer companies selected by the
Company.
The comparison assumes $100 was invested on June 30, 1992 in the Company's
Common Stock, the Standard & Poor's 500 Composite Index, and the peer group. The
companies in the peer group, all of which are in the automotive parts industry,
are as follows:
Arvin Industries, Inc. MascoTech, Inc.
Dana Corp. Modine Manufacturing Company
Defiance, Inc. Newcor, Inc.
Douglas & Lomason Company(1) Redlaw Industries
Excel Industries, Inc. Simpson Industries, Inc.
Federal Screw Works SPX Corp.
Gentex Corp. Sudbury, Inc.(2)
Howell Industries, Inc. Walbro Corp.
The Lamson & Sessions Company Worthington Industries, Inc.
- ---------------
(1) Douglas & Lomason was acquired by Magna International on November 18, 1997.
(2) Sudbury, Inc. was acquired by Intermet Corporation on February 26, 1997.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD AUTOCAM S&P 500 PEER
(FISCAL YEAR COVERED) CORP INDEX GROUP
<S> <C> <C> <C>
JUN92 100 100 100
JUN93 121.34 113.63 134.78
JUN94 229.71 115.23 128.29
JUN95 185.23 145.27 134.43
JUN96 166.13 183.04 148.70
JUN97 205.32 246.55 181.23
</TABLE>
11
<PAGE> 14
PROPOSAL TO AMEND THE 1991 INCENTIVE STOCK OPTION PLAN
The Board of Directors of the Company has adopted, subject to shareholder
approval, an amendment to Sections 5 and 6 of the Autocam Corporation 1991
Incentive Stock Option Plan (the "Plan"), to increase the number of shares of
the Company's Common Stock available for issuance upon the exercise of options
granted thereunder to 750,000 shares and to make all employees of the Company
eligible for awards pursuant to the Plan. The Plan was previously approved by
shareholders in November 1991 with Messrs. Kennedy and Hekman excluded from the
Plan. An amendment was approved in November 1993 increasing the number of shares
available under the Plan from 150,000 to 300,000 and an additional amendment
approved in November 1994 increasing the number of shares available under the
Plan to 500,000 shares. This availability has been automatically adjusted under
the terms of the Plan to 551,250 shares as a result of subsequent stock
dividends declared by the Company.
As of June 30, 1997, options were outstanding for 353,033 shares and an
additional 72,342 options have been exercised prior to June 30, 1997. Thus, only
125,875 shares of Common Stock remained reserved for issuance under the Plan at
June 30, 1997.
The Company has elected to continue issuing options pursuant to the Plan
rather than initiating a new plan and an additional grant of 173,145 shares has
been made to employees generally that is contingent upon approval of this
proposal. The Board of Directors believes that its continued ability to grant
options will be of assistance in attracting and retaining highly qualified
employees to the benefit of the Company and its shareholders. A majority of the
votes cast is required to approve this proposal.
The following is a summary of the principal provisions of the Plan as
amended:
Administration. The Plan is administered by the Compensation Committee of
the Board of Directors of the Company, comprised of directors who are not
eligible to participate in the Plan. The Committee makes recommendations
periodically to the Board of Directors with respect to the officers and other
employees and former officers and employees who have a consulting arrangement
with the Company who shall participate in the Plan and the extent of their
participation. In making such determinations, the Committee considers the
position and responsibilities of the employee, the nature and value to the
Company of his or her services and accomplishments, the present and potential
contribution of the employee to the success of the Company and such other
factors as the Committee may deem relevant. Mr. Edward W. Hekman and Mr. Warren
A. Veltman have been granted options under the Plan (see "Compensation of
Executive Officers -- Option Values at Fiscal Year End).
Shares. The shares covered by the Plan may be either authorized and
unissued shares or issued shares which have been reacquired by the Company.
Price. The option price shall not be less than one hundred percent (100%)
of the market value of the shares of Common Stock on the date of the
Compensation Committee's approval of the grant. The aggregate fair market value
of the Common Stock (determined at the date of the option grant) for which any
employee may be granted options first exercisable in any fiscal year may not
exceed $100,000.
Duration and Exercise of Options. An option granted under the Plan must be
exercised by the optionee by the date specified by the Compensation Committee,
which shall be a maximum of ten years from the date of grant during employment
of the optionee, or in any event within three months after termination of
employment for any cause other than death or total or permanent disability. The
Compensation Committee may in its discretion provide that an option may not be
exercised in whole or in part for any period or periods of time specified by the
Compensation Committee. No option may be exercised for a period of twelve (12)
months after the date of its grant. Thereafter, and except as otherwise
provided, any option may be exercised in whole or in part from time to time
during its term. If an optionee does or becomes totally and permanently
12
<PAGE> 15
disabled while in the employ of the Company, the option granted such optionee
may, but only within the year next succeeding such death or disability, be
exercised as and to the extent that the optionee was entitled to exercise the
option at the date of death or disability, and the option period shall terminate
at the end of the year next succeeding such event or, if earlier, the expiration
of the option. In addition, in the event a person becomes beneficial owner of
more than thirty percent (30%) of the Company's Common Stock otherwise than
through a transaction arranged with the prior approval of the Company's Board of
Directors, all options then outstanding may be exercised immediately.
Adjustments. The Compensation Committee may make appropriate adjustments in
the price of the shares and the number allotted or subject to allotment if there
is any change in the Common Stock as a result of a share dividend, share split,
recapitalization or otherwise.
Payment of Option Price. The option price shall be paid in cash or through
the delivery of previously owned shares of the Company's Common Stock or by a
combination of cash and Common Stock.
Amendment and Termination of Plan. The Board of Directors may from time to
time amend, suspend or discontinue the Plan; provided, however, that the Board
of Directors may not amend the Plan to increase the number of shares of Common
Stock on which options may be granted under the Plan, materially increase the
benefits accruing to optionees under the Plan, or materially modify the
provision of the Plan relating to eligibility to be granted an option, without
further shareholder approval.
Tax Aspects. Options granted under the Plan are qualified options for
federal income tax purposes. The holder of an option granted under the Plan
would not be subject to any tax with respect to the grant of the option, but the
holder will recognize taxable income upon the sale of the stock after the
exercise of the option. If the holder sells the stock more than one year after
the exercise of the option, the difference between the sale price and the option
price will be taxable as a long-term capital gain. If the holder sells the stock
within one year after the exercise of the option, the holder would recognize
ordinary taxable income equal to the excess of the fair market value of the
stock at the time of exercise over the option price, and taxable capital gain in
an amount equal to the excess of the sale price of the stock over the fair
market value of the stock at the time of exercise.
Proposed Option Grants. The Compensation Committee has granted options for
173,145 shares to employees of the Company contingent upon the shareholders'
approval of the amendment to the Plan. No options may be granted under the Plan
after August 31, 2001.
On September 1, 1997, the market value of the Common Stock of the Company
was $11.75 per share.
13
<PAGE> 16
PLAN BENEFITS
AUTOCAM CORPORATION 1991 INCENTIVE STOCK OPTION PLAN
<TABLE>
<CAPTION>
DOLLAR NO. OF
NAME AND POSITION VALUE(1)(2) SHARES(2)
----------------- ----------- ---------
<S> <C> <C>
John C. Kennedy, Chairman, President and CEO................ 0 0
Warren A. Veltman, Secretary/Treasurer...................... $ 140,096 34,650
All Current Executive Officers as a Group................... $ 140,096 34,650
All current Directors and Nominees Not Executive Officers as
a Group................................................... 0 0
All Employees Not Executive Officers as a Group............. $1,564,127 491,528
Each person receiving five per cent (5%) of total options
issued.................................................... $ 523,012 130,575
</TABLE>
- ---------------
(1) Value of shares in excess of the option price on June 30, 1997. Closing
price on June 30, 1997 was $12.00 per share. No associate of any Executive
Officer, Director or Director Nominee holds any options.
(2) Amounts include options issued which are contingent on the proposal to amend
the 1991 Incentive Stock Option Plan to reserve additional shares for
issuance.
The Board of Directors favors a vote FOR the proposal to approve the
amended 1991 Incentive Stock Option Plan. Proxies solicited by the Board of
Directors will be so voted unless shareholders specify a different choice in
their proxies.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST WITH RESPECT TO THE
AMENDED PLAN IS REQUIRED FOR ITS APPROVAL, PROVIDED THE TOTAL VOTE CAST ON THE
PROPOSAL REPRESENTS OVER 50% OF ALL SHARES ENTITLED TO VOTE THEREON.
14
<PAGE> 17
RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected the public accounting
firm of Deloitte & Touche LLP to report on the Company's financial statements
for fiscal 1998, and the shareholders are being asked to ratify this selection.
Deloitte & Touche LLP has been the public accounting firm retained by the
Company since 1988. Deloitte & Touche LLP has indicated that a representative of
that firm will be present at the shareholders' meeting. Such representative
shall be given an opportunity to make a statement, if he or she so desires, and
it is expected that such representative will be available to respond to
appropriate questions presented at the meeting.
OTHER MATTERS
The Board of Directors knows of no other business to come before the
meeting. In the event that any other business not known or determined at this
time does come before the meeting, the persons named in the enclosed Proxy
intend to vote in accordance with their best judgment.
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and certain officers and persons who own ten percent (10%)
or more of the Company's common stock file with the SEC and the NASDAQ National
Market System initial reports of ownership and reports of changes in ownership
of Company Common Stock. These officers, directors and 10% shareholders are
required by SEC regulation to furnish the Company with copies of these reports.
To the Company's knowledge, based solely upon review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended June 30, 1997, all Section
16(a) requirements applicable to its officers, directors and 10% beneficial
owners were complied with.
VOTING OF PROXIES
Proxies which are signed and returned will be voted for the nominees named
above to serve until the Annual Meeting of Shareholders in 2000 unless authority
to vote upon the election of directors is withheld. Proxies will be voted as
specified by the shareholder either for or against the proposal to amend the
Autocam Corporation 1991 Incentive Stock Option Plan and ratification of the
selection of auditors. If no specification is given, Proxies will be voted for
the proposed amendment and for ratification of the selection of auditors.
Abstentions will be treated as shares present for determining a quorum but
unvoted for determining ratification of auditors.
SHAREHOLDERS' PROPOSALS
FOR FISCAL 1998 ANNUAL MEETING
Proposals of shareholders intended to be presented at the Company's 1998
Annual Meeting must be received by the Company at 4070 East Paris Avenue,
Kentwood, Michigan 49512, no later than June 1, 1998, in order to be eligible
for inclusion in the Proxy Statement and form of Proxy relating to that meeting.
A shareholder who desires to submit any such proposal should refer to the
applicable rules and regulations of the Securities and Exchange Commission,
Washington, D.C. 20549.
15
<PAGE> 18
AVAILABILITY OF S.E.C. FORM 10-K
A copy of the Company's 10-K Annual Report, filed with the Securities and
Exchange Commission, is available without charge to shareholders by written
request to:
Warren A. Veltman
Autocam Corporation
4070 East Paris Avenue
Kentwood, Michigan 49512
16
<PAGE> 19
AUTOCAM CORPORATION
1991 INCENTIVE STOCK OPTION PLAN
Section 1 - Purpose
The AUTOCAM CORPORATION 1991 INCENTIVE STOCK OPTION PLAN (hereinafter
called the "Plan) is a plan to provide incentive to certain employees of
Autocam Corporation and its subsidiaries (hereinafter called the "Corporation")
based upon such employees' individual contributions to the long term growth and
profitability of the Corporation, in order to encourage their identity with
shareholder concerns and their current and continuing interest in the
development and financial success of the Corporation.
Section 2 - Definitions
(a) The term "subsidiaries" shall mean those corporations and
partnerships in which the Corporation owns directly or indirectly a majority
equity interest as defined under generally accepted accounting principles.
(b) The term "Code" shall mean the Internal Revenue Code of 1986, as
the same may be from time to time amended.
(c) The term "Committee" shall mean such committee of the Board of
Directors of the Corporation as shall be established by the Board of Directors,
the members of which shall be "disinterested persons" under Rule 16b-3 of the
Securities and Exchange Commission (or any successor regulation issued under
federal securities laws) and shall be ineligible to participate in the Plan, or
in the absence of an appointed committee all members of the Board of Directors
who are disinterested persons.
(d) The term "company stock" shall mean shares of the common capital
stock of the Corporation available for award or awarded, or subject to options
or rights granted, under the Plan.
(e) The term "market value" shall mean for a share of company stock
as of any date (i) the mean between the highest and lowest sale prices for the
company stock as reflected in the National Association of Securities Dealers
Automated Quotation System (NASDAQ) for that date, or if there is no sale on
such date then on the next preceding date on which a sale has occurred, or (ii)
if there is no public trading market for the company stock, then the value
established by the Committee or the Board of Directors for purposes of the
Plan.
(f) The term "options" shall mean collectively the incentive stock
options available for grant or granted under Section 8 of the Plan.
(g) The term "optionee" means any person to whom an option or right
has been granted or who becomes a holder of an option or right under Section 8
of the Plan.
Section 3 - Effective Date and Duration
<PAGE> 20
Subject to the approval of the Plan by the shareholders of the
Corporation, the Plan shall be generally effective as of September 1,1991. The
Plan shall continue until it is terminated by the Board of Directors as
provided in Section 10.
Section 4 - Administration
The Committee shall be responsible for the general operation and
administration of the Plan and shall have the authority to interpret the Plan
and to adopt administrative rules and regulations governing its operation. The
Committee may delegate the performance of administrative functions to the
Secretary of the Committee.
Section 5 - Participation, Stock Awards and Option Grants
(a) Each year, the Committee shall designate as participants in the
Plan those officers and employees of the Corporation and those former officers
and employees who have a consulting arrangement with the Corporation that the
Committee determines.
(b) Each year, the Committee may grant stock options that qualify as
"incentive stock options" within the meaning of Section 422 of the Code to each
current and former officer and employee whom it has designated as a participant
for such year. Upon the approval by the Board of Directors of the Corporation
of the individual awards and/or grants, if any, made to executive officers and
of the total of all awards and grants made to all other persons, the
determination of the Committee as to each such award and grant shall become
final.
Section 6 - Shares Reserved Under the Plan
There is hereby reserved for use upon exercise of options to be granted
from time to time under the Plan, an aggregate of 750,000 shares of company
stock Shares of company stock may be authorized but unissued shares, treasury
shares, shares acquired in the open market, or any combination of the
foregoing, and if acquired in the open market, shall be acquired by an agent
independent of the Corporation. Any shares of company stock underlying options
that are forfeited pursuant to Section 8(d) of the Plan and, to the extent
permissible for purposes of allowing the Plan to continue to be considered as
described under Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), any shares of company stock that are used for
full or partial payment of the purchase price of shares with respect to which
an option is exercised pursuant to Section 8 of the Plan may thereafter again
be awarded or made subject to grant under the Plan. In the event of any change
in the outstanding shares of the common capital stock of the Corporation by
reason of a stock dividend, stock split, recapitalization, merger,
consolidation, combination or exchange of shares, or other similar change, the
Committee may make appropriate adjustments in the aggregate number of shares of
company stock made subject to options granted or reserved for award or grant
under the Plan, in the prices of options granted, or provide for the
substitution of other securities of the class exchanged for common capital
stock of the Corporation in any merger or consolidation.
2
<PAGE> 21
Section 7 - Options Granted Under the Plan
(a) Options granted to a participant may not be sold, transferred,
alienated or assigned (other than by will or the laws of descent and
distribution) during the exercise period established with respect to such
shares, but nothing contained in this sentence shall preclude the sale or other
transfer of shares of company stock obtained by the proper exercise of any
option. During the lifetime of an optionee, the option shall be exercisable
only by the optionee personally or by the optionee's legal representative.
(b) The exercise of options by a participant under this Plan shall
be subject to satisfaction of the conditions precedent that the participant
refrain from engaging in any activity that, in the opinion of the Committee, is
competitive with any activity of the Corporation (except that employment at the
request of the Corporation with an entity in which the Corporation has,
directly or indirectly, a substantial ownership interest, or other employment
specifically approved by the Committee, shall not be considered to be an
activity that is competitive with any activity of the Corporation) and from
otherwise acting, either prior to or after termination of employment, in any
manner inimical or in any way contrary to the best interests of the Corporation
and that the participant furnish to the Corporation such information with
respect to the satisfaction of the foregoing conditions precedent as the
Committee shall reasonably request. Any shares of company stock obtained upon
exercise of an option granted under the Plan may be made subject to such other
conditions or restrictions as the Committee deems advisable, including without
limitation, provisions to comply with federal and state securities laws.
(c) Certificates issued for shares of company stock acquired
pursuant to this Plan may bear a legend stating that the shares are issued
subject to the restrictions set forth in the Plan.
Section 8 - Grants of Options
(a) Participants eligible to receive grants of options under this
Section 8 shall be selected by the Committee from among the officers and
employees of the Corporation and from former officers and employees who have a
consulting arrangement with the Corporation. The Committee may grant more than
one option to any eligible current or former officer or employee.
(b) The Committee shall determine the eligible participants to whom,
and the time or times at which, options will be granted, the number of shares
to be subject to each option, the duration of each option, the time or times
within which the option may be exercised, the cancellation of the option (with
the consent of the holder thereof) and the other conditions of the grant of the
option. The provisions and conditions of the grants of options need not be the
same with respect to each optionee or with respect to each option.
(c) Except as otherwise specifically provided herein, options
granted pursuant to the Plan shall be subject to the following terms and
conditions:
(i) Option Price. At the time the Committee approves the
grant, the Committee
3
<PAGE> 22
shall determine the option price which shall be not less than one
hundred percent (100%) of the market value of the company stock on the
date of Committee approval of the grant.
(ii) Payment. The option price shall be paid in full at the
time of exercise. No shares shall be issued until full payment has been
received therefor. Payment may be in cash or, with the prior
approval of and upon the conditions established by the Committee, by
delivery of shares of company stock owned by the optionee; provided,
however, that company stock acquired by the optionee through the
exercise of an incentive stock option may not be used for payment prior
to the expiration of the holding periods prescribed in Section
422(a)(1) of the Code. If payment is made by the delivery of shares of
company stock, the value of the shares on the day they are delivered
shall be the market value on such day.
(iii) Duration of Options. The duration of options shall be
determined by the Committee, but in no event shall the maximum duration
of an incentive stock option exceed ten (10) years from the date of its
grant.
(iv) Other Terms and Conditions. Options may contain such
other provisions, not inconsistent with the provisions of the Plan,
as the Committee shall determine to be appropriate from time to time;
provided, however, that no option shall be exercisable in whole or in
part for a period of twelve (12) months from the date on which the
option is granted. Options shall be exercisable in full or in such
cumulative installments as shall be determined by the Committee on the
grant of the option. If an option shall be exercisable in installments,
the Committee may, in its discretion, provide for other events in which
all installments shall become immediately exercisable if any
installment be presently exercisable.
(v) Incentive Stock Options. The Committee may not grant a
participant incentive stock options in the aggregate that are first
exercisable during any one calendar year with respect to company stock
the aggregate market value of which exceeds $100,000, taking into
account all stock option plans of the Corporation.
(d) If the employment of an optionee to whom an incentive stock
option has been granted under the Plan shall be terminated (except as set forth
below) such option may be exercised, to the extent that the option was
exercisable on the date of termination of employment, only until the earlier of
three (3) months after such termination or the original expiration date
of the option; provided, however, that any option held by an optionee whose
employment shall be terminated either (i) for cause or (ii) voluntarily by the
optionee and without the consent of the participating affiliate by which the
optionee was employed (which consent shall be assumed in the case of retirement
at normal retirement age but not in the case of early retirement) shall, to the
extent not theretofore exercised, immediately terminate. If an optionee to whom
an incentive stock option has been granted under the Plan shall become disabled
while employed and such disability results in the termination of employment,
such option may be exercised, to the extent that the option was exercisable on
the date of termination of employment, by either the disabled optionee or such
optionee's legal representative, as the case may be, and the right to exercise
the option shall terminate upon the earlier of the expiration of twelve (12)
months from the date of such termination of employment or the original
expiration date of the option. If an optionee has been granted an
4
<PAGE> 23
option exercisable in installments, then, notwithstanding the terms specifying
the installments in which the option shall be exercisable, upon the death or
disability of the optionee at any time subsequent to the expiration of the
first year of the term of the option, the option shall be exercisable within
the time period set forth above as to all shares of company stock remaining
subject to the option. For the purposes of this Section 8, the term "disabled"
shall have the meaning contained within Section 22(e)(3) of the Code.
(e) An optionee or a transferee of an option pursuant to Section
7(a) shall have no rights as a shareholder with respect to any company stock the
subject of either an unexercised or exercised option until the optionee or
transferee shall have become the holder of record of such stock, and no
adjustments shall be made for dividends in cash or other property or other
distributions or rights in respect of such stock for which the record date is
prior to the date on which the optionee or transferee shall have in fact become
the holder of record of the company stock acquired pursuant to the option or
right.
Section 9 - General
(a) If, in connection with the exercise of any option hereunder, it
is necessary or desirable, to comply with any law or regulation of any
governmental authority relating to the issuance or sale of securities, that the
participant receiving such shares shall agree that the participant will take
the shares for investment and not with any present intention to resell the same
and that the participant will dispose of such shares only in compliance with
such laws and regulations, the participant shalL upon the request of the
Committee, execute and deliver to the Committee an agreement to such effect
satisfactory to the Committee.
(b) If a participant dies prior to the exercise in full of any
option granted to the participant, the option and any shares issued thereunder
shall be distributed to the participant's designated beneficiary or, in the
absence of a beneficiary designation, to the participant's estate. The
designation of a beneficiary shall be made in writing on a form prescribed by
and filed with the Secretary of the Committee.
(c) Neither the establishment of the Plan nor any provisions of the
Plan or modification thereof shall be held or construed as giving any
participant in the Plan the right to be retained in the service of the
Corporation and the Corporation expressly reserves its right to discharge any
such participant whenever the interests of the Corporation may so require.
(d) Each distribution of company stock under this Plan shall be made
subject to such federal, state and local tax withholding requirements as apply
on the distribution date. For this purpose, the Committee may provide for the
withholding of shares of company stock or allow a participant to tender back to
the Corporation shares of company stock received in such distribution.
5
<PAGE> 24
(e) Notwithstanding any other provisions in the Plan, in the event
of a Change in Control (as hereinafter defined) all options then outstanding
shall become immediately exercisable. Distribution of all shares of company
stock due because of the exercise of options, shall be made as soon as
practicable within sixty (60) days after the date of the Change in Control.
For purposes of this Plan, a Change in Control shall occur if any "person"
or "group" within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act
becomes the "beneficial owner" as defined in Rule 13d-3 under the Exchange Act
of more than thirty percent (30%) of the then outstanding voting securities of
the Corporation otherwise than through a transaction or transactions arranged
by or consummated with the prior approval of the Corporation's Board of
Directors.
Section 10 - Amendment, Suspension and Termination
The Board of Directors of the Corporation reserves the right at any
time to amend, suspend, or terminate the Plan; provided, however, no such
amendment, suspension or termination shall adversely affect any award or grant
then in effect unless the prior approval of the participant so affected is
obtained. No amendment of the Plan shall, without approval of the shareholders
of the Corporation, (a) increase the aggregate number of shares of company
stock which are reserved for the Plan (except as provided in Section 6), (b)
change the group of eligible employees under the Plan, (c) change the manner of
determining the option price or the amount payable upon exercise of a right or
(d~ increase the maximum duration of an option.
Section 11 - Governing Law
The Plan and all determinations made and action taken pursuant thereto
shall be governed by the laws of the State of Michigan and construed in
accordance therewith.
6
<PAGE> 25
AUTOCAM CORPORATION
PROXY FOR ANNUAL MEETING--OCTOBER 21, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints John C. Kennedy and
Warren A. Veltman and each or either of them, proxies with full power
of substitution, to vote all stock of Autocam Corporation, a Michigan
corporation, which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held at Rembrandt's At
Bridgewater, 333 Bridge Street, N.W., Grand Rapids, Michigan 49504,
on Tuesday, October 21, 1997, at 4:00 p.m. and at any adjournment.
IF YOU SIGN AND RETURN THIS PROXY, THE SHARES REPRESENTED HEREON WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREON. IF NOT OTHER-
WISE SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AS
NOMINATED AND THE RATIFICATION OF THE AUDITORS. THE PROXIES WILL VOTE
IN ACCORDANCE WITH THEIR BEST JUDGMENT ON ANY OTHER MATTERS WHICH MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
The undersigned hereby acknowledges receipt of the Annual Report of the
Company for its fiscal year ended June 30, 1997, and Notice of Annual
Meeting of Shareholders and Proxy Statement dated September 15, 1997.
- --------------------------------------------------------------------------
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) hereon. If stock is held
jointly, each holder should sign. When signing as attorney, executor,
administrator, trustee, guardian, corporate officer or in any other
capacity, please state title in full.
- --------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------- ----------------------------------
- ------------------------------- ----------------------------------
- ------------------------------- ----------------------------------
<PAGE> 26
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------- 1. ELECTION OF DIRECTORS
AUTOCAM CORPORATION
- --------------------------------- JOHN C. KENNEDY FOR ALL WITH- FOR ALL
KENNETH K. RIETH NOMINEES HOLD EXCEPT
MARK J. BISSELL [ ] [ ] [ ]
Mark box at right if an address change or [ ] Instruction: To withhold authority to vote for an individual nominee,
comment has been noted on the reverse mark the "For All Except" box and write that nominee's name on the space
side of this card. provided below.
RECORD DATE SHARES: ------------------------------------------------------------------------
2. RATIFICATION OF SELECTION OF DELOITTE FOR AGAINST ABSTAIN
& TOUCHE LLP AS AUDITORS FOR THE COMPANY [ ] [ ] [ ]
FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
3. APPROVAL OF THE AMENDED AUTOCAM FOR AGAINST ABSTAIN
CORPORATION 1991 INCENTIVE STOCK OPTION [ ] [ ] [ ]
-------------------- PLAN EXTENDING THE COVERAGE TO ALL
Please be sure to sign and date EMPLOYEES AND INCREASING THE SHARES
this Proxy. Date RESERVED THEREUNDER TO 750,000 SHARES.
- -----------------------------------------------------
- -----Shareholder sign here----Co-owner sign here-----
DETACH CARD DETACH CARD
</TABLE>
