JPE, INC.
---------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1997
To the Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
JPE, Inc. (the "Company") to be held at the Sheraton Inn-Ann Arbor, 3200
Boardwalk, Ann Arbor, Michigan 48108, on Thursday, May 15, 1997 at 9:00 a.m.,
local time, for the following purposes:
(1) To elect two directors of the Company to serve until the Annual
Meeting of Shareholders in 2000 and one director of the Company to
serve until the Annual Meeting of Shareholders in 1998.
(2) To consider such other business as may properly come before the
Meeting.
Only shareholders of record at the close of business on March 17, 1997 will
be entitled to vote at the Meeting.
Your attention is called to the attached proxy statement and accompanying
proxy. It is important that your shares be represented and voted at the Annual
Meeting, regardless of whether you plan to attend in person. You are therefore
urged to sign, date and return the accompanying proxy card promptly in the
enclosed envelope. If you attend the Meeting, you may withdraw your proxy and
vote your own shares.
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1996 accompanies this Notice.
By Order of the Board of Directors
Donna L. Bacon, Secretary
Ann Arbor, Michigan
April 28, 1997
<PAGE>
JPE, INC.
900 Victors Way
Suite 140
Ann Arbor, Michigan 48108
-------------------------
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 15, 1997
GENERAL INFORMATION
The Annual Meeting of Shareholders of JPE, Inc. (the "Company") will be
held at the Sheraton Inn-Ann Arbor, 3200 Boardwalk, Ann Arbor, Michigan 48108,
on Thursday, May 15, 1997, at 9:00 a.m., local time, for the purposes set forth
in the accompanying Notice of Annual Meeting of Shareholders. The approximate
mailing date for this proxy statement and the proxy is April 28, 1997.
It is important that your shares be represented at the Meeting. If you are
unable to attend the Meeting, please sign and date the enclosed proxy and return
it to the Company. The proxy is solicited by the Board of Directors of the
Company. Shares represented by valid proxies in the enclosed form will be voted
if received in time for the Annual Meeting.
Expenses in connection with the solicitation of proxies will be borne by
the Company and may include requests by mail and personal contact by its
directors, officers and employees. The Company will reimburse brokers or other
nominees for their expenses in forwarding proxy material to principals. Any
person giving a proxy has the power to revoke it at any time before it is voted.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only holders of record of shares of the Company's Common Stock at the close
of business on March 17, 1997 are entitled to notice of, and to vote at, the
Meeting or any adjournment or adjournments thereof, each share having one vote.
On such record date, the Company had issued and outstanding 4,602,180 shares of
Common Stock.
Set forth below is information relating to the beneficial ownership of
outstanding shares of Common Stock by each person who is known to the Company to
be the beneficial owner of more than 5% of the outstanding shares of Common
Stock as of March 17, 1997:
<PAGE>
<TABLE>
<CAPTION>
Name and Address
of Beneficial Owner Shares Beneficially Owned
- ------------------- -------------------------
Indirectly through Percent
Number Shareholder Agreement of Class
------ --------------------- --------
<S> <C> <C> <C>
Dr. John Psarouthakis (1) 767,862 (2) 1,381,682 (3) 46.7%
900 Victors Way, Suite 140
Ann Arbor, Michigan 48108
<FN>
(1) Chairman of the Board, Chief Executive Officer and a Director of the
Company.
(2) Consists of (a) 730,362 shares owned by a trust of which Dr. Psarouthakis
is trustee and a beneficiary and (b) 37,500 shares subject to stock options
exercisable within 60 days of March 17, 1997.
(3) Consists of (a) 30,000 shares held by a charitable foundation established
by Dr. Psarouthakis and (b) shares owned or subject to stock options
exercisable within 60 days of March 17, 1997 by persons who have granted
Dr. Psarouthakis the power to vote their shares until various dates in 2007
under a shareholder agreement.
</FN>
</TABLE>
I. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes serving staggered
three-year terms, with each class as nearly equal in number as possible. The
Board of Directors proposes that Drs. John Psarouthakis and Otto Gago be elected
as directors of the Company to hold office for a three-year term until the
Annual Meeting of Shareholders in 2000 and C. William Mercurio be elected as a
director of the Company to hold office for an initial one-year term until the
Annual Meeting of Shareholders in 1998, or until their successors are elected
and qualified. The persons named in the accompanying proxy intend to vote all
valid proxies received by them for the election of the nominees named above,
unless such proxies are marked to the contrary. Withheld votes and broker
non-votes will not be deemed votes cast in determining the nominee vote, but
they will be counted for purposes of determining whether a quorum is present. In
case a nominee is unable or declines to serve, which is not anticipated, it is
intended that the proxies be voted in accordance with the best judgment of the
proxy holders.
The following information is furnished with respect to each nominee for
election as a director, each person whose term of office as a director will
continue after the Meeting and each executive officer of the Company.
<PAGE>
<TABLE>
<CAPTION>
Percent of
Total Shares of
Positions and Shares Common
Offices with of Common Stock of the
the Company Stock Company
and Other Beneficially Beneficially Term
Principal Owned as of Owned as of to
Name of Officer Age Occupations March 17, 1997 March 17, 1997 Expire
- --------------- --- ----------- -------------- -------------- ------
NOMINEES FOR ELECTION AS DIRECTOR FOR A THREE-YEAR TERM
<S> <C> <C> <C> <C> <C>
John Psarouthakis (1) 64 Chairman of the 2,149,544 46.7% 1997
(December 1990) Board, Chief through
Executive Officer Shareholder
and Director of Agreement
the Company
Otto Gago (2) 62 Director of the 34,462 * 1997
(May 1993) Company; Thoracic
and Cardiovascular
Surgeon
NOMINEE FOR ELECTION AS DIRECTOR FOR A ONE-YEAR TERM
C. William Mercurio (3) 57 Director of the 111,625 2.4% 1997
(July 1996) Company; President
of the Company's
OEM Group
DIRECTORS CONTINUING IN OFFICE
John F. Daly (4) 74 Director of the 23,200 * 1998
(May 1993) Company; Retired
Vice Chairman of
the Board of
Directors of
Johnson Controls,
Inc.
Donald R. Mandich (5) 71 Director of the 23,200 * 1999
(May 1993) Company; Retired
Chairman and Chief
Executive Officer
of Michigan Mutual
Insurance Company
and its subsidiaries
OTHER EXECUTIVE OFFICERS
James J. Fahrner (6) 45 Vice President- 13,250 * --
Finance and Chief
Financial Officer
Donna L. Bacon (7) 45 Vice President, 19,750 * --
General Counsel
and Secretary
All Directors and
Executive Officers as
a Group (7 persons) (8) 2,375,031 51.6%
<FN>
* Less than 1%.
(1) Consists of (a) 730,362 shares owned by a trust of which Dr. Psarouthakis
is trustee and a beneficiary, (b) 37,500 shares subject to stock options
exercisable within 60 days of March 17, 1997, and (c) 1,381,682 shares
owned or subject to stock options exercisable within 60 days of March 17,
1997 by persons who have granted Dr. Psarouthakis the power to vote their
shares until various dates in 2007 under a shareholder agreement.
(2) Consists of (a) 27,962 shares held in Dr. Gago's individual retirement
account and (b) 6,500 shares subject to stock options exercisable within 60
days of March 17, 1997. Dr. Psarouthakis has the power to vote the shares
held in Dr. Gago's individual retirement account under a shareholder
agreement. Does not include (a) 215,627 shares held by Dr. Gago's wife and
(b) 15,000 shares held by a charitable foundation established by Dr. and
Mrs. Gago, all of which Dr. Psarouthakis has the power to vote under a
shareholder agreement.
(3) Consists of (a) 105,375 shares owned by Mr. Mercurio directly and (b) 6,250
shares subject to stock options exercisable within 60 days of March 17,
1997.
(4) Consists of (a) 16,700 shares owned by Mr. Daly directly and (b) 6,500
shares subject to stock options exercisable within 60 days of March 17,
1997. Does not include 2,000 shares owned by a trust of which Mr. Daly's
wife is trustee and beneficiary.
(5) Consists of (a) 16,700 shares owned by a trust of which Mr. Mandich is
trustee and beneficiary and (b) 6,500 shares subject to stock options
exercisable within 60 days of March 17, 1997.
(6) Consists of (a) 3,000 shares owned by a trust of which Mr. Fahrner is
trustee and a beneficiary and (b) 10,250 shares subject to stock options
exercisable within 60 days of March 17, 1997.
(7) Consists of (a) 3,000 shares owned by Ms. Bacon directly and (b) 16,750
shares subject to stock options exercisable within 60 days of March 17,
1997.
(8) Includes 90,250 shares subject to stock options exercisable within 60 days
of March 17, 1997 by the Company's directors and executive officers as a
group.
</FN>
</TABLE>
<PAGE>
OTHER INFORMATION RELATING TO NOMINEES AND DIRECTORS
Following each director's name is a brief account of his business
experience during the past five years.
JOHN PSAROUTHAKIS
Dr. John Psarouthakis is the founder of the Company and has been Chairman
of the Board, Chief Executive Officer and a Director of the Company since it
began operations in late 1991. In 1978, Dr. Psarouthakis organized J. P.
Industries, Inc. ("JPI"), which became a Fortune 500 transportation components
manufacturing and distribution company, where he served as Chairman, President
and a Director until its sale in August, 1990. After the sale of JPI, Dr.
Psarouthakis was involved in various private investments and professional
activities until the Company began operations. Dr. Psarouthakis is currently an
Adjunct Professor teaching Acquisitions and Mergers at The University of
Michigan Graduate School of Business.
JOHN F. DALY
Mr. John F. Daly was the Chairman of the Board of Directors and Chief
Executive Officer of Hoover Universal, Inc., a diversified manufacturer of
industrial engineered parts and components, from 1976 until his retirement in
1987. Mr. Daly also served as the Vice Chairman of the Board of Directors of
Johnson Controls, Inc., from May 1985 until his retirement in 1987. Mr. Daly is
a director of AAOMS-Educational Foundation, Comerica Bank & Trust, F.S.B.,
Edwards Brothers, Inc. and Handleman Company and is a trustee of Sienna Heights
College. Mr. Daly became a Director of the Company in May 1993.
DONALD R. MANDICH
Mr. Donald R. Mandich served as Chairman and Chief Executive Officer of
Michigan Mutual Insurance Company and its subsidiaries from May 1995 through May
1996 and has served as a director of such company since May 1985. He was
Chairman of the Board and Chief Executive Officer of Comerica Bank from 1981
until his retirement in 1990. Mr. Mandich is a member of the Board and former
Chairman of the Heart and Vascular Institute of the Henry Ford Hospital. Mr.
Mandich became a Director of the Company in May 1993.
OTTO GAGO
Dr. Otto Gago has been a thoracic and cardiovascular surgeon since 1967. He
currently practices in Ann Arbor, Michigan. Dr. Gago is also an investor in new
businesses and real estate ventures. Dr. Gago became a Director of the Company
in May 1993.
C. WILLIAM MERCURIO
Mr. C. William Mercurio has been President of the Company's OEM Group since
July 1996, prior to which he served as President of Plastic Trim, Inc. since its
acquisition by the Company in April 1995. In November 1990, Mr. Mercurio and a
group of investors purchased Plastic Trim from its parent company, Protective
Treatments, Inc., and he has held the position of president of Plastic Trim
since 1990. Mr. Mercurio became a Director of the Company in July 1996.
During the fiscal year ended December 31, 1996, the Board of Directors of
the Company held seven meetings.
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee, a Compensation
Committee and an Executive Committee to assist it in the management of the
affairs of the Company.
The Company's Audit Committee held two meetings in the fiscal year ended
December 31, 1996. The Audit Committee is composed of Messrs. Daly, Gago and
Mandich and is responsible for the engagement of the Company's independent
accountants and reviews with them the scope and timing of their audit services
and any other services they may be asked to perform, their report on the
Company's accounts following completion of the audit and the Company's policies
and procedures relating to internal accounting and financial controls. Coopers &
Lybrand serves as independent auditors of the Company. The Board of Directors
has ratified the engagement of Coopers & Lybrand for 1997.
The current members of the Company's Compensation Committee are Messrs.
Daly, Gago and Mandich. The Compensation Committee determines the compensation
payable and other benefits available to the Company's executive officers and to
some of the Company's other management. During the fiscal year ended December
31, 1996, the Compensation Committee held two meetings.
The current members of the Company's Executive Committee are Dr.
Psarouthakis and Messrs. Daly and Mandich. The Executive Committee did not meet
during the fiscal year ended December 31, 1996.
The Board of Directors does not have a nominating committee, but from time
to time it may establish committees in addition to the Audit, Compensation and
Executive Committees to assist it in the discharge of its responsibilities.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION OF DIRECTORS
Each director who is not also an officer or employee of the Company
receives a semi-annual director's fee of $3,000 and is reimbursed for expenses
of attending Board of Directors and committee meetings.
On April 27, 1995, the Board of Directors of the Company approved the JPE,
Inc. Director Stock Option Plan (the "Director Plan"). Pursuant to the Director
Plan, on April 27, 1995, each non-employee director of the Company was granted
an option to purchase 5,000 shares of Common Stock of the Company at an exercise
price of $12.75 per share. On the date of each annual meeting of shareholders
subsequent to April 27, 1995, each non-employee director serving on or elected
to the Board on such date shall receive an option to purchase 3,000 shares of
Common Stock of the Company at an exercise price equal to the fair market value
of the Company's Common Stock on the date of such grant.
SUMMARY COMPENSATION TABLE
The following table sets forth information for the fiscal years ended
December 31, 1994, 1995 and 1996 concerning compensation of the Company's Chief
Executive Officer and each of the Company's executive officers whose total
annual salary and bonus exceeded $100,000 in 1996:
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
------------------- ------------
Fiscal Other Annual Stock Option All Other
Name and Position Year Salary (1) Bonus Compensation (2) Shares (#) Compensation (3)
- ----------------- ---- ---------- ----- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
John Psarouthakis 1996 $233,333 $ 50,000 -- 110,000 (4) $ 9,250
Chairman of the 1995 192,500 50,000 -- 90,000 4,500
Board, Chief 1994 160,000 75,000 -- -- 4,500
Executive Officer
and Director
C. William Mercurio 1996 167,760 50,000 -- 25,000 (4) 98,374 (5)
President-OEM
Group and Director
Gareth L. Reed (6) 1996 158,333 -- -- -- 8,187
former President- 1995 184,167 41,000 -- 93,750 4,500
Aftermarket Group 1994 160,000 60,000 -- -- 4,500
and Director
Donna L. Bacon 1996 152,500 40,000 -- 75,000 (7) 9,250
Vice President, 1995 146,625 35,000 -- 15,000 0
General Counsel 1994 28,438 7,500 -- 30,000 0
and Secretary
James J. Fahrner 1996 153,125 40,000 -- 95,000 (8) 9,250
Vice President 1995 78,542 20,000 -- 45,000 0
and Chief
Financial Officer
<FN>
(1) Amounts represent the dollar value of base salary earned by the named
executive officer during the fiscal year covered as reported on the
officer's W-2.
(2) The dollar value of perquisites provided to each of the named executive
officers does not exceed the lesser of $50,000 or 10% of the total of
annual salary and bonus reported for the named executive officer.
(3) Represents the amount contributed to an account for the employee's benefit
by the Company under the Company's 401(k) Savings Plan, unless otherwise
indicated.
(4) Represents options granted as replacement options in connection with the
December 16, 1996 repricing of options. See "Option Grants in Last Fiscal
Year" below.
(5) Represents $72,000 paid in consideration for a covenant not-to-compete and
$26,374 contributed to Mr. Mercurio's account under the Plastic Trim Profit
Sharing Retirement Plan.
(6) Mr. Reed resigned as President-Aftermarket Group and Director of the
Company effective October 15, 1996.
(7) Includes options to purchase 15,000 shares of the Company's Common Stock
that were canceled in connection with the December 16, 1996 repricing of
options. See "Option Grants in Last Fiscal Year" below.
(8) Includes options to purchase 25,000 shares of the Company's Common Stock
that were canceled in connection with the December 16, 1996 repricing of
options. See "Option Grants in Last Fiscal Year" below.
</FN>
</TABLE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning grants of stock
options to the Company's named executive officers during the fiscal year ended
December 31, 1996:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
For Option Term (4)
---------------------------
% of Total
Options
Number of Granted to Exercise
Options Employees in Price Per Expiration
Name Granted (1) Fiscal Year Share (2) Date (3) 5% 10%
- ---- ----------- --------------- --------- ------------ -- ---
<S> <C> <C> <C> <C> <C> <C>
John Psarouthakis 20,000 (5) N/A $7.25 11/03/98 $ 13,946 $ 28,491
23,678 (5) N/A 7.25 11/27/00 36,494 78,491
66,322 (5) N/A 7.25 11/27/05 263,206 647,337
Gareth L. Reed -- -- -- -- -- --
C. William 25,000 (5) N/A 7.25 11/27/05 99,215 244,013
Mercurio
Donna L. Bacon 15,000 (6) 3% 7.75 11/01/06 N/A N/A
30,000 (5) N/A 7.25 10/25/04 101,663 242,563
15,000 (5) N/A 7.25 11/27/05 59,529 146,408
15,000 (5) N/A 7.25 11/01/06 67,330 170,024
James J. Fahrner 15,000 (6) 3% 9.875 7/01/06 N/A N/A
10,000 (6) 2% 7.75 11/01/06 N/A N/A
30,000 (5) N/A 7.25 6/19/05 111,892 271,806
15,000 (5) N/A 7.25 11/27/05 59,529 146,408
15,000 (5) N/A 7.25 7/01/06 64,458 161,213
10,000 (5) N/A 7.25 11/01/06 44,887 113,350
<FN>
(1) The options become exercisable as to up to 25% of the underlying shares of
Common Stock on the first anniversary of the date of grant and 25% each
year thereafter.
(2) The exercise price is to be paid in full in cash or, with the consent of
the Compensation Committee, in Common Stock or by a promissory note payable
to the order of the Company which is acceptable to the Compensation
Committee.
(3) The options may expire earlier in certain circumstances such as the
executive's death or permanent disability or the termination of his
employment with the Company.
(4) The dollar amounts under these columns assume a compounded annual market
price increase for the underlying shares of Common Stock from the date of
grant to the end of the option term of 5% and 10%. This format is
prescribed by the Commission and is not intended to forecast future
appreciation of shares of Common Stock. The actual value, if any, an
executive may realize will depend on the excess of the market price for
shares of Common Stock on the date the option is exercised over the
exercise price. Accordingly, there is no assurance that the value realized
by an executive will be at or near the value estimated above. Potential
Realizable Value is not calculated for options that were replaced during
the fiscal year ended December 31, 1996.
(5) Represents replacement option issued in connection with the December 16,
1996 repricing of options. See "Ten-Year Option/SAR Repricings" below.
(6) Such option was canceled on December 16, 1996 and replaced with an option
at an exercise price of $7.25 per share. See "Ten-Year Option/SAR
Repricings" below.
</FN>
</TABLE>
<PAGE>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table sets forth information concerning (i) each exercise of
stock options during the fiscal year ended December 31, 1996 by each named
executive officer of the Company and (ii) the value of unexercised stock options
held by such persons as of December 31, 1996:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<CAPTION>
Value of
Unexercised
Number of In-the-Money
Unexercised Options Options at
Shares at December 31, 1996 December 31, 1996
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable (1)
- ---- ----------- -------- -------------------- ------------------
<S> <C> <C> <C> <C>
John Psarouthakis -- -- 37,500/72,500 0/0
Gareth L. Reed 16,700 $100,033 33,437/0 0/0
C. William Mercurio -- -- 6,250/18,750 0/0
Donna L. Bacon -- -- 18,750/41,250 0/0
James J. Fahrner -- -- 11,250/58,750 0/0
<FN>
(1) In calculating the value of unexercised in-the-money options at December
31, 1996, the Company used a market value of $7.125 per share, the closing
price for shares of Common Stock on the Nasdaq National Market on December
31, 1996.
</FN>
</TABLE>
<PAGE>
TEN-YEAR OPTION/SAR REPRICINGS
The Board of Directors of JPE, Inc. acknowledged the effort that would be
required from its key employees to implement changes at the Company's operations
and to effect a successful turnaround of Pebra Inc., being acquired in December,
1996. This Board of Directors determined that the most effective and economical
method to motivate and reward such employees would be to reprice all outstanding
options of current, active employees. Therefore, the Board of Directors approved
an option exchange for current, active employees entitling such employees to
cancel their outstanding options in exchange for new options with an exercise
price of $7.25 per share, the fair market value of the Company's stock on the
date of exchange. The new options were subject to the same vesting schedule as
the canceled options, including the same vesting commencement date, with the
same termination date; provided that if the canceled option was an incentive
stock option, it would now become a non-qualified option.
JPE, Inc. Board of Directors
<TABLE>
<CAPTION>
Length of
Number of Market Original
Securities Price of Exercise Option Term
Underlying Stock at Price at Remaining
Options/ Time of Time of at Date of
SARs Repricing Repricing New Repricing
Repriced or or Exercise or
Name Date or Amended Amendment Amendment Price Amendment
---- ---- ---------- --------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
John Psarouthakis 12/16/96 20,000 $7.25 $12.65 $7.25 1.92 years
23,678 7.25 11.55 7.25 3.92 years
66,322 7.25 10.50 7.25 8.92 years
C. William Mercurio 12/16/96 25,000 7.25 10.50 7.25 8.92 years
Donna L. Bacon 12/16/96 30,000 7.25 10.75 7.25 7.83 years
15,000 7.25 10.50 7.25 8.92 years
15,000 7.25 7.75 7.25 9.92 years
James J. Fahrner 12/16/96 30,000 7.25 14.00 7.25 8.58 years
15,000 7.25 10.50 7.25 8.92 years
15,000 7.25 9.875 7.25 9.67 years
10,000 7.25 7.75 7.25 9.92 years
</TABLE>
<PAGE>
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
During 1993, Section 162(m) of the Internal Revenue Code was enacted to
limit the corporate deduction for compensation paid to each of the five most
highly compensated executive officers of a publicly-held corporation to $1
million per year, unless certain requirements are met. The Compensation
Committee has reviewed the impact of this legislation on the Company's executive
compensation plans and concluded that this legislation should not apply to limit
the deduction for executive compensation paid by the Company in 1996.
REPORT OF COMPENSATION COMMITTEE
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company specifically
incorporates this information by reference, and shall not be deemed filed under
such Acts.
INTRODUCTION AND ORGANIZATION
The Compensation Committee of the Board of Directors, composed of
non-employee directors, reviews and develops compensation programs for key
management, evaluates executive performance, administers the Company's
compensation programs and makes recommendations as to compensation matters to
the Board of Directors.
GENERAL POLICIES
The Compensation Committee's overall compensation policy with regard to
executive officers is to provide a compensation package that is intended to
attract and retain qualified executives and to provide incentives to achieve the
Company's goals and increase shareholder value. The Compensation Committee
implements this policy through base salaries, bonuses and grants of stock
options, stock appreciation rights and restricted stock.
BASE SALARIES
Base salary is determined for each of the Company's key executives by the
Compensation Committee based upon recommendations of the Company's Chief
Executive Officer. Factors affecting executive salary determinations include
experience, leadership, the Company's performance and achievements, individual
initiative, performance and achievements and an evaluation of the
responsibilities of the position held by the executive. No specific weighting of
factors is used.
BONUSES
The Company awards its executive officers discretionary bonuses deemed
appropriate by the Compensation Committee. Bonuses are intended to provide
incentives to achieve the Company's financial and operational goals and increase
shareholder value, as well as to recognize an executive's individual
contributions to the Company. Factors affecting executive bonus determinations
include an evaluation of the Company's results and the executive's initiative,
performance and achievements, and the executive's salary. The Compensation
Committee does not use any specific weighting of factors. The Compensation
Committee obtains recommendations from the Chief Executive Officer as to
executive officer bonuses based on an evaluation of each individual executive's
performance during the year.
LONG-TERM INCENTIVES
The Compensation Committee believes that executive ownership of the
Company's stock, together with compensation plans that foster the alignment of
management's interests with those of the Company's shareholders, are in the best
interests of shareholders and management. Under the Company's 1993 Stock
Incentive Plan, the Compensation Committee approved grants of stock options to
executive officers and to other key employees. Awards under the 1993 Stock
Incentive Plan are intended to provide participants with an increased incentive
to make significant contributions to the long-term performance and growth of the
Company, to join the interests of participants with the interests of
shareholders of the Company and to facilitate attracting and retaining key
employees of exceptional ability.
The Compensation Committee's policy is to award stock options in amounts
reflecting the participant's position and the ability to influence the Company's
overall performance. In determining the size of individual awards, the
Compensation Committee also considers the amounts of options outstanding and
previously granted both in the aggregate and with respect to the optionee, the
amount of shares remaining available for grant under the Company's stock
incentive plan, the amount of stock owned by the executive and the aggregate
amount of the current awards. Generally, the exercise price for stock options
will be at or above the fair market value of the underlying shares on the date
of the grant.
OTHER COMPENSATION
The Company has adopted certain employee benefit plans, including its
401(k) savings plan and health benefit plans, in which executive officers have
been permitted to participate. Benefits under these plans are not directly or
indirectly tied to the Company's performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of Dr. Psarouthakis is determined based upon the same
criteria as are used for other executive officers. Dr. Psarouthakis did not
participate in the approval of his own compensation, but he did participate in
the discussion of the Company's performance and he made recommendations
concerning the compensation of executives reporting to him.
By the Compensation Committee
John F. Daly
Otto Gago
Donald R. Mandich
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was established in May 1993 and
consists of Messrs. Daly, Gago and Mandich, each of whom has been an director of
the Company since that date. None of these directors has ever been an officer or
employee of the Company or any of its subsidiaries.
STOCK PERFORMANCE GRAPH
The following table compares the cumulative return since October 1993 (the
date of the Company's initial public offering) on a hypothetical investment in
JPE, Inc. (JPEI), the Nasdaq National Market (U.S.) Index and other motor
vehicle equipment manufacturers and distributors. The stock price performance
shown on the graph is not necessarily indicative of future price performance.
<TABLE>
COMPARISON OF 38 MONTH CUMULATIVE TOTAL RETURN*
Among JPE, Inc., The Nasdaq Stock Market-US Index
and a Peer Group
<CAPTION>
10/27/93 12/93 12/94 12/95 12/96
-------- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
JPE, Inc. 100 107 83 85 62
Peer Group 100 124 82 70 97
Nasdaq Stock Market - U.S. 100 100 98 138 170
<FN>
* $100 invested on 10/27/93 in stock or Index - including reinvestment of
dividends. Fiscal year ending December 31.
</FN>
</TABLE>
<PAGE>
Assumes $100 invested on October 27, 1993 in JPE, Inc., Nasdaq National
Market (U.S.) Index and other motor vehicle equipment manufacturers and
distributors (APS Holding Corp., Excel Industries, Hahn Automotive Warehouse,
MascoTech, Inc., Simpson Industries, Inc., Standard Products Co., Stant Corp.
and Tower Automotive), weighted for market capitalization.
Total return equals price appreciation plus dividends and assumes
reinvestment of dividends.
II. OTHER MATTERS
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANT
Coopers & Lybrand L.L.P. is the independent public accountant for the
Company and its subsidiaries and has reported on the Company's consolidated
financial statements for the fiscal year ended December 31, 1996. The Company's
independent public accountant is appointed by the Company's Board of Directors
after receiving recommendations from the Audit Committee. Coopers & Lybrand
L.L.P. has been reappointed as independent public accountant for the Company for
fiscal year 1997.
Representatives from Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting of Shareholders, will have the opportunity to make a
statement at the Meeting if they desire to do so and are expected to be
available to respond to appropriate questions.
OTHER PROPOSALS
Neither the Company nor the members of its Board of Directors intend to
bring before the Annual Meeting any matters other than those set forth in the
Notice of Annual Meeting, and they have no present knowledge that any other
matters will be presented for action at the Meeting by others. However, if any
other matters properly come before such Meeting, it is the intention of the
persons named in the enclosed form of proxy to vote in accordance with their
best judgment.
A shareholder proposal which is intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company at its principal
executive offices by December 29, 1997.
By Order of the Board of Directors
Donna L. Bacon, Secretary
Dated: April 28, 1997
<PAGE>
JPE, INC.
ANNUAL MEETING OF SHAREHOLDERS
May 15, 1997
P The undersigned hereby appoints John Psarouthakis and Donna L. Bacon, and
R each of them, with full power of substitution, the proxies of the
O undersigned to vote the shares of the undersigned at the Annual Meeting of
X Shareholders of JPE, Inc. to be held May 15, 1997, and at any adjournment
Y thereof, on all matters properly coming before such meeting.
1. ELECTION OF DIRECTORS: (change of address)
John Psarouthakis -------------------------------------
Otto Gago -------------------------------------
C. William Mercurio -------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card.)
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. The Proxies cannot vote your
shares unless you sign and return this Card.
SEE REVERSE SIDE
<PAGE>
/X/ Please mark your votes THIS PROXY IS SOLICITED ON BEHALF OF THE
as in this sample. BOARD OF DIRECTORS AND, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES FOR DIRECTOR NAMED HEREIN. IN
THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING, INCLUDING
THE ELECTION OF ANY PERSON TO THE BOARD OF
DIRECTORS WHERE A NOMINEE NAMED IN THE PROXY
STATEMENT IS UNABLE TO SERVE OR, FOR GOOD
CAUSE, WILL NOT SERVE.
FOR WITHHELD
1. Election of Change / /
Directors / / / / of
(see reverse) Address
For, except vote withheld from Attend / /
the following nominee(s): Meeting
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the Proxy Statement dated April 28, 1997 and ratifies all that
the proxies or any of them or their substitutes may lawfully do or cause to be
done by virtue hereof and revokes all former proxies.
SIGNATURE(S) DATE
---------------------- ------------- PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY
SIGNATURE(S) DATE CARD PROMPTLY USING THE
---------------------- ------------- ENCLOSED ENVELOPE.
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full title as
such.
