SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
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
[X] Definitive proxy statement permitted by Rule
14a-6(e) (2) )
[X] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SIMPSON INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)
_________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies: ________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
(5) Total fee paid: ______________________________________________________
[ ] Fees paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid: _____________________________________________
(2) Form, schedule or registration statement no.: _______________________
(3) Filing party: _______________________________________________________
(4) Date filed: _________________________________________________________
<PAGE>
SIMPSON
INDUSTRIES, Inc. [logotype]
- --------------------------------------------------------------------------
32100 Telegraph Road
Bingham Farms, Michigan 48025
(810) 540-6200
March 24, 1995
To Our Shareholders:
You are cordially invited to attend the 1995 Annual Meeting of
Shareholders of Simpson Industries, Inc. which will be held on Tuesday,
April 25, 1995 at Michigan State University Management Education Center,
811 West Square Lake Road, Troy, Michigan (map enclosed). The meeting will
start promptly at 11:00 a.m. local time. After the required business
session there will be reports to the shareholders on the progress of the
Company, and a discussion period will follow the reports.
The attached notice of the meeting and Proxy Statement describes the
items of business to be transacted, including the election of directors.
Whether or not you plan to attend the meeting, we urge you to sign,
date and return your proxy in the addressed envelope enclosed for your
convenience so that as many shares as possible may be represented at the
meeting. No postage is required if the envelope is mailed in the United
States. The giving of the proxy will not affect your right to attend the
meeting, nor, if you choose to revoke the proxy, your right to vote in
person.
Sincerely,
/s/ Robert W. Navarre /s/ Roy E. Parrott
Robert W. Navarre Roy E. Parrott
Chairman of the Board President and Chief
Executive Officer
<PAGE>
SIMPSON
INDUSTRIES, Inc.
[logotype]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 25, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Simpson Industries, Inc. (the "Company"), will be held at the Michigan
State University Management Education Center, 811 West Square Lake Road,
Troy, Michigan, on Tuesday, April 25, 1995, at 11:00 a.m. local time for
the purposes of:
(1) Electing three directors to serve until the 1998 Annual Meeting
of Shareholders; and
(2) Transacting such other business as may properly come before the
meeting or any adjournment thereof.
You are invited to attend the meeting. If you do not expect to
attend in person, you are urged to sign and return immediately the
enclosed proxy which is solicited by the Board of Directors. A postage
paid envelope is enclosed for use in returning the proxy. The proxy is
revocable and will not affect your right to vote in person if you attend
the meeting.
By Order of the Board of Directors,
Frank K. Zinn
Secretary
Bingham Farms, Michigan
March 24, 1995
<PAGE>
SIMPSON
INDUSTRIES, Inc.
[logotype]
PROXY STATEMENT
Annual Meeting to be held April 25, 1995
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Simpson Industries,
Inc., a Michigan corporation (the "Company"), to be used at the Annual
Meeting of Shareholders of the Company to be held on Tuesday, April 25,
1995, or at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders and in this Proxy
Statement. The expenses of soliciting proxies will be paid by the Company.
This Proxy Statement and the enclosed form of proxy were first sent or
given to security holders on or about March 24, 1995.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by
(i) filing with the Secretary of the Company, at or before the Annual
Meeting, a written notice of revocation bearing a later date than the
proxy, (ii) duly executing a subsequent proxy relating to the same shares
and delivering it to the Secretary of the Company at or before the Annual
Meeting, or (iii) attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice revoking a proxy
should be sent to the Secretary of the Company at the Company's executive
offices.
The Annual Report to Shareholders for the year ended December 31,
1994 is enclosed herewith.
The mailing address of the Company's principal executive offices is
32100 Telegraph Road, Suite 120, Bingham Farms, Michigan 48025.
Only shareholders of record of the Company's common stock, $1 par
value, at the close of business on March 10, 1995 will be entitled to vote
at the meeting or any adjournment thereof. On that date, the Company had
17,976,563 shares of common stock issued and outstanding. Each share of
common stock outstanding on the record date is entitled to one vote. A
majority of outstanding shares will constitute a quorum. Shares cannot be
voted at the meeting unless the holder is present in person or represented
by proxy. Shares may not be voted cumulatively for the election of
directors.
MATTERS TO COME BEFORE THE MEETING
The nominees for election to the Board receiving a plurality of the
votes cast at the meeting will be elected as Directors. Abstentions are
counted only for purposes of determining whether a quorum is present at
the meeting. Broker non-votes will not be counted for any purpose.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall
consist of not less than three nor more than 12 members, and that the
directors shall be divided into three classes as nearly equal in number as
possible. The term of office of each class of directors expires at the
third succeeding annual meeting after election and the terms of office of
the three classes overlap. Pursuant to the Company's Bylaws, the Board has
fixed its size at nine. Three directors are to be elected to hold office
until the 1998 annual meeting, or until their successors have been elected
and have been qualified, and one vacancy presently exists, reflecting the
unexpired term of John K. Pfahl, deceased.
The nominees named below have been selected by the Nominating
Committee of the Board of Directors of the Company. If, due to unforseen
circumstances, any of the nominees will not be available for election, the
proxies will be voted for such other person or persons as the Board of
Directors may select.
<PAGE>
The following table and accompanying text set forth the name, age,
principal occupation for the past five years and term of service with
respect to the three individuals who are nominees for election and the
five directors previously elected who will continue in office after the
meeting, as provided to the Company by each such person. Proxies solicited
by the Board of Directors will be voted in favor of the three nominees if
they are received in time to be voted, unless a shareholder indicates
otherwise on the proxy.
<TABLE>
<CAPTION>
First Elected
Name and Age Principal Occupation as a Director
Nominees for Election as Directors Until the 1998 Annual Meeting
<S> <S> <C>
Robert W. Navarre, 61....... Business Consultant (Naples, Florida)....................... 1965
Frank K. Zinn, 60........... Member in the firm of Dykema Gossett PLLC, attorneys
(Detroit, Michigan)........................................ 1974
Michael E. Batten, 54....... Chairman and Chief Executive Officer, Twin Disc,
Incorporated, a manufacturer of clutches, reverse and
reduction gears, hydraulic couplings and torque converters,
universal joints and transmissions (Racine, Wisconsin).....
<CAPTION>
Directors Whose Terms Continue Until the 1996 Annual Meeting
<S> <S> <C>
George R. Kempton, 61....... Chairman and Chief Executive Officer, Kysor Industrial
Corporation, a manufacturer of commercial and transpor-
tation products for the refrigeration, on and off highway
vehicle and marine industries (Cadillac, Michigan)......... 1983
Ronald L. Roudebush, 47..... Business Consultant (Bloomfield Hills, Michigan) ........... 1993
F. Lee Weaver, 52........... Partner in the firm of Weaver, Bennett & Bland, P.A.,
attorneys (Matthews, North Carolina)....................... 1976
<CAPTION>
Directors Whose Terms Continue Until the 1997 Annual Meeting
<S> <S> <C>
Walter J. Kirchberger, 60... Vice President-Research, PaineWebber, Incorporated (Troy,
Michigan).................................................. 1971
Roy E. Parrott, 54.......... President and Chief Executive Officer, Simpson Industries,
Inc. ...................................................... 1989
</TABLE>
Each nominee is currently a director of the Company, except for Mr.
Batten. Each nominee has been employed in a principal occupation in the
capacity shown above or in a similar one with the same employer for more
than five years, except as set forth below.
In May 1994, Mr. Navarre resigned as Chief Executive Officer of the
Company and retired from the Company in November 1994. Mr. Navarre
continues as Chairman of the Board of Directors of the Company, and
presently serves as a consultant to the Company, as described more fully
under Executive Compensation -- Compensation Committee Interlocks and
Insider Participation. Mr. Navarre also serves as a director of Kysor
Industrial Corporation.
The law firm of which Mr. Zinn is a member has provided legal
services to the Company and its subsidiaries for more than the past two
fiscal years and the Company expects to retain such firm for such purposes
in the current fiscal year.
Mr. Batten serves as a director of the following publicly-owned
companies: Twin Disc, Incorporated, Briggs & Stratton Corporation, Firstar
Corporation and Universal Foods Corporation.
Mr. Kempton also serves as a director of the following
publicly-owned companies: Kysor Industrial Corporation, Guardsman
Products, Incorporated and JLG Industries, Incorporated.
Prior to becoming a business consultant, Mr. Roudebush was President
of Automotive Operations of Rockwell International from 1991 to 1994.
Prior thereto, Mr. Roudebush was President of the On-Highway Products
business of Rockwell International for more than five years.
Committees of the Board. The Audit Committee of the Board of
Directors is presently comprised of Messrs. Kirchberger and Zinn. The
Audit Committee recommends to the Board the appointment of independent
auditors, reviews with the independent auditors the scope and results of
the audit engagement and any non-audit services to be performed by the
independent auditors, monitors the Company's system of internal accounting
controls and evaluates the independence of the independent auditors and
their fees for services. The Compensation Committee of the Board of
Directors is presently comprised of Messrs. Bakken, Roudebush, Weaver and
Zinn. The Compensation Committee monitors the Company's compensation
policies, sets the compensation of the chief executive officer, and
establishes the salary ranges of executive officers of the Company and
remuneration of the directors. The Compensation Committee also administers
the 1984 Stock Option Plan, which was terminated during 1993, the
Supplemental Executive Retirement Plan and the 1993 Executive Long-Term
Incentive Plan. The Nominating Committee of the Board of Directors is
presently comprised of Messrs. Kempton, Kirchberger and Weaver. This
committee is responsible for establishing criteria for selecting and
retaining directors, recommending to the Board nominees for election as
directors and establishing procedures for filling vacancies on the Board.
Shareholders wishing to propose director candidates for consideration by
the Nominating Committee may do so by writing to the Chairman of the
Nominating Committee at the Company's executive office prior to February 1
of each year for the Annual Meeting held during the following April. The
Bylaws of the Company require shareholders who intend to make a director
nomination at the Annual Meeting to provide notice of this intention to
the Secretary of the Company to be received not less than 60 nor more than
90 days prior to April 25, 1996 in accord with the procedures set forth in
the Company's Bylaws.
Director Attendance and Remuneration. During the year ended
December 31, 1994, the Board met a total of five times, the Audit
Committee met two times, the Compensation Committee met four times, and
the Nominating Committee met one time. Directors (other than those who are
also officers or employees of the Company) were paid an annual retainer of
$19,000 for the year ended December 31, 1994. Additional fees are paid on
a per diem basis in the event directors attend special meetings of the
Board and its committees which may be scheduled. Each incumbent director
attended 100% of the meetings of the Board and any committees on which he
served during the year ended December 31, 1994, except that one director
missed one Board meeting.
In addition, non-employee directors receive options to purchase
shares of the common stock of the Company pursuant to the 1993
Non-Employee Director Stock Option Plan (the "Non-Employee Director Option
Plan"). On the day following each annual meeting of the Company's
shareholders, each non-employee director will be granted a non-qualified
stock option ("NQSO") to purchase 1,000 shares, effective as of each such
day following the annual shareholders' meeting. The NQSO will have an
exercise price equal to the fair market value of the shares on the date of
grant. All NQSOs granted under the Non-Employee Director Option Plan will
vest 100% upon the day preceding the first annual shareholders' meeting
following the grant of such NQSO and will remain exercisable until the
tenth anniversary of their grant date; provided that all NQSOs held by a
Director will immediately become 100% vested upon the effective date of a
change in control of the Company.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information with respect to the cash
compensation paid by the Company and its subsidiaries as well as certain
other compensation paid or accrued in all capacities in which they served
during the Company's last three fiscal years, to (i) the Chief Executive
Officer of the Company and (ii) each of the four highest compensated
executive officers (other than the Chief Executive Officer) of the Company
whose compensation exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------------------ -------------------------
Restricted Securities
Stock Underlying All Other
Award(s) Options Compensa-
Name and Principal Position Year Salary Bonus ($)(1) (#)(1) tion (2)
<S> <C> <C> <C> <C> <C> <C>
Robert W. Navarre................... 1994 $302,610 $184,084 $ -- (3) 1,500 $ --
Chairman of the Board; 1993 330,270 222,336 -- 1,500 12,735
Chief Executive Officer 1992 305,142 159,160 -- -- 9,337
(through May 1994)
Roy E. Parrott...................... 1994 $300,686 $182,914 $60,500(4) 16,500 $ 7,020
President; 1993 242,150 162,987 55,125 18,000 12,735
Chief Executive Officer 1992 228,166 118,990 -- -- 9,303
(beginning May 1994)
Kathryn L. Williams................. 1994 $142,060 $ 81,091 $22,000(6) 6,000 $ 6,648
Vice President 1993 136,150 90,902 18,375 12,000 1,269
and Chief Financial Officer, 1992 22,500(5) 11,742 65,000 -- --
Treasurer
George G. Gilbert................... 1994 $139,360 $ 63,033 $22,000(7) 6,000 $ 6,522
Vice President--Transmission 1993 132,494 88,507 18,375 6,000 7,147
and Chassis Group 1992 124,654 64,994 -- -- 5,080
James A. Hug........................ 1994 $126,024 $ 78,049 $22,000(8) 6,000 $ 5,898
Vice President--Heavy Duty 1993 110,166 72,310 18,375 6,000 6,371
Products Group 1992 103,416 51,620 -- -- 4,219
Frank C. Lukacs..................... 1994 $112,752 $ 64,899 $22,000(9) 6,000 $ 5,277
Vice President--Engine 1993 78,730 37,895 6,431 -- 4,243
Products Group 1992 64,390 16,097 -- -- 2,621
<FN>
(footnotes on next page)
<PAGE>
Footnotes for chart on page 3.
(1) Dividends are paid on the shares of restricted stock listed and
options are restated for a 3-for-2 stock distribution as of July 28,
1994.
(2) These amounts represent contributions by the Company to the accounts
of the named executives under the Simpson Industries, Inc. Savings
Plan.
(3) As of November 30, 1994, Mr. Navarre retired from the Company and
held no shares of restricted stock. On February 21, 1989, 6,075
shares were awarded to Mr. Navarre of which 675 shares vested
annually, beginning on June 1, 1989 and continued on each June 1
until his retirement on November 30, 1994 at which time the remaining
2,025 shares were vested.
(4) As of December 31, 1994, Mr. Parrott held 14,813 shares of restricted
stock, valued at $137,020. On September 1, 1989, 15,000 shares were
awarded to Mr. Parrott of which 1,500 shares vest annually beginning
on June 1, 1990 and continuing on each June 1 until June 1, 1999. On
May 11, 1993, 4,500 shares were awarded to Mr. Parrott of which 450
shares vest annually beginning on December 1, 1993 and continuing on
each December 1 until December 1, 2002. On February 26, 1994, 4,125
shares were awarded to Mr. Parrott of which 413 shares or 412 shares
vest annually beginning on December 1, 1994 and continuing on each
December 1 until December 1, 2003.
(5) Ms. Williams joined the Company in November 1992.
(6) As of December 31, 1994, Ms. Williams held 8,550 shares of restricted
stock, valued at $79,088. On November 2, 1992, 7,500 shares were
awarded to Ms. Williams of which 750 shares vest annually beginning
on December 1, 1993 and continuing on each December 1 until
December 1, 2002. On May 11, 1993, 1,500 shares were awarded to
Ms. Williams of which 150 shares vest annually beginning on December
1, 1993 and continuing on each December 1 until December 1, 2002. On
February 26, 1994, 1,500 shares were awarded to Ms. Williams of which
150 shares vest annually beginning on December 1, 1994 and continuing
on each December 1 until December 1, 2003.
(7) As of December 31, 1994, Mr. Gilbert held 7,050 shares of restricted
stock, valued at $65,213. On August 27, 1990, 7,500 shares were
awarded to Mr. Gilbert of which 750 shares vest annually, beginning
on June 1, 1991 and continuing on each June 1 until June 1, 2000. On
May 11, 1993, 1,500 shares were awarded to Mr. Gilbert of which 150
shares vest annually beginning on December 1, 1993 and continuing on
each December 1 until December 1, 2002. On February 26, 1994, 1,500
shares were awarded to Mr. Gilbert of which 150 shares vest annually
beginning December 1, 1994 and continuing on each December 1 until
December 1, 2003.
(8) As of December 31, 1994, Mr. Hug held 5,265 shares of restricted
stock, valued at $48,701. On February 21, 1989, 2,812 shares were
awarded to Mr. Hug of which 281 shares or 282 shares vested on
December 1, 1989 and on December 1, 1990 and 282 shares or 281 shares
vest annually on each June 1 thereafter until June 1, 1998. On
February 27, 1990, 3,180 shares were awarded to Mr. Hug, of which 318
shares vested on December 1, 1990 and 318 shares vest annually on
each June 1 thereafter until June 1, 1999. On May 11, 1993, 1,500
shares were awarded to Mr. Hug of which 150 shares vest annually
beginning on December 1, 1993 and continuing on each December 1 until
December 1, 2002. On February 26, 1994, 1,500 shares were awarded to
Mr. Hug of which 150 shares vest annually beginning on December 1,
1994 and continuing on each December 1 until December 1, 2003.
(9) As of December 31, 1994, Mr. Lukacs held 3,915 shares of restricted
stock valued at $36,214. On February 21, 1989, 1,125 shares were
awarded to Mr. Lukacs of which 113 shares or 112 shares vest annually
beginning on December 1, 1989 and continuing on each December 1 until
December 1, 1998. On February 27, 1990, 3,390 shares were awarded to
Mr. Lukacs, of which 339 shares vest annually beginning on December
1, 1990 and continuing on each December 1 until December 1, 1999. On
May 11, 1993, 525 shares were awarded to Mr. Lukacs of which 53
shares or 52 shares vest annually beginning on December 1, 1993 and
continuing on each December 1 until December 1, 2002. On February 26,
1994, 1,500 shares were awarded to Mr. Lukacs of which 150 shares
vest annually beginning on December 1, 1994 and continuing on each
December 1 until December 1, 2003.
</TABLE>
STOCK OPTIONS
The following table sets forth information with respect to stock
options granted by the Company to the Chief Executive Officer and each of
the four most highly compensated executive officers of the Company during
the Company's last fiscal year. In addition, the table provides an
estimated grant date present value for each set of options using the
Black-Scholes valuation method.
<TABLE>
Option Grants In Last Fiscal Year
<CAPTION>
Individual Grants
- ---------------------------------------------------------------------------------------------------
% of Total
Options
Number of Granted
Securities To
Underlying Employees Grant Date
Options in Fiscal Exercise Price Expiration Present
Name Granted Year ($/Share) Date Value ($)(1)
<S> <C> <C> <C> <C> <C>
Robert W. Navarre........ 1,500(2) 2.8% $13.25 5/11/04 $ 6,300
Roy E. Parrott........... 16,500(3) 31.1% $14.67 2/25/04 $58,905
Kathryn L. Williams...... 6,000(3) 11.3% $14.67 2/25/04 $21,420
George G. Gilbert........ 6,000(3) 11.3% $14.67 2/25/04 $21,420
James A. Hug............. 6,000(3) 11.3% $14.67 2/25/04 $21,420
Frank C. Lukacs.......... 6,000(3) 11.3% $14.67 2/25/04 $21,420
<FN>
________________
(1) The material assumptions and adjustments incorporated in the
Black-Scholes model include the following:
Grant Date
--------------------------------
February 26, 1994 May 11, 1994
----------------- ------------
Risk-Free Interest Rate.............. 5.6% 6.9%
Stock Price Volatility............... 38.7% 40.3%
Dividend Yield....................... 2.5% 2.8%
Reduction for Plan Design Features... 32.9% 17.5%
Expected Option Term................. 6 Years 6 Years
The model assumes: (a) a Risk-Free Interest Rate that represents the
interest rate on a U.S. security with a maturity date corresponding to
that of the expected option term; (b) Stock Price Volatility is
calculated using daily stock prices for the one-year period prior to
the grant date; (c) Dividend Yield is calculated using the annual
dividend rate in effect at date of grant ($.37 per share); (d) a
Reduction for Plan Design Features to reflect the probability of
forfeiture due to termination prior to vesting, and the probability of
a shortened option term due to termination of employment prior to the
option expiration date; and (e) an Expected Option Term of six years,
which represents the expected length of time between grant date and
exercise date. Notwithstanding the fact that these options are
non-transferable, no discount for lack of marketability was taken.
The ultimate values of the options will depend on the future
market price of the Company's stock, which cannot be forecast with
reasonable accuracy. The actual value, if any, an optionee will realize
upon exercise of an option will depend on the excess of the market
value of the Company's common stock over the exercise price on the date
the option is exercised.
(2) These options were granted pursuant to the 1993 Executive Long-Term
Incentive Plan and become exercisable April 24, 1995.
(3) These options were granted pursuant to the 1993 Executive Long-Term
Incentive Plan and become exercisable 20% per year beginning February
26, 1995.
</TABLE>
<PAGE>
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
executives in the Summary Compensation Table, concerning the exercises of
stock options or stock appreciation rights ("SARs") during the last fiscal
year and unexercised options and SARs held as of the end of the last
fiscal year.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs at In-the-Money Options/SARs
Acquired Fiscal Year End at Fiscal Year End
on Value --------------------------- ---------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
R. W. Navarre....... -- $ -- 1,500 1,500 $ -- $ --
R. E. Parrott....... 6,450 $42,462 34,650 30,900 $25,874 $ --
K. L. Williams...... -- $ -- 2,400 15,600 $ -- $ --
G. G. Gilbert ...... -- $ -- 1,200 10,800 $ -- $ --
J. A. Hug........... -- $ -- 1,200 10,800 $ -- $ --
F. C. Lukacs........ -- $ -- -- 7,500 $ -- $3,875
</TABLE>
SEVERANCE ARRANGEMENTS
To help retain key management personnel in the event of a change in
control of the Company, the Company has entered into severance agreements
with Messrs. Parrott, Gilbert and Hug and Ms. Williams. The agreements
provide for special severance pay and benefits in the event of termination
of employment within three years (for Mr. Parrott) or two years (for Ms.
Williams and Messrs. Gilbert and Hug) after a change in control of the
Company. The agreements define a change in control as (i) a change in the
stock ownership of the Company of a magnitude which requires filing of
reports under the Securities Exchange Act of 1934, and such a change is
deemed to have occurred if any person acquires 25% of the Company's
outstanding voting stock, or (ii) a change in the composition of the
majority of the Board of Directors during any two-year period unless each
new director was approved by at least two-thirds of the remaining
directors who were also directors at the beginning of the period. The
agreement with Mr. Parrott expires December 31, 1995, while the agreements
with Ms. Williams and Messrs. Gilbert and Hug expire December 31, 1996.
Each such agreement is automatically extended for successive one-year
periods unless terminated on 30 days notice and provided that no change in
control has occurred.
Under the agreements, the special severance pay and benefits will
not be paid if employment is terminated because of death or disability, or
if terminated by the Company for cause or by the executive officer for
other than a "good reason," as defined in the severance agreements. If,
after a change in control in the Company, the employment relationship is
terminated by the Company other than for cause or is terminated by the
executive officer for "good reason," the Company will pay the executive
officer, from the date of termination to the earlier of the date which is
three years (for Mr. Parrott) or two years (for Ms. Williams and Messrs.
Gilbert and Hug) after the change in control or until the executive
officer's normal retirement date, monthly payments equal to the executive
officer's monthly salary prior to termination plus 1/12th of 70% of the
executive officer's salary for the year immediately prior to the
termination, up to the maximum allowable under applicable federal tax laws
(for Mr. Parrott) or the executive officer's monthly salary prior to
termination plus 1/12 of the average of the short-term incentive bonus
payments paid to the executive officer or accrued with respect to each of
the two years preceding termination (for Ms. Williams and Messrs. Gilbert
and Hug). The Company shall also maintain in full force and effect during
each period any stock option or incentive compensation arrangement and all
group insurance and retirement plans to which the executive officer was
otherwise entitled immediately prior to his or her termination and the
right to immediately exercise in full all outstanding stock options.
PENSION PLAN
The Company has a non-contributory defined benefit pension plan for
salaried employees which provides for payment of a fixed retirement
benefit to participants upon retirement at age 65. The amount of a
participant's annual defined retirement benefit is comprised of up to
three component amounts determined on the basis of the average base
compensation paid to a participant during three separate time periods. The
first component amount, applicable to service performed from July 1, 1976
through June 30, 1981, is equal to the sum of .75% of average base
compensation up to $9,000 plus 1.5% of average base compensation in excess
of $9,000 multiplied by the number of years of participation as of July 1,
1981. The second component amount, applicable to service performed from
July 1, 1981 through December 31, 1988, is equal to the sum of 1.5% of
each year's base compensation up to a specified break point amount, 2.5%
of each year's base compensation in excess of the break point amount, and
2.5% of the participant's salary reduction contributions under the Savings
Plan. The third component amount, applicable to service performed after
December 31, 1988, is equal to the sum of 1.7% of each year's base
compensation below the break point amount, 2.05% of each year's base
compensation above the break point amount (with such calculations
continuing until such time as the participant has accumulated 35 years of
participation), and 1.7% of a participant's compensation for each plan
year commencing after December 31, 1988 in which he or she has been a
participant for more than 35 years. The sum of these three component
amounts equals a participant's annual retirement benefit. Base
compensation under the pension plan includes base salary, but does not
include cash bonuses paid by the Company under its annual incentive plan.
Once benefit payments commence, they may not be reduced because of any
increases in a participant's Social Security payments or other similar
benefits. Benefits under the pension plan are payable, at the election of
the participant, under several different annuity forms or in an equivalent
lump sum payment. The estimated annual benefits payable upon retirement at
normal retirement age (assuming continued employment at the person's
current base compensation rate) under a lifetime annuity for the other
executive officers listed in the above table are as follows:
Mr. Navarre--$83,004; Mr. Parrott--$50,511; Ms. Williams--$76,666; Mr.
Gilbert--$59,556; Mr. Hug--$69,652; and Mr. Lukacs--$78,063. Mr. Navarre
retired on November 30, 1994 and elected to receive his pension benefits
in the form of a lump sum payment.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Since 1988, the Company has maintained an unfunded plan to provide
additional retirement income to selected executive employees to help
attract and retain superior executive personnel. The Supplemental
Executive Retirement Plan ("SERP") is administered by the Compensation
Committee of the Board of Directors. Generally, a participant in the SERP
will be eligible for benefits after he or she has completed at least five
years of service as an officer of the Company or ten years of service at a
specified level at which an employee bonus is available ("bonus service").
The normal retirement benefit that a participant is eligible to receive
under the SERP is equal to the greater of (i) 2% of his average base
compensation times his years of bonus service up to 30 years, or (ii) 4%
of his average base compensation times his years of officer service to a
maximum of 15 years. No participant is entitled to more than 60% of his
average base compensation less deductions for social security benefits and
benefits under other pension plans provided by the Company or from
previous employers. Participants are eligible for similar benefits upon
early retirement, disability or termination of employment, subject to the
same reductions provided under the Company's Pension Plan. Benefits under
the SERP are payable, at the election of the participant, under several
different annuity forms or in an equivalent lump sum payment. Such
benefits are paid out of the general assets of the Company and are not
funded in advance of payment. The estimated annual benefits payable upon
retirement at normal retirement age (assuming continued employment at the
person's current base compensation rate) under a lifetime annuity for the
executive officers listed in the above table are as follows:
Mr. Navarre--$95,263; Mr. Parrott--$97,365; Ms. Williams--$0; Mr.
Gilbert--$0; Mr. Hug--$2,384; and Mr. Lukacs--$0. Mr. Navarre retired on
November 30, 1994 and elected to receive his SERP benefits in the form of
a lump sum payment.
COMPENSATION COMMITTEE REPORT
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors which is comprised of
four non-employee directors. It is the primary responsibility of the
Committee to monitor the Company's compensation policies and programs. The
Committee reviews the performance and establishes the compensation of the
Chief Executive Officer. In the performance of its responsibilities, the
Committee reviews compensation data, surveys and other materials obtained
from independent sources reflecting the compensation practices of other
companies. From time to time, the Committee has engaged the services of
independent compensation consulting firms to evaluate and make
recommendations regarding the Company's executive compensation policies
and programs. In 1992 and 1993, an independent consulting firm was engaged
to evaluate the Company's executive compensation program including
incentive compensation. The Committee was informed that the Company's
executive salary ranges and benefits were in line with competitive
industry standards. On the basis of the consulting firm's evaluation and
other data reviewed by the Committee, the Board of Directors adopted the
1993 Executive Long-Term Incentive Plan which was subsequently approved by
the shareholders.
The Internal Revenue Code (the "Code") was amended, effective for
tax years commencing in 1994, to limit the Company's ability to deduct
more than $1 million of an executive's nonperformance-based compensation.
The Code and current proposed regulations issued thereunder generally
exclude from this limitation compensation that is determined under
pre-established performance goals. Although this limitation will not
affect the deductibility of executive compensation in the current year,
the Committee will continue to review the issue and determine whether the
Company's executive compensation programs should be amended in the future
to meet the deductibility requirements.
Compensation Policies for Executive Officers. The Company's
executive compensation policies are designed to attract and retain highly
qualified executive officers through competitive salary and benefit
programs and to encourage extraordinary effort through incentive awards.
The policies are also designed to promote Company stock ownership among
the executive group to align their long-term interests with those of the
shareholders and to encourage enhancement of shareholder value.
The Company's executive compensation program has three components:
(i) annual base salary, (ii) short-term incentives through annual bonus
awards, and (iii) long-term incentives through participation in the
Company's long-term incentive plans. Executive officer salary ranges are
established annually by the Compensation Committee. Executive officer
salaries are based principally on individual performance, compensation
data for comparable companies obtained from independent sources, and upon
nationwide compensation studies covering senior executive officers from
general manufacturing companies.
The short-term incentive bonus program provides for annual cash
bonuses of a percentage of base salary ranging from a maximum of 36% for
lower-level executives to a maximum of 75% for senior executive officers.
Bonus amounts are determined on the basis of the Company's earnings
performance related to beginning of the year equity. Under the program, no
annual bonuses are earned until a 16% defined return on shareholders'
equity is realized. Maximum bonus levels are only achieved after the
Company realizes a 34% defined return on shareholders' equity. Individual
bonus awards also take into account the officer's individual performance
and that of his operating unit.
Long-term incentive awards have been made through the Company's 1984
Stock Option Plan and 1993 Executive Long-Term Incentive Plan which
provide for the granting of stock options, stock appreciation rights,
restricted stock, performance units and performance shares to key
employees. Stock option awards provide the executive with the right to
purchase shares of common stock over a ten-year period at a price equal to
the fair market value of the common stock on the date of grant. Restricted
stock awards consist of shares of the common stock which cannot be sold or
transferred until the applicable restriction period lapses and may be
forfeited if the executive terminates employment prior to the expiration
of the restriction period. Long-term incentive rewards are principally
designed to encourage long-term enhancement of shareholder value and align
the future interests of executive officers with the success of the
Company. Stock options only reward executive officers to the extent that
shareholders have benefitted. The amount of these awards is primarily
determined by a formula based on the midpoint of such executive's salary
range divided by the current price of the Company's stock.
Chief Executive Officer Compensation. Roy E. Parrott was appointed
Chief Executive Officer of the Company on May 10, 1994. Mr. Parrott's
annual base salary was established at $327,600 based on executive
compensation data for comparable companies provided by an independent
consulting firm, some of which companies are included in the Industry
Index included in the Comparison of Five Year Cumulative Total Return
table and accompanying graph in the Company's Proxy Statement. Mr.
Parrott's base salary is slightly below the mid-point of the current
salary range for the position as reviewed by the Committee in May 1994.
Mr. Parrott's 1994 bonus of $182,914 was based on the Company's earning
performance during 1994 in accord with the formula provided in the
short-term incentive bonus plan, and the Committee's assessment for Mr.
Parrott's attainment of specific goals established at the beginning of the
year.
Robert W. Navarre served as Chief Executive Officer until Mr.
Parrott's election on May 10, 1994. Mr. Navarre's annual base salary was
last established at $330,270 on October 1, 1992 based on executive
compensation data described in the preceding paragraph. No adjustments
were made since that date. Mr. Navarre's 1994 bonus of $184,084 was based
on the Company's earning performance during 1994 in accord with the
formula provided in the short-term incentive bonus plan. Mr. Navarre
retired as an employee on November 30, 1994 and presently serves as
chairman of the Board of Directors.
COMPENSATION COMMITTEE
Ronald L. Roudebush
James K. Bakken
F. Lee Weaver
Frank K. Zinn
February 24, 1995
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1994, Mr. Navarre, Chairman of the Board of the
Company, served as a director of Kysor Industrial Corporation. Mr.
Kempton, a director of the Company, is also a director and the Chairman
and Chief Executive officer of Kysor Industrial Corporation. The Company
engaged Mr. Navarre as a consultant beginning January 1, 1995; the
Consulting Agreement provides for payments of $125,000 during 1995,
$100,000 during 1996 and $75,000 during 1997, which payments include his
normal director fees.
PERFORMANCE GRAPH
The following is a line-graph presentation comparing cumulative,
five-year shareholder return, on an indexed basis, of the Company's common
stock with the NASDAQ (U.S.) Index, the Russell 2000 Index and an industry
index of publicly-traded companies operating primarily in Standard
Industrial Classification 371 ("Industry Index"). The Russell 2000 Index
is comprised of companies with a market capitalization similar to that of
the Company. The Company selected the Industry Index because the companies
included therein are engaged in the manufacturing of motor vehicles and
related parts, accessories and equipment.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*<F1>
AMONG SIMPSON INDUSTRIES, INC., NASDAQ (U.S.) INDEX,
RUSSELL 2000 INDEX AND INDUSTRY INDEX
[EDGAR NOTE: The performance graph required by Item 402(l) of
Regulation S-K appears in this position of the paper document.
A copy of the performance graph on paper is being submitted to
the Branch Chief in the Division of Corporation Finance. A
table containing the data used to create the performance
graph's data points is provided below.]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Simpson Industries, Inc..... 100.00 97.27 156.83 195.70 272.79 185.00
NASDAQ (U.S.)............... 100.00 84.92 136.28 158.58 180.93 176.92
Russell 2000................ 100.00 80.49 117.56 139.20 165.52 162.51
Industry Index.............. 100.00 83.54 108.60 159.38 230.87 197.72
</TABLE>
<F1>
________________
* Assumes that the value of an investment in the Company's common stock
and each index was $100 on December 31, 1989 and that all dividends were
reinvested.
<PAGE>
FURTHER INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information concerning those
persons who are known by management of the Company to be beneficial owners
of more than 5% of the Company's outstanding common stock (as provided to
the Company by such persons or the recordholder of such shares).
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
<S> <C> <C>
J. P. Morgan & Co., Incorporated...... 1,715,100 shrs. (1) 9.6%
60 Wall Street
New York, New York
Farmers Group, Inc.................... 1,539,750 shrs. (2) 8.6%
4680 Wilshire Boulevard
Los Angeles, California
<FN>
________________
(1) Sole voting power--1,164,950 shares (6.5%); sole investment
power--1,710,600 shares (9.6%), as reported in the Schedule 13G, dated
December 30, 1994, received by the Company from such beneficial owner.
(2) Farmers Group, Inc. exercises shared voting and investment powers over
1,539,750 shares with B.A.T. Industries p.l.c., as reported in the
Schedule 13G, dated February 9, 1995, received by the Company from
such beneficial owners.
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of common stock by the Company's directors and named
executive officers, and all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Beneficial Ownership(1) of Class
<S> <C> <C>
F. Lee Weaver.......................... 108,826 (2) .6%
Walter J. Kirchberger.................. 82,932 .5%
Roy E. Parrott......................... 62,591 .4%
Frank K. Zinn.......................... 51,561 (3) .3%
James K. Bakken........................ 37,050 .2%
James A. Hug........................... 36,339 .2%
Robert W. Navarre...................... 28,312 .2%
George R. Kempton...................... 23,313 (4) .1%
Frank C. Lukacs........................ 21,563 .1%
Kathryn L. Williams.................... 17,404 .1%
George G. Gilbert...................... 16,078 .1%
Ronald L. Roudebush.................... 1,500 --
All present directors and executive
officers as a group (12 in number).... 487,469 shrs. 2.7%
<FN>
________________
(1) Includes shares beneficially held for certain executive officers and
directors under the Simpson Industries, Inc. Savings Plan and the
Company's Dividend Investment Plan and also includes 156,150 shares of
Common Stock certain executive officers and directors may acquire
within the next 60 days pursuant to the exercise of stock options
under the Company's long-term incentive plans.
(2) Includes 83,542 shares owned by Prudence B. Weaver, Mr. Weaver's wife,
for her own benefit.
(3) Includes 14,061 shares owned jointly by Mr. Zinn and Ruth A. Zinn, his
wife.
(4) Includes 20,463 shares owned jointly by Mr. Kempton and Joyce H.
Kempton, his wife.
</TABLE>
EXECUTIVE OFFICERS
Set forth below is certain information concerning the current
executive officers of the Company, which group includes the Company's
principal officers.
<TABLE>
<CAPTION>
Name and Age Office(s) and Length of Service
<S> <S>
Roy E. Parrott, 54........ President and director since 1989; Chief
Executive Officer since 1994
Kathryn L. Williams, 39... Vice President and Chief Financial Officer
since 1994; Vice President--Finance from 1992
to 1994 and Treasurer since 1993
George G. Gilbert, 46..... Vice President--Technology Services since 1995;
Vice President--Transmission and Chassis Group
from 1993 to 1995 and Vice President--Engine
Products Group from 1990 to 1993
James A. Hug, 48.......... Vice President--Automotive Group since 1995;
Vice President--Heavy Duty Products Group from
1992 to 1995 and Vice President--Heavy Duty
Products Group-South from 1990 to 1992
</TABLE>
Upon the resignation of Robert W. Navarre as Chief Executive Officer
of the Company in May 1994, Mr. Parrott was selected as Chief Executive
Officer of the Company by its Board of Directors.
Prior to joining the Company in August 1990 as Vice
President--Engine Products Group, Mr. Gilbert served from 1981 to 1990 as
Chief Engineer and later as Operations Manager, Ball Bearing Products
Group, Federal-Mogul Corporation.
Mr. Hug has been with the Company for over 25 years and from 1985 to
1990 served as a Manufacturing Manager of the Company.
Prior to joining the Company in November 1992 as Vice
President--Finance, Ms. Williams served from 1989 to 1992 as Vice
President and Controller--Operations, Vice President, Finance--Grocery
Products Division and Controller of the Kraft USA Group of the Kraft
General Foods subsidiary of Philip Morris Companies, Inc.
Executive officers of the Company are appointed annually by the
Board of Directors and serve at the pleasure of the Board.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than
10% of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and
Exchange Commission (S.E.C.). Executive officers, directors and greater
than 10% shareholders are required by S.E.C. regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no
Form-5s were required for those persons, the Company believes that, during
the Company's last fiscal year, all filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied
with.
ACCOUNTANTS
KPMG Peat Marwick, independent public accountants, have audited the
financial statements of the Company since 1991. Representatives from KPMG
Peat Marwick will be present at the Annual Meeting of Shareholders, will
have an opportunity to make a statement if they wish, and will be
available to respond to appropriate questions. The Board of Directors has
selected KPMG Peat Marwick to audit the financial statements of the
Company for the fiscal year ending December 31, 1995.
OTHER MATTERS AND SHAREHOLDER PROPOSALS
At the date of this Proxy Statement, the Board of Directors is not
aware of any matters to be presented for action at the meeting other than
those described above. However, if any other matters should come before
the meeting, it is the intention of the persons named in the accompanying
proxy to vote such proxy in accordance with their judgment on such
matters. Any proposals of shareholders to be presented at the 1996 Annual
Meeting which are eligible for inclusion in the Company's proxy statement
for that meeting under applicable rules of the Securities and Exchange
Commission must be received by the Company no later than November 24,
1995. Shareholders who intend to make a director nomination or a proposal
of business at any Annual or Special Meeting, which proposal was not
included in the Company's proxy statement for that meeting, must provide
notice of this intention to the Secretary of the Company to be received
not less than 60 nor more than 90 days prior to the date of the meeting in
accord with the procedures set forth in the Company's Bylaws in order to
be properly brought before the Annual or Special Meeting.
Bingham Farms, Michigan
March 24, 1995
<PAGE>
[Form of Proxy -- Front]
SIMPSON INDUSTRIES, INC.
The undersigned hereby constitutes and appoints Roy E. Parrott and
Kathryn L. Williams, or either of them, attorneys and proxies with full
power of substitution to vote at the Annual Meeting of Shareholders of
Simpson Industries, Inc., to be held on Tuesday, April 25, 1995, or at any
adjournment or adjournments thereof.
The shares represented by this proxy will be voted as directed. Unless
authority is withheld, this proxy will be voted to elect as directors the
nominees shown.
Discretionary authority is hereby conferred as to any other matters as
may properly come before the meeting. The undersigned acknowledges receipt
of the Notice of Annual Meeting of Shareholders, the Proxy Statement dated
March 24, 1995, and the Annual Report of Simpson Industries, Inc. to its
Shareholders for the year ended December 31, 1994. The undersigned
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.
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign this Proxy exactly as your name appears on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
HAS YOUR ADDRESS CHANGED?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
[Form of Proxy -- Back]
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
1.) Election of Directors / / / / / /
SIMPSON INDUSTRIES, INC. Robert W. Navarre, Frank K. Zinn
and Michael E. Batten
If you do not wish to direct the voting of
your shares for a particular nominee, mark
the "For All Except" box and strike a line
through the Nominee(s) name. Your shares
will be voted for the remaining Nominee(s).
RECORD DATE SHARES:
2.) To act in their discretion upon the
transaction of such other business as may
properly come before the meeting.
Please be sure to sign and date this Proxy.
Mark box at right / /
Date____________________ if address change
has been noted
________________________ ________________________ on the reverse side.
Shareholder sign here Co-owner sign here
DETACH CARD DETACH CARD
