<PAGE>
HOLOPHANE CORPORATION
250 EAST BROAD STREET, SUITE 1400
COLUMBUS, OHIO 43215
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1997
Notice is hereby given that the 1997 Annual Meeting of Stockholders of
Holophane Corporation will be held at the Concourse Hotel, 4300 International
Gateway, Columbus, Ohio, on Thursday, May 6, 1997, at 11:00 a.m., for
the following purposes:
1. to elect two directors, each for a term to expire at the 2000 Annual
Meeting of Stockholders;
2. to consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche LLP as the Company's independent accountants for the
1997 fiscal year; and
3. to act upon such other matters as may properly come before the
meeting or any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on March 14,
1997 as the record date for the determination of the stockholders entitled to
notice of and to vote at the meeting and at any adjournment or postponement
thereof.
You are cordially invited to attend the Annual Meeting. Whether or not
you plan to attend the Annual Meeting, you may ensure your representation by
completing, signing, dating and promptly returning the enclosed proxy card. A
return envelope, which requires no postage if mailed in the United States,
has been provided for your use. If you attend the Annual Meeting and inform
the Secretary of the Company in writing that you wish to vote your shares in
person, your proxy will not be used.
If your shares are held of record by a broker, bank or other nominee and
you wish to attend the meeting, you must obtain a letter from the broker,
bank or other nominee confirming your beneficial ownership of the shares and
bring it to the meeting. In order to vote your shares at the meeting, you
must obtain from the record holder a proxy issued in your name.
Regardless of how many shares you own, your vote is very important.
Please SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TODAY.
By order of the Board of Directors,
Bruce A. Philp
SECRETARY
Columbus, Ohio
March 28, 1997
<PAGE>
HOLOPHANE CORPORATION
250 EAST BROAD STREET, SUITE 1400
COLUMBUS, OHIO 43215
----------------------
PROXY STATEMENT
----------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors and management of Holophane Corporation, a Delaware
corporation (the "Company"), of proxies for use at the 1997 Annual Meeting
of Stockholders of the Company (the "Annual Meeting") to be held at the
Concourse Hotel, 4300 International Gateway, Columbus, Ohio, on Thursday,
May 6, 1997, at 11:00 a.m., and at any and all postponements or
adjournments thereof, for the purposes set forth in the accompanying Notice
of Meeting.
This Proxy Statement, Notice of Meeting and accompanying proxy card are
first being mailed to stockholders on or about March 28, 1997.
The principal executive offices of the Company are located at 250 East
Broad Street, Suite 1400, Columbus, Ohio 43215.
GENERAL
Only stockholders of record at the close of business on March 14,
1997 are entitled to notice of and to vote the shares of common stock, par
value $.01 per share, of the Company (the "Common Stock") held by them on
that date at the Annual Meeting or any postponements or adjournments thereof.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote for the slate of
nominees proposed by the Board of Directors; for ratification of the
appointment of Deloitte & Touche LLP as the Company's independent
accountants for the fiscal year ending December 31, 1997 and as
recommended by the Board of Directors with regard to all other matters or, if
no such recommendation is given, in their own discretion. Abstentions, broker
non-votes or, in the case of the proposal to elect the slate of nominees
proposed by the Board of Directors only, instructions on the accompanying
proxy card to withhold authority to vote for the nominated director will
result in a proposal's receiving fewer votes. Under the Delaware General
Corporation Law and the Company's Second Amended and Restated Certificate of
Incorporation (the "Charter"), (i) a plurality of the votes of the
outstanding shares of Common Stock entitled to vote and present, in person or
by properly executed proxy, will be required to elect a nominated director
and (ii) the affirmative vote of the holders of at least a majority of the
outstanding shares of Common Stock entitled to vote and present, in person or
by properly executed proxy, will be required to ratify the appointment of
Deloitte & Touche LLP as the Company's independent accountants for the
fiscal year ending December 31, 1997. Each stockholder may revoke a
previously granted proxy at any time before it is exercised by filing with
the Secretary of the Company a revoking instrument or a duly executed proxy
bearing a later date. The powers of the proxy holders will be suspended if
the person executing the proxy attends the Annual Meeting in person and so
requests in writing. Attendance at the Annual Meeting will not, in itself,
constitute revocation of a previously granted proxy.
1
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The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of Common Stock outstanding on March
14, 1997 will constitute a quorum. Each outstanding share entitles its holder
to cast one vote on each matter to be voted upon at the Annual Meeting. As of
March 14, 1997, the record date for the 1997 Annual Meeting, 11,354,516
shares of Common Stock were outstanding and entitled to vote. Stockholders
will not be entitled to appraisal rights in connection with any of the
matters to be voted on at the Annual Meeting.
2
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STOCK OWNERSHIP
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of March 14, 1997,
by each of the Company's directors and nominees, each of the Company's named
executive officers, all directors and officers as a group and each person who
is known by the Company to beneficially own five percent or more of any class
of the Company's voting securities.
SHARES BENEFICIALLY OWNED
-------------------------
DIRECTORS, NOMINEES AND NUMBER EXERCISABLE
OTHER NAMED EXECUTIVE OFFICERS (A) OF SHARES OPTIONS TOTAL PERCENT
- ---------------------------------- --------- ------- ------- -------
John R. DallePezze (b) 346,411 192,375 538,786 4.7%
R. David Andrews (c) 4,205 6,000 10,205 *
William R. Michaels 70,818 6,000 76,818 *
Robert L. Purdum 2,500 18,000 20,500 *
Anthony P. Scotto 48,533 6,000 54,533 *
Tadd C. Seitz 6,000 18,000 24,000 *
Jeffrey M. Wilkins 1,000 6,000 7,000 *
John S. Forbes (b) 19,489 25,750 45,239 *
John W. Harvey 58,624 49,750 108,374 1.0
S. Lee Keller (b) 144,092 49,750 193,842 1.7
Bruce A. Philp (b) 165,415 49,750 215,165 1.9
All directors and officers as a
group (13 persons) 923,683 476,325 1,400,008 11.8
OTHER 5% STOCKHOLDERS
- ---------------------
First Pacific Advisors, Inc. (d) 787,000 6.9
11400 West Olympic Boulevard
Los Angeles, CA 90064
FWHY-Coinvestments II Partners, 694,990 6.1
L.P. (e)
2420 Texas Commerce Tower
201 Main Street
Fort Worth, Texas 76102
Neuberger & Berman LLC (f) 899,700 7.9
605 THIRD AVENUE
NEW YORK, NY 10158-3698
The Capital Group Companies, Inc. (g) 918,000 8.1
333 South Hope Street
Los Angeles, CA 90041
3
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OTHER 5% STOCKHOLDERS
- ---------------------
T. Rowe Price Associates, Inc. (h) 779,000 6.9
100 East Pratt Street
Baltimore, MD 21202
___________________
* Less than 1%.
(a) The business address of each of the directors, nominees and named
executive officers is: c/o Holophane Corporation, 250 East Broad
Street, Suite 1400, Columbus, Ohio 43215.
(b) Also includes shares of Common Stock held by the respective spouses of
executive officers of the Company and by their children that reside with
them.
(c) Mr. Andrews has declined to stand for re-election as a director of
the Company. His term will expire at the Annual Meeting.
(d) Information is based on the Schedule 13G dated February 13, 1997,
which reflects the aggregate beneficial ownership and shared dispositive
power over 787,400 shares of Common Stock by First Pacific Advisors,
Inc., ("First Pacific"), a Massachusetts corporation. First Pacific has
shared voting power over 257,700 shares.
(e) Information is based on the Schedule 13G dated February 14, 1997
(the "Acadia 13G"), which reflects the collective beneficial ownership
of 1,242,217 shares, or 10.9%, of the Company's Common Stock by Acadia
Partners, L.P., a Delaware limited partnership ("Acadia"), Acadia FW
Partners, L.P., a Delaware limited partnership ("Acadia FW"), Acadia
MGP, Inc., a Texas corporation ("Acadia MGP"), J. Taylor Crandall
("Crandall"), Acadia Electra Partners, L.P., a Delaware limited
partnership ("Acadia Electra"), FWHY-Coinvestments V Partners, L.P., a
Texas limited partnership ("FWHY-V"), Group 31, Inc., a Texas
corporation, FWHY-Coinvestments II Partners, L.P., a Texas limited
partnership ("FWHY-II"), Bondo FTW, Inc., a Delaware corporation ("Bondo
FTW), David Bonderman ("Bonderman") and Glenn R. August (collectively,
the "Acadia Group"). According to the Acadia 13G, because of his
position as the president of Bondo FTW, the sole general partner of
FWHY-II, Mr. Bonderman may be deemed to be the beneficial owner of the
694,990 shares of Common Stock held by FWHY-II. The Acadia 13G states
that, in his capacity as president of Bondo FTW, Mr. Bonderman has the
sole power to vote or to direct the vote and dispose or direct the
disposition of such shares.
Each member of the Acadia Group which possesses the sole or shared power
to vote or dispose of 5% or more of the Company's Common Stock is set
forth separately on this table. Except as set forth herein, no member of
the Acadia Group has the shared power to vote any of the shares of
Common Stock held by any other member of the Acadia Group. The Acadia
13G states that neither the fact of its filing by the Acadia Group nor
anything contained therein shall be deemed an admission by the members
of the Acadia Group that a "group" exists within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.
4
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(f) Information is based on the Schedule 13G dated February 10, 1997,
which reflects the aggregate beneficial ownership of and shared
dispositive power over 899,700 shares of Common Stock by Neuberger &
Berman, LLC, ("Neuberger"), a New York limited partnership. Neuberger
has sole voting power over 579,400 shares and shared voting power over
142,850 shares.
(g) Information is based on the Schedule 13G dated February 12, 1997,
which reflects the beneficial ownership of and sole voting and
dispositive power over 918,000 shares of Common Stock by Capital
Guardian Trust Company ("Capital Trust"), a California corporation and a
wholly-owned subsidiary of The Capital Group Companies, Inc., ("Capital
Group"), a Delaware corporation.
(h) Information is based on the Schedule 13G dated February 14, 1997,
which reflects the beneficial ownership of and sole dispositive power
over 779,000 shares of Common Stock by T. Rowe Price Associates, Inc.,
("T. Rowe Price"), a Maryland corporation. T. Rowe Price has sole voting
power over 21,000 shares.
CERTAIN RELATIONSHIPS AND CERTAIN TRANSACTIONS
STOCKHOLDERS AGREEMENT AND REGISTRATION RIGHTS
In connection with the Company's initial public offering (the
"Offering"), the Company entered into an Amended and Restated Stockholders
Agreement dated as of October 15, 1993 (the "Stockholders Agreement"), with
the members of the Acadia Group, each of the Company's then executive
officers and directors who owned Common Stock and certain other pre-existing
stockholders. The Stockholders Agreement provides for certain registration
rights with respect to the Common Stock. At any time after April 28, 1994,
and provided that the Acadia Group owns at least 5% of the Company's
outstanding Common Stock on a fully diluted basis at such time, the Acadia
Group will have one demand registration right. The Company and the Acadia
Group will split the expenses for such demand registration, and such demand
registration must cover at least 50% of the Common Stock owned by the Acadia
Group and at least 5% of the Company's then outstanding Common Stock on a
fully diluted basis. Such demand registration will be subject to customary
underwriting and hold-back provisions. All of the parties to the Stockholders
Agreement will have incidental, or piggy-back, registration rights if the
Company proposes to register any of its equity securities under the
Securities Act of 1933 (other than registration of employee benefit plans) or
if the Acadia Group exercises its demand registration right, again subject to
customary underwriting and hold-back provisions. The registration rights of
the Stockholders Agreement will continue until October 2003.
Pursuant to the Stockholders Agreement, on September 11, 1995, the
Company registered 1,798,427 shares of Common Stock beneficially owned by
Acadia Partners, L.P., Acadia Electra Partners, L.P. and other stockholders.
Of such shares, 1,563,850 shares were sold to the public in a secondary
offering on October 15, 1995 and the Company incurred aggregate expenses of
$175,720 in connection therewith.
ITEM 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes with
regular three year staggered terms. The term of office of directors in Class
I expires at the Annual Meeting. Upon the determination by Mr. Andrews not to
stand for election, the size of the Board was reduced from seven directors to
six and the number of directors
5
<PAGE>
in Class I was reduced from three to two. The Board of Directors proposes
that the nominees described below be elected to Class I for a new term to
expire at the 2000 Annual Meeting of Stockholders and until their successors
are duly elected and qualified. The Board of Directors has no reason to
believe that any of the nominees will not serve if elected, but if any of
them should become unavailable to serve as a director, and if the Board
designates a substitute nominee, the persons named as proxies will vote for
the substitute nominee designated by the Board.
NOMINEES STANDING FOR ELECTION TO THE BOARD OF DIRECTORS
CLASS I - TERM TO EXPIRE AT THE 2000 ANNUAL MEETING
Directors will be elected by a plurality of the votes entitled to vote
and present, in person or by properly executed proxy. The accompanying proxy
will be voted for the election of the Board's nominees unless contrary
instructions are given. If elected, all nominees are expected to serve until
the 2000 Annual Meeting or until their successors are duly elected and
qualified. If the Board's nominee is unable to serve, the persons named as
proxies intend to vote, unless the number of nominees is reduced by the Board
of Directors, for such other person as the Board of Directors may designate.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF ITS NOMINEES FOR DIRECTORS, WHICH IS DESIGNATED AS PROPOSAL NO. 1
ON THE ENCLOSED PROXY CARD.
WILLIAM R. MICHAELS DIRECTOR SINCE 1989
Mr. Michaels, 62, was the Chairman of the Board of the Company from June
1989 through February 1992. Since September 1988, Mr. Michaels has been
Chairman of the Board, President and Chief Executive Officer of Pinnacle
Automation, Inc., a manufacturer of specialized material handling equipment.
Mr. Michaels is a member of the Audit Committee.
ROBERT L. PURDUM DIRECTOR SINCE 1994
Mr. Purdum, 61, retired as Chairman of Armco Inc., a major steel
manufacturer, in 1994. Mr. Purdum joined Armco in 1962 following service in
the U.S. Navy. He was elected President of Armco in 1986 and served as Chief
Executive Officer from November 1990 to December 1993. Mr. Purdum is a
director of Berlitz International, Inc., a language services firm, and
Chairman of Day International, an engineered rubber products company. Mr.
Purdum is also a partner in American Industrial Partners and is on the Board
of Trustees of GMI Engineering & Management Institute. Mr. Purdum is Chairman
of the Audit Committee.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
CLASS II - TERM TO EXPIRE AT THE 1998 ANNUAL MEETING
JOHN R. DALLEPEZZE, CHAIRMAN DIRECTOR SINCE 1989
Mr. DallePezze, 53, has been a Director, President and Chief Executive
Officer of the Company since he joined the Company in October 1989 and
Chairman of the Board since February 1992. Prior to joining the Company, Mr.
DallePezze served from 1983 to 1989 as President of the McCullough Division
of N.L. Industries Inc. and
6
<PAGE>
Western Atlas International Inc. Prior to 1983, Mr. DallePezze served as
General Manager of the Lighting Products Division of Corning Inc.
ANTHONY P. SCOTTO DIRECTOR SINCE 1991
Mr. Scotto, 50, is a Managing Director of Oak Hill Partners, Inc., the
investment advisor and management company for Acadia Partners, L.P. and
Keystone, Inc. Mr. Scotto serves as a director of Ivex Packaging Corporation
and Specialty Foods Corporation. Mr. Scotto is a member of the Compensation
Committee.
CLASS III - TERM TO EXPIRE AT THE 1999 ANNUAL MEETING
JEFFREY M. WILKINS DIRECTOR SINCE 1996
Mr. Wilkins, 52, has been Chairman and Chief Executive Officer of
Metatec Corporation, an information services company, since August 1989. Mr.
Wilkins founded and served as Chief Executive Officer of CompuServe from its
beginning in 1969 until mid-1985. Mr. Wilkins serves as a director of
Checkfree Corporation.
TADD C. SEITZ DIRECTOR SINCE 1993
Mr. Seitz, 55, is the retired Chairman and Chief Executive Officer of
The Scotts Company, a manufacturer of lawn and garden care products. He
continues to serve as a director of Scotts as well as private company boards.
Mr. Seitz is Chairman of the Compensation Committee.
DIRECTORS' REMUNERATION; ATTENDANCE
Directors of the Company who are not employees receive an annual
retainer fee of $25,000. Employees who serve as directors receive no
additional remuneration. All directors are reimbursed for out-of-pocket
expenses. Non-employee directors receive no fringe benefits other than
elective deferral of directors' fees through the Supplemental Executive
Retirement Plan.
All independent directors will receive an annual grant of options to
purchase 4,000 shares of Common Stock pursuant to the Company's 1996
Incentive Stock Plan.
The Company's Charter and Bylaws provide for the elimination of
liability of directors and the indemnification of directors and officers to
the fullest extent permitted by Delaware law.
The Board of Directors met five times during 1996. All of the directors
attended 100% of the total number of meetings of the Board and of the
committees on which they served during 1996, except for Mr. Andrews who
attended four meetings.
7
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COMMITTEES OF THE BOARD
The Board has standing Compensation and Audit Committees.
COMPENSATION COMMITTEE. The Compensation Committee met five times during
1996. The purpose of the Compensation Committee of the Board of Directors
(the "Committee") is to establish and administer executive compensation
policies which are aligned with the Company's business objectives. A detailed
report follows.
AUDIT COMMITTEE. The Audit Committee met five times during 1996. Its
functions are to recommend the appointment of independent accountants; review
the arrangements for and scope of the audit by independent accountants;
review the independence of the independent accountants; consider the adequacy
of the system of internal accounting controls and review any proposed
corrective actions; review and monitor the Company's policies regarding
business ethics and conflicts of interests; discuss with management and the
independent accountants the Company's draft annual financial statements and
key accounting and/or reporting matters; and other related functions.
8
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EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth information concerning total compensation
earned or paid to the Chief Executive Officer and the four most highly
compensated executive officers of the Company who served in such capacities
on December 31, 1996 (the "named executive officers") for services rendered
to the Company.
SUMMARY COMPENSATION TABLE
The following table discloses compensation paid or to be paid to the
named executive officers for each of the last three fiscal years.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(a) COMPENSATION
----------------------------- ------------------------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(b) OPTIONS/SARs PAYOUTS COMPENSATION(c)
- --------------------------- ---- ------ -------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John R. DallePezze ........ 1996 $305,597 $122,575 55,000 $203,767 $44,233
Chairman, President & 1995 291,096 248,600 81,000 461,596 70,087
Chief Executive Officer 1994 278,500 225,362 67,500 0 35,267
John S. Forbes ............ 1996 $152,800 $ 40,800 13,000 $ 72,775 $18,643
Vice President, 1995 145,550 85,000 21,000 167,298 27,846
Marketing 1994 139,250 85,000 18,000 0 15,695
John W. Harvey ............ 1996 $152,800 $ 49,100 13,000 $ 72,775 $19,224
Vice President, 1995 145,550 89,500 21,000 164,392 27,958
Manufacturing 1994 139,250 85,000 18,000 0 15,695
S. Lee Keller ............. 1996 $152,800 $ 41,800 13,000 $ 72,775 $18,713
Vice President, 1995 145,550 98,500 21,000 176,018 29,402
Sales 1994 139,250 85,000 18,000 0 15,695
Bruce A. Philp ............ 1996 $152,800 $ 46,500 13,000 $ 72,775 $19,042
Vice President, Finance, 1995 145,550 93,500 21,000 172,789 28,826
Chief Financial Officer 1994 139,250 85,000 18,000 0 15,695
</TABLE>
_________
(a) Other Annual Compensation, which consists solely of perquisites or
other personal benefits, was less than the lesser of $50,000 or 10% of
such named executive officer's annual salary and bonus for such
year.
(b) Amounts include deferred portions under the Company's Supplemental
Executive Retirement Plan.
(c) All Other Compensation for the 1996 fiscal year reflects amounts
contributed by the Company to Messrs. DallePezze, Forbes, Harvey, Keller
and Philp of $10,497 each under the Company's Thrift Plan and $33,736,
$8,146, $8,727, $8,216 and $8,545, respectively, as supplemental
retirement benefits under the Company's Supplemental Executive
Retirement Plan.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1996
to the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM (b)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ------------------------
NAME GRANTED FISCAL YEAR PRICE (c) DATE 5% 10%
---- ---------- ------------- --------- ------------- ---------- -----------
($/SHARE)
<S> <C> <C> <C> <C> <C> <C>
John R. Dallepezze...... 55,000(a) 26.2 $20.375 Feb. 20, 2006 $ 704,755 $1,785,988
John S. Forbes.......... 13,000(a) 6.2 20.375 Feb. 20, 2006 166,578 422,143
John W. Harvey.......... 13,000(a) 6.2 20.375 Feb. 20, 2006 166,578 422,143
S. Lee Keller........... 13,000(a) 6.2 20.375 Feb. 20, 2006 166,578 422,143
Bruce A. Philp.......... 13,000(a) 6.2 20.375 Feb. 20, 2006 166,578 422,143
All Optionees........... 209,600 100.0 20.375 Feb. 20, 2006 2,685,757 6,806,237
</TABLE>
_______________
(a) Twenty-five percent of such options vest on February 20, 1997, with
the remaining 75% vesting 25% per year until fully vested on February
20, 2000. Such options have stock-for-stock exercise and tax withholding
features, which allow the holders, in lieu of paying cash for the
exercise price and any tax withholding, to have the Company
commensurately reduce the number of shares of Common Stock to which they
would otherwise be entitled upon exercise of such options.
(b) The dollar amounts under these columns are the result of calculations
at the 5% and 10% annualized rates of stock price appreciation set by
the Securities and Exchange Commission and therefore are not intended to
forecast future appreciation, if any, of the Company's stock price.
(c) The exercise price of the options is the per share fair market value of
the underlying Common Stock on the date of the grant.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
The following table provides information on option exercises in fiscal
1996 by the named executive officers and values of such officers' unexercised
options at December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE END EXERCISABLE/ FISCAL YEAR-END
NAME ON EXERCISE REALIZED UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- --------- ------------------------ -------------------------
<S> <C> <C> <C> <C>
John R. DallePezze...... 0 $0 141,750/178,750 $1,163,295/$933,660
John S. Forbes.......... 24,000 $150,595 12,750/45,250 $105,983/$242,978
John W. Harvey.......... 0 $0 36,750/45,250 $301,013/$242,978
S. Lee Keller........... 0 $0 36,750/45,250 $301,013/$242,978
Bruce A. Philp.......... 0 $0 36,750/45,250 $301,013/$242,978
</TABLE>
EMPLOYMENT AGREEMENT
On August 30, 1993, the Company entered into an amended employment
agreement (the "Employment Agreement") with Mr. DallePezze which sets forth
the terms and conditions of Mr. DallePezze's employment as President,
Chairman and Chief Executive Officer. Mr. DallePezze's current compensation
includes a base salary of $338,000 and a targeted bonus of 70% of the base
salary.
If Mr. DallePezze's employment is terminated by the Company without
Cause or if he resigns for Good Reason, other than within two years following
a Change of Control (in each case, as defined in the Employment Agreement),
Mr. DallePezze would be entitled to receive severance payments and other
benefits. These payments and benefits would include (a) a single lump sum
payment of any accrued base salary, benefits and bonus under the Bonus Plan;
(b) continuation of base salary, bonus payments and fringe benefits generally
for a period of 36 months following termination of employment, provided that
such amounts shall be reduced if Mr. DallePezze accepts third-party
employment; and (c) full vesting of all outstanding stock options.
Within two years following a Change of Control, if Mr. DallePezze's
employment is terminated by the Company without Cause or if he resigns for
Good Reason, he would be entitled to receive certain lump sum payments and
other benefits, including (a) a single lump sum payment of any accrued base
salary, benefits and bonus under the Bonus Plan; (b) a single lump sum
payment equal to the sum of (i) two times Mr. DallePezze's applicable base
salary and targeted Annual bonus and (ii) the maximum Long-Term bonus payment
possible under the Bonus Plan; and (c) reimbursement of any excise tax
incurred under Section 4999 of the Internal Revenue Code of 1986 (the "Code")
plus any resulting income taxes as a result of such reimbursement. In
addition, upon the occurrence of a Change in Control, Mr. DallePezze will
become fully vested in all employee benefit plans in which he is a
participant, including all stock options granted to him.
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If Mr. DallePezze's employment is terminated by the Company for Cause or
if he resigns without Good Reason, he would not be entitled to any severance
pay or any other additional compensation.
TERMINATION BENEFITS AGREEMENTS
In September and October 1993, the Company entered into certain
Termination Benefits Agreements (the "Termination Agreements") with each of
the Company's executive officers other than Mr. DallePezze. Under the terms
of the Termination Agreements, the executive officers are entitled to receive
certain benefits upon the termination of their employment within two years
following a Change in Control if termination is without Cause or for Good
Reason (all terms as defined in the Termination Agreements). Benefits payable
upon termination would include (a) a single lump sum payment of any accrued
base salary, benefits and bonus under the Bonus Plan; (b) continuation of
fringe benefits for a period of 18 months following termination of
employment; (c) a single lump sum payment equal to the sum of (i) 1 1/2
times the executive's applicable base salary and targeted Annual bonus and
(ii) the maximum Long-Term bonus payment possible under the Bonus Plan; and
(d) reimbursement of any excise tax incurred under Section 4999 of the Code,
plus any resulting income taxes. In addition, upon the occurrence of a Change
in Control, the executive will become fully vested in all employee benefit
plans in which he is a participant, including all stock options granted to
him.
COMPENSATION COMMITTEE REPORT ON COMPENSATION OF
EXECUTIVE OFFICERS OF THE COMPANY
The purpose of the Compensation Committee of the Board of Directors is
to establish and administer executive compensation policies which are aligned
with the Company's business objectives. The Committee recommends compensation
actions for all corporate officers to the Board of Directors for approval.
All Committee members are non-employee directors.
COMPENSATION PHILOSOPHY
There are certain guiding principles utilized by the Committee in structuring
the compensation packages of key executives. They are:
Pay for Performance - To align the executives' interest with the
interests of stockholders, a high percentage of executives' total
compensation is composed of leveraged short-term and long-term
incentives directly linked to the performance of the Company.
Competitiveness - Executives are provided with an opportunity to earn
total compensation at a level above the median for comparable companies
when Company performance exceeds industry norms and that of its
competitors. This opportunity enables the Company to significantly
challenge its management team.
Executive Ownership - A major component of total compensation is equity
based. This links management's interests with stockholders' interests
and rewards for long-term results.
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Management Development - Total compensation programs are designed to
attract and retain individuals with the leadership and technical skills
required to ensure the Company's future. The Committee believes that
the Company's human resources can provide a competitive advantage.
COMPONENTS OF EXECUTIVE COMPENSATION
The components of total compensation for all executives are base salary, a
bonus plan, fringe benefits and stock options. The Committee annually reviews
total compensation for the Company's executives as well as each component of
compensation. Compensation consultants are utilized by the Committee to
assist in structuring the compensation program and to supply appropriate
competitive compensation information. The Committee has utilized data from a
group of publicly held companies in similar lines of business as the Company
as well as data for general industrial companies of similar size as the
Company. For stock performance comparisons, the Company utilizes the Dow
Jones Industrial Index for the Electrical Components and Equipment Group
which includes companies engaged in similar lines of business as the Company.
While some of these companies were also used for competitive compensation
information, those with substantially larger market capitalization were
excluded.
BASE SALARY - Base salary for all executive officers is targeted to be
in the second quartile (below the median but above the 25th percentile) of
comparable companies. Salaries are reviewed annually and may be adjusted
based subjectively on individual and corporate performance, as measured by
sales, EBITDA and net income, as well as industry comparisons. No specific
weight was assigned to these factors in determining 1996 base salaries for
the executive officers.
BONUS PLAN - The Company's management employees, including the
executive officers, participate in the Holophane Bonus Plan, consisting of
both an Annual and Long-Term Bonus. The Plan is targeted to provide total
cash compensation (salary plus bonuses) in the third quartile of comparable
companies if Company performance objectives are met. Depending on actual
performance, total cash compensation may range from the lowest to the highest
quartile of comparable companies.
Each Bonus Plan participant has a target bonus ranging from 10% to 70%
of base salary. Annual Bonuses, ranging from 0% to 150% of target, are paid
based upon performance against Company financial objectives, including goals
for increases in sales, EBITDA and cash flow. The Chief Executive Officer's
Annual Bonus is based solely upon performance versus these objectives. The
Annual Bonus for other Plan participants, including the executive officers,
is based on performance versus both (in order of importance) Company
objectives and individual objectives. While sales and net income improved in
1996, overall Company performance fell short of the Company's financial
objectives resulting in bonuses which were lower than target.
The Long-Term Bonus is paid if certain long-term goals are met. The
Long-Term Bonus Plan is a rolling three year plan (except for the two year
transition period ending in 1996). Awards are based solely on achievement of
earnings per share objectives. The maximum Long-Term Bonus award for each
participant equals the target bonus in the first year of each plan period.
The 1996 Long-Term Bonus Plan was paid at maximum levels due to the 31%
earnings per share improvement for the two year period. During this time
frame, the market price of Holophane stock increased 52%.
FRINGE BENEFITS - The executive officers participate in the same fringe
benefit plans offered to all salaried employees, including the 5% defined
contribution Thrift Plan. Additionally, they participate in the Supplemental
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Executive Retirement Plan, a non-qualified plan intended to "restore"
retirement benefits which would have accrued under the Thrift Plan were it
not for various limitations under the Code. In addition, participants may be
entitled to defer a portion of their bonuses or director's fees.
STOCK OPTIONS - The Company's Incentive Stock Plans foster executive
stock ownership and align the executives' interests with stockholders'
interests. Grants are targeted to be at the 75th percentile of grants for
similarly compensated executives at comparable companies. Consistent with the
intent of the Incentive Stock Plan, the Compensation Committee has
established stock ownership expectations for all participants.
The maximum number of shares of Common Stock with respect to which
awards may be granted under the 1993 Incentive Stock Plan is 1,182,000. Last
year, 209,600 stock options were granted to directors and key employees,
including the named executives as set forth in the Summary Compensation
Table. Under the 1996 Incentive Stock Plan, 800,000 additional shares were
authorized for use after 1996.
SECTION 162(m) COMPLIANCE
Section 162(m) of the Internal Revenue Code of 1986 places certain
restrictions on the amount of compensation in excess of $1,000,000 which may
be deducted for each executive. The Company intends to satisfy the
requirements of Section 162(m) should the need arise.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. DallePezze is compensated pursuant to the terms of his Employment
Agreement. Based on competitive data from the Company's compensation
consultant, the Committee believes that, relative to CEO compensation in
comparable companies, Mr. DallePezze's base salary for 1996 was in the second
quartile, his annual cash compensation was in the first quartile and his
total cash compensation was in the third quartile. Mr. DallePezze was granted
55,000 stock options pursuant to the 1993 Incentive Stock Plan described
above under STOCK OPTIONS. This grant was established at the 75th percentile
of grants for similarly compensated executives at comparable companies. The
grant also reflects Mr. DallePezze's leadership in achieving the Company's
past performance as well as expectations for his future contribution.
Members of the Compensation Committee
ANTHONY P. SCOTTO
TADD C. SEITZ, CHAIRMAN
JEFFREY M. WILKINS
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STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
the Common Stock of Holophane since becoming a public company on October 28,
1993 with the cumulative total return of (i) the Standard & Poor's 500
Composite Stock Price Index and (ii) the Dow Jones Industrial Index for the
Electrical Components and Equipment Group. The graph assumes the investment
of $100 in Holophane Common Stock, the Standard & Poor's 500 Index and the
Dow Jones Industrial Index for the Electrical Components and Equipment Group.
The initial public offering price of the Company's Common Stock was $10 per
share, adjusted for the 3:2 stock split on December 15, 1996.
[graph]
ITEM 2- RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Company has appointed Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 31, 1997.
Deloitte & Touche LLP has served as the Company's independent accountants
since 1989. Services provided to the Company and its subsidiaries by Deloitte
& Touche LLP with respect to 1996 included the examination of the Company's
consolidated financial statements, limited reviews of quarterly reports,
services related to filings with the Securities and Exchange Commission and
consultations on various tax and information services matters.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting to respond to appropriate questions and to make such statements as
they may desire.
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Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent accountants for 1997 will require the affirmative vote
of a majority of the shares of Common Stock represented in person or by proxy
and entitled to vote at the Annual Meeting. In the event stockholders do not
ratify the appointment of Deloitte & Touche LLP as the Company's independent
accountants for the forthcoming fiscal year, such appointment will be
reconsidered by the Audit Committee and the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR 1997, WHICH IS DESIGNATED AS PROPOSAL NO. 2 ON
THE ENCLOSED PROXY CARD.
OTHER MATTERS
Under the securities laws of the United States, the Company is required
to report in this proxy statement any known failures by officers, directors
or 10% stockholders to file on a timely basis a Form 3, Form 4 or Form 5,
relating to beneficial ownership of the Company's equity securities, during
the last fiscal year. To the best of the Company's knowledge, all required
filings have been made on a timely basis.
As of the date of this proxy statement, the Company knows of no other
business that will be presented for consideration at the Annual Meeting other
than the items referred to above. Proxies in the enclosed form will be voted
in respect of any other business that is properly brought before the Annual
Meeting in accordance with the judgment of the person or persons voting the
proxies.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
In general, stockholder proposals for the nomination of directors
intended to be presented at an Annual Meeting must be received by the Company
at least 60 and not more than 90 days prior to the Annual Meeting, or by
March 8, 1997, for the 1998 Annual Meeting. The requirements for submitting
such proposals and the required contents thereof are set forth in the
Company's Bylaws.
Any proposal of a stockholder intended to be presented at the Company's
1998 Annual Meeting of Stockholders must be received by the Secretary of the
Company, in order to be considered for inclusion in the Company's proxy
statement relating to the 1998 Annual Meeting, by November 28, 1997.
SOLICITATION OF PROXIES
The cost of soliciting proxies for the 1997 Annual Meeting will be borne
by the Company. The Company has retained Corporate Investor Communications,
Inc. to aid in the solicitation of proxies. For these services, the Company
will pay a fee of approximately $2,000 and reimburse it for certain
out-of-pocket disbursements and expenses. Officers and regular employees of
the Company may, but without compensation other than their regular
compensation, solicit proxies by further mailing or personal conversations,
or by telephone, telex or facsimile. The Company will, upon request,
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of stock.
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HOLOPHANE CORPORATION
250 EAST BROAD STREET, SUITE 1400
COLUMBUS, OHIO 43215
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 6, 1997
The undersigned hereby appoints JOHN R. DALLEPEZZE and BRUCE A. PHILP,
or either of them, my attorneys and proxies, with full power of substitution,
to vote at the annual meeting of stockholders of said corporation to be held
on May 6, 1997, and at any adjournment thereof, with all of the powers I
would have if personally present, for the following purposes:
1. ELECTION OF CLASS I DIRECTORS.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees.
(INSTRUCTIONS: Do not check ""WITHHOLD AUTHORITY'' to vote for only
certain individual nominees. To withhold authority to vote for any
individual nominee, strike a line through the nominee's name below
and check ""FOR'').
William R. Michaels Robert L. Purdum
2. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR
THE CURRENT FISCAL YEAR.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON OTHER SIDE)
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3. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND
ANY ADJOURNMENT THEREOF.
THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders dated March 28, 1997, the Proxy Statement
furnished therewith and the Annual Report to Stockholders of the Company for
the fiscal year ended December 31, 1996. Any proxy heretofore given to
vote said shares is hereby revoked.
DATED:_____________________________ , 1997
__________________________________________
__________________________________________
Signature(s) shall agree with the name(s)
printed on this proxy. If shares are
registered in two names, both stockholders
should sign this proxy.
If signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.
PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
