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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
DT INDUSTRIES, INC.
----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BRUCE P. ERDEL
VICE PRESIDENT--FINANCE AND SECRETARY
----------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $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 0-11:1
(4) Proposed maximum aggregate value of transaction:
1 Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ X ] 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 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: $125
(2) Form, Schedule or Registration Statement No.: Preliminary Proxy
Statement
(3) Filing Party: the Registrant
(4) Date Filed: 9/20/96
<PAGE>
DT INDUSTRIES, INC.
----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Monday, November 11, 1996
----------------------
To the Stockholders of
DT Industries, Inc.
The Annual Meeting of Stockholders of DT Industries, Inc., a Delaware
corporation (the "Company"), will be held at University Plaza, 333 John Q.
Hammons Parkway, Springfield, Missouri 65806 on Monday, November 11, 1996, at
10:00 a.m., Central Standard Time, for the following purposes:
(1) To approve or disapprove an amendment to the Company's Restated
Certificate of Incorporation which would classify the Board of
Directors into three classes of directors with staggered three-year
terms;
(2) To elect directors to serve for terms of one to three years
respectively or until their successors are elected and qualified if
the proposal to amend the Restated Certificate of Incorporation to
provide for a classified Board of Directors is approved, and to
provide that the same persons shall be elected for a term of one year
if the proposal to amend the Restated Certificate of Incorporation is
not approved;
(3) To approve or disapprove the adoption of the Company's 1996 Long-Term
Incentive Plan;
(4) To ratify or reject the appointment of Price Waterhouse LLP as
independent auditors of the Company for the fiscal year ending
June 29, 1997; and
(5) To transact such other business as may properly come before the
meeting or any adjournment thereof, according to the proxies'
discretion and in their discretion.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on September 16, 1996,
are entitled to notice of and to vote at the meeting.
Order of the Board of Directors,
Bruce P. Erdel
Vice President--Finance and Secretary
Springfield, Missouri
October 1, 1996
PLEASE FILL OUT, DATE AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT IN THE
ACCOMPANYING POSTAGE PAID ENVELOPE, EVEN IF YOU PLAN TO ATTEND THE MEETING. YOU
MAY REVOKE YOUR PROXY IN WRITING, OR AT THE ANNUAL MEETING IF YOU WISH TO VOTE
IN PERSON.
<PAGE>
DT INDUSTRIES, INC.
Corporate Centre, Suite 2-300
1949 East Sunshine
Springfield, Missouri 65804
----------------------
PROXY STATEMENT
----------------------
ANNUAL MEETING OF STOCKHOLDERS
Monday, November 11, 1996
---------------------
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of DT Industries,
Inc., a Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 10:00 a.m., Central Standard
Time, Monday, November 11, 1996, or at any adjournment thereof, for the purposes
set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at University Plaza, 333 John Q.
Hammons Parkway, Springfield, Missouri 65806. The proxy is revocable at any time
prior to its exercise by delivering to the Company a written notice of
revocation or a duly executed proxy bearing a later date or by attending the
Annual Meeting and voting in person.
This proxy material is first being sent to stockholders on or about October
1, 1996.
OUTSTANDING SHARES AND VOTING RIGHTS
Stockholders of record at the close of business on September 16, 1996 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on that date, there were outstanding and entitled to vote 9,009,250
shares of common stock, $.01 par value ("Common Stock"), each of which is
entitled to one vote. No cumulative voting rights exist under the Company's
Restated Certificate of Incorporation. For information regarding the ownership
of the Company's Common Stock by holders of more than five percent of the
outstanding shares and by the management of the Company, see "Security Ownership
of Certain Beneficial Owners and Management."
For purposes of determining the presence of a quorum and counting votes on
the matters presented, shares represented by abstentions and "broker non-votes"
will be counted as present, but not as votes cast, at the Annual Meeting. Under
Delaware law and the Company's Amended By-laws, all matters expected to be
submitted for consideration at the Annual Meeting will be determined on the
basis of a percentage of votes cast at the Annual Meeting. All matters expected
to be brought before the meeting require the affirmative vote of the holders of
a majority of the Company's Common Stock represented and voting at the Annual
Meeting for approval.
APPROVAL OR DISAPPROVAL OF PROPOSAL TO AMEND
THE RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved and recommends that the
stockholders adopt an amendment (the "Amendment") to the Company's Restated
Certificate of Incorporation which would divide the Company's Board of Directors
into three approximately equal classes with staggered terms. The purpose of the
Amendment is to promote continuity and stability in the Company's management and
policies by making an attempted takeover of
<PAGE>
the Company more difficult. The proposed Amendment is not, however, in response
to any effort of which the Company is aware to accumulate the Common Stock, or
obtain control, of the Company. Rather, the Board of Directors wishes to protect
stockholder investments in the Company by ensuring that unsolicited bidders will
not be in a position to place undue pressure on the Board of Directors or
stockholders of the Company and that the ability of the Board of Directors to
negotiate with any potential acquirer is from the strongest practical position,
which is in the interest of all stockholders. At present, the Board of Directors
does not intend to propose further amendments to the Company's Restated
Certificate of Incorporation or Amended By-laws that might affect attempts to
take over or change control of the Company.
The Company's Restated Certificate of Incorporation contains other
provisions that may limit or prevent a change in control of the Company. Article
4 thereof provides that the authorized capital of the Company consists of
100,000,000 shares of Common Stock and 1,500,000 shares of preferred stock. The
Board of Directors may issue, from time to time, Common Stock or one or more
classes or series of preferred stock with such designations and preferences and
voting and other rights as they deem appropriate without stockholder approval.
The Board of Directors, by issuing such Common Stock or preferred stock, could
adversely affect the voting power of the outstanding shares of Common Stock and
discourage any attempt to gain control of the Company.
To implement the classified Board of Directors, the Amendment would
permit Class I, Class II and Class III directors initially to be elected at the
1996 Annual Meeting of Stockholders for terms of one year, two years and three
years, respectively. If the Amendment is adopted, Class I directors elected at
the 1996 Annual Meeting will hold office until the 1997 Annual Meeting; Class II
directors elected at the 1996 Annual Meeting will hold office until the 1998
Annual Meeting; and Class III directors elected at the 1996 Annual Meeting will
hold office until the 1999 Annual Meeting; and, in each case, until their
successors are duly elected and qualified or until their earlier death,
resignation or removal. At each annual meeting commencing with the 1997 Annual
Meeting, directors elected to succeed those in the class whose terms then expire
will be elected for three-year terms so that the terms of one class of directors
will expire each year. Thus, after 1996, stockholders will elect only one-third
of the directors at each annual meeting. In addition, the Board of Directors may
fill any vacancies which occur for the remainder of the term of the director who
resigns.
Delaware law provides that the certificate of incorporation of a
corporation may provide that the directors be divided into one, two or three
classes, the terms of the directors initially to be classified as follows: the
first class to expire at the annual meeting next ensuing; the second class one
year thereafter; and the third class two years thereafter and that at each
annual election held after such classification, directors shall be elected for a
full term. The Amendment is also consistent with the rules of the Nasdaq Stock
Market on which the Company's Common Stock is traded.
ADVANTAGES OF A CLASSIFIED BOARD. The Board of Directors believes that
dividing the directors into three classes is advantageous to the Company and its
stockholders because providing that directors will serve three-year terms rather
than one-year terms increases the likelihood of continuity and stability in the
policies formulated by the Board. While management has not experienced any
problems with continuity in the past, it wishes to ensure that this experience
will continue and believes that the staggered election of directors will promote
continuity because only one-third of the directors will be subject to election
each year.
The Amendment would significantly extend the time required to make any
change in control of the Board and will tend to discourage any hostile takeover
bid for the Company. Presently, a change in control of the Board can be made by
the holders of a majority of the outstanding stock of the Company at a single
annual meeting. Under the proposed Amendment, it will take at least two annual
meetings for such stockholders to make a change in control of the Board, since
only a minority of the directors will be elected at each meeting. Staggered
terms would also guarantee that approximately two-thirds of the directors, or
more, at any one time have at least one year's experience as directors of the
Company.
DISADVANTAGES OF A CLASSIFIED BOARD. The Amendment will make it more
difficult for stockholders to change the composition of the Board even if
stockholders believe such a change would be desirable. Because of the additional
time required to change control of the Board, the Amendment will also tend to
perpetuate incumbent management. The Amendment will increase the amount of time
required for a takeover bidder to obtain control of the Company without the
cooperation of the Board, even if the bidder were to acquire a majority of the
Company's outstanding stock; accordingly, it will tend to discourage certain
tender offers, perhaps including some offers which stockholders might deem to be
in their best interest. As a result, stockholders may be deprived of
opportunities to sell some or all of their shares in a tender offer. Tender
offers for control usually involve a purchase price higher
2
<PAGE>
than the current market price and may involve a bidding contest between
competing takeover bidders. The Amendment could also discourage open market
purchases by a potential takeover bidder. Such purchases could temporarily
increase the market price of the Company's Common Stock, enabling stockholders
to sell their shares at a price higher than that which would otherwise prevail.
Finally, the Amendment could decrease the market price of the Company's Common
Stock by making the stock less attractive to persons who invest in securities in
anticipation of an increase in price if a takeover attempt develops.
For information regarding the nominees for election to the Board of
Directors at the 1996 Annual Meeting and the class of directors in which each
director will initially serve if the Amendment is adopted, see "Election of
Directors" below.
The Board of Directors recommends voting "FOR" approval of the
Amendment.
ELECTION OF DIRECTORS
The directors are elected at the Annual Meeting of the Stockholders of the
Company and each director elected holds office until his successor is elected
and qualified. The Board currently consists of nine members. The stockholders
will vote at the Annual Meeting for the election of nine directors. There are no
family relationships among any directors or executive officers of the Company.
If the proposal described under the heading "Approval or Disapproval of
Proposal to Amend the Restated Certificate of Incorporation" is approved by the
stockholders, the persons named in the enclosed proxy will vote for the election
of the nominees for each class of the Board of Directors and for the respective
terms designated below unless authority to vote is withheld. If the proposal is
not adopted, the persons named in the enclosed proxy will vote for the election
of such nominees for a one-year term expiring at the 1997 Annual Meeting of
Stockholders unless authority to vote is withheld.
All nominees have consented to serve if elected. In the event that any of
the nominees should be unable to serve, the persons named in the proxy will vote
for such substitute nominee or nominees as they, in their discretion, shall
determine. The Board of Directors has no reason to believe that any nominee
named herein will be unable to serve.
The following material contains information concerning the nominees for
election as Directors.
<TABLE>
<CAPTION>
NOMINEES FOR DIRECTORS
CLASS I (TERM OF OFFICE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
EXPIRES IN 1997)
<S> <C> <C> <C>
James J. Kerley 73 Former Chairman of the Board of July 1992
Rohr, Inc., Chula Vista,
California
Charles F. Pollnow 64 Chairman of the Board, November 1995
President and Chief Executive
Officer of Brulin
Corporation, Indianapolis,
Indiana
Samuel A. Hamacher 44 Executive Vice President of July 1992
Harbour Group Industries,
Inc., St. Louis, Missouri
</TABLE>
<TABLE>
<CAPTION>
CLASS II (TERM OF OFFICE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
EXPIRES IN 1998)
<S> <C> <C> <C>
Stephen J. Gore 49 President and Chief Executive February 1994
Officer of the Company,
Springfield, Missouri
Lee M. Liberman 75 Chairman Emeritus of Laclede May 1994
Gas Company, St. Louis,
Missouri
Gregory A. Fox 34 Group President of Harbour Group February 1994
Industries, Inc., St. Louis,
Missouri
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NOMINEES FOR DIRECTORS
CLASS III (TERM OF OFFICE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
EXPIRES IN 1999)
<S> <C> <C> <C>
William H.T. Bush 58 Chairman of the Board of Bush, November 1995
O'Donnell & Co., Inc.,
St. Louis, Missouri and
Chairman of the Board of
National Auto & Casualty Co.,
Pasadena, California
James C. Janning 49 Chairman of the Board of the July 1992
Company, Springfield,
Missouri, President and Chief
Operating Officer of Harbour
Group Ltd., St. Louis, Missouri
and President and Chief
Executive Officer of Allied
Healthcare Products, Inc.,
St. Louis, Missouri
Donald E. Nickelson 63 Vice Chairman of Harbour Group May 1994
Industries, Inc., St. Louis,
Missouri
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation described above during the past five years.
Mr. Kerley was elected a director of the Company in July 1992 pursuant to a
prior agreement between the Company and Harbour Group Investments II, L.P.
("Investments L.P."), a private investment fund. Mr. Kerley served as the
non-executive Chairman of the Board of Directors of Rohr, Inc. from January 1993
to December 1994 and served as its interim President and Chief Executive Officer
from January 1993 to April 1993. Mr. Kerley retired from Emerson Electric Co. at
the end of 1986 and has served on a number of boards of directors since that
time. While active in industry, he was, at various times, the Chief Financial
Officer of Emerson Electric Co., the Monsanto Company and TransWorld Airlines,
Inc. He serves on the board of directors of Atlantic Coast Airlines and Borg
Warner Automotive, Inc.
Mr. Pollnow has been the Chairman of the Board, President and Chief
Executive Officer of Brulin Corporation, a manufacturer of healthcare,
commercial and industrial products with headquarters in Indianapolis, Indiana,
since November 1987.
Mr. Hamacher has been the Executive Vice President of Harbour Group
Industries, Inc. (a consulting firm which provides corporate development
services primarily to affiliated manufacturing companies), in charge of
corporate development since January 1992. From January 1988 to January 1992, he
was the Vice President-Finance of Harbour Group Ltd. (a consulting firm which
provides operations management services primarily to affiliated manufacturing
companies). Mr. Hamacher has also served as a director of Allied Healthcare
Products, Inc. since May 1992.
Mr. Gore has been the President and Chief Executive Officer of the Company
since June 1993. From May 1992 through May 1993, Mr. Gore was President of the
Company and served as its Chief Financial Officer from October 1990 to August
1993. From January 1988 to September 1990, he served as Senior Vice President of
Finance of Harris-Adacom Corp. (a multinational manufacturer of data
communication products). Prior to that time, Mr. Gore, a certified public
accountant, served as Chief Financial Officer of Techamerica Group, Inc. (a
manufacturer of veterinary pharmaceuticals). He received Bachelor of Science
degrees in Accounting and Computer Science from Missouri Western College and a
Masters of Business Administration from Rockhurst College.
Mr. Liberman has served as Chairman Emeritus of, and a consultant to,
Laclede Gas Company, a natural gas utility, since January 1994. From 1976 to
January 1994, he served as Chairman of the Board and a director of Laclede Gas
Company and, from 1974 to August 1991, as its Chief Executive Officer. Mr.
Liberman has served as a director of CPI Corporation since 1975, Falcon Products
since 1982 and Furniture Brands International since 1985.
Mr. Fox has been Group President of Harbour Group Industries, Inc. since
November 1995. From October 1993 to November 1995, he served as Group Vice
President--Components Group of the Company, and President of Detroit Tool Metal
Products Co., a subsidiary of the Company, from October 1994 to November 1995.
From July
4
<PAGE>
1992 to October 1993, he served as a division president of the Company, having
primary responsibility for the Peer operation. From August 1990 to July 1992, he
served as operations manager for Harbour Group Ltd.
Mr. Bush has been Chairman of the Board of Bush, O'Donnell & Co., Inc., an
investment advisory and merchant banking firm located in St. Louis, Missouri
since 1986. Mr. Bush has also been Chairman of the Board of National Auto &
Casualty Insurance Co. located in Pasadena, California since 1996. Mr. Bush is
also a director of Mississippi Valley Bancshares, Inc., Search Financial
Services, Inc. located in Dallas, Texas, INTRAV, Inc., a travel services company
located in St. Louis, Missouri, Rite Choice Managed Care, Inc., a healthcare
provider located in St. Louis, Missouri, and Search Capital Group, Inc., a
consumer finance company located in Dallas, Texas.
Mr. Janning has served as Chairman of the Board of Directors of the Company
since May 1993. Mr. Janning has been the President of Harbour Group Ltd. since
January 1992, its Chief Operating Officer since August 1988 and has served as
Group President of Harbour Group Ltd. from May 1988 to January 1992. Mr. Janning
has also served as Group President of Harbour Group II Management Co. ("Harbour
Group") (the general partner of Investments L.P.) and as President of HGM III
Co. (the general partner of a private investment fund) since January 1990 and
December 1993, respectively. In addition, Mr. Janning holds various executive
positions with operating companies owned by affiliates of Harbour Group
Industries, Inc. He has also served as a director of Allied Healthcare Products,
Inc. (a manufacturer of medical gas and respiratory therapy equipment) since
1992 and as its President and Chief Executive Officer from July 1993 to August
1994 and since May 1996 and served as a director of Greenfield Industries, Inc.
(a manufacturer of cutting tools) since 1987.
Mr. Nickelson has served as Vice Chairman of Harbour Group Industries, Inc.
since 1991. From 1988 to 1990, he served as President of PaineWebber Group,
Inc., an investment banking and brokerage firm. Mr. Nickelson has served as a
director of PaineWebber Group, Inc. from 1980 to 1993, as a director of
Corporate Property Associates 10 and Corporate Property Associates 11, two
public real estate investment trusts located in New York, New York, since 1990
and 1991, respectively, as a director of Allied Healthcare Products, Inc. since
May 1992, and as a director and Chairman of the Board of Directors of Greenfield
Industries, Inc. since August 1993. He also has served as a director of Sugen,
Inc. since 1993, as a trustee of Mainstay Fund Group since 1995, and as a
director of Sedgwick James of New York since 1996.
BOARD MEETINGS-COMMITTEES OF THE BOARD
The Board of Directors met five times during the fiscal year ended June 30,
1996. The Board of Directors presently maintains an Executive Committee, a
Compensation and Options Committee, an Audit Committee and a Nominating
Committee.
The Executive Committee consists of Messrs. Gore, Hamacher, Janning,
Nickelson and Liberman and exercises all powers of the Board of Directors, to
the extent permitted by law, between meetings of the Board. The Executive
Committee met one time during the fiscal year ended June 30, 1996.
The Compensation and Options Committee consists of Messrs. Janning,
Hamacher, Kerley and Bush and reviews and approves the Company's executive
compensation policy, makes recommendations concerning the Company's employee
benefit policies and administers the Company's Retirement Income Savings Plan,
Cafeteria Benefit Plan and incentive compensation bonus and stock option plans
in effect from time to time, unless otherwise specified in such plan. The
Compensation and Options Committee met four times during the fiscal year ended
June 30, 1996.
The Audit Committee consists of Messrs. Liberman, Kerley and Pollnow and
recommends engagement of the Company's independent auditors and is primarily
responsible for approving the services performed by the Company's independent
auditors and for reviewing and evaluating the Company's accounting principles
and its systems of internal accounting controls. The Audit Committee met five
times during the fiscal year ended June 30, 1996.
The Nominating Committee consists of Messrs. Nickelson, Fox and Liberman
and recommends nominees for election to the Board of Directors. The Nominating
Committee met one time during the fiscal year ended June 30, 1996. The
Nominating Committee will consider nominees submitted by stockholders for
inclusion on the recommended list of nominees submitted by the Company and voted
on at the Annual Meeting of Stockholders in 1997 if such nominations are
submitted in writing to the Company's headquarters, Attention: Nominating
Committee, no later than June 3, 1997.
5
<PAGE>
During the fiscal year ended June 30, 1996, no director attended fewer than
75% of the aggregate of (1) the total number of meetings of the Board of
Directors (held during the period for which he has been a director) and (2) the
total number of meetings held by all committees of the Board on which he served
(during the periods that he served); except that Mr. Kerley missed a Board
meeting and two committee meetings which were held on the same day.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
HOLDERS OF MORE THAN FIVE PERCENT BENEFICIAL OWNERSHIP
The following table sets forth certain information concerning the
beneficial ownership of Common Stock as of September 16, 1996 by each
stockholder who is known by the Company to own beneficially in excess of 5% of
the outstanding Common Stock. Except as otherwise indicated, all persons listed
below have sole voting and investment power with respect to their shares of
Common Stock. The Common Stock constitutes the only class of equity securities
outstanding.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK OUTSTANDING SHARES
<S> <C> <C>
Peer Investors L.P. (1)(4)
7701 Forsyth Boulevard
St. Louis, Missouri 63105 2,861,594 31.8%
Harbour Group Investments II, L.P. (2)(4)
7701 Forsyth Boulevard
St. Louis, Missouri 63105 46,350 *
Harbour Group II Management Co. (3)(4)
7701 Forsyth Boulevard
St. Louis, Missouri 63105 202,837 2.3
NBD Bancorp, Inc. (5)
611 Woodward Avenue
Detroit, Michigan 48226 686,000 7.6
Dimensional Fund Advisors (6)
1299 Ocean Avenue
Santa Monica, California 90401 474,000 5.3
</TABLE>
- -------------
* Less than 1.0%.
(1) Peer Investors L.P. ("Peer L.P.") is a Delaware limited partnership whose
general partner is Fox HG II Companies Investments L.P. ("Fox HGII"), a
Delaware limited partnership of which Sam Fox is the general partner.
(2) Investments L.P. is a Delaware limited partnership whose general partner is
Harbour Group, a Missouri corporation controlled by Sam Fox. Harbour Group
has a 1% interest in Investments L.P. Investments L.P. was organized to
make subordinated debt and equity investments in certain operating
companies controlled by Harbour Group and its affiliates. Its limited
partners consist mainly of institutional investors.
(3) Excludes shares owned by Investments L.P.
(4) Peer L.P., Investments L.P. and Harbour Group are under the common control
of Sam Fox. An additional 36,194 shares of Company Common Stock are owned
by Fox HGII, and an additional 90,000 shares are owned by Fox Family
Foundation, a foundation of which Sam Fox is a trustee. Consequently, Sam
Fox may be construed as the beneficial owner of 3,236,975 shares (or 35.9%
of the outstanding shares).
(5) Information based on a filing of Form 13G filed in February 1996.
(6) Information based on a filing of Form 13F filed as of June 1996.
6
<PAGE>
BENEFICIAL OWNERSHIP OF MANAGEMENT AND NOMINESS
The following table sets forth certain information concerning the
beneficial ownership of Common Stock as of September 16, 1996 by each director
and director nominee of the Company, by each of the executive officers listed in
the Summary Compensation Table ("Named Executive Officers"), and by all
directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAME OF BENEFICIAL OWNER COMMON STOCK OUTSTANDING SHARES
<S> <C> <C>
James C. Janning (1)(2) 93,750 1.0%
Stephen J. Gore (3) 82,287 *
William H.T. Bush 2,000 *
Bruce P. Erdel (4) 30612 *
Gregory A. Fox (1)(5) 58848 *
Samuel A. Hamacher (1)(6) 5961 *
James J. Kerley(6) 7500 *
Lee M. Liberman (6)(7) 5000 *
Donald E. Nickelson (1)(6) 4912 *
Charles F. Pollnow 1,000 *
------- ---
All directors, director nominees and
executive officers as a group (10 persons) 291,920 3.2%
======= ====
</TABLE>
- -------------
* Less than 1.0%.
(1) Excludes shares owned by Peer L.P., Harbour Group and Investments L.P. Each
of these individuals is an officer and/or director of affiliates of Peer
L.P., Harbour Group and/or Investments L.P. and each such person disclaims
beneficial ownership of shares beneficially owned by Peer L.P., Harbour
Group and Investments L.P.
(2) Excludes 1,000 shares owned by Mr. Janning's spouse, as to which shares Mr.
Janning disclaims beneficial ownership. Includes 3,750 shares issuable
pursuant to options granted under the Directors Nonqualified Stock Option
Plan which have become exercisable.
(3) Includes 14,687 shares issuable pursuant to options granted under the 1994
Employee Stock Option Plan which have become exercisable.
(4) Includes 7,312 shares issuable pursuant to options granted under the 1994
Employee Stock Option Plan which have become exercisable.
(5) Includes 5,000 shares issuable pursuant to options granted under the 1994
Employee Stock Option Plan which have become exercisable.
(6) Includes 2,500 shares issuable pursuant to options granted under the 1994
Directors Nonqualified Stock Option Plan which have become exercisable.
(7) Excludes 1,500 shares owned by J & L Investments, a partnership in which
Mr. Liberman holds a 50% interest, as to which shares Mr. Liberman
disclaims beneficial ownership.
7
<PAGE>
EXECUTIVE OFFICERS
The following provides certain information regarding the executive officers
of the Company who are appointed by and serve at the pleasure of the Board of
Directors:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
<S> <C> <C>
Stephen J. Gore 49 President and Chief Executive Officer (1)
Bruce P. Erdel 36 Vice President--Finance and Secretary (2)
</TABLE>
- -------------
(1) See information under "Election of Directors."
(2) Mr. Erdel has been the Vice President--Finance of the Company since August
1993 and Secretary since February 1994. From February 1989 to August 1993,
he was the Director of Accounting of Harbour Group Ltd. From 1987 to 1989,
he served as Corporate Controller of Burks Pumps, Inc. (a pump
manufacturer). Prior to that time, Mr. Erdel, a certified public
accountant, served with Price Waterhouse. He received a Bachelor of Science
degree in Accounting from Northeast Missouri State University.
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid or accrued by the
Company for services rendered during the fiscal years ended June 26, 1994, June
25, 1995, and June 30, 1996 to each of the Company's executive officers whose
total salary and bonus exceeded $100,000 during the fiscal year ended June 30,
1996.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- ------------
OTHER ANNUAL STOCK OPTION
NAME AND COMPENSATION AWARDS ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($) ($)(3)(4) (In Shares) COMPENSATION ($)(5)
<S> <C> <C> <C> <C> <C> <C>
Stephen J. Gore
President and
Chief Executive 1996 $280,816 $224,000 $15,000 31,050 $6,581
Officer 1995 244,038 87,500 12,563 12,000 7,462
1994 168,461 145,061 (2) -- 117,500 7,862
Bruce P. Erdel*
Vice President--
Finance and 1996 $139,712 $ 89,600 $5,500 8,100 $6,381
Secretary 1995 116,923 33,600 3,477 6,000 6,708
1994 75,625 72,531 (2) -- 47,500 3,519
</TABLE>
- -------------
* Mr. Erdel joined the Company in August 1993.
(1) Includes amounts deferred under the 401(k) feature of the Company's
Retirement Income Savings Plan.
(2) Includes special bonuses paid in fiscal
1994 to Mr. Gore and Mr. Erdel of $50,000 and $25,000, respectively, in
connection with the successful initial public offering of the Company's
common stock.
(3) Excludes certain personal benefits, the total value of which
was less than 10% of the total annual salary and bonus for each of the
executives (i.e. lease value of vehicles, life insurance premium, etc.).
(4) The amount shown represents a bonus accrued to reimburse the interest cost
on a promissory note used to purchase certain shares of the Common Stock.
(5) Reflects Company contributions under the Retirement Income Savings Plan.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AGREEMENTS. On
September 19, 1990, the Company entered into an employment agreement with
Stephen J. Gore, pursuant to which Mr. Gore is employed by the
8
<PAGE>
Company. The employment agreement provides that if Mr. Gore's employment is
terminated or his salary or job responsibility becomes significantly reduced for
any reason other than (i) death, (ii) voluntary termination or (iii) cause, he
will be entitled to receive a severance payment equal to 75% of his salary. The
Stockholder Agreements between the Company and each of the Named Executive
Officers also contain provisions for payments to such Named Executive Officers,
under certain circumstances, following the termination of their employment with
the Company. See "Certain Transactions--Agreements with Existing Stockholders."
OPTIONS
The following table sets forth information concerning options granted
during the fiscal year ended June 30, 1996 under the Company's stock option
plans to the Named Executive Officers.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENTAGE OF POTENTIAL REALIZED VALUE AT
SECURITIES TOTAL OPTIONS ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK APPRECIATION FOR
OPTIONS EMPLOYEES IN PER SHARE EXPIRATION OPTION TERM (3)
NAME GRANTED (1) FISCAL 1996 (2) EXERCISE PRICE DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Stephen J.
Gore 31,050 14.2% $13.625 10/30/05 $266,058 $674,242
Bruce P.
Erdel 8,100 3.7% $13.625 10/30/05 $ 69,407 $175,890
</TABLE>
- -------------
(1) Represents options granted pursuant to the 1994 Employee Stock Option Plan
with an exercise price equal to the market price on the date of grant.
Options become exercisable with respect to one-fourth of the shares covered
thereby on each anniversary of the date of grant, commencing on the second
anniversary of such date.
(2) Options to purchase a total of 219,000 shares were granted to employees
under the Company's 1994 Employee Stock Option Plan in fiscal 1996, the
purpose of which is to provide a financial incentive to key employees who
are in a position to make significant contributions to the Company.
(3) Potential realizable value is calculated based on an assumption that the
price of the Company's Common Stock appreciates at the annual rate shown
(5% and 10%), compounded annually, from the date of grant of the option
until the end of the option term. The value is net of the exercise price
but is not adjusted for the taxes that would be due upon exercise. The 5%
and 10% assumed rates of appreciation are mandated by the rules of the
Securities and Exchange Commission and do not in any way represent the
Company's estimate or projection of future stock prices.
The following table sets forth information concerning option exercises and
the value of unexercised options held by the Named Executive Officers named in
the Summary Compensation Table above as of June 30, 1996.
<TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED,
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED OPTIONS AT OPTIONS AT
NAME ON EXERCISE VALUE REALIZED JUNE 30, 1996 JUNE 30, 1996
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Stephen J. Gore -- -- 12,500 59,375 $80,550 $360,544
Bruce P. Erdel -- -- 6,250 29,688 32,850 146,713
</TABLE>
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Hamacher and Kerley were appointed as members of the Compensation
and Options Committee upon its formation in March 1994. In June 1994 and
November 1995, respectively, Messrs. Janning and Bush were added as new members
to such committee. Mr. Janning was indebted to the Company during the last
fiscal year, as evidenced by certain promissory notes, in an amount in excess of
$60,000, and received a bonus in the amount of the interest cost of such notes
plus all federal and state income taxes applicable to such payments pursuant to
an agreement with the Company. See "Certain Transactions -- Agreements with
Existing Stockholders."
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is entitled to receive
an annual fee of $10,000 for his services as a director and additional fees of
$750 for attendance at each meeting of the full Board of Directors and $350 for
attendance at each meeting of committees of the Board of Directors. Directors
are also entitled to reimbursement for their expenses incurred in attending
meetings.
DIRECTORS STOCK OPTION PLAN. The Company maintains a 1994 Directors
Non-Qualified Stock Option Plan (the "Directors Stock Option Plan") which
provides for the granting of options to the Company's directors who are not
employees of the Company, for up to 100,000 shares of Common Stock.
The Directors Stock Option Plan is administered by a Directors Stock Option
Committee of two or more members of the Board of Directors. Directors who have
been granted an option under the Directors Stock Option Plan during the
twelve-month period preceding appointment to the committee are not eligible to
serve on such committee, and no option may be granted to a director while
serving on the committee.
Options granted or to be granted under the Directors Stock Option Plan may
not be exercised for a period of two years from the date of grant and thereafter
become exercisable on a cumulative basis in 25% increments beginning on the
second anniversary of the date of grant and concluding on the fifth anniversary
of the date of grant. All options granted under the Directors Stock Option Plan
expire ten years from the date of grant.
Options granted or to be granted under the Directors Stock Option Plan are
nontransferable, and the exercise price must be equal to the fair market value
of the Common Stock on the date of grant as set forth in the Directors Stock
Option Plan or as determined by the Directors Stock Option Committee. Upon
exercise, the exercise price must be paid in full in cash or such other
consideration as the Directors Stock Option Committee may permit.
The Directors Stock Option Plan by its express terms provides for the grant
of options thereunder to each eligible director serving on the date of the
Company's initial public offering with respect to 10,000 shares of Common Stock,
and an additional option to the Chairman of the Board of Directors (provided he
is an eligible director) with respect to 5,000 shares of Common Stock, in each
case at the initial public offering price. In addition, the Directors Stock
Option Plan provides for the grant of options to each person first becoming an
eligible director subsequent to the date of the Company's initial public
offering with respect to 10,000 shares of Common Stock and the grant of an
additional option to each person first becoming Chairman of the Board subsequent
to such date (provided he is an eligible director) with respect to 5,000 shares
of Common Stock, in each case at the fair market value on the date of grant. On
November 10, 1995, Messrs. Bush and Pollnow were granted options with respect to
10,000 shares of Common Stock , respectively, with an exercise price per share
of $13.50.
INDEMNIFICATION AND LIMITATION OF LIABILITY
The Company's Restated Certificate of Incorporation limits the liability of
directors for money damages, and the Company's Amended By-laws provide for the
indemnification of the Company's directors and officers, to the full extent
permitted by the Delaware General Corporation Law.
BOARD COMPENSATION AND OPTIONS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Options Committee (the "Committee"), whose purpose is
to administer the Company's executive compensation policies, is composed
entirely of non-employee members of the Board of Directors and reviews,
recommends and approves changes to the Company's compensation policies and
programs for the chief executive officer, other senior executives and certain
key employees whose annual base salary exceeds $100,000. In addition to the
delegated authority in areas of compensation, the Committee administers the
Company's stock option plans and agreements and approves grants to be made in
connection therewith.
10
<PAGE>
In the Committee's discharge of its responsibilities, it considers the
compensation, primarily of the chief executive officer, all other executive
officers and certain other key officers, sets overall policy and considers in
general the basis of the levels of compensation of other key employees.
POLICY AND OBJECTIVES. Recognizing its role as a key representative of the
stockholders, the Committee seeks to promote the interests of stockholders by
attempting to align management's remuneration, benefits and perquisites with the
economic well-being of the Company. Since the achievement of operational
objectives should, over time, represent the primary determinant of share price,
the Committee links elements of compensation of executive officers and certain
key employees with the Company's operating performance. In this way, objectives
under a variety of compensation programs should eventually reflect the overall
performance of the Company. By adherence to the compensation program, the
compensation process should provide for enhancement of shareholder value.
Basically, the Committee seeks the successful implementation of the Company's
business strategy by attracting and retaining talented managers motivated to
accomplish these stated objectives. The Committee attempts to be fair and
competitive in its views of compensation. Thus rewards involve both business and
individual performance. The key ingredients of the program consist of base
salary, annual cash incentives and long range incentives consisting of stock
options.
BASE SALARY. As a general principle, base salaries for the chief executive
officer, as well as other executive officers of the Company, are determined by
comparing salary data for similar positions in companies that match the
Company's size in sales and earnings. Near the end of fiscal year 1994, the
Committee commissioned a study, performed by an independent employee benefits
consulting firm, to evaluate executive compensation at companies comparable to
the Company. The results of this study were considered by the Committee in
setting target compensation, composed of base salary and bonus, for the
executive officers of the Company, including the chief executive officer, for
the 1996 fiscal year. An updated version of this study was prepared at the end
of fiscal 1996 and utilized in setting compensation for the chief executive
officer and other executive officers for the 1997 fiscal year. Target
compensation for each of the Company's executive officers is generally equal to
the median amount in the salary survey for the corresponding position. The
Committee anticipates that it will periodically use updated versions of these
studies or other independent studies or salary surveys of companies comparable
to the Company as a component in the determination of base salary for executive
officers. In addition, the performance of each executive officer is evaluated
annually and salary adjustments are based on various factors including revenue
growth, earnings per share improvement, increases in cash flow, new product
development, market appreciation for publicly traded securities, reduction of
debt, personal performance, and position in the salary study or survey range.
The Committee approves base salary adjustments for the Named Executive Officers,
including the chief executive officer. Minimum compensation levels and severance
arrangements for the current chief executive officer were established by a
September 1990 agreement approved by the board of directors of the Company's
predecessor. Compensation established for the chief executive officer by the
Committee has exceeded such minimum levels.
CASH INCENTIVE COMPENSATION. To reward performance, the chief executive
officer and other executive officers are eligible for annual cash bonuses. The
actual amount of incentive compensation paid to each executive officer is
predicated on the financial performance of the Company and an assessment of each
participant's relative role in achieving the annual financial objectives of the
Company as well as each such person's contributions of a strategic nature in
maximizing shareholder value. Bonuses are calculated first, by reviewing
corporate performance and determining, based on such performance, what
percentage of the target compensation discussed above each of the executive
officers, including the chief executive officer, should receive; and second, by
reviewing previously established individual goals for each executive officer.
Corporate performance and individual goals each comprise a pre-set percentage of
annual cash incentive compensation.
STOCK-BASED INCENTIVES. The Company's 1994 Employee Stock Option Plan is a
long-term incentive program for the chief executive officer, other executive
officers and certain other key employees. The basic objective of this plan is
the specific and solid alignment of executive and shareholder interests by
forging a direct relationship between this element of compensation and the
shareholders' level of return. This program represents a desire by the Company
to permit executives and other key employees to obtain an ownership position and
a proprietary interest in the Company's Common Stock.
Under the 1994 Employee Stock Option Plan, approved by the stockholders,
stock option grants are approved from time to time by the Committee. Generally,
the Committee attempts to reflect the optionee's potential impact on corporate
financial and operational performance in the award of stock options. Stock
options were also granted to the chief executive officer and chief financial
officer during fiscal 1996 in order to make their overall compensation
11
<PAGE>
packages competitive with other companies comparable to the Company. Stock
options granted under the plan during fiscal 1996 have an exercise price equal
to the market price of the Common Stock on the date of grant, expire after ten
years, and, after two years, vest 25% annually.
Compensation and Options Committee
Samuel A. Hamacher, Chairman
James C. Janning
James J. Kerley
William H.T. Bush
12
<PAGE>
PERFORMANCE GRAPH
The following table presents the cumulative return for the Company, the
Nasdaq Market Value Index and an index comprised of five companies traded on
various exchanges and in the over-the-counter market which the Company believes
to present a representative peer group of the Company. The Nasdaq and the peer
group data have been provided by Media General Financial Services, Inc.,
Richmond, Virginia, without independent verification by the Company.
COMPARISON OF CUMULATIVE TOTAL RETURNS
[Performance Graph]
<TABLE>
<CAPTION>
04/15/94 06/30/94 09/30/94 12/30/94 03/31/95 06/30/95 09/29/95 12/29/95 03/29/96 06/28/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DT INDUSTRIES, INC. 100.00 109.71 104.49 75.01 83.91 82.29 96.45 94.84 134.55 128.52
PEER GROUP 100.00 78.25 92.82 82.74 86.89 98.40 110.59 98.49 106.36 96.48
BROAD MARKET 100.00 98.29 103.52 101.44 104.44 114.25 127.30 126.28 132.11 141.90
</TABLE>
Companies in the Self-Determined Peer Group: CINCINNATI MILACRON, INC.
GIDDINGS & LEWIS, INC.
GLEASON CORP.
MONARCH MACHINE TOOL COMPANY
NEWCOR, INC.
Notes:
A. The lines represent quarterly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the quarterly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level of all series was set to 100.0 on 4/15/94.
13
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
persons who own more than 10% of a registered class of the Company's equity
securities to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Executive officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms which they file.
To the Company's knowledge, based solely on review of information furnished
to the Company, reports filed through the Company and representations that no
other reports were required, all Section 16(a) filing requirements applicable to
its executive officers, directors and greater than 10% beneficial owners were
complied with during the fiscal year ended June 30, 1996.
CERTAIN TRANSACTIONS
RELATED PARTY TRANSACTIONS
The Company is party to an Operations Consulting and Advisory Services
Agreement dated February 10, 1994 (the "HGL Services Agreement") with Harbour
Group Ltd. ("HGL"), pursuant to which HGL provides management consulting
services to the Company for a one-year term, which term automatically renews
from year to year until terminated by the Company or HGL upon 30 days' written
notice. HGL is an affiliate of Peer L.P., Investments L.P. and Harbour Group.
Under the HGL Services Agreement, the Company compensates HGL for management
consulting services at HGL's approximate costs incurred in performing such
services. The Company is also party to a Corporate Development Consulting and
Advisory Services Agreement (the "HGI Services Agreement") dated February 10,
1994 with Harbour Group Industries, Inc. ("HGI") pursuant to which HGI provides
corporate development services to the Company for a one-year term, which term
automatically renews from year to year until terminated by the Company or HGI
upon 30 days' written notice. HGI is an affiliate of Peer L.P., Investments L.P.
and Harbour Group. Under the HGI Services Agreement, the Company compensates HGI
for corporate development services by paying an annual fee equal to the greater
of $100,000 or HGI's approximate costs incurred in performing such services,
plus a transaction fee equal to an amount which ranges from 2.5% of the first $1
million of the purchase price to 0.5% of the portion of the purchase price in
excess of $4 million for each completed acquisition or disposition by the
Company in which HGI performs services during the term of the HGI Services
Agreement, subject to a minimum fee per transaction of $125,000.
The terms of the HGL Services Agreement were determined by HGL and the
Company to preserve the historical arrangement between the Company and HGL
whereby HGL provided the Company with management consulting and advisory
services at approximate cost. The terms of the HGI Services Agreement were
determined in part to reimburse HGI for the estimated approximate annual cost of
HGI personnel engaged in performing services for the Company thereunder and in
part with reference to customary formulas utilized by financial advisors for
providing acquisition and/or divestiture-related services. The Company believes
that the rate agreed to by the Company and HGI is less than the rate customarily
charged by other financial advisory service providers. Charges totaling $285,000
and $783,000 were paid by the Company to HGL and HGI, respectively, during the
fiscal year ended June 30, 1996.
Until April 1994, the Company had been included in an insurance program
maintained by HGL providing workers compensation and employer's liability,
general liability and automobile liability and physical damage insurance
coverage for all companies controlled by Harbour Group or its affiliates. The
insurance program utilized a retrospective rating plan and automatic premium
adjustment plan, which provide for calculations of the premiums for the
insurance program based on the application of rating formulae to actual incurred
losses and reserves for future losses which required adjustment of the premiums
retrospectively. In connection with this program, the Company entered into an
Insurance Agreement with HGL pursuant to which it agreed to reimburse HGL, and
HGL agreed to reimburse the Company, for their respective pro rata shares of any
retrospective premium adjustment. The Company continues to participate in an
insurance program providing umbrella and excess coverages to the Company and
certain other companies controlled or advised by HGL.
The Company believes that each of the related party transactions described
herein was on terms no less favorable to the Company than could have been
obtained from unaffiliated third parties.
14
<PAGE>
AGREEMENTS WITH EXISTING STOCKHOLDERS
Prior to 1994, Stephen J. Gore, Bruce P. Erdel, Gregory Fox and James C.
Janning, together with certain other members of the management of the Company,
acquired shares of Common Stock at prices determined by the Board of Directors
of the Company, and the purchase price therefor was paid partly in cash and
partly by delivery of promissory notes payable to the Company secured by all or
some portion of the purchased shares. Such notes have a ten-year maturity, bear
interest at fixed rates of interest from 5.84% to 6.28% per annum and are
payable interest only annually, with one principal payment at maturity. In
connection with such promissory notes, the Company agreed to pay annual bonuses
to such stockholders in amounts equal to the annual interest payments on the
notes plus all federal and state income taxes applicable to such payments. In
connection with the purchase of his shares of the Common Stock, each such
stockholder entered into an agreement with the Company and Peer L.P., which
agreements were amended in connection with the Company's initial public offering
(as amended, the "Stockholder Agreements"). The Stockholder Agreements provide
for, among other things, restrictions on transfer of shares of the Common Stock
owned by such stockholder, a right to acquire additional securities of the
Company in order to maintain the stockholder's percentage of equity interest in
the Company in certain circumstances and "tag-along" and "drag-along" rights in
the event of certain sales of the Common Stock by Peer L.P. The transfer
restrictions of the Stockholder Agreements, which are subject to modification or
waiver by the Company, generally prohibited the sale of 50% of such shares of
Common Stock until April 15, 1996, and an aggregate 65% of such shares until
October 15, 1995. A pro rata portion of the indebtedness originally incurred to
purchase such shares must be repaid in connection with any permitted sale of
such Common Stock by such stockholder. The transfer restrictions of the
Stockholder Agreements are in addition to any other restrictions on the sale or
transfer of such shares imposed under applicable law. Certain of the Stockholder
Agreements, including the Stockholder Agreements of Messrs. Gore, Erdel and Fox,
also contain provisions concerning noncompetition and confidentiality applicable
to such stockholders and provisions for payments to such stockholders, under
certain circumstances, following the termination of their employment with the
Company. In the event of a termination of any such stockholder's employment by
the Company without cause or his voluntary resignation within 60 days of a
substantial reduction in his duties, responsibilities or compensation, the
Stockholder Agreements provide for payment of up to one year's base salary to
such executive.
During the fiscal year ended June 30, 1996, the following executive
officers and directors had promissory notes in excess of $60,000 outstanding to
the Company:
<TABLE>
<CAPTION>
BALANCE OUTSTANDING
-------------------------------
HIGHEST DURING AT JUNE 30, INTEREST
SHAREHOLDER POSITION FISCAL 1996 1996 RATE DUE DATE
<S> <C> <C> <C> <C> <C>
Stephen J. Gore President & Chief
Executive
Officer,
Director $ 84,600 $ 84,600 6.28% 9/30/03
James C. Janning Director 112,800 112,800 6.28 9/30/03
Gregory A. Fox Director 66,600 66,600 5.84 11/30/03
</TABLE>
REGISTRATION RIGHTS
Pursuant to a registration rights agreement between the Company and Peer
L.P., Investments L.P. and Harbour Group (the "Registration Rights Agreement"),
Peer L.P., Investments L.P., Harbour Group and such of their respective
permitted transferees as may be deemed to be affiliates of the Company have
rights to demand registration under the Securities Act of 1933, as amended (the
"Securities Act") of its or their shares of the Company's Common Stock. In
addition, in the event the Company proposes to register any of its securities
under the Securities Act, such persons (or their permitted transferees) will
have rights, subject to certain exceptions and limitations, to have the shares
of the Company's capital stock then owned by them included in such registration
statement. The Company has agreed that, in the event of any registration of
securities owned by such person (or a permitted transferee) in accordance with
the provisions thereof, it will indemnify such person, and certain related
persons, against liabilities incurred in connection with such registration,
including liabilities arising under the Securities Act.
15
<PAGE>
The registration rights described above are subject to certain limitations
intended to prevent undue interference with the Company's ability to distribute
securities, including the provision that demand registration rights may not be
exercised within 90 days after the effective date of the Company's most recent
registration statement.
APPROVAL OR DISAPPROVAL OF THE COMPANY'S
1996 LONG-TERM INCENTIVE PLAN
TERMS OF THE INCENTIVE PLAN
On September 18, 1996, the Board of Directors of the Company adopted the
1996 Long-Term Incentive Plan (the "Plan"), subject to stockholder approval
prior to June 29, 1997. The Plan will become effective on the date of its
approval by the shareholders. The Plan is intended to promote the interests of
the Company and its stockholders by attracting and retaining exceptional
executive personnel and other key employees of the Company and its subsidiaries,
motivating such employees by means of stock options and performance-related
incentives to achieve long-range performance goals, and enabling such employees
to participate in the long-term growth and financial success of the Company. The
Plan will be administered by a committee (the "Incentive Plan Committee") of the
Board of Directors consisting solely of two or more directors who are
"non-employee directors" as defined in Rule 16b-3 under the Exchange Act and
"outside directors" as defined in Section 162(m) of the Internal Revenue Code of
1986 (the "Code").
The Plan provides for the granting of four types of awards on a stand
alone, combination, or tandem basis, specifically, nonqualified stock options,
incentive stock options, restricted shares and performance stock awards. The
Plan provides for the granting of up to a total of 600,000 shares of Common
Stock, provided that the total number of shares with respect to which awards are
granted in any one year may not exceed 100,000 shares to any individual employee
and 200,000 shares in the aggregate, and the total number of shares with respect
to which grants of restricted and performance stock awards are made in any year
shall not exceed 50,000 shares to any individual employee and 100,000 shares in
the aggregate (subject, in each case, to adjustment in the event of a stock
split, stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization, or other such change). As of the date hereof,
approximately 200 employees are eligible to participate in the Plan. No payments
or contributions are required to be made by the employees who participate in the
Plan other than the payment of any purchase price upon the exercise of a stock
option. As of September 18, 1996, the market value of the Common Stock which may
be issued under the Plan was $32.00 per share.
A stock option award grants the right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, and subject
to such other terms and conditions, all as the Incentive Plan Committee may
determine; provided that the exercise price of any stock option shall not be
less than 100% of the fair market value of the Common Stock on the date of grant
of the award. An incentive stock option award granted pursuant to the Plan is an
award in the form of a stock option which complies with the requirements of
Section 422 of the Code or any successor Section as it may be amended from time
to time. All other stock option awards granted under the Plan are nonqualified
stock options. The exercise price of all stock option awards under the Plan is
payable, at the Incentive Plan Committee's discretion, in cash, in shares of
already owned Common Stock of the Company, in any combination of cash and
shares, or any other method deemed appropriate by the Incentive Plan Committee.
Each option grant may be exercised in whole, at any time, or in part, from time
to time, after the grant becomes exercisable.
A grant of restricted shares pursuant to the Plan is a transfer of shares
of Common Stock, subject to such restrictions, if any, on transfer or other
incidents of ownership, for such periods of time as the Incentive Plan Committee
may determine. The certificates representing the restricted shares shall be held
by the Company as escrow agent until the end of the applicable period of
restriction, during which the shares may not be sold, transferred, gifted,
bequeathed, pledged, assigned, or otherwise alienated or hypothecated,
voluntarily or involuntarily, except as otherwise provided in the Plan. However,
during the period of restriction, the recipient of restricted shares will be
entitled to vote the restricted shares and to retain cash dividends paid
thereon.
A performance stock award is a right granted to an employee to receive
restricted shares that are not issued to the employee until after the
satisfaction of the performance goals during a performance period. A performance
stock award is earned by the employee over a time period determined by the
Incentive Plan Committee on the basis of performance goals established by the
Incentive Plan Committee at the time of grant. Performance goals
16
<PAGE>
established by the Incentive Plan Committee may be based on one or more the
following criteria: earnings or earnings growth; earnings per share; return on
equity, assets, capital employed or investment; revenues or revenue growth;
gross profit; gross margin; operating profit; operating margin; operating cash
flow; stock price appreciation and total shareholder return. If the performance
goals set by the Incentive Plan Committee are not met, no restricted shares
shall be issued pursuant to the performance stock award. To be entitled to
receive a performance stock award, an employee must remain in the employment of
the Company or its subsidiaries through the end of the performance period, but
the Incentive Plan Committee may provide for exceptions to this requirement as
it deems equitable in its sole discretion.
In the event of a change of control of the Company, the following may, in
the sole discretion of the Incentive Plan Committee, occur with respect to the
employee awards outstanding: (i) automatic lapse of all restrictions and
acceleration of any time periods relating to the exercise or vesting of stock
options and restricted shares so that awards may be immediately exercised or
vested; and automatic satisfaction of performance goals on a pro rata basis with
respect to the number of restricted shares issuable pursuant to a performance
stock award so that such pro rata or other portion of such restricted shares may
be immediately vested; (ii) upon exercise of a stock option during the 60-day
period after the date of a change of control, the participant exercising the
stock option may, in lieu of the receipt of Common Stock, elect by written
notice to the Company to receive a cash amount equal to the excess of the
aggregate value of the shares of Common Stock covered by the stock option, over
the aggregate exercise price of the stock option; (iii) following a change of
control, if a participant's employment terminates for any reason other than
retirement or death, any stock options held by the participant may be exercised
until the earlier of three months after the termination of employment or the
expiration date of such stock option; and (iv) all awards become non-cancelable.
Except as otherwise provided in the Plan, the Board may at any time
terminate, and, from time to time, amend or modify the Plan. Any such action of
the Board may be taken without the approval of the Company's stockholders, but
only to the extent that such stockholder approval is not required by applicable
law or regulation. Furthermore, no amendment, modification, or termination of
the Plan shall adversely affect any awards already granted to a participant
without his or her consent. No amendment or modification of the Plan may change
any performance goal, or increase the benefits payable for the achievement of a
performance goal, once established for a performance stock award.
FEDERAL INCOME TAX CONSEQUENCES OF GRANTS UNDER THE PLAN
The following discussion generally summarizes the Federal income tax
consequences to participants who may receive grants of awards under the Plan.
NONQUALIFIED STOCK OPTIONS. For Federal income tax purposes, no income is
recognized by a participant upon the grant of a nonqualified stock option under
the Plan. Upon the exercise of an option, however, compensation taxable as
ordinary income will be realized by the participant in an amount equal to the
excess of the fair market value of a share of the Company's Common Stock on the
date of such exercise over the exercise price. A subsequent sale or exchange of
such shares will result in gain or loss measured by the difference between (i)
the exercise price, increased by any compensation reported upon the
participant's exercise of the option, and (ii) the amount realized on such sale
or exchange. Such gain or loss will be capital in nature if the shares were held
as a capital asset and will be long-term if such shares were held for more than
one year.
The Company generally is entitled to a deduction (subject to the provisions
of Section 162(m) of the Code) for compensation paid to a participant at the
same time and in the same amount as the participant is considered to have
realized compensation by reason of the exercise of an option.
INCENTIVE STOCK OPTIONS. No taxable income generally is realized by the
participant for Federal income tax purposes upon the grant or exercise of an
incentive stock option. If shares of the Company's Common Stock are issued to a
participant pursuant to the exercise of an incentive stock option granted under
the Plan, and if no disqualifying disposition of such shares is made by such
participant within two years after the date of grant or within one year after
the transfer of such shares to a participant, then (a) upon sale of such shares,
any amount realized in excess of the option price will be taxed to such
participant as a long-term capital gain and any loss sustained will be a
long-term capital loss, and (b) no deduction will be allowed to the Company for
Federal income tax purposes. Upon exercise of an incentive stock option, the
participant may be subject to alternative minimum tax on certain items of tax
preference.
17
<PAGE>
If shares of the Company's Common Stock acquired upon the exercise of an
incentive stock option are disposed of prior to the expiration of the
two-years-from-grant/one-year-from-transfer holding period, generally (a) the
participant will realize ordinary income in the year of disposition in the
amount equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on the disposition of the shares)
over the option price thereof, and (b) the Company will be entitled to deduct
such amount (subject to the provisions of Section 162(m) of the Code). Any
further gain or loss realized will be taxed as capital gain or loss, which will
be long-term or short-term depending on whether the shares were held for more
than one year, and will not result in any deduction by the Company.
If an incentive stock option is exercised at a time when it no longer
qualifies as an incentive stock option, the option is treated as a nonqualified
stock option.
RESTRICTED SHARES; PERFORMANCE STOCK AWARDS. Awards of restricted shares
generally will not result in taxable income to the employee for Federal income
tax purposes at the time of grant. A recipient of restricted shares generally
will receive compensation subject to tax at ordinary income rates on the fair
market value of the Company's Common Stock at the time the restricted shares are
no longer subject to forfeiture. However, a recipient who so elects under
Section 83(b) of the Code within 30 days of the date of the grant will have
ordinary taxable income on the date of the grant equal to the fair market value
of the restricted shares as if such shares were unrestricted and could be sold
immediately. If the restricted shares subject to such election are forfeited,
the recipient will not be entitled to any deduction, refund or loss for tax
purposes with respect to the forfeited shares. Upon sale of the restricted
shares after the forfeiture period has expired, the holding period to determine
whether the recipient has long-term or short-term capital gain or loss begins
when the restriction period expires and the tax basis will be equal to the fair
market value of the restricted shares on the date the restriction period
expires. However, if the recipient timely elects to be taxed as of the date of
the grant, the holding period commences on the date of the grant and the tax
basis will be equal to the fair market value of the restricted shares on the
date of the grant as if such shares were then unrestricted and could be sold
immediately.
The award of a performance stock award generally will not result in taxable
income to the employee for Federal income tax purposes at the time of grant. A
recipient of a performance stock award generally will be subject to tax at the
same time and in the same manner as applicable to recipients of restricted
shares as described above.
The Company is generally entitled to a deduction (subject to the provisions
of Section 162(m) of the Code) for compensation paid to a participant in the
same amount as the participant is considered to have realized compensation with
respect to restricted shares or a performance stock award.
LIMITS ON DEDUCTIONS. Under Section 162(m) of the Code, the amount of
compensation paid to the Chief Executive Officer and the four other most highly
paid executive officers of the Company in the year for which a deduction is
claimed by the Company (including its subsidiaries) is limited to $1,000,000 per
person, except that compensation that is performance-based will be excluded for
purposes of calculating the amount of compensation subject to this $1,000,000
limitation. The ability of the Company to claim a deduction for compensation
paid to any other executive officer or employee of the Company (including its
subsidiaries) is not affected by this provision.
The Company has structured the Plan so that any compensation for which the
Company may claim a deduction in connection with the exercise of nonqualified
stock options, the disposition by an optionee of shares acquired upon the
exercise of incentive stock options and the lapse of restrictions on restricted
shares received pursuant to performance stock awards is intended to be
performance-based within the meaning of Section 162(m) of the Code. All other
awards under the Plan are not performance-based and therefore any amounts for
which the Company may claim a deduction will be subject to the limitations on
deductibility in Section 162(m) of the Code.
Information contained herein relating to the Plan is qualified in its
entirety by reference to such plan, which is attached to this Proxy Statement as
Exhibit A.
The Board of Directors recommends voting "FOR" approval of the Plan.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Price Waterhouse LLP to be the
independent auditors of the Company for the year ending June 29, 1997.
18
<PAGE>
A representative of Price Waterhouse LLP is expected to be available at the
Annual Meeting to make a statement if such representative desires to do so and
to respond to appropriate questions. The Board of Directors recommends voting
"FOR" approval and ratification of such selection.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, proxies may be solicited by officers, directors and
regular employees of the Company personally or by telephone, telegraph or
facsimile for no additional compensation. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to beneficial owners of the stock held of record by such
persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in so doing.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The rules of the SEC currently provide that stockholder proposals for the
1997 Annual Meeting must be received at the Company's principal executive office
not less than 120 calendar days prior to the anniversary date of the release of
the Company's proxy statement to stockholders in connection with the 1996 Annual
Meeting to be considered by the Company for possible inclusion in the proxy
materials for the 1997 Annual Meeting.
FINANCIAL INFORMATION
The Company's Annual Report for the fiscal year ended June 30, 1996 is
being mailed to stockholders on or about the date of mailing this Proxy
Statement. THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY RECORD OR BENEFICIAL
SHAREHOLDER AS OF SEPTEMBER 16, 1996, WHO SO REQUESTS IN WRITING, A COPY OF SUCH
ANNUAL REPORT OR THE COMPANY'S ANNUAL REPORT ON FORM 10-K (WITHOUT EXHIBITS),
INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, FILED
WITH THE SEC. ANY SUCH REQUEST SHOULD BE DIRECTED TO DT INDUSTRIES, INC.,
CORPORATE CENTRE, SUITE 2-300, 1949 EAST SUNSHINE, SPRINGFIELD, MISSOURI 65804,
ATTENTION: BRUCE P. ERDEL.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters to
come before the meeting. If any other matters should come before the meeting,
the persons named in the enclosed proxy intend to vote the proxy according to
their best judgment.
You are urged to complete, sign, date and return your proxy to make certain
your shares of Common Stock will be voted at the Annual Meeting. For your
convenience in returning the proxy, an addressed envelope is enclosed, requiring
no additional postage if mailed in the United States.
By Order of the Board of Directors,
Bruce P. Erdel
Vice President--Finance and Secretary
October 1, 1996
19
<PAGE>
EXHIBIT A
DT INDUSTRIES, INC.
1996 LONG-TERM INCENTIVE PLAN
1. ADOPTION AND PURPOSE
DT Industries, Inc. (the "Company") hereby adopts this 1996 Long-Term Incentive
Plan dated September 18, 1996 (the "Plan"). The purposes of the Plan are to
promote the interests of the Company and its stockholders by (a) attracting and
retaining exceptional executive personnel and other key employees of the Company
and its Subsidiaries (as defined below); (b) motivating such employees by means
of performance-related incentives to achieve long-range performance goals; and
(c) enabling such employees to participate in the long-term growth and financial
success of the Company.
2. DEFINITIONS
The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:
"Award" means, individually or collectively, a grant under this Plan of Options
or Restricted Shares or a Performance Stock Award. The issuance of Restricted
Shares pursuant to a Performance Stock Award shall not be a new Award under this
Plan.
"Award Agreement" means a written agreement entered into between the Company and
a Participant setting forth the terms and conditions of an Award made to such
Participant under this Plan, in the form prescribed by the Committee.
"Board" means the Board of Directors of the Company.
"Change of Control" shall have the meaning specified in Section 12(b).
"Code" means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.
"Committee" means a committee appointed by the Board, each member of which shall
be a "Non-Employee Director" within the meaning of
Rule 16b-3 under the Exchange Act and shall be an "outside director" within the
meaning of Section 162(m) of the Code. The Committee shall be composed of at
least two (2) such directors.
"Common Stock" means the common stock of the Company.
"Company" means DT INDUSTRIES, INC., a Delaware corporation headquartered in
Springfield, Missouri.
"Effective Date" means the effective date of this Plan as defined in Section 17.
"Employee" means a key employee of the Company or a Subsidiary.
"Employee Award" means an Award to an Employee under this Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended. Reference
to a specific section of the Exchange Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated
A-1
<PAGE>
under such section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
"Fair Market Value" means the closing price of the Common Stock as reported on
the Nasdaq "National Market" on the relevant valuation date or, if there were no
Common Stock transactions on the valuation date, on the next preceding date on
which there were Common Stock transactions.
"Incentive Stock Option" has the meaning specified in Section 6(b).
"Negative Discretion" means other factors to be applied by the Committee in
reducing the number of Restricted Shares to be issued pursuant to a Performance
Stock Award if the Performance Goals have been met or exceeded if, in the
Committee's sole judgment, such application is appropriate in order to act in
the best interest of the Company and its shareholders.
"Participant" means an Employee who has been granted an Award under this Plan.
"Performance Goals" means, with respect to any Performance Period, performance
goals based on any of the following criteria and established by the Committee
prior to the beginning of such Performance Period or performance goals based on
any of the following criteria and established by the Committee after the
beginning of such Performance Period that meet the requirements to be considered
pre-established performance goals under Section 162(m) of the Code: earnings or
earnings growth; earnings per share; return on equity, assets, capital employed
or investment; revenues or revenue growth; gross profit; gross margin; operating
profit; operating margin; operating cash flow; stock price appreciation and
total shareholder return. Such Performance Goals may be particular to an
Employee or the division, department, branch, line of business, Subsidiary or
other unit in which the Employee works, or may be based on the performance of
the Company generally.
"Performance Period" means the period of time designated by the Committee
applicable to a Performance Stock Award during which the Performance Goals shall
be measured.
"Performance Stock Award" shall have the meaning specified in Section 6(d).
"Plan" means this DT INDUSTRIES, INC. 1996 Long-Term Incentive Plan.
"Plan Year" means an annual period coinciding with the Company's fiscal year.
"Reporting Person" means an officer or director of the Company subject to the
reporting requirements of Section 16 of the Exchange Act.
"Restricted Shares" shall have the meaning specified in Section 6(c).
"Securities Act" means the Securities Act of 1933, as amended. Reference to a
specific section of the Securities Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.
"Stock Option" has the meaning specified in Section 6(a).
"Subsidiary" means any corporation or other entity, whether domestic or foreign,
in which the Company has or obtains, directly or indirectly, a proprietary
interest of more than 50% by reason of stock ownership or otherwise.
3. ELIGIBILITY
Any Employee selected by the Committee is eligible to receive an Employee Award.
A-2
<PAGE>
4. PLAN ADMINISTRATION
(a) This Plan shall be administered by the Committee. The Committee shall
periodically make determinations with respect to the participation of Employees
in this Plan and, except as otherwise required by law or this Plan, the grant
terms of Awards including vesting schedules, price, performance standards
(including Performance Goals), length of relevant performance, restriction or
option period, dividend rights, post-retirement and termination rights, payment
alternatives such as cash, stock, contingent awards or other means of payment
consistent with the purposes of this Plan, and such other terms and conditions
as the Committee deems appropriate. Except as otherwise required by this Plan,
the Committee shall have authority to interpret and construe the provisions of
this Plan and the Award Agreements and make determinations pursuant to any Plan
provision or Award Agreement which shall be final and binding on all persons.
(b) The Committee, in its sole discretion and on such terms and conditions as it
may provide, may delegate all or any part of its authority and powers under this
Plan to one or more directors or officers of the Company; provided, however,
that the Committee may not delegate its authority and powers (i) with respect to
Reporting Persons, or (ii) in any way which would jeopardize this Plan's
qualification under Section 162(m) of the Code or Rule 16b-3 of the Exchange
Act.
(c) All determinations and decisions made by the Committee, the Board and any
delegate of the Committee pursuant to Section 4(b) shall be final, conclusive,
and binding on all persons, and shall be given the maximum deference permitted
by law.
5. STOCK SUBJECT TO THE PROVISIONS OF THIS PLAN
(a) The stock subject to the provisions of this Plan shall either be shares of
authorized but unissued Common Stock, shares of Common Stock held as treasury
stock or previously issued shares of Common Stock reacquired by the Company,
including shares purchased on the open market. Subject to adjustment in
accordance with the provisions of Section 10, (i) the total number of shares of
Common Stock with respect to which Awards may be granted under this Plan may not
exceed 600,000 shares, (ii) the total number of shares of Common Stock with
respect to which Awards may be granted in any Plan Year may not exceed 200,000
shares and (iii) the total number of Restricted Shares with respect to which
Awards may be granted in any Plan Year shall not exceed 100,000 shares.
(b) Subject to adjustment in accordance with Section 10, and subject to Section
5(a), (i) the total number of shares of Common Stock with respect to which
Awards may be granted in any Plan Year to any Employee shall not exceed 100,000
shares and (ii) the total number of Restricted Shares with respect to which
Awards may be granted in any Plan Year to any Employee shall not exceed 50,000
shares.
(c) For purposes of calculating the total number of shares of Common Stock
available for grants of Awards, the grant of an Award of Restricted Shares or a
Performance Stock Award shall be deemed to be equal to the maximum number of
shares of Common Stock which may be issued under the Award.
(d) Subject to clauses (ii) and (iii) of Section 5(a) and subject to Section
5(b), there shall again be available for Awards under this Plan, all of the
following: (i) shares of Common Stock represented by Awards which have been
canceled, forfeited, surrendered, terminated or expire unexercised during
preceding Plan Years; and (ii) the excess amount of variable Awards which become
fixed at less than their maximum limitations.
6. EMPLOYEE AWARDS UNDER THIS PLAN
Subject to the provisions of this Plan, the Committee shall have the sole and
complete authority to determine the Employees to whom Awards shall be granted
and the type, terms and conditions of such Awards. As the Committee may
determine, the following types of Awards may be granted under this Plan to
Employees on a stand alone, combination or tandem basis:
A-3
<PAGE>
(a) Stock Option. A right to buy a specified number of shares of Common Stock at
a fixed exercise price during a specified time, and subject to such other terms
and conditions, all as the Committee may determine; provided that the exercise
price of any Stock Option shall not be less than 100% of the Fair Market Value
of the Common Stock on the date of grant of the Award.
(b) Incentive Stock Option. An award in the form of a Stock Option which shall
comply with the requirements of Section 422 of the Code or any successor Section
as it may be amended from time to time.
(c) Restricted Shares. A transfer of shares of Common Stock to a Participant,
subject to such restrictions, if any, on transfer or other incidents of
ownership, for such periods of time (with respect to each Award, a "Restriction
Period") as the Committee may determine. The stock certificate or certificates
representing Restricted Shares shall be registered in the name of the
Participant to whom such Restricted Shares shall have been awarded. During the
Restriction Period, certificates representing the Restricted Shares shall bear a
restrictive legend to the effect that ownership of the Restricted Shares, and
the enjoyment of all rights appurtenant thereto, are subject to the
restrictions, terms and conditions provided in the Plan and the applicable Award
Agreement. Such certificates shall remain in the custody of the Company and the
Participant shall deposit with the Company stock powers or other instruments of
assignment, each endorsed in blank, so as to permit retransfer to the Company of
all or any portion of the Restricted Shares that shall be forfeited or otherwise
not become vested in accordance with the Plan and the applicable Award
Agreement.
Restricted Shares shall constitute issued and outstanding shares of Common Stock
for all corporate purposes. The Participant will have the right to vote such
Restricted Shares, to receive and retain all dividends and distributions paid or
distributed on such Restricted Shares, and to exercise all other rights, powers
and privileges of a holder of Common Stock with respect to such Restricted
Shares; except that (i) the Participant will not be entitled to delivery of the
stock certificate or certificates representing such Restricted Shares until the
Restriction Period shall have expired and unless all other vesting requirements
with respect thereto shall have been fulfilled or waived; (ii) the Company will
retain custody of the stock certificate or certificates representing the
Restricted Shares during the Restriction Period; (iii) any such dividends and
distributions paid in shares of Common Stock shall constitute Restricted Shares
and be subject to all of the same restrictions during the Restriction Period as
the Restricted Shares with respect to which they were paid; (iv) the Participant
may not sell, assign, transfer, pledge, exchange, encumber or dispose of the
Restricted Shares or his or her interest in any of them during the Restriction
Period; and (v) a breach of any restrictions, terms or conditions provided in
the Plan or established by the Committee with respect to any Restricted Shares
will cause a forfeiture of such Restricted Shares.
(d) Performance Stock Awards. A right, granted to an Employee, to receive
Restricted Shares (as defined in Section 6(c) hereof) that are not to be issued
to the Employee until after the satisfaction of the Performance Goals during a
Performance Period.
7. PERFORMANCE STOCK AWARDS
(a) Administration. Performance Stock Awards may be granted to Employees either
alone or in addition to other Awards granted under this Plan. The Committee
shall determine the Employees to whom Performance Stock Awards shall be awarded
for any Performance Period, the duration of the applicable Performance Period,
the number of Restricted Shares to be awarded at the end of a Performance Period
to Employees if the Performance Goals are met or exceeded and the terms and
conditions of the Performance Stock Award in addition to those contained in this
Section 7.
(b) Payment of Award. During or after the end of a Performance Period, the
financial performance of the Company during such Performance Period shall be
measured against the Performance Goals. If the Performance Goals are not met, no
Restricted Shares shall be issued pursuant to the Performance Stock Award. If
the Performance Goals are met or exceeded, the Committee shall certify that fact
in writing in the Committee minutes or elsewhere and certify the number of
Restricted Shares to be issued under each Performance Stock Award in accordance
with the related Award Agreement. The Committee may, in its sole discretion,
apply Negative Discretion to reduce the number of Restricted Shares to be issued
under a Performance Stock Award.
A-4
<PAGE>
(c) Requirement of Employment. To be entitled to receive a Performance Stock
Award, an Employee must remain in the employment of the Company or its
Subsidiaries through the end of the Performance Period, except that the
Committee may provide for partial or complete exceptions to this requirement as
it deems equitable in its sole discretion.
8. OTHER TERMS AND CONDITIONS
(a) Assignability. No Stock Option or Performance Stock Award shall be
assignable or transferable except by will or by the laws of descent and
distribution and during the lifetime of a Participant, Stock Options shall be
exercisable only by such Participant.
(b) Award Agreement. Each Award under this Plan shall be evidenced by an Award
Agreement.
(c) Rights as a Shareholder. Except as otherwise provided in this Plan or in any
Award Agreement, a Participant shall have no rights as a shareholder with
respect to shares of Common Stock covered by an Award until the date the
Participant is the holder of record of such shares.
(d) No Obligation to Exercise. The grant of an Award shall impose no obligation
upon the Participant to exercise the Award.
(e) Payments by Participants. The Committee may determine that Awards for which
a payment is due from a Participant may be payable: (i) in U.S. dollars by
personal check, bank draft or money order payable to the order of the Company,
by money transfers or direct account debits; (ii) through the delivery or deemed
delivery based on attestation to the ownership of shares of Common Stock with a
Fair Market Value equal to the total payment due from the Participant; (iii) by
a combination of the methods described in (i) and (ii) above; or (iv) by such
other methods as the Committee may deem appropriate.
(f) Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state and local taxes (including the Participant's FICA
obligation) required to be withheld with respect to an Award or any dividends or
other distributions payable with respect thereto. Subject to the requirements of
Rule 16b-3 of the Exchange Act, the Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part, by
(i) electing to have the Company withhold otherwise deliverable shares of Common
Stock having a Fair Market Value not exceeding the minimum amount required to be
withheld, or (ii) delivering to the Company shares of Common Stock then owned by
the Participant. The amount of the withholding obligation satisfied by shares of
Common Stock withheld or delivered shall be the Fair Market Value of such shares
determined as of the date that the taxes are required to be withheld.
(g) Restrictions on Sale and Exercise. If and to the extent required to comply
with rules promulgated under Section 16 of the Exchange Act, (i) no Award
providing for exercise, a vesting period, a Restriction Period or the attainment
of performance standards shall permit unrestricted ownership of shares of Common
Stock by the Participant for at least six months from the date of grant, and
(ii) shares of Common Stock acquired pursuant to an Award granted under this
Plan may not be sold or otherwise disposed of for at least six months after the
date of the grant of the Award.
(h) Requirements of Law. The granting of Awards and the issuance of shares of
Common Stock upon the exercise of Awards shall be subject to all applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges (including the Nasdaq Stock Market) upon which the Common Stock may be
listed. As a condition precedent to the issuance of shares of Common Stock
pursuant to the grant or exercise of an Award, the Company may require the
Participant to take any reasonable action to meet such requirements.
(i) Non-Exclusivity of the Plan. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the
A-5
<PAGE>
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
(j) Unfunded Plan. Neither the Company nor any Subsidiary shall be required to
segregate any cash or any shares of Common Stock which may at any time be
represented by Awards and the Plan shall constitute an "unfunded" plan of the
Company. Neither the Company nor any Subsidiary shall, by any provisions of the
Plan, be deemed to be a trustee of any Common Stock or any other property, and
the liabilities of the Company and any Subsidiary to any Employee pursuant to
the Plan shall be those of a debtor pursuant to such contract obligations as are
created by or pursuant to the Plan, and the rights of any Employee, former
employee or beneficiary under the Plan shall be limited to those of a general
creditor of the Company or the applicable Subsidiary, as the case may be. In its
sole discretion, the Board may authorize the creation of trusts or other
arrangements to meet the obligations of the Company under the Plan, provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.
(k) Legends. In addition to any legend contemplated by Section 6(c), each
certificate evidencing Common Stock subject to an Award shall bear such legends
as the Committee deems necessary or appropriate to reflect or refer to any
terms, conditions or restrictions of the Award applicable to such shares,
including, without limitation, any to the effect that the shares represented
thereby may not be disposed of unless the Company has received an opinion of
counsel, acceptable to the Company, that such disposition will not violate any
federal or state securities laws.
(l) Company's Rights. The grant of Awards pursuant to the Plan shall not affect
in any way the right or power of the Company to make reclassifications,
reorganizations or other changes of or to its capital or business structure or
to merge, consolidate, liquidate, sell or otherwise dispose of all or any part
of its business or assets.
(m) Designation of Beneficiaries. If permitted by the Committee, a Participant
may designate a beneficiary or beneficiaries in the event of the death of the
Participant and may change such designation from time to time by filing a
written designation of beneficiary or beneficiaries with the Committee on a form
to be prescribed by it, provided that no such designation shall be effective
unless so filed prior to the death of such Participant.
9. AMENDMENTS
(a) Except as otherwise provided in this Plan, the Board may at any time
terminate and, from time to time, may amend or modify this Plan. Any such action
of the Board may be taken without the approval of the Company's shareholders,
but only to the extent that such shareholder approval is not required by
applicable law or regulation, including specifically Rule 16b-3 under the
Exchange Act and Section 162(m) of the Code.
(b) No amendment, modification or termination of this Plan shall in any manner
adversely affect any Awards theretofore granted to a Participant under this Plan
without the consent of such Participant. No amendment or modification of this
Plan may change any Performance Goal, or increase the benefits payable for
achievement of a Performance Goal, once established for a Performance Stock
Award.
10. RECAPITALIZATION
The aggregate number of shares of Common Stock as to which Awards may be granted
to Participants, the number of shares thereof covered by each outstanding Award,
and the price per share thereof in each such Award, shall all be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, stock dividend, combination or exchange of
shares, exchange for other securities, reclassification, reorganization,
redesignation, merger, consolidation, recapitalization or other such change.
Any such adjustment may provide for the elimination of fractional shares.
11. NO RIGHT TO EMPLOYMENT
No person shall have any claim or right to be granted an Award, and the grant of
an Award shall not be construed as giving a Participant the right to be retained
in the employ of the Company or a Subsidiary. Nothing in this Plan
A-6
<PAGE>
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.
12. CHANGE OF CONTROL
(a) Notwithstanding anything contained in this Plan or any Award Agreement to
the contrary, in the event of a Change of Control, as defined below, the
following may, in the sole discretion of the Committee (as constituted prior to
the occurrence of the Change of Control), occur with respect to any and all
Employee Awards outstanding as of such Change of Control:
(i) automatic lapse of all restrictions and acceleration of any time periods
relating to the exercise or vesting of Stock Options and Restricted Shares so
that such Awards may be immediately exercised or vested in full on or before the
relevant date fixed in the Award Agreement; and automatic satisfaction of
Performance Goals on a pro rata basis with respect to the maximum number of
Restricted Shares issuable pursuant to a Performance Stock Award, or on such
other basis as set forth in the Award Agreement, so that such pro rata or other
portion of such Restricted Shares may be immediately vested;
(ii) upon exercise of a Stock Option (including an Incentive Stock Option)
during the 60-day period from and after the date of a Change of Control, the
Participant exercising the Stock Option may in lieu of the receipt of Common
Stock upon the exercise of the Stock Option, elect by written notice to the
Company to receive an amount in cash equal to the excess of the aggregate Value
(as defined below) of the shares of Common Stock covered by the Stock Option or
portion thereof surrendered determined on the date the Stock Option is
exercised, over the aggregate exercise price of the Stock Option. As used in
this Section 12(a)(iii) the term "Value" means the higher of (i) the highest
Fair Market Value during the 60-day period from and after the date of a Change
of Control and (ii) if the Change of Control is the result of a transaction or
series of transactions described in paragraphs (i) or (iii) of the definition of
Change of Control, the highest price per share of the Common Stock paid in such
transaction or series of transactions (which in the case of paragraph (i) shall
be the highest price per share of the Common Stock as reflected in a Schedule
13D filed by the person having made the acquisition);
(iii) following a Change of Control, if a Participant's employment terminates
for any reason other than retirement or death, any Stock Options held by such
Participant may be exercised by such Participant until the earlier of three
months after the termination of employment or the expiration date of such Stock
Options; and
(iv) all Awards become non-cancellable.
(b) A "Change of Control" of the Company shall be deemed to have occurred upon
the happening of any of the following events:
(i) the acquisition, other than from the Company, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of beneficial ownership of 25 or more of either the then outstanding shares of
Common Stock of the Company or the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors; provided, however, that any acquisition by the Company or any of its
Subsidiaries, or any employee benefit plan (or related trust) of the Company or
its Subsidiaries, or any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Common Stock and voting securities of the Company
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of the then outstanding
shares of Common Stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors, as the case may be, shall not constitute a Change of
Control;
A-7
<PAGE>
(ii) individuals who constitute the Board as of the Effective Date hereof (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director subsequent to such date
whose election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(iii) approval by the shareholders of the Company of a reorganization, merger or
consolidation of the Company, in each case, with respect to which the
individuals and entities who were the respective beneficial owners of the Common
Stock and voting securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or a complete
liquidation or dissolution of the Company or of the sale or other disposition of
all or substantially all of the assets of the Company.
13. GOVERNING LAW
To the extent that federal laws do not otherwise control, this Plan shall be
construed in accordance with and governed by the law of the State of Delaware.
14. CAPTIONS
Captions are provided herein for convenience of reference only, and shall not
serve as a basis for interpretation or construction of this Plan.
15. RESERVATION OF SHARES
The Company, during the term of the Plan, will at all times reserve and keep
available the number of shares of Common Stock as shall be sufficient to satisfy
the requirements of the Plan. The inability of the Company to obtain the
necessary approvals from any regulatory body having jurisdiction or approval
deemed necessary by the Company's counsel to the lawful issuance and sale of any
shares of Common Stock under the Plan shall relieve the Company of any liability
in respect of the nonissuance or sale of such shares of Common Stock as to which
such requisite authority shall not have been obtained.
16. SAVINGS CLAUSE
This Plan is intended to comply in all aspects with applicable law and
regulation, including, with respect to those Employees who are Reporting
Persons, Rule 16b-3 under the Exchange Act. In case any one or more of the
provisions of this Plan shall be held invalid, illegal or unenforceable in any
respect under applicable law and regulation (including Rule 16b-3), the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and the invalid, illegal or
unenforceable provision shall be deemed null and void; however, to the extent
permissible by law, any provision which could be deemed null and void shall
first be construed, interpreted or revised retroactively to permit this Plan to
be construed in compliance with all applicable laws (including Rule 16b-3) so as
to foster the intent of this Plan. Notwithstanding anything in this Plan to the
contrary, the Committee, in its sole and absolute discretion, may bifurcate this
Plan so as to restrict, limit or condition the use of any provision of this Plan
to Participants who are Reporting Persons without so restricting, limiting or
conditioning this Plan with respect to other Participants. All Awards of Stock
Options and Performance Stock Awards are intended to comply with Section 162(m)
of the Code.
A-8
<PAGE>
17. EFFECTIVE DATE AND TERM
The effective date (the "Effective Date") of this Plan shall be the date of its
approval by the Company's shareholders. If such approval is not obtained on or
before June 29, 1997, this Plan shall terminate on such date. No new Awards
shall be granted under this Plan after the tenth anniversary of the Effective
Date. Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after the authority for grant of new Awards hereunder has been
exhausted.
A-9
<PAGE>
[Logo]
October 1, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
which will be held at the University Plaza, 333 John Q. Hammons Parkway,
Springfield, Missouri 65806 at 10:00 a.m., Central Standard Time, on Monday,
November 11, 1996. Enclosed you will find the formal Notice of Annual Meeting
and Proxy Statement.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted at the meeting. Accordingly, please
date, sign and promptly return the enclosed proxy form.
We hope that you will attend and look forward to seeing you there.
James C. Janning Stephen J. Gore
Chairman of the Board President and Chief Executive Officer
<PAGE>
DT INDUSTRIES, INC.
PROXY
Annual Meeting November 11, 1996
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement of DT Industries, Inc. (the "Company"), each
dated October 1, 1996, and the Annual Report for the Fiscal Year ended June 30,
1996, and appoints BRUCE P. ERDEL and GREGORY D. WILSON, or either of them, with
full power to act alone, the proxies and true and lawful attorneys-in-fact of
the undersigned, with full power of substitution and revocation, on behalf and
in the name of the undersigned to vote all shares of stock of said Company which
the undersigned is entitled to vote at the 1996 Annual Meeting of the
Stockholders of the Company to be held at University Plaza, 333 John Q. Hammons
Parkway, Springfield, Missouri 65806, on November 11, 1996, at 10:00 a.m. and at
any adjournment thereof, with the same effect as if the undersigned were present
and voting such shares on the following matters and in the following manner:
(1) To approve or disapprove an amendment to the Company's Restated
Certificate of Incorporation which would classify the Board of
Directors into three classes of directors with staggered three-year
terms.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(2) To elect the following nominees as Directors of the Company to serve
for terms of one to three years respectively or until their successors
are elected and qualified if the proposal to amend the Restated
Certificate of Incorporation to provide for a classified Board of
Directors is approved, and to provide that the same persons shall be
elected for a term of one year if the proposal to amend the Restated
Certificate of Incorporation is not approved:
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to vote for
below (except as marked all nominees listed below
to the contrary below)
Class I (Term of Office Expires in 1997):
James J. Kerley, Charles F. Pollnow, and Samuel A. Hamacher
Class II (Term of Office Expires in 1998):
Stephen J. Gore, Lee M. Liberman, and Gregory A. Fox
Class III (Term of Office Expires in 1999):
William H.T. Bush, James C. Janning, and Donald E. Nickelson
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.
- --------------------------------------------------------------------------------
(3) To approve or disapprove the adoption of the Company's 1996 Long-Term
Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) To ratify or reject the appointment of Price Waterhouse LLP as
independent auditors for the Company for the fiscal year ending June
29, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) To transact such other business as may properly come before the
meeting or any adjournment thereof, according to the proxies'
discretion, and in their discretion.
The shares represented by this proxy will be voted in accordance with the
specification made. If no specification is made, the shares represented by this
proxy will be voted "FOR" Proposal 1, "FOR" all nominees listed in Proposal 2,
"FOR" Proposal 3, "FOR" Proposal 4, and in the discretion of the proxies on such
other business as may properly come before the meeting.
[ ] Please mark this box if you plan to
attend the meeting.
Dated , 1996
-----------------------------------------
-----------------------------------------
Please date and sign exactly as your
name(s) appears on the stock certificate.
If shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person. This proxy votes all
shares held in all capacities unless
specified.
(YOU ARE REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY)
