June 1, 2000 SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A (AMENDED)
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CLARION TECHNOLOGIES, INC.
(Name of registrant as specified in its charter)
(Name of person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:_______
(2) Aggregate number of securities to which transaction applies:__________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): ___________
(4) Proposed maximum aggregate value of transaction:______________________
(5) Total fee Paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:_______________________________________
(2) Form, schedule, or registration statement no.:________________
(3) Filing party:_________________________________________________
(4) Date filed:___________________________________________________
[CLARION TECHNOLOGIES LOGO]
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
and PROXY STATEMENT
May 22, 2000
Dear Stockholder:
You are cordially invited to attend Clarion Technologies, Inc.'s 2000
Annual Meeting of Stockholders which will be held on June 20, 2000, at 10:00
a.m., local time, at the Haworth Conference Center, 225 College Avenue, Holland,
Michigan 49423.
The official Notice of Meeting, Proxy Statement and Proxy are included with
this letter. The proposals listed in the Notice of Meeting are more fully
described in the Proxy Statement.
Whether or not you plan to attend the Annual Meeting in person, and
regardless of the number of shares you own, please complete, sign, date and
return the enclosed proxy card promptly in the enclosed envelope. This will
ensure that your shares are voted as you wish and that a quorum will be present.
Sincerely,
/s/ David W. Selvius
David W. Selvius
Chief Financial Officer and Secretary
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN YOUR PROXY
CARD IN THE ENCLOSED ENVELOPE
Clarion Technologies, Inc.
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of the stockholders of Clarion Technologies, Inc. (the
"Company"), will be held at the Haworth Conference Center, 225 College Avenue,
Holland, Michigan 49423, on June 20, 2000, at 10:00 a.m., local time, for the
following purposes:
1. To elect nine directors, each for a term of one year.
2. To consider and vote on a proposal to approve the 2000 Employees'
Stock Purchase Plan.
3. To consider and vote upon a proposal to approve the First Amendment to
the Clarion Technologies, Inc. 1999 Stock Incentive Plan.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on May 16, 2000, will be
entitled to vote at the meeting and at any adjournments or postponements
thereof.
Whether or not you expect to be present at this meeting, you are urged to
sign the enclosed proxy and return it promptly in the enclosed envelope. If you
do attend the meeting and wish to vote in person, you may do so even though you
have submitted a proxy.
By Order of the Board of Directors,
May 22, 2000 /s/ David W. Selvius
David W. Selvius
Chief Financial Officer and Secretary
CLARION TECHNOLOGIES, INC.
235 Central Avenue
Holland, Michigan 49423
--------------------------
PROXY STATEMENT
--------------------------
2000 Annual Meeting of Stockholders
June 20, 2000
--------------------------
This Proxy Statement is furnished to the stockholders of Clarion
Technologies, Inc. (the "Company"), in connection with the solicitation by the
Board of Directors of proxies to be used at the Annual Meeting of Stockholders.
The Annual Meeting will be held on June 20, 2000, at 10:00 a.m., local time, at
the Haworth Conference Center, 225 College Avenue, Holland, Michigan 49423.
SOLICITATION OF PROXIES
Each stockholder, as an owner of the Company, is entitled to vote on
matters scheduled to come before the Annual Meeting. The use of proxies allows a
stockholder of the Company to be represented at the Annual Meeting if he or she
is unable to attend the meeting in person. The proxy card accompanying this
Proxy Statement is to be used for such purpose.
If the proxy card is properly executed and returned, the shares represented
by the proxy will be voted at the Annual Meeting of Stockholders and at any
adjournment of that meeting. Where stockholders specify a choice, the proxy will
be voted as specified. If no choice is specified, the shares represented by the
proxy will be voted FOR the election of all nominees named in the proxy and FOR
the proposals described in this Proxy Statement. A proxy may be revoked prior to
its exercise by (1) delivering a written notice of revocation to the Secretary
of the Company, (2) executing a proxy at a later date, or (3) attending the
meeting and voting in person. However, attendance at the meeting does not
automatically serve to revoke a proxy.
On May 16, 2000, the record date of the meeting set by the Board, there
were 20,546,254 shares of Common Stock and 1,962,750 shares of Preferred Stock
outstanding. Each outstanding share of Common Stock entitles the holder thereof
to one vote per share and each outstanding share of Preferred Stock currently
entitles the holder thereof to two votes per share. The presence in person or by
Proxy of at least a majority of such shares shall constitute a quorum. Under
Delaware law, abstentions are treated as present and entitled to vote and
therefore have the effect of a vote against a matter. A broker non-vote on a
matter is considered not entitled to vote on that matter and thus is not counted
in determining whether a matter requiring approval of a majority of shares
present and entitled to vote has been approved. Votes cast at the meeting or
submitted by Proxy will be counted by inspectors of the meeting who will be
appointed by the Company.
ELECTION OF DIRECTORS
The Board of Directors has nominated the following persons for election as
directors, each to serve until the 2001 annual meeting: Harrington Bischof,
Bryan C. Cressey, Terence M. Graunke, Michael C. Miller, Jack D. Rutherford,
Frederick A. Sotok, Frank T. Steck, Craig A. Wierda, and Troy D. Wiseman. Each
of the nominees currently serves as a director of the Company.
This Proxy Statement contains more information about the nominees below.
Unless otherwise directed by a stockholder's proxy, the persons named as proxy
voters in the accompanying proxy will vote for the nominees named above. If any
of the nominees become unavailable, which is not anticipated, the Board of
Directors, at its discretion, may designate substitute nominees, in which event
the enclosed proxy will be voted for such substituted nominees. Proxies cannot
be voted for a greater number of persons than the number of nominees named.
A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Company. Accordingly, the nine persons who receive
the largest number of votes cast at the meeting will be elected as directors.
There is no right to cumulative voting as to any matter, including the election
of directors.
The Board of Directors recommends a vote FOR the election of the nominees
to the Board of Directors.
The following biographical information is provided for each nominee for
election at the Annual Meeting.
Harrington Bischof, 65, has served as a Director of the Company since
October 1998. Mr. Bischof currently serves as President of Pandora Capital
Corporation, a solely owned private investment company. Mr. Bischof has more
than 30 years of investment banking experience, including 11 years with White,
Weld & Co., where he became Senior Vice President and head of its investment
banking activities in the Midwest. Following the merger of White, Weld & Co.
with Merrill Lynch & Co., Mr. Bischof headed that firm's Investment Banking
Group in the Midwest for eight years, serving on several of the firm's
investment banking management committees and as a Director of Merrill Lynch
International Bank in London. In 1991, Mr. Bischof became a Senior Advisor to
Prudential Securities, Inc. Mr. Bischof currently serves as a Director of
Peerless Industrial Group, Inc., Utilities, Inc. and Old Republic International
Corporation, a New York Stock Exchange listed insurance holding company. Mr.
Bischof received a BS in Engineering from Princeton University.
Bryan C. Cressey, 50, has served as a Director of the Company since October
1998. Mr. Cressey is the co-founder of Golder, Thoma, Cressey, Rauner, Inc. and
its successor Thoma Cressey Equity Partners, a firm engaged in the private
equity investment business since the late 1970s which manages over $1 billion of
private equity funds. Utilizing an industry consolidation investment strategy
they pioneered, Mr. Cressey's firm has led over 40 industry consolidation
investments focusing primarily on the service sector, producing the world's
largest paging company, second largest networking cable company, fourth largest
funeral home company and sixth largest propane distribution company. Mr. Cressey
currently serves as Chairman of Cable Design Technologies, a public company
listed on the New York Stock Exchange, and as a director of several other
entities. Mr. Cressey was inducted into the Chicago Entrepreneurial Hall of Fame
in 1998. Mr. Cressey received an MBA from Harvard Business School, a JD from
Harvard Law School, and a BA from the University of Washington.
Terence M. Graunke, 41, has served as a Director of the Company since
October 1998. Mr. Graunke is the founder and Chairman of Lake Capital
Management, a private investment management company. Prior to establishing Lake
Capital Management, Mr. Graunke served as Chairman and Chief Executive Officer
of Mastering, Inc., a publicly traded information technology training company
that was acquired by PLATINUM technology, inc. in early 1998. Mr. Graunke
founded Eagle River Interactive, Inc., a publicly traded interactive development
company, in May 1994 where he served as Chairman, President and Chief Executive
Officer until 1997 when the company was acquired by Omnicom Group. From December
1992 to May 1994, Mr. Graunke served as President and Chief Executive Officer of
various Omnicom marketing companies. Mr. Graunke served as a Director of U.S.
Robotics, a publicly traded company, prior to its sale to 3Com.
Michael C. Miller, 34, has served as a Director of the Company since April
2000 and as President - Automotive Business Unit of the Company since February
2000. Mr. Miller is a former owner and the former
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Executive Vice President of Drake Products Corporation, a $55 million dollar
custom injection-molding firm based in Greenville, Michigan. Mr. Miller served
Drake for 10 years in the areas of market development, operations, legal and
financial affairs. Prior to acquiring Drake, Mr. Miller was a partner at H. E.
Miller Associates, a multi-principal automotive representation company located
in Grand Rapids, Michigan. Mr. Miller has a background in economics at Albion
College and an associate's degree in Plastics Manufacturing from Grand Rapids
Community College.
Jack D. Rutherford, 66, has served as Chairman of the Board of the Company
since November 1998 and has been a Director of the Company since October 1998.
Mr. Rutherford served as Chief Executive Officer of the Company from January
1999 through December 1999. Mr. Rutherford is the co-founder, Chairman and Chief
Executive Officer of ICM Industries, Inc., a private holding company of
turn-around manufacturing businesses. ICM has acquired 13 companies with total
revenues of over $452 million. From 1978 to 1985, Mr. Rutherford served in
various executive officer positions at International Harvester (Navistar
International), including Vice Chairman from 1984 to 1985 and President and
Chief Operating Officer from 1983 to 1984. Prior to joining International
Harvester, Mr. Rutherford was employed by Ford Motor Company for 26 years. Mr.
Rutherford received an MBA from Michigan State University and an advanced
management degree from Harvard Business School.
Frederick A. Sotok, 65, has served as a Director of the Company since May
1999. Mr. Sotok became Manager of Manufacturing in 1977 at Prince Corporation,
an $800 million dollar automotive supplier of interior parts. Prince Corporation
was acquired in 1996 by Johnson Controls, Inc. Mr. Sotok became Vice President
of Manufacturing in 1980 and Senior Vice President of Operations in 1989. In
1993, Mr. Sotok became Executive Vice President and Chief Operating Officer.
Prior to employment with Prince Corporation, Mr. Sotok spent 17 years with
General Electric in various manufacturing positions. Mr. Sotok is also on the
advisory board of Innotec, Inc. in Zeeland, Michigan and consults with other
West Michigan firms. Mr. Sotok holds an MBA from the University of Detroit and a
bachelor's degree in metallurgy from Penn State University.
Frank T. Steck, 62, has served as a Director of the Company since October
1998. Mr. Steck has over 35 years of experience in retail, wholesale and
manufacturing with strong emphasis in heavy duty industries, including
agriculture, automotive, truck and construction. Mr. Steck is currently employed
in the executive search industry as Vice President of A.T. Kearney, a position
he has held for more than five years. Mr. Steck has previously served as Senior
Vice President and General Manager-North America of Fleetguard, Inc., a
subsidiary of Cummins Engine Co., as Vice President-Worldwide Parts Marketing
and Sales of J.I. Case, a subsidiary of Tenneco, Inc., as Vice President and
General Manager-Corporate Parts Operations of International Harvester, and as
Director of Marketing-Automotive Products of Sears, Roebuck and Company. Mr.
Steck currently serves as a Director of SRC Holdings Corporation and Duro-Test.
Mr. Steck graduated from Wilkes University with a BS degree in business
administration and economics.
Craig A. Wierda, 39, has served as a Director of the Company since February
1999. Mr. Wierda has over 16 years of experience in the automotive industry. Mr.
Wierda acquired his first automobile dealership in 1985 and currently owns five
dealerships throughout Michigan, with total annual sales of more than $100
million. From 1995 to 1996, Mr. Wierda served as a director of Prince
Corporation, a Tier I supplier in the automotive interior trim manufacturing
industry. Prince Corporation was acquired in 1996 by Johnson Controls, Inc. Mr.
Wierda received a BA from the Northwood Institute.
Troy D. Wiseman, 34, has served as Vice Chairman of the Board of the
Company since November 1998 and has been a Director of the Company since
February 1998. Mr. Wiseman also served as Chairman of the Company from April
1998 until November 1998 and served as Chief Executive Officer of the Company
from April 1998 until December 1998. Mr. Wiseman is the founder, Chairman and
CEO of Invest Linc, a company specializing in providing financial consulting
services and bridge financing to emerging growth companies preparing for an
initial public offering. Mr. Wiseman also served from 1994 to 1999 as the
Manager of Invest L'Inc. Bridge Fund, LLC, a privately held investment fund
which provides short term financing to both privately and publicly held
companies. Mr. Wiseman is founder and President of Apportum Consulting Corp., a
New York based business consulting firm specializing in assisting microcap
companies in "going public" through public mergers. Mr. Wiseman was co-founder
of Cami'z, Inc. a publicly traded retail company where he served as a member of
the board of directors and held various executive officer positions including
Vice President, Chief Operating Officer, Chief Financial Officer and Secretary
from 1987 to 1994. In 1994, Cami'z acquired Chavuin International, Ltd., by
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merger and became B.U.M. International, Inc. Mr. Wiseman is a co-founder of the
Wiseman-Roosen-Winslow Foundation, which funds the opening of new orphanages in
developing countries, and he is a director of Children of Promise International
which operates 52 orphanages serving about 2,500 children in 16 countries.
There are no family relationships between any of the foregoing persons or
any of the Company's executive officers.
Board and Committees
The Board of Directors held seven meetings (exclusive of committee
meetings) during 1999. During 1999, each director attended at least 75% of the
meetings of the Board of Directors and any committees on which such director
served. The Board of Directors has established the following committees, the
functions and current members of which are noted below.
Executive Committee. The Company has an Executive Committee comprised of
Bryan Cressey, Jack Rutherford, Fred Sotok, Troy Wiseman and Craig Wierda. The
Executive Committee acts from time to time on behalf of the Board in managing
the business and affairs of the Company (except as limited by law or the
Company's Bylaws), and is delegated certain assignments and functions by the
Board of Directors. The Committee met four times during the last fiscal year.
Audit Committee. The Company has an Audit Committee comprised of Harrington
Bischof and Jack Rutherford. The Audit Committee recommends to the Board of
Directors the selection of independent auditors and reviews the scope of their
audit, their audit reports, and any recommendations made by them. The committee
approves fees paid for audit and nonaudit services by the independent public
accountants. The committee also reviews the activities of the Company's internal
auditors, and reviews and recommends to the Board issues concerning the
Company's dividend policies, capital expenditures, and other related financial
matters. The committee met two times during the last fiscal year.
Executive Compensation Committee. The Company has an Executive Compensation
Committee comprised of Harrington Bischof, Bryan Cressey, Frank Steck and Craig
Wierda. The Executive Compensation Committee recommends to the Board the annual
executive incentive plan, the grant of employee stock options, and the annual
remuneration of the Company's Chairman and Chief Executive Officer, and acts as
the administrative committee for the Company's employee stock option and long
term incentive plans. The committee met six times during the last fiscal year.
Operational Oversight Committee. The Company created an Operational
Oversight Committee comprised of Fred Sotok, Jack Rutherford and Craig Wierda in
January 2000. The Operational Oversight Committee assumed the duties of the
office of the Chief Executive Officer, including periodic operational reviews.
The President of the Company reports to this Committee.
Compensation of Directors
Directors of the Company each received annual compensation of $10,000 in
1999 for serving as a director of the Company, which $10,000 was paid in the
form of 2,462 shares of Company common stock. For 2000, each director will
receive restricted stock awards of shares of Company common stock. Each quarter
the Company will grant each director a number of shares equal to $10,000 divided
by the closing price of Company common stock on the NASDAQ OTC Bulletin Board on
the first trading day of 2000. Each restricted stock award will vest six months
after the grant date. In addition, the Company reimburses directors for out of
pocket expenses incurred to attend board of directors and committee meetings.
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EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Company's executive officers, other than Michael C. Miller, who also serves as a
director (see "Election of Directors"):
Name Age Position
- --------------------------------- --- ----------------------------------------
William Beckman 52 President
David W. Selvius 35 Chief Financial Officer
Jeffrey W. Anonick 39 President - Consumer Products and Office
Furniture Business Unit
Timothy R. Kline 43 President - Heavy Truck Business Unit
William Beckman has served as President of the Company since December 1999. From
February 1999 until November 1999, Mr. Beckman served as Chief Executive Officer
of Clarion Plastics Technologies, Inc., a wholly-owned subsidiary of the
Company. From October 1997 until January 1999, Mr. Beckman served as Chief
Financial Officer of Johnson Controls Interiors, an automotive supplier of
interior parts. Prior to October 1997, Mr. Beckman served as Vice President -
Finance of Johnson Controls Interiors as well as Prince Corporation. Prince
Corporation was an automotive supplier of interior parts that was acquired by
Johnson Controls, Inc. in 1996.
David W. Selvius has served as Chief Financial Officer of the Company since
January 2000. From February 1999 until December 1999, Mr. Selvius served as Vice
President - Corporate Finance of Clarion Plastics Technologies, Inc., a
wholly-owned subsidiary of the Company. From September 1996 until January 1999,
Mr. Selvius served as Director, Corporate Finance of Johnson Controls Interiors
and from May 1994 until August 1996 as Treasury Manager of Prince Corporation.
Jeffrey W. Anonick has served as President-Consumer Products and Office
Furniture Business Unit of the Company since February 2000. From June 1997 until
January 2000, Mr. Anonick served as President, and from January 1995 until May
1997, as Vice President of Operations, of Drake Products Corporation, a full
service custom injection molding firm.
Timothy R. Kline has served as President-Heavy Truck Business Unit of the
Company since February 2000. From September 1998 until January 2000, Mr. Kline
served as President and Chief Operating Officer of Clarion Plastics
Technologies, Inc., a wholly-owned subsidiary of the Company. From February 1998
until August 1998, Mr. Kline served as President of JAC Products, an injection
molding and roll forming extrusion firm; from 1997 until January 1998 as
President - Molding Division of Plastech Exterior Systems, Inc., formerly known
as Bryan Custom Plastics; and prior to 1997, as Vice President and General
Manager of Bryan Custom Plastics.
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SECURITIES OWNERSHIP
The following table shows, as of March 31, 2000, the number of shares
beneficially owned by (i) each Director, Director nominee and Named Executive
identified in the executive compensation tables of this Proxy Statement, (ii)
all directors and executive officers as a group, and (iii) the beneficial owners
of more than 5% of the Company's Common Stock. Except as described in the notes
following the table, the following persons have sole voting and dispositive
power as to all of their respective shares.
Directors, Named Executives, Amount and Nature
and 5% Stockholders of Beneficial Ownership Percent of Class(1)
- ------------------------------ --------------------------- ----------------------
Preferred Common Preferred Common
Jack D. Rutherford(2) 62,500 1,027,750(3) 3.18% 4.85%
William Beckman -- 285,000(4) -- 1.37%
Timothy R. Kline -- 171,258(5) -- *
R. Townley Rose, Jr.(6) -- 1,197,426 -- 5.83%
Robert W. Martin(7) -- 95,000 -- *
Gary E. Dewel(8) 12,500 232,693(9) * 1.13%
Harrington Bischof -- 249,000(10) -- 1.21%
Bryan C. Cressey 62,500(11) 1,399,000(12) 3.18% 6.77%
Terence M. Graunke 62,500 299,000(13) 3.18% 1.45%
Michael C. Miller -- 2,030,000(14) -- 9.87%
Frederick A. Sotok -- 51,400(15) -- *
Frank T. Steck 25,000 449,000(16) 1.27% 2.18%
Troy D. Wiseman 31,250(17) 1,538,703(18) 1.59% 7.45%
Craig A. Wierda 237,500(19) 3,570,000(20) 12.10% 16.53%
All executive officers and directors
As a Group (15 persons) 493,750 12,610,230(21) 25.16% 54.52%
___________________
*Less than one percent.
(1) Percentages are calculated based upon shares outstanding, plus shares which
the director has the right to acquire under preferred stock conversion
rights exercisable within 60 days and stock options and warrants
exercisable within 60 days.
(2) Mr. Rutherford served as Chief Executive Officer of the Company from
January 1999 through December 1999. Mr. Rutherford continues to serve as
Chairman of the Board of Directors and as a member of the Operational
Oversight Committee.
(3) Includes (i) 125,000 shares with respect to which Mr. Rutherford has a
right to acquire beneficial ownership within 60 days by converting
preferred stock into common stock, (ii) 510,000 shares with respect to
which Mr. Rutherford has a right to acquire beneficial ownership under
options exercisable within 60 days, and (iii) 25,000 shares with respect to
which Mr. Rutherford has the right to acquire beneficial ownership within
60 days by exercising certain warrants.
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(4) Consists of (i) 50,000 shares owned by Beckman Family Investments LLC, (ii)
210,000 shares with respect to which Mr. Beckman has a right to acquire
beneficial ownership under options exercisable within 60 days, and (iii)
25,000 shares with respect to which Mr. Beckman has the right to acquire
beneficial ownership within 60 days by exercising certain warrants.
(5) Includes (i) 100 shares owned by Mr. Kline's children, and (ii) 20,000
shares with respect to which Mr. Kline has the right to acquire beneficial
ownership under options exercisable within 60 days.
(6) Mr. Rose resigned as an officer and employee effective September 8, 1999.
(7) Mr. Martin retired as an officer and employee effective December 31, 1999.
(8) Mr. Dewel retired as an officer and employee effective February 22, 2000.
(9) Includes (i) 25,000 shares with respect to which Mr. Dewel has the right to
acquire beneficial ownership within 60 days by converting preferred stock
into common stock, and (ii) 100,000 shares with respect to which Mr. Dewel
has the right to acquire beneficial ownership under stock options
exercisable within 60 days.
(10) Includes (i) 25,000 shares owned by the Harrington Bischof Trust, and (ii)
10,000 shares with respect to which Mr. Bischof has a right to acquire
beneficial ownership under options exercisable within 60 days.
(11) Consists of 62,500 shares owned by the Cressey Family Partnership.
(12) Includes (i) 250,000 shares owned by Cressey Companies LLC, (ii) 125,000
shares with respect to which the Cressey Family Partnership has a right to
acquire beneficial ownership within 60 days by converting preferred stock
into common stock, and (iii) 10,000 shares with respect to which Mr.
Cressey has a right to acquire beneficial ownership under options
exercisable within 60 days.
(13) Includes (i) 32,000 shares owned by Kermit Investments LP, (ii) 47,000
shares owned by Slick Partners LP, (iii) 32,000 shares owned by Wilma
Investments LP, (iv) 125,000 shares with respect to which Mr. Graunke has a
right to acquire beneficial ownership within 60 days by converting
preferred stock into common stock, and (v) 10,000 shares with respect to
which Mr. Graunke has a right to acquire beneficial ownership under options
exercisable within 60 days.
(14) Consists of (i) 2,000,000 shares owned by Drake Products Corporation and
(ii) 30,000 shares with respect to which Mr. Miller has a right to acquire
beneficial ownership under options exercisable within 60 days.
(15) Includes 400 shares owned by Mr. Sotok's grandchildren.
(16) Includes (i) 150,000 shares owned by Mr. Steck's wife, (ii) 50,000 shares
with respect to which Mr. Steck has a right to acquire beneficial ownership
within 60 days by converting preferred stock into common stock, and (iii)
10,000 shares with respect to which Mr. Steck has a right to acquire
beneficial ownership under options exercisable within 60 days.
(17) Consists of 31,250 shares owned by the Wiseman Family Trust.
(18) Includes (i) 30,800 shares owned by Apportum Consulting Corp., (ii) 1,113
shares owned by Invest L'Inc., (iii) 865,444 shares owned by Invest L'Inc.
Emerging Growth Equity Fund I, with respect to which Mr. Wiseman disclaims
beneficial ownership, (iv) 20,000 shares owned by Mr. Wiseman's children,
(v) 470,606 shares owned by the Wiseman Family Trust, (vi) 62,500 shares
with respect to which the Wiseman Family Trust has a right to acquire
beneficial ownership within 60 days by converting preferred stock into
common stock, (vii) 10,000 shares with respect to which Mr. Wiseman has a
right to acquire beneficial ownership under options exercisable within 60
days, (viii) 20,000 shares with respect to which Invest L'Inc. has a right
to acquire beneficial ownership under options exercisable within 60 days,
and (ix) 20,000 shares with respect to which Invest L'Inc. Bridge Fund LLC
has a right to acquire beneficial ownership under options exercisable
within 60 days.
(19) Consists of 237,500 shares owned by the Emilie D. Wierda Living Trust.
(20) Includes (i) 475,000 shares with respect to which the Emilie D. Wierda
Living Trust has a right to acquire beneficial ownership within 60 days by
converting preferred stock into common stock, (ii) 200,000 shares with
respect to which the Wierda Trust has a right to acquire beneficial
ownership by exercising certain warrants within 60 days, (iii) 350,000
shares with respect to which Eagle Companies, Inc. has a right to acquire
beneficial ownership under options exercisable within 60 days, and (iv)
25,000 shares with respect to which Mr. Wierda has the right to acquire
beneficial ownership within 60 days by exercising certain warrants.
(21) Included in this number are 2,557,500 shares with respect to which
executive officers and directors have the right to acquire beneficial
ownership under options and warrants exercisable within 60 days and under
preferred stock conversion rights exercisable within 60 days.
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SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the Company's
President and the five other most highly compensated executive officers (the
"Named Executives") for each of the three years ended December 31, 1999, 1998
and 1997.
Long Term
Annual Compensation Compensation
Securities All Other
Name and Principal Salary (1) Bonus Restricted Stock Underlying Compensation(3)
Position Year ($) ($) Awards ($)(2) Options (#) ($)
Jack D. Rutherford(4) 1999 $120,000 $0 $0 500,000 $120,450
Chief Executive Officer 1998 16,667 0 0 260,000 0
1997 0 0 0 0 0
William Beckman 1999 $135,577 $0 $0 450,000 $11,000
President 1998 0 0 0 0 0
1997 0 0 0 0 0
Timothy R. Kline 1999 $180,000 $0 $50,000 50,000 $5,202
President of Clarion 1998 62,308 0 0 0 184
Plastics Technologies, Inc. 1997 0 0 0 0 0
R. Townley Rose, Jr.(5) 1999 $123,893 $ 5,000 $0 0 $135,741(5)
Executive Vice President 1998 112,500 0 0 0 0
1997 0 0 0 0 0
Robert W. Martin(6) 1999 $118,750 $0 $81,250 0 $10,729
Chief Financial Officer 1998 15,385 0 90,000 0 0
1997 0 0 0 0 0
Gary E. Dewel(7) 1999 $100,002 $16,667 $0 0 $0
Executive Vice President 1998 0 0 0 0 0
of Clarion Plastics Technologies, 1997 0 0 0 0 0
(1) Includes amounts deferred by employees pursuant to Section 401(k) of the
Internal Revenue Code.
(2) For Mr. Kline this amount represents the value of 25,000 shares of the
Company's common stock granted to Mr. Kline based on a price of $2.00 per
share. For Mr. Martin this amount represents 25,000 shares granted in 1999
based on a price of $3.25 per share and 45,000 shares granted in 1998 based
on a price of $2.00 per share.
(3) The amounts disclosed in this column include: (a) a Company 401(k) match of
$1,404 to Mr. Kline in 1999, (b) payments by the Company of premiums for
term life insurance for the benefit of the Named Executives: $450 for Mr.
Rutherford in 1999, and $736 and $184 for Mr. Kline in 1999 and 1998,
respectively; (c) accrued employment contract obligation of $120,000 for
Mr. Rutherford in 1999; (d) severance payments of $135,741 for Mr. Rose in
1999; and (e) other perquisites in 1999 of $11,000 for Mr. Beckman, $7,715
for Mr. Kline, and $10,729 for Mr. Martin.
(4) Mr. Rutherford served as Chief Executive Officer of the Company from
January 1999 through December 1999.
(5) Mr. Rose resigned as an officer and employee effective September 8, 1999.
Other Compensation for Mr. Rose includes 1999 severance payments totaling
$80,000 cash and 15,926 shares of Company common stock valued at $55,741.
In addition, in connection with the termination of his Employment Agreement
the Company agreed to pay Mr. Rose twenty monthly payments of $17,500
beginning January 2000.
(6) Mr. Martin retired as an officer and employee effective December 31, 1999.
(7) Mr. Dewel retired as an officer and employee effective February 22, 2000.
-8-
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on options granted to the Named
Executives during the year ended December 31, 1999.
Percentage of
Number of Total Options
Securities Granted to Exercise or Grant Date
Underlying Employees in Base Price Present
Name Options(1) Fiscal Year (per share) Expiration Date Value(2)
Jack D. Rutherford 500,000 46.1% $1.00 01/01/02 $1,306,355
William Beckman 450,000 41.5% 3.25 03/01/09 789,840
Timothy R. Kline 50,000 4.6% 2.00 01/01/04 110,245
R. Townley Rose, Jr. 0 0% N/A N/A N/A
Robert W. Martin 0 0% N/A N/A N/A
Gary E. Dewel 0 0% N/A N/A N/A
(1) The options granted to Mr. Rutherford were vested immediately. The options
granted to Mr. Beckman vest 20% a year for the first five years of the term
of the options. The options granted to Mr. Kline vested 10,000 shares
immediately upon grant and 10,000 shares per year for four years on January
1 of each year beginning with January 1, 2000.
(2) The values reflect standard application of the Black-Scholes option pricing
model based on (a) expected stock price volatility of 0.62, (b) risk free
rate of return of 4.57% for Mr. Rutherford and Mr. Kline and 4.65% for Mr.
Beckman, (c) a cash dividend yield of 0%, and (d) an expected time of five
years to exercise. The actual value, if any, of the options granted is
dependent upon the market value of the Company's common stock subsequent to
the date the options become exercisable.
AGGREGATED STOCK OPTION EXERCISES IN 1999 AND YEAR END OPTION VALUES
The following table provides information on the exercise of stock options
during 1999 by the Named Executives and the number and value of unexercised
options at December 31, 1999.
Number of Securities Value of Unexercised
Underlying Unexercised In the Money Options
Options at December 31, 1999 at December 31, 1999(2)
Shares
Acquired
on Value
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
Jack D. Rutherford 0 $0 510,000 0 $1,488,125 $ 0
William Beckman 0 0 150,000 300,000 103,125 206,250
Timothy R. Kline 0 0 10,000 40,000 19,375 77,500
R. Townley Rose, Jr. 0 0 0 0 0 0
Robert W. Martin 0 0 0 0 0 0
Gary E. Dewel 0 0 0 0 0 0
(1) Represents the aggregate market value of shares acquired at time of
exercise, less the aggregate exercise price paid by the employee.
(2) Values are based on the difference between the closing price of the
Company's common stock on December 31, 1999 ($3.9375) and the exercise
prices of the options.
-9-
EMPLOYMENT AGREEMENTS
Mr. Beckman entered into an Employment Agreement with the Company and
Clarion Plastics Technologies, Inc. dated March 1, 1999. The Employment
Agreement provides for (a) a base salary of $150,000 for the first year of the
contract and $250,000 for the second year of the contract, (b) certain bonuses
if certain sales objectives are achieved, (c) the grant of options to acquire
450,000 shares at an exercise price of $3.25 per share, and (d) certain employee
benefits. The Employment Agreement has a term of six years commencing February
1, 1999, and will be automatically renewed for successive one year terms unless
terminated by either party.
Mr. Kline entered into an Employment Agreement with the Company and Clarion
Plastics Technologies, Inc. dated March 23, 1999, effective as of September 1,
1998. The Employment Agreement as amended provides for (a) a base salary of
$180,000 per year, (b) the grant of options to acquire 50,000 shares at an
exercise price of $2.00 per share, and (c) certain employee benefits. The
Employment Agreement has a term of one year and is automatically renewed for
successive one year terms unless terminate by either party.
CERTAIN TRANSACTIONS
In January 1999, the Company terminated a consulting agreement into which
it had entered with Invest L'Inc. Partners, LLC, a firm owned by Troy Wiseman, a
Director of the Company. The termination agreement required the Company to pay
an aggregate amount of $42,000 in termination costs. Also in January 1999, the
Company entered into an agreement with Invest L'Inc., a firm also owned by Mr.
Wiseman, pursuant to which the firm will provide consulting services for
strategic initiatives. The agreement provides for monthly payments by the
Company of $15,000 plus expenses (capped at $1,000 per month) through December
2003.
On October 1, 1999, the Company acquired Double "J" Molding, Inc. ("Double
J"). The Company issued 850,000 shares of Clarion common stock to the sellers of
Double J. Of the 850,000 Clarion shares issued for the acquisition, 425,000
shares ("Put Shares") are subject to the terms of stock put agreements ("Put
Agreements") with the sellers which require the Company to purchase some or all
of the Put Shares from the holders at a price of $6.00 per share. The maximum
potential repurchase obligation of the Company is $2,550,000. The outstanding
put options expire on November 15, 2000 and are exercisable between October 1,
2000 and November 14, 2000. Concurrent with the issuance of these stock put
options, the Company entered into a stock put agreement with Craig Wierda, a
member of the Board of Directors ("Director Put Agreement") which requires that
Mr. Wierda purchase a number of shares of Clarion common stock equal to the
product of: (i) the aggregate purchase price paid by the Company for the Put
Shares, divided by the lesser of (ii) the closing price of the common stock
quoted on NASDAQ on the date the Company receives notice of its obligation to
perform under the Put Agreements, or (iii) $6.00. The Company's put option
expires on November 25, 2000 and is exercisable between October 1, 2000 and
November 24, 2000. In exchange for the Director Put Agreement, Mr. Wierda
received 200,000 warrants to purchase Clarion common stock at an exercise price
of $5.00 per share. The warrants are immediately exercisable and expire on
September 30, 2002.
As of January 1999, the Company entered into a three year agreement with
Eagle Companies, Inc. ("Eagle"), a firm owned by Mr. Wierda, pursuant to which
Eagle provides consulting and management services regarding strategic
initiatives and provides office space for certain corporate employees of the
Company. For those services and the space, the Company has granted Eagle options
to purchase 350,000 shares of common stock at the price of $3.25 per share. The
options are immediately exercisable and expire on December 31, 2002.
In February 2000, the Company entered into an agreement to acquire the
assets of Drake Products Corporation ("Drake"). As a condition to the receipt of
financing, the banks which provided the financing required the Company to obtain
guarantees on $12 million of term debt. Mr. Wierda and his spouse, Jack
Rutherford and William Beckman (each a "Guarantor") agreed to provide guarantees
on $3 million of the debt. Each Guarantor executed a $1,000,000 guaranty and
obtained a supporting letter of credit. In consideration, the Company executed
an agreement ("Fee Agreement") with each Guarantor pursuant to which the Company
pays each Guarantor a monthly fee of 1% of that Guarantor's guaranty amount, in
arrears, on the anniversary date of the Fee Agreement, either in cash or in
shares of common stock valued at $4.00 per share. Concurrently with the
execution of the Fee
-10-
Agreement, the Company issued to each Guarantor a warrant for the purchase of
25,000 shares of common stock at a price of $4.625 per share. The warrants are
immediately exercisable and expire three years from issuance.
In fiscal 1999, the Company settled litigation in which it was involved
with Plastech Exterior Systems, Inc. Mr. Timothy Kline, the President and Chief
Operating Officer of Clarion Plastics Technologies, Inc., a wholly-owned
subsidiary of the Company, was also personally involved in that litigation. To
induce Mr. Kline to settle his involvement in the litigation concurrently with
the Company's settlement, the Company issued Mr. Kline 50,000 shares of Company
common stock.
Mr. Rutherford entered into a two-year Employment Agreement with the
Company, dated January 1, 1999, to serve as Chairman of the Board and Chief
Executive Officer. Mr. Rutherford continues to serve as Chairman of the Board,
however, effective January 2000 the duties of Chief Executive Officer have been
assumed by the Operational Oversight Committee of the Board of Directors which
consists of Fred Sotok, Jack Rutherford and Craig Wierda. The Company accrued
$120,000 as of December 31, 1999 for the remaining compensation due under Mr.
Rutherford's Employment Agreement.
On August 23, 1999, the Company entered into a Settlement Agreement and
Mutual Release with Mr. R. Townley Rose, Jr. in conjunction with the termination
of Mr. Rose's employment by the Company as Executive Vice President, and to
induce Mr. Rose to settle his personal involvement in the Plastech Exterior
Systems, Inc. litigation. Under the terms of the Agreement and Release in fiscal
1999, the Company paid Mr. Rose $80,000 in cash and issued him 15,926 shares of
common stock valued at $55,741. The Company is also required to pay Mr. Rose
twenty monthly installments of $17,500 beginning January 2000.
On December 31, 1999, Mr. Robert Martin retired as Chief Financial Officer
of the Company. The Company continues to pay Mr. Martin's salary at the annual
rate of $125,000 and to provide standard employee benefits while his retirement
package is determined.
On February 22, 2000, Mr. Gary Dewel retired as Executive Vice President -
Supply Chain of the Company. The Company paid Mr. Dewel $183,333 for services
rendered (July 1999 through May 2000) and issued him options to acquire 100,000
shares of common stock at a price of $4.375 per share, exercisable immediately
and expiring June 2005. Mr. Dewel will continue to receive standard employee
benefits through June 2000.
-11-
PROPOSAL TO ADOPT THE 2000 EMPLOYEES' STOCK PURCHASE PLAN
By written consent effective April 25, 2000, the Board of Directors adopted
the Clarion Technologies, Inc., 2000 Employees' Stock Purchase Plan (the "Plan")
to become effective July 1, 2000, subject to approval by the Company's
shareholders. The following summary of the Plan is subject to the specific
provisions contained in the complete text of the Plan set forth in Appendix A to
this Proxy Statement.
The Plan provides for the purchase of the Company's Common Stock ("common
stock"), par value $.001 per share, by employees of the Company at a discount
from the market price of such shares. A total of 400,000 shares is reserved for
issuance under this plan.
The Board of Directors believes that the opportunity to purchase shares of
the Company's common stock under the Plan at a discount from market price is
important to attract and retain qualified employees who are essential to the
success of the Company, and that stock ownership is important to providing such
persons with incentive to perform in the best interests of the Company.
At the annual meeting, the Company's shareholders are being asked to
consider and approve this Plan.
Description of the Employee Stock Purchase Plan. All active employees of
the Company and its participating subsidiaries, except certain part-time
employees, are eligible to participate in the Plan after completing three months
of continuous employment as of the beginning of an Option Period. An Option
Period begins on the first day of each fiscal quarter and ends on the last day
of the fiscal quarter. No employee is entitled to purchase shares of common
stock under the Plan if he or she is or would be, after the purchase, the holder
of five percent (5%) or more of the total voting power of the Company.
The Plan provides an opportunity for eligible employees to purchase shares
of the Company's common stock at a price equal to eighty-five percent (85%) of
the fair market value of the shares as of the last business day of the Option
Period. If the Company's shares continue to be traded in the NASDAQ SmallCap
market or the NASDAQ NMS market or if the Stock becomes listed upon an
established stock exchange, the fair market value per share shall be the average
of the last reported sales price of the Company's common stock as of the close
of business for each of the last thirty (30) trading days of the applicable
Option Period. Eligible employees who have elected to participate may contribute
cash (up to 10% of gross earnings of each fiscal quarter) to the Stock Purchase
Plan through equal weekly payroll deductions, by lump sum contributions received
45 days prior to the last day of the option period, or both. However, the
aggregate market value of shares purchased in any fiscal year for any employee
may not exceed $25,000. Purchases of shares are made as of the last business day
of each fiscal quarter with funds contributed by participating employees during
this quarter. A participant may terminate his or her participation at any time
prior to his or her last pay date in an Option Period by written notice to the
Company, but will not be eligible to reenter the Plan for the balance of the
Company's fiscal year.
Rights under the Plan are not transferable. Any termination of employment,
including death and retirement, terminates participation. In addition, the Stock
Purchase Plan automatically terminates on June 30, 2010, unless terminated
earlier by the Board of Directors. The Board of Directors may amend the Stock
Purchase Plan at any time, except that it cannot be amended without shareholder
approval if the amendment would: (a) increase the maximum number of shares that
may be issued under the plan, (b) decrease the purchase price per share subject
to the plan, (c) withdraw the administration of the Plan from the Committee, (d)
change the class of employees eligible to participate under the plan, or (e)
render options granted under the plan unqualified for special tax treatment
under the Internal Revenue code of 1986, as amended (the "Code").
Summary of Federal Income Tax Consequences. The Plan is intended to be a
qualified "Employee Stock Purchase Plan," as defined in Section 423 of the Code.
The following paragraph summarizes the consequences of the acquisition and
disposition of shares of the Company's common stock for federal income tax
purposes, based on management's understanding of existing federal income tax
laws.
Funds contributed by employees through payroll deductions are a part of
current compensation taxable as ordinary income, although not actually received
by employees. As of the purchase date, on the last business day of each fiscal
quarter, a participating employee will be considered to have been granted an
option to purchase shares
-12-
and to have simultaneously exercised that option with respect to the shares
purchased on that date. If the employee does not dispose of such shares for a
period of two (2) years after the date of the grant of the option (the "Holding
Period"), upon subsequent disposition of the shares or upon death, the employee
will realize compensation, taxable as ordinary income, equal to the lesser of:
(a) the amount by which the fair market value of the shares at the time of
disposition or death exceeds the option exercise price, or (b) the amount by
which the fair market value of the shares at the time the option was granted
exceeded the option exercise price. If (b) is the lesser amount, the difference
between the fair market value of the shares at the time of disposition or death
and the fair market value of the shares at the time of the option was granted
will be taxed as a capital gain. In the event the Holding Period requirement
described above is not met, the amount to be treated as compensation on
disposition of the shares by the employee is the difference between the option
exercise price and the fair market value of the shares at the time of
disposition. In the event the Holding Period requirement is not met, the Company
will be entitled to a deduction for federal income tax purposes equal to the
amount recognized as compensation by the employee. In all other events, the
Company will not be entitled to any deduction for federal income tax purposes
with respect to shares to an employee pursuant to exercise of an option granted
under the Stock Purchase Plan.
The Board of Directors recommends a vote FOR approval and adoption of the
2000 Employees' Stock Purchase Plan. The affirmative vote of a majority of the
outstanding shares of common stock voted at the Annual Meeting is required to
approve and adopt the Plan. While broker nonvotes will not be treated as votes
cast on the approval of the Plan, shares voted as abstentions will be counted as
votes cast. Since a majority of the votes cast is required for approval, the sum
of any negative votes and abstentions will necessitate offsetting affirmative
votes to approve and adopt the Plan. Unless otherwise directed by marking on the
accompanying proxy, the proxy holders named therein will vote for the approval
of the Plan.
PROPOSAL TO ADOPT THE FIRST AMENDMENT
TO THE CLARION TECHNOLOGIES, INC. 1999 STOCK INCENTIVE PLAN
By written consent effective April 25, 2000, the Board of Directors adopted
the First Amendment (the "Amendment") to the Clarion Technologies, Inc. 1999
Stock Incentive Plan (the "Plan"), subject to approval by the Company's
shareholders.
General
The Plan currently provides for the granting of stock incentives to
employees of the Company or any subsidiary and non-employee directors,
consultants and independent contractors of the Company and any subsidiary to
acquire, in the aggregate, not more than 1,000,000 shares of Common Stock of the
Company plus certain shares of Common Stock which have not been issued under the
Company's 1998 Stock Option Plan. The Plan was adopted by the Board of Directors
of the Company on May 24, 1999, and was approved by a majority of the
shareholders of the Company on May 24, 1999.
Amendment
The Amendment increases the maximum number of shares reserved under the
Plan from 1,000,000 to 2,000,000 shares of common stock. Please review the
Amendment in its entirety as set forth in Appendix B to this Proxy Statement.
Purpose
The purpose of the Plan is to advance the interests of the Company and its
shareholders by enabling the Company and its subsidiaries to attract and retain
persons of ability to perform services for the Company and its subsidiaries by
providing an incentive to such individuals through equity participation in the
Company and by rewarding such individuals who contribute to the achievement by
the Company of its economic objectives.
The Board of Directors recommends a vote FOR approval and adoption of the
First Amendment to the Clarion Technologies, Inc. 1999 Stock Incentive Plan. The
affirmative vote of a majority of the outstanding shares of common stock voted
at the Annual Meeting is required to approve and adopt the Amendment. While
broker nonvotes will not be treated as votes cast on the approval of the
Amendment, shares voted as abstentions will be
-13-
counted as votes cast. Since a majority of the votes cast is require for
approval, the sum of any negative votes and abstentions will necessitate
offsetting affirmative votes to approve and adopt the Amendment. Unless
otherwise directed by marking on the accompanying proxy, the proxy holders named
therein will vote for the approval of the Amendment.
-14-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Securities Exchange Act of 1934, the
Company's directors and officers, as well as any person holding more than 10
percent of its Common Stock, are required to report initial statements of
ownership of the Company's securities and changes in such ownership to the
Securities and Exchange Commission. Based upon a review of the copies of such
forms furnished to the Company, the Company believes that Mr. Sotok, Mr. Wierda,
Mr. Beckman, Mr. Selvius, Mr. Miller, Mr. Kline, and Mr. Anonick each filed
initial statements of ownership on Form 3 late, and for the period from January
1, 1999, through December 31, 1999, each of the directors, officers or 10
percent shareholders have not yet filed an Annual Report on Form 5.
RELATIONS WITH INDEPENDENT ACCOUNTANTS
The consolidated financial statements of the Company have been audited by
Perrin, Fordree & Company, P.C. ("Perrin"), independent certified public
accountants.
On April 18, 2000, the Company dismissed Perrin as its independent
accountant. The Company certifies that (i) the audit reports of Perrin on the
consolidated financial statements of Clarion Technologies, Inc. for the past two
years did not contain any adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope, or accounting principles;
(ii) the decision to change independent accountants was approved by the Board of
Directors of the Company; (iii) i connection with its audits for the two most
recent fiscal years and any subsequent interim periods through April 18, 2000,
there were no disagreements with Perrin on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which disagreement, if not resolved to the satisfaction of Perrin, would have
caused it to make reference to the subject matter of the disagreement in
connection with its report; and (iv) during the two most recent fiscal years and
through April 18, 2000, there have been no reportable events (as defined in
Regulation S-B Item 304(a)(1)(iv)(B)).
The Company engaged Ernst & Young LLP as its new independent accountant as
of April 18, 2000. During the two most recent fiscal years and through April 18,
2000, the Company has not consulted with Ernst & Young LLP regarding: (i) the
application of accounting principles to a specified completed or contemplated
transaction or the type of audit opinion that might be rendered on the Company's
financial statements, and in no case was either written or oral report provided
to the Company that the Company concluded was an important factor in reaching a
decision as to an accounting, auditing or financial reporting issue; or (ii) any
matter that was either the subject of a disagreement, as that term is defined in
Item 304(a)(1)(iv) of Regulation S-B and the related instructions to Item 304 of
Regulation S-B, or a reportable event required to be disclosed pursuant to Item
304(a)(1)(iv) of Regulation S-B.
A representative of Ernst & Young LLP is expected to be present at the
annual meeting with the opportunity to make a statement, if desired, and will be
available to respond to appropriate questions.
STOCKHOLDER PROPOSALS-2001 ANNUAL MEETING
Any stockholder proposal intended to be presented at the next annual
meeting of the Company must be received by the Company at 235 Central Avenue,
Holland, Michigan 49423, not later than December 31, 2000, if the stockholder
wishes the proposal to be included in the Company's proxy materials relating to
the annual meeting of shareholders in 2001. If the Company receives notice of a
shareholder proposal after February 28, 2001, the persons named as proxies for
the 2001 Annual Meeting of Stockholders will have discretionary voting authority
to vote on that proposal at that meeting.
In addition, the Company's Bylaws contain certain notice and procedural
requirements applicable to director nominations and stockholder proposals,
irrespective of whether the proposal is to be included in the Company's proxy
materials. A copy of the Company's Bylaws has been filed with the Securities and
Exchange Commission and can be obtained from the Public Reference Section of the
Commission or the Company.
-15-
MISCELLANEOUS
If any matters, other than the matters set forth herein, properly come
before the meeting, it is the intention of the persons named in the enclosed
proxy to vote the shares thereby represented in accordance with their judgment.
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or telegraph by a few regular employees of the Company without
additional compensation. The Company may reimburse brokers and other persons
holding stock in their names or in the names of nominees for their expenses in
sending proxy materials to the principals and obtaining their proxies.
The Annual Report on Form 10-KSB of the Company for the year ended December
31, 1999, including financial statements, is being mailed to stockholders with
this proxy statement.
Stockholders are urged to date and sign the enclosed proxy and return it
promptly to the Company in the enclosed envelope.
By Order of the Board of Directors,
/s/ David W. Selvius
May 22, 2000 David W. Selvius
Chief Financial Officer and Secretary
-16-
APPENDIX A
CLARION TECHNOLOGIES, INC.
2000 EMPLOYEES' STOCK PURCHASE PLAN
1. Purpose. The purpose of the Clarion Technologies, Inc. Employees' Stock
Purchase Plan (the "Plan") is to provide employees of Clarion Technologies, Inc.
(the "Company") and the "Participating Subsidiaries" (as herein defined) with a
further inducement to continue their employment with the Company or the
Participating Subsidiaries and to encourage such employees to increase their
efforts to promote the best interests of the Company by permitting them to
purchase shares of common stock, par value $0.001 per share (the "Stock") of the
Company, at a price less than the market price thereof, under such circumstances
that the purchase qualifies as the exercise of an option granted under an
employee stock purchase plan, as defined by Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"). As used herein, the term "Company" does
not include any subsidiaries of the Company. This Plan may be adopted by the
board of directors of any corporation which is a member of a controlled group of
corporations, within the meaning of Section 1563(a) of the Code, of which the
Company is also a member, and upon such adoption and with the approval of the
committee described in Section 2, such corporation shall be deemed to be one of
the "Participating Subsidiaries." The committee described in Section 2, in its
discretion, is authorized to approve participation in the Plan by any foreign
entity which is a controlled foreign corporation of the Company, within the
meaning of Section 957(a) of the Code. Upon adoption by the board of directors
of any such controlled foreign corporation and with the approved of the
committee described in Section 2, such corporation shall be deemed to be one of
the "Participating Subsidiaries."
2. Committee to Administer Plan. The Plan shall be administered by a
committee appointed by the Board of Directors of the Company (the "Committee").
The Committee shall consist of not less than three members. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee may establish from time to time such
regulations, provisions and procedures, within the terms of the Plan, as in the
opinion of its members may be advisable in the administration of the Plan. The
Committee shall keep minutes of its meetings. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts reduced to or approved in writing
by a majority of the members of the Committee, shall be the valid acts of the
Committee. The interpretation and construction by the Committee of any
provisions of the Plan shall be final unless otherwise determined by the Board
of Directors. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan.
3. Eligibility. Participation under the Plan shall be open to all active
employees (the "Eligible Employees") of the Company or the Participating
Subsidiaries except (a) employees who have been continuously employed by the
Company or a Participating Subsidiary for less than ninety (90) days at the
beginning of an Option Period (as hereinafter defined); (b) employees whose
customary employment by the Company or a Participating Subsidiary is less than
twenty (20) hours per week; and (c) employees whose customary employment by the
Company or a Participating Subsidiary is for not more than six months in a
calendar year. No option rights shall be granted under the Plan to any person
who is not an Eligible Employee, and no Eligible Employee shall be granted
option rights under the Plan (a) if such employee, immediately after receiving
the grant of such option rights under the Plan, owns (under the rules of
Sections 423(b)(3) and 424(d) of the Code) stock possessing 5 percent or more of
the total combined voting power or value of all classes of stock of the Company
or any of its subsidiary corporations (as defined by Section 425(f) of the
Code); or (b) which permit such employee to purchase stock under this Plan and
any other employee stock purchase plan of the Company and its subsidiary
corporations (as defined by Section 424(f) of the Code) aggregating more than
$25,000 of the fair market value of such stock ("Maximum Value") (determined at
the time the respective options are granted) in any one calendar year, and in no
event may such option rights accrue at a rate which exceeds that permitted by
Section 423(b)(8) of the Code.
4. Stock Available for Plan. Purchase of Stock pursuant to and on behalf of
this Plan for delivery under this Plan may be made out of the Company's
presently or hereafter authorized but unissued Stock or from outstanding shares
of Stock, or partly out of each, as determined by the Committee. The maximum
number of shares of Stock which may be purchased under the Plan is 400,000
shares, subject, however, to adjustment as
A-1
hereinafter set forth. In the event the Company shall, at any time after the
effective date of the Plan, change its issued Stock into an increased number of
shares of Stock, with or without par value, through a Stock dividend or split of
shares, or into a decreased number of shares, with or without par value, through
a combination of shares, then effective with the record date for such change,
the maximum number of shares of Stock which thereafter may be purchased under
the Plan shall be the maximum number of shares which, immediately prior to such
record date, remained available for purchase under the Plan, proportionately
increased, in the case of such Stock dividend or split up of shares, or
proportionately decreased in the case of such combination of shares. In the
event of any other change affecting Stock, such adjustment shall be made as may
be deemed equitable by the Board of Directors to give proper effect to such
event.
5. Effective Dates. This Plan shall become effective on July 1, 2000,
provided that the Plan has been adopted by the Company's Board of Directors and
approved by the shareholders of the Company at a duly called meeting or any
adjournment thereof. The first Option Period under the Plan shall commence on
July 1, 2000, and end on September 30, 2000. As long as the Plan remains in
effect, a new Option Period shall commence on the first day of each fiscal
quarter year of the Company and end on the last day of each such fiscal quarter
year.
6. Participation. An employee of the Company or a Participating Subsidiary
who is an Eligible Employee at or prior to the first day of any Option Period
may become a Participant as of such date by (a) at least ten (10) days prior to
such date, completing and forwarding a payroll deduction authorization form (the
"Authorization") to the Eligible Employee's appropriate payroll location; and/or
(b) at least forty-five (45) days prior to the last day of the Option Period,
completing and forwarding a lump sum payment form furnished by the Company
accompanied by payment to the Company in the amount of the lump sum to be
credited to the Eligible Employee's Purchase Account. The Authorization will
direct a regular payroll deduction from the Participant's compensation to be
made on each of the Participant's pay dates occurring during each Option Period
in which he or she is a Participant.
7. Payroll Deductions and Lump Sum Payments. The Company and its
Participating Subsidiaries will maintain payroll deduction accounts for all of
their respective employees who are Participants and who have filed
Authorizations for Payroll Deduction. Payments made by Participants, whether by
payroll deduction or lump sum payment, shall be credited to the Participant's
Stock Purchase Account (the "Purchase Account"). No amounts other than payroll
deductions and lump sum payments authorized under this Plan may be credited to a
Participant's Purchase Account. A Participant may authorize a payroll deduction
in any amount not less than $10 for each pay date, but not more than a maximum
of ten percent (10%) of the Participant's gross earnings payable as wages,
salary, and bonus compensation, before withholding or other deductions ("Gross
Earnings"), with respect to which payments are to be made to him or her by the
Company or the Participating Subsidiary on such pay date. A Participant may make
one lump sum payment in any Option Period in any amount not less than $25, but
not more than a maximum of ten percent (10%) of the Participant's Gross Earnings
for the immediately preceding Option Period. In the event a Participant makes
payments for credit to his or her Purchase Account through both lump sum
payments and payroll deductions, the total of all such payments during any
Option Period shall not exceed ten percent (10%) of the Participant's Gross
Earnings during the immediately preceding Option Period. In no event shall
payments of any kind for credit to a Purchase Account by or on behalf of any
Participant in any calendar year exceed the amount that would result in the
purchase of Stock having an aggregate Maximum Value (as defined in Section 3
above). The Committee, in its discretion, may vary the Option Period and the
payroll deduction period of Eligible Employees of any Participating Subsidiary
which is a foreign controlled corporation of the Company, within the meaning of
Section 957(a) of the Code "Foreign Participating Subsidiary"), in a manner
necessary or convenient for participation in the Plan by Eligible Employees of a
Participating Subsidiary, and the Committee shall have the authority to
establish the terms and conditions of participation in the Plan by Eligible
Employees of a Foreign Participating Subsidiary, provided that such terms and
conditions are not materially inconsistent with the Plan.
8. Changes in Payroll Deduction. Payroll deductions shall be made for each
Participant in accordance with the Participant's Authorization and shall
continue until the Participant's participation terminates, the Authorization is
revised or the Plan terminates. A Participant may, as of the beginning of any
Option Period, increase or decrease the Participant's payroll deduction within
the limits specified in Section 7 by filing a new Authorization at least ten
(10) days prior to the beginning o such Option Period.
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9. Termination of Participation; Withdrawal of Funds. A Participant may for
any reason at any time on written notice given to the Company prior to the
Participant's last pay date in any Option Period elect to terminate his or her
participation in the Plan and permanently draw out the balance accumulated in
his or her Purchase Account. Upon any termination by a Participant of
participation, he or she shall cease to be a Participant, his or her
Authorization shall be revoked insofar as subsequent payroll deductions are
concerned, and the amount to his or her credit in his or her Purchase Account,
and not payable in respect of the exercise of any option to purchase Stock
theretofore granted under the plan, as well as any unauthorized payroll
deductions made after such revocation, shall be promptly refunded to the former
Participant. An Eligible Employee who has thus terminated participation in the
Plan may thereafter begin participation in the Plan again only during the fiscal
year of the Company following the fiscal year of the Company in which such
termination and withdrawal of funds occurred. Partial withdrawals of funds will
not be permitted.
10. Purchase of Shares. Each Participant during each Option Period under
this Plan will be granted an option as of the "Purchase Date" (as herein
defined) for the purchase of as many whole shares of Stock as may be purchased
with the funds in his or her Purchase Account. This election shall be
automatically made as provided in this Section unless the Participant terminates
participation as provided in Section 9. The purchase price for each share of
Stock purchased shall be eighty-five percent (85%) of the fair market value of a
share of Stock on the "Purchase Date" (as herein defined). If such percentage
results in a fraction of a cent, the purchase price shall be increased to the
next higher full cent. The term "Purchase Date" shall be the last business day
of the Option Period. If, as of each Purchase Date, the Participant's Purchase
Account contains funds, the Participant shall be deemed to have exercised an
option to purchase shares at the purchase price, the Participant's Purchase
Account shall be charged for the amount of the purchase, and a stock certificate
shall be issued or an entry shall be made to the Participant's account
maintained by the Company's transfer agent. As of each subsequent Purchase Date
when funds have again accrued in the Participant's Purchase Account, shares will
be purchased in the same manner.
If the Stock continues to be traded in the NASDAQ SmallCap market, the
NASDAQ NMS market or if the Stock becomes listed upon an established stock
exchange, the fair market value per share shall be the average of the last
reported sales price of the Stock as of the close of business for each of the
last thirty (30) trading days of the applicable Option Period.
11. Registration of Certificates. Upon the request of a Participant during
participation in the Plan, and upon a Participant's termination of
participation, a stock certificate representing the full number of shares of
Stock owned by such Participant under the Plan, if not previously issued, shall
be issued and delivered to the Participant. Fractional share interests shall be
paid in cash to the Participant. Certificates may be registered only in the name
of the Participant or the names of the Participant and his or her spouse.
12. Rights on Retirement, Death, or Termination of Employment. In the event
of a Participant's retirement, death or termination of employment, no payroll
deduction shall be taken from any pay due and owing to a Participant at such
time and the balance in the Participant's Purchase Account shall be paid to the
Participant or, in the event of the Participant's death, to the Participant's
estate.
13. Rights Not Transferable. Rights under this Plan are not transferable by
a Participant and are exercisable only by the Participant during his or her
lifetime.
14. Application of Funds. All funds received or held by the Company or a
Participating Subsidiary under this Plan may be used by the Company or such
Participating Subsidiary for any corporate purpose.
15. Amendment of the Plan. The Board of Directors of the Company may at any
time, or from time to time, amend this Plan in any respect, except that, without
the approval of a majority of the shares of Stock of the Company then issued and
outstanding and entitled to vote, no amendment shall be made (a) increasing the
number of shares approved for this Plan (other than as provided in Section 4),
(b) decreasing the Purchase Price per share, (c) withdrawing the administration
of this Plan from the Committee, (d) changing the designation of the class of
employees eligible to receive options under the Plan, or (e) which would render
options granted under the Plan unqualified for special tax treatment under the
Code.
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16. Termination of the Plan. Unless sooner terminated as hereinafter
provided, this Plan shall terminate on June 30, 2010. The Company may, by action
of its Board of Directors, terminate the Plan at any time. Notice of termination
shall be given to all then Participants, but any failure to give such notice
shall not impair the termination. Upon termination of the Plan, all amounts in
Purchase Accounts of Participants shall be promptly refunded.
17. Governmental Regulations. The Company's obligation to sell and deliver
Stock under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of such Stock.
If at any time shares of Stock deliverable hereunder are required to be
registered or qualified under any applicable law, or delivery of such shares is
required to be accompanied or preceded by a prospectus or similar circular,
delivery of certificates for such shares may be deferred for a reasonable time
until such registrations or qualifications are effected or such prospectus or
similar circular is available.
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APPENDIX B
FIRST AMENDMENT TO THE
CLARION TECHNOLOGIES, INC.
1999 STOCK INCENTIVE PLAN
BACKGROUND
1. Effective May 24, 1999, Clarion Technologies, Inc. (the "Company")
adopted and approved the Clarion Technologies, Inc. 1999 Stock Incentive Plan
(the "Original Plan").
2. The Plan provides for the reservation, for purposes of the Plan, of one
million (1,000,000) shares of the Company's common stock, $.001 par value per
share.
3. The Company desires to amend the Plan to provide for an increased number
of shares to be authorized under the Plan.
AGREEMENT
1. The first sentence of Section 4.1 is deleted in its entirety and is
replaced as follows:
Subject to adjustment as provided in Section 4.3 of the Plan, the
maximum number of shares of Common Stock that will be available for
issuance under the Plan will be 2,000,000 shares of Common Stock, plus any
shares of Common Stock which, as of the date the Plan is approved by the
shareholders of the Company, are reserved for issuance under the Company's
1998 Stock Option Plan and which are not thereafter issued or which have
been issued by are subsequently forfeited and which would otherwise have
been available for further issuance under such plan.
2. Except as otherwise set forth herein, the terms of the Plan are hereby
ratified and shall continue in full force and effect.
Approved by the Board of Directors of the Company on April 25, 2000.
CLARION TECHNOLOGIES, INC.
/s/ David W. Selvius
David W. Selvius,
Chief Financial Officer and Secretary
Approved by the Shareholders of the Company on June ___, 2000.
CLARION TECHNOLOGIES, INC.
David W. Selvius,
Chief Financial Officer and Secretary
::ODMA\PCDOCS\GRR\427577\9
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CLARION TECHNOLOGIES, INC.
235 Central Avenue, Holland, Michigan 49423
This Proxy is Solicited by the Board of Directors.
Annual Meeting to be held at the Haworth Conference Center
225 College Avenue, Holland, Michigan 49423
June 20, 2000, at 10:00 a.m.
The undersigned hereby appoints William Beckman and David Selvius, or either one
of them, with power of substitution in each, proxies to vote, as designated on
the reverse side, all of the undersigned's shares of Common Stock of CLARION
TECHNOLOGIES, INC., at the Annual Meeting of Shareholders to be held on June 20,
2000, and any and all adjournments thereof.
Properly executed proxies will be voted as marked and, if not marked, will
be voted FOR all of the nominees, FOR the approval of the 2000 Employees' Stock
Purchase Plan, and FOR the approval of the First Amendment to the Clarion
Technologies, Inc. 1999 Stock Incentive Plan.
1. Election of Directors - The Board of Directors recommends a vote FOR
the nominees named below. (Check Only One Box)
A. For all nominees listed below [ ]
B. For none of the nominees listed below [ ]
C. For all nominees except names crossed out [ ]
Harrington Bischof Frederick A. Sotok Bryan C. Cressey
Frank T. Steck Michael C. Miller Terence M. Graunke
Craig A. Wierda Jack D. Rutherford Troy D. Wiseman
2. Approval of the 2000 Employees' Stock Purchase Plan - The Board of
Directors recommends a vote FOR this proposal.
FOR [ ] AGAINST [ ]
3. Approval of the First Amendment to the Clarion Technologies, Inc. 1999
Stock Incentive Plan -The Board of Directors recommends a vote FOR
this proposal.
FOR [ ] AGAINST [ ]
(To be Dated and Signed on Other Side)
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENTS THEREOF.
YOUR VOTE IS IMPORTANT.
Whether or not you plan to attend, you can be sure your shares are represented
at the meeting by promptly returning your completed proxy in the enclosed
postage-paid envelope which is addressed to our tabulation service at American
Securities Transfer & Trust, Inc. P.O. Box 1596, Denver CO 80201-1596.
Please date, sign exactly as name appears hereon, and mail promptly in the
enclosed envelope which requires no postage if mailed in the United States. When
signing as attorney, executor, administrator, trustee, guardian, etc., give full
title as such. If shares are held jointly, both owners must sign.
Dated:___________________________, 2000
Signature:_____________________________
Signature:_____________________________