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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Rule 14a-11(c) or Rule 14a-12
CAPITAL DIRECTIONS, INC.
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(Name of Registrant as Specified in Its Charter)
CAPITAL DIRECTIONS, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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CAPITAL DIRECTIONS, INC.
322 South Jefferson Street, Mason, Michigan 48854 517-676-0500
______________________________________________________________________________
March 22, 1996
Dear Shareholder:
Capital Directions, Inc. invites you to attend the 1996 Annual Meeting of
Shareholders beginning at 11:00 a.m. on Thursday, April 25, at the Eldorado
Golf Course, 3750 West Howell Road, Mason, Michigan.
Please read the accompanying Notice of Annual Meeting and Proxy Statement for
information pertaining to the matters to be considered and acted upon at the
Annual Meeting.
We appreciate your continued interest in Capital Directions, Inc. and look
forward to seeing you at the Annual Meeting. Whether or not you are present,
it is important that your shares are represented. Accordingly, please sign,
date, and mail the enclosed Proxy promptly.
Sincerely,
Douglas W. Dancer
Douglas W. Dancer
Chairman of the Board
Timothy P. Gaylord
Timothy P. Gaylord
President and
Chief Executive Officer
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CAPITAL DIRECTIONS, INC.
322 South Jefferson Street, Mason, Michigan 48854 517-676-0500
______________________________________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1996
The Annual Meeting of Shareholders of Capital Directions, Inc. will begin at
11:00 a.m. on Thursday, April 25, 1996 at the Eldorado Golf Course, 3750 West
Howell Road, Mason, Michigan, for the following purposes:
(1) To elect a board of seven directors, each to hold office for
a term of one year and until a successor has been elected and
qualified; and
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Shareholders of record at the close of business on March 1, 1996 will be
entitled to notice of and to vote at the Annual Meeting, or any adjournment
thereof.
All Shareholders are invited to attend the Annual Meeting. Please be sure to
mark, date, sign, and return the enclosed proxy card, whether or not you plan
to attend the meeting, so your shares will be voted. Any Shareholder present
at the meeting, may vote personally on all matters brought forward. In that
event, his or her Proxy will not be used.
BY ORDER OF THE BOARD OF DIRECTORS
George A. Sullivan
George A. Sullivan
Secretary
March 22, 1996
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CAPITAL DIRECTIONS, INC.
322 South Jefferson Street, Mason, Michigan 48854 (517) 676-0500
______________________________________________________________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies, beginning March 22, 1996, by the Board of Directors of Capital
Directions, Inc. (the "Company"), to be voted at the Annual Meeting of
Shareholders of the Company to be held at the Eldorado Golf Course, 3750 West
Howell Road, Mason, Michigan, on April 25, 1996 at 11:00 a.m. (the "Annual
Meeting").
If the form of Proxy accompanying this Proxy Statement is properly executed and
returned to the Company, the shares represented by the Proxy will be voted at
the Annual Meeting of Shareholders in accordance with the directions given in
such Proxy. If no choice is specified, the shares represented by the Proxy
will be voted for the election of directors listed as nominees in the Proxy and
in accordance with the best judgement of the Proxy holder with respect to any
other matter to come before the Shareholders at the Annual Meeting. A Proxy
may be revoked prior to its exercise by delivering a written notice of
revocation to the Secretary of the Company, executing a subsequent Proxy, or
attending the meeting and voting in person. Attendance at the Annual Meeting
does not, however, automatically serve to revoke the Proxy.
VOTING SECURITIES AND RECORD DATE
As of March 1, 1996, the record date for the Annual Meeting, the Company had
issued and outstanding 297,428 shares of Common Stock, par value $5.00 per
share ("Common Stock"), each outstanding share entitles the record holder
thereof one vote upon each matter to be voted upon at the meeting, or any
adjournment. The transaction of business at the Annual Meeting requires the
presence of a quorum, which will be established by the presence or
representation at the Annual Meeting of majority of the outstanding shares of
Common Stock entitled to vote. Directors are elected by a plurality of the
votes cast at the Annual Meeting. Thus, the seven nominees for election as
directors who receive the greatest number of votes cast will be elected
directors (see "(1) ELECTION OF DIRECTORS"). Therefore, broker non-votes on
shares as to which authority is withheld with respect to the election of
directors will be counted for quorum purposes, but since they are not votes
cast, will have no effect on the election of directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of January 2, 1996, as
to the Common Stock beneficially owned by each person known by the Company to
be the beneficial owner of more than five percent (5%) of the Common Stock:
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Ownership of Class
--------------- ---------------------- ----------------------- --------
Common Stock, June M. Oesterle Trust 26,630(1) 8.95%
$5 par value Lyle M. Oesterle Trust
1975 Okemos Rd.
Mason, MI 48854
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(1)Total of shares owned by both the June M. Oesterle Trust of which June
M. Oesterle is the sole Trustee and the Lyle M. Oesterle Trust of which Lyle M.
Oesterle, spouse of June M. Oesterle, is sole Trustee.
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(1) ELECTION OF DIRECTORS
Seven directors are proposed to be elected at the Annual Meeting to serve until
the next Annual Meeting and/or until their successors are elected. The Bylaws
of the Company permit the Board of Directors to establish the size of the Board
from seven to nine members. The present Board has fixed seven as the size of
the Board to be elected. The Proxies cannot be voted for a greater number of
persons than the number of nominees named.
In the event that any nominee is unable to serve, which is not now
contemplated, the Proxy holders, to the extent they have been granted authority
to vote in the election of directors, may or may not vote for a substitute
nominee. The nominees for directors are the persons named below, all of whom
are presently serving as directors of the Company. These persons, according to
the information supplied by them, owned beneficially, directly or indirectly,
the number of shares of Common Stock of the Company set forth opposite their
respective names. All information is presented as of January 2, 1996.
DIRECTORS
Principal Occupation For Amount and Nature
Last Five Years Director of Beneficial Percent
Name Age Or More Since (1) Ownership (2) of Class
- -------------- --- ------------------------- --------- ------------- --------
Gerald Ambrose 46 County Controller for the 1990 300 (3)
County of Ingham; Vice
Chairman of the Board,
Mason State Bank, and the
Company
Douglas W. Dancer 55 President, Dancer's Inc. 1986 7391 2.48
Department Stores; Chairman
of the Board, Mason State
Bank, and the Company
Glenn R. Doran, Ph.D 50 Superintendent, 1986 316 (3)
Mason Public Schools
Timothy P. Gaylord 41 President & Chief Executive 1995 2170 (3)
Officer of Mason State Bank
and the Company
Marvin B. Oesterle 44 Partner, Golden Acres Farms 1981 2540 (3)
and Oesterle Brothers
Seed Corn
Terry Shultis 60 Senior Management Advisor, 1980 1505 (3)
Retired President and Chief
Executive Officer of Mason
State Bank, Monex Financial
Services, Inc., and the Company
George A. Sullivan 63 Attorney; Secretary of the 1975 1060 (3)
Company
7 directors as a group 15282 5.14
(1) Includes service as a director of the Company's wholly-owned subsidiary,
Mason State Bank (the "Bank"). The Company was organized in 1988 to act,
inter alia, as a holding company for Mason State Bank, and the Bank's
directors became directors of the Company.
(2) Includes shares owned by or jointly with spouse, or minor child, or other
relative residing in same household, or as trustee.
(3) Less than one percent.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a number of standing committees, including Audit and
Personnel.
The members of the Audit Committee include: George A. Sullivan, Chairman;
Marvin B. Oesterle; and Douglas W. Dancer, ex-officio. The Audit Committee,
which met three times during 1995, appoints, subject to approval by the Board
of Directors, the Bank's independent auditors and approves the program of
continuous internal audit and the scope of audit procedures. The committee
also reviews the accounting principles and the control procedures and practices
adopted by management, the services performed by the independent auditors, and
approves the fees paid to the independent auditors.
The members of the Personnel Committee include: Glenn R. Doran, Chairman;
Terry Shultis; Timothy P. Gaylord; Gerald Ambrose; and Douglas W. Dancer,
ex-officio. This committee met nine times in 1995. The Bank's Personnel
Committee approves the officers' salary budget for the year and recommends
changes in official salaries and other benefits to the Bank's Board of
Directors.
In 1995 there were a total of twelve regularly scheduled meetings of the Board
of Directors of the Company. Of the nominees for re-election as directors of
the Company, no director attended less than seventy-five percent of the
aggregate of the total number of meetings of the Board of Directors of the
Company held in 1995 and the total number of meetings held by all standing
committees of the Board on which they served.
Each director of the Company is entitled to receive an annual retainer of
$6,240. In lieu of payment of director fees, each director is eligible to
participate in a deferred compensation plan adopted in 1986. All of the
directors, except Gerald Ambrose and Timothy P. Gaylord, have elected to
participate in part in the plan which provides for retirement and death
benefits to be paid to the participating directors or their beneficiaries over
fifteen years. Deferred director fees are used to purchase life insurance
policies of which the Bank is the owner and beneficiary. These life insurance
policies are structured to fully fund the Bank's obligation under the terms of
the plan.
EXECUTIVE OFFICERS
First Elected as
an Officer of
Name (age) Position with the Company the Company
- ---------- -------------------------- ----------------
Douglas W. Dancer (55) Chairman 1988
Terry Shultis (60) Senior Management Advisor, 1988
Retired President & CEO
George A. Sullivan (63) Secretary 1988
Robert G. Kennedy (49) Treasurer 1988
Timothy P. Gaylord (41) President & CEO 1995
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation paid by the Company and its
subsidiaries during the fiscal year ended December 31, 1995 to each of the
Company's Chief Executive Officers. There were no executive officers whose
combined salary and bonus exceeded $100,000.
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SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
Name and All Other
Principal Position Year Salary ($) Bonus ($) Options/SARs (#) Compensation ($)
- --------------------- ---- ---------- --------- ---------------- ----------------
Terry Shultis 1995 $93,119 (3) 0 300 (4) $21,962 (5)
President and CEO (1) 1994 $89,698 $3,000 0 $20,275
1993 $89,588 $4,400 0 $18,766
Timothy P. Gaylord 1995 $75,322 (3) $9,000 700 (4) $4,941 (5)
President and CEO (2)
(1) Mr. Shultis retired as President and CEO of the Company and the Bank
on October 1, 1995. On that date he became Senior Management Advisor
to the Company.
(2) Mr. Gaylord became President and CEO of the Company and the Bank upon
Mr. Shultis' semi-retirement on October 1, 1995. He was formerly
Executive Vice President of the Bank.
(3) Includes 1995 directors fees for Mr. Shultis of $6,000 and for Mr.
Gaylord of $1,500.
(4) The amounts shown represent the number of shares covered by stock
options and stock appreciation rights granted under the Capital
Directions, Inc. Incentive Stock Option Plan as more fully described
in the Option/SAR Grants in Last Fiscal Year table set forth below.
(5) "All Other Compensation" is comprised of the following items: for Mr.
Shultis (i) a contribution of $11,400 to the Bank's Supplemental
Executive Retirement Plan which was adopted for Mr. Shultis' benefit in
1988 and is designed to pay him a defined benefit upon retirement, (ii)
a contribution by the Bank of $5,246 to the Bank's 401(k) Plan, and
(iii) gifts by the Bank of $2,816 in cash and an automobile with a
value of $2,500 made in connection with Mr. Shultis' retirement; and
for Mr. Gaylord, a contribution by the Bank of $4,941 to the Bank's
401(k) Plan.
The following table presents information about stock options and tandem stock
appreciation rights ("SARs") granted to the named executive officers during
1995 under the Capital Directions, Inc. Stock Option Plan (the "Stock Option
Plan").
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
Potential Realizable
Value at Assumed
% of Total Annual Rates of Stock
Options/SARs Exercise Price Appreciation
Granted to or Base for Option Term (2)
Options/SARs Employees Price Expiration
Name Granted (#) (1) in Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ---- --------------- -------------- -------- ---------- ------ -------
Terry Shultis 300 15 25.50 3/15/05 4,812 12,192
Timothy P. Gaylord 700 35 25.50 3/15/05 11,228 28,448
(1) The amounts shown are shares of the Company's Common Stock
and tandem SARs covered by options granted under the Stock Option
Plan. The options and the SARs vest over 3 years, from the grant
date of March 16, 1995 with one-third of the covered shares becoming
part of the exercisable portion each year. The SARs may be
exercised only in respect to up to 50 percent of the shares covered
by the option, and only for an amount of cash equal to the difference
between the base price shown and the market price of the Company's
Common Stock at the time of exercise. Exercise of an SAR cancels
the option with respect to the shares for which the SAR was
exercised. The cash received may be used only to pay the exercise
price of the remaining portion of the option.
(2) The potential realizable value is reported net of the option
exercise price and the SAR base price, but before income taxes
associated with exercise. These amounts represent assumed annual
compounded rates of appreciation of five percent and ten percent
from the date of grant to the end of the option and SAR. Actual
gains, if any, on stock option and SAR exercises are dependent on
the future performance of the Company's Common Stock, overall stock
market conditions, and the optionees' continued employment through
the vesting period. The amounts reflected in this table may not
necessarily be achieved.
The following table presents the number of shares covered by, and the value of,
unexercised options and SARs held by the named executive officers at December
31, 1995. No options or SARs were exercised by the named executive officers
during 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Unexercised Options/ Value of Unexercised In-the-Money
SARs at FY-End (#) Options/SARs at FY-End ($) (1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------------ ---------------------------------
Terry Shultis 0/300 0/1,650
Timothy P. Gaylord 0/700 0/3,850
(1) The value shown is based upon the market bid price at December 31,
1995 of $31.00 of the option exercise price and SAR base price.
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EMPLOYMENT AGREEMENTS
The Company has entered into agreements with Mr. Shultis and Mr. Gaylord
relating to their employment by the Company and the Bank. These agreements are
summarized below. This summary is not intended to be complete and is qualified
in its entirety by reference to the agreements.
The agreement between Mr. Shultis and the Company (the "Shultis Agreement")
provides that Mr. Shultis will be employed by the Company as Senior Management
Advisor from October 1, 1995 through December 31, 1997, subject to earlier
termination as provided in the Shultis Agreement. Mr. Shultis is obligated
under the Shultis Agreement to work 1,000 hours annually for which he is paid a
salary of $55,900, in each case prorated for the period October 1, 1995 through
December 31, 1995. Mr. Shultis is also entitled to customary benefits such as
group health and dental insurance coverage available to executive level full
time employees of the Company. The Shultis Agreement provides that the Company
may terminate Mr. Shultis' employment for cause without further obligation to
compensate Mr. Shultis. The Shultis Agreement generally defines cause to
include, among other things, misfeasance, malfeasance, and nonfeasance of Mr.
Shultis' duties and breach of the Shultis Agreement. Mr. Shultis may terminate
the Shultis Agreement upon 14 days written notice. The Shultis Agreement
provides that Mr. Shultis shall not for a period of one year after termination
of the Shultis Agreement perform services for Michigan based competitors of the
Company and its affiliates and will maintain the confidentiality of certain
information and trade secrets of the Company.
The agreement among Mr. Gaylord, the Company, and the Bank (the "Gaylord
Agreement") provides that Mr. Gaylord will be employed by the Company and the
Bank as their President and Chief Executive Officer from October 1, 1995
through September 30, 1997, subject to automatic renewal for one year periods
unless terminated in accordance with the Gaylord Agreement. The Gaylord
Agreement provides an annual salary rate for 1995 of $85,000, subject to
adjustment by the Board of Directors in subsequent years during the term of the
Gaylord Agreement. Mr. Gaylord is also entitled to customary employee benefits
and perquisites. The Gaylord Agreement provides that in the event of a change
in control of the Company or the Bank, if Mr. Gaylord's employment is
involuntarily terminated, or if Mr. Gaylord's status and compensation are
reduced without cause within one year of the change in control, Mr. Gaylord
shall be entitled to payment of an amount equal to his annual salary. The
Gaylord Agreement provides that the Company and the Bank may terminate Mr.
Gaylord's employment at any time for cause without further obligation to
compensate Mr. Gaylord. The Gaylord Agreement broadly defines cause to
generally include, among other things, misfeasance, malfeasance, and
nonfeasance of Mr. Gaylord's duties and breach of the Gaylord Agreement. The
Gaylord Agreement further provides that Mr. Gaylord shall not, for a period of
one year after Mr. Gaylord's last day of employment, provide financial services
or otherwise compete with the business of the Company and the Bank in the City
of Mason, Michigan and a three mile radius surrounding it. Further, Mr.
Gaylord shall not during that one year period, solicit customers of the Bank
and its affiliates or solicit for hire any then current Bank or Company
employees or contact them for the purpose of inducing them to leave the Bank or
Company. The Gaylord Agreement also requires Mr. Gaylord to maintain the
confidentiality of certain information and trade secrets of the Company and the
Bank following the termination of his employment.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Directors and officers of the Company and their associates were customers of,
and had transactions with, subsidiaries of the Company in the ordinary course
of business during 1995. All loans and commitments included in such
transactions were made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not involve more
than the normal risk of collectibility or present other unfavorable features.
TRANSACTION OF OTHER BUSINESS
The Board of Directors of the Company does not intend to bring any other matters
before the Annual Meeting. At the date of this Proxy Statement, the Board is not
aware of any matter other than the election of directors to be presented for
action by others or that any nominee named herein for election to the Board of
Directors will be unavailable. If any of the nominees listed above is not
available for election as a director, or if any other matters come before the
meeting or any adjournment thereof, it is intended that the shares represented
by Proxies given to the Board of Directors' designees will be voted with respect
thereto in accordance with the best judgement of the Proxies after consultation
with the Board of Directors.
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RELATIONSHIP WITH INDEPENDENT ACCOUNT
For the year 1995, Crowe, Chizek and Company was engaged by the Board of
Directors to perform an audit of the Company's financial statements and has
been so engaged for the year 1996. A representative of Crowe Chizek will be
present at the meeting to make a statement if he or she desires and to respond
to appropriate questions. The Company periodically reviews bids from qualified
accounting firms.
ADDITIONAL INFORMATION
The cost of soliciting Proxies will be borne by the Company. In addition to
solicitation by mail, officers and regular employees of the Company and its
subsidiaries may solicit Proxies by telephone, telegraph, or in person. The
Company has retained the services of The Independent Election Corporation of
America to deliver Proxy materials to brokers, nominees, fiduciaries, and other
custodians for distribution to their beneficial owners, as well as the
solicitation of Proxies from these institutions. The cost of the solicitation
is expected to amount to approximately $2,500, plus reasonable out-of-pocket
expenses.
SHAREHOLDERS ARE URGED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS.
George A. Sullivan
George A. Sullivan
Secretary
March 22, 1996
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CAPITAL DIRECTIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Glenn R. Doran and Marvin B. Oesterle, jointly and severally, proxies, with full power of
substitution, to vote all the shares of capital stock of Capital Directions, Inc. which the undersigned may be entitled to vote, at
the Annual Meeting of Shareholders to be held at the Eldorado Golf Course, 3750 West Howell Road, Mason, Michigan, at 11:00 a.m. on
April 25, 1996, or any adjournment thereof.
The proxies named on the reverse hereof are directed to vote as specified on the reverse hereof or, if no specification is
made, FOR all nominees named on the reverse side and to vote IN ACCORDANCE WITH THEIR DISCRETION on such other matters that may
properly come before the meeting. The Board of Directors recommends a vote FOR all Agenda items.
(To be Signed on Reverse Side)
FOR WITHHELD Nominees: Gerald Ambrose FOR AGAINST ABSTAIN
1. Election of / / / / Douglas W. Dancer 2. Transact such other / / / / / /
Directors Glenn R. Doran business as may
Timothy P. Gaylord properly come before
Marvin B. Oesterle the meeting or any
Terry Shultis adjournment thereof.
George A. Sullivan
For, except vote withheld from the SIGNATURE(S)
following nominee(s) ----------------------------------------
DATE
- --------------------------------- ------------------------------------------------
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such.