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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
X-RITE, INCORPORATED
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(Name of Registrant as Specified in Its Charter)
X-RITE, INCORPORATED
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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] 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:
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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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X-RITE, INCORPORATED
3100 44TH STREET, S.W.
GRANDVILLE, MICHIGAN 49418
NOTICE OF ANNUAL MEETING TO BE HELD MAY 20, 1998
The Annual Meeting of Shareholders of X-Rite, Incorporated will be held at
the Grand Valley State University Eberhard Center, 301 West Fulton Street, Grand
Rapids, Michigan, on Wednesday, May 20, 1998, at 4:30 p.m., for the following
purposes:
1. To elect three directors as set forth in the accompanying Proxy
Statement.
2. To act upon a proposal to amend the Company's Articles of
Incorporation with respect to the size of the Board of Directors.
3. To transact any other business that may properly come before the
meeting.
Shareholders of record as of the close of business on March 20, 1998, are
entitled to notice of, and to vote at the meeting. You are requested to sign,
date, and return the accompanying Proxy in the enclosed, self-addressed
envelope, regardless of whether you expect to attend the meeting in person. If
you attend the meeting in person, you may withdraw your Proxy and vote your
shares in person if you wish.
By Order of the Board of Directors
DUANE F. KLUTING
Secretary
April 8, 1998
Grandville, Michigan
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X-RITE, INCORPORATED
3100 44TH STREET, S.W.
GRANDVILLE, MICHIGAN 49418
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PROXY STATEMENT
APRIL 8, 1998
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SOLICITATION OF PROXIES
This Proxy Statement is being furnished to the shareholders of X-Rite,
Incorporated (the "Company") on or about April 8, 1998, in connection with the
solicitation by the Board of Directors of the Company of Proxies to be used at
the Annual Meeting of Shareholders to be held on Wednesday, May 20, 1998, at
4:30 p.m. at the Grand Valley State University Eberhard Center, 301 West Fulton
Street, Grand Rapids, Michigan.
If the form of Proxy accompanying this Proxy Statement is properly executed
and returned, the shares represented by the Proxy will be voted at the Annual
Meeting of Shareholders in accordance with the directions given in the Proxy.
Where shareholders specify a choice by marking on the Proxy card, 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 the directors listed as nominees in the
Proxy, and in the discretion of the Proxy voters on any other matter voted upon
at the 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.
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 facsimile by a few regular employees of the Company without
additional compensation. The Company has retained D.F. King & Co., Inc., to aid
in the solicitation of proxies at an estimated cost of $4,500, plus expenses. In
addition, brokers, nominees, custodians, and other fiduciaries will be
reimbursed by the Company for their expenses in connection with sending proxy
materials to beneficial owners and obtaining their Proxies.
VOTING SECURITIES AND RECORD DATE
March 20, 1998, has been fixed by the Board of Directors as the record date
for determining shareholders entitled to vote at the Annual Meeting. On that
date 21,160,191 shares of the Company's common stock, par value $.10 per share,
were issued and outstanding. Shareholders are entitled to one vote for each
share of the Company's common stock registered in their names at the close of
business on the record date.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation specify that the Board of Directors
shall consist of nine (9) members, divided into three classes, with the
directors of the classes to hold office for staggered terms of three (3) years
each. Ted Thompson, Ronald A. VandenBerg, and Dr. Peter M. Banks, as described
in the following table, have been nominated for election to three year terms
expiring in 2001.
Unless otherwise specifically directed by a marking on a shareholder's
Proxy, the persons named as proxy voters in the accompanying Proxy will vote for
the nominees described below. In the event any of these nominees is no longer a
candidate at the time of the Annual Meeting of Shareholders (a situation which
is not now anticipated), the Board of Directors may designate a substitute
nominee, in which case the accompanying Proxy will be voted for the substituted
nominee.
Directors are elected by a plurality of the votes cast by shareholders.
Therefore, the nominees for each class receiving the most affirmative votes cast
will be elected, irrespective of the number of votes received. Broker nonvotes,
votes withheld, and votes against any candidate will not have a bearing on the
outcome of the election. Votes will be counted by Inspectors of Election
appointed by the presiding officer at the meeting.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
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The content of the following table relating to business experience is based
upon information furnished to the Company by the nominees and directors.
NAMES, (AGES), POSITIONS AND BACKGROUNDS
OF DIRECTORS AND NOMINEES SERVICE AS A DIRECTOR
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Nominees For Terms to Expire in 2001
Dr. Peter M. Banks (60) is the President, Chief Executive
Officer and Chairman of the Board of ERIM, International,
Inc., a high technology research and development defense
systems company headquartered in Ann Arbor, Michigan, and he
has held that position since 1995. From 1990 to 1995 Dr.
Banks was the Dean of Engineering at the University of
Michigan. He also serves as a director of Tecumseh Products,
Inc.
Ted Thompson (68) is the Chairman of the Board and Chief Director since 1958
Executive Officer of X-Rite, Incorporated, and he has held Chairman of the Board and Chief
that position for more than five years. Mr. Thompson also Executive Officer Member of
serves as a director of Gentex Corporation. Nominating Committee
Ronald A. VandenBerg (58) is a Business Unit Vice President Director since 1989
of Donnelly Corporation, a manufacturer of glass related Chairman of Compensation
products for the automotive and electronics industries, Committee and Member of
headquartered in Holland, Michigan. Mr. VandenBerg has held Nominating Committee
several executive positions with Donnelly for many years.
Directors Whose Terms Expire in 2000
Rufus S. Teesdale (77) has been retired for more than five Director since 1958
years. Prior to retirement he was a Partner in Loan Services Chairman of Audit Committee
and Systems in Glen Ellyn, Illinois (a software supplier to
financial institutions).
Charles VanNamen (72) has been retired for more than five Director since 1958
years. Prior to retirement he was a Senior Engineer with the Member of Audit and
Instrument Division of Lear Siegler, Inc., in Grand Rapids, Compensation Committees
Michigan (a manufacturer of aerospace instruments).
Richard E. Cook (52) is the President and C.O.O. of Cascade Director since 1997
Engineering headquartered in Grand Rapids, Michigan, and he Member of Compensation and
has held that position for more than five years. Nominating Committees
Directors Whose Terms Expire in 1999
Stanley W. Cheff (56) is the President and Chief Executive Director since 1996
Officer of Wolverine Building, Inc., a construction firm Chairman of Nominating
headquartered in Grand Rapids, Michigan, and he has held Committee and member of
that position for more than five years. Compensation Committee
Dr. Marvin G. DeVries (64) is an economics consultant, and Director since 1986
he served as a Professor of Economics at the F.E. Seidman Member of Audit Committee
School of Business, Grand Valley State University,
Allendale, Michigan, for more than five years prior to his
retirement in 1994. In addition, Dr. DeVries served as Dean
of the Business School from 1973 to 1988.
James A. Knister (60) is Group Managing Director -- Ventures Director since 1996
of Donnelly Corporation, a manufacturer of glass related Member of Audit and
products for the automotive and electronics industries, Nominating Committees
headquartered in Holland, Michigan, and he has held that
position since 1996. Previously, Mr. Knister has held
several executive positions with Donnelly for many years.
Mr. Knister also serves as a director of Applied Films
Corporation.
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The Company has an Audit Committee which recommends to the Board of
Directors the selection of independent public accountants to serve as the
Company's auditors, and reviews the scope of their audit and their audit report.
This Committee met on two occasions during the fiscal year ended January 3,
1998.
The Company has a Compensation Committee which makes recommendations to the
Board regarding annual remuneration of the Company's executive officers, and
which is responsible for administering the Company's various incentive plans
involving the Company's common stock. This Committee met on four occasions
during the fiscal year ended January 3, 1998. A report from this Committee
appears infra under the caption Report on Executive Compensation.
The Company has a Nominating Committee that is responsible for recommending
to the Board of Directors annually a slate of nominees for election as directors
to be submitted to the shareholders of the Company at the Annual Meeting. The
Committee is also responsible for recommending nominees to fill vacancies that
may occur at other times. The Committee will consider persons suggested as
nominees by shareholders, and suggestions should be sent to the Nominating
Committee c/o the Company's Secretary at its headquarters. This Committee met on
one occasion during the fiscal year ended January 3, 1998.
The Board of Directors met six times during the past fiscal year, and all
directors attended at least seventy-five percent (75%) of the aggregate number
of meetings of the Board and meetings of committees on which they served.
PROPOSAL TO AMEND ARTICLES
Article IV of the Company's Articles of Incorporation currently provides
that the Board of Directors shall consist of nine members. At a meeting held on
March 17, 1998, the Board of Directors unanimously adopted a resolution
approving an amendment to that provision of the Articles of Incorporation and
recommended the amendment for approval by the Company's shareholders. The
amendment specifies, in Section B, that the Board of Directors shall consist of
at least six, but not more than nine members, with the specific number to be
established by the Board of Directors from time to time.
Whenever a vacancy occurs on the Board of Directors, under the current
Articles the Company is obligated fill that vacancy. Moreover, if the vacancy
occurs a short time in advance of an Annual Meeting of Shareholders, the Board
of Directors comes under considerable pressure to find a nominee appropriate to
fill that position for presentation to the shareholders for election. It is the
unanimous belief of the Company's directors that the Company would be best
served by permitting the Board of Directors to determine when, and if vacancies
should be filled, subject to the limitation that there would always be at least
six directors. In this manner, the Board of Directors would be afforded the
opportunity to carefully seek out and evaluate nominees with the abilities and
experiences most appropriate to the needs of the Company at the time a vacancy
occurs. Under the Company's Articles of Incorporation, any director appointed by
the Board to fill a vacancy, including any vacancy created by an increase in the
size of the Board, shall hold office only until the next annual meeting of
shareholders.
Section C of Article IV also will require modification since this Section
currently specifies that the Board of Directors shall be divided into three
classes with three directors in each class. If the proposed amendment is
adopted, there may be fewer than nine directors holding office. Accordingly, the
proposed amendment will modify Section C by specifying that the directors shall
be divided into three classes as nearly equal in number as possible. The
proposed amendment is as follows:
ARTICLE IV
B. Size of Board. The Board of Directors shall consist of at least
six, but not more than nine members and the specific number of directors to
be elected or appointed within such limits shall be as determined by the
Board of Directors from time to time.
C. Classification of Board. Directors shall be divided into three
classes and each class shall be as nearly equal in number as possible to
the other classes. At each annual meeting of shareholders, directors
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shall be elected to serve for a term which expires at the third annual
meeting of the shareholders following the meeting of shareholders at which
the director is elected, or for such shorter term where necessary to
balance the number of directors in each of the three classes of directors.
The affirmative vote of a majority of the outstanding shares of common
stock, in person or by proxy, on the proposed amendment to Article IV is
required for approval.
The Board of Directors recommends a vote FOR adoption of the proposed
amendment.
SECURITIES OWNERSHIP OF MANAGEMENT
The following table contains information regarding ownership of the
Company's common stock by each director and nominee for election as a director,
each executive officer named in the tables under the caption Executive
Compensation, and all directors and executive officers as a group. The content
of this table is based upon information supplied by the persons identified in
the table and represents the Company's understanding of circumstances in
existence as of March 2, 1998.
AMOUNT AND NATURE OF OWNERSHIP
---------------------------------------------
NAME AND ADDRESS OF SHARES BENEFICIALLY EXERCISABLE
BENEFICIAL OWNER OWNED(1) OPTIONS(2) TOTAL PERCENT OF CLASS
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Rufus S. Teesdale 1,514,853 30,000 1,544,853 7.2
3152 E. Gatehouse, S.E.
Grand Rapids, MI 49546
Ted Thompson 1,528,300(3) 120,000 1,648,300 7.2
3100 44th Street
Grandville, MI 49418
Joan Mariam Andrew 2,229 30,000 32,229 *
Dr. Peter M. Banks -- -- -- *
(director nominee)
Bernard J. Berg 12,985 73,000 85,985 *
Stanley W. Cheff 3,000 20,000 23,000 *
Robert D. Claflin 1,325 4,000 5,325 *
Richard E. Cook -- 10,000 10,000 *
Dr. Marvin DeVries 1,596 62,000 63,596 *
Duane F. Kluting 19,711(4) 67,000 86,711 *
James A. Knister 2,000 20,000 22,000 *
Ronald A. VandenBerg 8,000 62,000 70,000 *
Charles VanNamen 691,000(5) 40,000 731,000 3.3
All Directors, Director Nominee and
Executive Officers as a Group (15 persons) 3,786,797 578,500 4,365,297 17.9
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* Less than one percent
(1) Except as disclosed in the footnotes below, each person named in the table
has sole voting and investment power with respect to the issued shares
listed in this column.
(2) This column reflects shares subject to options exercisable within 60 days.
(3) Includes 160,000 shares issued to a trust established by Mr. Thompson's
wife, and he disclaims beneficial ownership of those shares.
(4) Includes 13,469 shares issued to a trust established by Mr. Kluting's wife,
and he disclaims beneficial ownership of those shares.
(5) Includes 265,900 shares issued to a trust established by Mr. VanNamen's
wife, and he disclaims beneficial ownership of those shares.
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SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table contains information regarding ownership of the
Company's common stock by persons or entities beneficially owning more than five
percent (5%) of the Company's common stock. The content of this table is based
upon information contained in Schedule 13G furnished to the Company. The
individuals listed in this table are founders and former directors of the
Company.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
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Leonard C. Blanding 1,437,132 6.8
6600 Tanglewood, S.E.
Grand Rapids, MI 49546
Lawrence E. Fleming 1,600,000 7.6
6200 Hall St., S.E.
Grand Rapids, MI 49546
Quinten E. Ward 1,204,100 6.0
2251 N. Rampart Blvd., Suite 102
Las Vegas, NV 89128
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EXECUTIVE COMPENSATION
The following table contains information regarding compensation paid by the
Company with respect to the preceding fiscal year to its chief executive officer
and to the four other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL --------------------------
COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
SALARY BONUS AWARD(S) OPTIONS COMPENSATION
EXECUTIVE YEAR ($) ($)(1) ($)(1)(2) (#) ($)(3)
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Ted Thompson 1997 289,455 121,510 -- 20,000 18,410
Chairman and Chief 1996 270,000 44,213 -- 20,000 14,219
Executive Officer and 1995 280,947 20,200 -- 20,000 13,650
President
Bernard J. Berg 1997 155,961 65,643 -- 15,000 3,236
Vice President -- 1996 148,910 9,622 14,373 10,000 3,909
Engineering 1995 147,841 10,900 -- 10,000 3,691
Duane F. Kluting 1997 150,894 63,548 -- 15,000 3,461
Vice President -- 1996 143,743 9,577 13,763 10,000 3,743
Chief Financial Officer 1995 142,621 10,600 -- 10,000 3,593
Joan Mariani Andrew 1997 131,750 55,692 -- 15,000 2,741
Vice President -- Sales 1996 121,726 10,017 14,983 10,000 440
and Marketing
Robert D. Claflin 1997 168,504 25,000 -- 5,000 5,297
President, 1996 148,877 34,024 -- 2,000 5,297
Labsphere, Inc.
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(1) The after tax portion of bonuses paid to the executive officers of the
parent company may be converted into common stock of the Company, at the
election of the executive, pursuant to the Company's Cash Bonus Conversion
Plan. Bonuses are converted at a discount of 50 percent from the market
value of the
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stock at the time the bonus is determined, but the shares received are
subject to certain restrictions on transfer and risks of forfeiture.
Restricted Stock Awards shown above are the result of such bonus
conversions.
(2) The values shown in this column represent the aggregate market value at the
date of grant for shares of restricted stock acquired pursuant to the
Company's Cash Bonus Conversion Plan. Restrictions lapse as to 20 percent of
the shares six months after grant and as to 20 percent on each of the first
four anniversaries of the grant date, or as to all shares in the event of
death, disability, retirement, or change in control of the Company.
Dividends will be paid on these shares to the same extent paid on the
Company's common stock generally. Restricted shares held at the close of the
Company's fiscal year were Mr. Berg 1,508 shares, Ms. Andrew 1,572 shares,
and Mr. Kluting 2,844 shares. Corresponding net market values as of that
same date were Mr. Berg $27,521, Ms. Andrew $28,689, and Mr. Kluting
$51,903.
(3) These amounts represent "matching" contributions by the Company pursuant to
its 401(k) Plan and annual premiums for term life insurance attributable to
each named executive officer.
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The following table contains information regarding stock options granted to
the above-named executive officers during the preceding fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
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OPTIONS PERCENT OF OPTIONS EXERCISE GRANT DATE
GRANTED GRANTED TO ALL PRICE EXPIRATION PRESENT VALUE
EXECUTIVE (1) EMPLOYEES ($/SH)(2) DATE ($)(3)
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Ted Thompson 20,000 11.1 15.63 1/20/07 124,600
Bernard J. Berg 15,000 8.4 15.63 1/20/07 93,450
Duane F. Kluting 15,000 8.4 15.63 1/20/07 93,450
Joan Mariani Andrew 15,000 8.4 15.63 1/20/07 93,450
Robert D. Claflin 5,000 2.8 15.00 4/9/07 30,550
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(1) Options become exercisable one year after the date of grant.
(2) The price may be paid in cash or by the surrender of outstanding shares.
(3) Present value calculated under the Black-Scholes Valuation Model, assuming
6.29 percent on 1/20/97 and 6.77 percent on 4/19/97 risk-free rates of
return, .50 percent dividend yield, .35 percent volatility, and exercise in
5 years. This model is an alternative suggested by the Securities and
Exchange Commission, and the Company neither endorses this particular model
nor necessarily agrees with the method for valuing options. The future
performance of the Company and the price of its shares will ultimately
determine the value of these options.
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The following table contains information regarding the exercise of options
during the preceding fiscal year by the above-named executives, as well as
unexercised options held by them at fiscal year-end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES VALUE YEAR-END(#) FISCAL YEAR-END($)
ACQUIRED ON REALIZED ------------------------------ ------------------------------
EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------
Ted Thompson -- -- 100,000 20,000 525,000 52,500
Bernard J. Berg -- -- 58,000 15,000 413,188 39,375
Duane F. Kluting -- -- 52,000 15,000 306,125 39,375
Joan Mariani Andrew -- -- 15,000 15,000 55,000 39,375
Robert D. Claflin -- -- 4,000 5,000 7,500 16,250
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is currently comprised of four members, and all
members are outside directors; i.e., none is an employee of the Company. The
Committee makes recommendations to the Board of Directors with respect to all
executive compensation except for the award of stock-based incentives, which are
the exclusive prerogative of the Committee.
The Compensation policies established for executive officers are designed
to assure the Company's ability to attract, motivate, and retain competent and
dedicated senior management. In constructing and applying these policies, a
conscious effort is made to identify and evaluate the executive compensation
programs for comparable employers, considering such factors as geographic and
industry influences, relative sizes, growth stages, and market capitalizations.
With the assistance of a consulting firm, the Committee has established a peer
group of corporations that it uses for compensation comparison purposes.
In general, compensation packages for executive officers are composed of
three elements: base salary, annual bonus, and stock-based incentives. Base
salary for an executive is determined by the executive's responsibility and the
Company's need to be competitive in the market for executive services. Bonus
compensation is based on achievement of corporate goals. Stock-based incentives
are intended to strengthen the alignment of interests between shareholders and
senior management and to address long-term performance.
In the early part of 1997, the Compensation Committee reviewed the annual
salary plan with the Chief Executive Officer for all other executive officers,
and made such adjustments as they thought appropriate, based upon salary survey
data for comparable employers, economic conditions in general, and individual
evaluations by the Chief Executive Officer. Annual salary for the Chief
Executive Officer was reviewed independently by the Committee and adjusted based
upon the same considerations for other executive salaries, plus the Committee's
evaluation of his performance as corporate leader.
At the same time, the Committee established an annual bonus program for
fiscal 1997 that is applicable to all executive officers. The program has two
components. One component is based on individual performance as determined by
the Compensation Committee, in conjunction with the Chief Executive Officer with
respect to other officers. A second component is based upon Company-wide
performance as measured by increases in economic value added ("EVA"), where EVA
is defined roughly to be the dollar amount by which the Company's operating
income exceeds its cost of capital. The bonuses for the Company's most highly
compensated officers are reported in the Summary Compensation Table contained in
this Proxy Statement.
The Committee also awarded stock options to seven executives during 1997
under the Employee Stock Option Plan, including the grants to the named
executives detailed in the foregoing table captioned Option Grants in Last
Fiscal Year. The options awarded to the executives, other than the Chief
Executive Officer, were awarded based upon recommendations from the Chief
Executive Officer, taking into account for each
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executive his contribution to success in prior periods by achieving agreed upon
goals, and his ability and willingness to influence success in the future by
striving to achieve individual and corporate goals. The Chief Executive Officer
was awarded an option based primarily on the Committee's judgment that it is in
the best interest of shareholders to provide incentive for the Chief Executive
Officer in the form of stock options, in an amount that is appropriate relative
to the options granted other executives, considering their abilities to
influence corporate performance.
COMPENSATION COMMITTEE
Stanley W. Cheff
Richard E. Cook
Charles VanNamen
Ronald A. VandenBerg
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STOCK PERFORMANCE GRAPH
The following graph depicts the cumulative total return on the Company's
common stock compared to the cumulative total return on the indices for NASDAQ
market (U.S. and foreign) and NASDAQ nonfinancial stocks. The graph assumes an
investment of $100 on the last trading day of 1992, and reinvestment of
dividends in all cases.
PERFORMANCE GRAPH
The Company has not adopted any long-term incentive plan or any defined
benefit or actuarial plan, as those terms are defined in the applicable
regulations promulgated by the Securities and Exchange Commission. Neither does
the Company have any contracts with its executive officers assuring them of
continued employment, nor any compensatory arrangement for executives linked to
a change in control of the Company.
During 1997 members of the Company's Board of Directors received an annual
retainer of $12,000, plus a meeting fee of $750 ($1,500 for chairpersons) for
each meeting of the Board or a committee attended. In addition, each person who
is a director immediately following each Annual Meeting of Shareholders is
entitled to receive an option to purchase 10,000 shares of the Company's common
stock at a price per share equal to the fair market value on that date. Each
option has a term of ten years and becomes exercisable in full six months after
the date of the grant.
Directors who have served three or more terms (nine years) are eligible to
become Directors Emeritus at such time as they no longer hold the position of a
director of the Company, if elected to that position by the Board of Directors.
Directors Emeritus are entitled to attend meetings of the Board, but they may
not vote, and they are entitled to receive the directors' annual retainer, but
no meeting fees. Director Emeritus status lasts for a period equal to the length
of service as a director or until any earlier resignation or death.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated financial statements of the Company and its subsidiaries
for the year ended January 3, 1998, have been audited by Arthur Andersen LLP,
independent public accountants, and the Board of Directors has selected Arthur
Andersen LLP to serve as the Company's independent accountants for the year
ending January 2, 1999. Representatives of Arthur Andersen LLP are expected to
be present at the Annual Meeting to respond to appropriate questions and will
have an opportunity to make a statement if they desire.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3, 4, and 5 furnished to the Company during or
with respect to the preceding fiscal year and written representations from
certain reporting persons, the Company is not aware of any failure by any
reporting person to make timely filings of those Forms as required by Section
16(a) of the Securities Exchange Act of 1934.
SHAREHOLDER PROPOSALS -- 1999 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the 1999 Annual
Meeting of the Shareholders of the Company must be received by the Company at
its headquarters, 3100 44th Street, S.W., Grandville, Michigan 49418, no later
than December 11, 1998, if the shareholder wishes the proposal to be included in
the Company's Proxy Statement relating to that meeting.
MISCELLANEOUS
The Company's Annual Report to Shareholders including financial statements,
is being mailed to shareholders with this Proxy Statement.
Management is not aware of any matters to be presented for action at the
Annual Meeting other than as set forth in this Proxy Statement. If other
business should come before the meeting, the persons named as proxy holders in
the accompanying Proxy intend to vote the shares in accordance with their
judgment, and discretionary authority to do so is included in the Proxy.
A COPY OF THE COMPANY'S REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS AVAILABLE, WITHOUT CHARGE, UPON WRITTEN REQUEST FROM
DUANE F. KLUTING, THE COMPANY'S VICE PRESIDENT/CHIEF FINANCIAL OFFICER, 3100
44TH STREET, S.W., GRANDVILLE, MICHIGAN 49418.
SHAREHOLDERS ARE URGED TO PROMPTLY DATE, SIGN, AND RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
DUANE F. KLUTING
Secretary
April 8, 1998
Grandville, Michigan
10
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X-RITE, INCORPORATED
3100 44th Street, S.W.
Grandville, Michigan 49418
PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Robert P. Cooper and Duane Kluting and each
of them, as Proxies, each with the power to appoint a substitute, to represent
and to vote, as designated on the reverse, all shares of common stock of
X-Rite, Incorporated held of record by the undersigned on March 20, 1998, at
the Annual Meeting of Shareholders to be held on May 20, 1998, or any
adjournment thereof.
When properly executed, this proxy will be voted in the manner directed by the
undersigned shareholder(s). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR A THREE-YEAR
TERM AND FOR THE APPROVAL OF THE PROPOSED AMENDMENT TO THE ARTICLES OF
INCORPORATION.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the reverse side. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
__________________________ ___________________________
__________________________ ___________________________
__________________________ ___________________________
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[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- ---------------------------------------- 1. Election of Directors
X-RITE, INCORPORATED FOR ALL WITH- FOR ALL
- ---------------------------------------- NOMINEES HOLD EXCEPT
DR. PETER M. BANKS
TED THOMPSON [ ] [ ] [ ]
RONALD A. VANDENBERG
Mark box at right if an address change or comment NOTE: If you do not wish your shares voted "For" a particular nominee,
has been noted on the reverse side of this card. [ ] mark the "For All Except" box and strike a line through the name(s) of
the nominee(s). Your shares will be voted for the remaining nominee(s).
RECORD DATE SHARES:
2. To approve the proposed amendment to FOR AGAINST ABSTAIN
the Articles of Incorporation. [ ] [ ] [ ]
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the Meeting.
---------
Please be sure to sign and date this Proxy. Date
- ----------------------------------------------------------
- ----Shareholder sign here----------Co-owner sign here-----
- --------------------------------------------------------------------------------
DETACH CARD DETACH CARD
X-RITE, INCORPORATED
Dear Shareholder,
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and operation of
your Corporation that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders scheduled
for May 20, 1998.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
X-RITE, INCORPORATED