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
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
DAL-TILE INTERNATIONAL 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:
Dal-Tile International
- - --------------------------------------------------------------------------------
April 16, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the 1997 Annual
Meeting of Stockholders of Dal-Tile International Inc. to be
held on Thursday, May 8, 1997, at 10:00 a.m., local time, at
The Chase Manhattan Bank, 11th floor, Conference Room A, 270
Park Avenue, New York, New York.
The Secretary's formal notice of the meeting and the Proxy
Statement which appear on the following pages will describe
the matters to be acted upon at the meeting.
We hope that you will be able to attend the meeting in
person. However, whether or not you plan to be present,
please complete, sign, date and return your proxy as soon as
possible so that your vote will be counted.
Sincerely yours,
/s/ Howard I. Bull
Howard I. Bull
President and Chief Executive Officer
7834 C.F. Hawn Frwy Dallas, Texas 75217 214-398-1411
DAL-TILE INTERNATIONAL INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
The 1997 Annual Meeting of Stockholders of Dal-Tile International Inc., a
Delaware corporation (the "Company"), will be held at The Chase Manhattan
Bank, 11th floor, Conference Room A, 270 Park Avenue, New York, New York on
Thursday, May 8, 1997, at 10:00 a.m., local time, for the following purposes:
1. To elect ten directors for terms ending at the 1998 Annual Meeting of
Stockholders;
2. To ratify the appointment by the Board of Directors of Ernst & Young
LLP, independent public accountants, as independent auditors for the
Company for the fiscal year ending January 2, 1998; and
3. To transact such other business as may properly come before the
meeting.
Stockholders of record as of the close of business on April 7, 1997 will be
entitled to vote at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ACCOMPANYING
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY
REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERY TO THE COMPANY OF
A SUBSEQUENTLY EXECUTED PROXY OR A WRITTEN NOTICE OF REVOCATION OR BY VOTING
IN PERSON AT THE MEETING.
By order of the Board of Directors,
/s/ Christine J. Smith
Christine J. Smith
Secretary
April 16, 1997
DAL-TILE INTERNATIONAL INC.
7834 HAWN FREEWAY
DALLAS, TEXAS 75217
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 8, 1997
----------------
This proxy statement is furnished to stockholders of Dal-Tile International
Inc., a Delaware corporation (the "Company" or "Dal-Tile"), in connection with
the solicitation of proxies by the Board of Directors of the Company (the
"Board" or "Board of Directors") for use at the 1997 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at 10:00 a.m.,
local time, on Thursday, May 8, 1997, at The Chase Manhattan Bank, 11th floor,
Conference Room A, 270 Park Avenue, New York, New York, and any adjournments
thereof.
Stockholders of record as of the close of business on April 7, 1997 (the
"Record Date") will be entitled to vote at the Annual Meeting or any
adjournments thereof. As of the Record Date, the Company had outstanding
53,435,101 shares of Common Stock, par value $.01 per share ("Common Stock"),
each entitled to one vote on all matters to be voted upon. Information
contained in this proxy statement pertaining to the Common Stock gives effect
to a recapitalization of the Company's common equity that became effective
immediately prior to completion of the Company's initial public offering of
Common Stock on August 14, 1996. This proxy statement, the accompanying form
of proxy and the Company's annual report to stockholders for the fiscal year
ended January 3, 1997 are being mailed on or about April 16, 1997 to each
stockholder entitled to vote at the Annual Meeting.
VOTING AND REVOCATION OF PROXIES
VOTING
If the enclosed proxy is executed and returned in time and not revoked, all
shares represented thereby will be voted. Each proxy will be voted in
accordance with the stockholder's instructions. If no such instructions are
specified, signed proxies will be voted FOR the election of each person
nominated for election as a director and FOR the ratification of the
appointment by the Board of Directors of Ernst & Young LLP as independent
auditors for the Company for the fiscal year ending January 2, 1998.
The holders of a majority in number of the total outstanding shares of
Common Stock entitled to vote at the Annual Meeting, present in person or by
proxy, constitutes a quorum. Assuming a quorum is present, the affirmative
vote of a plurality of the votes cast at the Annual Meeting and entitled to
vote in the election will be required for the election of directors and the
affirmative vote of a majority of the votes cast at the Annual Meeting and
entitled to vote thereon will be required to act on all other matters to come
before the Annual Meeting, including ratification of the appointment by the
Board of Directors of Ernst & Young LLP as independent auditors for the
Company. An automated system administered by the Company's transfer agent will
tabulate the votes. For purposes of determining the number of votes cast with
respect to any voting matter, only those cast "for" or "against" are included;
abstentions and broker non-votes are excluded. Accordingly, with respect to
the election of directors, abstentions and broker non-votes will have no
effect on the outcome. For purposes of determining whether the affirmative
vote of a majority of the votes cast at the Annual Meeting and entitled to
vote has been obtained, abstentions will be included in, and broker non-votes
will be excluded from, the number of shares present and entitled to vote.
Accordingly, with respect to any matter other than the election of directors,
abstentions will have the effect of a vote "against" the matter and broker
non-votes will have the effect of reducing the number of affirmative votes
required to achieve the majority vote.
REVOCATION
A stockholder giving a proxy may revoke it at any time before it is voted by
delivery to the Company of a subsequently executed proxy or a written notice
of revocation. In addition, returning your completed proxy will not prevent
you from voting in person at the Annual Meeting should you be present and wish
to do so.
SHAREHOLDERS AGREEMENT
Pursuant to a certain shareholders' agreement (the "Shareholders
Agreement"), DTI Investors LLC, a beneficial owner of Common Stock of the
Company ("DTI Investors"), and Armstrong World Industries, Inc., a beneficial
owner of Common Stock of the Company ("AWI"), have agreed to cause the Board
of Directors of Dal-Tile to be comprised of (i) six individuals designated by
DTI Investors, (ii) three individuals designated by AWI, and (iii) the Chief
Executive Officer of Dal-Tile. As of the Record Date, DTI Investors and AWI
beneficially owned approximately 87.9% of the outstanding Common Stock of the
Company and, as such, have the voting power to effect the election of the
nominees. The six individuals designated by DTI Investors are: Messrs.
Pilliod, Danforth, Lewis, Mai, Goldsmith and Skelsey. The three individuals
designated by AWI are: Messrs. Lorch, Riddick and Shannon. The rights and
obligations of DTI Investors and AWI to designate directors are subject to
change in the event of certain circumstances, more particularly described in
the Shareholders Agreement.
ELECTION OF DIRECTORS
The Board of Directors currently consists of ten directors. Ten directors
are to be elected at the Annual Meeting to hold office as directors until the
1998 Annual Meeting of Stockholders of the Company or until their respective
successors have been duly elected and qualified. Unless otherwise directed,
signed proxies in the accompanying form will be voted FOR the nominees listed
below. All nominees have consented to be named and to serve if elected. If any
one or more of the nominees is unable to serve or for good cause will not
serve, proxies will be voted for the substitute nominee or nominees, if any,
proposed by the Board of Directors. The Board has no knowledge that any
nominee will or may be unable to serve or will or may withdraw from
nomination. Each nominee will be elected if he receives the affirmative vote
of a plurality of the votes cast by holders of shares of Common Stock at the
Annual Meeting.
The Board of Directors proposes the election of the following nominees for a
term of one year. All of the nominees are presently directors of the Company.
Set forth below for each nominee are his name and age, all positions and
offices with the Company that he holds, if any, his principal occupations
during at least the last five years and any additional directorships in
publicly held companies or registered investment companies.
NAME AGE POSITION OR OFFICE HELD
---- --- -----------------------
Charles J. Pilliod, Jr.. 78 Chairman of the Board of Directors
Howard I. Bull.......... 56 President and Chief Executive Officer and Director
Douglas D. Danforth..... 74 Director
Drew Lewis.............. 65 Director
George A. Lorch......... 55 Director
Vincent A. Mai.......... 56 Director
Frank A. Riddick III.... 40 Director
Robert J. Shannon, Jr... 48 Director
Henry F. Skelsey........ 38 Vice President and Director
John M. Goldsmith....... 33 Vice President and Director
2
Charles J. Pilliod, Jr., Chairman of the Board of Directors--Mr. Pilliod has
been the Chairman of the Board of Directors since October 1993 and a Director
since March 1990. From October 1993 through April 1994, he also served as
President and Chief Executive Officer of the Company. Mr. Pilliod served as
U.S. Ambassador to Mexico from 1986 to 1989. Prior to that, he was the
Chairman and Chief Executive Officer of Goodyear Tire & Rubber Company. Mr.
Pilliod is also a director of A. Schulman Inc. and Marvin & Palmer Associates,
Inc.
Howard I. Bull, President and Chief Executive Officer and Director--Mr. Bull
has been President and Chief Executive Officer and a Director of the Company
since April 1994. Prior to joining the Company, Mr. Bull spent ten years with
Baker Hughes Incorporated, a worldwide diversified oil services company, where
he became Chief Executive Officer for Baker Hughes Drilling Equipment Company.
Additionally, he served York International Corporation, a worldwide
manufacturer and distributor of air conditioner and refrigeration equipment,
as President of its Applied Systems Division and Air Conditioning Business
Group. Mr. Bull is a director of Marine Drilling Companies, Inc. and National-
Oilwell, Inc.
Douglas D. Danforth, Director--Mr. Danforth has been a Director of the
Company since February 1997. He was Chairman and Chief Executive Officer of
Westinghouse Corporation from December 1983 to December 1987. Mr. Danforth is
a director of Travelers Group Inc. and Sola International Inc.
Drew Lewis, Director--Mr. Lewis has been a Director of the Company since
March 1990. Mr. Lewis retired as Chairman, President and Chief Executive
Officer of Union Pacific Corp., a transportation company, in January 1997. He
served as President of Union Pacific Corp. from April 1986 to May 1994 and as
U.S. Secretary of Transportation between 1981 and 1983. Mr. Lewis is also a
director of Ford Motor Company, American Express Co., FPL Group Inc., Gannett
Co., Inc., Union Pacific Resources Group Inc., Lucent Technologies, Inc.,
Mafeo Consolidated Group and Gulfstream Aerospace Corporation.
George A. Lorch, Director--Mr. Lorch has been a Director of the Company
since December 1995. Mr. Lorch has been Chairman and Chief Executive Officer
of AWI, a beneficial owner of Common Stock of the Company, since April 1994.
Mr. Lorch was an Executive Vice President of AWI from March 1988 to September
1993 and served as President and Chief Executive Officer of AWI from September
1993 to April 1994. Mr. Lorch is also a director of Stanley Works, Household
International and R.R. Donnelley & Sons Company.
Vincent A. Mai, Director--Mr. Mai has been a Director of the Company since
October 1989. Mr. Mai has been the President and Chief Executive Officer of
AEA Investors Inc. ("AEA Investors") since April 1989. AEA Investors is the
managing member of DTI Investors, a beneficial owner of Common Stock of the
Company. For the preceding 15 years, he was a Managing Director of Lehman
Brothers Inc., an investment banking firm. Mr. Mai also is a director of the
Federal National Mortgage Association.
Frank A. Riddick III, Director--Mr. Riddick has been a Director of the
Company since December 1995. Mr. Riddick has been Senior Vice President,
Finance and Chief Financial Officer of AWI, a beneficial owner of Common Stock
of the Company, since April 1995. Previously, he held the following positions
with FMC Corporation, a chemicals and machinery company: Controller, May 1993-
March 1995 and Treasurer, December 1990-May 1993.
Robert J. Shannon, Jr., Director--Mr. Shannon has been a Director of the
Company since December 1995. Mr. Shannon currently is President, Worldwide
Floor Products Operations of AWI, a beneficial owner of Common Stock of the
Company. From March 1992 through December 1995, Mr. Shannon was President of
American Olean Tile Company, Inc. ("AO"), then a subsidiary of AWI. During
1991, Mr. Shannon was General Manager, Worldwide Gasket Products, of AWI.
Henry F. Skelsey, Vice President and Director--Mr. Skelsey has been a Vice
President and a Director of the Company since October 1989. Mr. Skelsey has
been a Managing Director of AEA Investors (the managing member of DTI
Investors, a beneficial owner of Common Stock of the Company) since March
1988. Prior to his association with AEA Investors, Mr. Skelsey was a Vice
President in the Merchant Banking division of Shearson Lehman Brothers Inc.,
an investment banking firm.
3
John M. Goldsmith, Vice President and Director--Mr. Goldsmith has been a
Vice President and a Director of the Company since April 1996. Mr. Goldsmith
is a Managing Director of AEA Investors (the managing member of DTI Investors,
a beneficial owner of Common Stock of the Company), and has been associated
with AEA Investors since 1989. Previously, he was a member of the Financial
Services practice of Ernst & Young LLP, an independent accounting firm.
SHAREHOLDERS AGREEMENT
Pursuant to the Shareholders Agreement, DTI Investors, a beneficial owner of
Common Stock of the Company, and AWI, a beneficial owner of Common Stock of
the Company, have agreed to cause the Board of Directors of Dal-Tile to be
comprised of (i) six individuals designated by DTI Investors, (ii) three
individuals designated by AWI, and (iii) the Chief Executive Officer of Dal-
Tile. As of the Record Date, DTI Investors and AWI beneficially owned
approximately 87.9% of the outstanding Common Stock of the Company and, as
such, have the voting power to effect the election of the nominees. The six
individuals designated by DTI Investors are: Messrs. Pilliod, Danforth, Lewis,
Mai, Goldsmith and Skelsey. The three individuals designated by AWI are:
Messrs. Lorch, Riddick and Shannon. The rights and obligations of DTI
Investors and AWI to designate directors are subject to change in the event of
certain circumstances, more particularly described in the Shareholders
Agreement.
FURTHER INFORMATION CONCERNING THE BOARD
OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company directs the management of the business
and affairs of the Company, as provided by Delaware law, and conducts its
business through meetings of the Board and two standing committees: Audit and
Compensation. In addition, from time to time, special committees may be
established under the direction of the Board when necessary to address
specific issues. The Company has no nominating or similar committee.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six meetings and took
four actions by written consent during the fiscal year ended January 3, 1997
(such fiscal year sometimes referred to herein as "fiscal 1996"). No director
participated in fewer than 75% of the aggregate number of meetings of the
Board of Directors and meetings of the committees of the Board on which he
served.
The Audit Committee's principal functions are to review the scope of the
annual audit of the Company by its independent public accountants, review the
annual financial statements of the Company and the related audit report of the
independent auditors, review management's selection of an independent public
accounting firm each year and review audit and any non-audit fees paid to the
Company's independent public accountants. The Company's Chief Financial
Officer generally attends Audit Committee meetings and delivers reports to and
answers inquiries from the Audit Committee. The Audit Committee reports its
findings and recommendations to the Board. The Audit Committee is composed of
three non-employee directors. From January 1, 1996 to April 23, 1996, the
members of the Audit Committee were Drew Lewis, Robert J. Shannon, Jr. and
Henry F. Skelsey. From April 24, 1996 to February 17, 1997, the members of the
Audit Committee were E. Mandell de Windt, John M. Goldsmith and Frank A.
Riddick III. Since February 18, 1997, the members of the Audit Committee have
been Douglas D. Danforth, John M. Goldsmith and Frank A. Riddick III. The
Audit Committee held one meeting in fiscal 1996.
The Compensation Committee is responsible for developing and making
recommendations to the Board of Directors with respect to the Company's
compensation policies and also determines the cash portion of the Company's
compensation program, including recommending to the Board the cash
compensation to be paid to the Company's executive officers. Since January 1,
1996, members of the Compensation Committee have been Drew Lewis, Robert J.
Shannon, Jr. and Henry F. Skelsey. The Compensation Committee held four
meetings in fiscal 1996.
4
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors served on the Company's Compensation Committee
during the fiscal year ended January 3, 1997: Drew Lewis, Robert J. Shannon,
Jr. and Henry F. Skelsey. Henry F. Skelsey also served as an officer of the
Company and certain of its subsidiaries during such fiscal year. Mr. Skelsey
is an officer of AEA Investors (the managing member of DTI Investors, a
beneficial owner of Common Stock of the Company). AEA Investors provided
certain management, consulting and financial services to the Company for
professional service fees and was reimbursed for out-of-pocket expenses. In
the fiscal year ended January 3, 1997, payments of such management fees and
reimbursement for expenses totaled $485,000. Such services included, but were
not necessarily limited to, advice and assistance concerning the strategy,
planning and financing of the Company, as needed from time to time. Such
arrangement with AEA Investors was terminated in August 1996 upon completion
of the Company's initial public offering of Common Stock and AEA Investors was
paid a termination fee of $4.0 million in connection therewith. The Company
receives the benefit of volume discounts for certain office services and
supplies made available to various companies associated with AEA Investors
pursuant to arrangements managed by a subsidiary of AEA Investors. Mr. Skelsey
is an officer and director of Dal-Tile and a Managing Director of AEA
Investors.
DIRECTORS' COMPENSATION
Directors who are full-time employees of the Company receive no additional
compensation for serving on the Board or its committees. Directors who are not
full-time employees of the Company, employees of AEA Investors or employees of
AWI receive an annual fee of $5,000, except for the Chairman who receives an
annual fee of $25,000, and $500 for each Board meeting attended, plus
reimbursement for traveling costs and other out-of-pocket expenses incurred in
attending such meetings. Directors who serve on one or more of the Audit
Committee and Compensation Committee receive $500 for attending a committee
meeting that occurs on a date other than the date of a meeting of the full
Board.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the New York Stock Exchange. Executive officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that,
during fiscal 1996, all filing requirements applicable to its executive
officers and directors and greater than 10% stockholders were complied with.
5
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Dal-Tile's Common Stock as of the Record Date with respect to (i)
each person known to Dal-Tile to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each of Dal-Tile's directors, (iii)
each of the executive officers named in the table under "Compensation of
Executive Officers--Executive Compensation--Summary Compensation Table", and
(iv) all the Company's directors and executive officers as a group.
PERCENT OF
NUMBER OF COMMON STOCK
SHARES(1) OWNED
---------- ------------
DTI Investors LLC............................... 28,604,811 53.5%
c/o AEA Investors Inc.
65 East 55th Street
New York, NY 10022
AEA Investors Inc.(2)........................... 28,604,811 53.5
65 East 55th Street
New York, NY 10022
Armstrong Enterprises, Inc.(3).................. 18,365,822 34.4
Liberty and Charlotte Streets
P.O. Box 3001
Lancaster, PA 17604
Armstrong World Industries, Inc.(3)............. 18,365,882 34.4
Liberty and Charlotte Streets
P.O. Box 3001
Lancaster, PA 17604
Charles J. Pilliod, Jr.......................... 111,000(4)(5) *
Howard I. Bull.................................. 503,013(5)(6) *
Douglas D. Danforth............................. 0(5) --
Drew Lewis...................................... 1,000(5) *
George A. Lorch................................. 0(7) --
Vincent A. Mai.................................. 20,000(5)(8) *
Frank A. Riddick III............................ 0(9) --
Robert J. Shannon, Jr........................... 0(10) --
Henry F. Skelsey................................ 12,000(5)(11) *
John M. Goldsmith............................... 5,000(5)(12) *
William R. Hanks................................ 98,265(13) *
Barry J. Kulpa.................................. 290,737(14) *
Carlos E. Sala.................................. 168,208(15) *
Javier Eugenio Martinez Serna................... 100,965(16) *
Harold G. Turk.................................. 202,974(17) *
All directors and executive officers as a group
(20 persons)................................... 1,705,052 3.09
- - --------
* Less than 1%.
(1) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares as of a given date which such
person has the right to acquire within 60 days after such date. For
purposes of computing the percentage of outstanding shares held by each
person or group of persons named above on a given date, any shares that
such person or persons have the right to acquire within 60 days after
such date is deemed to be outstanding, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person.
(2) AEA Investors is the managing member of DTI Investors and accordingly may
be deemed to beneficially own such shares.
(3) Based on information supplied to the Company by Armstrong Enterprises,
Inc., which is a wholly owned subsidiary of AWI.
(4) Consists of 111,000 shares subject to options. Shares are held in nominee
name, Hertrus and Company.
6
(5) Such director is a member of DTI Investors. Under the rules of the SEC,
as such director does not have voting or investment power over the shares
of Common Stock owned by DTI Investors, such director does not have
beneficial ownership of such shares. Such director's membership interest
in DTI Investors represents a less than 1% indirect interest in the
Common Stock of the Company, which interest is in addition to any stock
options held, or shares of Common Stock identified herein as beneficially
owned, by such director.
(6) Consists of 502,913 shares subject to options and 100 shares.
(7) Excludes 18,365,822 shares indirectly owned by AWI, for which Mr. Lorch
serves as an officer and director. Mr. Lorch disclaims beneficial
ownership of such shares.
(8) Excludes 28,604,811 shares owned by DTI Investors, the managing member of
which is AEA Investors. Mr. Mai is a member of DTI Investors, and serves
as an officer and director of AEA Investors. Mr. Mai disclaims beneficial
ownership of the shares beneficially owned by DTI Investors and AEA
Investors.
(9) Excludes 18,365,822 shares indirectly owned by AWI, for which Mr. Riddick
serves as an officer. Mr. Riddick disclaims beneficial ownership of such
shares.
(10) Excludes 18,365,822 shares indirectly owned by AWI, for which Mr. Shannon
serves as an officer. Mr. Shannon disclaims beneficial ownership of such
shares.
(11) Excludes 28,604,811 shares owned by DTI Investors, the managing member of
which is AEA Investors. Mr. Skelsey is a member of DTI Investors and
serves as an officer of AEA Investors. Mr. Skelsey disclaims beneficial
ownership of the shares beneficially owned by DTI Investors and AEA
Investors.
(12) Excludes 28,604,811 shares owned by DTI Investors, the managing member of
which is AEA Investors. Mr. Goldsmith serves as an officer of AEA
Investors. Mr. Goldsmith disclaims beneficial ownership of the shares
beneficially owned by DTI Investors and AEA Investors.
(13) Consists of 95,265 shares subject to options and 3,000 shares.
(14) Consists of 290,737 shares subject to options.
(15) Consists of 168,208 shares subject to options.
(16) Consists of 100,965 shares subject to options.
(17) Consists of 202,974 shares subject to options.
SHAREHOLDERS AGREEMENT
Pursuant to the Shareholders Agreement, each of DTI Investors, which
beneficially owned approximately 53.5% of the Common Stock outstanding on the
Record Date, and AWI, which beneficially owned approximately 34.4% of the
Common Stock outstanding on the Record Date, has agreed to vote the shares of
Common Stock owned or controlled by it to effectuate the provisions of the
Shareholders Agreement, including for the election as directors of Dal-Tile of
(i) six individuals designated by DTI Investors, (ii) three individuals
designated by AWI, and (iii) the Chief Executive Officer of Dal-Tile. The
managing member of DTI Investors is AEA Investors. Accordingly, AWI and DTI
Investors have the voting power to effect the election of the nominees set
forth above in "Election of Directors". The rights and obligations of DTI
Investors and AWI to designate directors are subject to change in the event of
certain circumstances, more particularly described in the Shareholders
Agreement. The Shareholders Agreement, among other things, contains provisions
(A) providing for registration rights under certain circumstances under the
Securities Act of 1933, as amended, and (B) prohibiting the parties from
acquiring additional shares of Common Stock until the earlier to occur of (x)
the fourth anniversary of the initial public offering of the Common Stock and
(y) the sale by DTI Investors or AWI or its subsidiaries of 25% or more of the
Common Stock owned by DTI Investors (or its predecessor) and certain members
of the Company's management or AWI and its subsidiaries, as the case may be,
as of December 31, 1995.
Pursuant to the Shareholders Agreement, the Company is prohibited from
engaging in, without the approval of a majority of the Board of Directors
(including at least one AWI designee), any sale or transfer to a third party
by merger or otherwise by the Company or any of its subsidiaries (in one
transaction or a series of related transactions) of any subsidiary of the
Company or assets of the Company or of a subsidiary thereof that involves
7
more than 20% of the total assets of the Company and its subsidiaries taken as
a whole on a cumulative basis, excluding, however, such dispositions in the
ordinary course of business (including, but not limited to, sales of inventory
and finished goods), and excluding the sale of all or substantially all of the
stock or assets of the Company.
AWI has also agreed that it, or one or more of its subsidiaries, will
purchase, from time to time, shares of Common Stock in open market
transactions at their prevailing market prices having an aggregate purchase
price (exclusive of broker commissions) of $15.0 million, by June 15, 1998
(the "Open Market Purchases"). As of the Record Date, based on information
available to the Company, AWI has purchased all such $15.0 million of Common
Stock pursuant to such agreement. The parties to the Shareholders Agreement
waived the restrictions contained therein to the extent necessary to permit
AWI or its subsidiaries to effect the Open Market Purchases.
8
COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
annual and long-term compensation of the Company's Chief Executive Officer and
each of the Company's four other most highly compensated executive officers,
in each case for the fiscal years ended December 31, 1994, December 31, 1995
and January 3, 1997:
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
NAME AND ----------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS COMPENSATION
------------------ ---- -------- -------- ------------ ------------
Howard I. Bull.......... 1996 $434,000 $ 23,469 384,226 $ 3,750(2)
President and Chief 1995 400,000 180,000 0 56,517(3)(4)
Executive Officer(1) 1994 284,615 325,000 388,500 30,776
Harold G. Turk.......... 1996 255,000 139,768 0 8,012(2)(5)(6)
Vice President, Home 1995 253,850 74,589 0 11,580(7)(4)
Center Services 1994 240,000 156,250 0 6,868
Barry J. Kulpa.......... 1996 328,200 16,860 448,273 13,368(2)(5)
Vice President and 1995 282,600 117,450 0 5,577(4)
Chief Operating 1994 132,501 89,436 111,000 44,772
Officer(8)
Javier Eugenio Martinez
Serna.................. 1996 216,499 83,747 57,631 39,813(5)(10)
Vice President, Mexico 1995 170,000 78,594 0 36,461(11)
Operations(9) 1994 160,000 40,000 0 25,242(12)
William R. Hanks........ 1996 185,000 94,493 73,182 5,125(2)(13)
Vice President, 1995 173,078 70,875 0 0
Manufacturing of 1994 139,248 85,000 0 175
Dal-Tile Corporation
- - --------
(1) Mr. Bull was appointed to his position as President and Chief Executive
Officer on April 15, 1994.
(2) The amounts shown include matching contributions made by the Company to
the Company's Supplemental Retirement Plan for fiscal year ended January
3, 1997 to Howard I. Bull, in the amount of $3,750, Harold G. Turk, in
the amount of $4,659, Barry J. Kulpa, in the amount of $5,510, and
William R. Hanks, in the amount of $4,389.
(3) The amount shown includes $48,825 of relocation expenses incurred in
fiscal year 1995 by Howard I. Bull which were reimbursed by the Company.
(4) The amounts shown include paid vacation for fiscal year 1995 to Howard I.
Bull, in the amount of $7,692, Harold G. Turk, in the amount of $4,904,
and Barry J. Kulpa, in the amount of $5,577.
(5) The amounts shown include a car lease allowance for fiscal year ended
January 3, 1997 to Harold G. Turk, in the amount of $1,300, Barry J.
Kulpa, in the amount of $7,800, and Javier Eugenio Martinez Serna, in the
amount of $18,098.
(6) The amount shown includes payments to Harold G. Turk for fiscal year
ended January 3, 1997 for taxable auto benefits in the amount of $677,
excess life insurance in the amount of $1,335 and other fringe benefits
in the amount of $41.
(7) The amounts shown include premiums paid for fiscal year 1995 by the
Company for split-dollar life insurance in the amount of $6,676 for the
benefit of Harold G. Turk.
(8) Mr. Kulpa was appointed to his position as Vice President and Chief
Operating Officer on July 2, 1994.
(9) Mr. Martinez Serna was appointed to his position as Vice President,
Mexico Operations in August 1995. He has been a director of Materiales
Ceramicos S.A. de C.V. since December 1985.
(10) The amount shown includes payments to Javier Eugenio Martinez Serna for
fiscal year ended January 3, 1997 in the amount of $6,092 for paid
vacation, $1,200 for contributions to a workers' profit sharing plan,
9
$9,199 for scholarships, $978 for meals, $1,286 for contributions to a
savings fund, $2,803 for life insurance and $157 for medical insurance.
(11) The amount shown includes payments made to Mr. Martinez Serna in the
amount of $9,723 for vacation pay, $17,248 for a car lease allowance,
$601 for a contribution to a workers' profit sharing plan, and $8,884 for
scholarships.
(12) The amount shown includes payments made to Mr. Martinez Serna in the
amount of $8,000 for vacation pay, $24,796 for a car lease allowance,
$436 for a contribution to a workers' profit sharing plan, and $16,806
for scholarships.
(13) The amount shown includes a payment to William R. Hanks for the fiscal
year ended January 3, 1997 in the amounts of $677 for taxable auto
benefits and $59 for other fringe benefits.
OPTION GRANT TABLE
The following table sets forth certain information regarding options granted
during the fiscal year ended January 3, 1997 by the Company to the individuals
named in the Summary Compensation Table:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE PER EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
---- ------------ ---------------- --------- ---------- -- ---
Howard I. Bull.......... 384,226 7.94% $9.91 1/1/06 $2,398,838 $6,054,210
Harold G. Turk.......... 0 0 N/A N/A N/A N/A
Barry J. Kulpa.......... 448,273 9.27% $9.91 1/1/06 2,798,703 7,063,393
Javier Eugenio Martinez
Serna................... 57,631 1.19% $9.91 1/1/06 359,808 908,086
William R. Hanks........ 73,182 1.51% $9.91 1/1/06 456,897 1,153,121
OPTION EXERCISE TABLE
The following table sets forth the number of shares covered by both
exercisable and unexercisable stock options as of the fiscal year ended
January 3, 1997. Also reported are values for "in-the-money" options that
represent the positive spread between the respective exercise prices of
outstanding stock options and the value of the Common Stock as of January 3,
1997 based on its closing price on the New York Stock Exchange.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN
OPTIONS/SARS AT THE MONEY OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END
------------------------- -------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ----------- ------------- ----------- -------------
Howard I. Bull.......... 0 $0 425,213 347,513 $4,234,431 $3,429,071
Harold G. Turk.......... 0 0 202,974 0 2,103,825 0
Barry J. Kulpa.......... 0 0 290,737 268,536 2,811,765 2,581,653
Javier Eugenio Martinez
Serna................... 0 0 100,965 28,815 1,020,568 272,734
William R. Hanks........ 0 0 95,265 36,591 954,990 346,334
10
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Harold G. Turk and
Javier Eugenio Martinez Serna. The agreement with Harold G. Turk, which
expires on December 31, 1999, provides for the payment of an annual base
salary of at least $225,000. The agreement with Mr. Martinez Serna, which
expires on January 1, 1998, provides for the payment of annual compensation,
including base salary and bonuses for his services thereunder, of not less
than 361,800,000 (pesos) (approximately U.S. $46,000 based on the peso/dollar
exchange rate on January 3, 1997). In addition, the agreement with Mr.
Martinez Serna provides that if his employment is terminated without cause
before the expiration of the agreement, Mr. Martinez Serna will be paid, on a
semi-monthly basis, all compensation owing under the agreement for the
remainder of the agreement's term, provided that he complies with all non-
competition restrictions. These repayments, however, will be offset by amounts
earned by Mr. Martinez Serna subsequent to the termination of employment
without cause. Each of the employment agreements described herein contains
provisions prohibiting the employee from competing with the Company during the
term of employment and, in certain cases, for a period thereafter.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee, which consists of three non-employee
directors, is responsible for executive compensation, including setting the
Company's compensation philosophy and policies, recommending to the Board of
Directors the compensation to be paid to the Chief Executive Officer and
determining the compensation for the other executive officers. The
Compensation Committee also is responsible for administering the Company's
executive compensation plans and programs. The Compensation Committee reviews
the Company's executive compensation plan on at least an annual basis to
ensure that the program continues to meet the goals of its compensation
philosophy.
COMPENSATION PHILOSOPHY
The Compensation Committee has four principal objectives in determining
executive compensation policies: (1) to support the development of a high-
caliber executive management team; (2) to establish a strong pay/performance
linkage; (3) to focus executive management on the critical financial and
operating objectives of the Company; and (4) to reward, motivate and retain
key executive talent. To achieve these objectives, the Committee has adopted
the following overriding policies:
. The Company will compensate competitively with the practices of other
leading companies in both the distribution and manufacturing sector.
. Total compensation will be targeted at the 75th percentile of the pay
scale of other leading companies in both the distribution and
manufacturing sector if Company and individual performance meet expected
levels or better.
. To achieve total compensation objectives and have a strong performance
emphasis, the use of variable incentive plans will be emphasized,
utilizing both annual and longer term stock-based plans.
. It is expected that in future fiscal years stock options and other
incentive-based compensation will constitute a significant portion of the
compensation of executive officers so that the interests of executive
officers will coincide with the interests of stockholders.
The Committee's specific executive compensation policies discussed below are
designed to achieve the Committee's objectives through the implementation of
the foregoing policies.
11
ELEMENTS OF EXECUTIVE COMPENSATION
The elements of the Company's compensation of executive officers are: (1)
annual cash compensation in the form of base salary and incentive bonuses; (2)
long-term incentive compensation in the form of stock options granted under
the Company's 1996 Amended and Restated Stock Option Plan; and (3) other
compensation and employee benefits generally available to all employees of the
Company, such as health insurance and employer matching contributions under
the Company's Employee Retirement Savings Plan, a "401(k)" plan.
BASE SALARY
The Compensation Committee reviews base salary levels of the executive
officers annually. Adjustments, if any, are made effective January 1 of each
year. Salary ranges for each executive officer are determined by the
Compensation Committee. The Company uses an outside consulting firm to
recommend salary ranges for each position using marketplace data from a broad
range of distribution and manufacturing companies of similar size to the
Company. Historically, a mid-point base salary has been established around the
75th percentile of the pay scale of other leading companies in both the
distribution and manufacturing sector. An executive officer's progression
through the salary range is based upon the Compensation Committee's evaluation
of the individual's job performance.
INCENTIVE BONUSES
The Committee's process for determining annual bonuses is designed to
motivate the Company's executive officers to perform to the best of their
abilities and to enhance stockholder value through achievement of the
Company's objectives. Therefore, a target bonus percentage is established for
each executive and is related to his or her potential impact on Company
results, while the percentage of bonus awarded is determined with performance-
related parameters. Incentive bonuses are paid annually upon certification by
the Compensation Committee of achievement of the relevant performance targets.
The amount of an executive's bonus for the fiscal year ended January 3, 1997
was based on pre-determined performance measures representing a mixture of
Company financial goals and three to four specific individual goals. For each
determined goal, four specific levels of performance were determined. At the
end of the fiscal year, pre-determined bonus percentages were applied to the
actual level of attainment for each goal, thus determining the total bonus
payment. Generally, executive bonuses were in the order of 25% of annual
salary.
STOCK OPTIONS
The Committee believes that the use of stock options as long-term
compensation serves to motivate executive officers to maximize stockholder
value and to remain in the Company's employment. The number of options granted
to each executive is determined by the Committee, in its discretion. In making
its determination, the Committee considers the executive's position at the
Company, his or her individual contribution, the number of options (if any) to
purchase Common Stock held by the executive and other factors, including an
analysis of the estimated amount potentially realizable from such options.
Each current executive officer holds options to purchase Common Stock
granted using the above stated criteria. The Committee believes these holdings
will encourage retention of key officers.
CEO COMPENSATION
The Compensation Committee determines Mr. Bull's compensation on the same
basis and under the same philosophy it uses in determining the compensation of
other executive officers. As discussed above, the goal of the Compensation
Committee is to link a significant portion of the compensation of its
executive officers, including Mr. Bull, to Company performance. The
Compensation Committee raised Mr. Bull's annual base salary to $434,000 in
fiscal 1996, representing an 8.5% increase to his previous base salary.
12
To further link Mr. Bull's compensation to Company performance, a
substantial amount of Mr. Bull's potential compensation for the fiscal year
ended January 3, 1997 was tied to the Company's achievement of certain
objective financial targets. Based on the Company's performance in the fiscal
year ended January 3, 1997, Mr. Bull realized a bonus award of $23,469, equal
to approximately 5% of his base salary.
In January of 1996, Mr. Bull was awarded a stock option grant to purchase
384,226 shares of Common Stock in accordance with the stated goals described
above under "Stock Options". Inclusive of the fiscal 1996 option grant, Mr.
Bull holds options to purchase a total of 772,726 shares of Common Stock.
SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a deduction to any publicly held corporation for compensation paid
in excess of $1 million in a taxable year to its chief executive officer or
any of the four other most highly compensated executive officers employed by
such corporation on the last day of its taxable year. The Compensation
Committee considered the impact of Section 162(m) on the compensation of its
executive officers. The Compensation Committee expects that the deduction
limitation does not, and will not, in the near future, apply to executive
officers' compensation. The Compensation Committee intends to monitor the
impact of Section 162(m) and consider structuring executive compensation
arrangements so that the deduction limitation will continue not to apply.
Respectfully submitted,
Drew Lewis
Robert J. Shannon, Jr.
Henry F. Skelsey
13
PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested on
August 14, 1996 in each of the Common Stock of the Company, Standard & Poor's
500 Index and the Dow Jones Building Materials Index. The returns of the
Standard & Poor's Index and the Dow Jones Building Materials Index are
calculated assuming reinvestment of dividends. The Company has not paid any
dividends. The graph covers a period commencing August 14, 1996, when the
Company's Common Stock was first publicly traded, through January 3, 1997. The
stock price performance shown on the graph below is not necessarily indicative
of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG DAL-TILE INTERNATIONAL INC., THE
S&P 500 INDEX AND THE DOW JONES BUILDING
MATERIALS INDEX
[GRAPH APPEARS HERE]
AUGUST 14, JANUARY 3,
1996 1997
---------- ----------
Dal-Tile International Inc.......................... 100 138
S&P 500 Index....................................... 100 113
Dow Jones Building Materials Index.................. 100 118
14
CERTAIN TRANSACTIONS
AEA Investors (the managing member of DTI Investors, which is a beneficial
owner of Common Stock), provided certain management, consulting and financial
services to the Company for professional service fees and was reimbursed for
out-of-pocket expenses. In the fiscal year ended January 3, 1997, payments of
such management fees and reimbursement for expenses totaled $485,000. Such
services included, but were not necessarily limited to, advice and assistance
concerning the strategy, planning and financing of the Company, as needed from
time to time. Such arrangement with AEA Investors was terminated in August
1996 upon completion of the Company's initial public offering of Common Stock,
and AEA Investors was paid a termination fee of $4.0 million in connection
therewith. The Company receives the benefit of volume discounts for certain
office services and supplies made available to various companies associated
with AEA Investors pursuant to arrangements managed by a subsidiary of AEA
Investors. Messrs. Mai, Skelsey and Goldsmith are officers and/or directors of
the Company; Mr. Mai is President and Chief Executive Officer of AEA
Investors; and Messrs. Skelsey and Goldsmith are each a Vice President and
Managing Director of AEA Investors.
On December 29, 1995, AWI acquired 37% of the then outstanding capital stock
of the Company in connection with the acquisition pursuant to which the
Company acquired AO and certain related assets of the ceramic tile business of
AWI (the "AO Acquisition"). In connection with the AO Acquisition, the Company
entered into agreements with AWI relating to (i) the use by the Company of
certain trademarks owned by AWI, and (ii) certain transition services
(including computer services) to be supplied by AWI or its affiliates to the
Company. These agreements were negotiated in connection with the AO
Acquisition and have arm's-length terms and conditions. Transactions pursuant
to such agreements are in the ordinary course of business. Messrs. Lorch,
Riddick and Shannon are directors of the Company; Mr. Lorch is a director and
executive officer of AWI, and Messrs. Riddick and Shannon are officers of AWI.
Before the AO Acquisition, AO was a subsidiary of AWI. As a subsidiary of
AWI, AO purchased pyrophyllite from Newfoundland Minerals and installation
materials from an affiliate of AWI, and incurred expenses relating to
management information systems and engineering services provided by AWI or its
affiliates.
The Company also leases certain computer services from AWI for approximately
$7 million per year through May 31, 1999.
RATIFICATION OF APPOINTMENT OF AUDITORS
Upon recommendation of the Audit Committee, the Board of Directors has
appointed Ernst & Young LLP, independent public accountants, to audit and
report on the consolidated financial statements of the Company for the fiscal
year ending January 2, 1998 and to perform such other services as may be
required of them. Ernst & Young LLP has served as auditors for the Company
since 1980. The Board of Directors has directed that management submit the
appointment of independent auditors for ratification by the stockholders at
the Annual Meeting. Representatives of Ernst & Young LLP are expected to be
present at the meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate stockholder
questions.
PROXIES WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG
LLP AS INDEPENDENT AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING JANUARY
2, 1998, UNLESS OTHERWISE SPECIFIED IN THE PROXY. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS.
15
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
the solicitation of proxies by use of the mail, some of the officers,
directors and regular employees of the Company and its subsidiaries, none of
whom will receive additional compensation therefor, may solicit proxies in
person or by telephone, telegraph or other means. As is customary, the Company
will, upon request, reimburse brokerage firms, banks, trustees, nominees and
other persons for their out-of-pocket expenses in forwarding proxy materials
to their principals.
STOCKHOLDER PROPOSALS FOR THE 1998
ANNUAL MEETING OF STOCKHOLDERS
Stockholders may present proposals that may be proper subjects for inclusion
in the proxy statement and for consideration at an Annual Meeting of
Stockholders. To be considered, proposals must be submitted on a timely basis.
Proposals for the 1998 Annual Meeting must be received by the Company no later
than December 17, 1997. Proposals, as well as any questions related thereto,
should be submitted in writing to the Secretary of the Company. Proposals may
be included in the proxy statement for the 1998 Annual Meeting if they comply
with certain rules and regulations promulgated by the SEC and in connection
with certain procedures described in the Company's By-Laws, a copy of which
may be obtained from the Secretary of the Company.
OTHER MATTERS
The Company knows of no other matter to be brought before the Annual
Meeting. If any other matter requiring a vote of the stockholders should come
before the Annual Meeting, it is the intention of the persons named in the
proxy to vote the same with respect to any such matter in accordance with
their best judgment.
The Company will furnish, without charge, to each person whose proxy is
being solicited upon written request, a copy of its Annual Report on Form 10-K
for the fiscal year ended January 3, 1997, as filed with the SEC (excluding
exhibits). Copies of any exhibits thereto also will be furnished upon the
payment of a reasonable duplicating charge. Requests in writing for copies of
any such materials should be directed to Richard Sewell, 7834 Hawn Freeway,
Dallas, TX 75217.
By order of the Board of Directors,
/s/ Christine J. Smith
Christine J. Smith
Secretary
Dallas, Texas
April 16, 1997
16
DAL-TILE INTERNATIONAL INC.
Proxy For Annual Meeting of Stockholders
May 8, 1997
PROXY
This proxy is Solicited on Behalf of the Dal-Tile International Inc.'s
Board of Directors.
The undersigned hereby appoints Howard I. Bull, Barry J. Kulpa and
Carlos E. Sala, and each of them, Proxies for the undersigned, with full power
of substitution, to represent and to vote all shares of Dal-Tile International
Inc. Common Stock which the undersigned may be entitled to vote at the 1997
Annual Meeting of Stockholders of Dal-Tile International Inc. to be held in New
York, New York on Thursday, May 8, 1997 at 10:00 a.m., or at any adjournment
thereof, upon the matters set forth on the reverse side and described in the
accompanying Proxy Statement and upon such other business as may properly come
before the meeting or any adjournment thereof.
Please mark this proxy as indicated on the reverse side to vote on any
item. If you wish to vote in accordance with the Board of Directors'
recommendations, please sign the reverse side; no boxes need to be checked. IF
THIS PROXY IS SIGNED BUT NO SPECIFICATIONS IS MADE, THE PROXY SHALL BE VOTED FOR
ITEMS 1 AND 2. In their discretion, the appointed Proxies are authorized to vote
upon such other business as may properly come before the meeting.
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENTS/ADDRESS ON REVERSE SIDE
SEE REVERSE
(Continued and to be signed on other side.) SIDE
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
The Board of Directors recommends a vote FOR items 1 and 2
Please Mark
your votes as [X]
indicated in
this example
ITEM 1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to the to vote for all nominees
contrary) listed to the right
[_] [_]
Nominees: Charles J. Pilliod, Jr., Howard I. Bull, Douglas D. Danforth, Drew
Lewis, George A. Lorch, Vincent A. Mai, Frank A. Riddick III, Robert J. Shannon,
Jr., Henry F. Skelsey, John M. Goldsmith
WITHHELD FOR: To withhold authority to vote for any individual nominee(s), write
that nominee(s) name on the line provided:
________________________________________________________________________________
ITEM 2. APPROVAL OF AUDITORS
FOR AGAINST ABSTAIN
[_] [_] [_] I PLAN TO ATTEND MEETING
If you check this box to the right an
admission card will be sent to you. [_]
Address Change
Please mark this box if you have address
changes on the reverse side. [_]
Receipt is hereby acknowledged
of the Dal-Tile International
Inc. Notice of Meeting and Proxy
Statement. PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Signature_________________________Signature_____________________Date____________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as an attorney, executor, administrator, trustee or guardian, please
give full title as such. Corporate and partnership proxies should be signed by
any authorized person indicating the person's title.
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE