UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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14a-6(e)(2))
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
DECORATOR INDUSTRIES, INC.
(Name of Registrant as Specified in Its Charter)
----------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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DECORATOR INDUSTRIES, INC.
10011 Pines Boulevard, Suite 201
Pembroke Pines, FL 33024
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD MAY 29, 2008
TO THE STOCKHOLDERS OF DECORATOR INDUSTRIES, INC.
Notice is hereby given that the annual meeting of the stockholders of
Decorator Industries, Inc. will be held at Suite 201, 10011 Pines Blvd.,
Pembroke Pines, Florida, on May 29, 2008 at 9:30 A.M., local time, for the
purpose of:
(a) Electing three directors for a term of three years.
(b) Transacting such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors fixed the close of business on April 11, 2008 as
the record date for the determination of stockholders entitled to notice of and
to vote at the annual meeting.
Copies of the Company's proxy statement for the meeting and annual
report to stockholders for the fiscal year ended December 29, 2007 are furnished
herewith.
PLEASE SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES. YOUR PROMPT
COMPLIANCE WITH THIS REQUEST WILL BE APPRECIATED AND WILL ASSIST IN OBTAINING A
QUORUM. YOUR PROXY MAY BE WITHDRAWN AT ANY TIME PRIOR TO ITS EXERCISE BY GIVING
NOTICE TO THE UNDERSIGNED.
By Order of the Board of Directors
MICHAEL K. SOLOMON
Secretary
April 21, 2008
PROXY STATEMENT
DECORATOR INDUSTRIES, INC.
10011 Pines Boulevard
Pembroke Pines, FL 33024
April 21, 2008
This statement is furnished in connection with the solicitation of
proxies to be used at the annual meeting of stockholders of Decorator
Industries, Inc. (the "Company") to be held May 29, 2008 at the place and time
and for the purposes set forth in the foregoing Notice of Annual Meeting, and at
any adjournment thereof. This proxy statement and the enclosed form of proxy and
annual report for 2007 were mailed to stockholders on or about April 21, 2008.
Proxies in the form enclosed are solicited on behalf of the Board of
Directors of the Company. The cost of preparing, assembling and mailing the
notice of annual meeting, proxy statement and form of proxy is to be borne by
the Company. In addition to the solicitation of proxies by use of the mails,
directors, officers or other employees of the Company may solicit proxies
personally or by telephone or other means and the Company may request certain
persons holding stock in their names or in the names of their nominees to obtain
proxies from and send proxy material to the principals and will reimburse such
persons for their expenses in so doing.
The accompanying proxy may be revoked by the stockholder at any time
prior to its use by giving notice of such revocation either personally or in
writing to Michael K. Solomon, Secretary of the Company, 10011 Pines Blvd. Suite
201, Pembroke Pines, FL 33024. Unless the proxy shall have been properly
revoked, the shares represented by proxies in the enclosed form will be voted.
Each such proxy will be voted as directed, but if no direction is indicated, it
will be voted FOR the election of the Board of Directors' nominees named below.
The record date for the determination of stockholders who will be
entitled to vote at the meeting was the close of business on April 11, 2008. As
of that date, there were outstanding 2,611,611 shares of Common Stock, par value
$.20 per share ("Common Stock"), that may be voted, the holders of which are
entitled to one vote per share, except for cumulative voting in the election of
directors, as explained below.
A quorum for the transaction of business at the annual meeting will
require the presence, in person or by proxy, of stockholders entitled to cast at
least a majority of the total number of votes entitled to be cast at the
meeting. Directors will be elected at the meeting by a plurality of the votes
cast. Abstentions and broker non-votes are counted as shares present for
determination of a quorum but are not counted as affirmative or negative votes
and are not counted in determining the number of votes cast on any matter.
Stockholders are entitled to cumulative voting in the election of
directors, which means that a stockholder is entitled to a number of votes equal
to the number of shares held by such stockholder multiplied by the number of
directors to be elected, and the stockholder may cast all of such votes for one
nominee or divide them among the three nominees.
1
ELECTION OF DIRECTORS
The Board of Directors consists of three classes of directors with
staggered terms. A purpose of the meeting is the election of three directors to
serve for a term of three years. The last two columns of the tables below give
information regarding the Common Stock beneficially owned by the nominee or
director as of the close of business on April 11, 2008. The percentages in the
last column were computed by dividing the number of shares beneficially owned by
the total of the number of shares of Common Stock outstanding and the number of
shares of Common Stock, if any, which the named nominee or director was entitled
to acquire within 60 days of April 11, 2008 through the exercise of stock
options. Mr. Bassett is trustee of the Trust under the Stock Plan for
Non-Employee Directors (the "Trust").
NOMINEES FOR ELECTION AS DIRECTORS
Information regarding the nominees for election as directors is set
forth below:
Common Shares Percent
Director Beneficially of
Name Age Principal Occupation Since Owned Class
- ---------------- ------ --------------------------- -------- -------------- -------
William C. Dixon 50 President and CEO of 2002 1,000 (1) --
BFD of Metro Washington, Inc.
Terrence H. Murphy 57 Attorney 2005 -- (1) --
Timothy J. Lindgren 61 Senior Vice President -- -- --
Hyatt Hotels & Resorts
- -------------------
(1) Excludes shares held in the Trust: 10,295 for Mr. Dixon and 3,950 for Mr.
Murphy.
William C. Dixon is President and CEO of BFD of Metro Washington, Inc.
He is also President and CEO of KHF of Metro Washington, Inc. BFD was
established in 2002; KHF was established in 2005. Both companies operate
furniture stores in the Washington, DC market. Mr. Dixon was President and CEO
of Barnes Furniture Co., Inc. from 1998 to 2005. Barnes is a privately held
retail furniture company. Mr. Dixon is the nephew of William A. Bassett.
Terrence H. Murphy is a shareholder in Buchanan Ingersoll & Rooney, PC,
a law firm with offices in Pittsburgh, Philadelphia and Harrisburg,
Pennsylvania, and other cities. Buchanan Ingersoll & Rooney serves as legal
counsel to the Company.
Timothy J. Lindgren is a senior vice president for Hyatt Hotels &
Resorts, overseeing the management and operations of 24 Hyatt hotels in 10
states. Throughout his 34-year career with Hyatt, Mr. Lindgren has held a
variety of management positions including general manager of several Hyatt
Regency hotels. He has also served as a director of Healthtronics, Inc. since
January 2003.
The above persons were nominated for the office of director by the
present Board of Directors upon the recommendation of the Nominating Committee.
The nominees have advised the Company that they are willing to serve as
directors for the term for which they are standing for election. If at the time
of the meeting any of the nominees should be unable or unwilling to serve as a
director for any reason, it is intended that the enclosed proxy will be voted
for the election of such person, if any, as is designated by the Board of
Directors to replace such nominee, unless the proxy withholds authority to vote
for nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING NOMINEES.
2
DIRECTORS WHOSE TERMS CONTINUE AFTER THE MEETING
Information regarding the directors whose terms of office continue
after the annual meeting is set forth below:
Common Shares Percent
Director Term Beneficially of
Name Age Principal Occupation Since Expires Owned Class
- ---------------- ------ --------------------------- -------- ------- ------------- -------
Joseph N. Ellis 79 Management Consultant 1993 2009 2,500 (1) --
Ellen Downey 55 Retired Treasurer 1997 2009 1,562 (1) --
Ryder Systems, Inc
William A. Bassett 71 Chairman of the Board and 1980 2010 339,112 (2) 11.46%
Consultant to the Company;
Former President and Chief Executive
Officer of the Company
William A. Bassett, as 94,708 (3) 3.24%
Trustee for the Trust
Thomas L. Dusthimer 73 Consultant to and Retired 1997 2010 1,250 (1) --
Director of Key Bank Elkhart
- ---------------------
(1) Excludes shares held in the Trust: 27,782 for Mr. Ellis, 26,697 for Ms.
Downey, and 25,984 for Mr. Dusthimer.
(2) Includes 31,250 optioned shares which may be acquired within 60 days.
(3) Mr. Bassett disclaims beneficial ownership of these shares.
Joseph N. Ellis founded La Salle-Deitch Co., Inc., a distributor of
products for the manufactured housing and recreational vehicle industry in 1963,
and served as its President, Chief Executive Officer and Chairman from 1971
until his retirement in 1992.
Ellen Downey was employed by Ryder Systems, Inc. in various financial
positions from 1978 to 1991 and from 1991 to 1993 served as Vice President and
Treasurer of that company.
William A. Bassett is a Consultant to the Company since January 1,
2008, and has been Chairman of the Board since 1994. Previously, he was
President of the Company from 1980 to December 2007 and Chief Executive Officer
from 1993 to December 2007.
Thomas L. Dusthimer has served as a consultant to and director of Key
Bank (Elkhart, Indiana District) since 1992. From 1973 until his retirement in
1992, Mr. Dusthimer served in various executive positions, including President,
Chief Executive Officer and Chairman, with Ameritrust Indiana Corporation and
Ameritrust National Bank.
At April 11, 2008, the officers and directors of the Company as a group
had sole or shared voting or investment power as to 480,082 shares of the
Company's Common Stock, which together with 65,810 optioned shares that could be
acquired within 60 days after April 11, 2008, would constitute 18.24% of the
total shares then outstanding.
DIRECTOR INDEPENDENCE
All directors and nominees for director, except Mr. Bassett, are
independent as defined in the Company Guide of the American Stock Exchange LLC.
ATTENDANCE AT STOCKHOLDER MEETINGS
Directors are expected to attend all stockholder meetings if reasonably
possible. All members of the Board attended the 2007 annual meeting of
stockholders.
CODE OF ETHICS
The Company has adopted a Code of Conduct and Ethics which covers all
directors, officers, and managers of the Company. It was filed as Exhibit 14 to
the Company's Quarterly Report on Form 10-Q for the quarter ended September 29,
2007.
3
BOARD AND COMMITTEE MEETINGS
The Board of Directors has the following committees: Audit Committee,
Compensation Committee, and Nominating Committee.
During the fiscal year 2007, the Board of Directors held five meetings.
The Audit Committee consists of Joseph N. Ellis (Chairman), Ellen
Downey, Thomas L. Dusthimer and William C. Dixon. The Audit Committee met four
times during 2007. See "Audit Committee Report" herein.
The Compensation Committee consists of Thomas L. Dusthimer (Chairman),
Joseph N. Ellis, and Ellen Downey. The function of the Compensation Committee is
to determine the salary, bonus and benefits for the Chief Executive Officer of
the Company and to recommend to the Board the salary, bonus and benefits for all
other officers. The Compensation Committee met three times in 2007.
The Nominating Committee consists of Ellen Downey (Chairwoman), Joseph
N. Ellis, and Thomas L. Dusthimer. The function of the Nominating Committee is
to recommend to the Board persons to be nominated by the Board for election as
directors and persons to be elected by the Board to fill any vacancies on the
Board. The Nominating Committee met twice in 2007. See "Nominating Committee
Report" herein.
During the year 2007, all directors attended at least 75% of the total
number of meetings of the Board of Directors and the committees of which he or
she was a member.
PRINCIPAL STOCKHOLDERS
See "Directors Whose Terms Continue After the Meeting" above for the
stockholding of William A. Bassett, Chairman of the Board of Directors.
According to information provided by Robert E. Robotti of New York, New
York, he held shared voting and dispositive power with respect to 921,144 shares
(31.47%) of the Company's Common Stock. This aggregate number of shares
includes: 544,077 (18.59%) shares beneficially owned by Robotti & Company
Advisors, LLC, an investment advisor registered under the Investment Advisers
Act of 1940, as amended; 366,518 (12.52%) shares beneficially owned by
Ravenswood Management Company, L.L.C., the general partner of two private
investment partnerships, each engaged in the purchase and sale of securities for
its own account; and 371,283 shares (12.68%) beneficially owned by Kenneth R.
Wasiak of New York, New York. The shares beneficially owned by Mr. Wasiak
include all of the shares beneficially owned by RMC. As a result of certain
provisions of the Pennsylvania Business Corporation Law, the Company believes
that 315,685 (10.78%) of these shares cannot be voted.
FMR Corp. of Boston, Massachusetts has reported on its Schedule 13G/A
dated February 14, 2006 that Fidelity Management & Research Company, a
wholly-owned subsidiary of FMR Corp. and a registered investment adviser, had
sole investment power with respect to 243,515 shares (8.32%) of the Company's
Common Stock. No further reports have been received from FMR Corp.
4
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table shows the compensation of the executive officers of
the Company for fiscal years 2007 and 2006. There were no stock awards, and the
Company does not maintain any nonqualified deferred compensation plans..
All
Other
Name and Fiscal Option Compensation Total
Principal Position Year Salary ($) Bonus ($) Awards ($)(1) ($) (2) ($)
- ----------------------------- ----------- ------------ ------------ ------------- ------------ ------------
William A. Johnson 2007 197,216 -- 12,410 6,618 216,244
President and Chief 2006 144,750 10,000 21,099 13,188 189,037
Executive Officer
Michael K. Solomon 2007 157,040 -- 891 12,129 170,060
Vice President, Treasurer, 2006 152,000 10,000 1,528 10,700 174,228
Chief Financial Officer and
Secretary
William A. Bassett
Chairman of the Board, 2007 365,000 -- -- 36,365 401,365
and Consultant to the 2006 350,000 20,000 -- 44,572 414,572
Company; former President and
Chief Executive Officer
- ---------------------
(1) Represents the dollar amount recognized for financial reporting purposes
during each fiscal year for the fair value of stock options granted to each
of the named executives, in accordance with SFAS 123R. All expense
recognized in 2007 and 2006 relates to options granted prior to 2006. For
additional information on valuation assumptions with respect to stock
option grants, refer to the Company's report on Form 10-K for the fiscal
year ended December 29, 2007.
(2) Medical/dental reimbursement plan payments, country club memberships,
personal use of Company vehicles, premiums paid by the Company on life and
long-term disability insurance policies, and Company contributions to the
401(k) Retirement Savings Plan. Included in this total for Mr. Bassett are
premiums on his life insurance benefits which totaled $25,368 and $25,368
in 2007 and 2006, respectively.
Mr. Johnson, age 48, has been Chief Executive Officer of the Company
since January 2, 2008, President of the Company since August 2007, and an
officer of the Company since June 1998. He was Executive Vice President of the
Company from February 2007 to August 2007 and Controller of the Company from
January 1997 to August 2007. He beneficially owns 28,200 shares of Common Stock,
including 27,000 optioned shares that may be acquired within 60 days of April
11, 2008.
Mr. Solomon, age 58, has been Vice President of the Company since 1994,
Treasurer and Chief Financial Officer since 1985, and Secretary since March
2005. He beneficially owns 77,560 shares of Common Stock, including 7,560
optioned shares that may be acquired within 60 days of April 11, 2008.
The Board of Directors has approved the salaries of the executive
officers of the Company on an annual basis. In approving the salaries, the Board
considered the size of the Company, its performance during the previous fiscal
year, the responsibilities and performance of the executive officer, and such
other factors as the directors wished to consider. No pre-determined formula or
guidelines were used, and no specific weight was given to any one factor.
The Board has also granted stock options to executive officers and
other key employees as a means of further motivating them to exert their best
efforts on behalf of the Company. On December 19, 2007, Mr. Johnson received
25,000 options at $4.14 per share, and Mr. Solomon received 10,000 options at
$4.14 per share. These options vest 20% per year beginning on the first
anniversary of the option grant and expire on December 19, 2017. No option
grants were made in 2006.
5
The Compensation Committee, composed of independent directors,
determines the salary, bonus and benefits of the Chief Executive Officer and
recommends to the Board the salary, bonus and benefits of the other officers of
the Company. In determining the compensation of the Chief Executive Officer, the
Compensation Committee considers (i) the compensation package as a whole,
including his or her salary, bonus, stock options and other perquisites, (ii)
his or her performance both quantitatively and qualitatively, (iii) whether the
financial goals of the Company, including both sales growth and return on equity
have been met, (iv) the sales/revenue increases of the Company, (v) the
compensation packages of other companies of similar size and in the Company's
line of business, to the extent such information is available, and (vi) such
other factors as the Committee may deem relevant at the time.
Mr. Johnson's salary upon his promotion to President of the Company on
August 20, 2008, was $225,000 per annum. Effective with his assumption of duties
as Chief Executive Officer on January 2, 2008, his annual salary was increased
to $260,000. The Company has no employment agreement with Mr. Johnson.
The Company's medical and dental reimbursement plan provides
reimbursement to the corporate and certain divisional officers of the Company
and their dependents (as defined in Section 152 of the Internal Revenue Code)
for their medical and dental expenses. Benefits under the plan are limited to
10% of the participant's compensation during the plan year. The plan also
prohibits any participant from receiving "double reimbursement"; i.e., if a
participant receives reimbursement from another source, he or she must remit to
the Company benefits received under the plan.
On September 1, 1998 the Company began a 401(k) Retirement Savings Plan
which is available to all eligible employees. To be eligible for the plan, the
employee must be at least 21 years of age and have completed one year of
employment. Eligible employees may contribute up to 75% of their earnings with a
maximum of $15,500 for 2007 ($20,500 for employees over 50 years of age) based
on the Internal Revenue Service annual contribution limit. Up until December 31,
2005, the Company matched 25% of the first 4% of the employee's contributions up
to 1% of the employee's earnings. From January 1, 2006 to December 31, 2007, the
Company matched 25% of the first 6% of the employee's contributions up to 1.5%
of the employee's earnings. Beginning January 1, 2008, the Company began
matching 100% of the first 3% of the employee's contributions and 50% of the
next 2% of the employee's contributions, up to a maximum contribution of 4% of
the employee's earnings. Contributions are invested at the direction of the
employee in one or more funds. As of January 1, 2008, Company contributions are
fully vested upon payment.
EMPLOYMENT AGREEMENT
The Company has an employment agreement with Mr. Bassett under which he
was paid a minimum of $336,000 for each of the years 2006 and 2007. For the five
years commencing January 1, 2008, Mr. Bassett will be employed as an
employee/consultant at an annual salary of $255,500 and the Company will
maintain a long term care policy for Mr. Bassett and his wife. The Company shall
also continue, maintain and pay the premiums on a $1,000,000 insurance policy
and a $1,000,000 key man insurance policy on the life of Mr. Bassett, the
proceeds of which key man insurance less the death benefits payable under the
terms of his employment agreement, shall be payable to Mr. Bassett or his
personal representative or named beneficiary.
6
OUTSTANDING EQUITY-BASED AWARDS
In February 2006 the Board of Directors adopted, and in May 2006 the
stockholders approved, the Company's 2006 Incentive Stock Option Plan (the "2006
Plan") which has a term of ten years. The 2006 Plan authorizes the issuance of
up to 250,000 shares of Common Stock pursuant to stock options granted to key
employees of the Company. The purchase price of optioned shares must be the fair
market value of the Common Stock on the date of grant, and the maximum term of
the options is ten years; in the case of options granted to employees who own
more than 10% of the outstanding Common Stock, however, the purchase price must
be 110% of the fair market value of the Common Stock on the date of grant and
the term of the option cannot exceed five years. The number of shares that may
be issued under the 2006 Plan, the number of optioned shares and the purchase
price per share are subject to adjustment for stock splits, stock dividends,
reclassifications and the like.
The Company's 1995 Incentive Stock Option Plan ("the 1995 Plan")
expired in May 2005, but options granted under the 1995 Plan continue to be
valid until their respective expiration dates. Outstanding equity awards at year
end were from both the 1995 Plan and the 2006 Plan.
Number of Shares Underlying Exercise
Unexercised Options Price Option
-------------------------------------- Per Share Expiration
Name Exercisable Unexercisable ($) Date
- ---------------------- -------------- -------------- ------------ ------------
William A. Johnson 12,500 -- 5.86 10/9/2012
William A. Johnson 3,000 2,000 (1) 8.06 3/5/2014
William A. Johnson 2,000 3,000 (2) 8.25 3/4/2015
William A. Johnson 5,000 7,500 (3) 9.30 4/1/2015
William A. Johnson -- 25,000 (4) 4.14 12/19/2017
William A. Bassett 31,250 -- 5.86 10/9/2012
Michael K. Solomon 12,500 -- 8.10 3/3/2008
Michael K. Solomon 5,000 -- 7.00 6/11/2009
Michael K. Solomon 1,920 1,280 (5) 8.06 3/5/2014
Michael K. Solomon -- 10,000 (6) 4.14 12/19/2017
- ---------------------
(1) Scheduled to vest 1,000 shares on each of March 5, 2008 and 2009.
(2) Scheduled to vest 1,000 shares on each of March 4, 2008, 2009, and 2010.
(3) Scheduled to vest 2,500 shares on each of April 1, 2008, 2009, and 2010.
(4) Scheduled to vest 5,000 shares on each of December 19, 2009, 2010, 2011,
2012, and 2013.
(5) Scheduled to vest 640 shares on each of March 5, 2008 and 2009.
(6) Scheduled to vest 2,000 shares on each of December 19, 2009, 2010, 2011,
2012, and 2013.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
With the exception of Mr. Bassett's employment contract as previously
mentioned, or the Company's stock option plans, the Company does not maintain
any agreement, plan or arrangement with any officer regarding payments or
benefits upon termination of employment or change in control. Mr. Bassett's
employment contract guarantees his employment and consulting benefits through
the end of December 2012. The Company's stock option plans provide that unvested
options will, under certain circumstances, become immediately exercisable in the
event of a dissolution, liquidation, or certain mergers involving the Company.
7
COMPENSATION OF DIRECTORS
The following table sets forth information with respect to the
compensation for fiscal 2007 of each of the Company's non-employee directors.
Mr. Bassett's compensation is reported in the Summary Compensation Table. He
receives no additional compensation for his duties as Chairman of the Board.
DIRECTOR COMPENSATION FOR FISCAL YEAR 2007
Stock
Awards
Name ($) (1)
- --------------------------------------- ---------
Joseph N. Ellis 21,000
Ellen Downey 19,000
Thomas L. Dusthimer 19,000
William C. Dixon 19,000
Terrence H. Murphy 13,000
- ---------------------
(1) The dollar amount recognized for financial statement reporting purposes
with respect to fiscal 2007.
Directors who are not employees of the Company are paid an annual
retainer fee of $11,000 for their scheduled services as directors, which
includes four meetings per year. Directors are paid $2,000 for each additional
meeting. Members of the Audit Committee are paid ($2,000 per meeting for
chairman and $1,500 per meeting for other members) for attending Audit Committee
meetings. All fees are paid quarterly in shares of the Company's Common Stock
valued at their closing price on the American Stock Exchange on the third
business day following the release of sales and earnings for the preceding
fiscal year. Under the Company's Stock Plan for Non-Employee Directors, the
directors may elect to defer receipt of their shares until after they leave the
Board by having them delivered to the Trust established under the Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on our records and other information, we believe that during the
fiscal year 2007 all of our directors and executive officers complied with the
reporting requirements of section 16(a) of the Securities Exchange Act of 1934
in a timely manner.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors serves as a focal point
for communications among the Board, the outside auditors and management as their
duties relate to financial accounting, reporting and internal controls. It
reviews the overall plan of the annual independent audit, the financial
statements, the scope of audit procedures, the performance of the Company's
independent auditors, and the independent auditors' evaluation of internal
controls. The Audit Committee assists the Board in fulfilling its fiduciary
responsibilities as to accounting policies, financial reporting practices and
the sufficiency of auditing with respect thereto; however, management has the
primary responsibility for the financial statements and the financial reporting
process. The Audit Committee selects the Company's outside auditors and reviews
and oversees any "related party transactions" with the Company.
The Board has determined that the current members of the Committee,
listed below, are "independent" as defined in Section 121A of the Company Guide
of the American Stock Exchange, and in Rule 10A-3 under the Securities Exchange
Act of 1934 and that the Committee qualifies under Section 121B(2) of the
Company Guide. The Board of Directors has determined that Ellen Downey qualifies
as an "audit committee financial expert" as defined by the rules of the
Securities and Exchange Commission.
The Audit Committee has reviewed and discussed with management the
audited financial statements of the Company for the fiscal year ended December
29, 2007 and has also discussed with Louis Plung & Company, the Company's
independent auditors for that fiscal year, their judgment as to the
acceptability and quality of the Company's accounting principles and the other
matters required by Statement on Auditing Standards 61 to be discussed with the
independent auditors. In addition, the Audit Committee received from Louis Plung
& Company the written disclosures and letter required by Independence Standards
Board Standard No. 1 and has discussed with them their independence from the
Company and its management. The Committee has also considered whether the
provision of nonaudit services to the Company by Louis Plung & Company is
compatible with maintaining their independence. Based on such review and
discussions, the Audit Committee recommended to the Board that the audited
financial statements for the fiscal year ended December 29, 2007 be included in
the Company's Annual Report on Form 10-K for that fiscal year and for filing
with the Securities and Exchange Commission.
Audit Committee: Joseph N. Ellis, Chairman, Ellen Downey, Thomas L. Dusthimer
and William C. Dixon.
8
NOMINATING COMMITTEE REPORT
The Board of Directors has adopted a Resolution which establishes the
Nominating Committee and sets forth its functions. The Resolution provides as
follows:
The Nominating Committee of the Board of Directors shall
consist of two or more directors, each of who shall be an
"Independent Director" as defined in the Company Guide of the
American Stock Exchange LLC ("Amex"), and no director shall
qualify as independent unless the Board affirmatively
determines that he or she does not have a material
relationship with the Company that would interfere with the
exercise of independent judgment. The Committee shall elect
its Chairperson from among its membership. The function of the
Nominating Committee shall be to recommend to the Board
persons to be nominated by the Board for election as directors
and persons to be elected by the Board to fill any vacancies
on the Board.
No employee or Floor Member of the Amex may be nominated as a
director of the Company. The Committee will consider for
recommendation to the Board nominees proposed by the
shareholders entitled to vote who deliver notice to the
Secretary of the Company not less than 45 days nor more than
75 days prior to the first anniversary of the record date for
the preceding year's annual meeting, commencing with the
annual meeting in the year 2005.
The members of the Nominating Committee shall hereafter be
Ellen Downey (Chairperson), Joseph N. Ellis, and Thomas L.
Dusthimer, each of who is an Independent Director who has been
determined by the Board not to have a material relationship
with the Company that would interfere with the exercise of
independent judgment.
No shareholders proposed nominees for election as directors at this
annual meeting. The three nominees approved by the Board were recommended by the
Nominating Committee because of their experience and knowledge of the Company's
business and industry. The Committee considered the following factors in
evaluating proposed nominees:
o the needs of the Company with respect to the particular talents and
experience of its incumbent directors;
o the knowledge, skills and experience of the candidate, including experience
in the markets the Company services, business, finance, in light of
prevailing business conditions, and the knowledge, skills and experience
already possessed by other members of the Board;
o experience with accounting rules and practices;
o references obtained with respect to the candidate;
o the amount of time the candidate can devote to serving on the Board,
and the number of other boards and board committees on which the candidate
serves; and
o the desire to balance the considerable benefit of continuity with the
periodic injection of fresh perspectives provided by new members.
There are no stated minimum criteria for director nominees. None of the
foregoing factors is an absolute requirement. The Nominating Committee will
evaluate all of these factors, and others, as necessary to satisfy the Company's
needs and objectives at the time a candidate is being considered. The Nominating
Committee's goal is to assemble a Board of Directors that brings to the Company
a variety of perspectives and skills derived from high quality business and
professional experience.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
The Board has established a process for stockholders to communicate
with members of the Board. The Chairperson of the Nominating Committee, with the
assistance of the Company's Secretary, is primarily responsible for monitoring
communications from shareholders and providing copies or summaries of such
communications to the other directors, as he or she considers appropriate.
Shareholders who wish to send communications to the Board may do so by writing:
Ellen Downey, Chairperson of the Nominating Committee, c/o the Company's
Secretary, 10011 Pines Blvd. Suite 201, Pembroke Pines, FL 33024.
DISCRETIONARY AUTHORITY
At the time of mailing copies of this proxy statement to stockholders,
the election of directors was the only matter known by management that will be
presented for action at the annual meeting of stockholders. Should any other
matters come before the meeting, action may be taken thereon pursuant to proxies
in the form enclosed, which confer discretionary authority upon the persons
named therein or their substitutes with respect to any such business which may
properly come before the meeting.
9
CONCERNING THE AUDITORS
Louis Plung & Company are the independent public accountants
of the Company and have been selected as the Company's independent public
accountants for the current fiscal year by the Audit Committee.
Representatives of such firm are not expected to be in attendance at the
annual meeting.
AUDIT FEES
The following table presents fees for professional audit services
rendered by Louis Plung & Company for the audit of the Company's annual
financial statements for the fiscal years ended December 29, 2007 and
December 30, 2006, and fees billed for other services rendered by Louis
Plung & Company during those periods.
Audit Fees(1) Audit Related Fees Tax Fees(2) All Other Fees Total
------------- ------------------ ----------- -------------- -------
2007 $48,800 -- $25,000 -- $73,800
2006 $45,500 -- $25,000 -- $70,500
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(1) Professional services rendered for the audit of the Company's financial
statements for the fiscal years ended December 29, 2007 and December 30,
2006, the audit of the Company's 401(k) plan, and the reviews of the
financial statements included in the Company's Forms 10-Q for that fiscal
year.
(2) Professional services rendered for the preparation of the Company's
federal, state, and local tax returns.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITOR
The Audit Committee is responsible for the pre-approval of all audit
and permitted non-audit services performed by outside auditors, and will not
engage outside auditors to perform any non-audit services proscribed by law or
regulation. The Audit Committee may delegate authority for the pre-approval of
all audit and non-audit services to a member of the Committee. All such
approvals will be reported to the Audit Committee at its next scheduled meeting.
The approval of a non-audit service to be performed by the outside auditors
shall be disclosed to the investors in a timely manner in accordance with
applicable regulations.
OTHER INFORMATION
The Nominating Committee will consider nominees recommended by
stockholders for election as directors at the annual meeting in the year 2009 if
information concerning the recommended nominees is received by the Company not
later than February 25, 2009 and not before January 24, 2009.
Stockholder proposals intended to be presented at the annual meeting in
the year 2009 must be received by the Company prior to December 22, 2008 to be
considered for inclusion in the Company's proxy statement and form of proxy for
that meeting.
By Order of the Board of Directors
MICHAEL K. SOLOMON
Secretary
10
DECORATOR INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 29, 2008
The undersigned hereby appoints Michael K. Solomon, Ellen Downey and
Joseph N. Ellis, and each of them (with full power to act without the others and
with full power of substitution), the attorney and proxy of the undersigned to
attend the Annual Meeting of the Stockholders of Decorator Industries, Inc. to
be held at 10011 Pines Blvd., Suite 201, Pembroke Pines, Florida at 9:30 A.M.,
E.D.S.T., on May 29, 2008, and any adjournment thereof, and to vote the number
of shares of Common Stock of the Company which the undersigned is entitled to
vote with all the power that the undersigned would possess if personally
present.
THE PROXIES ARE DIRECTED TO VOTE AS SET FORTH HEREIN. IF NO DIRECTION
IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES NAMED HEREIN. If any of the named nominees is
unavailable for election, such shares may be voted for such substitute nominee
as may be designated by the Board of Directors.
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF
DIRECTORS. PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT IN
THE ENCLOSED ENVELOPE.
(CONTINUED ON REVERSE SIDE)
14475
ANNUAL MEETING OF STOCKHOLDERS OF
DECORATOR INDUSTRIES, INC.
May 29, 2008
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
| | 20300000000000000000 5 052908
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR " ALL NOMINEES
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE,
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x]
- --------------------------------------------------------------------------------
1. Election of Directors:
NOMINEES:
[ ] FOR ALL NOMINEES O William C. Dixon
O Terrence H. Murphy
[ ] WITHHOLD AUTHORITY O Timothy J. Lindgren
FOR ALL NOMINEES
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s),
mark "FOR ALL EXCEPT" and fill in the circle next to each
nominee you wish to withhold, as shown here: O
- --------------------------------------------------------------------------------
2. In their discretion, the proxies may vote upon such other matters as may
properly come before the meeting.
- --------------------------------------------------------------------------------
To change the address on your account, please check the box at right
and indicate your new address in the address space above. Please note
that changes to the registered name(s) on the account may not be [ ]
submitted via this method.
- --------------------------------------------------------------------------------
The undersigned hereby acknowledges receipt of the Annual Report for the fiscal
year ended December 29, 2007 and the notice of Annual Meeting and Proxy
Statement for the 2008 Annual Meeting of Stockholders.
YOUR VOTE IS IMPORTANT TO US. PLEASE COMPLETE, DATE AND SIGN THE PROXY CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
Signature of Stockholder Date:
------------------------------- --------------
Signature of Stockholder Date:
------------------------------- --------------
Note: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.