<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
FILED BY THE REGISTRANT /X/
FILED BY A PARTY OTHER THAN THE REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
WILLCOX & GIBBS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
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:
------------------------------------------------------------------------
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
NOTICE IS HEREBY GIVEN that the 128th Annual Meeting of Stockholders of
Willcox & Gibbs, Inc. (the "Company") will be held at The University Club, One
West 54th Street, New York, New York, at 11:00 A.M. (New York City time) on
Friday, May 12, 1995, for the following purposes:
- to elect three members of the Board of Directors of the Company;
- to amend the Certificate of Incorporation to change the name of the
Company to Rexel North America, Inc.;
- to amend the Certificate of Incorporation to increase the number of
authorized shares of Common Stock of the Company from 35,000,000 to
40,000,000;
- to amend and restate the Certificate of Incorporation to reflect the
foregoing amendments, if approved by the stockholders, and otherwise to
eliminate or revise certain outdated provisions;
- to amend the 1988 Stock Incentive Plan to increase the number of shares
authorized for issuance from 1,266,667 to 2,266,667; to limit the number
of stock options which may be granted to any employee in each calendar
year; and to make certain technical amendments regarding the manner of
determining the number of shares available under the plan; and
- to transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on Friday, March 31,
1995, as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting.
If you will be unable to attend the meeting, you are respectfully requested
to sign and return the accompanying proxy in the enclosed envelope.
By Order of the Board of Directors,
JON O. FULLERTON
Secretary
April , 1995
<PAGE>
[LOGO]
PROXY STATEMENT
This proxy statement is furnished to the stockholders of Willcox & Gibbs,
Inc. (hereinafter referred to as "W&G" or the "Company") in connection with the
solicitation of proxies for the Annual Meeting of Stockholders to be held on May
12, 1995. The address of the Company's principal executive office and the
Company's mailing address is 150 Alhambra Circle, Suite 900, Coral Gables, FL
33134, and the telephone number of its principal executive office is (305)
446-8000. This proxy statement and the enclosed proxy are being sent to
stockholders commencing on or about , 1995.
The enclosed proxy is solicited by the Board of Directors of the Company.
Execution of the proxy will not affect a stockholder's right to attend the
Annual Meeting and to vote in person or to revoke the proxy. A proxy may be
revoked at any time before it is exercised by written notice of revocation
delivered to the Secretary of the Company.
The Company will bear the cost of the solicitation of proxies, including the
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of stock. In addition to the use of the mails,
proxies may be solicited by personal interview, telephone or telecopy. In
addition, the Company has retained Chemical Bank to assist in the solicitation
of proxies, and anticipates that the fees it will incur for this service,
excluding out-of-pocket expenses, will not exceed $5,000.
VOTING SECURITIES OUTSTANDING
The only outstanding class of voting securities of the Company is its Common
Stock, of which there were 24,114,138 shares outstanding at February 6, 1995.
Each share is entitled to one vote.
Only holders of Common Stock of record at the close of business on March 31,
1995 (the "Record Date"), will be entitled to vote at the Annual Meeting of
Stockholders.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following persons were known by the Company to be the beneficial owners
of more than five percent of the outstanding Common Stock as of February 6, 1995
(based on the most recently available Schedule 13G and 13D SEC filings):
<TABLE>
<CAPTION>
NAME AND ADDRESS PERCENT
OF BENEFICIAL OWNER SHARES OWNED OF CLASS
- -------------------------------------------------- ------------ --------
<S> <C> <C>
Rexel, S.A. ("Rexel") 5,917,487(1)(2) 24.5%
26, rue de Londres,75009
Paris, France
International Technical 4,636,994(1) 19.2%
Distributors, Inc. ("ITD")
301 46th Court
Meridian, Mississippi 39305
Spears, Benzak, Salomon & Farrell, Inc. 1,900,351(3) 7.9%
45 Rockefeller Plaza
New York, NY 10111
Fleet Financial Group, Inc. 1,473,941(4) 6.1%
50 Kennedy Plaza
Providence, Rhode Island 02903
Pioneering Management Corporation 1,314,000(5) 5.4%
60 State Street
Boston, MA 02109-1820
<FN>
- ------------------------
(1) Reported in an amended Schedule 13D, dated November 30, 1994, that Pinault
-- Printemps -- Redoute S.A. ("Pinault"), by virtue of its control of Rexel
and, through Rexel, ITD, may be deemed to be the indirect beneficial owner
of the shares of Common Stock held by Rexel and ITD, and may be deemed to
share power to vote or dispose of such shares with such companies. Further
reported that as a result of the relationship among Pinault, Rexel and ITD,
Rexel and ITD may be deemed to share power to vote or dispose of the shares
of Common Stock held directly by each of them with Pinault. Previously
reported, in Schedule 13D, dated November 25, 1992, that Rexel and Pinault
may be deemed to share the power to direct the vote or disposition of the
shares of Common Stock held directly by ITD with Robert Merson, a director
and minority shareholder of ITD and an officer of the Company, and that
pursuant to a shareholders' agreement among Mr. Merson, Rexel and ITD, ITD
may not sell, pledge, assign or otherwise dispose of any shares of the
Common Stock without Mr. Merson's approval (except as may otherwise be
provided).
(2) Rexel and Pinault each filed three late reports on Form 4, reporting a
total of 13 transactions.
(3) Reported beneficial ownership of 1,900,351 shares, with no power to vote
and shared power to dispose of such shares. Reported that the shared power
to dispose of such shares is subject to revocation at any time by the
various customers on whose behalf the shares were purchased.
(4) Reported sole power to vote 33,700 shares and sole power to dispose of
1,440,241 shares.
(5) Reported sole voting power and shared dispositive power for 1,314,000
shares.
</TABLE>
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
As of February 6, 1995, shares of Common Stock were beneficially owned by
directors and nominees for directors, by the executive officers required to be
listed in the Summary Compensation Table below (see "Executive Compensation"),
and by all directors and executive officers as a group, as follows:
<TABLE>
<CAPTION>
PERCENT OF
NAME SHARES OWNED(1) CLASS(2)
- ------------------------------------------------------------ --------------- ----------
<S> <C> <C>
Jules Altshuler 5,000 *
Wayne Campbell 67,183(3) *
Frederic de Castro 2,000 *
John B. Fraser 5,000 *
R. Gary Gentles 2,000 *
Steven M. Hitt 3,194 *
Austin List 4,369 *
Eric Lomas 3,000 *
Robert M. Merson 78,100(4) *
Gerald E. Morris 3,000 *
Nicolas Sokolow 2,000 *
Alain C. Viry 102,000(5) *
Serge Weinberg 3,000 *
John K. Ziegler 141,761(6) *
All Directors and Executive Officers
as a Group 477,649(7) 2.0
<FN>
- ------------------------
* Less than 1%.
(1) The persons included in the table had sole voting and investment power with
respect to shares reported as beneficially owned, except as otherwise
indicated in this and the following notes. With respect to each of Messrs.
de Castro, Fraser, Gentles, List, Lomas, Morris, Sokolow and Weinberg,
includes options to purchase 2,000 shares of Common Stock which are
exercisable within 60 days of February 6, 1995. With respect to Messrs.
Altshuler, Campbell, Merson, Viry and Ziegler, includes options to
purchase, respectively, 4,000, 28,000, 28,000, 102,000 and 24,000 shares of
Common Stock which are exercisable within 60 days of February 6, 1995. With
respect to Messrs. Campbell, Hitt and Ziegler, includes, respectively,
19,183, 194 and 37,585 shares of Common Stock held under the Company's
Employee Stock Ownership Plan as of September 30, 1994, the most recent
date for which such information is available. Voting power with respect to
such shares is shared with the Trustee under such plan.
(2) Percentages are calculated by dividing (x) the number of shares in the
"Shares Owned" column by (y) the sum of the number of shares of Common
Stock outstanding as of February 6, 1995 and the number of shares which a
particular owner (or group of owners) has a right to acquire within 60 days
of such date.
(3) Mr. Campbell resigned as an officer of the Company effective February 10,
1995.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(4) Does not include 4,636,994 shares of Common Stock owned by ITD, of which
Mr. Merson is a vice president and director and in which he owns a 12.96%
interest. Mr. Merson disclaims beneficial ownership of such shares.
(5) Mr. Viry filed one late report on Form 5 reporting one transaction.
(6) Includes 13,510 shares held by Mr. Ziegler as trustee for the benefit of
his wife, as to which Mr. Ziegler has sole voting and investment power. Mr.
Ziegler resigned as an officer and director of the Company on March 18,
1994.
(7) Includes options to purchase 236,000 shares of Common Stock which are
exercisable within 60 days of February 6, 1995. Also includes 78,504 shares
of Common Stock held under the Company's Employee Stock Ownership Plan as
of September 30, 1994, the most recent date for which such information is
available, as to which voting power is shared with the Trustee under such
plan.
</TABLE>
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for the classification
of the Board of Directors into three classes (Class I, Class II and Class III).
At the time of this year's Annual Meeting of Stockholders, the Board will
consist of nine directors.
At this year's Annual Meeting, three Class III directors are to be elected
to serve for three-year terms expiring at the 1998 Annual Meeting. The remaining
six directors in Classes I and II were previously elected by stockholders and
will continue to serve their terms of office, which will expire at the Annual
Meetings to be held in 1996 and 1997, respectively.
In connection with the acquisition by Rexel of 30% of the outstanding Common
Stock from the Company in November 1992 and of additional Common Stock from the
Company on March 1994 raising Rexel's ownership to 40%, Rexel was granted the
right to nominate certain directors pursuant to the terms of the Investment
Agreement between Rexel and the Company (the "Investment Agreement"). Messrs. de
Castro, Lomas, Morris, Viry and Weinberg were previously nominated by Rexel
pursuant to the Investment Agreement. The Investment Agreement expired December
31, 1994. The three nominees for election as Class III directors were nominated
by the Nominating Committee of the Board of Directors.
If any nominee becomes unavailable for any reason or if a vacancy should
occur before the election (which events are not anticipated), the shares
represented by the accompanying proxy may be voted for such other person as may
be determined by the holders of such proxies.
Directors are elected by a plurality vote. Under the Company's Certificate
of Incorporation and By-Laws and under New York law, abstentions and broker
non-votes will not have the effect of votes in opposition to a nominee. The
Board of Directors of the Company recommends that stockholders vote FOR each
nominee listed below.
4
<PAGE>
The following table sets forth information with respect to each nominee for
election as a director of the Company:
<TABLE>
<CAPTION>
NAME OF NOMINEE; YEAR TERM
POSITIONS AND OFFICES WOULD EXPIRE DIRECTOR PRINCIPAL OCCUPATIONS DURING
WITH COMPANY AGE AND CLASS SINCE LAST FIVE YEARS; OTHER DIRECTORSHIPS
- --------------------- --- ------------ -------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Austin List Director 72 1998 1981 Vice Chairman and director of Strahl & Pitsch, Inc. (refiner of
Class III natural waxes) (prior to 1989 to present), Chief Executive Officer
and director of Golding Industries (textile printing) (October 1993
to December 1994); Senior Vice President and director of Johnston
Industries, Inc. (manufacturers of industrial textile fabrics)
(before 1988 to October 1993); director of Worldtex, Inc.; director
and Chairman of the Turkish-U.S. Business Council.
Alain C. Viry 46 1998 1992 President and Chief Executive Officer of the Company (March 1994 to
Director; President Class III present); Executive Vice President of Rexel (electrical parts and
and Chief Executive supplies distribution) (1991 to 1994); Vice President of Finances and
Officer Communication of Rexel (1981 to 1991); director of Guillevin
International, Inc. (electrical parts and supplies distribution).
Nicolas Sokolow 45 1998 1994 Partner, Cabinet, Sokolow, Dunaud, Mercadier & Carreras (law firm)
Director Class III (1994 to present); Partner, Coudert Brothers (law firm) (1981 to
1994).
</TABLE>
The following table sets forth information with respect to those incumbent
directors whose terms will continue after the Annual Meeting:
<TABLE>
<CAPTION>
NAME OF DIRECTOR; YEAR TERM
POSITIONS AND OFFICES EXPIRES AND DIRECTOR PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
WITH COMPANY AGE CLASS SINCE OTHER DIRECTORSHIPS
- --------------------- --- ------------ -------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Frederic de Castro 37 1997 1994 Chief Financial Officer, Rexel, S.A. (electrical parts and supplies
Director Class II distributor) (April 1992 to present); Treasurer, Recticel
(manufacturer of polyurethane) (August 1990 to March 1992); head of
staff of the chief executive officer of Societe General de Belgique
(industrial holding company) (March 1989 to August 1990); director of
Guillevin International, Inc. (electrical parts and supplies
distribution).
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NAME OF DIRECTOR; YEAR TERM
POSITIONS AND OFFICES EXPIRES AND DIRECTOR PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
WITH COMPANY AGE CLASS SINCE OTHER DIRECTORSHIPS
- --------------------- --- ------------ -------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
John B. Fraser 60 1997 1988 President, Geneva Financial Corp. (investment banking) (July 1994 to
Director Class II present); Managing Director, Citibank N.A. (investment banking) (June
1987 to June 1994); director of Worldtex, Inc. (covered yarn
manufacturing).
R. Gary Gentles 46 1996 1993 President, Blue Circle America (cement production) (January 1995 -
Director Class I present); Executive Vice President and President Cement Group of
Lafarge Corporation (cement production) (November 1992 to 1994);
President and General Manager of Platres Lafarge L'Isle-sur-Sorgue
(September 1990 to November 1992); President -- Northeastern Region
of Lafarge Canada, Inc. and Senior Vice President of Lafarge
Corporation (February 1989 to August 1990); director of the Portland
Cement Association.
Eric Lomas Director; 48 1997 1992 President of Hill Thompson Group Ltd. (investment banking) (1989 to
Chairman of the Class II present); co-head of investment banking, Gruntal & Co. (investment
Board banking) (1985 to 1989); trustee of Blanchard Group of Funds;
director of DCI, Inc.; director of Certron Corporation; director of
Diversified Communications Inc.
Gerald E. Morris 62 1996 1994 President, Intalite International N.V. (manufacturing and marketing of
Director Class I commercial ceilings) (1968 to present); President, Morris & Arndt
Associates, Inc. (investment banking) (1988 to present); director,
Beacon Trust Company; trustee, Blanchard Group of Funds.
Serge Weinberg 44 1996 1992 Chairman and Chief Executive Officer of Rexel (electrical parts and
Director; Vice Class I supplies distribution) (1990 to present); Member of Executive Board
Chairman of the of Pinault -- Printemps -- Redoute, S.A. (June 1993 to present);
Board Managing Director of Pallas Finance (corporate finance) (1987 to
1990); director of Guillevin International, Inc. (electrical parts
and supplies distribution).
</TABLE>
6
<PAGE>
COMMITTEES AND MEETINGS
The Company has standing Executive, Audit, Nominating and Executive
Compensation Committees of the Board of Directors. The Executive Committee may
exercise the powers of the Board of Directors (with certain statutory
exceptions) between meetings of the Board. The Audit Committee reviews
accounting matters with Company management and discusses accounting matters with
the Company's independent accountants in connection with the annual audit. The
Nominating Committee considers and recommends nominees for election to the
Company's Board of Directors. The Executive Compensation Committee reviews
compensation matters, including adoption and implementation of benefit plans,
and takes action or makes recommendations with respect thereto. During the 1994
fiscal year, the Executive Committee, composed of Messrs. Gentles, Viry and
Weinberg, held one meeting, the Executive Compensation Committee, composed of
Messrs. Fraser, List and Lomas, held four meetings, the Nominating Committee,
composed of Messrs. Gentles, Viry and Weinberg, held one meeting, the Audit
Committee, composed of Messrs. Fraser, List and Morris, held four meetings, and
the Company's Board of Directors held twelve meetings. Mr. Gentles attended
fewer than 75 percent of the aggregate number of meetings of the Board and of
the committees of which he is a member. On February 28, 1995, Mr. Lomas resigned
from the Compensation Committee and was replaced by Mr. Morris.
COMPENSATION OF OUTSIDE DIRECTORS
Non-employee directors (other than Mr. Lomas and employees of Rexel) are
paid a fee of $1,333 per month and an additional $900 for each meeting attended.
Mr. Lomas is paid $75,000 per year for his services as Chairman of the Board of
Directors of the Company. The Company does not pay any fees to directors who are
employees of Rexel (currently Messrs. Weinberg and de Castro, and prior to his
election as President and Chief Executive Officer, Mr. Viry) in connection with
their service as directors of the Company, but reimburses them for their
reasonable out-of-pocket expenses incurred in connection with attending meetings
of the Board of Directors of the Company and its committees.
Each director of the Company has entered into an Indemnity Agreement with
the Company, which provides that the Company will indemnify each such person to
the fullest extent permitted by law for losses arising in connection with their
service as a director or officer of the Company.
The Company has a retirement plan for directors pursuant to which they are
entitled, upon leaving the Board of Directors for any reason other than removal
for cause, to a quarterly payment (paid in monthly installments) equal to the
quarterly retainer paid by the Company to active directors (excluding meeting
and committee fees) at the time of their retirement under the plan. Such
payments will be made for a period equal to the retired director's service on
the Board (excluding periods during which he also was an employee of the
Company), subject to termination upon the death of the director. A retired
director receiving payments under the plan is required to be available for
consultation with officers of the Company upon their request. [At its March 16,
1995 meeting, the Board of Directors amended the plan to limit benefits so that
increases in the directors' annual retainer and additional years of service
after the 1995 annual meeting will not increase the amount of a director's
retirement benefits.]
Each director of the Company other than one who is an officer or employee of
the Company or an entity in which the Company owns at least a 20% interest (an
"Outside Director") is entitled to receive a stock option under the Company's
1988 Stock Incentive Plan (the "Plan"). Each person who
7
<PAGE>
was an Outside Director at the close of the 1993 Annual Meeting of Stockholders
was granted, as of the date of such meeting, a non-qualified stock option to
purchase 10,000 shares of Common Stock, and the Plan provides that each person
who subsequently becomes an Outside Director will be granted a similar option as
of the date of such person's election to the Board of Directors. The option
price is equal to the fair market value of the Common Stock on the date of the
option grant, and may be paid in cash or shares of Common Stock which have been
owned by the optionee for at least six months (with such shares valued based on
the fair market value of the Common Stock on the date of option exercise). The
option price for options granted in 1993 was $6.5625, the option price for
options granted to Messrs. de Castro and Morris on March 1, 1994, was $8.0625
and the option price for the option granted to Mr. Sokolow on March 18, 1994,
was $7.25. The director options become exercisable, in whole or in part, in 20%
increments on each of the first five anniversaries of the date following the
date of grant, provided the optionee is a director of the Company on such date.
The option expires ten years from the date of grant, subject to earlier
termination upon termination of the optionee's service as a director. However,
if the optionee dies during his or her period of service as a director, the
optionee's legal representative will have the right to exercise the option for a
period of twelve months after the optionee's death, even if such option would
otherwise have expired earlier. An option exercised after termination of service
can only be exercised to the extent it was exercisable at the time of such
termination of service. Stock options granted to Outside Directors are not
transferable except by will or by the laws of descent and distribution.
Each option granted to an Outside Director is granted in tandem with a
limited stock appreciation right which entitles the optionee to elect to receive
within 60 days following the occurrence of a Change of Control (as defined in
the Plan), in lieu of exercising the option, a payment equal to the product of
the number of shares as to which the stock appreciation right is exercised
multiplied by the excess of the Change of Control Price (as defined in the Plan)
over the exercise price of the related option. See "Executive Compensation --
Change of Control Provisions" for the definition of "Change of Control" under
the Plan.
At its March 16, 1995 meeting, the Board of Directors took action to amend
the Plan, subject to stockholder approval, to, among other things, provide for
an annual grant of a stock option to purchase 2,500 shares of Common Stock to
each director (other than the Chairman of the Board) who is not an employee of
either the Company or Rexel, and an option to purchase 5,000 shares of Common
Stock to the Chairman of the Board (if he is not an employee of the Company or
Rexel). Under the amendment, each such grant would be made following the annual
meeting of stockholders each year, but only if the Company's earnings per share
for the preceding year were at least 110% of the Company's earnings per share
for the year before that. See "Proposal to Amend the 1988 Stock Incentive Plan."
On March 1, 1995 the Executive Compensation Committee granted Mr. Lomas an
option to purchase 30,000 shares of Common Stock at an exercise price of
$6.3125, its fair market value, subject to stockholder approval of the Amendment
and Restatement of the Plan.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation of the
Chief Executive Officers of the Company during 1994 and the four most highly
compensated executive officers of the Company other than the CEOs.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------------------
ANNUAL COMPENSATION SECURITIES
RESTRICTED UNDERLYING
---------------------- STOCK AWARDS OPTIONS/SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (#) COMPENSATION ($)
- --------------------------------------------- --------- ---------- ---------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Alain C. Viry, 1994 $237,500 $ 75,000 None 100,000
President and Chief Executive Officer;
President and Chief Executive Officer of The
Summers Group, Inc. (1)
John K. Ziegler, 1994 93,750 90,000 None None $1,257,005(3)
Former Chairman of the Board, President and 1993 375,000 109,057 None 120,000 2,500
Chief Executive Officer (2) 1992 375,000 None (4) None 4,105,573(4)
Robert M. Merson, 1994 200,000 100,000 None None 7,024(5)
Senior Vice President; President and CEO of 1993 200,000 65,434 None 70,000 4,001
Southern Electric Supply Company; President
of W&G Eastern Region
Jules Altshuler, 1994 147,000 202,000 None None None
Vice President; President of W&G Midwest
Division
Steven M. Hitt, 1994 152,500 168,520 None None 9,259(6)
Vice President and Chief Financial Officer;
Executive Vice President of The Summers
Group, Inc.
Wayne Campbell, 1994 200,000 None None None 2,500(8)
Vice President; 1993 200,000 65,434 None 70,000 2,500
President of Consolidated Electric Supply 1992 200,000 50,000 None None 2,500
Division (7)
<FN>
- ------------------------------
(1) Elected President and Chief Executive Officer effective March 18, 1994,
subsequent to Mr. Ziegler's resignation.
(2) Resigned as an officer and director of the Company, effective March 18,
1994. See "-- Employment Contracts" below.
(3) Includes $625 contributed by the Company under a defined contribution plan.
Also includes $750,000 representing 200% of Mr. Ziegler's current salary
and $506,380 representing an accelerated payment of deferred compensation,
both payable pursuant to a Severance Agreement between the Company and Mr.
Ziegler in settlement of his rights under his employment contract. See "--
Employment Contracts" below.
(4) Pursuant to Mr. Ziegler's employment contract with the Company, as a result
of the "Change of Control" of the Company (as defined in such contract) in
1992, Mr. Ziegler was entitled to a lump sum cash payment of $4,596,813 if
he terminated employment at his or the Company's election. In lieu thereof,
Mr. Ziegler and the Company entered into an agreement pursuant to which the
Company paid to Mr. Ziegler $932,219, issued to him 228,362 shares of
Common Stock of the Company subject to restrictions on transfer and a risk
of forfeiture that were scheduled to terminate as to one third of such
shares on each of the first three anniversaries of November 12, 1992, and
agreed to pay Mr. Ziegler $25,319 per month for 36 months commencing
December 1, 1992. Pursuant to Mr. Ziegler's agreement with the Company, the
restrictions on these shares terminated on March 1, 1994, as a result of
the increase in Rexel's beneficial ownership of W&G common stock to 40%.
The value of these shares was $1,227,451 on March 1, 1994.
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
(5) Reflects Company contributions under a defined contribution plan.
(6) Reflects Company contributions under defined contribution plans.
(7) Resigned as an officer of the Company, effective February 10, 1995.
(8) Includes $2,500 in Company contributions under a defined contribution plan.
Also includes $200,000 representing one year's salary and $36,000 in
consulting fees, both payable pursuant to a Severance and Consulting
Agreement between the Company and Mr. Campbell in settlement of rights
under his employment contract. See "-- Employment Contracts" below.
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL POTENTIAL REALIZABLE VALUE
UNDERLYING OPTIONS/ AT ASSUMED ANNUAL RATES OF
OPTIONS/ SARS GRANTED EXERCISE STOCK PRICE APPRECIATION
SARS TO EMPLOYEES OR BASE FOR OPTION TERM (3)
GRANTED IN FISCAL PRICE EXPIRATION DATE --------------------------
NAME (#) (1) YEAR ($/SH) (2) 5% ($) 10% ($)
- ------------------------------ ---------- ------------ ---------- ------------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alain C. Viry 100,000 76.92% $ 6.50 May 12, 2004 $ 409,000 $ 1,036,000
All stockholders (4) N/A N/A N/A N/A 98,626,824 249,822,470
<FN>
- ------------------------------
(1) The option is exercisable immediately and was granted in tandem with a
limited SAR applicable in the event of a "Change of Control" of the
Company. See "-- Change of Control Provisions" below.
(2) The stock option is subject to termination prior to its expiration date in
the event of a termination of employment.
(3) This information is provided pursuant to the rules of the Securities and
Exchange Commission. Using $6.50, the market price of the Company's common
stock on the date of the option grant, the 5% and 10% rates of appreciation
would result in per share prices of 10.59 and 16.86, respectively at the
end of the 10-year option term. This presentation is not a prediction of
possible future prices of the Company's common stock.
(4) For "All Stockholders", the potential realizable value is calculated from
$6.50, the market price of the Company's common stock on the date of the
option grant, and the 24,114,138 outstanding shares of Company common stock
on such date.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
(1)
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS/SARS AT FY-END
----------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------ ----------- ---------------
<S> <C> <C>
Alain C. Viry..................................................... 102,000 8,000
John K. Ziegler................................................... 24,000 None
Robert M. Merson.................................................. 28,000 42,000
Jules Altshuler................................................... 4,000 16,000
Steven M. Hitt.................................................... None None
Wayne Campbell.................................................... 28,000 42,000
<FN>
- ------------------------------
(1) No options were exercised by the executive officers named in the table in
1994. Such executive officers held no unexercised in-the-money stock
options or SARs at fiscal year end.
</TABLE>
10
<PAGE>
RETIREMENT PLANS
Prior to July 1994, the Company maintained a non-contributory defined
benefit retirement plan, under which eligible employees were entitled at normal
retirement age of 65 to an annual retirement benefit equal to 1 1/4% of their
earnings for each year of service up to the maximum earnings subject to Social
Security withholding for that year, and 1 1/2% of all earnings for each year of
service in excess of such amount, subject to an earnings limitation imposed
under the Internal Revenue Code for years beginning 1989. Effective as of July
1994, in connection with the disposition of the Company's apparel division, the
Company transferred the assets and liabilities of this plan to the purchaser of
the apparel division. As a result of the transfer, employees who remained with
the Company ceased accruing benefits under the plan. The estimated annual
retirement benefits payable at age 65 to the executive officers named in the
Summary Compensation Table above are as follows: to Mr. Campbell, $28,920 (based
on earnings and service to the date of plan transfer), and to Mr. Ziegler,
$89,664 (based on earnings and service to the date of his resignation on March
18, 1994). Messrs. Viry, Altshuler, Hitt, and Merson do not participate in this
plan.
Mr. Altshuler is a participant in the Retirement Plan for the Non-Bargaining
Employees of Sacks Electrical Supply Company. Benefits under the plan were
frozen as of December 31, 1994 and the plan was terminated effective February
22, 1995. Mr. Altshuler's estimated annual benefit payable at age 65 under the
plan is $15,600.
Under the Company's supplemental retirement plan, key employees selected by
the Executive Compensation Committee are entitled to an amount, payable monthly
over a ten-year period following retirement, equal to a percentage (up to 40%)
determined by the Committee of the portion (determined by the Committee) of the
employee's base salary for the Company's last full fiscal year prior to
retirement, multiplied by the employee's years of participation in the plan (not
exceeding 10), and subject to the plan's vesting requirements (10 years for full
vesting). Thus, upon normal retirement at age 65 (or, if later, ten years as a
participant), an employee receiving the maximum award possible under the plan
will receive a total retirement benefit of 400% of base salary. The plan
provides a similar benefit in the event of death or disability prior to normal
retirement, and a lesser benefit in the event of certain other terminations of
employment. Under the plan, Mr. Campbell will receive annual benefits of $51,737
for ten years commencing upon his resignation on February 10, 1995. Mr.
Ziegler's benefits under this plan, as modified by his employment contract, are
set forth under "-- Employment Contracts" below. Messrs. Viry, Altshuler, Hitt,
and Merson do not participate in this plan.
EMPLOYMENT CONTRACTS
Mr. Viry has a contract with the Company providing for services in a senior
executive capacity for a three-year term expiring March 1997, which renews
automatically for successive one-year terms. The contract may be terminated by
the Company or Mr. Viry upon certain specified notice periods ranging from six
months to immediately, depending on the circumstances. The contract provides for
a minimum salary of $300,000 per annum and for bonuses as approved by the
Executive Compensation Committee in accordance with the incentive plan then
applicable to executive officers of the Company with a minimum bonus of $75,000
for his service in 1994.
11
<PAGE>
Mr. Altshuler has a contract with a subsidiary of the Company for a term
ending April 1996, subject to earlier termination under certain circumstances,
at a minimum annual salary of $147,000. His contract provides for a bonus based
on the results of such subsidiary, but beginning in 1995 his bonus will be based
on the results of the W&G Midwest Division.
Mr. Campbell had a contract with the Company providing for services in a
senior executive capacity for an indefinite period, which was subject to
termination by either the Company or Mr. Campbell on one year's notice, at the
minimum salary of $200,000 per annum. Mr. Campbell resigned as an officer of the
Company, effective February 10, 1995. Pursuant to a Severance and Consulting
Agreement between the Company and Mr. Campbell, Mr. Campbell will receive a
salary of $200,000 per annum through February 10, 1996 and, in addition, will
receive $4,311 for 120 consecutive months commencing March 11, 1995, which
represents payments due to Mr. Campbell pursuant to the Company's supplemental
retirement plan (see above). Mr. Campbell will also be paid the sum of $2,000
per month for 18 months commencing March 11, 1995, for his availability to
consult with the Company up to 15 business days per year in connection with
various Company matters.
Mr. Hitt has a contract with the Company to serve as Chief Financial Officer
at a base salary of no less than $160,000 per annum. His contract provides for a
1994 bonus based on results of The Summers Group, Inc. and thereafter in
accordance with the bonus plan applicable to executive officers of the Company.
The contract is subject to termination by either party upon 30 days' notice.
Upon termination by the Company, Mr. Hitt is entitled to severance pay equal to
twelve months' salary.
Mr. Merson has a contract with the Company to serve as president and chief
executive officer of Southern Electric Supply Company, Inc., a subsidiary of the
Company ("SES"), and to serve as a Senior Vice President and a member of the
Office of the President of the Company. The agreement has a term continuing
through November 12, 1997, subject to (i) termination by either party upon one
year's notice and (ii) immediate termination by the unanimous vote of all the
members of the Executive Committee of the Board of Directors of the Company. Mr.
Merson's contract provides for a base salary of no less than $200,000 per annum.
Beginning with 1995, Mr. Merson will be covered under the bonus plan applicable
to executive officers of the Company. Mr. Merson is required not to compete with
the Company for a period of three years after the termination of his employment
with the Company, and if Mr. Merson's employment is terminated on one year's
notice or upon immediate notice approved by the Executive Committee of the
Company, the Company will pay Mr. Merson $3,333.33 per month during such three
years.
Mr. Ziegler had a contract with the Company providing for services in a
senior executive capacity for an indefinite period, subject to termination on
two years notice by the Company or not less than six months notice by Mr.
Ziegler, at a minimum salary of $375,000 per annum. Under the contract, Mr.
Ziegler was entitled to an annual bonus no less than 25% of the first $1,000,000
available for distribution under the Company's Incentive Compensation Plan and
no less than 10% of all additional amounts available thereunder. In addition,
the contract supplemented Mr. Ziegler's retirement benefits under the Company's
supplemental retirement plan (see "Retirement Plans" above) so that the
aggregate benefits from both sources would be increased from $12,500 per month
over 120 months to $16,667 per month over 180 months.
Mr. Ziegler resigned as an officer and director of the Company, effective
March 18, 1994. Pursuant to a Severance Agreement between the Company and Mr.
Ziegler, Mr. Ziegler was provided benefits as
12
<PAGE>
if his contract had been terminated by the Company as of March 31, 1994,
including $750,000, representing 200% of Mr. Ziegler's then current salary,
$90,000, representing payment of a bonus for three months of 1994, $109,057,
representing Mr. Ziegler's 1993 bonus, $506,380, representing an accelerated
payment of the remaining 20 installments of deferred compensation payable under
Mr. Ziegler's employment contract, and $93,750, representing Mr. Ziegler's
salary through March 31, 1994. As prescribed by Mr. Ziegler's employment
contract and the Company's supplemental retirement plan, Mr. Ziegler will be
paid 180 monthly payments of $13,890; in addition, pursuant to a consulting
agreement called for by the Severance Agreement, in accordance with the
supplemental retirement plan, he is entitled to 120 monthly payments of $2,777
with each monthly payment offset by the amount of compensation earned from other
employment. Commencing July 13, 1994, such payments were fully offset by such
other compensation. Mr. Ziegler's options to purchase 24,000 shares of Company
Common Stock vested as scheduled on March 25, 1994. A $100,000 loan made to Mr.
Ziegler in 1979, scheduled to be paid in seven annual installments after his
departure, and the Company's obligation to pay Mr. Ziegler $100,000 over ten
years after his departure were forgiven. Mr. Ziegler agreed to purchase from the
Company a car used by him at its net book value.
CHANGE OF CONTROL PROVISIONS
The Company's 1988 Stock Incentive Plan provides that, if there is a Change
of Control of the Company (as defined below), unless otherwise determined by the
Executive Compensation Committee at the time of grant, all stock options and
SARs granted under the Plan which are not then exercisable will become fully
exercisable and vested and the restrictions and deferral limitations applicable
to restricted stock and deferred stock granted under the Plan will lapse and
such shares and awards will be deemed fully vested. To the extent the cash
payment of any award is based on the fair market value of Company Common Stock,
such fair market value shall be the Change of Control Price, as defined below.
A Change of Control occurs on the date a person or group (other than the
Company and certain of its affiliates or Rexel and its affiliates) becomes a 25%
beneficial owner of the voting securities of the Company, the date on which
one-third or more of the Board of Directors consists of persons other than
Current Directors (as defined) or the date of approval by stockholders of
certain agreements providing for merger, consolidation or disposition of all or
substantially all assets. The Change of Control Price will be the highest price
per share of Company Common Stock paid in any open market transaction, or paid
or offered to be paid relating to a Change of Control of the Company, at any
time during the 90-day period ending with the Change of Control.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program consists of the following key
elements: base salary, annual bonuses and periodic grants of stock options.
BASE SALARY. Most of the Company's executive officers have employment
contracts providing for a minimum base salary. The amounts of such base salary
were generally determined by negotiation with such officers, and were largely
influenced by the base salaries historically paid to them. In the case of
certain subsidiaries which were acquired by the Company in the last several
years, salary arrangements with key employees who have subsequently become
executive officers of the Company were negotiated as part of the applicable
acquisition agreement. Mr. Viry's employment contract was negotiated between him
and Rexel, the owner of approximately 40% of the Company's stock, and was
13
<PAGE>
approved by the Executive Compensation Committee. Mr. Ziegler's employment
contract was negotiated with the Company in 1992. Base salary rates paid by the
Company are generally intended to be at or below the average for comparable
positions with similar companies in the electrical supply distribution industry,
with the opportunity for significant bonuses if certain financial results are
achieved.
BONUSES. In previous years, pursuant to the Company's Incentive
Compensation Plan, the Company set aside for payment of bonuses a specified
portion of its consolidated net earnings before taxes (as defined) in excess of
12% of consolidated net worth (as defined). Bonuses were allocated from this
pool to key employees by the Executive Compensation Committee based on their
relative base salary and other evaluations of their performance. During 1994,
the Committee determined to discontinue the Incentive Compensation Plan and to
adopt a program beginning in 1995 in which bonuses will be based on the extent
to which pre-established performance goals have been satisfied. During the
transition period between the two programs, bonuses were determined on an ad hoc
basis, with the bonus of certain executive officers determined pursuant to their
employment contracts. Mr. Ziegler's employment contract provided for a specified
portion of the bonus pool under the Incentive Compensation Plan to be paid to
him. The Severance Agreement with Mr. Ziegler entered into upon his resignation
in March 1994 included a payment of $90,000 representing three months' bonus for
1994. Mr. Viry's employment contract, which was negotiated with Rexel and
approved by the Committee, provided for a fixed bonus of $75,000 for his service
in 1994. See "-- Employment Contracts" above.
STOCK OPTIONS. Stock option grants are intended to provide incentives for
superior long-term future performance and to create and maintain in the Company
the entrepreneurial environment and spirit of a small company. The number of
stock options awarded to a particular employee is based on the Committee's
subjective judgment. In general, the Committee expects to grant the largest
awards to the Company's Chief Executive Officer and other senior management due
to their substantial influence on the Company's performance. During 1994 the
only stock options granted by the Committee were an option to purchase 100,000
shares granted to Mr. Viry and an option to purchase 30,000 shares granted to an
executive officer not named in the Summary Compensation Table.
EXECUTIVE COMPENSATION COMMITTEE
Eric Lomas, Chair
John B. Fraser
Austin List
The information above under the caption "Board Compensation Committee Report
on Executive Compensation" and under the caption "Performance Graph" below shall
not be deemed to be incorporated by reference into any filing by the Company
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that the Company expressly states in any
such filing that such information under either or both such captions is
incorporated by reference therein.
14
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total shareholder return for the
periods indicated of (1) the Company's Common Stock, (2) a New York Stock
Exchange Market Value Index, (3) an index of textile weaving companies published
by Media General Financial Services, Inc. ("MGFS"), and (4) an index of
electrical supply distribution companies (Primary SIC Code 5063) published by
MGFS, all based on information provided by MGFS. In each case the graph assumes
an investment of $100 on December 31, 1989 and that all dividends were
reinvested. Until November 12, 1992, the Company was engaged in both lines of
business reflected in the graph. On November 12, 1992, the Company declared a
distribution of its textile business as a dividend to shareholders. The graph
has been constructed on the assumption that the shares received as such dividend
were sold and the proceeds reinvested in the Company's Common Stock on December
15, 1992, the date on which the Company's Common Stock traded "Ex-Dividend."
[CHART]
<TABLE>
<CAPTION>
ELECTRICAL
NYSE TEXTILE DISTRIBUTION
YEAR END W&G INDEX INDEX INDEX
- -------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
1989........................................ 100 100 100 100
1990........................................ 45.42 95.92 86.17 80.15
1991........................................ 62.87 124.12 120.81 136.00
1992........................................ 102.44 129.96 144.73 155.68
1993........................................ 158.78 147.56 -- 164.85
1994........................................ 120.37 144.69 -- 162.34
</TABLE>
15
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
John B. Fraser, Austin List and Eric Lomas served on the Executive
Compensation Committee during 1994. Mr. Lomas has served as Chairman of the
Board of the Company since March 1994, and is paid $75,000 per annum for such
service. During 1994 the Company paid to Hill Thompson Capital Markets, of which
Mr. Lomas is President, a fee of $540,000 for its financial advisory services in
connection with the disposition of the Company's apparel division in July 1994
for consideration valued at approximately $43.7 million. On February 28, 1995,
Mr. Lomas resigned from the Executive Compensation Committee.
CERTAIN TRANSACTIONS
Outstanding indebtedness of Mr. Ziegler to an affiliate of the Company in
the amount of $100,000, incurred in March 1979, provided for repayment on an
interest-free basis in seven annual installments over a period commencing in the
year of termination of employment with the Company. This indebtedness was
cancelled in connection with Mr. Ziegler's resignation from the Company. See
"Executive Compensation -- Employment Contracts" above.
C.E.S. Industries, Inc. a subsidiary of the Company, made an advance to Mr.
Viry, which bears interest at a rate of 7.69% per annum, to assist him in
purchasing a new residence in connection with his relocation from Paris, France
to Coral Gables, Florida at the request of the Company. The highest amount
outstanding on the advance during 1994 was $980,000 and the balance, secured by
a first mortgage on the residence, was $718,841 at February 6, 1995. Any gain
recognized on resale of the residence will be divided between Mr. Viry and
C.E.S. in the proportion that the principal amount outstanding bears to the
total resale price. Any loss will be borne by C.E.S.
The Company made a loan to Mr. Campbell, which bears interest at a rate of
8 1/2% per annum, to assist him in purchasing a new residence in connection with
his relocation from Atlanta, Georgia to Miami, Florida at the Company's request.
The highest amount outstanding on the loan during 1994 was $118,617 and the
balance was $108,388 at February 6, 1995.
The Company's SES subsidiary leases eleven facilities from Mr. Merson and/or
members of his or his wife's family, for terms extending through 2002. The
Company believes that these leases are on terms at least as favorable as SES
could have obtained from an unaffiliated third party.
In connection with the Purchase Agreement, dated as of April 22, 1992, among
the Company, Rexel, ITD and SES pursuant to which Rexel acquired approximately
30% of the outstanding Common Stock of the Company, the Company was required to
accelerate the exercisability of outstanding employee stock options to purchase
Company Common Stock. In order to enable employees of the Company to exercise
such options, Worldtex, Inc., which was at the time a subsidiary of the Company,
agreed to guarantee loans made by NationsBank of Florida, N.A., to such
employees in amounts up to the aggregate exercise price of each borrower's
options. The loans are payable over four years and bear interest at the prime
rate of NationsBank plus 1/2% per annum (6 1/2% as of the date of the loans and
as of February 6, 1995, and each borrower's obligation to reimburse Worldtex for
any payment under its guarantee is secured by a pledge of the stock received
upon exercise of the employee's option. Pursuant to this program, Worldtex
guaranteed loans in an aggregate principal amount of $3,498,577 (for all Company
and Worldtex employees participating), including a loan of $572,000 to Mr.
Ziegler and no loans to the other executive officers of the Company required to
be named in the Summary
16
<PAGE>
Compensation Table. During 1994, the largest amount of indebtedness outstanding
with respect to the loan to Mr. Zeigler was $556,113 and the balance thereof as
of February 6, 1995 was $349,557. In connection with the Purchase Agreement, all
of the stock of Worldtex was distributed as a dividend to the stockholders of
record of the Company as of November 23, 1992.
On December 10, 1993, the Company, Rexel and ITD entered into a Purchase
Agreement (the "Purchase Agreement"), pursuant to which, on March 1, 1994, the
Company issued additional shares of Common Stock to Rexel, at a price of $9 per
share, which increased Rexel's beneficial ownership of the outstanding Common
Stock from 30% to 40%, and the Company, Rexel and ITD amended the Investment
Agreement. Pursuant to such amendment, the termination date of the Investment
Agreement was changed from November 12, 1997, to December 31, 1994 (except that
the provisions relating to the maintenance of directors' and officers' liability
insurance will continue in effect through November 12, 1997), the number of
directors of the Company was reduced from ten to nine during the term of the
Investment Agreement and Rexel became entitled to nominate five of the nine
directors of the Company during the term of the Investment Agreement.
In January 1994, the Company engaged Hill Thompson Capital Markets to act as
its financial advisor in connection with the Company's efforts to dispose of its
apparel parts and supplies distribution businesses, for which it was paid a fee
of $540,000 as a result of the consummation of such disposition. Mr. Lomas is
President of Hill Thompson.
The Company has contracts for insurance coverage with National Union Fire
Ins. Co. and Reliance Insurance Co., entered into on May 13, 1994 under which
the Company's directors and officers (as well as the Company) are indemnified
under certain circumstances with respect to litigation and other costs and
liabilities arising out of actual or alleged misconduct of such directors and
officers. The Company pays 100% of all premiums ($162,500 for the period ending
May 11, 1995) to the insurers.
PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO CHANGE THE
COMPANY'S NAME TO "REXEL NORTH AMERICA, INC."
The Board of Directors has authorized and approved, subject to stockholder
approval, an amendment to Article First of the Company's Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), changing the
Company's name to "Rexel North America, Inc." (the "Name Change Amendment"). The
Certificate of Incorporation, as proposed to be amended and restated at the
annual meeting, is set forth in Exhibit A to this Proxy Statement, and the Name
Change Amendment is set forth in Article First thereof. It is contemplated that,
if the Name Change Amendment is approved by the Company's stockholders, it will
be filed in accordance with the laws of the State of New York so as to become
effective as soon as practicable thereafter. If the Name Change Amendment and
the other amendments to be proposed at the annual meeting are approved, the
Certificate of Incorporation will be amended and restated in its entirety as set
forth in Exhibit A.
BACKGROUND OF THE CHANGES
In 1992, Rexel acquired 30% of the Company's Common Stock, and it has
subsequently increased its ownership to 43.7% as of February 6, 1995. Rexel is a
major supplier of electrical equipment, with operations in 13 countries. The
Company has called upon Rexel's expertise and strengths in the
17
<PAGE>
electrical distribution business in connection with the Company's business, and
the Company expects it will increasingly do so in the future. In addition, the
name "Willcox & Gibbs" has been primarily associated with the Company's apparel
equipment and parts distribution business, which was divested by the Company in
1994. As a result, the Board of Directors has determined that the Company's name
should be changed to "Rexel North America, Inc."
The Company believes that the cost associated with the change will be
approximately $100,000. Little advertising will be required, as the Company
conducts all of its business under the names of its various subsidiaries.
Stockholders are not required to turn in their stock certificates for new
certificates should this proposal be adopted.
VOTE REQUIRED FOR THE PROPOSAL
Approval of the Name Change Amendment requires the affirmative vote of a
majority of the Common Stock outstanding on the Record Date. Under the Company's
Certificate of Incorporation and By-Laws and under New York law, abstentions and
broker non-votes will have the effect of a "no" vote on this proposal.
Your directors recommend that stockholders vote FOR the approval and
adoption of the Name Change Amendment.
PROPOSED AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION INCREASING THE
NUMBER OF SHARES OF AUTHORIZED COMMON STOCK
The Board of Directors has authorized and approved, subject to stockholder
approval, an amendment to Article Third of the Company's Certificate of
Incorporation, increasing the number of authorized shares of Common Stock by
5,000,000 shares, from 35,000,000 to 40,000,000 shares (the "Common Stock
Amendment"). The Certificate of Incorporation, as proposed to be amended and
restated at the annual meeting, is set forth in Exhibit A to this Proxy
Statement, and the Common Stock Amendment is set forth in Article Third thereof.
It is contemplated that, if the proposed amendment is approved by the Company's
stockholders, it will be filed in accordance with the laws of the State of New
York so as to become effective as soon as practicable thereafter. If the Common
Stock Amendment and the other amendments to be proposed at the annual meeting
are approved, the Certificate of Incorporation will be amended and restated in
its entirety as set forth in Exhibit A.
BACKGROUND OF THE CHANGES
The Company's authorized common stock presently consists of 35,000,000
shares of Common Stock, par value $1 per share. As of February 6, 1995,
24,705,233 shares of Common Stock were issued and outstanding, 591,095 shares
were held in the Company's treasury, 5,224,660 shares were reserved for issuance
pursuant to the Company's 7% Convertible Subordinated Debentures due 2014, and
815,753 shares were reserved for issuance pursuant to employee benefit plans.
Accordingly, as of February 6, 1995, only 4,845,449 shares of Common Stock
remain available for issuance. (In addition, if the proposed increase in shares
authorized for issuance under the 1988 Stock Incentive Plan is approved, an
additional 1,000,000 shares of Common Stock will be reserved for issuance,
leaving only 3,845,449 available shares.)
18
<PAGE>
The Board of Directors believes it is desirable to have authorized, unissued
and unreserved shares of Common Stock available for purposes such as financings,
acquisitions, stock dividends and stock splits. The presence of an adequate
supply of authorized, unissued and unreserved shares of Common Stock provides
flexibility by allowing shares to be issued without further action by the
stockholders unless such action is required in a specific case by applicable law
or the rules of any exchange on which the Company's securities may then be
listed.
The additional shares of Common Stock which will be authorized by the
proposed amendment will have the same rights and privileges as the shares of
Common Stock currently authorized and issued, and will be available for issuance
without further action by the Company's stockholders unless such action is
required by applicable laws, rules and regulations. The Company cannot predict
the prices at which the additional shares of Common Stock will be sold. Except
as noted herein, the Company does not have any present plans, proposals,
commitments, understandings or arrangements which would result in the issuance
of any shares of Common Stock. Holders of shares of Common Stock are not
entitled to preemptive rights.
OTHER CONSIDERATIONS
Although the Board of Directors does not deem the proposed amendment to be
an "anti-takeover" proposal, the amendment could be considered as having the
effect of discouraging an attempt by another person to acquire control of the
Company since the issuance of additional shares of Common Stock could be used to
dilute the stock ownership of such person or could be sold to persons who might
side with the Board of Directors of the Company in opposing a takeover bid. The
proposed amendment is not part of a plan or arrangement intended to have an
anti-takeover effect, and management has no present intention to propose
additional measures to stockholders that might have such an effect. Management
reserves the right, however, as laws, interpretations thereof, or circumstances,
in Management's judgment, suggest a need for the same, to recommend such
measures to the stockholders.
The Company currently has provisions in its Certificate of Incorporation and
By-Laws which are intended to reduce the detrimental effects associated with
certain unsolicited takeover proposals. The following is a brief summary of such
provisions and does not purport to be complete. The summary is subject in all
respects to the provisions of the Certificate of Incorporation and By-Laws,
which are available from the Secretary of the Company, and to the laws of the
State of New York.
Pursuant to the Certificate of Incorporation, the Company's Board of
Directors is divided into three classes, each of which must consist of at least
three directors who serve for a term of three years, with one class being
elected each year. The directors have sole authority to increase (to a maximum
of twelve directors) or decrease (to a minimum of nine directors) the size of
the Board and to fill all vacancies. Directors may be removed only for cause.
Only the Board of Directors is authorized to call special meetings of the
stockholders, and the written consent of all stockholders is required for action
without a meeting. The affirmative vote of the holders of 75% of the stock
entitled to vote for the election of directors is required to amend the
foregoing provisions or adopt any provision of the Certificate of Incorporation
or By-Laws inconsistent therewith.
The Certificate of Incorporation further provides that a merger,
consolidation or other specified business combination (a "Business Combination")
involving a holder of at least ten percent of the voting stock of the Company (a
"Related Person") must be approved by the holders of 75% of the voting power of
the Company's outstanding shares unless certain approvals are given by at least
a
19
<PAGE>
majority of the Company's directors who were directors before the Related Person
became a Related Person or, if the Business Combination is a merger or
consolidation, certain minimum price requirements are met. The affirmative vote
of the holders of 75% of the outstanding voting power is required to repeal or
amend the foregoing provision. Rexel is not a Related Person because its
acquisition of 30% of the Common Stock was approved in advance by the Company's
directors.
In addition, the Company's stockholders have authorized two million shares
of Preference Stock (which will be redesignated as "Preferred Stock" if the
Restatement Amendment, described below, is adopted by the stockholders). Under
the terms of such authorization, the Board of Directors may issue the Preference
Stock from time to time in one or more series and may fix the dividend rates,
voting rights and liquidation preferences and establish redemption, sinking
fund, conversion, exchange and other relative rights, preferences and
limitations of particular series.
VOTE REQUIRED FOR THE PROPOSAL
Approval of this proposed amendment of the Certificate of Incorporation
requires the affirmative vote of a majority of the Common Stock outstanding on
the Record Date. Under the Company's Certificate of Incorporation and By-Laws
and under New York law, abstentions and broker non-votes will have the effect of
a "no" vote on this proposal.
Your directors recommend that stockholders vote FOR the approval and
adoption of the Common Stock Amendment.
PROPOSED AMENDMENT AND RESTATEMENT OF THE CERTIFICATE OF
INCORPORATION TO REFLECT THE NAME CHANGE AMENDMENT AND THE
COMMON STOCK AMENDMENT, IF APPROVED, AND TO ELIMINATE OR AMEND
CERTAIN OUTDATED PROVISIONS
The Board of Directors has authorized and approved, subject to stockholder
approval, amendments to the Company's Certificate of Incorporation to amend and
restate the Certificate of Incorporation to reflect the Name Change Amendment
and the Common Stock Amendment, if approved by the stockholders, and otherwise
to eliminate or revise certain outdated provisions (the "Restatement
Agreement"). The amendments with respect to the outdated provisions relate to
changing the purpose for which the Corporation was formed to any purpose
permitted by law; deleting Article Fourth, which specifies that the Corporation
shall have perpetual existence, and then redesignating Section D, Article Third
as Article Fourth; changing the reference in Article Sixth from "principal place
of business" to "office"; deleting references to authorized shares of Preferred
Stock, none of which is outstanding; deleting provisions setting forth the terms
of the Series A Junior Preference Stock and the Series B Junior Preference
Stock, none of which is outstanding; and changing references to "Preference"
stock to "Preferred" stock. The Certificate of Incorporation, as proposed to be
amended and restated, is set forth in Exhibit A to this Proxy Statement. It is
contemplated that, if the proposed amendment and restatement is approved by the
Company's stockholders, it will be filed in accordance with the laws of the
State of New York so as to become effective as soon as practicable thereafter.
If either the Name Change Amendment or the Common Stock Amendment, or both, are
not approved by stockholders but the Restatement Amendment is approved, the
Certificate of Incorporation will be amended and restated without effecting the
amendment not approved.
20
<PAGE>
BACKGROUND OF THE CHANGES
In the years since the Company was incorporated in 1866, changes in New York
law have eliminated the need for a Certificate of Incorporation to state a
detailed set of corporate purposes, to state the corporation's term of existence
or to state a principal place of business in New York. In addition, the
provisions of the Certificate of Incorporation relating to Preferred Stock were
outmoded and unnecessary in light of the similar but more flexible provisions
relating to Preference Stock included in the Certificate of Incorporation. Also,
as a result of the expiration on December 31, 1994, of the Company's Preference
Stock Purchase Rights, it became unnecessary to provide for the issuance of the
Series A and Series B Junior Preference Stock. The Board of Directors has
decided, in conjunction with the other proposed amendments to the Certificate of
Incorporation, that it is appropriate to update the Company's Certificate of
Incorporation by making the Restatement Amendment.
VOTE REQUIRED FOR THE PROPOSAL
Approval of the Restatement Amendment requires the affirmative vote of a
majority of the Common Stock outstanding on the Record Date. Under the Company's
Certificate of Incorporation and By-Laws and under New York law, abstentions and
broker non-votes will have the effect of a "no" vote on this proposal.
Your directors recommend that stockholders vote FOR the approval and
adoption of the Restatement Amendment.
PROPOSAL TO AMEND THE 1988 STOCK INCENTIVE PLAN
The Company's 1988 Stock Incentive Plan (the "Plan") was adopted in 1988 and
amended and restated in 1993, in each case with the approval of stockholders.
The purpose of the Plan is to enable the Company to attract and retain employees
who contribute to the Company's success by their ability, ingenuity and
industry, and to enable such employees to participate in the long-term growth of
the Company by giving them an equity interest in the Company.
The Board of Directors believes that the Plan is accomplishing its purpose.
Since only 245,753 shares remain available of the 1,266,667 shares (after giving
effect to a stock dividend in 1989) previously authorized by the stockholders,
the Board believes that additional shares should be authorized for grant under
the Plan. The Board also believes that it is desirable to modify the
compensation of Outside Directors (as defined below) by increasing the portion
of such compensation which is payable in equity securities of the Company.
Accordingly, at its May 13, 1994 meeting, the Board of Directors took action
to amend the Plan, subject to stockholder approval, to increase the number of
shares authorized for awards under the Plan to 2,266,667; and at its March 16,
1995 meeting, the Board of Directors took action to amend and restate the Plan,
subject to stockholder approval, to (i) reflect the increase in the number of
shares adopted in May, 1994; (ii) limit the number of options which may be
granted to any employee in each calendar year; (iii) provide for annual grants
of options to purchase 2,500 shares of Common Stock to Outside Directors other
than the Chairman of the Board and annual grants of options to purchase 5,000
shares of Common Stock to any Outside Director who served as Chairman of the
Board for the preceding year, in each case only if the Company's earnings per
share for the year prior to the grant was at least 110% of the Company's
earnings per share for the year before that; (iv) clarify that a non-employee
Chairman of the Board is eligible to be granted awards by the Committee
administering the
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<PAGE>
Plan in addition to the fixed annual option grant; and (v) make certain
technical amendments regarding the manner of determining the number of shares
available under the Plan. [At the same meeting, the Board took action to amend
the retirement plan for directors to limit benefits so that increases in the
directors' annual retainer and additional years of service after the 1995 annual
meeting will not increase the amount of a director's retirement benefits.]
PRINCIPAL PROVISIONS OF THE PLAN
The following summary of the Plan, as amended and restated (effective March
16, 1995, subject to stockholder approval) is qualified in its entirety by
reference to the full text of the Plan which is attached as Exhibit B to this
Proxy Statement.
SHARES. The total number of shares of the Company's Common Stock available
for distribution under the Plan is 2,266,667. Options with respect to more than
300,000 shares shall not be granted to any employee in any calendar year.
Shares awarded under the Plan may be authorized and unissued shares or
treasury shares. If shares subject to an option under the Plan cease to be
subject to such option, or shares awarded under the Plan are forfeited, or an
award under the Plan otherwise terminates without a payment being made to the
participant in the form of Common Stock, such shares will again be available for
future distribution under the Plan, regardless of whether the forfeiting
participant received any benefits of ownership such as dividends from the
forfeited award.
ADMINISTRATION. The Plan is administered by the Executive Compensation
Committee or such other committee (the "Committee") of no less than three
directors, as may be appointed by the Board of Directors, each of whom is
disinterested as determined pursuant to Rule 16b-3 under the Securities Exchange
Act of 1934, as amended. The Committee is authorized to, among other things, set
the terms of awards to officers (including the Chairman of the Board) and
employees under the Plan, amend such awards, and waive compliance with the terms
of such awards. The provisions attendant to the grant of an award under the Plan
may vary from participant to participant. With respect to awards to Outside
Directors (other than the Chairman of the Board), the Committee has authority to
interpret the Plan and adopt administrative regulations, but not to vary the
amount or terms of awards from those set forth in the Plan.
PARTICIPATION. The Committee may make awards under the Plan to officers
(including the Chairman of the Board) and employees of the Company or of an
entity in which the Company owns at least a 20% interest, but not to any
director other than the Chairman of the Board who is not an employee of the
Company or of an entity in which the Company owns at least a 20% interest. The
employee and officer participants in the Plan are selected from among those
eligible in the sole discretion of the Committee. The Plan also provides for (i)
the grant of an initial option (the "Initial Option") to purchase 10,000 shares
of Common Stock to each director of the Company other than one who is an
employee of the Company or of an entity in which the Company owns at least a 20%
interest (an "Outside Director"), and (ii) the grant of an annual option to
purchase 2,500 shares of Common Stock to each Outside Director other than the
Chairman of the Board or an employee of Rexel and an option to purchase 5,000
shares of Common Stock to any Outside Director (other than a Rexel employee) who
served as Chairman of the Board for the preceding year, in each case only if the
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<PAGE>
Company's earnings per share for the year prior to the grant were at least 110%
of the Company's earnings per share for the year before that. The terms of these
stock options are set forth in the Plan and are described below.
AWARDS TO OUTSIDE DIRECTORS. Each person who was an Outside Director at the
close of the 1993 annual meeting of stockholders (which term for purposes of the
Initial Option includes directors who are Rexel employees but not employees of
the Company) was granted, as of the date of such meeting, as an Initial Option,
a non-qualified stock option to purchase 10,000 shares of Common Stock, and each
person who subsequently becomes an Outside Director will be granted a similar
Initial Option as of the date of such person's election to the Board of
Directors. At the close of each annual meeting of stockholders commencing with
the 1995 annual meeting (or in the case of a person who subsequently becomes an
Outside Director, with the annual meeting following the grant of his Initial
Option), if the Company's earnings per share for the immediately preceding
fiscal year exceed 110% of the Company's earnings per share for the fiscal year
prior thereto, each Outside Director other than the Chairman of the Board and
any employee of Rexel will be granted an option to purchase 2,500 shares of
Common Stock and any Outside Director (other than a Rexel employee) who served
as Chairman of the Board for the preceding year will be granted an option to
purchase 5,000 shares of Common Stock (which grant shall be pro rated for
service of less than a full year as Chairman of the Board) (each such option
being referred to as an "Annual Option").
The option price for each Initial Option and Annual Option is equal to the
fair market value of the Common Stock on the date of the option grant, and may
be paid in cash or shares of Common Stock which have been owned by the optionee
for at least six months (with such shares valued based on the fair market value
of the Common Stock on the date of option exercise). An Initial Option becomes
exercisable, in whole or in part, in 20% increments on each of the first five
anniversaries of the date following the date of grant, provided the optionee is
a director of the Company on such date. Each Annual Option becomes fully
exercisable, in whole or in part, on the last business day before the annual
meeting which follows the grant of such option, provided the optionee is a
director of the Company on such date. Each option will expire ten years from the
date of its grant, subject to earlier termination upon termination of the
optionee's service as a director. However, if the optionee dies during his or
her period of service as a director, the optionee's legal representative has the
right to exercise the option for a period of twelve months after the optionee's
death, even if such option would otherwise have expired earlier. An option
exercised after termination of service can only be exercised to the extent it
was exercisable at the time of such termination of service. Stock options
granted to Outside Directors are not transferable except by will or by the laws
of descent and distribution.
Each option granted to an Outside Director is granted in tandem with a
limited stock appreciation right which entitles the optionee to elect to receive
within 60 days following the occurrence of a Change of Control (as defined in
the Plan), in lieu of exercising the option, a payment equal to the product of
the number of shares as to which the stock appreciation right is exercised
multiplied by the excess of the Change of Control Price (as defined in the Plan)
over the exercise price of the related option.
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<PAGE>
AWARDS TO OFFICERS AND EMPLOYEES. The Plan authorizes the Committee to
grant awards to officers and employees in the form of stock options, stock
appreciation rights, restricted stock, deferred stock, loans, and tax offset
payments. Awards may be granted alone or in tandem with other types of awards
under the Plan. A summary of these awards is set forth below:
1. STOCK OPTIONS.
Incentive stock options ("ISOs") and non-qualified stock options may be
granted for such number of shares of Common Stock as the Committee
determines. A stock option will be exercisable at such times, over such term
and subject to such terms and conditions as the Committee determines, at an
exercise price determined by the Committee. To the extent required by Rule
16b-3 under the Exchange Act, the exercise price of stock options will not
be less than 50% of the fair market value of the Common Stock on the date of
grant. (ISOs are subject to restrictions as to exercise period and price as
required by the Internal Revenue Code.) Payment of the exercise price may be
made in such manner as the Committee may provide, including cash, delivery
of shares of Common Stock already owned or subject to award under the Plan,
or any other manner determined by the Committee. The Committee may provide
that all or part of the shares received upon exercise of an option using
restricted or deferred stock will be restricted stock or deferred stock.
Upon an optionee's termination of employment, the option will be
exercisable to the extent determined by the Committee, either in the initial
grant or an amendment thereto. The Committee may provide that an option
which is outstanding on the date of an optionee's death will remain
outstanding for an additional period after the date of such death,
notwithstanding that such option would have expired earlier under its terms.
Stock options will not be transferable except by will or by the laws of
descent and distribution.
2. STOCK APPRECIATION RIGHTS ("SARS").
Upon the exercise of an SAR, the Company will pay to the holder in cash,
Common Stock or a combination thereof (the method of payment to be at the
discretion of the Committee), an amount equal to the excess of the fair
market value of the Common Stock on the exercise date over the amount
determined by the Committee (generally, the exercise price of options
granted in tandem with SARs), multiplied by the number of SARs being
exercised. SARs will not be transferable except by will or by the laws of
descent and distribution.
The Committee may also grant limited SARs that will be exercisable only
in the event of a "Change of Control" of the Company (as defined in the
Plan). In awarding SARs or limited SARs, the Committee may provide that in
the event of a Change in Control, SARs or limited SARs may be paid on the
basis of the "Change of Control Price" (as defined in the Plan). See "Change
of Control Provisions" below.
3. RESTRICTED STOCK.
In making an award of restricted stock the Committee will determine the
periods, if any, during which the stock is subject to forfeiture, and the
purchase price, if any, for the stock. The vesting of restricted stock may
be unconditional or may be conditioned upon the completion of a specified
period of service with the Company or a subsidiary, the attainment of
specific performance goals or such other criteria as the Committee may
determine.
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<PAGE>
During the restricted period, the award holder may not sell, transfer,
pledge or assign the restricted stock, except as may be permitted by the
Committee. The certificate evidencing the restricted stock will be
registered in the award holder's name, although the Committee may direct
that it remain in the possession of the Company until the restrictions have
lapsed. Except as may otherwise be provided by the Committee, upon the
termination of the award holder's service with the Company for any reason
during the period before all restricted stock has vested, or in the event
the conditions to vesting are not satisfied, all restricted stock that has
not vested will be subject to forfeiture and the Committee may provide that
any purchase price paid by the award holder, or an amount equal to the
restricted stock's fair market value on the date of forfeiture, if lower,
shall be paid to the award holder. During the restricted period, the award
holder will have the right to vote the restricted stock and to receive any
cash dividends, if so provided by the Committee. Stock dividends will be
treated as additional shares of restricted stock and will be subject to the
same terms and conditions as the initial grant, unless otherwise provided by
the Committee.
4. DEFERRED STOCK.
Deferred stock may be conditioned upon the attainment of specific
performance goals or such other criteria as the Committee may determine. In
making an award of deferred stock the Committee will determine the periods,
if any, during which the award is subject to forfeiture, and may provide for
the issuance of stock pursuant to the award without payment therefor. Upon
vesting, the award will be settled in shares of Common Stock, cash equal to
the fair market value of such stock, or a combination thereof, as provided
by the Committee. During the deferral period set by the Committee, the award
holder may not sell, transfer, pledge or assign the deferred stock award. In
the event of termination of service before the expiration of the deferral
period, the deferred stock award will be forfeited, except as may be
provided by the Committee. Deferred stock will carry no voting rights until
such time as the Common Stock is actually issued.
5. LOANS.
The Committee may provide that the Company will make, or arrange for, a
loan to an officer or employee with respect to the exercise of any stock
option granted under the Plan, with respect to the payment of the purchase
price, if any, of any restricted stock awarded under the Plan, with respect
to any taxes arising from an award under the Plan, or any combination
thereof, provided that the Company will not loan to any individual more than
the excess of the purchase or exercise price of an award (plus taxes arising
therefrom) over the par value of any shares of Common Stock awarded. The
Committee will determine the terms of any such loan.
6. TAX OFFSET PAYMENTS.
The Committee may provide for a tax offset payment to an award holder
not in excess of the amount necessary to pay the federal, state, local and
other taxes payable with respect to any award and the receipt of the tax
offset payment, assuming the award holder is taxed at the maximum tax rate
applicable to such income. The tax offset payment may be paid in cash,
Common Stock, or a combination thereof, as determined by the Committee.
DEFERRAL OF AWARDS. The Committee may permit an award holder to elect to
defer receipt of any award for a specified period or until a specified event.
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<PAGE>
CHANGE OF CONTROL PROVISIONS. If there is a Change of Control of the
Company (as defined below), all stock options held by Outside Directors and,
unless otherwise determined by the Committee at the time of grant, all stock
options and SARs held by officers or employees which are not then exercisable
will become fully exercisable and vested, and the restrictions and deferral
limitations applicable to restricted stock will lapse and such shares and awards
will be deemed fully vested. Unless the Committee provides otherwise, to the
extent the cash payment of any award is based on the fair market value of Common
Stock, such fair market value shall be the Change of Control price, as defined
below.
A Change of Control occurs on the date any person or group (other than the
Company, Rexel or certain of their respective affiliates) becomes a beneficial
owner of 25% or more of the Company's voting securities, the date on which
one-third or more of the Board of Directors consists of persons other than
Current Directors (as defined) or the date of approval by stockholders of
certain agreements providing for merger, consolidation or disposition of all or
substantially all assets. The Change of Control Price will be the highest price
per share of Common Stock paid in any open market transaction, or paid or
offered to be paid relating to a Change of Control of the Company, at any time
during the 90-day period ending with the Change of Control.
AMENDMENT AND TERMINATION. The Plan shall continue in effect for an
unlimited period, but may be discontinued or amended by the Board of Directors,
except that no amendment or discontinuation may adversely affect any outstanding
award without the holder's written consent. Amendments to provisions governing
awards to Outside Directors may not be made more than once every six months,
except as required by law. Amendments may be made without stockholder approval
except as required to satisfy Rule 16b-3 or other regulatory requirements.
ADJUSTMENT. In the case of a stock split, stock dividend, reclassification,
recapitalization, merger, reorganization, or other changes in the Company's
structure affecting the Common Stock, appropriate adjustments may be made by the
Committee, in its sole discretion, in the number of shares reserved under the
Plan, the limitations on individual awards, the number of shares covered by
options and other awards then outstanding under the Plan and, where applicable,
the amount to be paid by the award holder or the Company for awards under the
Plan. No such adjustment may increase the aggregate value of any outstanding
award. If the Committee makes any adjustment under this provision to outstanding
stock options, a similar adjustment will automatically be made to the number and
terms of stock options to be granted to Outside Directors under the Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of
certain federal income tax aspects of awards made under the Plan based upon the
Laws in effect on the date hereof.
1. INCENTIVE STOCK OPTIONS.
Generally, no taxable income is recognized by the participant upon the
grant of an ISO or upon the exercise of an ISO during the period of his
employment with the Company or one of its subsidiaries or within three
months (12 months, in the event of permanent and total disability, or the
term of the option, in the event of death) after termination. However, the
exercise of an ISO may result in an alternative minimum tax liability to the
participant. If the participant continues to hold the shares acquired upon
exercise of an ISO for at least two years from the date of grant
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<PAGE>
and one year from the transfer of the shares to the participant, then: (a)
upon the sale of the shares, any amount realized in excess of the option
price will be taxed as long-term capital gain and (b) no deduction will be
allowed to the employer corporation for federal income tax purposes.
If Common stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of the one-year and two-year holding periods
described above, then generally: (a) the participant will recognize ordinary
income in an amount equal to the excess, if any, of the fair market value of
the shares on the date of exercise (or, if less, the amount realized on the
disposition of the shares) over the option price, and (b) the employer
corporation will be entitled to deduct any such recognized amount. Any
further gain recognized by the participant on such disposition will be taxed
as short-term or long-term capital gain, depending on whether the shares
were held for more than one year, but such additional amounts will not be
deductible by the employer corporation.
2. NON-QUALIFIED STOCK OPTIONS.
Except as noted below with respect to officers and directors subject to
Section 16 of the Exchange Act ("Insiders"), with respect to non-qualified
stock options: (a) no income is recognized by the participant at the time
the option is granted; (b) generally upon exercise of the option, the
participant recognizes ordinary income in an amount equal to the difference
between the option price and the fair market value of the shares on the date
of exercise and the employer corporation will be entitled to a tax deduction
in the same amount, to the extent such income is considered reasonable
compensation; and (c) at disposition, any appreciation after the date of
exercise is treated either as long-term or short-term capital gain,
depending on whether the shares were held for more than one year by the
participant, and such appreciation is not deductible by the employer
corporation.
3. STOCK APPRECIATION RIGHTS.
No income will be recognized by a participant in connection with the
grant of an SAR. Except as noted below with respect to Insiders, when the
SAR is exercised the participant will generally be required to recognize as
ordinary income in the year of exercise an amount equal to the amount of
cash and the fair market value on the date of exercise of any shares
received. If the participant receives Common Stock upon exercise of an SAR,
the post-exercise appreciation will be treated in the same manner discussed
above under "Non-Qualified Stock Options."
4. RESTRICTED STOCK.
A participant receiving restricted stock generally will recognize
ordinary income in the amount of the fair market value of the restricted
stock at the time the stock is no longer non-transferable or subject to
forfeiture, less the consideration paid for the stock. However, a
participant may elect, under Section 83(b) of the Internal Revenue Code, to
recognize ordinary income on the date of grant in an amount equal to the
excess of the fair market value of the shares on such date (determined
without regard to the restrictions) over their purchase price. The holding
period to determine whether the participant has long-term or short-term
capital gain on a subsequent disposition of the shares generally begins when
the restriction period expires, and the tax basis for such shares will
generally be the fair market value of such shares on such date. However, if
the participant has made an election under Section 83(b), the holding period
will commence on the date of grant, and the tax basis will be equal to the
fair market value of the shares on such date (determined without regard to
the restrictions).
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<PAGE>
5. DEFERRED STOCK.
A participant receiving deferred stock generally will recognize ordinary
income equal to the fair market value of the deferred stock on the date that
the stock is distributed to the participant, and the capital gain holding
period for such stock will also commence on that date.
6. SPECIAL RULES APPLICABLE TO INSIDERS.
If an Insider exercises a non-qualified stock option within six months
of its grant, the income recognition date is generally the date six months
after the date of grant, unless the Insider makes an election under Section
83(b) of the Internal Revenue Code to recognize income as of the date of
exercise. The Insider recognizes ordinary income equal to the excess of the
fair market value of the stock on the income recognition date over the
option price, and the holding period for treating any subsequent gain as
long-term capital gain begins on the income recognition date. Similar rules
apply with respect to the exercise of SARs settled in stock.
7. DIVIDENDS AND DIVIDEND EQUIVALENTS.
Dividends paid on restricted stock prior to the date on which the
forfeiture restrictions lapse generally will be treated as compensation that
is taxable as ordinary income to the participant, and will be deductible by
the employer corporation. If, however, the participant makes a Section 83(b)
election with respect to the restricted stock, the dividends will be taxable
as ordinary dividend income to the participant and will not be deductible by
the employer corporation. If dividend equivalents are credited with respect
to deferred stock or other awards, the participant generally will recognize
ordinary income when the dividend equivalents are paid and the employer
corporation will be entitled to a deduction at that time.
8. WITHHOLDING TAXES.
A participant in the Plan may be required to pay the employer
corporation an amount necessary to satisfy the applicable federal and state
law requirements with respect to withholding of taxes on wages, or to make
some other arrangements to comply with such requirements. The employer has
the right to withhold from salary or otherwise or to cause a participant (or
the executor or administrator of the participant's estate or his
distributee) to make payment of any federal, state, local or foreign taxes
required to be withheld with respect to any award under the Plan. The Plan
authorizes the Committee to permit employees to use the shares payable under
the Plan to satisfy withholding obligations.
9. COMPANY DEDUCTIONS.
As a general rule, the Company or one of its subsidiaries will be
entitled to a deduction for federal income tax purposes at the same time and
in the same amount that an Outside Director, officer or employee recognizes
ordinary income from awards under the Plan, to the extent such income is
considered reasonable compensation under the Code. However, Section 162(m)
of the Code limits to $1 million the annual tax deduction that the Company
and its subsidiaries can take with respect to the compensation of each of
certain executive officers unless the compensation qualifies as "performance
based" or certain other exemptions apply.
BENEFITS UNDER THE PLAN
On February 9, 1995 the Committee granted stock options under the Plan to
certain employees, and on March 1, 1995 the Committee granted stock options
under the Plan to Mr. Lomas, the Company's non-employee Chairman of the Board of
Directors, in each case subject to stockholder
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<PAGE>
approval of the amendment and restatement of the Plan. The number of options
granted on such dates is set forth in the New Plan Benefits Table below. It is
anticipated that the Committee will make additional grants under the Plan from
time to time. The size of future awards and the identity of the recipients
cannot be determined at this time. It is expected that approximately 75 to 100
employees will be selected to receive awards under the Plan.
The following table sets forth the number of stock options granted to the
indicated officers and employee groups on February 9, 1995 and March 1, 1995 and
to be granted to Outside Directors at the close of the 1995 Annual Meeting, in
each case subject to stockholder approval of the amendment and restatement of
the Plan. The table does not reflect future awards which might be granted under
the Plan.
NEW PLAN BENEFITS
1988 STOCK INCENTIVE PLAN, AS AMENDED
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF STOCK OPTIONS
- ---------------------------------------------- -----------------------
<S> <C>
Alain C. Viry 50,000
President and
Chief Executive Officer;
President and Chief Executive Officer of The
Summers Group, Inc.
Robert M. Merson 30,000
Senior Vice President; President and CEO of
Southern Electric Supply Company; President
of W & G Eastern Region
Jules Altshuler 10,000
Vice President and President of
W&G Midwest Division
Steven M. Hitt 30,000
Vice President and Chief Financial
Officer; Executive Vice President of The
Summers Group, Inc.
Executive Group 120,000
(6 persons)
Outside Director Group 47,500
(6 persons)(1)
Non-Executive Officer 249,000
Employee Group (36 persons)
<FN>
- ------------------------
(1) Includes an option to purchase 30,000 shares of Common Stock granted by the
Committee to the Chairman of the Board on March 1, 1995.
</TABLE>
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<PAGE>
TERMS OF THE OPTIONS GRANTED ON FEBRUARY 9, 1995 AND MARCH 1, 1995
The options granted on February 9, 1995, subject to stockholder approval of
the amendment and restatement of the Plan, excluding the option granted to Mr.
Viry, have an exercise price of $6.00, which was the fair market value of the
Common Stock on the date of grant. Mr. Viry's option has an exercise price of
$7.25. On March 1, 1995, the Committee granted Mr. Lomas, the non-employee
Chairman of the Board of the Company, an option to purchase 30,000 shares of
Common Stock at an exercise price of $6.3125, which was the fair market value of
the Common Stock on the date of grant. The option price for all such options may
be paid in cash or by delivering shares of Common Stock which the optionee has
owned for at least six months (with such shares valued based on the fair market
value of the Common Stock on the date of exercise). No consideration other than
services was received by the Company for the grant of the options. The options
granted to Mr. Viry and Mr. Lomas were immediately exercisable. The other
options will become exercisable, in whole or in part, in 20% increments on each
of the first five anniversaries of the date of grant, provided the optionee is
still employed by the Company on such date.
The options have a ten-year term, but, except for the options held by
Messrs. Viry and Lomas, will expire earlier in the event of the optionee's
termination of employment as follows. If termination occurs by reason of
retirement or for any reason beyond the optionee's control (other than death),
the option will expire three months after the date of termination. If
termination of employment or service occurs for reasons within the optionee's
control, including voluntary resignation or termination for cause, the option
will expire on the date of such termination. If termination occurs by reason of
the optionee's death, the option will expire 12 months after such death (which
period may extend beyond the ten-year option term). In each case, following an
optionee's termination of employment, the option may be exercised only to the
extent it was exercisable on the date of termination of employment.
Each option was granted in tandem with a limited stock appreciation right
which entitles the optionee to elect to receive within 60 days following the
occurrence of a Change of Control (as defined in the Plan), in lieu of
exercising the option, a payment equal to the product of the number of shares as
to which the stock appreciation right is exercised multiplied by the excess of
the Change of Control Price (as defined in the Plan) over the exercise price of
the related option.
MISCELLANEOUS
The closing price of the Common Stock on the New York Stock Exchange
Composite Tape on March 31, 1995 was $ per share.
VOTE REQUIRED FOR THE PROPOSAL
Approval of the amended and restated 1988 Stock Incentive Plan requires the
affirmative vote of a majority of the Common Stock outstanding on the Record
Date. Under the Company's Certificate of Incorporation and By-Laws and under New
York law, abstentions and broker non-votes will have the effect of a "no" vote
on this proposal.
The Board of Directors recommends that stockholders vote FOR the approval
and adoption of the amended and restated 1988 Stock Incentive Plan.
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INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. served as independent accountants in the audit of
the books and accounts of the Company for the 1994 fiscal year. A representative
of Coopers & Lybrand L.L.P. is expected to be present at the Annual Meeting of
Stockholders with the opportunity to make a statement if so desired. Such
representative is expected to be available to respond to appropriate questions.
The Audit Committee of the Board of Directors has not yet selected the
independent accountants for the 1995 fiscal year audit.
STOCKHOLDER PROPOSALS
Pursuant to the By-Laws of the Company, nominations for the election of
directors may be made by the Board of Directors, the Nominating Committee or any
stockholder entitled to vote for the election of directors, provided such
stockholder has delivered written notice of his intention to make such
nomination in accordance with the By-Laws. Such notice must be delivered to or
mailed, postage prepaid, and received by the Secretary of the Company at 150
Alhambra Circle, Suite 900, Coral Gables, FL 33134, in the case of an annual
meeting, not later than 90 days prior to the anniversary date of the immediately
preceding Annual Meeting. However, if the Annual Meeting is to be held more than
30 days before or after the anniversary date of the immediately preceding Annual
Meeting, and in the case of any special meeting, such notice must be delivered
or received not later than the close of business on the 10th day following the
first public disclosure by the Company of the date of such meeting. Each such
notice must state: (i) the name and address of the stockholder who intends to
make the nomination and of the person(s) to be nominated; (ii) a representation
that the stockholder is a holder of record of stock entitled to vote at such
meeting (or if the record date for such meeting is subsequent to the date
required for notice, a representation that the stockholder is a holder of record
at the time of such notice and intends to be a holder of record on the record
date for such meeting), specifying the number and class of shares so held, and
that the stockholder intends to appear in person or by proxy at the meeting to
nominate the person(s) specified in the notice; (iii) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person(s) (naming such person(s)) pursuant to which the nomination(s) are
to be made; (iv) such other information regarding each nominee as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the SEC had each nominee been nominated or intended to be nominated, by
the Board of Directors; and (v) consent of each nominee to serve as a director
of the Company if so elected.
The By-Laws of the Company also provide that no business may be brought
before an Annual Meeting except such business as shall be specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, other business brought before the meeting by or at
the direction of the Board of Directors or the Chairman of the Board or business
brought before the meeting by a stockholder entitled to vote thereon, provided
such stockholder has given written notice of such stockholder's intention to
bring such business before the Annual Meeting in accordance with the By-Laws.
Such notice must be delivered to, or mailed, postage prepaid, and received by,
the Secretary of the Company at the address specified above within the time
period described above. Each such notice must state: (i) a brief description of
the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting; (ii) the name and address of the
stockholder who intends to propose such business; (iii) a representation that
the
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stockholder is a holder of record of stock of the Company entitled to vote at
such meeting (or if the record date for such meeting is subsequent to the date
required for such stockholder notice, a representation that the stockholder is a
holder of record at the time of such notice and intends to be a holder of record
on the record date for such meeting), and that the stockholder intends to appear
in person or by proxy at such meeting to propose such business; and (iv) any
material interest of the stockholder in such business.
A copy of the By-Laws of the Company is available by written request to the
Secretary of the Company at the above address or by oral request at (305)
446-8000.
In the event that any stockholder desires to present a proposal to be
reflected in the Company's form of proxy and proxy statement for the 1996 Annual
Meeting of Stockholders, that proposal must be received at the Company's
principal offices on or before December 21, 1995. Timely receipt of a
stockholder proposal satisfies only one of the various requirements for
inclusion of such a proposal in the Company's proxy materials.
DISCRETIONARY AUTHORITY
Management has no knowledge of any matters to be presented for action by the
stockholders other than as set forth above. The accompanying form of proxy gives
discretionary authority, however, in the event that any additional matters
should be presented.
By Order of the Board of Directors,
JON O. FULLERTON
Secretary
April , 1995
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EXHIBIT A
RESTATED CERTIFICATE OF INCORPORATION
OF
REXEL NORTH AMERICA, INC.
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
We the undersigned, being officers of Willcox & Gibbs, Inc., do hereby
certify:
1. The current name of the Corporation is Willcox & Gibbs, Inc. The
original name was Willcox & Gibbs Sewing Machine Company.
2. The Certificate of Incorporation of the Corporation was filed by the
Department of State on the second day of March, 1866.
3. The Certificate of Incorporation is hereby amended as follows:
a. to change the name of the Corporation to Rexel North America, Inc.;
b. to change the purpose for which the Corporation was formed;
c. to increase the number of authorized shares of Common Stock of the
Corporation from 35,000,000 to 40,000,000;
d. to delete references to authorized shares of Preferred Stock of the
Corporation, none of which are outstanding, and to change references to
"Preference" stock to "Preferred" stock;
e. to delete Article Fourth, which specifies that the Corporation shall
have perpetual existence, and to redesignate Section D, Article Third as
Article Fourth;
f. to change the reference in Article Sixth from "principal place of
business" to "office"; and
g. to delete the provisions setting forth the terms of the Series A
Junior Preference Stock and the Series B Junior Preference Stock, none of
which is outstanding. The text of the Certificate of Incorporation, as so
amended, is hereby restated to read in full as follows:
FIRST:
The corporate name of the Corporation is Rexel North America, Inc.
SECOND:
The purpose for which the Corporation is formed is to engage in any lawful
act or activity for which corporations may be organized under the Business
Corporation Law, provided that it is not formed to engage in any act or activity
requiring the consent or approval of any state official, department, board,
agency or other body, without such consent or approval first being obtained.
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THIRD:
The aggregate number of shares which the Corporation shall have authority to
issue is forty-two million (42,000,000), to consist of two million (2,000,000)
shares of Preferred Stock having a par value of one dollar ($1) each and forty
million (40,000,000) shares of Common Stock having a par value of one dollar
($1) each.
A. PREFERRED STOCK
(1) The Preferred Stock may be issued from time to time in one or more
series. Authority is hereby expressly granted to the Board of Directors to
establish and designate one or more series of Preferred Stock and to fix the
variations in the relative rights, preferences and limitations of each such
series, including, but not limited to, the following:
(a) The number of shares to constitute such series and the designation
of the shares of such series.
(b) The dividends, if any, payable on such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class
or series of stock and whether such dividends shall be cumulative and, if
so, from what dates.
(c) Whether the shares of such series shall be subject to redemption by
the Corporation or at the option of the holder or both and, if so, the
times, prices and other terms and conditions of such redemption.
(d) Whether the shares of such series shall be subject to the operation
of a purchase, retirement or sinking fund and, if so, the terms and
conditions thereof.
(e) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or series or any other securities
and, if so, the times, prices, rates, adjustments and other terms and
conditions of such conversion or exchange.
(f) Whether the shares of such series shall have voting rights in
addition to any voting rights provided by law and this Certificate of
Incorporation and, if so, the terms of such voting rights, which may be
general or limited.
(g) The conditions, limitations or restrictions, if any, on payment of
dividends or the making of distributions on, or the purchase, redemption or
other acquisition of, any other stock, on the creation of indebtedness or on
the issue or reissue of any additional stock.
(h) The rights of the holders of the shares of such series upon the
voluntary or involuntary liquidation, dissolution or winding up of, or upon
any distribution of the assets of, the Corporation.
(2) Shares of any series of Preferred Stock which have been purchased,
redeemed (whether through the operation of a purchase, retirement or sinking
fund or otherwise) or otherwise reacquired by the Corporation or which, if
convertible or exchangeable, have been converted into or exchanged for shares of
stock of any other class or series or any other securities, which are cancelled
by the Board of Directors, shall have the status of authorized and unissued
shares of Preferred Stock and may be
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reissued as a part of the series of which they were originally a part or may be
reissued as part of a new series of Preferred Stock to be created by the Board
of Directors or as part of any other series of Preferred Stock, all subject to
the conditions or restrictions on issuance required by the resolution or
resolutions adopted by the Board of Directors providing for the issue of any
series of Preferred Stock, by this Certificate of Incorporation or by law.
B. COMMON STOCK
(1) Each share of Common Stock shall have one vote and, except as provided
by law or by the resolution or resolutions providing for the issue of any series
of Preferred Stock adopted by the Board of Directors as hereinabove provided,
the exclusive voting power for all purposes shall be vested in the holders of
Common Stock. The holders of Common Stock shall not have cumulative voting
power.
(2) In the event of any liquidation, dissolution or winding up of the
Corporation, the holders of the Common Stock shall be entitled, after payment or
provision for payment of the debts and other liabilities of the Corporation, and
the amounts to which the holders of the Preferred Stock shall be entitled, to
share ratably in the remaining net assets of the Corporation.
FOURTH:
Unless otherwise provided by the Board of Directors, no holder of shares of
the Corporation of any class, now or hereafter authorized, shall have any
preemptive right (as such holder) to subscribe for or purchase any securities
now or hereafter authorized by the Corporation, including without limitation any
shares of stock of the Corporation of any class, any obligations or securities
of the Corporation convertible into or exchangeable for such shares or any
options, warrants or rights to acquire any of the foregoing.
FIFTH:
The following provisions are inserted for the management of the business and
for the conduct of the affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stockholders:
(1) The number of directors of the Corporation (exclusive of directors (the
"Preferred Stock Directors") who may be elected by the holders of any one or
more series of Preferred Stock which may at any time be outstanding, voting
separately as a class or classes) shall not be less than nine nor more than
twelve, the exact number to be fixed from time to time solely by resolution of
the Board of Directors, acting by not less than a majority of the entire Board
and to be fixed initially at nine.
(2) The Board of Directors (exclusive of Preferred Stock Directors) shall be
divided into three classes; with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1983, three directors of the
first class shall be elected to hold office for a term expiring at the 1984
annual meeting, three directors of the second class shall be elected to hold
office for a term expiring at the 1985 annual meeting and three directors of the
third class shall be elected to hold office for a term expiring at the 1986
annual meeting. At each annual meeting commencing with the annual meeting of
1984, each class of directors whose term shall expire at the meeting shall be
elected to hold office for a
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three year term and until the election and qualification of their respective
successors in office. In case of any increase in the number of directors (other
than Preferred Stock Directors), the number of directors in each class shall be
as nearly equal as possible.
(3) Subject to the rights of the holders of any one or more series of
Preferred Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office for cause or other reason shall be filled solely by the
Board of Directors, acting by not less than a majority of the directors then in
office. Any director so chosen shall hold office until the next election of the
class for which such director shall be elected and qualified (subject to any
requirement of law specifically calling for an earlier vote of stockholders). No
decrease in the number of directors shall shorten the term of any incumbent
director.
(4) Except as otherwise provided in Article THIRD of this certificate of
incorporation with respect to the holders of any one or more series of Preferred
Stock or as otherwise provided by law, special meetings of stockholders for any
purpose or purposes shall be called solely by resolution of the Board of
Directors, acting by not less than a majority of the entire Board, and the power
of stockholders to call a special meeting is specifically denied. The place and
notice of any special meeting shall be as set forth in the By-Laws. No business
shall be transacted and no corporate action shall be taken other than that
stated in the notice of meeting at a special meeting of stockholders.
(5) Subject to the rights of the holders of any one or more series of
Preferred Stock then outstanding, any director or the entire Board of Directors
of the Corporation may be removed, but such removal shall be only for cause. At
any annual meeting of the stockholders of the Corporation or at any special
meeting of stockholders of the Corporation the notice of which shall state that
the removal of a director or directors is among the purposes of the meeting, the
holders of stock of the Corporation entitled to vote thereon, by vote of a
majority of the outstanding shares thereof, may remove such director or
directors for cause.
(6) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting except by unanimous written consent of all stockholders entitled to vote
thereon, and the power of less than all such stockholders to consent in writing,
without such a meeting, to the taking of any action is specifically denied.
(7) Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, this Certificate of
Incorporation or the By-Laws), the affirmative vote of the holders of not less
than 75 percent of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (which shall mean 75% of
the votes entitled to be cast by such shares) shall be required (i) to amend or
repeal any provision of this Article FIFTH (including, without limitation, this
section (7)) or (ii) to adopt any provision in this Certificate of Incorporation
or the By-Laws of the Corporation which is inconsistent with any provision of
this article FIFTH or (iii) in general, to adopt, amend or repeal any provision
of the By-Laws of the Corporation relating to meetings of stockholders or
directors (including, without limitation, voting or quorum requirements) or
qualification, election or removal of directors or officers.
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SIXTH:
The office of the Corporation shall be in the City of New York, in the
County of New York, and State of New York.
SEVENTH:
The Secretary of the State of New York is hereby designated as the agent of
the Corporation upon whom process in any action or proceeding against it may be
served. The address to which the Secretary of State shall mail a copy of process
in any action or proceeding against the Corporation which may be served upon him
is c/o CT Corporation System, 1633 Broadway, New York, New York 10019.
EIGHTH:
The affirmative vote of the holders of not less than 75 percent of the
outstanding shares of "Voting Stock" (as hereinafter defined) of the Corporation
shall be required for the approval or authorization of any "Business
Combination" (as hereinafter defined) of the Corporation with any Related Person
(as hereinafter defined); provided, however, that the 75 percent voting
requirement shall not be applicable if:
(1) A majority of the "Continuing Directors" (as hereinafter defined) of the
Corporation (a) have expressly approved in advance the acquisition of
outstanding shares of Voting Stock of the Corporation that caused the Related
Person to become a Related Person or (b) have approved the Business Combination
prior to the Related Person involved in the Business Combination having become a
Related Person; or
(2) The Business Combination is a merger or consolidation and the cash or
fair market value of the property, securities or other consideration to be
received per share by holders of Common Stock of the Corporation in the Business
Combination is not less than the highest per share price (with appropriate
adjustments for recapitalizations and for stock splits, stock dividends and like
distributions), as determined in good faith by a majority of the Continuing
Directors, paid by the Related Person in acquiring any of its holdings of the
Corporation's Common Stock.
For purposes of this Article EIGHTH:
(i) The term "Business Combination" shall mean (a) any merger or
consolidation of the Corporation or a subsidiary with or into a Related
Person, (b) any sale, lease, exchange, transfer or other disposition,
including without limitation a mortgage or any other security device, of all
or any "Substantial Part" (as hereinafter defined) of the assets either of
the Corporation (including without limitation any voting securities of a
subsidiary) or of a subsidiary, or both, to a Related Person, (c) any merger
or consolidation of a Related Person with or into the Corporation or a
subsidiary, (d) any sale, lease, exchange, transfer or other disposition of
all or any Substantial Part of the assets of a Related Person to the
Corporation or a subsidiary, (e) the issuance of any securities of the
Corporation or a subsidiary to a Related Person, (f) any recapitalization
that would have the effect of increasing the voting power of a Related
Person, (g) any agreement,
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contract or other arrangement providing for any of the transactions
described in this definition of Business Combination and (h) any series of
related transactions which, if taken together, would come within this
definition of Business Combination.
(ii) The term "Related Person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with its
"Affiliates" and "Associates" (as defined on April 1, 1983 in Rule 12b-2
under the Securities Exchange Act of 1934), "Beneficially Owns" (as defined
on April 1, 1983 in Rule 13d-3 under the Securities Exchange Act of 1934) in
the aggregate ten percent or more of the outstanding Voting Stock of the
Corporation, any Affiliate or Associate of any such individual, corporation,
partnership or other person or entity and any assignee of any of the
foregoing.
(iii) The term "Substantial Part" shall mean more than 20 percent of the
fair market value of the total assets of the corporation in question, as
determined in good faith by a majority of the Continuing Directors, as of
the end of its most recent fiscal year ending prior to the time the
determination is being made.
(iv) Without limitation, any shares of Common Stock of the Corporation
that any Related Person has the right to acquire pursuant to any agreement,
or upon exercise of conversion rights, warrants or options, or otherwise,
shall be deemed beneficially owned by the Related Person.
(v) For the purposes of paragraph (2) of this Article EIGHTH, the term
"other consideration to be received" shall include, without limitation,
Common Stock of the Corporation retained by its existing public stockholders
in the event of a Business Combination in which the Corporation is the
surviving corporation.
(vi) The term "Voting Stock" shall mean all outstanding shares of capital
stock of the Corporation or another corporation entitled to vote generally
in the election of directors and each reference to a proportion of shares of
Voting Stock shall refer to such proportion of the votes entitled to be cast
by such shares.
(vii) The term "Continuing Director" shall mean a Director who is not an
Affiliate or Associate of the Related Person and who (a) was a member of the
Board of Directors of the Corporation immediately prior to the time that the
Related Person involved in a Business Combination became a Related Person or
(b) is a successor of such a Director who is recommended to succeed such a
Director by a majority of the Continuing Directors then on the Board.
The affirmative vote of the holders of not less than 75 percent of the
outstanding shares of Voting Stock of the Corporation shall be required to amend
or repeal any provision of this Article EIGHTH (including, without limitation,
this paragraph).
NINTH:
No director shall be personally liable to the Corporation or any shareholder
for damages for any breach of duty in such capacity, except if a judgment or
other final adjudication adverse to the director establishes that (i) the
director's acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law, (ii) the director personally gained in
fact a financial profit or other advantage to which he was not legally entitled
or (iii) the director's acts violated Section 719 of the Business Corporation
Law of New York. If the Business Corporation Law of New York is amended
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after approval by the stockholders of this provision to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of directors of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Business Corporation Law of New York, as so
amended. Neither the amendment nor repeal of this Article NINTH, nor the
adoption of any provision of this Certificate of Incorporation or the By-Laws of
the Corporation or of any statute inconsistent with this Article NINTH, shall
eliminate or reduce the effect of this Article NINTH in respect of any acts or
omissions occurring prior to such amendment, repeal or adoption of an
inconsistent provision.
4. The amendments and restatement referred to herein were duly authorized
by the vote of the Board of Directors of the Corporation, followed by the
affirmative vote of the holders of a majority of all outstanding shares entitled
to vote thereon at the Corporation's Annual Meeting of Shareholders duly called
and held on May , 1995.
IN WITNESS WHEREOF, we have signed this Certificate on the day of May,
1995, and we affirm that the statements contained herein are true under
penalties of perjury.
- ------------------------------------------------------------------------------
President
- ------------------------------------------------------------------------------
Secretary
[SEAL]
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EXHIBIT B
WILLCOX & GIBBS
1988 STOCK INCENTIVE PLAN
(As Amended and Restated effective March 16, 1995)
SECTION 1. PURPOSE.
The purposes of the Willcox & Gibbs 1988 Stock Incentive Plan (the "Plan")
are (i) to enable Willcox & Gibbs, Inc. (the "Company") and Related Companies
(as defined below) to attract and retain employees who contribute to the
Company's success by their ability, ingenuity and industry, and to enable such
employees to participate in the long-term success and growth of the Company by
giving them an equity interest in the Company, and (ii) to enable the Company to
pay part of the compensation of its Outside Directors (as defined in Section
5.2) in options to purchase the Company's Common Stock, thereby increasing such
directors' proprietary interest in the Company. For purposes of the Plan, a
"Related Company" means any corporation, partnership, joint venture or other
entity in which the Company owns, directly or indirectly, at least a 20%
beneficial ownership interest.
SECTION 2. TYPES OF AWARDS.
2.1 Awards under the Plan may be in the form of (i) Stock Options; (ii)
Stock Appreciation Rights; (iii) Restricted Stock; (iv) Deferred Stock; (v)
Loans; and/or (vi) Tax Offset Payments.
2.2 An eligible officer or employee may be granted one or more types of
awards, which may be independent or granted in tandem. If two awards are granted
in tandem the award holder may exercise (or otherwise receive the benefit of)
one award only to the extent he or she relinquishes the tandem award.
SECTION 3. ADMINISTRATION.
3.1 The Plan shall be administered by the Executive Compensation Committee
of the Company's Board of Directors (the "Board") or such other committee of
directors as the Board shall designate (the "Committee"), which shall consist of
not less than three disinterested persons (as such term is defined in Rule 16b-3
under the Securities Exchange Act of 1934 or any successor rule) who shall serve
at the pleasure of the Board.
3.2 The Committee shall have the following authority with respect to awards
under the Plan to officers (including the Chairman of the Board) and employees:
to grant awards to eligible officers or employees under the Plan; to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall deem advisable; to interpret the terms and provisions of
the Plan and any award granted under the Plan; and to otherwise supervise the
administration of the Plan. In particular, and without limiting its authority
and powers, with respect to awards to officers and employees, the Committee
shall have the authority:
(a) to determine whether and to what extent any award or combination of
awards will be granted hereunder, including whether any awards will be
granted in tandem with each other;
(b) to select the officers or employees to whom awards will be granted;
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SECTION 3. ADMINISTRATION. (CONTINUED)
(c) to determine the number of shares of the common stock of the Company
(the "Stock") to be covered by each award granted hereunder;
(d) to determine the terms and conditions of any award granted hereunder,
including, but not limited to, any vesting or other restrictions based on
performance and such other factors as the Committee may determine, and to
determine whether the terms and conditions of the award are satisfied;
(e) to determine the treatment of awards upon an award holder's retirement,
disability, death, termination for cause or other termination of
employment or service;
(f) to determine pursuant to a formula or otherwise the fair market value of
the Stock on a given date; provided, however, that if the Committee fails
to make such a determination, fair market value shall mean the closing
sale price of the Stock on a given date;
(g) to determine that amounts equal to the amount of any dividends declared
with respect to the number of shares covered by an award (i) will be paid
to the award holder currently or (ii) will be deferred and deemed to be
reinvested or (iii) will otherwise be credited to the award holder, or
that the award holder has no rights with respect to such dividends;
(h) to determine whether, to what extent, and under what circumstances Stock
and other amounts payable with respect to an award will be deferred
either automatically or at the election of an award holder, including
providing for and determining the amount (if any) of deemed earnings on
any deferred amount during any deferral period;
(i) to provide that the shares of Stock received as a result of an award
shall be subject to a right of first refusal, pursuant to which the
holder shall be required to offer to the Company any shares that he or
she wishes to sell, subject to such terms and conditions as the Committee
may specify;
(j) to amend the terms of any award, prospectively or retroactively;
provided, however, that no amendment shall impair the rights of the award
holder without his or her consent; and
(k) to substitute new Stock Options for previously granted Stock Options, or
for options granted under other plans, in each case including previously
granted options having higher option prices.
3.3 With respect to awards to Outside Directors (other than awards to the
Chairman of the Board granted pursuant to Section 3.2), the Committee shall have
authority to interpret the Plan; to adopt, amend, and rescind administrative
regulations to further the purposes of the Plan; and to take any other action
necessary to the proper operation of the Plan. However, the Committee shall have
no discretion to vary the amount or terms of awards as set forth in Section 14,
except as provided in Section 4.3.
3.4 All determinations made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan participants.
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SECTION 3. ADMINISTRATION. (CONTINUED)
3.5 The Committee may from time to time delegate to one or more officers of
the Company any or all of its authorities granted hereunder except with respect
to awards granted to persons subject to Section 16 of the Securities Exchange
Act of 1934. The Committee shall specify the maximum number of shares that the
officer or officers to whom such authority is delegated may award.
SECTION 4. STOCK SUBJECT TO PLAN.
4.1 The total number of shares of Stock reserved and available for
distribution under the Plan shall be 2,266,667 (subject to adjustment as
provided below). Such shares may consist of authorized but unissued shares or
treasury shares. The exercise of a Stock Appreciation Right for cash or the
payment of any other award in cash shall not count against this share limit.
Options with respect to more than 300,000 shares shall not be granted to any
officer or employee in any calendar year.
4.2 To the extent a Stock Option terminates without having been exercised,
or an award terminates without the award holder having received payment of the
award, or shares awarded are forfeited, the shares subject to such award shall
again be available for distribution in connection with future awards under the
Plan regardless of whether the forfeiting participant received any benefits of
ownership such as dividends from the forfeited award. At no time will the number
of shares issued under the Plan plus the number of shares estimated by the
Committee to be ultimately issued with respect to outstanding awards under the
Plan exceed the number of shares authorized under Section 4.1. If the
Committee's estimate of the number of shares to be issued with respect to an
award is greater than the number of shares actually issued with respect thereto,
such excess number of shares shall again be available in connection with future
awards under the Plan.
4.3 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, Stock dividend, Stock split,
spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee in its sole discretion, may be
made in the aggregate number of shares reserved for issuance under the Plan, the
limitations on individual awards, the number of shares subject to outstanding
awards and the amounts to be paid by award holders or the Company, as the case
may be, with respect to outstanding awards; provided, however, that no such
adjustment shall increase the aggregate value of any outstanding award. In the
event any change described in this Section 4.3 occurs and an adjustment is made
in the outstanding Stock Options, a similar adjustment shall be made in the
number and terms of Stock Options granted and to be granted to Outside Directors
under Section 14.
SECTION 5. ELIGIBILITY.
5.1 Officers (including the Chairman of the Board) and other employees of
the Company or a Related Company are eligible to be granted awards under the
Plan. Except as provided in Section 5.2, Outside Directors other than any
Outside Director serving as Chairman of the Board are not eligible to be granted
awards under the Plan. The officer and employee participants under the Plan
shall be selected from time to time by the Committee, in its sole discretion,
from among those eligible.
5.2 Awards under Section 14 of the Plan shall be made solely to Outside
Directors, which term shall mean (i) for purposes of Initial Options granted
under Section 14.1, any director of the Company
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<PAGE>
SECTION 5. ELIGIBILITY. (CONTINUED)
other than one who is an officer or employee of the Company or a Related
Company, and (ii) for purposes of Annual Options granted under Section 14.2, any
director of the Company other than one who is an officer or employee of the
Company, a Related Company, or Rexel, S.A. ("Rexel").
SECTION 6. STOCK OPTIONS.
6.1 The Stock Options awarded to officers and employees under the Plan may
be of two types: (i) Incentive Stock Options within the meaning of Section 422A
of the Internal Revenue Code or any successor provision thereto; and (ii)
Non-Qualified Stock Options. To the extent that any Stock Option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
6.2 Subject to the following provisions, Stock Options awarded to officers
and employees under the Plan shall be in such form and shall have such terms and
conditions as the Committee may determine:
(a) OPTION PRICE. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee; provided, however,
that to the extent required to satisfy the exemption requirements of Rule
16b-3 under the Securities Exchange Act of 1934 (or any successor rule),
the option price of Stock Options granted to persons subject to Section
16 of the Securities Exchange Act of 1934, shall not be less than 50% of
the fair market value of the Stock on the date of the award of the Stock
Option.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the
Committee. If the Committee provides that any Stock Option is exercisable
only in installments, the Committee may waive such installment exercise
provisions at any time in whole or in part.
(d) METHOD OF EXERCISE. Stock Options may be exercised in whole or in part
at any time during the option period by giving written notice of exercise
to the Company specifying the number of shares to be purchased,
accompanied by payment of the purchase price. Payment of the purchase
price shall be made in such manner as the Committee may provide in the
award, which may include cash (including cash equivalents), delivery of
shares of Stock already owned by the optionee or subject to awards
hereunder, any other manner permitted by law determined by the Committee,
or any combination of the foregoing. The Committee may provide that all
or part of the shares received upon the exercise of a Stock Option which
are paid for using Restricted Stock or Deferred Stock shall be restricted
or deferred in accordance with the original terms of the award in
question.
(e) NO STOCKHOLDER RIGHTS. An optionee shall have neither rights to
dividends or other rights of a stockholder with respect to shares subject
to a Stock Option until the optionee has given written notice of exercise
and has paid for such shares.
(f) SURRENDER RIGHTS. The Committee may provide that options may be
surrendered for cash upon any terms and conditions set by the Committee.
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<PAGE>
SECTION 6. STOCK OPTIONS. (CONTINUED)
(g) NON-TRANSFERABILITY. No Stock Option shall be transferable by the
optionee other than by will or by the laws of descent and distribution.
During the optionee's lifetime, all Stock Options shall be exercisable
only by the optionee.
(h) TERMINATION OF EMPLOYMENT. If an optionee's employment with the Company
or a Related Company terminates by reason of death, disability,
retirement, voluntary or involuntary termination or otherwise, the Stock
Option shall be exercisable to the extent determined by the Committee.
The Committee, may provide that, notwithstanding the option term fixed
pursuant to Section 6.2(b), a Stock Option which is outstanding on the
date of an optionee's death shall remain outstanding for an additional
period after the date of such death.
6.3 Notwithstanding the provisions of Section 6.2, no Incentive Stock
Option shall (i) have an option price which is less than 100% of the fair market
value of the Stock on the date of the award of the Stock Option, (ii) be
exercisable more than ten years after the date such Incentive Stock Option is
awarded or (iii) be awarded more than ten years after the effective date of this
restatement of the Plan.
SECTION 7. STOCK APPRECIATION RIGHTS.
7.1 A Stock Appreciation Right awarded to an officer or employee shall
entitle the holder thereof to receive payment of an amount, in cash, shares of
Stock or a combination thereof, as determined by the Committee, equal in value
to the excess of the fair market value of the shares as to which the award is
granted on the date of exercise over an amount specified by the Committee. Any
such award shall be in such form and shall have such terms and conditions as the
Committee may determine.
7.2 The Committee may provide that a Stock Appreciation Right awarded to an
officer or employee may be exercised only within the 60-day period following
occurrence of a Change of Control (as defined in Section 16.2). Unless the
Committee provides otherwise, in the event of a Change of Control the amount to
be paid upon an officer or employee's exercise of a Stock Appreciation Right
shall be based on the Change of Control Price (as defined in Section 16.3).
SECTION 8. RESTRICTED STOCK.
Subject to the following provisions, all awards of Restricted Stock to
officers and employees shall be in such form and shall have such terms and
conditions as the Committee may determine:
(a) The Restricted Stock award shall specify the number of shares of
Restricted Stock to be awarded, the price, if any, to be paid by the
recipient of the Restricted Stock and the date or dates on which, or the
conditions upon the satisfaction of which, the Restricted Stock will
vest. The vesting of Restricted Stock may be unconditional or may be
conditioned upon the completion of a specified period of service with the
Company or a Related Company, upon the attainment of specified
performance goals or upon such other criteria as the Committee may
determine.
(b) Stock certificates representing the Restricted Stock awarded to an
officer or employee shall be registered in the recipient's name, but the
Committee may direct that such certificates be held by the Company on
behalf of the recipient. Except as may be permitted by the Committee, no
share of Restricted Stock may be sold, transferred, assigned, pledged or
otherwise encumbered by the recipient until such share has vested in
accordance with the terms of the
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<PAGE>
SECTION 8. RESTRICTED STOCK. (CONTINUED)
Restricted Stock award. At the time Restricted Stock vests, a certificate
for such vested shares shall be delivered to the officer or employee (or
his or her designated beneficiary in the event of death), free of all
restrictions.
(c) The Committee may provide that the officer or employee shall have the
right to vote or receive dividends on Restricted Stock. The Committee may
provide that Stock received as a dividend on, or in connection with a
stock split of, Restricted Stock shall be subject to the same
restrictions as the Restricted Stock.
(d) Except as may be provided by the Committee, in the event of an officer's
or employee's termination of employment before all of his or her
Restricted Stock has vested, or in the event any conditions to the
vesting of Restricted Stock have not been satisfied prior to any deadline
for the satisfaction of such conditions set forth in the award, the
shares of Restricted Stock which have not vested shall be forfeited, and
the Committee may provide that (i) any purchase price paid by the officer
or employee shall be returned to the employee or (ii) a cash payment
equal to the Restricted Stock's fair market value on the date of
forfeiture, if lower, shall be paid to the officer or employee.
(e) The Committee may waive, in whole or in part, any or all of the
conditions to receipt of, or restrictions with respect to, any or all of
the officer's or employee's Restricted Stock.
SECTION 9. DEFERRED STOCK AWARDS.
Subject to the following provisions, all awards of Deferred Stock to
officers and employees shall be in such form and shall have such terms and
conditions as the Committee may determine:
(a) The Deferred Stock award shall specify the number of shares of Deferred
Stock to be awarded to any recipient and the duration of the period (the
"Deferral Period") during which, and the conditions under which, receipt
of the Stock will be deferred, and the period, if any, during which the
award is subject to forfeiture. The Committee may condition the award of
Deferred Stock, or receipt of Stock or cash at the end of the Deferral
Period, upon the attainment of specified performance goals or such
criteria as the Committee may determine.
(b) Except as may be permitted by the Committee, Deferred Stock awards may
not be sold, assigned, transferred, pledged or otherwise encumbered
during the Deferral Period.
(c) At the expiration of the Deferral Period, the recipient (or his or her
designated beneficiary in the event of death) shall receive (i)
certificates for the number of shares of Stock equal to the number of
shares covered by the Deferred Stock award, (ii) cash equal to the fair
market value of such Stock or (iii) a combination of shares and cash, as
the Committee may determine.
(d) Except as may be provided by the Committee, in the event of an officer's
or employee's termination of employment before the end of the Deferral
Period, his or her Deferred Stock award shall be forfeited.
(e) The Committee may waive, in whole or in part, any or all of the
conditions to receipt of, or restrictions with respect to, Stock or cash
under a Deferred Stock award.
B-6
<PAGE>
SECTION 10. LOANS.
The Committee may provide that the Company shall make, or arrange for, a
loan or loans to an officer or employee with respect to the exercise of any
Stock Option awarded under the Plan, with respect to the payment of the purchase
price, if any, of any Restricted Stock awarded hereunder or with respect to any
taxes arising from an award hereunder, PROVIDED, HOWEVER, that the Company shall
not loan to an officer or employee more than the excess of the purchase or
exercise price of an award (together with the amount of any taxes arising from
such award) over the par value of any shares of Stock awarded. The Committee
shall have full authority to decide whether a loan will be made hereunder and to
determine the amount, term and provisions of any such loan, including the
interest rate to be charged, whether the loan will be with or without recourse
against the borrower, any security for the loan, the terms on which the loan is
to be repaid and the conditions, if any, under which the loan may be forgiven.
SECTION 11. TAX OFFSET PAYMENTS.
The Committee may provide for a Tax Offset Payment by the Company to an
officer or employee in an amount specified by the Committee, which shall not
exceed the amount necessary to pay the federal, state, local and other taxes
payable with respect to any award and receipt of the Tax Offset Payment assuming
the officer or employee is taxed at the maximum tax rate applicable to such
income. The Tax Offset Payment may be paid in cash, Stock or a combination
thereof, as determined by the Committee.
SECTION 12. ELECTION TO DEFER AWARDS.
The Committee may permit an officer or employee to elect to defer receipt of
an award for a specified period or until a specified event, upon such terms as
are determined by the Committee.
SECTION 13. TAX WITHHOLDING.
13.1 Each Outside Director, officer or employee shall, no later than the
date as of which the value of an award first becomes includible in such person's
gross income for applicable tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any federal,
state, local or other taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company (and, where
applicable, any Related Company), shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due to
the Outside Director, officer or employee.
13.2 To the extent permitted by the Committee, and subject to such terms
and conditions as the Committee may provide, an officer or employee may elect to
have the withholding tax obligation, or any additional tax obligation with
respect to any awards hereunder, satisfied by (i) having the Company withhold
shares of Stock otherwise deliverable to such person with respect to the award
or (ii) delivering to the Company shares of unrestricted Stock.
SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS.
14.1 Each person who is an Outside Director at the close of the 1993 Annual
Meeting of Stockholders shall be granted as of such date a Stock Option to
purchase 10,000 shares of common
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<PAGE>
SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS. (CONTINUED)
stock of the Company (an "Initial Option"). Each person who becomes an Outside
Director after such date shall be granted, as an Initial Option as of the date
of his or her election as an Outside Director, a Stock Option to purchase 10,000
shares of common stock of the Company.
14.2 At the close of each annual meeting of stockholders commencing with
the 1995 annual meeting, (or in the case of a person who subsequently becomes an
Outside Director, commencing with the annual meeting following the grant of such
person's Initial Option), if the Company's earnings per share (as certified by
the Company's independent auditors) for the immediately preceding fiscal year
exceed 110% of the Company's earnings per share (as certified by the Company's
independent auditors) for the fiscal year prior thereto, each Outside Director
other than the Chairman of the Board for the preceding year shall be granted an
option to purchase 2,500 shares of Common Stock and any Outside Director who
served as Chairman of the Board for the preceding year shall be granted an
option to purchase 5,000 shares of Common Stock (with the grant to the Chairman
of the Board pro rated for less than a full year of service in such position)
(each option pursuant to this Section 14.2 being referred to as an "Annual
Option").
14.3 Stock Options granted under this Section 14 shall be Non-Qualified
Stock Options and shall have the following terms and conditions:
(a) OPTION PRICE. The option price per share of Stock purchasable under the
Stock Option shall be equal to the average of the high and low sale price
of the Stock on the date the Stock Option is granted.
(b) OPTION TERM. The term of the Stock Option shall be ten years, subject
to earlier termination in the event of termination of service as a
director, as set forth in paragraph (e) below, and subject to earlier or
later termination in the event of the director's death, as set forth in
paragraph (f) below.
(c) EXERCISABILITY. Each Initial Option shall become exercisable with
respect to 20% of the underlying shares on the first anniversary of the
date immediately following the date of grant, and an additional 20% on
each subsequent anniversary thereof, provided that the optionee is a
director of the Company on such date. Each Annual Option shall become
fully exercisable, in whole or in part, on the last business day before
the annual meeting which follows the grant of such option, provided the
optionee is a director of the Company on such date. Notwithstanding the
preceding two sentences, in the event of a Change of Control (as defined
in Section 16), each Stock Option granted under this Section 14 shall
become fully exercisable and vested.
(d) METHOD OF EXERCISE. The Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of
exercise to the Company specifying the number of shares to be purchased,
accompanied by payment of the purchase price. Payment of the purchase
price shall be made in cash (including cash equivalents) or by delivery
of shares of Stock already owned by the optionee for at least six months,
or any combination of the foregoing. Shares delivered upon payment of the
exercise price shall be valued at the average of the high and low sale
prices on the date of exercise.
B-8
<PAGE>
SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS. (CONTINUED)
(e) TERMINATION OF SERVICE AS DIRECTOR. If an optionee's status as a
director of the Company is terminated for cause (as defined below), such
director's Stock Options shall terminate on the date of such termination
of service. If an optionee's status as a director is terminated for any
reason other than death or termination for cause, such director's Stock
Options may be exercised only within three months of such termination of
service, and only to the extent such Stock Options were exercisable on
the date of such termination of service. For purposes of this paragraph,
termination for cause shall mean termination on account of any act of
fraud or intentional misrepresentation, embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any Related
Company.
(f) DEATH OF OPTIONEE. If an optionee's status as a director of the Company
is terminated by reason of the optionee's death, such director's Stock
Options may be exercised by his or her legal representatives only within
12 months following the director's death and only to the extent such
Stock Options were exercisable on the date of such death.
(g) NON-TRANSFERABILITY. No Stock Option shall be transferable by the
optionee other than by will or by the laws of descent and distribution.
During the optionee's lifetime, all Stock Options shall be exercisable
only by the optionee.
(h) NO STOCKHOLDER RIGHTS. An optionee shall have neither rights to
dividends nor other rights of a stockholder with respect to shares
subject to a Stock Option until the optionee has given written notice of
exercise and has paid for such shares.
(i) LIMITED STOCK APPRECIATION RIGHTS. Each Stock Option under this Section
14 shall be granted in tandem with a Limited Stock Appreciation Right
which may be exercised only within the 60-day period following a Change
of Control (as defined in Section 16.2) and upon exercise shall entitle
the holder to receive payment, for each share as to which the Limited
Stock Appreciation Right is exercised, of an amount equal in value to the
excess of the Change of Control Price (as defined in Section 16.3) over
the exercise price of the related Stock Option. Such Limited Stock
Appreciation Right shall be payable in cash, except that if a cash
payment would be subject to disgorgement under Section 16(b) of the
Securities Exchange Act of 1934, such Limited Stock Appreciation Right
shall be payable in shares of Stock.
SECTION 15. AMENDMENTS AND TERMINATION.
The Board may discontinue the Plan at any time and may amend it from time to
time. No amendment or discontinuation of the Plan shall adversely affect any
award previously granted without the award holder's written consent. The
provisions of Section 14 shall not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. Amendments may be made
without stockholder approval except as required to satisfy Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule) or other regulatory
requirements.
B-9
<PAGE>
SECTION 16. CHANGE OF CONTROL.
16.1 In the event of a Change of Control, unless otherwise determined by the
Committee at the time of grant or by amendment (with the holder's consent) of
such grant:
(a) all outstanding Stock Options and all outstanding Stock Appreciation
Rights awarded under the Plan shall become fully exercisable and vested;
(b) the restrictions and deferral limitations applicable to any outstanding
Restricted Stock and Deferred Stock awards under the Plan shall lapse and
such shares and awards shall be deemed fully vested; and
(c) to the extent the cash payment of any award is based on the fair market
value of Stock, such fair market value shall be the Change of Control
Price.
16.2 A "Change of Control" shall be deemed to occur on:
(a) the date that any person or group deemed a person under Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, (other than the
Company and its subsidiaries as determined immediately prior to that
date, an employee benefit plan of the Company or its subsidiaries, or
Rexel and its affiliates) in a transaction or series of transactions has
become the beneficial owner, directly or indirectly (with beneficial
ownership determined as provided in Rule 13d-3, or any successor rule,
under such Act) of 25% or more of the outstanding securities of the
Company ("Voting Securities") having the right under ordinary
circumstances to vote at an election of the Board;
(b) the date on which one-third or more of the members of the Board shall
consist of persons other than Current Directors (for these purposes, a
"Current Director" shall mean any member of the Board as of the effective
date of the Plan, any Rexel Nominee (as defined in the Investment
Agreement, dated as of November 12, 1992, among the Company, Rexel and
International Technical Distributors, Inc., as amended from time to time)
and any successor of a Current Director whose nomination or election has
been approved by a majority of the Current Directors then on the Board);
or
(c) the date of approval by the stockholders of the Company of an agreement
providing for (A) the merger or consolidation of the Company with another
corporation where the stockholders of the Company, immediately prior to
the merger or consolidation, would not beneficially own, immediately
after the merger or consolidation, shares entitling such stockholders to
50% or more of all votes (without consideration of the rights of any
class of stock to elect directors by a separate class vote) to which all
stockholders of the corporation issuing cash or securities in the merger
or consolidation would be entitled in the election of directors or where
the members of the Board, immediately prior to the merger or
consolidation, would not, immediately after the merger or consolidation,
constitute a majority of the Board of Directors of the corporation
issuing cash or securities in the merger or consolidation or (B) the sale
or other disposition of all or substantially all the assets of the
Company.
16.3 "Change of Control Price" means the highest price per share paid in any
transaction reported on the New York Stock Exchange Composite Tape, or paid or
offered in any transaction related to a Change of Control at any time during the
90-day period ending with the Change of
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<PAGE>
SECTION 16. CHANGE OF CONTROL. (CONTINUED)
Control. Notwithstanding the foregoing sentence, in the case of Stock
Appreciation Rights granted in tandem with Incentive Stock Options, the Change
of Control Price shall be the highest price paid on the date on which the Stock
Appreciation Right is exercised.
SECTION 17. GENERAL PROVISIONS.
17.1 Each award under the Plan shall be subject to the requirement that, if
at any time the Committee shall determine that (i) the listing, registration or
qualification of the Stock subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any government regulatory body or (iii) an agreement by the recipient of an
award with respect to the disposition of Stock is necessary or desirable (in
connection with any requirement or interpretation of any federal or state
securities law, rule or regulation) as a condition of, or in connection with,
the granting of such award or the issuance, purchase or delivery of Stock
thereunder, such award shall not be granted or exercised, in whole or in part,
unless such listing, registration, qualification, consent, approval or agreement
shall have been effected or obtained free of any conditions not acceptable to
the Committee.
17.2 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements. Neither the adoption of the Plan
nor any award hereunder shall confer upon any employee of the Company, or of a
Related Company, any right to continued employment, and no award shall confer
upon any Outside Director any right to continued service as a director.
17.3 Determinations by the Committee under the Plan relating to the form,
amount, and terms and conditions of awards need not be uniform, and may be made
selectively among persons who receive or are eligible to receive awards under
the Plan, whether or not such persons are similarly situated.
17.4 No member of the Board or the Committee, nor any officer or employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination or interpretation taken or made with
respect to the Plan, and all members of the Board or the Committee and all
officers or employees of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.
SECTION 18. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on November 15, 1988, subject to approval by the
Company's stockholders. The amendment increasing the number of shares to
2,266,667 shall be effective May 13, 1994, and this amendment and restatement of
the Plan shall be effective on March 16, 1995, in each case subject to approval
by the Company's stockholders.
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<PAGE>
WILLCOX & GIBBS, INC.
Solicited by the Board of Directors for use at the Annual Meeting of
Stockholders of Willcox & Gibbs, Inc - May 12, 1995, at 11:00 A.M. at The
University Club, One West 54th Street, New York, New York.
The undersigned hereby appoints Jon O. Fullerton, Allan M. Gonopolsky
and Alain C. Viry, and any one or all of them, attorneys and proxies, with
full power of substitution and revocation in each, for and on behalf of the
undersigned, and with all the powers the undersigned would possess if
personally present, to vote at the above Annual Meeting and any adjournments
thereof all shares of stock that the undersigned would be entitled to vote
at such meeting.
Date
- --------------------------------------------
Signature
- --------------------------------------------
Signature
- --------------------------------------------
Please mark, date and sign as your name appears to the left and return in the
enclosed envelope. If acting as executor, administrator, trustee, guardian,
etc., you should so indicate when signing. If the signer is a corporation,
please sign the full corporate name, by duly authorized officer. If shares are
held jointly, each stockholder named should sign.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE MARK ON THE REVERSE SIDE AND RETURN PROMPTLY.
<PAGE>
/x/
PLEASE MARK
YOUR CHOICES
LIKE THIS
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDERS. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED "FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
APPROVAL OF ITEMS 2, 3, 4 AND 5.
WILL ATTEND
/ /
- ------------------------
ACCOUNT NUMBER
- -------
COMMON
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND
"FOR" APPROVAL OF ITEMS 2, 3, 4 AND 5.
Item 1: Election of Messrs. List, Viry and Sokolow as Class III Directors.
Withheld for the following only:
(Write the name of the nominee(s) in the space provided)
FOR all Nominees / / Withheld for all Nominees / /
Item 2: Approval of the Name Change Amendment to change the name of the
Company to Rexel North America, Inc.
FOR / / AGAINST / / ABSTAIN / /
Item 3: Approval of the Common Stock Amendment to increase the number of
authorized shares of Common Stock from 35,000,000 to 40,000,000.
FOR / / AGAINST / / ABSTAIN / /
Item 4: Approval of amending and restating the Certificate of Incorporation to
reflect the amendments in Items 2 and 3, if approved by the
stockholders, and otherwise to eliminate or revise certain outdated
provisions.
FOR / / AGAINST / / ABSTAIN / /
Item 5: Approval of the amended and restated 1988 Stock Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
In their discretion, the proxies are authorized to vote upon other business as
may properly come before the meeting.
PLEASE MARK YOUR CHOICES LIKE THIS / / IN BLUE OR BLACK INK.
