<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DANIEL INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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> 2
[DANIEL INDUSTRIES LOGO]
9753 Pine Lake Drive - Houston, Texas 77055 - (713) 467-6000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 1, 1996
Notice is hereby given that the annual meeting of stockholders of Daniel
Industries, Inc. (the "Company") will be held in the Ritz II Room of The Ritz
Carlton Hotel, 1919 Briar Oaks Lane, Houston, Texas at 4:00 p.m. on Thursday,
February 1, 1996, for the following purposes:
1. To elect three Class III directors of the Company to hold office
until the third succeeding annual meeting of stockholders after their
election and until their respective successors shall have been elected and
qualified.
2. To consider and act upon a proposal of the Board of Directors of
the Company to approve an amendment to the 1977 Stock Option Plan, which
increases by 300,000 the number of shares available for issuance under such
plan.
3. To consider and act upon a proposal of the Board of Directors of
the Company to approve the Daniel Industries, Inc. 1995 Non-Employee
Directors' Stock Option Plan.
4. To consider and act upon a proposal of the Board of Directors of
the Company to approve the Daniel Industries, Inc. Stock Award Plan.
5. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Only holders of record of shares of Common Stock of the Company at the
close of business on December 18, 1995, will be entitled to notice of and to
vote at the meeting or any adjournment thereof.
All stockholders of the Company are cordially invited to attend the annual
meeting. However, the Board of Directors requests that you promptly sign, date
and mail the enclosed proxy even if you plan to be present at the meeting. Your
proxy should be returned in the enclosed envelope, which requires no postage if
mailed in the United States.
By Order of the Board of Directors,
/s/ MICHAEL R. YELLIN
-----------------------------------
MICHAEL R. YELLIN
Secretary
December 28, 1995
PLEASE DATE, SIGN AND RETURN THE
ENCLOSED PROXY WITHOUT DELAY.
<PAGE> 3
[DANIEL INDUSTRIES LOGO]
9753 Pine Lake Drive - Houston, Texas 77055 - (713) 467-6000
PROXY STATEMENT
This proxy statement and the enclosed form of proxy are being mailed or
otherwise delivered on or about December 28, 1995, to record holders of shares
of Common Stock, $1.25 par value ("Common Stock"), of Daniel Industries, Inc.
(the "Company") at the close of business on December 18, 1995. The enclosed form
of proxy is solicited by the Board of Directors of the Company to be used at the
annual meeting of stockholders of the Company to be held on February 1, 1996,
and at any adjournment thereof. Any stockholder who executes and returns the
enclosed form of proxy may revoke it at any time before it is voted by notifying
the holder thereof of the fact of revocation or by voting in person at the
meeting. Otherwise, if received in time, it will be voted at the meeting.
Holders of record of shares of Common Stock at the close of business on
December 18, 1995, are entitled to notice of and to vote at the annual meeting.
Such holders will be entitled to cast one vote for each share so held by them on
each matter submitted to stockholders at the meeting. On the record date, there
were issued and outstanding 12,083,485 shares of Common Stock. The holders of a
majority of the total shares of Common Stock outstanding on the record date,
whether present in person or represented by proxy, will constitute a quorum for
the transaction of business at the annual meeting. The shares held by each
stockholder who signs and returns the enclosed form of proxy will be counted for
purposes of determining the presence of a quorum at the meeting. Abstentions are
counted toward the calculation of a quorum. Any unvoted position in a brokerage
account will be considered as not voted and will not be counted toward
fulfillment of quorum requirements.
The enclosed form of proxy provides a means for a stockholder to vote for
all of the nominees for director listed therein, to withhold authority to vote
for one or more of such nominees, or to withhold authority to vote for all of
such nominees. The Company's by-laws provide that directors are elected by a
plurality of the votes cast. Accordingly, the withholding of authority by a
stockholder will have no effect on the results of the election of those
directors for whom authority to vote is withheld.
Approval of the amendment to the 1977 Stock Option Plan will require the
affirmative vote of a majority of the total shares of Common Stock outstanding
on the record date; and approval of (i) the 1995 Non-Employee Directors' Stock
Option Plan; (ii) the Stock Award Plan and (iii) any other matters as may
properly come before the annual meeting will require the affirmative vote of a
majority of the total shares of Common Stock present in person or represented by
proxy and entitled to vote at the annual meeting. Abstentions have the same
effect as a vote against any proposal.
The Annual Report to Stockholders of the Company for its fiscal year ended
September 30, 1995, accompanies this proxy statement; however, the Annual Report
does not constitute a part of the proxy solicitation material.
1
<PAGE> 4
OWNERSHIP OF COMMON STOCK
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to each
person who at December 18, 1995, was known by the Company to be the beneficial
owner at that date of more than five percent of the outstanding shares of Common
Stock. Except as otherwise set forth, such persons have sole voting and sole
investment power with respect to the shares beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER
OF SHARES
BENEFICIALLY PERCENT
OWNED(1) OF CLASS
------------ --------
<S> <C> <C>
Farmers Group, Inc.(2)
4680 Wilshire Blvd.
Los Angeles, CA 90010........................................... 925,400 7.7%
State of Wisconsin Investment Board
121 East Wilson St.
Madison, WI 53702............................................... 995,300 8.2%
Mitchell Hutchins Institutional Investors, Inc.(3)
1285 Avenue of the Americas
New York, NY 10019.............................................. 608,800 5.1%
W. A. Griffin(4)
9753 Pine Lake Drive
Houston, TX 77055............................................... 1,518,067 12.6%
</TABLE>
- ---------------
(1) Based upon information furnished by directors, officers and known principal
stockholders as of December 18, 1995.
(2) Farmers Group, Inc. has shared voting and dispositive power with respect to
the shares beneficially owned by them.
(3) Mitchell Hutchins Institutional Investors, Inc. has shared voting and
dispositive power with respect to the shares beneficially owned by them.
(4) At December 18, 1995, W. A. Griffin, Chairman Emeritus and a member of the
Board of Directors, owned 983,792 shares of Common Stock (8.1%). Mr. Griffin
is also considered to be the beneficial owner of 534,275 shares of Common
Stock (4.4%) held in his capacity as trustee of a trust in which he has a
vested beneficial interest.
2
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 18, 1995, the shares of
Common Stock beneficially owned by (i) each director and nominee for director of
the Company, (ii) each executive officer of the Company listed in the summary
compensation table set forth below and (iii) all officers and directors of the
Company as a group. Except as otherwise set forth, such persons have sole voting
power and sole investment power with respect to the shares beneficially owned by
them.
<TABLE>
<CAPTION>
NUMBER
OF SHARES
BENEFICIALLY PERCENT
OWNED OF CLASS
------------ --------
<S> <C> <C>
W. A. Griffin................................................. 1,518,067(1) 12.6%
Leo E. Linbeck, Jr............................................ -0- *
R. H. Clemons, Jr............................................. 12,721 *
Gibson Gayle, Jr.............................................. 10,000 *
W. A. Griffin, III............................................ 140,139(2) 1.2%
Ronald C. Lassiter............................................ 10,300 *
Richard L. O'Shields.......................................... 12,000 *
Ralph F. Cox.................................................. -0- *
B. E. O'Neill................................................. 10,000(3) *
William C. Morris............................................. 192,259(4) 1.6%
W. C. Clingman................................................ 35,039(5) *
H. G. Schopfer, III........................................... 14,370(6) *
T. L. Sivak................................................... 9,364(7) *
M. R. Yellin.................................................. 13,435(8) *
All officers and directors as a group (14 persons)............ 1,978,751(9) 16.2%
</TABLE>
- ---------------
* Less than 1%.
(1) For further information concerning the shares of Common Stock beneficially
owned by Mr. Griffin, see Note (4) to the table under "Principal
Stockholders."
(2) At December 18, 1995, Mr. Griffin, III owned 60,667 shares of Common Stock.
Mr. Griffin, III is also considered to beneficially own 75,807 shares of
Common Stock that may be acquired within 60 days of December 18, 1995,
through the exercise of outstanding options and 3,665 shares of Common
Stock which are attributable to him through his participation in the
Company's profit sharing and savings plan.
(3) Mr. O'Neill is considered to beneficially own 10,000 shares of Common Stock
that may be acquired within 60 days of December 18, 1995, through the
exercise of an outstanding option.
(4) Mr. Morris is not standing for reelection.
(5) At December 18, 1995, Mr. Clingman owned 211 shares of Common Stock. Mr.
Clingman is also considered to beneficially own 28,307 shares of Common
Stock that may be acquired within 60 days of December 18, 1995, through the
exercise of outstanding options and 6,521 shares of Common Stock which are
attributable to him through his participation in the Company's profit
sharing and savings plan.
(6) At December 18, 1995, Mr. Schopfer, III owned 1,000 shares of Common Stock.
Mr. Schopfer, III is also considered to be the beneficial owner of 12,500
shares of Common Stock that may be acquired within 60 days of December 18,
1995, through the exercise of outstanding options and 870 shares of Common
Stock which are attributable to him through his participation in the
Company's profit sharing and savings plan.
(7) Mr. Sivak is considered to beneficially own 8,000 shares of Common Stock
that may be acquired within 60 days of December 18, 1995, through the
exercise of outstanding options and 1,364 shares of Common Stock which are
attributable to him through his participation in the Company's profit
sharing and savings plan.
3
<PAGE> 6
(8) Mr. Yellin is considered to beneficially own 11,000 shares of Common Stock
that may be acquired within 60 days of December 18, 1995, through the
exercise of outstanding options and 2,435 shares of Common Stock which are
attributable to him through his participation in the Company's profit
sharing and savings plan.
(9) Of the shares of Common Stock attributable to all officers and directors of
the Company as a group, 145,614 shares of Common Stock (1.2%) are
considered to be beneficially owned by such persons because such shares may
be acquired by them within 60 days of December 18, 1995, through the
exercise of outstanding options, and 15,912 shares of Common Stock (0.1%)
are considered to be beneficially owned by such persons because such shares
are attributable to them through their participation in the Company's
profit sharing and savings plan.
ELECTION OF DIRECTORS
At the annual meeting of stockholders, three Class III directors of the
Company are to be elected. These directors will be elected to hold office until
the third succeeding annual meeting of stockholders after their election and
until their respective successors shall have been elected and qualified.
The enclosed form of proxy lists three persons nominated by the Board of
Directors for election at the annual meeting of stockholders as Class III
directors. Proxies may not be voted for more than three nominees for Class III
director. The Board of Directors does not contemplate that any of its nominees
will become unavailable for any reason. However, should any nominee of the Board
of Directors become unavailable, proxies which do not withhold authority to vote
for that nominee will be voted for another nominee to be selected by the Board
of Directors.
DIRECTORS AND NOMINEES FOR DIRECTOR
The following table sets forth with respect to each nominee listed in the
enclosed form of proxy and each other person whose term of office as a director
will continue after the annual meeting: (i) the name and age of such person;
(ii) the principal occupation of such person for at least the last five years
(unless otherwise noted); and (iii) the year during which such person first
became a director of the Company. The table has been prepared from information
obtained from such persons.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- --- --------------------- --------
<S> <C> <C> <C>
CLASS III -- NOMINEES FOR TERMS EXPIRING AT THE THIRD SUCCEEDING ANNUAL MEETING
W. A. Griffin(1)............ 80 Chairman Emeritus of the Board of Directors of the 1951
Company and Consultant to the Company
Brian E. O'Neill(2)......... 60 President and Chief Executive Officer of Williams 1994
Interstate Natural Gas Systems
Ralph F. Cox(3)............. 63 International Petroleum Consultant and retired --
President and Chief Operating Officer of Union
Pacific Resources Company
CLASS I -- DIRECTORS WHOSE TERMS EXPIRE AT THE FIRST SUCCEEDING ANNUAL MEETING
Leo E. Linbeck, Jr.(4)...... 61 Chairman of the Board of Directors and Chief 1988
Executive Officer of Linbeck Construction
Corporation and Chairman of the Board of
Directors, Chief Executive Officer and President
of Linbeck Corporation
Ralph H. Clemons, Jr.(5).... 69 Consultant to the Company 1981
Gibson Gayle, Jr.(6)........ 69 Senior Partner, Fulbright & Jaworski L.L.P., a law 1985
firm
CLASS II -- DIRECTORS WHOSE TERMS EXPIRE AT THE SECOND SUCCEEDING ANNUAL MEETING
W. A. Griffin, III(7)....... 51 President and Chief Executive Officer of the 1991
Company
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- --- -------------------- --------
<S> <C> <C> <C>
Ronald C. Lassiter(8)....... 63 Chairman of the Board of Directors and Chief 1985
Executive Officer of Zapata Protein, Inc., a
marine protein company, and, formerly, Chairman of
the Board of Directors and Chief Executive Officer
of Zapata Corporation, a natural gas and marine
protein company
Richard L. O'Shields(9)..... 69 Chairman of the Board of Directors of the Company 1986
</TABLE>
- ---------------
(1) Mr. Griffin served as Chairman of the Board of Directors of the Company from
1957, and as Chief Executive Officer of the Company from 1985, until his
retirement in February 1995. He now is a consultant to the Company. Mr.
Griffin is a member of the Stock Option Committee of the Board of Directors
of the Company.
(2) Mr. O'Neill is President and Chief Executive Officer of each of the
interstate natural gas pipeline interests owned by The Williams Companies,
Inc. which are collectively referred to as the Williams Interstate Natural
Gas Systems ("WINGS") and include Northwest Pipeline Corporation, Williams
Natural Gas Company, Williams Western Company and, since May 1995,
Transcontinental Gas Pipeline Corporation and Texas Gas Transmission
Company. Prior to assuming his current position in January 1994, Mr. O'Neill
served as President of Williams Natural Gas Company since he joined the
company in 1988. Mr. O'Neill is also a director of the Gas Research
Institute and the American Gas Association. Mr. O'Neill is a member of the
Compensation Committee and Stock Option Committee of the Board of Directors
of the Company.
(3) Mr. Cox is a consultant on international petroleum activities. He is an
independent Trustee for the Fidelity Group of Funds and a member of the
Board of Directors of CH2M Hill, Ltd., Sanifill, Inc., and Rio Grand, Inc.
Mr. Cox also serves on advisory boards at Texas A&M University and the
University of Texas. Mr. Cox is a former Vice Chairman of the Board of
Atlantic Richfield Company (ARCO); and, President and Chief Operating
Officer of Champlin Petroleum Company (Union Pacific Resources Company).
(4) Mr. Linbeck, Jr. serves as a Life Director of the Associated General
Contractors of America and as a director of GeoQuest International Holdings,
Inc., John Hancock Advisers, Inc., and Panhandle Eastern Corporation. He
also serves as a director of The Bionomics Institute and the Texas Council
on Economic Education. He is currently serving as Chairman, Texans for
Lawsuit Reform. Mr. Linbeck is a member of the Executive Committee and
Compensation Committee of the Board of Directors of the Company.
(5) Mr. Clemons, Jr. was President and Chief Operating Officer of the Company
from 1985 until his retirement in 1991 and has served as a consultant to the
Company since then. Mr. Clemons is a member of the Stock Option Committee of
the Board of Directors of the Company.
(6) Mr. Gayle, Jr. has been a partner in the law firm of Fulbright & Jaworski
L.L.P. since 1961, and he served as Chairman of that firm's Executive
Committee from 1979 until 1992. Fulbright & Jaworski L.L.P. provides legal
services to the Company on an ongoing basis, and the Company proposes to
continue to engage the firm during the current fiscal year. Mr. Gayle is a
member of the Audit Committee and the Stock Option Committee of the Board of
Directors of the Company.
(7) Mr. Griffin, III has served as President and Chief Operating Officer of the
Company since July 1, 1991. From 1985 to 1989, Mr. Griffin, III was Vice
President, Finance and in 1989, he was elected Vice President, Finance and
Chief Financial Officer of the Company. Mr. Griffin, III is the son of W. A.
Griffin, the Chairman Emeritus of the Board of Directors of the Company. Mr.
Griffin, III serves as a Trustee of Southwest Research Institute.
(8) Mr. Lassiter is a member of the Executive Committee and Audit Committee of
the Board of Directors of the Company.
5
<PAGE> 8
(9) Mr. O'Shields, who retired as a member of the Board of Directors of
Panhandle Eastern Corporation in 1993, had served as Chairman of that Board
of Directors from 1979 until 1988. Mr. O'Shields is a member of the
Executive Committee and Compensation Committee of the Board of Directors of
the Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended September 30, 1995, the Board of Directors of
the Company held eight meetings. During fiscal 1995, each member of the Board of
Directors attended at least 75% of the combined number of meetings of the Board
of Directors and of the committees of the Board of which such director was a
member.
The Audit Committee of the Board of Directors reviews with the Company's
independent accountants the scope and results of the annual audit of the
Company's consolidated financial statements. In addition, the Audit Committee
reviews the independent accountants' management letter containing their
recommendations for improvements to the Company's internal controls. The Audit
Committee also recommends to the Board of Directors the selection of independent
accountants. The Audit Committee currently is composed of Gibson Gayle, Jr.,
William C. Morris and Ronald C. Lassiter. During the fiscal year ended September
30, 1995, the Audit Committee held two meetings.
The Compensation Committee of the Board of Directors advises the Board of
Directors concerning the compensation and benefits of certain executive officers
and operating officers of the Company. The Compensation Committee currently is
composed of Brian E. O'Neill, Leo E. Linbeck, Jr., Richard L. O'Shields and
Joseph L. Parrish, advisory director to the Company. During the fiscal year
ended September 30, 1995, the Compensation Committee held three meetings.
The Board of Directors of the Company has no standing nominating committee
or committee performing a similar function.
6
<PAGE> 9
COMPANY EXECUTIVE AND OPERATING OFFICERS
EXECUTIVE OFFICERS OF THE COMPANY
The following table lists the name, age, current position and period of
service with the Company of each executive officer of the Company. Except for
the General Counsel and the Controller, who are appointed by the Chief Executive
Officer and serve at his pleasure, each executive officer of the Company was
elected by the Board of Directors of the Company and will hold office until the
next annual meeting of the Board of Directors or until his successor shall have
been elected and qualified.
<TABLE>
<CAPTION>
COMPANY
EXECUTIVE
OFFICER
NAME AGE SINCE POSITION
---- --- --------- --------
<S> <C> <C> <C>
W. A. Griffin, III............... 51 1985 President and Chief Executive Officer
W. C. Clingman................... 61 1977 Vice President, Information Services
Michael R. Yellin................ 50 1981 Vice President, Secretary and
Treasurer
Henry G. Schopfer, III........... 49 1988 Vice President, Finance and Chief
Financial Officer
Thomas L. Sivak.................. 53 1987 General Counsel
Mary R. Beshears(1).............. 38 1995 Controller and Chief Accounting
Officer
</TABLE>
- ---------------
(1) Ms. Beshears, who is a Certified Public Accountant, joined the Company in
1984. From 1987 to 1991, she served as Internal Auditor, and from 1991 to
1995, she served as Manager of Financial Reporting. In 1995, she was named
Controller and Chief Accounting Officer.
OPERATING OFFICERS
The following table lists the principal operating officers of the Company
and its subsidiaries. Although these positions do not constitute executive
offices, the persons who hold such positions are expected to make significant
contributions to the business of the Company. With the exception of Mr. Hoffman,
all of these principal officers have been employed by the Company or a
subsidiary in a management capacity for at least five years.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Larry G. Irving.......................... 61 Vice President, Meter Operations --
Worldwide
Bela Vaczi............................... 50 Manager, Manufacturing -- Worldwide
Jerry T. Davis........................... 52 President, Daniel Flow Products, Inc.
James E. Hall............................ 53 Vice President, Electronics, Daniel Flow
Products, Inc.
H. H. Willis............................. 49 Managing Director, Daniel Industries,
Ltd.
Friedel Hoffman.......................... 60 General Manager, Daniel Messtechnik GmbH
Kenton Chickering, III................... 60 President, Daniel Valve Company
</TABLE>
7
<PAGE> 10
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE WITH RESPECT TO COMPENSATION OF EXECUTIVE
OFFICERS
The Compensation Committee of the Board of Directors is responsible for
advising the Board concerning the compensation and benefits of the executive
officers of the Company. The Company's compensation program is designed to
attract, motivate and retain management talent required to achieve corporate
objectives and increase stockholder value. The program includes base salaries
and annual and long-term incentives in the form of cash bonuses, stock awards
and stock options.
Salaries for executive officers are reviewed annually and revised, if
appropriate, based on a variety of factors, including individual performance,
general levels of market salaries and the Company's overall financial results.
The Committee's review and analysis of these matters is subjective and no
specific weight is given to any single performance factor. During the fiscal
year ended September 30, 1995, the salary of the President was increased 25.0%
when he was named Chief Executive Officer, and the other executive officers'
salaries were increased by an average of 9.2%.
Incentive compensation in the form of cash bonuses is generally linked to
the achievement of key financial and operational objectives by the Company, but
amounts awarded for any fiscal year are not based on the application of any
formula. The Board of Directors recently approved the Stock Award Plan pursuant
to which awards of Company Common Stock, with limitations on vesting and
transferability, may be awarded in lieu of a portion of the cash bonus. For the
fiscal year ended September 30, 1995, total cash bonuses accrued for such year
for the executive officers named in the summary compensation table were
$140,500, including $62,500 for the Chief Executive Officer. Under the Stock
Award Plan, 10,217 shares of Common Stock were awarded to the named executive
officers, including 4,545 shares for the Chief Executive Officer, subject to
stockholder approval of the Stock Award Plan.
The Committee believes that by providing those persons who have substantial
responsibility for the management and growth of the Company and its subsidiaries
with an opportunity to increase their ownership of Company stock, the interests
of stockholders and those persons will be more closely aligned. Accordingly,
officers and other key employees of the Company and its subsidiaries are
eligible to receive stock options from time to time, giving them the right to
purchase shares of Common Stock at a specified price. During the year ended
September 30, 1995, options to acquire 173,000 shares of Common Stock were
granted to the named executive officers, including options to acquire 60,000
shares of Common Stock granted to the Chief Executive Officer.
Compensation Committee of the Board of
Directors
Brian E. O'Neill
Leo E. Linbeck, Jr.
Richard L. O'Shields
Joseph L. Parrish
8
<PAGE> 11
CASH COMPENSATION
The following table sets forth certain information regarding compensation
for services rendered during the last three fiscal years to each of the
Company's five most highly compensated executive officers, including the Chief
Executive Officer and the former Chief Executive Officer who served for a period
in fiscal 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(2)
--------------------------- ---- --------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
W. A. Griffin, III, President and 1995 242,200 62,500 60,000 31,031
Chief Executive Officer 1994 196,400 36,000 -- 7,648
1993 168,483 40,000 37,500 4,248
W. A. Griffin(1) 1995 93,932 -- -- --
1994 275,150 25,000 -- 5,467
1993 258,483 35,000 37,500 4,604
W. C. Clingman, Vice President, 1995 119,525 21,000 30,000 21,226
Information Services 1994 115,775 13,500 -- 4,991
1993 102,150 15,000 15,000 3,721
H. G. Schopfer, III, 1995 124,160 24,000 40,000 14,051
Vice President, Finance 1994 103,275 9,000 -- 3,798
1993 92,650 10,000 7,500 2,422
T. L. Sivak, General Counsel 1995 116,035 16,500 20,000 17,231
1994 101,400 6,750 -- 4,155
1993 92,650 7,500 4,500 1,491
M. R. Yellin, Vice President, 1995 107,650 16,500 20,000 13,863
Secretary and Treasurer 1994 97,650 9,000 -- 4,108
1993 83,483 10,000 7,500 2,303
</TABLE>
- ---------------
(1) W. A. Griffin served as Chief Executive Officer of the Company from October
1, 1994 to February 2, 1995.
(2) For 1993 and 1994, represents the vested amount of the Company's
contribution to the Company's profit sharing and savings plan that was
allocated to the employee's account. For 1995, includes $8,027, $5,499,
$5,352, $4,924 and $4,815, as the vested amount of the Company's
contribution to the Company's profit sharing and savings plan, and $23,004,
$15,727, $8,699, $12,307 and $9,048, as the Company's contribution to the
Company's supplemental retirement plan in each case, allocated to the
accounts of Messrs. Griffin, III; Clingman; Schopfer, III; Sivak and Yellin,
respectively.
OPTION GRANTS AND EXERCISES
The following table sets forth additional information concerning individual
grants of stock options made during the fiscal year ended September 30, 1995, to
each of the executive officers named in the Summary Compensation Table.
9
<PAGE> 12
OPTION GRANTS DURING FISCAL 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE OF FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5%($) 10%($)
----- ---------- ------------- ----------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
W. A. Griffin, III....... 60,000 13 14.125 4/6/05 533,500 1,350,700
W. C. Clingman........... 30,000 6 14.125 4/6/05 266,500 675,300
H. G. Schopfer, III...... 40,000 8 14.125 4/6/05 355,300 900,500
T. L. Sivak.............. 20,000 4 14.125 4/6/05 177,700 450,200
M. R. Yellin............. 20,000 4 14.125 4/6/05 177,700 450,200
</TABLE>
The following table sets forth the aggregate option exercises during the
last fiscal year and the value of outstanding options at year-end held by
certain executive officers.
AGGREGATE OPTION EXERCISES IN FISCAL 1995 AND OPTION VALUES
AT SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
OPTIONS UNEX- UNEXERCISED
ERCISED AT IN-THE-MONEY
YEAR OPTIONS AT
SHARES VALUE END (#) YEAR END
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) (#) UNEXERCISABLE UNEXERCISABLE
---- ----------- ------- ------------- -------------
<S> <C> <C> <C> <C>
W. A. Griffin, III......................... None None 75,807/60,000 $68,622/$45,000
W. C. Clingman............................. None None 28,307/30,000 37,293/ 22,500
H. G. Schopfer, III........................ None None 12,500/40,000 5,625/ 30,000
T. L. Sivak................................ None None 8,000/20,000 30,937/ 15,000
M. R. Yellin............................... None None 11,000/20,000 5,625/ 15,000
</TABLE>
CHANGE OF CONTROL AGREEMENTS
Effective March 15, 1995, the Company entered into Change of Control
Agreements with the executive officers named in the summary compensation table
and certain of its operating officers (the "Employee(s)"). Each Change of
Control Agreement is for a term of three years from the later of the effective
date of the Change of Control Agreement or the last Change in Control
(hereinafter defined) of the Company, and is automatically renewable for
successive one-year terms if notice of termination is not given by the Company.
Each Change of Control Agreement is subject to earlier termination upon (i) the
Employee's death, disability or retirement or (ii) termination by the Employee
or the Company of the Employee's employment with the Company. Under each Change
of Control Agreement, a "change in control" of the Company shall have occurred
if (i) a report on Schedule 13D shall be filed with the Securities and Exchange
Commission disclosing that any person (or group of persons acting in concert),
other than the Company, one of its subsidiaries or any employee benefit plan of
the Company, is the beneficial owner of 20 percent of the outstanding securities
of the Company entitled to vote for directors ("Voting Stock"); (ii) any person
(or group of persons acting in concert), other than the Company, one of its
subsidiaries or any employee benefit plan of the Company, shall purchase
securities pursuant to a tender offer or exchange offer to acquire any Voting
Stock and, immediately thereafter, is the beneficial owner of 20 percent of the
Voting Stock; (iii) the stockholders of the Company shall approve (w) a merger
or consolidation of the Company with any other person, (x) any sale or other
transfer of all or substantially all the assets of the Company, (y) the
dissolution of the Company, or (z) a transaction immediately after the
consummation of which any person (or group of persons acting in concert) would
be the beneficial owner of 50 percent of the outstanding Voting Stock; or (iv)
during any 12-month period, individuals who at the beginning of that period
constituted the Board of Directors cease to constitute a majority thereof.
10
<PAGE> 13
Under each Change of Control Agreement, in the event the Employee
terminates his employment as a result of an event of termination for good reason
or is terminated by the Company other than as a result of an event of
termination for cause, in each case following a Change in Control, the Company
would (i) pay such individual a cash lump sum payment equal to two and one-half
times the sum of (i) the amount of base salary the Employee would have been paid
during the fiscal year of termination, (ii) the amount of any cash bonus paid or
payable to the Employee for services rendered in the prior fiscal year, and
(iii) the amount of any income that (y) is includable in the Employee's gross
income for tax purposes or (z) is attributable to the exercise of options
exercised by the Employee within the one-year period prior to the termination
date. Each Change of Control Agreement also obligates the Company to maintain in
effect, during the three-year period following termination (or such earlier date
that the Employee becomes a full-time employee of another person), other benefit
plans (including life insurance, medical and disability) for the benefit of such
Employee or to provide substantially similar benefits. If all or any part of a
payment under a Change of Control Agreement would not be deductible for federal
income tax purposes by the Company or one of its tax affiliates, the amount
would be reduced such that no portion of any change of control payment to such
Employee (whether under the Change of Control Agreement or otherwise) is not
deductible by the Company or a tax affiliate thereof.
Each Change of Control Agreement provides generally that an event of
termination for good reason shall have occurred if the Company shall (i) assign
the Employee duties inconsistent with the Employee's position in effect
immediately prior to the first Change in Control of the Company; (ii) remove or
fail to re-elect or re-appoint the Employee to any position with the Company
held immediately prior to the first Change in Control; (iii) take any other
action that results in a material diminution in such position, authority, duties
or responsibilities; (iv) reduce the Employee's annual base salary as in effect
immediately prior to the first Change in Control of the Company or as may be
increased thereafter; (v) relocate the Employee's principal office outside of
Houston, Texas; (vi) fail to continue the Employee's participation, on
substantially the same basis, in any benefit plan in which the Employee
participated prior to the first Change in Control, unless an equitable
arrangement shall have been made; (vii) materially reduce any other benefits
that were provided to the Employee by the Company prior to the first Change in
Control, including any material fringe benefits, or (viii) reduce the Employee's
number of paid vacation days. An event of termination for cause shall have
occurred if the Employee willfully and continuously fails to substantially
perform the Employee's duties or willfully engages in conduct known to be
injurious to the Company.
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company do not receive fees for
attending meetings of the Board of Directors. Each non-employee director of the
Company receives fees of $1,000 for each meeting of the Board of Directors and
for each committee meeting thereof that he attends, subject to a maximum daily
fee of $1,000. Mr. O'Shields receives a fee of $6,000 and each other
non-employee director receives a fee of $3,000 per quarter of the Company's
fiscal year during which he serves as a director of the Company. See also,
"Proposal to Approve the Daniel Industries, Inc. 1995 Non-Employee Directors'
Stock Option Plan."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
With the exception of W. A. Griffin, who retired February 2, 1995, no
member of the Compensation Committee of the Board of Directors of the Company
was, during the fiscal year ended September 30, 1995, an officer or employee of
the Company or any of its subsidiaries, or was formerly an officer of the
Company or any of its subsidiaries.
During the fiscal year ended September 30, 1995, no executive officer of
the Company served as (i) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served on the Compensation Committee of the Company, (ii) a
director of another entity, one of whose executive officers served on the
Compensation Committee of the Company, or (iii) a member of the compensation
committee (or other board committee performing equivalent functions) of another
entity, one of whose executive officers served as a director of the Company.
11
<PAGE> 14
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Securities Exchange Act of 1934 requires that the Company's directors,
executive officers and 10% stockholders report to the Securities and Exchange
Commission certain transactions involving Common Stock. The Company believes
that these filing requirements have been satisfied except that Ralph H. Clemons,
Jr. was late in filing a report regarding stock sales made in May 1993,
September 1994 and August 1995.
PERFORMANCE GRAPH
The following graph compares, as of each of the dates indicated, the
performance of the Common Stock to the Standard & Poor's 500 Stock Index ("S&P
500") and the Standard & Poor's Oil Composite Index ("S&P Oil Composite") for
the Company's last five fiscal years. The graph assumes that the value of the
investment in the Common Stock and each index was $100 at September 30, 1990 and
that all dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DANIEL S&P OIL
(FISCAL YEAR COVERED) INDUSTRIES S&P 500 COMPOSITE
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 104.03 131.17 109.31
1992 74.14 145.66 116.57
1993 93.75 164.60 134.88
1994 71.58 170.67 132.91
1995 94.81 221.43 159.52
</TABLE>
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Commission or subject to
Regulations 14A and 14C under the Exchange Act or to the liabilities of Section
18 under the Exchange Act.
PROPOSAL TO AMEND THE 1977 STOCK OPTION PLAN
The Board of Directors of the Company has approved an amendment to the 1977
Stock Option Plan (the "Option Plan") that would make an additional 300,000
shares of Common Stock available for issuance upon the exercise of options
granted thereunder and has directed that the amendment be submitted to the
holders of Common Stock for their approval.
In 1977, the stockholders of the Company approved the Option Plan, pursuant
to which options to purchase up to 100,000 shares of Common Stock could be
granted to executive officers and other key employees of the Company and its
subsidiaries (currently, approximately 90 persons). In 1990 and 1994, the
12
<PAGE> 15
stockholders approved amendments increasing by 250,000 and 400,000,
respectively, the number of shares of Common Stock available for the grant of
future options.
The Option Plan is administered by the Stock Option Committee of the Board
of Directors of the Company. The Stock Option Committee has the authority to
determine which key employees of the Company and its subsidiaries will be
granted options under the Option Plan, the number of shares of Common Stock
covered by, and the duration of, each option granted under the Option Plan, and
other terms and conditions of each option granted under the Option Plan. These
determinations are made at the time the option is granted. The options granted
under the Option Plan terminate upon severance of the optionee's employment
relationship with the Company for any reason, other than death, and are not
transferable except by will or intestate succession or pursuant to a qualified
domestic relations order.
The price at which shares of Common Stock may be purchased upon the
exercise of an option and the expiration date of the option granted under the
Option Plan is fixed by the Stock Option Committee at the time the option is
granted, but the price per share may not be less than 50% of the fair market
value of a share of Common Stock on the date the option is granted. The exercise
price per share and the number of shares issuable upon the exercise of
outstanding options, as well as the number of shares of Common Stock available
for the granting of future options under the Option Plan, are subject to
adjustment in the event of any stock dividend or other change in the Company's
capital structure.
No optionee will recognize income upon the grant of an option under the
Option Plan. Upon the exercise of any portion of an option, the optionee will
recognize taxable ordinary income equal to the excess of the fair market value
of the shares so acquired as of the date of exercise over the option price paid
for such shares. The Company receives a deduction for compensation expense for
the amount of such ordinary income. Although recent amendments to the federal
income tax laws limit the amount of that deduction, the Company believes that it
is unlikely that this limitation would diminish the amounts deductible by the
Company upon the exercise of options. Upon disposition of the shares acquired
upon the exercise of the option, the optionee will generally recognize a
long-term or short-term capital gain or loss (depending on how long the shares
were held) equal to the excess of the amount realized by the optionee upon such
disposition over the fair market value of the shares on the date the optionee
exercised the option.
At December 18, 1995, options to purchase 718,579 shares of Common Stock
were outstanding and 52,876 shares of Common Stock were available for the grant
of future options under the Option Plan. The greater number of shares with
respect to which options have been or may be granted under the Option Plan is a
result of adjustments for stock dividends and stock splits. The table under the
heading "Option Grants During Fiscal 1995," which is included in the information
with respect to "Executive Compensation", sets forth the number of shares of
Common Stock covered by options granted under the Option Plan during the fiscal
year ended September 30, 1995, to each executive officer named in that table.
During that fiscal year, (i) options to purchase 173,000 shares of Common Stock
were granted under the Option Plan to all current executive officers of the
Company as a group; (ii) no options were granted under the Option Plan to any
directors or nominees for director who were not executive officers of the
Company; (iii) no options were granted under the Option Plan to any associate of
any director, executive officer or nominee; and (iv) options to purchase 470,000
shares of Common Stock were granted under the Option Plan to all employees as a
group, including all current officers of the Company who are not executive
officers.
The Board of Directors has approved the proposed amendment to the Option
Plan and recommends that the stockholders vote "for" approval of the amendment.
PROPOSAL TO APPROVE THE DANIEL INDUSTRIES, INC. 1995
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
The Board of Directors of the Company has approved the Daniel Industries,
Inc. 1995 Non-Employee Directors' Stock Option Plan (the "Directors' Plan"), a
copy of which is attached hereto as Exhibit A, and has directed that the
Directors' Plan be submitted to the holders of Common Stock for their approval.
An aggregate of 170,000 shares may be issued under the Directors' Plan.
13
<PAGE> 16
Pursuant to the terms of the Directors' Plan, following the annual meeting
of stockholders on February 1, 1996, each non-employee director of the Company,
including directors who are full time consultants to the Company and the
advisory director will be granted an option to purchase 15,000 shares of Common
Stock and, for so long as shares are available for grant under the Directors'
Plan, each future non-employee director will be granted an option to purchase
15,000 shares of Common Stock on the date of his initial election. The non-
employee directors of the Company will be W. A. Griffin, Brian E. O'Neill and
Ralph F. Cox, subject to their election, Leo E. Linbeck, Jr., R. H. Clemons,
Jr., Gibson Gayle, Jr., Ronald C. Lassiter and Richard L. O'Shields. Joseph L.
Parrish serves as an advisory director of the Company.
The purpose of the Directors' Plan is to advance the interests of the
Company by providing the non-employee directors with additional incentive to
serve the Company by increasing their proprietary interest in the success of the
Company. The options granted under the Directors' Plan will become exercisable
as follows: 5,000 shares on the first anniversary of the grant, 5,000 additional
shares on the second anniversary of the grant and the remaining shares on the
third anniversary of the grant. Each option granted to the Company's non-
employee directors provides for the purchase of the shares thereunder at a per
share purchase price equal to the closing sale price of the Company's Common
Stock on the New York Stock Exchange on the date of grant. The term of each
option granted under the Directors' Plan is ten years, subject to earlier
termination if the optionee ceases to be a member of the Company's Board of
Directors. If the optionee gives notice that he does not intend to stand for
reelection or is given notice asking him to retire, or if the optionee ceases to
be a member of the Board by reason of death or disability, the option will
terminate on the earlier of the expiration date or one year following the date
he ceases to be a member of the Board. If the optionee resigns as a director,
the option will terminate on the earlier of the expiration date or 30 days
following the effective date of the resignation.
No optionee will recognize income upon the grant of an option under the
Directors' Plan. Upon the exercise of any portion of an option, the optionee
will recognize taxable ordinary income equal to the excess of the fair market
value of the shares so acquired as of the date of exercise over the option price
paid for such shares. The Company receives a deduction for compensation expense
for the amount of such ordinary income. Upon disposition of the shares acquired
upon the exercise of the option, the optionee will generally recognize a
long-term capital gain or loss (depending on how long the shares were held)
equal to the excess of the amount realized by the optionee upon such disposition
over the fair market value of the shares on the date the optionee exercised the
option.
The Board of Directors has approved the proposed Directors' Plan and
recommends that the stockholders vote "for" approval of the plan.
PROPOSAL TO APPROVE
THE DANIEL INDUSTRIES, INC. STOCK AWARD PLAN
The Board of Directors of the Company has approved the 1995 Daniel
Industries, Inc. Stock Award Plan (the "Award Plan"), a copy of which is
attached hereto as Exhibit B, that would make 100,000 shares of Common Stock
available for issuance as a part of the incentive compensation paid to the
Company's executive officers and operating officers (13 persons) and has
directed that the Award Plan be submitted to the holders of Common Stock for
their approval.
The Award Plan will be administered by the Compensation Committee of the
Board of Directors of the Company and will enable the Compensation Committee to
award Common Stock as a part of the total incentive compensation paid to the
Company's executive officers and operating officers. The shares of Common Stock
awarded a Grantee will be issued in his name, but he will not have the right to
sell or otherwise dispose of the shares until the shares are vested and any
limits placed on transferability of the shares expire. The Grantee will have
the right to vote the shares which have not yet vested or are otherwise subject
to transferability limitations and collect the dividends paid thereon, but any
unvested shares will be subject to forfeiture if a Grantee resigns or is
terminated for cause.
14
<PAGE> 17
Under current interpretations of the Internal Revenue Code of 1986, as
amended (the "Code"), the Grantee will generally recognize ordinary income in
the form of compensation for federal income tax purposes when his rights with
respect to the stock first become non-forfeitable or transferable by him in an
amount equal to the fair market value of the stock at that time. However, if a
Grantee makes an election under Section 83(b) of the Code he will recognize
ordinary income in the form of compensation for federal income tax purposes when
the stock is transferred to him, without regard to any forfeiture provisions or
restrictions on the Grantee's ability to freely transfer the stock in an amount
equal to the fair market value of the stock at that time. The Company will be
entitled to a deduction for federal income tax purposes in the same amount and
at the same time that the Grantee of the stock recognizes the income
attributable to the stock award, subject to certain limitations that apply if
the Grantee's aggregate compensation is greater than $1 million. Although
amounts in excess of $1 million may not, under certain circumstances, be
deductible by the Company, the Company does not anticipate that any Grantee's
compensation will exceed the $1 million limit on deductions.
NEW PLAN BENEFITS
STOCK AWARD PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE ($) NUMBER OF UNITS
NAME AND POSITION (1) (1)
----------------- ---------------- ---------------
<S> <C> <C>
W.A. Griffin, III, President and Chief Executive Officer...... 62,500 4,545
W.C. Clingman, Vice President, Information Services........... 21,000 1,527
H.G. Schopfer, III, Vice President, Finance................... 24,000 1,745
T.L. Sivak, General Counsel................................... 16,500 1,200
M.R. Yellin, Vice President, Secretary and Treasurer.......... 16,500 1,200
Executive Officer Group....................................... 140,500 10,217
Non-Executive Director Group.................................. -- --
Non-Executive Officer/Employee Group.......................... 134,794 9,804
</TABLE>
- ---------------
(1) Awards for a specified dollar amount were made subject to stockholders'
approval to each of the listed persons or groups on December 8, 1995, which
awards are payable in shares of Common Stock based on the closing sale price
as reported on the New York Stock Exchange on that date ($13.75). Such
awards vest over a three-year period with the Grantee being entitled to the
delivery of one-third of the shares covered by the award on each of the
first, second and third anniversary dates of the award, provided such
Grantee is still employed by the Company. In the event of the retirement,
disability or death of the Grantee, the award vests in full when such event
occurs.
The Board of Directors has approved the Stock Award Plan and recommends
that the stockholders vote "for" approval of the plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective February 3, 1995, W. A. Griffin entered into a two-year
Consulting Agreement with the Company under which he provides services and
advice on business matters as requested by the Chief Executive Officer. Under
the Consulting Agreement, the Company pays Mr. Griffin a fee of $135,000 per
year and reimburses him for certain expenses. Effective July 1, 1994, R. H.
Clemons, Jr. entered into a two-year Consulting Agreement with the Company under
which he provides services primarily in the area of product development and
marketing. Under the Consulting Agreement the Company pays Mr. Clemons a fee of
$85,000 per year and reimburses him for certain expenses.
In fiscal 1995, the Company sold the operating assets of its subsidiary,
Daniel En-Fab Systems, Inc., to En-Fab, Inc., a Delaware corporation, whose
principal stockholders are W. A. Griffin and the subsidiary's former president,
for approximately $1.5 million. As a result of such sale, En-Fab, Inc. was
indebted to the Company in the amount of $752,000. The indebtedness was paid in
full in October 1995.
15
<PAGE> 18
INDEPENDENT ACCOUNTANTS
Under the recommendation of the Audit Committee, the Board of Directors of
the Company has selected Price Waterhouse LLP, independent accountants, to audit
the consolidated financial statements of the Company and its subsidiaries for
the fiscal year ending September 30, 1996. Price Waterhouse LLP has served as
the Company's independent accountants for the past 39 years. Neither Price
Waterhouse LLP nor any of its partners has any financial interest in or any
connection with the Company, other than as independent accountants.
Representatives of Price Waterhouse LLP are expected to be available at the
annual meeting of stockholders to respond to appropriate questions, and they
will be permitted to make a statement if they so desire.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of holders of shares of Common Stock intended to be presented
at the annual meeting of stockholders of the Company to be held in 1997 must be
received by the Company at its principal executive offices, 9753 Pine Lake
Drive, Houston, Texas 77055, no later than August 30, 1996, in order to be
included in the proxy statement and form of proxy relating to that meeting.
OTHER INFORMATION
At the date of this proxy statement, the Board of Directors of the Company
knows of no other matters to be presented for consideration at the annual
meeting of stockholders. However, if any other matters should properly come
before the meeting or any adjournment thereof, the persons named in the enclosed
form of proxy will have discretionary authority to vote the shares of Common
Stock represented by such proxy with respect to such matters. The shares
represented by such proxy will also be voted with respect to matters incident to
the conduct of the meeting.
The cost of solicitation of proxies in the accompanying form will be borne
by the Company. Certain officers and regular employees of the Company may
solicit the return of proxies by telephone, telegram or personal interview. In
addition, the Company has employed Morrow & Co. to assist in the solicitation of
proxies. The fees and expenses of that firm in connection with such solicitation
are not expected to exceed $10,000.
By Order of the Board of Directors,
/s/ MICHAEL R. YELLIN
---------------------
MICHAEL R. YELLIN
Secretary
16
<PAGE> 19
EXHIBIT A
DANIEL INDUSTRIES, INC.
1995 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. PURPOSE.
This 1995 Non-Employee Directors' Stock Option Plan (this "Plan") of Daniel
Industries, Inc., a Delaware corporation (the "Company"), is adopted, subject to
stockholder approval to the extent required by Section 15 hereof, for the
benefit of the directors of the Company, including advisory directors and
directors who are full-time consultants to the Company, who at the time of their
service are not employees of the Company or any of its subsidiaries
("Non-Employee Directors"), and is intended to advance the interests of the
Company by providing the Non-Employee Directors with additional incentive to
serve the Company by increasing their proprietary interest in the success of the
Company.
2. ADMINISTRATION.
This Plan shall be administered by the Board of Directors of the Company.
All questions of interpretation and application of this Plan, or as to options
granted hereunder (the "Options"), shall be subject to the determination by the
Board of Directors, which determination shall be final and binding.
Notwithstanding the above, the selection of Non-Employee Directors to whom
Options are to be granted, the number of shares subject to any Option, the
exercise price of any Option and the term of any Option shall be as hereinafter
provided and the Board of Directors shall have no discretion as to such matters.
3. OPTION SHARES.
The stock subject to the Options and other provisions of this Plan shall be
shares of the Company's Common Stock, $1.25 par value per share (or such other
par value as may be designated by act of the Company's stockholders, the "Common
Stock"). The total amount of the Common Stock with respect to which Options may
be granted shall not exceed 170,000 shares in the aggregate; provided, that the
class and aggregate number of shares which may be subject to the Options granted
hereunder shall be subject to adjustment in accordance with the provisions of
Section 12 hereof. Such shares may be treasury shares or authorized but unissued
shares.
If any outstanding Option for any reason shall expire or terminate by
reason of the death of the optionee, the surrender of any such Option, or any
other cause, the shares of Common Stock allocable to the unexercised portion of
such Option may again be subject to an Option under this Plan.
4. GRANT OF OPTIONS.
Subject to the provisions of Section 5 hereof, there shall be granted to
each person who is a Non-Employee Director following the annual meeting of
stockholders of the Company on February 1, 1996, an Option to purchase 15,000
shares of the Common Stock at an Option Price equal to the closing sale price
per share, as reported on the New York Stock Exchange on such date.
For so long as this Plan is in effect and shares are available for the
grant of Options hereunder, each person who shall become a Non-Employee Director
after the February 1, 1966 annual meeting of stockholders shall be granted, on
the date of his initial election, an Option to purchase 15,000 shares of Common
Stock at an Option Price equal to the closing sale price of a share of Common
Stock on that date as reported on the New York Stock Exchange; provided that, if
no sale of the Common Stock was reported on such date, then the fair market
value shall mean the closing sale price of a share of the Common Stock as of the
first preceding date for which such prices were reported; and provided further
that if the Common Stock is no longer traded on the New York Stock Exchange, the
Board of Directors may provide for another means for determining the fair market
value of a share of Common Stock on the date of grant.
<PAGE> 20
5. DURATION OF OPTIONS.
Subject to the vesting provisions of Section 6 hereof, each Option granted
under this Plan shall be exercisable for a term of ten years from the date of
grant, subject to earlier termination as provided in Section 9 hereof.
6. AMOUNT EXERCISABLE.
Each Option will be exercisable as follows:
(a) Beginning on the day after the first anniversary of the date of
grant, an Option may be exercised for up to 1/3 of the shares subject to
the Option;
(b) After the expiration of each succeeding anniversary date of the
date of grant, an Option may be exercised for up to an additional 1/3 of
the shares initially subject to the Option, so that after the expiration of
the third anniversary of the date of grant, the Option shall be exercisable
in full;
(c) To the extent not exercised, installments shall be cumulative, and
an Option may be exercised in whole or in part until it expires on the
tenth anniversary of the date of grant.
7. EXERCISE OF OPTIONS.
An optionee may exercise such optionee's Option by delivering to the
Company a written notice stating (i) that such optionee wishes to exercise such
Option on the date such notice is so delivered, (ii) the number of shares of
stock with respect to which such Option is to be exercised and (iii) the address
to which the certificate representing such shares of stock should be mailed. To
be effective, such written notice shall be accompanied by payment of the Option
Price of each of such shares of stock, together with the amount of any required
withholding tax.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the optionee, (ii) payment of the Option Price of the shares
of stock with respect to which such Option is to be exercised and (iii) payment
of an amount necessary to satisfy any withholding tax liability that may result
from the exercise of such Option, a certificate representing the number of
shares of stock with respect to which such Option has been so exercised, such
certificate to be registered in the name of such optionee, shall be delivered to
such optionee, provided that such delivery shall be considered to have been made
when such certificate shall have been mailed, postage prepaid, to such optionee
at the address specified for such purpose in such written notice from the
optionee to the Company.
8. TRANSFERABILITY OF OPTIONS.
Options shall not be transferable by the optionee otherwise than by will or
under the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as amended (the
"Code"), and shall be exercisable, during his lifetime, only by the optionee.
9. TERMINATION OF SERVICE, DEATH AND CHANGE IN CONTROL.
In the event an optionee gives notice of his resignation from the Board of
Directors before the expiration of the Option, the Option shall terminate on the
earlier of the 30th day following the effective date of such resignation or the
expiration date of the Option.
In the event an optionee gives notice that he does not intend to stand for
reelection or is given notice that he will be asked to retire from the Board of
Directors, then, notwithstanding Article 6 hereof, the Option shall become
exercisable with respect to all shares subject thereto, and the Option shall
terminate on the earlier of one year from the effective date of his retirement
from the Board or the date of expiration of the Option.
In the event of the death or disability of an optionee while a member of
the Board of Directors, then, notwithstanding Article 6 hereof, the Option shall
become exercisable with respect to all shares subject thereto and the Option
shall terminate on the earlier of one year from the date of such death or
disability or the date of
2
<PAGE> 21
expiration of the Option. After the death of the optionee, his executors or
administrators, or any person or persons to whom the option may be transferred
by will or by the laws of descent and distribution shall have the right, at any
time prior to the Option's termination, to exercise the Option pursuant to the
terms of the Plan.
If there shall occur a change in the control of the Company while any
shares of Common Stock remain subject to an outstanding Option, then the Option
shall terminate only upon the expiration of the Option without regard to the
other provisions of this Section 9. For purposes of this Plan, a "change in
control" of the Company shall mean a change in control of a nature that would be
required to be reported in response to Item 5(f) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 (the "Exchange Act")
as in effect on the date hereof; provided, that, without limitation, such a
change in control shall be deemed to have occurred if (i) any person, including
a "person" as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, is
or becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's
then outstanding securities or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Company's Board
of Directors cease for any reason to constitute at least a majority thereof.
10. REQUIREMENTS OF LAW.
The Company shall not be required to sell or issue any shares under any
Option if the issuance of such shares shall constitute a violation by the
optionee or the Company of any provisions of any law or regulation of any
governmental authority. Each Option granted under this Plan shall be subject to
the requirements that, if at any time the Board of Directors of the Company
shall determine that the listing, registration or qualification of the shares
subject thereto upon any securities exchange or under any state or federal law
of the United States or of any other country or governmental subdivision
thereof, or the consent or approval of any governmental regulatory body, or
investment or other representations, are necessary or desirable in connection
with the issue or purchase of shares subject thereto, no such Option may be
exercised in whole or in part unless such listing, registration, qualification,
consent, approval or representation shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. If required at any time
by the Board of Directors, an Option may not be exercised until the optionee has
delivered an investment letter to the Company. In addition, specifically in
connection with the Securities Act of 1933 (as now in effect or hereafter
amended), upon exercise of any Option, the Company shall not be required to
issue the underlying shares unless the Board of Directors has received evidence
satisfactory to it to the effect that the holder of such Option will not
transfer such shares except pursuant to a registration statement in effect under
such Act or unless an opinion of counsel satisfactory to the Company has been
received by the Company to the effect that such registration is not required.
Any determination in this connection by the Board of Directors shall be final,
binding and conclusive. If the shares issuable on exercise of an Option are not
registered under the Securities Act of 1933, the Company may imprint on the
certificate for such shares the following legend or any other legend which
counsel for the Company considers necessary or advisable to comply with the
Securities Act of 1933:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH REGISTRATION
OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION,
THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER."
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) and, if any shares are so registered, the Company may remove
any legend on certificates representing such shares. The Company shall not be
obligated to take any other affirmative action to cause the exercise of an
Option or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority.
3
<PAGE> 22
11. NO RIGHTS AS STOCKHOLDER.
No optionee shall have rights as a stockholder with respect to shares
covered by his Option until the date of issuance of a stock certificate for such
shares; and, except as otherwise provided in Section 12 hereof, no adjustment
for dividends, or otherwise, shall be made if the record date therefor is prior
to the date of issuance of such certificate.
12. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
The existence of outstanding Options shall not affect in any manner the
right of the Company (i) to make any change in the Company's capital structure
or its business, (ii) to effect any merger or consolidation of the Company,
(iii) to issue any bonds, debentures or other evidences of indebtedness, (iv) to
issue any preferred stock or any other securities affecting the Common Stock or
the rights of the holders thereof, (v) to cause the dissolution of the Company
or any sale or transfer of all or any part of the assets or business of the
Company, or (vi) to take any other corporate action or proceeding, whether of a
similar character or otherwise.
If the Company shall effect a reclassification of shares of Common Stock,
the payment of a stock dividend to holders of shares of Common Stock, or some
other increase or reduction in the number of shares of Common Stock outstanding
without receiving compensation therefor in money, services or property, then (i)
the number, class and per share price of shares of Common Stock issuable upon
the exercise of any outstanding Option shall be appropriately adjusted so that
the optionee to whom such Option was granted shall be entitled upon the exercise
of such Option to receive, for the same aggregate consideration, the same number
and class of shares that such optionee would have received had such optionee
exercised such Option immediately prior to the occurrence of the event requiring
such adjustment and (ii) the aggregate number of shares of Common Stock, and the
class thereof, that may be issued upon the exercise of Options that are not at
the time outstanding shall be adjusted by substituting for such number and class
that number and class of shares that would have been received by the holder of
record of an equal number of outstanding shares of Common Stock as the result of
the occurrence of the event requiring such adjustment.
After a merger of one or more corporations into the Company, or after a
consolidation of the Company and one or more corporations under circumstances in
which the Company is the surviving corporation, each holder of an outstanding
Option shall be entitled upon the exercise of such Option to receive (subject to
any required action by shareholders), in lieu of the number of shares of Common
Stock issuable upon the exercise of such Option, the number and class of shares
or other securities to which such holder would have been entitled pursuant to
the terms of the agreement of merger or consolidation if, immediately prior to
such merger or consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares of Common Stock
issuable upon the exercise of such Option.
If the Company is merged into or consolidated with another corporation
under circumstances in which the Company is not the surviving corporation, or if
the Company dissolves, (i) subject to the provisions of clause (iii) of this
grammatical paragraph, after the effective date of such merger or consolidation,
as the case may be, each holder of any outstanding Option shall be entitled upon
the exercise of such Option to receive, in lieu of shares of Common Stock, such
shares or other securities as the holders of shares of Common Stock received
pursuant to the terms of such merger or consolidation; (ii) the Board of
Directors of the Company, in its discretion, may waive any limitations set forth
in or imposed pursuant to Section 6 hereof so that all outstanding Options shall
be exercisable in full from and after a date prior to the effective date of such
merger, consolidation or dissolution, as the case may be; and (iii) all
outstanding Options may be canceled by the Board of Directors as of the
effective date of such merger, consolidation or dissolution, provided that (x)
notice of such cancellation shall be given to each holder of an outstanding
Option and (y) such holder shall have the right to exercise such Option in full
(without regard to any limitations set forth in or imposed pursuant to Section 6
hereof) during the 30-day period immediately preceding the effective date of
such merger, consolidation or dissolution.
Except as in this Paragraph 12 expressly provided, the issue by the Company
of shares of any class, or securities convertible into shares of any class, for
money or services or property, either upon direct sale or upon
4
<PAGE> 23
the exercise of rights or warrants to subscribe therefor or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number, class or Option Price of any shares issuable upon
the exercise of any outstanding Option.
13. AMENDMENT OR TERMINATION OF PLAN.
The Board of Directors may modify, revise or terminate this Plan at any
time and from time to time; provided, however, that without the further approval
of the stockholders of the Company, the Board of Directors may not (a) change
the aggregate number of shares which may be issued under Options pursuant to the
provisions of this Plan; (b) reduce the Option Price permitted for the Options;
or (c) extend the term during which an Option may be exercised or the
termination date of this Plan unless, in each such case, the Board of Directors
of the Company shall have obtained an opinion of legal counsel to the effect
that stockholder approval of the amendment is not required (i) by law, (ii) by
the rules and regulations of, or any agreement with, the New York Stock Exchange
or (iii) to make available to the optionee with respect to any option granted
under this Plan, the benefits of Rule 16b-3 of the Rules and Regulations under
the Securities Exchange Act of 1934 (the "1934 Act"), or any similar or
successor rule. In addition, this Plan may not be amended more than once every
six months with respect to the plan provisions referred to in Rule
16b-3(c)(2)(ii)(A) of the Rules and Regulations under the 1934 Act other than to
comport with changes in the Code, the Employee Retirement Income Security Act,
or the rules thereunder.
14. WRITTEN AGREEMENT.
Each Option granted hereunder shall be embodied in a written option
agreement, which shall be subject to the terms and conditions prescribed above,
and shall be signed by the optionee and by the appropriate officer of the
Company for and in the name and on behalf of the Company. Such an option
agreement shall contain such other provisions as the Committee in its discretion
shall deem advisable.
15. EFFECTIVE DATE OF PLAN.
This Plan shall become effective and shall be deemed to have been adopted
on February 1, 1996, if within one year of that date either (i) it shall have
been approved by the stockholders of the Company or (ii) the Board of Directors
shall have received an opinion of legal counsel to the effect that such approval
is not required (a) by law, or (b) to make available to the optionee with
respect to the Option the benefits of Rule 16b-3 of the Rules and Regulations
under the 1934 Act. No Option shall be granted pursuant to this Plan on or after
February 1, 2006.
5
<PAGE> 24
EXHIBIT B
DANIEL INDUSTRIES, INC.
STOCK AWARD PLAN
ARTICLE I
PURPOSE
The purpose of the Daniel Industries, Inc. Stock Award Plan is to promote
the interests of Daniel Industries, Inc. (the "Company") and its stockholders by
providing the Company with a mechanism to enable the Company and its
subsidiaries to attract, retain and motivate their key employees with
compensatory arrangements and benefits that make use of the Company's stock so
as to provide for or increase the proprietary interests of such employees in the
Company.
ARTICLE II
DEFINITIONS
2.1 "Award" shall mean an award of Stock granted under this Plan.
2.2 "Board" shall mean the Board of Directors of the Company.
2.3 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.4 "Committee" shall mean the committee appointed by the Board to
administer this Plan.
2.5 "Company" shall mean Daniel Industries, Inc.
2.6 "Disinterested" shall mean disinterested within the meaning of
applicable regulatory requirements, including those promulgated under Section 16
of the Exchange Act.
2.7 "Employee" shall mean an officer or employee of the Company or a
Subsidiary.
2.8 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.9 "Fair Market Value" shall mean the closing price of the Stock on the
date in question as reported in the New York Stock Exchange -- Composite
Transactions listing or if, in the discretion of the Committee, another means of
determining the fair market value of a share of Stock at such date shall be
necessary or advisable, the Committee may provide for another means of
determining such fair market value.
2.10 "Grantee" shall mean an Employee to whom an Award is granted pursuant
to this Plan.
2.11 "Plan" shall mean this Daniel Industries, Inc. Stock Award Plan.
2.12 "Stock" shall mean the Company's common stock, $1.25 par value (or
such other par value as may be designated by act of the Company's stockholders).
2.13 "Subsidiary" shall mean any subsidiary of the Company.
ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to participate in the Plan shall be
those full-time key Employees as the Committee shall determine during the term
of this Plan.
<PAGE> 25
ARTICLE IV
STOCK AWARDS
4.1 Stock Subject to the Plan. The total amount of the Stock with respect
to which Awards may be granted shall not exceed in the aggregate 100,000 shares.
The class and aggregate number of shares which may be subject to Awards granted
under the Plan shall be subject to adjustment under Section 4.5. Shares may be
treasury shares or authorized but unissued shares.
4.2 Awards Procedure. The Committee may make awards of Stock to eligible
Employees selected by it. The amount of each Award and the vesting and/or
transferability restrictions with respect to each Award shall be determined by
the Committee in its sole discretion. If the Committee imposes vesting and/or
transferability restrictions on the Grantee's rights with respect to shares of
Stock granted to him, the Committee may issue such instructions to the Company's
transfer agent in connection therewith as it deems appropriate. The Committee
may also cause the certificate for shares issued pursuant to an Award to be
imprinted with any legend which counsel for the Company considers advisable with
respect to the restrictions.
4.3 Award Agreements. Each Award shall be evidenced by a written agreement
between the Company and the Grantee containing the vesting and/or
transferability restrictions and other provisions not inconsistent with the Plan
as the Committee may require. Any Stock forfeited by a Grantee pursuant to an
Award Agreement shall again be available for use in future Awards.
4.4 Grantee's Rights as Stockholder.
(a) Commencing on the date of the transfer of shares of stock to a Grantee
on the books of the Company pursuant to an Award, the Grantee shall have the
right to receive all dividends or other distributions paid or made with respect
to the shares awarded.
(b) Commencing on the date of the transfer of shares of Stock to a Grantee
on the books of the Company pursuant to an Award, the Grantee shall have the
right to vote the shares.
4.5 Changes in the Company's Capital Structure. The existence of Awards
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Stock
or the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a dividend in capital stock or other
equity securities of the Company on its Stock, or other increase or reduction of
the number of shares of Stock outstanding, without receiving consideration
therefor in money, services, or property, or the reclassification of its Stock,
in whole or in part, into other equity securities of the Company, then the
number and class of shares then reserved for issuance under the Plan (or in the
case of a dividend of, or reclassification into, other equity securities, those
other securities) shall be adjusted by substituting for the total number and
class of shares of stock then reserved, the number and class or classes of
shares of stock (or in the case of a dividend of, or reclassification into,
other equity securities, those other securities) that would have been received
by the owner of an equal number of outstanding shares of Stock as a result of
the event requiring the adjustment.
4.6 Requirements of Law. The Company shall not be required to issue or
deliver any shares of Stock under any Award if such issuance or delivery shall
constitute a violation by the Grantee or the Company of any provisions of any
law or regulation of any governmental authority. Each Award granted under this
Plan shall be subject to the requirements that, if at any time the Board or the
Committee shall determine that the listing, registration or qualification of the
shares upon any securities exchange or under any state or federal law of the
United States or of any other country or governmental subdivision, or the
consent or approval of any governmental regulatory body, or investment or other
representations, are necessary or desirable in connection with the issue or
purchase or delivery of shares subject to an Award, no shares shall be delivered
pursuant to
-2-
<PAGE> 26
an Award unless the listing, registration, qualification, consent, approval or
representations shall have been effected or obtained free of any conditions not
acceptable to the Committee. Any determination in this connection by the
Committee shall be final. In the event the shares issued pursuant to an Award
are not registered under the Securities Act of 1933, the Company may imprint on
the certificate for those shares the following legend or any other legend which
counsel for the Company considers necessary or advisable to comply with the
Securities Act of 1933:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of
any state and may not be sold or transferred except upon registration or
upon receipt by the Company of an opinion of counsel satisfactory to the
Company, in form and substance satisfactory to the Company, that
registration is not required for a sale or transfer.
The Company may, but shall in no event be obligated to, register any securities
covered by this Plan under the Securities Act of 1933 (as now in effect or as
later amended) and, in the event any shares are registered, the Company may
remove any legend on certificates representing those shares. The Company shall
not be obligated to take any other affirmative action in order to cause the
issuance or delivery of shares under an Award to comply with any law or
regulation or any governmental authority.
ARTICLE V
ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the Board,
the members of which shall be Disinterested persons. The Committee shall consist
of not less than two members of the Board who are not Employees. The Board shall
have the power from time to time to add or remove members of the Committee and
to fill vacancies arising for any reason. Meetings shall be held at any time and
place as the Committee shall choose. A majority of the members of the Committee
shall constitute a quorum for the transaction of business. The vote of a
majority of those members present at any meeting shall decide any question
brought before that meeting. In addition, the Committee may take any action
otherwise proper under the Plan by the affirmative vote, taken without a
meeting, of a majority of its members. No member of the Committee shall be
liable for any act or omission of any other member of the Committee or for any
act or omission on his own part, including but not limited to the exercise of
any power or discretion given to him under the Plan, except those resulting from
his own gross negligence or willful misconduct. All questions of interpretation
and application of the Plan or as to Awards granted under it shall be subject to
the determination of a majority of the Committee. The Committee, in exercising
any power or authority granted under this Plan or in making any determination
under this Plan, shall perform or refrain from performing those acts using its
sole discretion and judgment. Any decision made by the Committee or any
refraining to act or any act taken by the Committee in good faith shall be final
and binding on all parties. The Committee's decision shall never be subject to
de novo review.
ARTICLE VI
TAX WITHHOLDING
6.1 General Method of Withholding. The Company may meet its tax withholding
obligations under the Code and applicable state or local law arising upon the
later of the date of transfer of the shares of stock to a Grantee or the first
date on which his rights with respect to the Stock are transferable by him by
delivering to him (or his estate, if applicable) a reduced number of shares of
Stock in the manner specified herein. The Company shall (i) calculate the amount
of withholding tax due on the assumption that all such shares of Stock are made
available for delivery, (ii) reduce the number of such shares made available for
delivery so that the Fair Market Value of the shares withheld approximates the
amount of tax the Company is obliged to withhold, and (iii) in lieu of the
withheld shares, remit cash to the United States Treasury and other applicable
governmental authorities, on behalf of the participant, in the amount of the
withholding tax due. The Company shall withhold only whole shares of Stock to
satisfy its withholding obligation. If the Fair Market Value of the withheld
shares does not equal the Company's withholding tax obligation, the Company
-3-
<PAGE> 27
shall withhold shares with a Fair Market Value slightly in excess of the amount
of its withholding obligation and shall remit the excess cash to the Grantee (or
his estate, if applicable) with the shares of Stock made available for delivery.
The withheld shares of Stock not made available for delivery by the Company
shall be retained as treasury stock or will be cancelled and, in either case,
the recipient's right, title and interest in such Stock shall terminate.
In the alternative, the Treasurer of the Company may permit the Grantee to
pay the sum necessary to satisfy the Company's withholding obligation directly
to the Company.
6.2 Section 83(b) Elections. No Employee shall exercise the election
permitted under Section 83(b) of the Code with respect to an Award without
written approval of the Treasurer of the Company. If the Treasurer permits such
an election with respect to any Award, the Company shall require the Grantee to
pay the Company an amount necessary to satisfy the Company's tax withholding
obligation.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate this Plan at any time. However,
no amendment or termination of the Plan may impair a Grantee's rights with
respect to an Award granted prior to the amendment or termination without the
written consent of the Grantee.
ARTICLE VIII
MISCELLANEOUS
8.1 No Employment Obligation. The granting of any Award shall not impose
upon the Company any obligation to employ or continue to employ any Grantee. The
right of the Company to terminate the employment of any officer or other
Employee shall not be diminished or affected by reason of the fact that an Award
has been granted to him.
8.2 Gender. If the context requires, words of one gender when used in this
Plan shall include the other and words used in the singular or plural shall
include the other.
8.3 Headings. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of this Plan and shall
not be used in construing the terms of this Plan.
8.4 Other Awards. The grant of an Award shall not confer upon the Grantee
the right to receive any future or other Awards under this Plan or the right to
receive future Awards subject to the same transferability conditions as Awards
previously granted.
8.5 Governing Law. The provisions of this Plan shall be construed,
administered and governed under the laws of the State of Texas.
-4-
<PAGE> 28
- --------------------------------------------------------------------------------
DANIEL INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON FEBRUARY 1, 1996
The undersigned stockholder of Daniel Industries, Inc. (the
"Company") hereby appoints W. A. Griffin, III, Michael R. Yellin and
Henry G. Schopfer, III, or any of them, attorneys and proxies of the
undersigned, with full power of substitution, to vote, as designated
below, the number of votes which the undersigned would be entitled to
cast if personally present at the Annual Meeting of Stockholders of
the Company to be held in the Ritz II Room of The Ritz Carlton Hotel,
1919 Briar Oaks Lane, Houston, Texas, at 4:00 P.M. on Thursday,
P February 1, 1996, and at any adjournment thereof.
1. / / FOR all of the nominees for Class III director listed
below (except as indicated to the contrary below).
R
/ / WITHHOLD AUTHORITY to vote for election of directors.
NOMINEES: W. A. Griffin, Brian E. O'Neill, Ralph F. Cox.
O
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT PERSON'S NAME IN THE SPACE
PROVIDED BELOW.)
X -----------------------------------------------------------------
2. Approval of the amendment to the Company's 1977 Stock Option
Plan to increase by 300,000 the number of shares available for
issuance thereunder. / / FOR / / AGAINST / / ABSTAIN
Y
3. Approval of the Company's 1995 Non-Employee Directors' Stock
Option Plan. / / FOR / / AGAINST / / ABSTAIN
4. Approval of the Company's Stock Award Plan. / / FOR
/ / AGAINST / / ABSTAIN
5. In their discretion, the above-named proxies are authorized to
vote upon such other matters as may properly come before the
meeting or any adjournment thereof and upon matters incident
to the conduct of the meeting.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
- --------------------------------------------------------------------------------
<PAGE> 29
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED. IF YOU EXECUTE AND RETURN
THIS PROXY BUT DO NOT SPECIFY OTHERWISE, THIS PROXY WILL BE VOTED FOR
EACH OF THE NOMINEES LISTED HEREIN OR IF ANY ONE OR MORE OF THE
NOMINEES BECOMES UNAVAILABLE, FOR ANOTHER NOMINEE OR OTHER NOMINEES
TO BE SELECTED BY THE BOARD OF DIRECTORS AND FOR PROPOSALS 2, 3 AND
4, WHICH ARE MORE PARTICULARLY DESCRIBED IN THE ACCOMPANYING PROXY
STATEMENT, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED.
Dated: ----------------------
-----------------------------
-----------------------------
(Signature of Stockholder(s))
Your signature should
correspond with your name as
it appears hereon. Joint
owners should each sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please set forth
your full title as it appears
hereon.
PLEASE MARK, SIGN, DATE
AND RETURN IMMEDIATELY.
PLEASE NOTE ANY CHANGE OF ADDRESS.
- --------------------------------------------------------------------------------
