<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / 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
Benjamin Moore & Co.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
Benjamin Moore & Co.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------
The Annual Meeting of the Shareholders of Benjamin Moore & Co. will be
held on Thursday, the 16th day of April, 1998, at 11:00 o'clock in the
morning, New Jersey time, at the Woodcliff Lake Hilton, Chestnut Ridge Road
and Tice Boulevard, Woodcliff Lake, New Jersey, for the following purposes:
1. To elect three (3) Class I Directors to hold office for three years
each.
2. To vote upon the 1998 Stock Incentive Plan.
3. To transact such other business as may properly be brought before the
meeting, or any adjournment or postponement thereof.
In accordance with the Bylaws of the Company, the Board of Directors has
fixed the close of business on March 2, 1998 as the record date for the
meeting. Accordingly, only shareholders of record at the close of business on
March 2, 1998 will be entitled to notice of and to vote at the meeting.
Whether or not you expect to be personally present at the meeting,
please complete, date, sign and return the enclosed proxy in the envelope
which is provided in order to be certain that your shares will be voted at
the meeting.
If you attend, we invite you to stay for lunch after the meeting. In
order that we may plan for lunch, we request you to please complete and
return the enclosed card together with the proxy.
Montvale, New Jersey
March 23, 1998
By Order Of The Board of Directors
John T. Rafferty
Secretary
<PAGE>
PROXY STATEMENT
General
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Benjamin Moore & Co., a New Jersey corporation (the
"Company"), of proxies to be used at the Annual Meeting of Shareholders to be
held on the 16th day of April, 1998, at 11:00 o'clock in the morning, New Jersey
time, or at any adjournment or postponement thereof (the "Meeting"). Only
shareholders of record at the close of business on March 2, 1998 (the "Record
Date") will be entitled to notice of and to vote at the Meeting.
The principal executive offices of the Company are located at 51 Chestnut
Ridge Road, Montvale, New Jersey 07645. This Proxy Statement and the related
Notice of Annual Meeting of Shareholders and proxy were first sent or given to
shareholders on or about March 23, 1998.
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1997, including financial statements, accompanies this Proxy
Statement and the related Notice of Annual Meeting of Shareholders and proxy.
The cost of the solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by use of the mails, the Company may use
the services of its officers and regular employees (none of whom will receive
any compensation therefor in addition to their regular compensation) to solicit
proxies, personally or by telephone. Arrangements may also be made with banks,
brokerage houses and other custodians, nominees and fiduciaries to forward the
proxy materials to the beneficial owners, and the Company may reimburse such
banks, brokerage houses, custodians, nominees and fiduciaries for their
reasonable expenses in connection therewith. At the 1997 Annual Meeting of
Shareholders, more than 92.7% of the outstanding shares were represented at the
meeting in person or by proxy.
Outstanding Shares
At the close of business on March 2, 1998, there were 8,852,536 shares of
Common Stock, par value $10 per share, outstanding. Each share of Common Stock
is entitled to one vote on all matters with respect to which holders thereof are
entitled to vote, as set forth in the accompanying Notice of Annual Meeting of
Shareholders.
Proxy Procedure
The form of proxy provides space for a shareholder to withhold authority to
vote for any or all nominees for the Board of Directors or to abstain from
voting on the 1998 Stock Incentive Plan if the shareholder chooses to do so. The
election of Directors requires a plurality of the votes cast and approval of the
1998 Stock Incentive Plan requires the affirmative vote of a majority of the
votes cast at the Meeting. Abstentions and broker non-votes are counted for
purposes of determining whether a quorum is present at the Meeting. For purposes
of election of Directors, abstentions and broker non-votes are not considered as
votes cast. For purposes of the proposal to approve the 1998 Stock Incentive
Plan, abstentions are considered as a vote against the proposal and broker
non-votes are not considered as votes cast. The presence of a majority of the
outstanding shares of Common Stock will constitute a quorum. Votes on each of
the above matters will be counted by duly appointed inspectors of election,
whose responsibilities are to ascertain the number of shares outstanding and the
voting power of each, determine the number of shares represented at the Meeting
and the validity of proxies and ballots, count all votes and report the results
to the Company.
A properly completed, signed and dated proxy which is received prior to the
Meeting will be voted in the manner specified therein. If authority to vote for
one or more of the nominees for election as Director has not been withheld on
the proxy in accordance with the instructions set forth thereon, the proxy will
be
<PAGE>
voted for the election of all such nominees; if authority to vote for one or
more of such nominees has been so withheld, the proxy will only be voted for the
election of the balance of such nominees. The proxy will be voted for not more
than three (3) Directors. If no direction is given with respect to the 1998
Stock Incentive Plan, a signed proxy will be voted in favor of such proposal.
At the date of this Proxy Statement, the Board of Directors does not know
of any matters to be brought before the Meeting which are not set forth in the
accompanying Notice of Annual Meeting of Shareholders. A proxy in the
accompanying form will confer discretionary authority with respect to any such
other matter. If any such other matter or matters are properly brought before
the Meeting or any adjournment(s) or postponement(s) thereof, it is the
intention of the persons named in the accompanying form of proxy to vote the
shares represented thereby in accordance with their best judgment.
A shareholder may revoke his or her proxy prior to the voting thereof by
giving written notice of revocation to the Secretary of the Company, by
executing and delivering a later dated proxy, or by attending the Meeting and
voting his or her shares in person.
PRINCIPAL SHAREHOLDERS
Set forth below is certain information, as of March 2, 1998 (or in the case
of interests under the Company's Employees' Stock Ownership Plan (the "ESOP"),
the most recent allocation date which is December 31, 1997), with respect to
certain persons, including each person who, to the knowledge of the Company, may
be deemed to own beneficially (within the meaning of the applicable rules and
regulations of the Securities and Exchange Commission) more than five percent of
the Company's Common Stock. In reviewing the following table, it should be noted
that as set forth in the notes thereto, a substantial number of the shares are
held in trusts, the trustees of which are more than one of the persons named
below; accordingly, the number of shares set forth opposite the name of each
such person (and the corresponding percentage ownership represented thereby)
refers, in several instances, to the same shares.
The shares shown include stock options issued under the Stock Option Plan
of the Company which are exercisable on or within sixty days after March 2,
1998. The stock options permit the purchase of a total of 8,000 shares, 6,000
shares, 10,000 shares and 6,000 shares by Messrs. Belcher, Jr., Dupuy, Roob and
Vail, respectively, each of whom is a Director of the Company. For the purpose
of calculating percentage ownership for each person such shares were also
considered to be outstanding.
<TABLE>
<CAPTION>
Shares Owned Approximate
Beneficially Percentage of
as of Outstanding
Name and Address March 2, 1998 Shares
- ---------------- --------------- --------------
<S> <C> <C>
Benjamin M. Belcher, Jr. 1,277,974 (1) 14.4
51 Chestnut Ridge Road
Montvale, New Jersey 07645
Yvan Dupuy 440,745 (2) 4.9
51 Chestnut Ridge Road
Montvale, New Jersey 07645
Richard Roob 864,553 (3) 9.7
51 Chestnut Ridge Road
Montvale, New Jersey 07645
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Shares Owned Approximate
Beneficially Percentage of
as of Outstanding
Name and Address March 2, 1998 Shares
<S> <C> <C>
Charles C. Vail 515,868 (4) 5.8
51 Chestnut Ridge Road
Montvale, New Jersey 07645
Benjamin Moore & Co. Employees' Stock 430,005 (5) 4.9
Ownership Plan Trust
51 Chestnut Ridge Road
Montvale, New Jersey 07645
</TABLE>
(1) Includes 1,149,061 shares held by trusts of which Mr. Belcher, Jr. is
co-trustee. The other co-trustees of said trusts are as follows: (a) trusts
holding a total of 16,000 of such shares--individuals having no affiliation
with the Company; (b) trusts holding 420,133 of such shares--Mr. Vail; (c)
trust holding 274,923 of such shares--Mr. Roob; and (d) a trust holding
8,000 of such shares--Mrs. Sara B. Wardell, a Director of the Company. In
each case, the co-trustees are empowered to make all decisions in respect
of the shares, including the voting and disposition thereof. Also, Mr.
Belcher, Jr. is one of three trustees of the ESOP. Mr. Belcher, Jr. has an
interest under the ESOP in 2,297 shares. The other trustees are Mr. Yvan
Dupuy and Mr. Richard Roob, each of whom is a Director of the Company. Mr.
Belcher, Jr.'s wife owns 2,824 shares which are not counted above, and in
which he disclaims any beneficial interest.
(2) Mr. Dupuy is one of three trustees of the ESOP. Mr. Dupuy has an interest
under the ESOP in 1,177 shares. The other trustees are Mr. Benjamin M.
Belcher, Jr. and Mr. Richard Roob, each of whom is a Director of the
Company.
(3) Includes 743,213 shares held by trusts of which Mr. Roob is a co-trustee.
The other co-trustees of said trusts are as follows: (a) trust holding
274,923 of such shares -- Mr. Belcher, Jr.; (b) a trust holding 19,200 of
such shares -- Mrs. Wardell and Mr. Vail; (c) a trust holding 9,559 of such
shares -- an individual having no affiliation with the Company and a
retiree of the Company; and (d) a trust holding 9,526 of such shares -- an
individual having no affiliation with the Company. In each case, the
trustees are empowered to make all decisions in respect of the shares,
including the voting and disposition thereof. Also, Mr. Roob is one of
three trustees of the ESOP. Mr. Roob has an interest under the ESOP in
3,079 shares. The other trustees are Mr. Benjamin M. Belcher, Jr. and Mr.
Yvan Dupuy, each of whom is a Director of the Company. Mr. Roob's wife owns
9,000 shares and each of his two daughters owns 500 shares, which are not
counted above, and in which he disclaims any beneficial interest.
(4) Includes 504,933 shares held by trusts of which Mr. Vail is a co-trustee.
The other co-trustees of said trusts are as follows: (a) trusts holding
420,133 of such shares -- Mr. Belcher, Jr.; (b) a trust holding 19,200 of
such shares - Mr. Roob and Mrs. Wardell; (c) a trust holding 24,000 of such
shares -- Mrs. Wardell; (d) a trust holding 33,600 of such shares -- Mr.
Ward B. Wack, a Director of the Company; and (e) a trust holding 8,000 of
such shares -- an individual having no affiliation with the Company. The
co-trustees are empowered to make all decisions in respect of the shares,
including the voting and disposition thereof. Also includes 935 shares in
which Mr. Vail has an interest under the ESOP. Mr. Vail's wife owns 200
shares which are not counted above, and in which he disclaims any
beneficial interest.
(5) The ESOP (described hereafter) owns these shares and the three trustees are
Mr. Benjamin M. Belcher, Jr., Mr. Yvan Dupuy and Mr. Richard Roob.
3
<PAGE>
Proposal No. 1
ELECTION OF DIRECTORS
Pursuant to the Company's Certificate of Incorporation and Bylaws, the
Board of Directors is divided into three classes. Each year the Directors in one
class are elected to serve terms of three years.
The Board of Directors has nominated Benjamin M. Belcher, Jr., Yvan Dupuy
and Gerald W. Moore, all of whom were previously elected by the shareholders,
for election as Class I Directors at the 1998 Annual Meeting of Shareholders.
The three (3) nominees for election as Class I Directors, if elected, will each
hold office for a three-year term until the Annual Meeting of Shareholders to be
held in the year 2001, and until a successor has been duly elected and
qualified.
Mr. William J. Fritz and Mr. Michael C. Quaid, Class I Directors, are
retiring at the time of the 1998 Annual Meeting of Shareholders after eighteen
and twenty-five years of service as Directors, respectively. Accordingly, the
Board of Directors pursuant to the Bylaws of the Company has determined that the
number of Directors of the Company will be reduced from 16 to 14, effective
April 16, 1996, upon the expiration of the terms of Mr. Fritz and Mr. Quaid.
The persons named as proxies in the accompanying form of proxy have advised
the Company that, unless otherwise instructed, they intend to vote the shares
covered by duly executed proxies for the election of Benjamin M. Belcher, Jr.,
Yvan Dupuy and Gerald W. Moore. All of the nominees have agreed to serve if
elected. Should any such person become unable or unavailable for election as a
Director, an event which the Board of Directors does not anticipate, the
individuals appointed as proxies reserve the right to vote such shares for the
election of such substitute nominee(s) as the Board of Directors may propose.
The following table sets forth certain information with respect to the
three (3) nominees for election as Class I Directors to hold office for three
years and with respect to each Director whose term of office will continue after
the Meeting. See also "Ownership of Securities by Nominees and Directors" below.
Nominees for Election
<TABLE>
<CAPTION>
Year Term Served as
of Office a Director
Name Age Principal Occupation Will Expire Since
- ----- ----- ---------------------- ------------- -----------
<S> <C> <C> <C> <C>
Class I Directors
Benjamin M. Belcher, Jr.* 63 Executive Vice President of the Company 2001 1975
since 1991; Vice President-Planning and
Secretary of the Company from 1983 to 1991(1)
Yvan Dupuy*+ 46 President of the Company since 1996; 2001 1990
Senior Vice President of the Company from
1995 to 1996; Vice President-Sales and
Marketing of the Company from 1988 to 1995
Gerald W. Moore *+(section) 65 Retired business executive; private investor 2001 1994
from 1989 to the present; formerly Associate
Editor of Equipment Distribution magazine
</TABLE>
4
<PAGE>
Directors Whose Terms of Office
Will Continue After the Meeting
<TABLE>
<CAPTION>
Year Term Served as
of Office a Director
Name Age Principal Occupation Will Expire Since
- ---- ----- ---------------------------------------- ------------ -----------
<S> <C> <C> <C> <C>
Class II Directors
Charles H. Bergmann, Jr. 54 Director of Communications of Alto Dairy 1999 1996
(section) Cooperative, a 100 year old farmer-owned
cooperative in Waupun, Wisconsin, and
employed there since 1989
Robert H. Mundheim 65 Senior Executive Vice President and General 1999 1997
Counsel since December 1997 of Salomon Smith
Barney Holdings, Inc. which together with its
sub-sidiaries conducts global investment banking,
global securities and commodities trading;
Executive Vice President and General Counsel
from September 1992 to 1997 of Salomon
Inc, a predecessor of Salomon Smith Barney
Holdings, Inc.
Charles C. Vail* 54 Senior Vice President-Human Resources and 1999 1986
Administration of the Company and a
Vice President since 1988
Ward B. Wack 66 Retired; Consultant to the Company from 1978 1999 1975
to 1994 (1)
Sara B. Wardell 55 Managing Director, Scoville Memorial Library, 1999 1987
Salisbury, CT, from 1978 to 1993 and since
then has been a library consultant (1)
Class III Directors
Ward C. Belcher 51 Vice President-Operations of the Company 2000 1988
since 1989 (1)
Frederick J. Costello+ 60 Retired executive of Union Carbide Corporation, 2000 1997
(section) a chemicals company; President of the Solvents
and Coatings Materials Division of Union
Carbide Corporation from 1989 until retirement
in 1993
Robert J. Hodgson 60 President of Technical Coatings Co., a 2000 1994
wholly owned U.S. subsidiary of the
Company, since 1987
John C. Moore, Jr.+ 53 Employed by Electronic Data Systems (EDS) 2000 1994
Consulting Business Unit which consults on
the use of information technology for the
operational needs of business, since 1989
Richard Roob*+ 65 Chairman of the Board of Directors 2000 1979
of the Company since 1984
Maurice C. Workman*+ 69 Retired; President of the Company from 1970 2000 1963
to 1996
</TABLE>
5
<PAGE>
*Member of the Executive and Finance Committee.
+Member of the Audit Committee.
(section)Member of the Compensation and Stock Option Plan Committee.
(1) Messrs. B. M. Belcher, Jr. and W. C. Belcher are brothers, Mrs. Wardell is
their sister and Mr. Wack is their first cousin.
Ownership of Securities by Nominees and Directors
Set forth below is certain information, as of March 2, 1998 (or in the case
of interests under the Company's Employees' Stock Ownership Plan (the "ESOP"),
the most recent allocation date which is December 31, 1997), with respect to the
shares of Common Stock of the Company, and with respect to the Common Shares of
its Canadian subsidiary, which may be deemed to be beneficially owned (within
the meaning of the applicable rules and regulations of the Securities and
Exchange Commission), by each nominee for election as a Director of the Company,
by each of its current Directors, by each of the executive officers named in the
Summary Compensation Table appearing below and by all Directors and executive
officers as a group. In reviewing the following table, it should be noted that
as set forth in the notes thereto, a substantial number of the shares are held
in trusts, the trustees of which are more than one of the persons named below;
accordingly, the number of shares set forth opposite the names of each such
person (and the corresponding percentage ownership presented below) refers, in
several instances, to the same shares.
The shares shown include stock options issued under the Stock Option Plan
of the Company which are exercisable on or within sixty days after March 2,
1998. The stock options permit the purchase of a total of 8,000 shares, 6,000
shares, 6,000 shares, 3,500 shares, 10,000 shares and 6,000 shares by Messrs.
B.M. Belcher, Jr., W. C. Belcher, Dupuy, Hodgson, Roob and Vail, respectively,
and 47,867 shares by all Directors and executive officers as a group. For the
purpose of calculating percentage ownership for each person or the group such
shares were also considered to be outstanding.
<TABLE>
<CAPTION>
Shares of
Shares of Approximate Canadian Approximate
Company Percentage of Subsidiary Percentage of
Owned as of Outstanding Owned as of Outstanding
Name 3/2/98 Shares 3/2/98 Shares
- ----- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Benjamin M. Belcher, Jr. (1) (1) 8,270 (12) .6
Ward C. Belcher 246,590 (2) 2.8 5,490 (13) *
Charles H. Bergmann, Jr. 99,531 (3) 1.1
Frederick J. Costello 500 *
Yvan Dupuy (1) (1) 1,000 *
William J. Fritz 12,500 *
Robert J. Hodgson 7,234 (4) * 1,000 *
Gerald W. Moore 84,240 (5) .9
John C. Moore, Jr. 346,958 (6) 3.9
Robert H. Mundheim 500 *
Michael C. Quaid 15,900 (7) * 600 *
Richard Roob (1) (1) 7,200 (14) .6
Charles C. Vail (1) (1)
Ward B. Wack 255,958 (8) 2.9 6,700 (15) .5
Sara B. Wardell 230,402 (9) 2.6 3,060 *
Maurice C. Workman 5,115 (10) * 1,000 *
Directors and executive officers
as a group (21 persons,
including the above) 2,759,234 (11) 31.0 29,520 (11) 2.3
</TABLE>
6
<PAGE>
*Represents .4% or less of the outstanding shares of Common Stock of the
Company or its Canadian subsidiary.
(1) Reference is made to the information set forth under the caption "Principal
Shareholders" above, and to the table and the notes thereunder.
(2) Includes 36,482 shares of the Company's Common Stock held by trusts of
which Mr. Ward C. Belcher is a co-trustee. The co- trustees are empowered
to make all decisions in respect of the shares, including the voting and
disposition thereof. Also includes 1,566 shares in which Mr. Belcher has an
interest under the Company's ESOP. In addition, Mr. Belcher is Custodian of
29,664 of such shares held under the Uniform Gifts to Minors Act. Mrs. Ward
C. Belcher owns 5,980 shares of the Company's Common Stock of which 4,256
shares are held as Custodian under the Uniform Gifts to Minors Act. Mr.
Belcher disclaims any beneficial interest in such shares which are not
counted above.
(3) Includes 94,226 shares owned by Bergmann Enterprises Limited Partnership of
which Mr. Bergmann, Jr. is the managing general partner. Also includes
4,176 shares held by a trust of which Mr. Bergmann, Jr. is a co-trustee
with Mrs. Charles H. Bergmann, Jr. Mrs. Bergmann, Jr. owns 3,972 shares and
is a trustee with their son of a trust holding 7,511 shares which are not
counted above, and in which Mr. Bergmann, Jr. disclaims any beneficial
interest.
(4) Includes 634 shares in which Mr. Hodgson has an interest under the
Company's ESOP.
(5) Held by two trusts of which Mr. Gerald W. Moore is a trustee. Mr. Gerald W.
Moore is: (a) the sole trustee of a trust holding 49,416 of such shares and
(b) a co-trustee with a bank of a trust holding 34,824 of such shares. The
trustees are empowered to make all decisions in respect of the shares,
including the voting and disposition thereof.
(6) Includes 346,608 shares held by a trust of which Mr. John C. Moore, Jr. is
a co-trustee with his uncle and two cousins. The co-trustees are empowered
to make all decisions in respect of the shares, including the voting and
disposition thereof.
(7) Mrs. Quaid owns 3,800 shares which are not counted above, and in which Mr.
Quaid disclaims any beneficial interest.
(8) Includes 222,358 shares owned by Wack Enterprises, L.P. of which Mr. Wack
is the sole shareholder of the general partner Warco Corp. Mr. Wack also
holds a 99% limited partnership interest in Wack Enterprises, L.P. Also
includes 33,600 shares of the Company's Common Stock held by a trust of
which Mr. Wack is a co-trustee. The other co-trustee is Mr. Vail. The
co-trustees are empowered to make all decisions in respect of the shares,
including the voting and disposition thereof. Mrs. Wack owns 200 shares
which are not counted above, and in which Mr. Wack disclaims any beneficial
interest.
(9) Includes 58,909 shares held by trusts of which Mrs. Wardell is a
co-trustee. The other co-trustees of said trusts are as follows: (a) a
trust holding 19,200 of such shares--Mr. Roob and Mr. Vail; (b) a trust
holding 24,000 of such shares--Mr. Vail; (c) a trust holding 8,000 of such
shares--Mr. Belcher, Jr.; and (d) a trust holding 7,709 of such shares--a
bank. Mrs. Wardell's adult daughter owns 27,361 shares which are not
counted above, and in which she disclaims any beneficial interest.
(10) Mrs. Workman owns 5,089 shares which are not counted above, and in which
Mr. Workman disclaims any beneficial interest.
(11) Shares which may be deemed to be owned by more than one executive officer
or Director have been counted only once for purposes of the group totals.
(12) Includes 4,800 shares held by a trust of which Mr. Belcher, Jr. is a
co-trustee. The co-trustees are empowered to make all decisions in respect
of the shares, including the voting and disposition thereof.
(13) Includes 1,230 shares held as custodian for his children.
(14) Includes 4,800 shares held by a trust of which Mr. Roob is a co-trustee.
The co-trustees are empowered to make all decisions in respect of the
shares, including the voting and disposition thereof.
(15) Held by Wack Enterprises, L.P. See footnote (8) above.
7
<PAGE>
Shares owned by the Directors' parents (including the Estates of parents),
spouses, adult children and their spouses, brothers or sisters and their spouses
(except those who are Directors of the Company), aunts and uncles, in which
shares beneficial ownership is disclaimed, total 1,002,033 shares, or 11.3% of
the outstanding shares.
Committees of the Board of Directors
The Company has an Audit Committee, an Executive and Finance Committee and
a Compensation and Stock Option Plan Committee, but does not have a Nominating
Committee. The Audit Committee functions include recommending to the Board of
Directors the engagement of the independent public accountants for the Company,
reviewing with the independent public accountants the plan and results of the
audit engagement, considering the effect of any non-audit services upon the
independence of the accountants, approving the fees for audit and non-audit
services, and reviewing with the independent public accountants the adequacy of
the Company's system of internal accounting controls. The Executive and Finance
Committee may exercise all powers of the Board of Directors with certain
exceptions as required by law. The Compensation and Stock Option Plan Committee
is responsible for the approval of the Company's performance bonus plan and for
compensation arrangements for senior executives, including each executive
officer named in the Summary Compensation Table appearing below; it establishes
performance goals for senior executives, and it administers the Company's Stock
Option Plan approved by the shareholders on April 15, 1993.
During 1997, there were five meetings of the Board of Directors, three
meetings of the Audit Committee, five meetings of the Executive and Finance
Committee and seven meetings of the Compensation and Stock Option Plan
Committee. Each Director of the Company attended at least 75% of the meetings of
the Board of Directors and the Committee or Committees of which such person was
a member.
DIRECTOR COMPENSATION
In 1997, all non-employee Directors of the Company were paid a fee at an
annual rate of $30,000 in consideration of their services as such. The fee will
be $30,000 for non-employee Directors in 1998. Directors who are employees are
not compensated for services as a Director.
In addition, William J. Fritz (who is a Director of the Company who retired
as an employee on December 31, 1996 and who will retire as a Director at the
Annual Meeting on April 16, 1998) was also paid a fee for consulting service
rendered to the Company in 1997 at an annual rate of $50,000. Further, Maurice
C. Workman (who is a Director of the Company who retired as an employee on April
30, 1996) was also paid a fee for consulting service rendered to the Company in
1997 at an annual rate of $75,000. He will be paid a fee for consulting service
in 1998 at an annual rate of $25,000. Gerald W. Moore (who is a Director of the
Company) will also be paid a fee in 1998 at an annual rate of $15,000 for
service as Chairman of the Compensation and Stock Option Plan Committee.
EXECUTIVE COMPENSATION
The following table sets forth information for each of the last three
fiscal years concerning the compensation earned by the Company's Chief Executive
Officer and each of the other four most highly compensated executive employees
of the Company during 1997 who were executive officers of the Company as of the
end of such fiscal year.
8
<PAGE>
Summary Compensation Table
Annual
Compensation
<TABLE>
<CAPTION>
Other
Annual All Other
Name and Salary Bonus Compensation Compensation
Principal Position Year ($) (1) ($) (2) ($) (3) ($) (4)
- ------------------- ---- ------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Richard Roob 1997 609,500 160,000 4,782 2,239
Chairman of the 1996 586,000 115,735 5,738 2,134
Board of Directors and 1995 558,300 -0- 6,599 1,900
Chief Executive Officer
Yvan Dupuy 1997 349,992 101,750 5,818 2,239
President and 1996 293,344 49,135 5,738 2,134
Chief Operating Officer 1995 221,100 -0- 6,599 1,900
Benjamin M. Belcher, Jr. 1997 307,500 66,885 4,782 2,239
Executive Vice President 1996 298,500 41,044 5,738 2,134
1995 284,500 -0- 6,599 1,900
Charles C. Vail 1997 235,625 42,398 10,680 2,239
Senior Vice President- 1996 215,500 32,476 12,261 2,134
Human Resources and 1995 205,100 -0- 13,731 1,900
Administration
Ward C. Belcher 1997 211,000 34,637 4,782 2,239
Vice President- 1996 203,000 27,912 5,738 2,134
Operations 1995 193,300 -0- 6,599 1,900
</TABLE>
(1) Salary includes amounts deferred pursuant to salary reduction elections
made under the Company's Deferred Savings and Investment Plan (a "401(k)
Plan") which does not have a Company matching contribution.
(2) See the discussion below under the caption "Annual Incentives".
(3) Includes only imputed income pursuant to the Internal Revenue Code of 1986
with respect to promissory notes without stated interest delivered in
partial payment for the purchase of Common Stock under the Employees' Stock
Purchase Plan. See caption "Compensation Committee Interlocks and Insider
Participation" below.
(4) Includes only the fair market value of shares allocated in respect of the
indicated years under the Employees' Stock Ownership Plan.
Revised Retirement Income Plan and Excess Benefit Plan
The following table shows, as of December 31, 1997, estimated annual
benefits payable upon retirement at age 65 under the Company's Revised
Retirement Income Plan (the "Retirement Plan") assuming that an employee would
be entitled to receive benefits under the Retirement Plan provisions which would
yield the largest benefit.
9
<PAGE>
Pension Plan Table
<TABLE>
<CAPTION>
Highest Average
Salary Over Years of Credited Service
3 Consecutive Years 10 Years 20 Years 30 Years 35 Years 40 Years 45 Years
- ------------------- -------- ---------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
$200,000 28,134 56,268 84,402 98,468 113,468 128,468
250,000 35,634 71,268 106,902 124,718 143,468 162,218
300,000 43,134 86,268 129,402 150,968 173,468 195,968
350,000 50,634 101,268 151,902 177,218 203,468 229,718
400,000 58,134 116,268 174,402 203,468 233,468 263,468
450,000 65,634 131,268 196,902 229,718 263,468 297,218
500,000 73,134 146,268 219,402 255,968 293,468 330,968
550,000 80,634 161,268 241,902 282,218 323,468 364,718
600,000 88,134 176,268 264,402 308,468 353,468 398,468
650,000 95,634 191,268 286,902 334,718 383,468 432,218
</TABLE>
The maximum number of years of credited service under the Retirement Plan
is capped at 35 years except for employees hired prior to January 1, 1970.
Under the Company's Retirement Plan, which is a non- contributory,
qualified, defined benefit plan, the Company makes actuarially determined annual
contributions on behalf of substantially all of its United States employees who
have completed at least one year of service with the Company. As of December 31,
1997, Messrs. Roob, Dupuy, Belcher, Jr., Vail and W. C. Belcher had respectively
21, 21, 36, 14 and 26 years credited service under the Plan. The compensation
covered by the Retirement Plan is that described under the "Salary" column of
the Summary Compensation Table. Benefits shown in the Pension Plan Table are
computed on the basis of a straight life annuity and are not subject to offset
for Social Security. To the extent that an employee's retirement benefit as
computed in accordance with the Plan exceeds maximum amounts permitted under the
Internal Revenue Code of 1986, the difference will be paid by the Company under
the Company's unfunded Excess Benefit Plan approved by the Board of Directors
which provides a compensating non-qualified annual retirement supplement.
Supplemental Executive Retirement Plan
In 1996 the Company established a non-qualified Supplemental Executive
Retirement Income Benefit Plan. This Plan is designed to equalize benefits for
certain senior executives. The Compensation and Stock Option Plan Committee has
been authorized to select the participants in this Plan. Messrs. Roob, Dupuy and
Vail are participants. Benefits under this Plan will not exceed the benefits
under the Retirement Plan and the Excess Benefit Plan for an employee with 35 or
more years of service.
The following table shows, as of December 31, 1997, estimated annual
benefits payable upon retirement at age 65 under the Supplemental Executive
Retirement Income Benefit Plan.
Supplemental Executive Retirement Income Benefit Plan Table
<TABLE>
<CAPTION>
Highest Average
Salary Over Years of Credited Service
3 Consecutive Years 15 Years 20 Years 25 Years
- ------------------- -------- -------- ---------
<S> <C> <C> <C>
$200,000 90,000 100,000 107,500
250,000 112,500 125,000 134,375
300,000 135,000 150,000 161,250
350,000 157,500 175,000 188,125
400,000 180,000 200,000 215,000
450,000 202,500 225,000 241,875
500,000 225,000 250,000 268,750
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Highest Average
Salary Over Years of Credited Service
3 Consecutive Years 15 Years 20 Years 25 Years
- -------------------- -------- -------- ----------
<S> <C> <C> <C>
550,000 247,500 275,000 295,625
600,000 270,000 300,000 322,800
650,000 292,500 325,000 349,375
</TABLE>
The maximum number of years of credited service under the Supplemental
Executive Retirement Income Benefit Plan is 25 years. As of December 31, 1997,
Messrs. Roob, Dupuy and Vail had respectively 21, 21 and 14 years of credited
service. The compensation covered by this Plan is that described under the
"Salary" column of the Summary Compensation Table. Benefits shown in the
Supplemental Executive Retirement Income Benefit Plan Table are computed on the
basis of a straight life annuity and are subject to offset by the participant's
benefits under the Retirement Plan and the Excess Benefit Plan and the
participant's primary Social Security benefit. Upon a participant's termination
of employment following a change in control the benefit under this Plan will
become fully vested and the actuarial equivalent of the benefit will be paid
immediately in a lump sum.
Canadian Subsidiary Plans
The Company's Canadian subsidiary, Benjamin Moore & Co., Limited, maintains
a non-contributory defined benefit pension plan which is qualified for tax
purposes under the laws of Canada, as well as an excess benefit plan and a
qualified profit sharing plan. The plans provide benefits to employees of the
Canadian subsidiary similar to those provided by the Company's Retirement Plan
and Excess Benefit Plan described above and Employees' Stock Ownership Plan
described below.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The following persons, who are non-employee Directors, serve as members of
the Compensation and Stock Option Plan Committee, which establishes the
compensation of the Company's senior executives named in the Summary
Compensation Table above: Charles H. Bergmann, Jr., Frederick J. Costello and
Gerald W. Moore.
The following officers and Directors of the Company were indebted to the
Company in amounts greater than $60,000 since January 1, 1997 under full
recourse promissory notes delivered in partial payment for the purchase of
Common Stock of the Company under the Employees' Stock Purchase Plan. Some of
the promissory notes bear interest at the rate of five (5) percent per annum and
the other promissory notes are without stated interest. In addition, Mr. Yvan
Dupuy was also indebted to Benjamin Moore & Co. under a full recourse promissory
note without stated interest given in connection with the purchase of Common
Shares of Benjamin Moore & Co., Limited on February 13, 1992. The highest
amounts outstanding under such notes for such persons since January 1, 1997 and
the amounts outstanding at March 2, 1998 were as follows:
<TABLE>
<CAPTION>
Since January 1, 1997 At March 2, 1998
With Interest Without Interest With Interest Without Interest
------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Ward C. Belcher $7,068 $56,663 $-0- $43,072
Michael A. Bonner -0- 60,112 -0- 48,555
Yvan Dupuy -0- 85,087 -0- 61,707
Robert J. Hodgson 1,414 116,435 -0- 97,302
John T. Rafferty 11,969 103,846 5,443 83,499
Richard Roob 7,068 56,663 -0- 43,072
Charles C. Vail -0- 163,312 -0- 143,548
Maurice C. Workman 2,120 151,180 -0- 141,800
</TABLE>
The foregoing amounts represent the aggregate principal balances
outstanding under the promissory notes. The notes were given in connection with
the purchase of the Company's Common Stock which generally occurred on (a) July
22, 1988, (b) January 1, 1991 and (c) May 27, 1994, at the then current fair
11
<PAGE>
value as determined in accordance with the terms of the Employees' Stock
Purchase Plan. As noted above, Mr. Dupuy also purchased Common Shares of
Benjamin Moore & Co., Limited. The promissory notes are secured by the shares to
which they relate. On and after January 1, 1991, all purchases under the
Employees' Stock Purchase Plan under full recourse promissory notes have been
made without stated interest on the notes.
REPORT ON EXECUTIVE COMPENSATION
The executive compensation program of the Company is administered by the
Compensation and Stock Option Plan Committee of the Board of Directors. This
Committee currently consists of Charles H. Bergmann, Jr., Frederick J. Costello
and Gerald W. Moore.
Beginning in 1997 this Committee consisted of Frank W. Burr, Gerald W.
Moore and Sara B. Wardell. On April 17, 1997 Charles H. Bergmann, Jr. was
appointed to this Committee. On May 21, 1997 Mr. Burr resigned as a Director and
as a member of the Committee. Then on December 18, 1997 Mrs. Wardell resigned as
a member of the Committee. She continues as a Director. Mr. Costello was then
appointed to the Committee effective January 9, 1998.
None of the named members of this Committee has been at any time an officer
or employee of the Company or any of its subsidiaries or has had any
relationship requiring disclosure by the Company under the rules and regulations
of the Securities and Exchange Commission. They have all been independent, non-
employee Directors.
The amount of the payment under the management incentive program for each
executive officer of the Company named in the Summary Compensation Table was
determined by the provisions of the annual incentive program and was approved by
the Compensation and Stock Option Plan Committee.
Base Salary
The Company has a philosophy of providing a level of base compensation or
salary that allows the Company to attract, retain and reward the talent needed
to maintain its leading position in the coatings business. The Company carefully
reviews the performance of employees in determining annual compensation
increases. This performance evaluation is made by the various levels of
management. All compensation increases for the five senior executives of the
Company appearing in the Summary Compensation Table are determined by the
Compensation and Stock Option Plan Committee.
All compensation decisions of the Compensation and Stock Option Plan
Committee, including those for the Chief Executive Officer, take into account
individual services rendered, level and scope of responsibility, experience, an
evaluation of overall Company performance, the need for motivation and retention
of executives of outstanding abilities, internal equity, and the requirement to
be competitive. Additional consideration is given to the compensation structures
of corporations in the same or similar lines of business as the Company as well
as a number of those in other lines of business. Survey data is used to assist
in this evaluation. Within this framework, the salary of the Chief Executive
Officer and the other senior executives of the Company is determined by the
Compensation and Stock Option Plan Committee based on the Committee's judgment
concerning their individual contribution to the business, level of
responsibility and experience. No specific formulas are used, but the Committee
believes that the motivation of the Company's executives and all of its
employees is extremely important to the ability of the Company to meet the
challenges of the future.
Annual Incentives
An annual incentive program was adopted by the Company effective January 1,
1993. It is intended to create a positive link between annual performance and
annual incentive compensation. The program
12
<PAGE>
has two broad components: a general profit sharing portion and a management
incentive plan. Incentive payments under the profit sharing portion of this
program for 1997 were made to all employees who are not participants in the
management incentive award program or the sales representative incentive
program. For 1997 the incentive payment threshold was the achievement of a
specified level of increase in net profits of the Company over 1996 net profit.
This amount was later adjusted for the third quarter 1997 restructuring charges.
Below the threshold level no incentive payment would be paid to any employee.
The Compensation and Stock Option Plan Committee determined incentive
opportunities for 1997 corresponding with the performance required to achieve
increasing levels of net income under the Company's strategic plan. Target
incentive opportunities were established under the profit sharing portion of
this program as an increasing percentage of base salary directly related to the
level of increase of net income. The profit sharing opportunity was designed to
foster a team based approach to collaborative working decisions.
In addition, approximately 170 employees, including those executive
officers named in the Summary Compensation Table, participated in the management
incentive award program. This program enabled the participants to receive an
incentive payment depending upon the level of increase in net profits. The
factors considered by the Compensation and Stock Option Plan Committee in
determining the specific percentage for each individual in this group of
employees, which included the executive officers named in the Summary
Compensation Table, were the level and scope of responsibilities, experience,
performance of the individual and competitive practices of companies in similar
lines of business for similar positions. Company results were adjusted for the
restructuring charges taken in the third quarter of 1997 which had the effect of
substantially reducing net income. The Compensation and Stock Option Plan
Committee decided that incentive payments should be made for overall performance
throughout the year. The incentive payment to the Chief Executive Officer,
Richard Roob, in 1997 of $160,000 reflects the Compensation and Stock Option
Plan Committee's judgment with respect to his level of responsibility within the
Company and his leadership and is in accordance with the general plan of the
incentive program.
Since an increase in net profits is generally used to determine the amount
of the annual incentive, the program is positively correlated with the
performance of the Company.
Long-Term Incentives
The Company's long-term incentive philosophy is that long-term incentives
should be related to increases in long-term shareholder value so as to create a
mutuality of interest among the Company, employees and shareholders. To further
this objective the Company provides a three component opportunity of long term
incentives for many employees. The first is the opportunity to purchase Common
Stock through the Employees' Stock Purchase Plan. This Plan is generally
available to employees who have more than five years of service with the
Company. The second opportunity is through the Employees' Stock Ownership Plan.
All employees of the Company with one year of service are participants in this
Plan. Lastly, the Compensation and Stock Option Plan Committee approved the
establishment of a long-term compensation program for senior leadership and key
management employees.
Stock Purchases
An Employees' Stock Purchase Plan was approved by the shareholders of the
Company on April 20, 1978. This was a continuation of the original plan
established in 1937. It permits the purchase of shares of Common Stock at fair
value. It is believed that stock ownership ensures a direct tie between the
interests of employees and shareholders of the Company. For a summary of the
indebtedness to the Company under this Plan of officers and Directors of the
Company, see the discussion above under the heading "Compensation Committee
Interlocks and Insider Participation".
13
<PAGE>
Employees' Stock Ownership Plan
The Company maintains an Employees' Stock Ownership Plan which is a
qualified plan covering substantially all of its United States employees. Under
the terms of this Plan, the Board of Directors of the Company is authorized to
make contributions from time to time out of the profits or retained earnings of
the Company to the Plan Trust fund; such contributions to be in an amount and in
the form of cash or shares of Common Stock as determined by the Board of
Directors in its sole discretion. Contributions, which are deductible expenses
for income tax purposes, are allocated annually to the participants in the Plan
in the ratio that the eligible compensation of each bears to the aggregate
eligible compensation of all such participants. In 1997 the Company contributed
to the Plan Trust fund an amount necessary to make the loan payment due on a
loan made on June 30, 1989, which was used to purchase shares for the Employees'
Stock Ownership Plan.
Long Term Compensation Program for Senior Leadership and Key
Management Employees
This program is a multiyear incentive program that targets the achievement
of four year sales and net profit goals. The principal incentive feature is the
award of stock options to approximately 40 senior managers, including the
executive officers named in the Summary Compensation Table. There is also a cash
bonus feature designed to facilitate part of the cash requirements needed by
option holders to exercise their options.
Cash Bonus Plan
The Cash Bonus Plan calls for a payment to senior executives based upon
cumulative earnings over the four year period 1998 through 2001.
1993 Stock Option Plan
Stock options encourage and reward efforts that result in corporate
financial success over the long-term as measured by stock price appreciation.
Employees receiving grants benefit only if shareholders benefit through
appreciation in the post- grant value of the shares of Common Stock. The current
Stock Option Plan of the Company was approved by the shareholders on April 15,
1993. Grants were made under this Plan on August 10, 1993 to 1,241 eligible
employees, including the executive officers named in the Summary Compensation
Table. Six other current employees have received grants since that time.
1998 Stock Incentive Plan
The 1998 Stock Incentive Plan that is being submitted to shareholders for
approval at the Meeting is described below.
Policy Regarding Section 162(m) of the Internal Revenue Code
Section 162(m) of the Internal Revenue Code generally limits the corporate
deduction for compensation paid to an employee who on the last day of fiscal
years beginning on or after January 1, 1994 is either the chief executive
officer or among the four most highly compensated officers other than the chief
executive officer to $1 million, except for qualified performance-based
compensation. Options that have been granted under the Company's Stock Option
Plan are designed to qualify as performance-based compensation under regulations
issued by the Internal Revenue Service. In addition, the stock option, stock
appreciation rights and performance award portions of the 1998 Stock Incentive
Plan that is being submitted to shareholders at the Meeting have been designed
so that awards pursuant thereto may qualify as performance-based compensation.
The Compensation and Stock Option Plan Committee intends to take such action as
it deems appropriate to preserve the tax deductibility of compensation paid by
the Company to the extent practicable and so long as this objective is
consistent with providing fair, competitive and rewarding compensation
consistent with performance.
14
<PAGE>
COMPENSATION AND STOCK OPTION PLAN COMMITTEE
Charles H. Bergmann, Jr. Frederick J. Costello Gerald W. Moore
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table provides information concerning the value of
unexercised options held by the executive officers named in the Summary
Compensation Table at the end of the last fiscal year, which is calendar year
1997. No stock options were exercised by such persons in 1997 and the Company
has not granted any stock appreciation rights ("SARs").
<TABLE>
<CAPTION>
Number of
Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Fiscal Year End (#) Fiscal Year End ($) (1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C>
Richard Roob 10,000/0 48,600/0
Yvan Dupuy 6,000/0 29,160/0
Benjamin M. Belcher, Jr. 8,000/0 38,880/0
Charles C. Vail 6,000/0 29,160/0
Ward C. Belcher 6,000/0 29,160/0
</TABLE>
(1) Values stated are based on the difference between the option exercise or
base price per share of $73.26 and the fair value of a share of Common
Stock on December 31, 1997 of $78.12 per share, as determined by Management
Planning, Inc., 101 Poor Farm Road, Princeton, New Jersey 08540, an
independent consulting firm retained since April 1988 to calculate the
current fair value of the Common Stock on a weekly basis. Such price as of
March 2, 1998 was $81.93 per share.
SEVERANCE ARRANGEMENTS
The Company has adopted a Severance Protection Plan (the "Severance Plan")
covering designated employees of the Company (including each of the executive
officers appearing in the Summary Compensation Table). Under the Severance Plan,
a covered executive will be entitled to specified severance benefits if he or
she is terminated within two years after a Change in Control (as defined in the
Severance Plan) by the Company other than for Cause (as defined in the Severance
Plan) or by the executive for Good Reason (as defined in the Severance Plan but
generally including an adverse change in the executive's position, a reduction
in salary or certain benefits or a relocation of the Company's offices more than
25 miles.) The severance benefits include a lump sum equal to three times the
executive's base salary, a pro-rata annual bonus for the year in which the
termination occurs and the continuation of certain health and welfare benefits
for three years following termination. Severance benefits would be reduced if
the amount otherwise payable would be subject to an excise tax under Section
4999 of the Internal Revenue Code of 1986.
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
shareholder return on the Common Stock with the cumulative total return of (i)
the Standard & Poor's 500 Stock Index which is a broad based
15
<PAGE>
widely used index useful for comparison purposes and (ii) a Peer Group of
five publicly traded companies in the coatings business. The companies in the
Peer Group are Lilly Industries, Inc., Pratt & Lambert United, Inc. through 1995
since it was acquired by The Sherwin-Williams Company in January 1996, RPM,
Inc., The Sherwin-Williams Company and The Valspar Corporation. All returns
assume that $100 was invested on December 31, 1992 and that all dividends were
reinvested, and all returns are weighted on the basis of market capitalization
at the beginning of each year of measurement.
[GRAPHIC OMITTED]
Fiscal Years Ended December 31
<TABLE>
<CAPTION>
Base
1992 1993 1994 1995 1996 1997
----- ----- ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
Benjamin Moore & Co. 100 125.33 114.84 120.64 95.15 141.03
S&P 500 Comp 100 110.08 111.53 153.45 188.68 251.63
Peer Group 100 116.73 117.04 145.35 190.65 201.96
</TABLE>
CERTAIN TRANSACTIONS
See the discussion above under the caption "Compensation Committee
Interlocks and Insider Participation".
Proposal No. 2
APPROVAL OF THE 1998 STOCK INCENTIVE PLAN
BENJAMIN MOORE & CO.
1998 STOCK INCENTIVE PLAN
SUMMARY
General
On February 9, 1998, the Compensation and Stock Option Plan Committee
adopted the Benjamin Moore & Co. 1998 Stock Incentive Plan (the "Stock Incentive
Plan"). The principal provisions of the Stock Incentive Plan are summarized
below, however, this summary does not purport to be complete and is qualified in
its entirety by reference to the provisions of the Stock Incentive Plan, which
is attached to this Proxy Statement as Exhibit A. Terms not defined herein shall
have the meanings set forth in the Stock Incentive Plan.
16
<PAGE>
If the Stock Incentive Plan is approved by the shareholders, there will be
no further new grants of options under the Stock Option Plan approved by the
shareholders on April 15, 1993.
Purpose
The purpose of the Stock Incentive Plan is to strengthen the Company by
providing an incentive to its employees, officers and directors through the
granting or awarding of incentive and nonqualified stock options, stock
appreciation rights, restricted stock, performance units, and performance shares
to employees, officers and Directors of the Company (collectively or
individually, "Awards"), thereby encouraging them to devote their abilities and
energies to the success of the Company.
Administration
The Stock Incentive Plan is to be administered by a committee consisting of
at least three Directors of the Company (the "Committee"), and it may be
administered by the entire Board. If the Committee consists of less than the
entire Board, each member will be a "nonemployee director" within the meaning of
Rule 16b-3 promulgated under the Exchange Act. To the extent necessary for any
Award to qualify as performance-based compensation under Section 162(m) of the
Code, each member of the Committee will be an "outside director" within the
meaning of Section 162(m) of the Code.
Each Award under the Stock Incentive Plan will be evidenced by an agreement
that sets forth the terms of the grant. Under the Stock Incentive Plan, the
Committee has the authority to, among other things: (i) select the individuals
to whom Awards will be granted, (ii) determine the type, size and the terms and
conditions of Awards and (iii) establish the terms for treatment of Awards upon
a termination of employment. In addition, the Committee may provide in its
discretion a right of first refusal in favor of the Company with respect to the
proposed sale of any shares subject to an Award.
Shares Available for Issuance
Under the Stock Incentive Plan, 400,000 shares of common stock will be
available for the grant of Awards to Eligible Individuals, provided that the
maximum number of shares with respect to which Awards may be granted to any
individual during any calendar year is 50,000. In addition, each Eligible
Director will be granted a Director Option in respect of 1,000 shares of Common
Stock on the first business day after the annual meeting of the shareholders of
the Company in 1998 and each year thereafter during which the Plan is in effect.
In the event of any Change in Capitalization (as defined in the Stock Incentive
Plan), however, the Committee may adjust the maximum number and class of shares
with respect to which Awards may be granted, the number and class of shares
which are subject to outstanding Awards and the purchase price thereof. Of the
total number of shares allotted under the Stock Incentive Plan, not more than
one-third of the number of allotted shares may be used for grants of restricted
stock. The maximum dollar amount that an individual may receive during any
calendar year in respect of cash-denominated performance units may not exceed $1
million.
Stock Options
The Committee will determine whether any option is a nonqualified or
incentive stock option at the time of grant. The per share exercise price of an
option granted under the Stock Incentive Plan will be determined by the
Committee at the time of grant and set forth in the option agreement, provided
that the purchase price per share under each incentive stock option must not be
less than 100% of the fair market value of the Common Stock of the Company
subject to the option at the date of grant (110% in the case of an incentive
stock option granted to a "Ten-Percent Stockholder" (as defined in the Stock
Incentive Plan)). Each option will be exercisable at such dates and in such
installments as determined by the Committee. All outstanding options will become
fully exercisable upon a "Change of Control" (as defined in the Stock Incentive
Plan). In addition, the Committee reserves the authority to accelerate the
exercisability of any option at any time.
17
<PAGE>
With respect to Director Options, the per share exercise price under each
Director Option shall be equal to 100% of the Fair Market Value of the Shares on
the date the Option is granted. The Director Options will be fully vested and
exercisable with respect to 100% of the underlying Shares on the date of the
annual meeting of shareholders next following the date of grant provided the
Optionee continues to serve as a Director on that date (but whether or not the
Director is reelected at the annual meeting on such date).
Each Option terminates at the time determined by the Committee, except that
the term of each Option may not exceed ten years (five years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder); provided, however,
that the Committee may (and in the case of a Director Option shall) provide
that an Option (other than an Incentive Stock Option) may, upon the death of
the Optionee, be exercised for up to one (1) year following the date of the
Optionee's death even if such period extends beyond ten (10) years from the
date the Option is granted and a Director Option will terminate three (3)
months following the Director ceasing to serve as a director (one (1) year in
the case of death or Disability and immediately upon termination for Cause).
Options are not transferable except by will or the laws of descent and
distribution or pursuant to a domestic relations order. Notwithstanding the
foregoing, the Committee may set forth in the option agreement, at the time
of grant or at any time thereafter, that the option may be transferred to
members of the optionee's immediate family, to trusts solely for the benefit
of such immediate family members and to partnerships in which such family
members and/or trusts are the only partners. Incentive stock options may be
exercised during the optionee's lifetime only by the grantee or his guardian
or legal representative. In the discretion of the Committee, the purchase
price for shares may be paid (i) in cash, (ii) by transferring shares of
Common Stock to the Company, (iii) by the delivery of a promissory note or
other evidence of indebtedness or (iv) by a combination of the foregoing. In
addition, options may be exercised through a registered broker-dealer
pursuant to such cashless exercise procedures which are, from time to time,
deemed acceptable by the Committee.
Stock Appreciation Rights ("SARs")
The Stock Incentive Plan permits the granting of SARs either in connection
with the grant of an option or as a freestanding right. A SAR permits a grantee
to receive upon exercise of the SAR, cash and/or shares, at the discretion of
the Committee, in an amount equal in value to the excess, if any, of the then
per share fair market value over the per share fair market value on the date the
SAR was granted (or option exercise price in the case of a SAR granted in
connection with an option). When a SAR is granted, however, the Committee may
establish a limit on the maximum amount a grantee may receive on exercise. The
Committee will decide at the time the SAR is granted the date or dates at which
it will become vested and exercisable; however, in the event of a Change of
Control of the Company, all SARs become immediately and fully exercisable.
Restricted Stock
The Committee will determine the terms of each restricted stock Award at
the time of grant, including the price, if any, to be paid by the grantee for
the restricted stock, the restrictions placed on the shares, and the time or
times when the restrictions will lapse. In addition, at the time of grant, the
Committee, in its discretion, may decide: (i) whether any deferred dividends
will be held for the account of the grantee or deferred until the restrictions
thereon lapse, (ii) whether any deferred dividends will be reinvested in
additional shares of Common Stock or held in cash, (iii) whether interest will
be accrued on any dividends not reinvested in additional shares of restricted
stock and (iv) whether any stock dividends paid will be subject to the
restrictions applicable to the restricted stock Award. Unless otherwise provided
at the time of grant, the restrictions on the restricted stock will lapse upon a
Change of Control. Shares of restricted stock are non-transferable until such
time as all restrictions upon such shares lapse.
Performance Units and Performance Shares
Performance units and performance shares will be awarded as the Committee
may determine, and the vesting of performance units and performance shares will
be based upon the Company's
18
<PAGE>
attainment within an established period of specified performance objectives
to be determined by the Committee among the following: earnings per share, share
price, pre-tax profits, net earnings, return on equity or assets, revenues,
EBITDA, cash flow or any combination of the foregoing. Upon granting performance
units or performance shares, the Committee may provide, to the extent permitted
under Section 162(m) of the Code, the manner in which performance will be
measured against the performance objectives, or may adjust the performance
objectives, to reflect the impact of specified corporate transactions, special
charges, foreign currency effects, accounting changes, and other similar
extraordinary or nonrecurring events. Performance units may be denominated in
dollars or in shares of Common Stock, and payments in respect of performance
units will be made in cash, shares, shares of restricted stock or any
combination of the foregoing, as determined by the Committee. The agreement
evidencing the Award of performance shares or performance units will set forth
the terms and conditions thereof, including those applicable in the event of the
grantee's termination of employment. In the event of a Change of Control, all or
a portion of the performance units will vest and the restrictions on all or a
portion of the performance shares will lapse, in either case, as determined by
the Committee at the time of grant and as set forth in the agreement evidencing
the Award of performance shares or performance units. Performance shares are
non-transferable until such time as any restriction upon such shares lapses.
Amendments and Termination
The Stock Incentive Plan will terminate on the day preceding the tenth
anniversary of the date of its adoption by the Committee. The Board or the
Committee may at any time and from time to time amend or terminate the Stock
Incentive Plan; provided, however, that, to the extent necessary under
applicable law, no such change will be effective without the requisite approval
of the Company's shareholders. In addition, no such change may alter or
adversely impair any rights or obligations under any Awards previously granted,
except with the written consent of the grantee.
Options To Be Granted To Certain Individuals And Groups
As of the date of this Proxy Statement, no grants have been made under the
Plan. However, the Company is contemplating granting Options in respect of up to
approximately 140,000 shares to approximately 40 Eligible Individuals. In
addition, there are 14 Eligible Directors who could qualify to participate in
the Plan. Because adoption of the Plan is subject to shareholder approval and
because the granting of Options (other than Director Options) and Awards will be
entirely within the discretion of the Committee (and no such action has as yet
been taken), it is not possible to determine the employees, Directors and other
persons to whom Options or Awards will be granted under the Plan or the number
of Shares or value of dollar-denominated grants to be covered by such Options
and Awards.
Certain Federal Income Tax Consequences Relating to Awards Under the Plan
Incentive Stock Option ("ISO"). In general, an Optionee will not recognize
taxable income upon the grant or exercise of an ISO, and the Company and its
subsidiaries will not be entitled to any business expense deduction with respect
to the grant or exercise of an ISO. (However, upon the exercise of an ISO, the
excess of the fair market value on the date of exercise of the shares received
over the exercise price of the option will be treated as an adjustment to
alternative minimum taxable income.) In order for the exercise of an ISO to
qualify as an ISO, an Optionee generally must be an employee of the Company or a
subsidiary (within the meaning of Section 422 of the Code) from the date the ISO
is granted through the date three months before the date of exercise (one year
preceding the date of exercise in the case of an Optionee whose employment is
terminated due to disability). The employment requirement does not apply where
an Optionee's employment is terminated due to his or her death.
If an Optionee has held the shares acquired upon exercise of an ISO for at
least two years after the date of grant and for at least one year after the date
of exercise, when the Optionee disposes of the shares, the difference, if any,
between the sales price of the shares and the exercise price of the option
19
<PAGE>
will be treated as long-term capital gain or loss subject to reduced rates
of tax, provided that any gain will be subject to further reduced rates of tax
if shares are held for more than eighteen months after the date of exercise. If
an Optionee disposes of the shares prior to satisfying these holding period
requirements (a "Disqualifying Disposition"), the Optionee will recognize
ordinary income (treated as compensation) at the time of the Disqualifying
Disposition, generally in an amount equal to the excess of the fair market value
of the shares at the time the option was exercised over the exercise price of
the option. The balance of the gain realized, if any, will be short-term or
long- term capital gain, depending upon whether the shares have been held for at
least twelve months after the date of exercise, with the lowest capital gain
rates available if shares are held for more than eighteen months after the date
of exercise. If the Optionee sells the shares in a Disqualifying Disposition at
a price below the fair market value of the shares at the time the option was
exercised, the amount of ordinary income (treated as compensation) will be
limited to the amount realized on the sale over the exercise price of the
option. In general, if the Company and its Subsidiaries comply with applicable
income reporting requirements, the Company and its Subsidiaries will be allowed
a business expense deduction to the extent an Optionee recognizes ordinary
income.
Nonqualified Stock Option. In general, an Optionee who receives a
nonqualified stock option will recognize no income at the time of the grant of
the option. In general, upon exercise of a nonqualified stock option, an
Optionee will recognize ordinary income (treated as compensation) in an amount
equal to the excess of the fair market value of the shares on the date of
exercise (or in the case of an Optionee who has timely elected to defer the
issuance of Shares upon exercise of an Option, the date of issuance of the
Shares) over the exercise price of the option. The basis in shares acquired upon
exercise of a nonqualified stock option will equal the fair market value of such
shares at the time of exercise, and the holding period of the shares (for
capital gain purposes) will begin on the date of exercise. In general, if the
Company and its Subsidiaries comply with applicable income reporting
requirements, they will be entitled to a business expense deduction in the same
amount and at the same time as the Optionee recognizes ordinary income. In the
event of a sale of the shares received upon the exercise of a nonqualified stock
option, any appreciation or depreciation after the exercise date generally will
be taxed as capital gain or loss, provided that any gain will be subject to
reduced rates of tax if the shares were held for more than twelve months and
will be subject to further reduced rates if the shares were held for more than
eighteen months.
Special rules may apply with respect to persons who may be subject to
Section 16(b) of the Exchange Act. Optionees who are or may become subject to
Section 16 of the Exchange Act should consult with their own tax advisors in
this regard.
Generally, if an Optionee delivers previously owned shares to pay the
exercise price, no gain or loss will be recognized in respect of the shares
delivered, and there will be a carryover basis and holding period for a like
number of shares acquired. If the option being exercised is an ISO and the
shares delivered were acquired upon exercise of an ISO and are delivered prior
to satisfaction of the ISO holding period requirements described above, the
delivery of shares will constitute a Disqualifying Disposition as to which the
rules described above will apply. If the option being exercised is a
nonqualified stock option, ordinary income (treated as compensation) will be
recognized only on the additional shares acquired and will be equal to the fair
market value of the shares on the date of exercise less any additional cash
paid.
Excise Taxes. Under certain circumstances, the accelerated vesting or
exercise of options in connection with a Change in Control might be deemed an
"excess parachute payment" for purposes of the golden parachute tax provisions
of Section 280G of the Code. To the extent it is so considered, an Optionee may
be subject to a 20% excise tax and the Company and its Subsidiaries may be
denied a tax deduction.
Section 162(m) of the Internal Revenue Code generally disallows a federal
income tax deduction to any publicly-held corporation for compensations paid in
excess of $1 million in any taxable year to the chief executive officer or any
of the four other most highly compensated executive officers who are employed by
the Company on the last day of the taxable year, but does not disallow a
deduction for
20
<PAGE>
qualified "performance-based compensation," the material terms of
which are disclosed to and approved by stockholders. The Company has structured
the Plan with the intention that compensation resulting from awards of options,
stock appreciation rights, performance shares and performance units may qualify
as "performance-based compensation" and, if so qualified, would be deductible.
The Board of Directors recommends a vote FOR approval of the Plan.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company, acting upon the recommendation of
the Audit Committee, has selected Deloitte & Touche LLP as the independent
public accountants for the Company in 1998. Deloitte & Touche LLP and its
predecessors, Deloitte Haskins & Sells and Haskins & Sells, have acted in such
capacity since 1957. A representative of Deloitte & Touche LLP is expected to be
present at the Meeting. The representative will have an opportunity to make a
statement, and will be available to respond to appropriate questions.
MISCELLANEOUS
Shareholder Proposal Date
Any shareholder proposal intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company, directed to the
attention of the Secretary, at its principal executive offices at 51 Chestnut
Ridge Road, Montvale, New Jersey 07645 not later than November 23, 1998 to be
considered for inclusion in the Company's Proxy Statement and form of proxy
relating to the 1999 Annual Meeting. Any such proposals must comply in all
respects with the rules and regulations of the Securities and Exchange
Commission.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and Directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership with the Securities and Exchange Commission. Executive officers,
Directors and greater than ten-percent shareholders are required by Securities
and Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based on review of the copies of such forms furnished to the Company, the
Company believes that during the year 1997 all Section 16(a) filing requirements
applicable to its executive officers, Directors and greater than ten-percent
beneficial owners were met.
AVAILABILITY OF FORM 10-K REPORT
Upon written request, the Company will furnish, without charge, a copy of
its Form 10-K Annual Report for 1997, as filed with the Securities and Exchange
Commission, to any person who, as of the close of business on March 2, 1998,
either held shares of the Company in his or her own name or was the beneficial
owner of shares held in the name of another person. Such shareholders must make
such requests to the Secretary, Benjamin Moore & Co., 51 Chestnut Ridge Road,
Montvale, New Jersey 07645. Owners of shares held in the name of another person
must include in their requests a representation that they were beneficial owners
of shares of Benjamin Moore & Co. as of the close of business on March 2, 1998.
By Order Of The Board of Directors
John T. Rafferty
Dated: March 23, 1998 Secretary
21
<PAGE>
Exhibit A
BENJAMIN MOORE & CO.
1998 STOCK INCENTIVE PLAN
1. Purpose.
The purpose of this Plan is to strengthen Benjamin Moore & Co. (the
"Company") by providing an incentive to its employees, officers and directors
and thereby encouraging them to devote their abilities and industry to the
success of the Company's business enterprise. It is intended that this purpose
be achieved by extending to employees, officers and directors of the Company and
its Subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights, Performance Awards and Restricted Stock (as
each term is herein defined).
2. Definitions.
For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a Change of
Control, the greater of (a) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in a Change of Control or (b) the highest Fair Market Value of a Share during
the ninety (90) day period ending on the date of a Change of Control.
2.2 "Affiliate" means any entity, directly or indirectly, controlled
by, controlling or under common control with the Company or any corporation or
other entity acquiring, directly or indirectly, all or substantially all the
assets and business of the Company, whether by operation of law or otherwise.
2.3 "Agreement" means the written agreement between the Company and an
Optionee or Grantee evidencing the grant of an Option or Award and setting forth
the terms and conditions thereof.
2.4 "Award" means a grant of Restricted Stock, a Stock Appreciation
Right, a Performance Award or any or all of them.
2.5 "Board" means the Board of Directors of the Company.
2.6 "Cause" means:
(a) for purposes of Section 6.4, the commission of an act of
fraud or intentional misrepresentation or an act of embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any
of its Subsidiaries; and
(b) in all other cases, (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with the
performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation in connection with the performance of
duties (other than traffic violations or similar offenses).
2.7 "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of
i
<PAGE>
warrants or rights or debentures, stock dividend, stock split or reverse stock
split, cash dividend, property dividend, combination or exchange of shares,
repurchase of shares, change in corporate structure or otherwise.
2.8 A "Change of Control" means the occurrence of any of the
following:
(a) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any "Person" (as
the term person is used for purposes of Section 13(d) or 14(d) of the Exchange
Act) immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent
(25%) or more of the combined voting power of the Company's then outstanding
Voting Securities; provided, however, in determining whether a Change of Control
has occurred, Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an acquisition which
would cause a Change of Control. A "Non- Control Acquisition" shall mean an
acquisition by (i) an employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by the Company (for purposes of this
definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, (iii) any
Person in connection with a "Non-Control Transaction" (as hereinafter defined),
or (iv) any individual who is a member of the Incumbent Board or a relative of
any such individual, or a group (within the meaning of Rule 13(d)-5(b)(1)
promulgated under the Exchange Act) of which any such individual is a member.
(b) A situation in which the individuals who, as of February 9,
1998 are members of the Board of Directors (the "Incumbent Board"), cease for
any reason to constitute at least two-thirds of the members of the Board;
provided, however, that if the election, or nomination for election by the
Company's common shareholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent Board, such new director shall, for purposes
of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the Company or
in which securities of the Company are issued, unless such merger, consolidation
or reorganization is a "Non-Control Transaction." A "Non-Control Transaction"
shall mean a merger, consolidation or reorganization with or into the Company or
in which securities of the Company are issued where:
(A) the shareholders of the Company, immediately before such
merger, consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or reorganization, at
least sixty percent (60%) of the combined voting power of the
outstanding voting securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of the Voting
Securities immediately before such merger, consolidation or
reorganization, and
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization constitute at least two-thirds
of the members of the board of directors of the Surviving Corporation,
or a corporation beneficially owning directly or indirectly fifty-one
percent (51%) or more of the Voting Securities of the Surviving
Corporation, and
ii
<PAGE>
(C) no Person other than (1) the Company, (2) any Subsidiary, (3)
any employee benefit plan (or any trust forming a part thereof)
maintained immediately prior to such merger, consolidation or
reorganization by the Company or any Subsidiary, or (4) any Person who,
immediately prior to such merger, consolidation or reorganization had
Beneficial Ownership of twenty-five percent (25%) or more of the then
outstanding Voting Securities, owns, directly or indirectly,
twenty-five percent (25%) or more of the combined voting power of the
Surviving Corporation's then outstanding voting securities;
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject Persons,
provided that if a Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then-outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change of Control shall occur.
2.9 "Code" means the Internal Revenue Code of 1986, as amended.
2.10 "Committee" means a committee, as described in Section 3.1,
appointed by the Board from time to time to administer the Plan and to perform
the functions set forth herein.
2.11 "Company" means Benjamin Moore & Co.
2.12 "Director" means a director of the Company.
2.13 "Director Option" means an Option granted pursuant to Section 6.
2.14 "Disability" means:
(a) in the case of an Optionee or Grantee whose employment with
the Company or a Subsidiary is subject to the terms of an employment agreement
between such Optionee or Grantee and the Company or Subsidiary, which employment
agreement includes a definition of "Disability", the term "Disability" as used
in this Plan or any Agreement shall have the meaning set forth in such
employment agreement during the period that such employment agreement remains in
effect; and
(b) in all other cases, the term "Disability" as used in this Plan
or any Agreement shall mean a physical or mental infirmity which impairs the
Optionee's or Grantee's ability to perform substantially his or her duties for a
period of one hundred eighty (180) consecutive days.
2.15 "Division" means any of the operating units, regions or divisions
of the Company designated as a Division by the Committee.
2.16 "Eligible Director" means a director of the Company who is not an
employee of the Company or any Subsidiary.
2.17 "Eligible Individual" means any director (other than an Eligible
Director), officer or employee of the Company or a Subsidiary designated by the
Committee as eligible to receive Options or
iii
<PAGE>
Awards subject to the conditions set forth herein.
2.18 "Employee Option" means an Option granted pursuant to Section 5.
2.19 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.20 "Fair Market Value" on any date means the closing sales price of
the Shares on such date on the principal national securities exchange on which
such Shares are listed or admitted to trading, or, if such Shares are not so
listed or admitted to trading, the average of the per Share closing bid price
and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or such other
market in which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Shares on such date, the Fair
Market Value shall be the value established by the Board in good faith and, in
the case of an Incentive Stock Option, in accordance with Section 422 of the
Code.
2.21 "Grantee" means a person to whom an Award has been granted under
the Plan.
2.22 "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.
2.23 "Nonemployee Director" means a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act.
2.24 "Nonqualified Stock Option" means an Option which is not an
Incentive Stock Option.
2.25 "Option" means a Nonqualified Stock Option, an Incentive Stock
Option, a Director Option, or any or all of them.
2.26 "Optionee" means a person to whom an Option has been granted under
the Plan.
2.27 "Outside Director" means a director of the Company who is an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.
2.28 "Parent" means any corporation which is a parent corporation
(within the meaning of Section 424(e) of the Code) with respect to the Company.
2.29 "Performance Awards" means Performance Units, Performance Shares
or either or both of them.
2.30 "Performance-Based Compensation" means any Option or Award that is
intended to constitute "performance based compensation" within the meaning of
Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder.
2.31 "Performance Cycle" means the time period specified by the
Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.
2.32 "Performance Objectives" has the meaning set forth in Section 10.
2.33 "Performance Shares" means Shares issued or transferred to an
Eligible Individual under Section 10.
iv
<PAGE>
2.34 "Performance Units" means Performance Units granted to an Eligible
Individual under Section 10.
2.35 "Plan" means the Benjamin Moore & Co. 1998 Stock Incentive Plan,
as amended and restated from time to time.
2.36 "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a "pooling of interests" under
generally accepted accounting principles.
2.37 "Restricted Stock" means Shares issued or transferred to an
Eligible Individual pursuant to Section 9.
2.38 "Shares" means the common stock, par value $10.00 per share, of
the Company.
2.39 "Stock Appreciation Right" means a right to receive all or some
portion of the increase in the value of the Shares as provided in Section 8
hereof.
2.40 "Subsidiary" means any corporation which is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect to
the Company.
2.41 "Successor Corporation" means a corporation, or a parent or
subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of the
Code applies.
2.42 "Ten-Percent Stockholder" means an Eligible Individual, who, at
the time an Incentive Stock Option is to be granted to him or her, owns (within
the meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, or of a Parent or a Subsidiary.
3. Administration.
3.1 The Plan shall be administered by the Committee, which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep minutes of its meetings. A quorum shall consist
of not fewer than two (2) members of the Committee and a majority of a quorum
may authorize any action. Any decision or determination reduced to writing and
signed by all of the members of the Committee shall be as fully effective as if
made by a majority vote at a meeting duly called and held. The Committee shall
consist of at least three (3) Directors of the Company and may consist of the
entire Board; provided, however, that (a) if the Committee consists of less than
the entire Board, each member shall be a Nonemployee Director and (b) to the
extent necessary for any Option or Award intended to qualify as
performance-based compensation under Section 162(m) of the Code to so qualify,
each member of the Committee, whether or not it consists of the entire Board,
shall be an Outside Director. No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in good faith with
respect to this Plan or any transaction hereunder, except for liability arising
from his or her own willful misfeasance, gross negligence or reckless disregard
of his or her duties. The Company hereby agrees to indemnify each member of the
Committee for all costs and expenses and, to the extent permitted by applicable
law, any liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
3.2 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:
v
<PAGE>
(a) determine those Eligible Individuals to whom Employee Options
shall be granted under the Plan and the number of such Employee Options to be
granted and to prescribe the terms and conditions (which need not be identical)
of each such Employee Option, including the purchase price per Share subject to
each Employee Option, and make any amendment or modification to any Option
Agreement consistent with the terms of the Plan;
(b) select those Eligible Individuals to whom Awards shall be
granted under the Plan and to determine the number of Stock Appreciation Rights,
Performance Awards and/or Shares of Restricted Stock to be granted pursuant to
each Award, the terms and conditions of each Award, including the restrictions
or Performance Objectives relating to Performance Awards, the maximum value of
each Performance Award and make any amendment or modification to any Award
Agreement consistent with the terms of the Plan;
(c) to construe and interpret the Plan and the Options and Awards
granted hereunder and to establish, amend and revoke rules and regulations for
the administration of the Plan, including, but not limited to, correcting
any defect or supplying any omission, or reconciling any inconsistency in the
Plan or in any Agreement, in the manner and to the extent it shall deem
necessary or advisable so that the Plan complies with applicable law including
Rule 16b-3 under the Exchange Act and the Code to the extent applicable, and
otherwise to make the Plan fully effective. All decisions and determinations by
the Committee in the exercise of this power shall be final, binding and
conclusive upon the Company, its Subsidiaries, the Optionees and Grantees, and
all other persons having any interest therein;
(d) to determine the duration and purposes for leaves of absence
which may be granted to an Optionee or Grantee on an individual basis without
constituting a termination of employment or service for purposes of the Plan;
(e) to exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan; and
(f) generally, to exercise such powers and to perform such acts as
are deemed necessary or advisable to promote the best interests of the Company
with respect to the Plan.
4. Stock Subject to the Plan; Grant Limitations.
4.1 The maximum number of Shares that may be made the subject of
Options and Awards granted under the Plan is 400,000; provided, however, that in
the aggregate, not more than one-third of the number of allotted Shares may be
made the subject of Restricted Stock Awards under Section 9 of the Plan (other
than shares of Restricted Stock made in settlement of Performance Units pursuant
to Section 10.1(b)). The maximum number of Shares that an Eligible Individual
may receive in respect of Options and Awards granted in any calendar year may
not exceed 50,000 Shares. The maximum dollar amount of cash or the Fair Market
Value of Shares that any Eligible Individual may receive in any calendar year in
respect of Performance Units denominated in dollars may not exceed $1,000,000.
Upon a Change in Capitalization, the maximum number of Shares referred to in the
first two sentences of this Section 4.1 shall be adjusted in number and kind
pursuant to Section 12. The Company shall reserve for the purposes of the Plan,
out of its authorized but unissued Shares or out of Shares held in the Company's
treasury, or partly out of each, such number of Shares as shall be determined by
the Board.
4.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 4.1 for the granting of further Options and Awards shall
be reduced as follows:
(a) In connection with the granting of an Option or an Award
(other than the granting of a Performance Unit denominated in dollars), the
number of Shares shall be reduced by the number of Shares in respect of which
the Option or Award is granted or denominated.
vi
<PAGE>
(b) In connection with the granting of a Performance Unit
denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date the
Performance Unit is granted.
4.3 Whenever any outstanding Option or Award or portion thereof
expires, is canceled or is otherwise terminated for any reason without having
been exercised or payment having been made in respect of the entire Option or
Award, the Shares allocable to the expired, canceled or otherwise terminated
portion of the Option or Award may again be the subject of Options or Awards
granted hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible
Individuals who will receive Employee Options, and the terms and conditions of
the grant to such Eligible Individuals shall be set forth in an Agreement.
5.2 Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Employee Option shall
be determined by the Committee and set forth in the Agreement; provided,
however, that the purchase price per Share under each Incentive Stock Option
shall not be less than 100% of the Fair Market Value of a Share on the date the
Incentive Stock Option is granted (110% in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder).
5.3 Maximum Duration. Employee Options granted hereunder shall be for
such term as the Committee shall determine, provided that an Incentive Stock
Option shall not be exercisable after the expiration of ten (10) years from the
date it is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder) and a Nonqualified Stock Option shall not
be exercisable after the expiration of ten (10) years from the date it is
granted; provided, however, that the Committee may provide that an Option (other
than an Incentive Stock Option) may, upon the death of the Optionee, be
exercised for up to one (1) year following the date of the Optionee's death even
if such period extends beyond ten (10) years from the date the Option is
granted. The Committee may, subsequent to the granting of any Employee Option,
extend the term thereof, but in no event shall the term as so extended exceed
the maximum term provided for in the preceding sentence.
5.4 Vesting. Subject to Section 7.4, each Employee Option shall become
exercisable in such installments (which need not be equal) and at such times as
may be designated by the Committee and set forth in the Agreement. To the extent
not exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Employee Option expires. The Committee may accelerate the exercisability of any
Employee Option or portion thereof at any time.
6. Option Grants for Nonemployee Directors.
6.1 Grant. Each Eligible Director shall be granted a Director Option in
respect of 1,000 Shares on the first business day after the annual meeting of
the shareholders of the Company in 1998 and each year thereafter during which
the Plan is in effect, provided that the Eligible Director is a Director on such
date.
All Director Options shall be evidenced by an Agreement containing such
other terms and conditions not inconsistent with the provisions of this Plan as
determined by the Board; provided, however, that such terms shall not vary the
price, amount or timing of Director Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Director Options.
vii
<PAGE>
6.2 Purchase Price. The purchase price for Shares under each Director
Option shall be equal to 100% of the Fair Market Value of such Shares on the
date the Director Option is granted.
6.3 Vesting. Subject to Sections 6.4 and 7.4, each Director Option
shall become fully vested and exercisable with respect to 100% of the Shares
subject thereto on the date of the annual meeting of shareholders next following
the date of grant; provided, however, that the Optionee continues to serve as a
Director as of such date (but whether or not the Director is reelected at the
annual meeting on such date); provided, further, that if a Director dies while a
Director prior to such date, the Director Option shall become fully vested and
exercisable with respect to 100% of the Shares subject thereto. If an Optionee
ceases to serve as a Director for any reason other than death, the Optionee
shall have no rights with respect to any Director Option which has not then
vested pursuant to the preceding sentence and the Optionee shall automatically
forfeit any Director Option which remains unvested.
6.4 Duration. Subject to Section 7.4, each Director Option shall
terminate on the date which is the tenth anniversary of the date of grant (or if
later, the first anniversary of the date of the Director's death if such death
occurs prior to such tenth anniversary), unless terminated earlier as follows:
(a) If an Optionee's service as a Director terminates for any
reason other than Disability, death or Cause, the Optionee may for a period of
three (3) months after such termination exercise his or her Option to the
extent, and only to the extent, that such Option or portion thereof was vested
and exercisable as of the date the Optionee's service as a Director terminated,
after which time the Option shall automatically terminate in full.
(b) If an Optionee's service as a Director terminates by reason of
the Optionee's resignation or removal from the Board due to Disability, the
Optionee may, for a period of one (1) year after such termination, exercise his
or her Option to the extent, and only to the extent, that such Option or portion
thereof was vested and exercisable, as of the date the Optionee's service as
Director terminated, after which time the Option shall automatically terminate
in full.
(c) If an Optionee's service as a Director terminates for Cause,
the Option granted to the Optionee hereunder shall immediately terminate in full
and no rights thereunder may be exercised.
(d) If an Optionee dies while a Director or within three (3)
months after termination of service as a Director as described in clause (a) of
this Section 6.4 or within twelve (12) months after termination of service as a
Director as described in clause (b) of this Section 6.4, the Option granted to
the Optionee may be exercised at any time within twelve (12) months after the
Optionee's death by the person or persons to whom such rights under the Option
shall pass by will, or by the laws of descent or distribution, after which time
the Option shall terminate in full; provided, however, that an Option may be
exercised to the extent, and only to the extent, that the Option or portion
thereof was exercisable on the date of death or earlier termination of the
Optionee's services as a Director.
7. Terms and Conditions Applicable to All Options.
7.1 Non-Transferability. An Option granted hereunder shall not be
transferable by the Optionee to whom granted except by will or the laws of
descent and distribution or, in the case of an Option other than an Incentive
Stock Option, pursuant to a domestic relations order (within the meaning of Rule
16a-12 promulgated under the Exchange Act), and an Incentive Stock Option may be
exercised during the lifetime of such Optionee only by the Optionee or his or
her guardian or legal representative. Notwithstanding the foregoing, the
Committee may set forth in the Agreement at the time of grant or thereafter,
that the Option (other than an Incentive Stock Option) may be transferred to
members of the Optionee's immediate family, to trusts solely for the benefit of
such immediate family members and to partnerships in which such family members
and/or trusts are the only partners. For this purpose, immediate family means
the Optionee's spouse, parents, children, stepchildren and grandchildren and the
viii
<PAGE>
spouses of such parents, children, stepchildren and grandchildren. The terms of
such Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Optionee.
7.2 Method of Exercise. The exercise of an Option shall be made only by
a written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares to
be purchased and accompanied by payment therefor and otherwise in accordance
with the Agreement pursuant to which the Option was granted. The purchase price
for any Shares purchased pursuant to the exercise of an Option shall be paid, as
determined by the Committee in its discretion, in either of the following forms
(or any combination thereof): (a) cash, (b) the transfer of Shares to the
Company upon such terms and conditions as determined by the Committee or (c) the
delivery of a promissory note or other evidence of indebtedness upon such terms
and conditions as determined by the Committee. In addition, both Employee
Options and Director Options may be exercised through a registered broker-dealer
pursuant to such cashless exercise procedures (other than Share withholding)
which are, from time to time, deemed acceptable by the Committee. Any Shares
transferred to the Company as payment of the purchase price under an Option
shall be valued at their Fair Market Value on the day preceding the date of
exercise of such Option. The Optionee shall deliver the Agreement evidencing the
Option to the Secretary of the Company who shall endorse thereon a notation of
such exercise and return such Agreement to the Optionee. No fractional Shares
(or cash in lieu thereof) shall be issued upon exercise of an Option and the
number of Shares that may be purchased upon exercise shall be rounded to the
nearest number of whole Shares.
7.3 Rights of Optionees. No Optionee shall be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (a) the Option
shall have been exercised pursuant to the terms thereof, (b) the Company shall
have issued and delivered Shares to the Optionee, and (c) the Optionee's name
shall have been entered as a shareholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such Shares, subject to such terms and conditions as may
be set forth in the applicable Agreement.
7.4 Effect of Change of Control. In the event of a Change of Control,
all Options outstanding on the date of such Change of Control shall become
immediately and fully exercisable. In addition, to the extent set forth in an
Agreement evidencing the grant of an Employee Option, an Optionee will be
permitted to surrender to the Company for cancellation within sixty (60) days
after such Change of Control any Employee Option or portion of an Employee
Option to the extent not yet exercised and the Optionee will be entitled to
receive a cash payment in an amount equal to the excess, if any, of (a) (i) in
the case of a Nonqualified Stock Option, the greater of (A) the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to the
Employee Option or portion thereof surrendered or (B) the Adjusted Fair Market
Value of the Shares subject to the Employee Option or portion thereof
surrendered or (ii) in the case of an Incentive Stock Option, the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to the
Employee Option or portion thereof surrendered, over (b) the aggregate purchase
price for such Shares under the Employee Option or portion thereof surrendered.
In the event an Optionee's employment with, or service as a Director of, the
Company and its Subsidiaries terminates following a Change of Control, each
Option held by the Optionee that was exercisable as of the date of termination
of the Optionee's employment or service shall remain exercisable for a period
ending not before the earlier of (x) the first anniversary of the termination of
the Optionee's employment or service or (y) the expiration of the stated term of
the Option.
8. Stock Appreciation Rights.
The Committee may in its discretion, either alone or in connection with the
grant of an Employee Option, grant Stock Appreciation Rights in accordance with
the Plan, the terms and conditions of which shall be set forth in an Agreement.
If granted in connection with an Option, a Stock Appreciation Right shall cover
the same Shares covered by the Option (or such lesser number of Shares as the
Committee
ix
<PAGE>
may determine) and shall, except as provided in this Section 8, be
subject to the same terms and conditions as the related Option.
8.1 Time of Grant. A Stock Appreciation Right may be granted (a) at any
time if unrelated to an Option, or (b) if related to an Option, either at the
time of grant, or at any time thereafter during the term of the Option.
8.2 Stock Appreciation Right Related to an Option.
(a) Exercise. A Stock Appreciation Right granted in connection
with an Option shall be exercisable at such time or times and only to the extent
that the related Options are exercisable, and will not be transferable except to
the extent the related Option may be transferable. A Stock Appreciation Right
granted in connection with an Incentive Stock Option shall be exercisable only
if the Fair Market Value of a Share on the date of exercise exceeds the purchase
price specified in the related Incentive Stock Option Agreement.
(b) Amount Payable. Upon the exercise of a Stock Appreciation
Right related to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (i) the excess of the Fair Market Value of a Share on
the date preceding the date of exercise of such Stock Appreciation Right over
the per Share purchase price under the related Option, by (ii) the number of
Shares as to which such Stock Appreciation Right is being exercised.
Notwithstanding the foregoing, the Committee may limit in any manner the amount
payable with respect to any Stock Appreciation Right by including such a limit
in the Agreement evidencing the Stock Appreciation Right at the time it is
granted.
(c) Treatment of Related Options and Stock Appreciation Rights
Upon Exercise. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and upon
the exercise of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be canceled to the extent of the number of
Shares as to which the Option is exercised.
8.3 Stock Appreciation Right Unrelated to an Option. The Committee may
grant to Eligible Individuals Stock Appreciation Rights unrelated to Options.
Stock Appreciation Rights unrelated to Options shall contain such terms and
conditions as to exercisability (subject to Section 8.6), vesting and duration
as the Committee shall determine, but in no event shall they have a term of
greater than ten (10) years. Upon exercise of a Stock Appreciation Right
unrelated to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (a) the excess of the Fair Market Value of a Share on
the date preceding the date of exercise of such Stock Appreciation Right over
the Fair Market Value of a Share on the date the Stock Appreciation Right was
granted, by (b) the number of Shares as to which the Stock Appreciation Right is
being exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation Right
at the time it is granted.
8.4 Method of Exercise. Stock Appreciation Rights shall be exercised by
a Grantee only by a written notice delivered in person or by mail to the
Secretary of the Company at the Company's principal executive office, specifying
the number of Shares with respect to which the Stock Appreciation Right is being
exercised. If requested by the Committee, the Grantee shall deliver the
Agreement evidencing the Stock Appreciation Right being exercised and the
Agreement evidencing any related Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Grantee.
8.5 Form of Payment. Payment of the amount determined under Sections
8.2(b) or 8.3 may be made in the discretion of the Committee solely in whole
Shares in a number determined at their Fair Market Value on the date preceding
the date of exercise of the Stock Appreciation Right, or
x
<PAGE>
solely in cash, or in a combination of cash and Shares. If the Committee decides
to make full payment in Shares and the amount payable results in a fractional
Share, payment for the fractional Share will be made in cash.
8.6 Effect of Change of Control. In the event of a Change of Control,
all Stock Appreciation Rights shall become immediately and fully exercisable. In
addition, to the extent set forth in an Agreement evidencing the grant of a
Stock Appreciation Right unrelated to an Option, a Grantee will be entitled to
receive a payment from the Company in cash or stock, in either case, with a
value equal to the excess, if any, of (a) the greater of (i) the Fair Market
Value, on the date preceding the date of exercise, of the underlying Shares
subject to the Stock Appreciation Right or portion thereof exercised and (ii)
the Adjusted Fair Market Value, on the date preceding the date of exercise, of
the Shares over (b) the aggregate Fair Market Value, on the date the Stock
Appreciation Right was granted, of the Shares subject to the Stock Appreciation
Right or portion thereof exercised. In the event a Grantee's employment with the
Company terminates following a Change of Control, each Stock Appreciation Right
held by the Grantee that was exercisable as of the date of termination of the
Grantee's employment shall remain exercisable for a period ending not before the
earlier of the first anniversary of (x) the termination of the Grantee's
employment or (y) the expiration of the stated term of the Stock Appreciation
Right.
9. Restricted Stock.
9.1 Grant. The Committee may grant Awards to Eligible Individuals of
Restricted Stock, which shall be evidenced by an Agreement between the Company
and the Grantee. Each Agreement shall contain such restrictions, terms and
conditions as the Committee may, in its discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the terms and provisions set forth below in this Section 9.
9.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to
an Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted
Stock Award, the appropriate blank stock powers and, in the discretion of the
Committee, an escrow agreement and any other documents which the Committee may
require within the time period prescribed by the Committee at the time the Award
is granted, the Award shall be null and void. At the discretion of the
Committee, Shares issued in connection with a Restricted Stock Award shall be
deposited together with the stock powers with an escrow agent (which may be the
Company) designated by the Committee. Unless the Committee determines otherwise
and as set forth in the Agreement, upon delivery of the Shares to the escrow
agent, the Grantee shall have all of the rights of a shareholder with respect to
such Shares, including the right to vote the Shares and to receive all dividends
or other distributions paid or made with respect to the Shares.
9.3 Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 9.4, such Shares shall not be sold, transferred or otherwise disposed
of and shall not be pledged or otherwise hypothecated, nor shall they be
delivered to the Grantee.
9.4 Lapse of Restrictions.
(a) Generally. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such terms and
conditions as the Committee may determine. The Agreement evidencing the Award
shall set forth any such restrictions.
xi
<PAGE>
(b) Effect of Change of Control. Unless the Committee shall
determine otherwise at the time of the grant of an Award of Restricted Stock,
the restrictions upon Shares of Restricted Stock shall lapse upon a Change of
Control. The Agreement evidencing the Award shall set forth any such provisions.
9.5 Treatment of Dividends. At the time an Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on such Shares by the Company shall be (a) deferred until the
lapsing of the restrictions imposed upon such Shares and (b) held by the Company
for the account of the Grantee until such time. In the event that dividends are
to be deferred, the Committee shall determine whether such dividends are to be
reinvested in shares of Stock (which shall be held as additional Shares of
Restricted Stock) or held in cash. If deferred dividends are to be held in cash,
there may be credited at the end of each year (or portion thereof) interest on
the amount of the account at the beginning of the year at a rate per annum as
the Committee, in its discretion, may determine. Payment of deferred dividends
in respect of Shares of Restricted Stock (whether held in cash or as additional
Shares of Restricted Stock), together with interest accrued thereon, if any,
shall be made upon the lapsing of restrictions imposed on the Shares in respect
of which the deferred dividends were paid, and any dividends deferred (together
with any interest accrued thereon) in respect of any Shares of Restricted Stock
shall be forfeited upon the forfeiture of such Shares.
9.6 Delivery of Shares. Upon the lapse of the restrictions on Shares of
Restricted Stock, the Committee shall cause a stock certificate to be delivered
to the Grantee with respect to such Shares, free of all restrictions hereunder.
10. Performance Awards.
10.1 Performance Units. The Committee, in its discretion, may grant
Awards of Performance Units to Eligible Individuals, the terms and conditions of
which shall be set forth in an Agreement between the Company and the Grantee.
Performance Units may be denominated in Shares or a specified dollar amount and,
contingent upon the attainment of specified Performance Objectives within the
Performance Cycle, represent the right to receive payment as provided in Section
10.1(b) of (i) in the case of Share-denominated Performance Units, the Fair
Market Value of a Share on the date the Performance Unit was granted, the date
the Performance Unit became vested or any other date specified by the Committee,
(ii) in the case of dollar-denominated Performance Units, the specified dollar
amount or (iii) a percentage (which may be more than 100%) of the amount
described in clause (i) or (ii) depending on the level of Performance Objective
attainment; provided, however, that, the Committee may at the time a Performance
Unit is granted specify a maximum amount payable in respect of a vested
Performance Unit. Each Agreement shall specify the number of Performance Units
to which it relates, the Performance Objectives which must be satisfied in order
for the Performance Units to vest and the Performance Cycle within which such
Performance Objectives must be satisfied.
(a) Vesting and Forfeiture. Subject to Sections 10.3(c) and 10.4,
a Grantee shall become vested with respect to the Performance Units to the
extent that the Performance Objectives set forth in the Agreement are satisfied
for the Performance Cycle.
(b) Payment of Awards. Subject to Section 10.3(c), payment to
Grantees in respect of vested Performance Units shall be made as soon as
practicable after the last day of the Performance Cycle to which such Award
relates unless the Agreement evidencing the Award provides for the deferral of
payment, in which event the terms and conditions of the deferral shall be set
forth in the Agreement. Subject to Section 10.4, such payments may be made
entirely in Shares valued at their Fair Market Value as of the day preceding the
date of payment or such other date specified by the Committee, entirely in cash,
or in such combination of Shares and cash as the Committee in its discretion
shall determine at any time prior to such payment; provided, however, that if
the Committee in its discretion determines to make such payment entirely or
partially in Shares of Restricted Stock, the Committee must
xii
<PAGE>
determine the extent to which such payment will be in Shares of Restricted Stock
and the terms of such Restricted Stock at the time the Award is granted.
10.2 Performance Shares. The Committee, in its discretion, may grant
Awards of Performance Shares to Eligible Individuals, the terms and conditions
of which shall be set forth in an Agreement between the Company and the Grantee.
Each Agreement may require that an appropriate legend be placed on Share
certificates. Awards of Performance Shares shall be subject to the following
terms and provisions:
(a) Rights of Grantee. The Committee shall provide at the time an
Award of Performance Shares is made the time or times at which the actual Shares
represented by such Award shall be issued in the name of the Grantee; provided,
however, that no Performance Shares shall be issued until the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of such
Performance Shares. If a Grantee shall fail to execute the Agreement evidencing
an Award of Performance Shares, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require within the time period prescribed by the Committee at
the time the Award is granted, the Award shall be null and void. At the
discretion of the Committee, Shares issued in connection with an Award of
Performance Shares shall be deposited together with the stock powers with an
escrow agent (which may be the Company) designated by the Committee. Except as
restricted by the terms of the Agreement, upon delivery of the Shares to the
escrow agent, the Grantee shall have, in the discretion of the Committee, all of
the rights of a shareholder with respect to such Shares, including the right to
vote the Shares and to receive all dividends or other distributions paid or made
with respect to the Shares.
(b) Non-transferability. Until any restrictions upon the
Performance Shares awarded to a Grantee shall have lapsed in the manner set
forth in Sections 10.2(c) or 10.4, such Performance Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee. The Committee may also
impose such other restrictions and conditions on the Performance Shares, if any,
as it deems appropriate.
(c) Lapse of Restrictions. Subject to Sections 10.3(c) and 10.4,
restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may, in
its discretion, determine at the time an Award is granted.
(d) Treatment of Dividends. At the time the Award of Performance
Shares is granted, the Committee may, in its discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof, declared or
paid on Shares represented by such Award which have been issued by the Company
to the Grantee shall be (i) deferred until the lapsing of the restrictions
imposed upon such Performance Shares and (ii) held by the Company for the
account of the Grantee until such time. In the event that dividends are to be
deferred, the Committee shall determine whether such dividends are to be
reinvested in shares of stock (which shall be held as additional Performance
Shares) or held in cash. If deferred dividends are to be held in cash, there may
be credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends in
respect of Performance Shares (whether held in cash or in additional Performance
Shares), together with interest accrued thereon, if any, shall be made upon the
lapsing of restrictions imposed on the Performance Shares in respect of which
the deferred dividends were paid, and any dividends deferred (together with any
interest accrued thereon) in respect of any Performance Shares shall be
forfeited upon the forfeiture of such Performance Shares.
xiii
<PAGE>
(e) Delivery of Shares. Upon the lapse of the restrictions on
Performance Shares awarded hereunder, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares, free of
all restrictions hereunder.
10.3 (a) Performance Objectives. Performance Objectives for Performance
Awards may be expressed in terms of (i) earnings per Share, (ii) Share price,
(iii) pre-tax profits, (iv) net earnings, (v) return on equity or assets, (vi)
revenues, (vii) EBITDA, (viii) cash flow or growth in cash flow or (ix) any
combination of the foregoing. Performance Objectives may be in respect of the
performance of the Company, any of its Subsidiaries, any of its Divisions or any
combination thereof. Performance Objectives may be absolute or relative (either
to the Company's prior performance or to the performance of one or more other
companies, peer groups or indices) and may be expressed in terms of a
progression within a specified range. The Performance Objectives with respect to
a Performance Cycle shall be established in writing by the Committee by the
earlier of (x) the date on which a quarter of the Performance Cycle has elapsed
or (y) the date which is ninety (90) days after the commencement of the
Performance Cycle, and in any event while the performance relating to the
Performance Objectives remain substantially uncertain.
(b) At the time of the granting of a Performance Award or
thereafter, in either case to the extent permitted under Section 162(m) of the
Code and the regulations thereunder without adversely affecting the treatment of
the Performance Award as Performance-Based Compensation, the Committee may
provide for the manner in which performance will be measured against the
Performance Objectives (or may adjust the Performance Objectives) to reflect the
impact of specified corporate transactions, extraordinary or nonrecurring
events, accounting changes and other similar events.
(c) Determination of Performance. Prior to the vesting, payment,
settlement or lapsing of any restrictions with respect to any Performance Award
that is intended to constitute Performance-Based Compensation and that is made
to a Grantee who is subject to Section 162(m) of the Code, the Committee shall
certify in writing that the applicable Performance Objectives have been
satisfied.
10.4 Effect of Change of Control. In the event of a Change of Control:
(a) With respect to Performance Units, the Grantee shall
(i) become vested in all or a portion of the Performance Units as determined by
the Committee at the time of the Award of such Performance Units and as set
forth in the Agreement and (ii) be entitled to receive in respect of all
Performance Units which become vested as a result of a Change of Control a cash
payment within ten (10) days after such Change of Control in an amount as
determined by the Committee at the time of the Award of such Performance Unit
and as set forth in the Agreement.
(b) With respect to Performance Shares, all or a portion of any
unissued Performance Shares shall be issued, and restrictions shall lapse
immediately on all or a portion of the Performance Shares in each case as
determined by the Committee at the time of the Award of such Performance Shares
and as set forth in the Agreement.
(c) The Agreements evidencing Performance Shares and Performance
Units shall provide for the treatment of such Awards (or portions thereof) which
do not become vested as the result of a Change of Control, including, but not
limited to, provisions for the adjustment of applicable Performance Objectives.
11. Effect of a Termination of Employment.
The Agreement evidencing the grant of each Option and each Award shall set
forth the terms and conditions applicable to such Option or Award upon a
termination or change in the status of the employment of the Optionee or Grantee
by the Company, a Subsidiary or a Division (including a termination or change by
reason of the sale of a Subsidiary or a Division), which, except for Director
xiv
<PAGE>
Options, shall be as the Committee may, in its discretion, determine at the time
the Option or Award is granted or thereafter.
12. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in Capitalization, the Committee
shall conclusively determine the appropriate adjustments, if any, to (i) the
maximum number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted under the Plan, (ii) the maximum number
and class of Shares or other stock or securities with respect to which Options
or Awards may be granted to any Eligible Individual during any calendar year,
(iii) the number and class of Shares or other stock or securities which are
subject to outstanding Options or Awards granted under the Plan and the purchase
price therefor, if applicable, (iv) the number and class of Shares or other
securities in respect of which Director Options are to be granted under Section
6 and (v) the Performance Objectives.
(b) Any such adjustment in the Shares or other stock or securities
subject to outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a modification
as defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a Grantee of an
Award shall be entitled to, or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities, such new, additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Shares subject to the Award or Option, as the case may be,
prior to such Change in Capitalization.
13. Effect of Certain Transactions.
Subject to Sections 7.4, 8.6, 9.4(b) and 10.4 or as otherwise provided in an
Agreement, in the event of (a) the liquidation or dissolution of the Company or
(b) a merger or consolidation of the Company (a "Transaction"), the Plan and the
Options and Awards issued hereunder shall continue in effect in accordance with
their respective terms, except that following a Transaction each Optionee and
Grantee shall be entitled to receive in respect of each Share subject to any
outstanding Options or Awards, as the case may be, upon exercise of any Option
or payment or transfer in respect of any Award, the same number and kind of
stock, securities, cash, property or other consideration that each holder of a
Share was entitled to receive in the Transaction in respect of a Share;
provided, however, that such stock, securities, cash, property, or other
consideration shall remain subject to all of the conditions, restrictions and
performance criteria which were applicable to the Options and Awards prior to
such Transaction.
14. Interpretation.
(a) The Plan is intended to comply with Rule 16b- 3 promulgated
under the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.
(b) Unless otherwise expressly stated in the relevant Agreement,
each Option, Stock Appreciation Right and Performance Award granted under the
Plan is intended to be Performance-Based Compensation within the meaning of
Section 162(m)(4)(C) of the Code. The Committee shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Options or Awards if the ability to exercise such discretion or the exercise of
such discretion itself would cause the compensation attributable to such Options
or Awards to fail to qualify as Performance-Based Compensation.
xv
<PAGE>
15. Pooling Transactions.
Notwithstanding anything contained in the Plan or any Agreement to the
contrary, in the event of a Change of Control which is also intended to
constitute a Pooling Transaction, the Committee shall take such actions, if any,
as are specifically recommended by an independent accounting firm retained by
the Company to the extent reasonably necessary in order to assure that the
Pooling Transaction will qualify as such, including but not limited to (a)
deferring the vesting, exercise, payment, settlement or lapsing of restrictions
with respect to any Option or Award, (b) providing that the payment or
settlement in respect of any Option or Award be made in the form of cash, Shares
or securities of a successor or acquirer of the Company, or a combination of the
foregoing, and (c) providing for the extension of the term of any Option or
Award to the extent necessary to accommodate the foregoing, but not beyond the
maximum term permitted for any Option or Award.
16. Termination and Amendment of the Plan.
The Plan shall terminate on the day preceding the tenth anniversary of the
date of its adoption by the Compensation and Stock Option Plan Committee of the
Board and no Option or Award may be granted thereafter. The Board or the
Compensation and Stock Option Plan Committee of the Board may sooner terminate
the Plan and the Board or the Compensation and Stock Option Plan Committee of
the Board may at any time and from time to time amend, modify or suspend the
Plan; provided, however, that:
(a) no such amendment, modification, suspension or termination
shall impair or adversely alter any Options or Awards theretofore granted under
the Plan, except with the consent of the Optionee or Grantee, nor shall any
amendment, modification, suspension or termination deprive any Optionee or
Grantee of any Shares which he or she may have acquired through or as a result
of the Plan; and
(b) to the extent necessary under any applicable law, regulation
or exchange requirement, no amendment shall be effective unless approved by the
shareholders of the Company in accordance with any applicable law, regulation or
exchange requirement.
17. Non-Exclusivity of the Plan.
The adoption of the Plan by the Compensation and Stock Option Plan Committee
of the Board shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.
18. Limitation of Liability.
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(a) give any person any right to be granted an Option or Award
other than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(c) limit in any way the right of the Company or any Subsidiary to
terminate the employment of any person at any time; or
xvi
<PAGE>
(d) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person at any particular rate of
compensation or for any particular period of time.
19. Regulations and Other Approvals; Governing Law.
19.1 Except as to matters of federal law, the Plan and the rights of
all persons claiming hereunder shall be construed and determined in accordance
with the laws of the State of New Jersey without giving effect to conflicts of
laws principles thereof.
19.2 The obligation of the Company to sell or deliver Shares with
respect to Options and Awards granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
19.3 The Board may make such changes as may be necessary or appropriate
to comply with the rules and regulations of any government authority, or to
obtain for Eligible Individuals granted Incentive Stock Options the tax benefits
under the applicable provisions of the Code and regulations promulgated
thereunder.
19.4 Each Option and Award is subject to the requirement that, if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
19.5 Notwithstanding anything contained in the Plan or any Agreement to
the contrary, in the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not otherwise
exempt from such registration, such Shares shall be restricted against transfer
to the extent required by the Securities Act and Rule 144 or other regulations
thereunder. The Committee may require any individual receiving Shares pursuant
to an Option or Award granted under the Plan, as a condition precedent to
receipt of such Shares, to represent and warrant to the Company in writing that
the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall be
appropriately amended to reflect their status as restricted securities as
aforesaid.
20. Right of First Refusal.
Upon such terms and conditions as determined by the Committee in its
discretion, the Committee at the time of grant of an Option or Award may provide
a right of first refusal in favor of the Company with respect to any proposed
sale by an Optionee or Grantee of Shares subject to an Option or Award.
21. Miscellaneous.
21.1 Multiple Agreements. The terms of each Option or Award may differ
from other Options or Awards granted under the Plan at the same time, or at some
other time. The Committee may also grant more than one Option or Award to a
given Eligible Individual during the term of the Plan, either
xvii
<PAGE>
in addition to, or in substitution for, one or more Options or
Awards previously granted to that Eligible Individual.
21.2 Withholding of Taxes.
(a) At such times as an Optionee or Grantee recognizes taxable
income in connection with the receipt of Shares or cash hereunder (a "Taxable
Event"), the Optionee or Grantee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Company in connection with the Taxable Event
(the "Withholding Taxes") prior to the issuance, or release from escrow, of such
Shares or the payment of such cash. The Company shall have the right to deduct
from any payment of cash to an Optionee or Grantee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes. In
satisfaction of the obligation to pay Withholding Taxes to the Company, the
Optionee or Grantee may make a written election (the "Tax Election"), provided
that it is permitted in the terms of the Agreement at the time of the grant or
thereafter, to have withheld a portion of the Shares then issuable to him or her
having an aggregate Fair Market Value equal to the Withholding Taxes.
(b) If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office.
21.3. Effective Date. The effective date of this Plan shall be as
determined by the Compensation and Stock Option Plan Committee of the Board,
subject only to the approval by the affirmative vote of the holders of a
majority of the securities of the Company present, or represented, and entitled
to vote at a meeting of shareholders duly held in accordance with the applicable
laws of the State of New Jersey within twelve (12) months of the adoption of the
Plan by the Compensation and Stock Option Plan Committee of the Board.
xviii
<PAGE>
Benjamin Moore & Co. - Proxy
51 Chestnut Ridge Road, Montvale, NJ 07645
--------------------------------------------
This Proxy Is Solicited On Behalf of the Board of Directors
The undersigned hereby appoints Benjamin M. Belcher, Jr., Yvan Dupuy and Richard
Roob as proxies to vote all shares of the undersigned at the Annual Meeting of
Shareholders to be held April 16, 1998. Each of the named proxies shall have the
power to appoint a substitute proxy for himself. The proxies, or any one of
them, shall have the power to vote: (i) only those shares of the Common Stock of
Benjamin Moore & Co. held of record by the undersigned as of the close of
business on March 2, 1998; (ii) at any adjournment or postponement of the
meeting; and (iii) upon any subject which may properly be brought before the
meeting. The proxies may vote upon all the matters described in the proxy
statement furnished with this proxy, subject to any directions indicated below.
If no directions are given, this proxy will be voted "FOR" the election of the
nominees listed below and "FOR" the proposal to approve the 1998 Stock Incentive
Plan.
1. Election of three (3) Class I Directors:
FOR all nominees listed below
(except as written below)
WITHHOLD AUTHORITY to vote for all nominees listed below
Benjamin M. Belcher, Jr. Yvan Dupuy Gerald W. Moore
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
2. To Approve the 1998 Stock Incentive Plan
/ / FOR this proposal / / AGAINST this proposal / / ABSTAIN from voting
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly be brought before the meeting, or any adjournment or
postponement thereof.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
Dated: , 1998
-----------------------------------
The signature(s) should agree with the name(s) imprinted to
the left. Custodians, Executors, Administrators, Trustees,
Guardians and Attorneys should so indicate when signing.
Shares held on record date:
--------------------------------
<PAGE>
Benjamin Moore & Co. - Voting Instructions
51 Chestnut Ridge Road, Montvale, NJ 07645
---------------------------------------------
EMPLOYEES' STOCK OWNERSHIP PLAN
These Instructions Are Solicited by the
Administrative Committee and the Trustees of the
Benjamin Moore & Co. Employees' Stock Ownership Plan
Pursuant to Section 9.8 of the Benjamin Moore & Co. Employees'
Stock Ownership Plan (the "Plan"), the undersigned hereby instructs
the Administrative Committee and the Trustees of the Plan, and each
or any of them, to vote as designated below, all shares of Common
Stock of Benjamin Moore & Co. held in the account of the
undersigned under the Plan as of the close of business on March 2,
1998, at the Annual Meeting of Shareholders to be held on April 16,
1998 or any adjournment or postponement thereof.
These instructions when properly executed will be followed in the
manner directed. If no instructions are given on this form or if
the form is not returned, all shares of Common Stock held in
your account under the Plan will be voted in the election of
Directors and on any other proposals before the meeting in the
same proportion as shares for which instructions have been
received from Participants in the Plan. If authority to vote for
one or more nominees is withheld, the shares of Common Stock
held in your account under the Plan will be voted only for the
balance of such nominees, if any.
1. Election of three (3) Class I Directors:
FOR all nominees listed below
(except as written below)
WITHHOLD AUTHORITY to vote for all nominees listed below
Benjamin M. Belcher, Jr. Yvan Dupuy Gerald W. Moore
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- -------------------------------------------------------------------------------
2. To Approve the 1998 Stock Incentive Plan
/ / FOR this proposal / / AGAINST this proposal / / ABSTAIN from voting
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly be brought before the meeting, or any adjournment or
postponement thereof.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
Dated: , 1998
-----------------------------------
The signature(s) should agree with the name(s) imprinted to
the left.
