GIBSON C R CO INC, SC 14F1, 1995-10-20

GIBSON C R CO INC
SC 14F1, 1995-10-20
BLANKBOOKS, LOOSELEAF BINDERS & BOOKBINDG & RELATD WORK

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 20, 1995

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

INFORMATION STATEMENT
PURSUANT TO SECTION 14(F) OF
THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER

THE C.R. GIBSON COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 0-4855 06-0361615
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>

32 KNIGHT STREET
NORWALK, CONNECTICUT 06856
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

(203) 847-4543
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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<PAGE> 2

THE C.R. GIBSON COMPANY
32 KNIGHT STREET
NORWALK, CONNECTICUT 06856
------------------------

INFORMATION STATEMENT PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
------------------------

INTRODUCTION

GENERAL

This Information Statement, which is being mailed on or about October 23,
1995 to holders of the Common Stock, $0.10 par value per share (the "Shares"),
of The C.R. Gibson Company, a Delaware corporation (the "Company"), is being
furnished in connection with the possible designation by Thomas Nelson, Inc., a
Tennessee corporation (the "Parent"), of a majority of the Board of Directors of
the Company (the "Board") pursuant to the terms of the Tender Offer and Merger
Agreement dated as of September 13, 1995, as amended by Amendment No. 1 to
Tender Offer and Merger Agreement dated as of October 16, 1995, by and between
the Parent, Nelson Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of the Parent (the "Offeror"), and the Company (as so amended, the
"Merger Agreement"). The Company expects the Parent to designate such number of
directors (the "Parent Designees"), rounded up to the next whole number, as will
give the Parent representation equal to the percentage of outstanding Shares
purchased by the Parent pursuant to the tender offer (the "Offer") to purchase
all outstanding Shares at $9.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
September 19, 1995, as supplemented and amended by the Supplement to the Offer
to Purchase, dated October 16, 1995, and the related Letter of Transmittal
(collectively, the "Offer to Purchase").

This Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder. THIS INFORMATION STATEMENT IS BEING PROVIDED SOLELY FOR
INFORMATION PURPOSES AND NOT IN CONNECTION WITH A VOTE OF THE COMPANY'S
STOCKHOLDERS.

You are urged to read this Information Statement carefully. You are not,
however, required to take any action.

Promptly following the purchase by the Offeror of such number of Shares as
represents at least a majority of the outstanding Shares, the Parent shall be
entitled pursuant to the Merger Agreement to designate such number of directors
of the Company, rounded up to the next whole number, that equals the product of
the number of directors on the Board multiplied by the percentage that the
number of Shares so purchased bears to the number of Shares outstanding. The
Company shall, at such time, take all actions necessary to cause the Parent
Designees to be so elected, including, without limitation, increasing the number
of directors or using its reasonable efforts to secure the resignation of such
number of directors as is necessary to enable the Parent Designees to be so
elected, or both. The consummation of the Offer would constitute a change in
control of the Company. It is currently anticipated that a sufficient number of
directors will resign and that certain of the Parent Designees will be elected
to fill the vacancies so created to enable the Company to fulfill its
obligations under the Merger Agreement without increasing the number of
directors of the Company.

The information contained in this Information Statement concerning the
Parent Designees has been furnished to the Company by the Parent, and the
Company assumes no responsibility for the accuracy or completeness of any such
information.

Pursuant to the Merger Agreement, on September 19, 1995, the Offeror
commenced the Offer which is currently scheduled to expire on October 30, 1995,
at which time, if the Offer is not extended and all
<PAGE> 3

conditions to the consummation of the Offer have been satisfied or waived, the
Offeror will be obligated to purchase all Shares properly tendered pursuant to
the Offer and not withdrawn.

IN THE EVENT THAT THE CONDITIONS TO CONSUMMATION OF THE OFFER SET FORTH IN
THE MERGER AGREEMENT AND THE OFFER TO PURCHASE ARE NOT SATISFIED OR WAIVED, OR
IF THE MERGER AGREEMENT IS TERMINATED PURSUANT TO ITS TERMS PRIOR TO THE
ELECTION OR APPOINTMENT OF THE PARENT DESIGNEES, THE PARENT WILL NOT HAVE ANY
RIGHT UNDER THE MERGER AGREEMENT TO HAVE THE PARENT DESIGNEES ELECTED OR
APPOINTED TO THE BOARD.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The only outstanding class of voting securities of the Company is the
Shares. As of the close of business on October 18, 1995, there were outstanding
7,444,039 Shares, each of which is entitled to one vote on each matter to be
considered at meetings of stockholders, including the election of directors.

To the best of the Company's knowledge, the following entity was the
beneficial owner of more than 5% of the outstanding Shares at December 31, 1994.

- ---------------
(1) A "beneficial owner" of a security for purposes of Rule 13d-3 under the
Exchange Act includes any person who, directly or indirectly, has or shares
voting power and/or investment power, although not necessarily the economic
benefit, with respect to that security.

(2) Information shown above has been obtained from a Schedule 13G dated February
10, 1995 containing information as of December 31, 1994, and filed with the
Securities and Exchange Commission (the "SEC"). Such Schedule 13G states
that Peter B. Cannell & Co., Inc. has sole voting and investment power as to
all 525,400 Shares.

The following is a tabulation as of October 18, 1995 of other stockholders
of the Company who to the knowledge of the Company owned beneficially in excess
of 5% of the outstanding Shares determined in accordance with Rule 13d-3 under
the Exchange Act. In addition to the information set forth below, pursuant to
certain stock option agreements dated as of September 13, 1995 among the Parent,
the Offeror and certain stockholders of the Company, including certain directors
and affiliates of the Company (the "Selling Stockholders"), the Parent shares
voting power with the Selling Stockholders with respect to 2,004,246 Shares

2
<PAGE> 4

constituting 26.9% of the outstanding Shares in connection with certain matters
specified in such stock option agreements and, accordingly, is deemed the
beneficial owner of such Shares.

<TABLE>
<CAPTION>
TITLE AMOUNT AND NATURE
OF NAME AND ADDRESS OF OF BENEFICIAL
CLASS BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS
- ------- ------------------------------------------------- ----------------- ----------------
<S> <C> <C> <C>
Common Bradford Venture Partners, L.P................... 1,025,262(2) 13.8%
Stock Overseas Equity Investor Partners,
Overseas Private Investor Partners,
Bradford Mills, Barbara M. Henagan,
Robert J. Simon, c/o Bradford
Associates, 22 Chambers Street,
Princeton, NJ 08540
Common The C.R. Gibson Company.......................... 1,035,790(3) 13.9%
Stock Employee Stock Ownership Plan
32 Knight Street, Norwalk, CT 06856
Common Robert G. Bowman................................. 498,894(4) 6.7%
Stock 32 Knight Street, Norwalk, CT 06856
Common John G. Russell.................................. 403,082(5) 5.4%
Stock 2780 Redding Road, Fairfield, CT 06430
</TABLE>

- ---------------
(1) A "beneficial owner" of a security for purposes of Rule 13d-3 includes any
person who, directly or indirectly, has or shares voting power and/or
investment power, although not necessarily the economic benefit, with
respect to that security.

(2) Of such Shares, 405,743, 405,743, 113,333, 20,205, 6,751 and 4,453 Shares
are owned directly or as trustee by Bradford Venture Partners, L.P.,
Overseas Private Investor Partners, Overseas Equity Investor Partners,
Bradford Mills, Barbara M. Henagan and Robert J. Simon, respectively. Mr.
Mills, Ms. Henagan and Mr. Simon are general partners of Bradford
Associates, which is the general partner of Bradford Venture Partners, L.P.
and Mr. Mills is Vice Chairman of the corporate general partner of Overseas
Private Investor Partners. Under an agreement with a term until November
1998 among these stockholders (excluding Overseas Equity Investor Partners)
and others, 911,929 of such Shares will be voted in favor of the election to
the Board of the representatives designated by the holders of a majority of
such Shares and in accordance with the decisions of such majority on
substantially all other matters submitted to stockholders of the Company.
The percentages of beneficial ownership of Bradford Venture Partners, L.P.,
Overseas Private Investor Partners, Overseas Equity Investor Partners, Mr.
Mills, Ms. Henagan and Mr. Simon, determined in accordance with Rule 13d-3,
are 5.5%, 5.5%, 1.5%, 13.8%, 13.8%, and 12.3%, respectively.

(3) There are three co-trustees of The C.R. Gibson Company Employee Stock
Ownership Plan (the "ESOP"), who are officers of the Company: Frank A.
Rosenberry, James M. Harrison and Willard D. Finch, III. Of the Shares owned
by the ESOP, 831,406 Shares have been allocated to the accounts of
participants in the ESOP. The allocated Shares are voted in accordance with
instructions received from participants or, as to Shares for which no
instructions are received, as directed by the co-trustees. The co-trustees
also share voting power as to the 204,384 Shares which have not been
allocated. The co-trustees share investment power as to all of the 1,035,790
Shares owned by the ESOP. In addition, the co-trustees of the ESOP own
individually an aggregate of 203,933 Shares as to which they have sole
voting and investment power including 109,146 Shares which could be acquired
within 60 days upon the exercise of options and a total of 37,707 Shares
which have been allocated to their accounts under the ESOP as to which they
have sole voting power.

(4) These Shares do not include 6,358 Shares which are owned by his wife as to
which Mr. Bowman disclaims beneficial ownership.

(5) These Shares do not include 7,333 Shares which are owned by his wife as to
which Mr. Russell disclaims beneficial ownership.

3
<PAGE> 5

DIRECTORS OF THE COMPANY

THE PARENT DESIGNEES

Pursuant to the provisions of the Merger Agreement, the Parent may
designate from among the persons identified below the persons to be elected to
the Board at such time as the Offeror has purchased such number of Shares as
represents at least a majority of the outstanding Shares and from time to time
thereafter, in such number as will give the Parent representation on the Board
equal to the product of the number of directors on the Board multiplied by the
percentage that such number of Shares so purchased bears to the number of Shares
outstanding. At the request of the Parent, the size of the Board will be
increased and/or current directors will resign in order for the Parent Designees
to be elected. The Parent has informed the Company that each of the Parent
Designees has consented to act as a director if so designated.

None of the directors of the Parent or the Offeror currently is a director
of, or holds any position with, the Company. The Company has been advised that,
to the best knowledge of the Parent and the Offeror, none of the Parent's or
Offeror's directors or their affiliates or associates beneficially owns any
equity securities, or rights to acquire any equity securities, of the Company
and none has been involved in any transactions with the Company or any of its
directors, executive officers, affiliates or associates which are required to be
disclosed pursuant to the rules and regulations of the SEC.

Set forth below are the names, ages, present principal occupations or
employment and five-year employment history of the Parent Designees. Unless
otherwise indicated, each person identified below has as a business address,
Nelson Place at Elm Hill Pike, P.O. Box 141000, Nashville, Tennessee 37214-1000.

<TABLE>
<CAPTION>
NAME AND YEAR FIRST BECAME
DIRECTOR OF THE PARENT PRINCIPAL OCCUPATION AND OTHER INFORMATION(1)
- ------------------------------ -------------------------------------------------------------
<S> <C>
Sam Moore..................... Chairman of the Board of Directors, Chief Executive Officer,
1961 President and a Director of the Parent since its founding in
1961. Mr. Moore is the father of S. Joseph Moore. Mr. Moore
is 65 years of age.
S. Joseph Moore............... Appointed Executive Vice President of the Parent in 1995,
1995 and, prior to such appointment, Mr. Moore served as
Divisional Vice President of the Parent in various capacities
since 1991. Mr. Moore is also the sole director and President
of the Offeror, elected to such positions in September 1995
upon the formation of the Offeror. S. Joseph Moore is the son
of Sam Moore. He is 32 years of age.
Brownlee O. Currey, Jr........ Chairman of the Board and President of the Nashville Banner
1984 Publishing Company, a newspaper company, a Director of OCC,
Inc., the principal subsidiary of Osborn Communications
Corporation, a diversified media company, and A+
Communications, Inc., a provider of paging communications and
telemessaging services. Mr. Currey is 67 years of age.
W. Lipscomb Davis, Jr......... Partner of Hillsboro Enterprises, an investment company, and
1984 a Director of SunTrust Bank, Nashville, N.A., a Tennessee
bank, American General Corporation, an insurance holding
company, and Genesco, Inc., a consumer products company. Mr.
Davis is 64 years of age.
Robert J. Niebel, Sr.......... Senior Vice President of 20th Century Christian, Inc., a
1973 publishing company. Mr. Niebel is 57 years of age.
Millard V. Oakley............. Businessman managing private investments. Mr. Oakley is 65
1972 years of age.
</TABLE>

4
<PAGE> 6

<TABLE>
<CAPTION>
NAME AND YEAR FIRST BECAME
DIRECTOR OF THE PARENT PRINCIPAL OCCUPATION AND OTHER INFORMATION(1)
- ------------------------------ -------------------------------------------------------------
<S> <C>
Joe M. Rodgers................ Chairman of the JMR Group (investments), a Director of AMR
1992 Corporation, an airline, BellSouth Telecommunications, a
telecommunications company, Gaylord Entertainment Company, a
diversified entertainment and communications company, Gryphon
Holding, Inc., an insurance company, LaFarge Corp., a cement
and construction materials company, and Willis Corroon plc,
an insurance holding company. Mr. Rodgers previously was the
Chairman and CEO of Berlitz International from December 1991
until February 1993. Mr. Rodgers is 61 years of age.
Cal Turner, Jr................ Chairman and Chief Executive Officer of Dollar General Corp.,
1991 an operator of general merchandise stores, and a Director of
First American Corporation, a Tennessee bank holding company,
and Shoney's, Inc., a national restaurant company. Mr. Turner
is 55 years of age.
Andrew J. Young............... Vice President of Law Companies Group, an engineering
1993 company. Chairman of the Atlanta Commission for Olympic
Games, and a Director of Delta Airlines and Host Marriott
Corporation, a lodging company. Mr. Young previously served
as the Mayor of Atlanta, Georgia from 1980 to 1990. Mr. Young
is 63 years of age.
</TABLE>

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(1) Unless otherwise indicated, each person has been an employee of the firm(s)
listed as his principal occupation for more than the last five years.

CURRENT DIRECTORS

Set forth below are the names, ages, present principal occupations or
employment, five-year employment history of, and number of Shares and percentage
of outstanding Shares held by the current directors of the Company.

5
<PAGE> 7

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME AND YEAR FIRST BECAME PRINCIPAL OCCUPATION AND OWNED AND PERCENT
DIRECTOR OF THE COMPANY OTHER INFORMATION(1) OF CLASS(2)
- ------------------------------ ---------------------------------------------- -----------------
<S> <C> <C>
Robert Garrett(a)............. President, Robert Garrett & Sons, Inc., New 8,624
1987 York, NY (merchant banking) and President, Ad (.12%)
Media Corporate Advisors Inc., New York, NY.
Mr. Garrett is 58 years of age and is also a
Director of Mickelberry Corporation, New York,
NY (holding company, advertising and
marketing).
James M. Harrison............. Executive Vice President -- Chief Operating 244,507(3)
1990 Officer (1994), Vice President -- Finance of (3.3%)
the Company (1988), Treasurer and Secretary
(1989). Mr. Harrison is 43 years of age.
Barbara M. Henagan(a)......... Senior Managing Director, Bradford Ventures 1,025,262(4)
1991 Ltd., New York, NY (private investment firm) (13.8%)
since 1991; Managing Director 1990 -- 1991.
General Partner, Bradford Associates since
1986. Ms. Henagan is 36 years of age, a
Director of Central Sprinkler, Pennsylvania
(fire suppression), and is also a Director of
various privately held companies.
Willard J. Partner in the law firm of Cummings & 20,000
Overlock(b)(c)(d)........... Lockwood, Stamford, CT, General Counsel to the (.27%)
1962 Company. Mr. Overlock is 72 years of age.
Frank A. Rosenberry(b)(c)..... President and Chief Executive Officer of the 338,457(3)
1984 Company. Joined the Company in 1983 as a Vice (4.5%)
President. Mr. Rosenberry is 57 years of age.
John G. Russell(b)............ Consultant, Fairfield, CT. Mr. Russell is 67 403,082
1962 years of age. From 1968 to 1987, Mr. Russell (5.4%)
was Senior Vice President -- Publisher of the
Company. He is a first cousin of Robert G.
Bowman.
Robert J. Simon(b)(c)......... Senior Managing Director, Bradford Ventures 911,929(5)
1989 Ltd., New York, NY (private investment firm) (12.3%)
since 1991; Managing Director 1990-1991.
General Partner, Bradford Associates since
1988. Mr. Simon is 36 years of age, and also
is Chairman and a Director of HoloPak
Technologies Inc., New Jersey (foil stamping);
The Sunbelt Companies, Inc., Greenville, SC
(home improvement centers); ADCO Technologies,
Inc., Jackson, Michigan (specialty chemicals),
and Tufco Technologies, Inc., Dallas, Texas
(converting and printing). Mr. Simon is also a
Director of various privately held companies.
</TABLE>

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(1) Unless otherwise indicated, the occupations have been the principal
occupations of the named individuals for the past five years.

(2) See Note (1) on page 3 hereof for discussion of beneficial ownership.
Information as to beneficial ownership is given as of October 18, 1995.

(3) Messrs. Harrison and Rosenberry are two of the three trustees of the ESOP
and share voting and investment power over the Shares owned by such plan as
described in Note (3) to the table on page 3 hereof. Additionally, of the
Shares represented, 19,400 Shares and 79,013 Shares, respectively, represent
Shares which may be acquired within 60 days through the exercise of stock
options by Messrs. Harrison and Rosenberry. See Note (3) to the table on
page 3 hereof.

(4) Of this total, Ms. Henagan has sole investment power over 6,751 Shares
including three trusts holding an aggregate of 1,203 Shares of which she is
the trustee, shared voting power over 1,025,262 Shares and shared investment
power over 924,819 Shares. See Note (2) to the table on page 3 hereof.

6
<PAGE> 8

(5) Of this total, Mr. Simon has sole investment power over 4,453 Shares, shared
voting power over 911,929 Shares and shared investment power over 405,743
Shares. See Note (2) to the table on page 3 hereof.

(a) Member of the audit committee of the Board.

(b) Member of the nominating committee of the Board.

(d) Member of the stock option committee of the Board.

As of October 18, 1995, the executive officers and directors of the Company
as a group (15 persons) beneficially owned an aggregate of 2,621,258 Shares (or
34.6% of the outstanding Shares) (including 133,080 Shares which could be
acquired within 60 days upon the exercise of options). Of this total, individual
members of the group have sole voting and investment power over 1,391,612 Shares
and shared voting and investment power over 1,229,646 Shares. Of this total,
Willard D. Finch, III and Steven P. Mack, executive officers of the Company,
owned 29,737 and 38,486 Shares, respectively (including 10,733 and 19,534
Shares, respectively, which could be acquired within 60 days upon exercise of
options), constituting .40% and .52% of the outstanding Shares. The total number
of Shares beneficially owned by such executive officers and directors does not
include any Shares owned solely by the beneficial owner's spouse.

EXECUTIVE OFFICERS OF THE COMPANY

Listed below are the executive officers of the Company, their ages as of
October 18, 1995, present positions with the Company and years in office. The
term of office of each extends until the organization meeting of the Board
following the Annual Meeting of Stockholders or until removal by the Board. None
of the named officers has been elected pursuant to any arrangement or
understanding with any other person, and none has any family relationship with
any other executive officer, except as noted below:

<TABLE>
<CAPTION>
YEARS IN
LAST
NAME AGE POSITION POSITION AND OFFICE
- ---------------------------- --- -------------- ---------------------------------------------
<S> <C> <C> <C>
Robert G. Bowman(a)......... 73 43 Chairman of the Board since 1952; President
and Chief Executive Officer 1952-1986;
Chairman of the Board and Chief Executive
Officer 1986-1988; Director of the Company
since 1947.
Frank A. Rosenberry......... 57 7 President and Chief Executive Officer since
1988; President and Chief Operating Officer
1986-1988; Senior Vice President -- Corporate
Development 1983-1985; Director of the
Company since 1984.
James M. Harrison........... 43 -- Executive Vice President and Chief Operating
Officer since 1994; Vice President -- Finance
of the Company 1988-1994; Secretary and
Treasurer since 1989; Director of the Company
since 1990.
Willard D. Finch, III....... 48 6 Vice President -- Manufacturing since 1989;
Assistant Vice President -- Manufacturing
1988-1989; Plant Manager 1976-1988;
Production Manager 1971-1976.
Steven P. Mack(a)........... 44 7 Vice President -- Product Development since
May 1988; Vice President -- Creative Papers
1984-1988; Group Product Manager 1974-1984.
J. Ted Theriault............ 50 -- Vice President -- Sales since September 1994;
National Accounts Manager 1993-1994;
Independent Sales Consultant 1991-1993; prior
thereto Vice President Sales and Marketing of
the Ingredient Technology Division of
Crompton and Knowles, Inc., Stamford, CT.
</TABLE>

7
<PAGE> 9

<TABLE>
<CAPTION>
YEARS IN
LAST
NAME AGE POSITION POSITION AND OFFICE
---- --- -------- -------------------
<S> <C> <C> <C>
Joseph O'Brien.............. 45 -- Vice President -- Marketing since May 1994;
Executive Director of Marketing 1992-1994;
prior thereto a Group Product Manager with
Gibson Greetings, Inc. of Cincinnati, OH.
</TABLE>

- ---------------
(a) Mr. Bowman is Mr. Mack's father-in-law.

COMMITTEES OF THE BOARD

There were five regularly scheduled meetings and one special meeting of the
Board during the last fiscal year. The Company has an executive committee, an
audit committee, a nominating committee and a stock option committee of the
Board.

The executive committee has the authority during intervals between meetings
of the Board to exercise the powers of the Board (except for certain powers
reserved solely for the Board). There were two meetings of the executive
committee in 1994.

The audit committee's principal functions are to recommend to the Board the
appointment of the independent auditors and to review the performance and scope
of audit and non-audit services to be provided by the independent auditors.
There was one meeting of the audit committee in 1994.

The function of the nominating committee is to review and recommend to the
Board nominees for election as directors, including incumbent directors. The
nominating committee met in March 1994 and recommended the nominees proposed by
the Board for election as directors at the 1994 Annual Meeting of Stockholders.

The nominating committee will consider nominees recommended by stockholders
for election as directors at an annual meeting of stockholders but does not
intend to solicit such recommendations. In order to receive consideration, all
such recommendations must be in writing, addressed to the Chairman of the
Nominating Committee, c/o the Secretary of the Company, and must include a
reasonable amount of biographical information about the person recommended,
contain a statement as to why the stockholder believes such person to be well
qualified to serve as a director, contain the written consent of the proposed
nominee to the submission of such information and the recommendation, and be
received by the Secretary no later than the November 30 preceding the annual
meeting of stockholders for which such person's nomination is recommended.

The principal function of the stock option committee is to administer the
1988 Stock Option Plan for Key Employees (the "Option Plan") which was adopted
by the Board in 1988 and approved by the stockholders in 1989, including
determining employees to whom options will be granted and the terms and
conditions of all option agreements. There were two meetings of the stock option
committee in 1994.

During the last fiscal year, all directors attended at least 75% of the
aggregate of all meetings of the Board and the committees on which they served.

REPORT ON EXECUTIVE COMPENSATION BY THE EXECUTIVE
COMMITTEE OF THE BOARD OF DIRECTORS

The Executive Committee of the Board (the "Committee") with the exception
of Mr. Rosenberry, is comprised of directors who are not employees of the
Company. The Committee is responsible for establishing and administrating the
Company's executive compensation programs. When the Committee considers such
matters, Mr. Rosenberry is recused from the Committee's discussions.

8
<PAGE> 10

COMPENSATION PHILOSOPHY AND OBJECTIVES

The philosophy underlying the development and administration of the
Company's annual long-term compensation plans is the alignment of the interests
of executive management with those of the stockholders. Key elements of this
philosophy are:

- Providing the executive with a base salary which is competitive with
executive salaries for comparable companies in its geographical area
to enable the Company to attract and retain the highly qualified
executive officer.

- Establishing compensation plans which deliver pay commensurate with
the Company's performance, as measured by operating, financial and
strategic objectives.

- Providing significant equity-based incentives for executives to
ensure that they are motivated over the long term to respond to the
Company's business challenges and opportunities from an ownership
standpoint.

Executive base salaries are structured so that such salaries are
competitive when compared to other companies of comparable size and geographical
location. The incentive compensation or annual bonus plan is a vehicle by which
executives can earn additional compensation depending upon Company performance
relative to certain annual objectives. The key Company objectives are its
relative growth and operating results which the Board believes are critical to
the Company's fundamental goal, that of building stockholder value.

One of the Company's equity-based incentive programs is the Option Plan.
The ultimate value of the stock options granted to executive officers under the
Option Plan is tied to the value of the Shares, thus providing additional
incentive for executives to build stockholder value. Options granted under the
Option Plan have an average life of eight years and vest over five years.

In addition to the Option Plan, the primary retirement/savings vehicle
which is Company-sponsored for executives, as well as all other full-time
employees, is the ESOP. The ESOP provides for the quarterly contribution of
amounts equal to 6% of the executive's then compensation. The proceeds of this
contribution are used to purchase Shares of Company stock in the ESOP, thereby
increasing the executive's ownership position in the Company and providing
further incentive for the executive to build stockholder value.

COMPANY PERFORMANCE AND CEO COMPENSATION

Over the past three years the Company has experienced only modest growth in
sales and inconsistent earnings and, as a result, under the incentive
compensation program as well as the Option Plan, the C.E.O., Frank A.
Rosenberry, has been awarded the amounts reflected in the following tables.
During 1994, the Company experienced a large operating loss at its Rytex
subsidiary and failed to meet its financial goals (a combination of sales,
operating income and earnings per share). In light of these circumstances, Mr.
Rosenberry received no annual bonus under the incentive compensation plan.
Furthermore, Mr. Rosenberry received no salary adjustment as of December 31,
1994 for the forthcoming year.

MEMBERS OF THE EXECUTIVE COMMITTEE:

Robert G. Bowman, Chairman
Richard E. Cheney
Rudolph Eberstadt, Jr.
Willard J. Overlock
Frank A. Rosenberry
Robert J. Simon

EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE

The following information is furnished for the years ended December 31,
1994, 1993 and 1992 with respect to the Company's Chief Executive Officer and
each of the other executive officers of the Company whose salary and bonus
exceeded $100,000 during 1994.

9
<PAGE> 11

ANNUAL COMPENSATION

<TABLE>
<CAPTION>
SHARES
UNDERLYING
OPTION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED COMPENSATION(1)
- ------------------------------------ ---- -------- ------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Frank A. Rosenberry................. 1994 $233,200 -- None $16,104
Chief Executive Officer 1993 $220,000 -- 20,000 $15,448
1992 $220,000 -- None $17,182
James M. Harrison................... 1994 $159,000 -- 15,000 $11,715
Executive Vice President, 1993 $150,000 -- 10,000 $11,849
Chief Operating Officer 1992 $150,000 $10,000 4,000 $12,352
Willard D. Finch, III............... 1994 $127,200 -- None $ 9,432
Vice President, Manufacturing 1993 $120,000 -- 7,500 $ 9,600
1992 $120,000 $10,000 4,000 $ 9,613
Steven P. Mack...................... 1994 $121,900 -- None $ 9,039
Vice President, Product 1993 $115,000 -- 7,500 $ 8,625
Development
1992 $115,000 -- 4,000 $ 9,285
</TABLE>

- ---------------
(1) Represents contributions by the Company in respect of the named officer
under the ESOP and the Company's Savings and Investment Plan.

DIRECTOR COMPENSATION

Each director who is not also an employee of the Company receives a fee of
$1,000 per meeting attended of the Board and $1,000 per meeting attended of the
committees thereof on which he serves other than the stock option committee. In
addition, each director who is not also an employee of the Company receives, at
the end of each year, Shares having a fair market value as of the end of that
year equal to $1,000 times the number of meetings of the Board, but not the
meetings of the committees thereof, attended during that year. Under certain
circumstances directors may receive cash in lieu of such Shares.

OTHER COMPENSATION MATTERS

The Company has entered into employment agreements (as amended) with each
of Messrs. Rosenberry, Harrison, Finch and Mack (the "Employment Agreements")
pursuant to which the Company will employ them until December 31, 1997,
provided, however, that prior to expiration of such period (i) the Company may
terminate such employee's employment for cause (as defined in the Employment
Agreements) or disability and (ii) such employment will automatically terminate
at death. In addition, prior to a change in control or a potential change in
control of the Company (as defined in the Employment Agreements), if any, the
Company may terminate these agreements upon the payment to the employee by the
Company of twelve months' salary. If the Company terminates the employee's
employment other than for death, cause or disability following a change in
control or potential change in control, the employee shall be entitled to a
lump-sum severance payment which shall be equal to 2.99 times the sum of (i) the
employee's annual salary as of the date of termination (as defined in the
Employment Agreements) and (ii) the aggregate bonus received by such employee in
respect of the three full years prior to the date of termination divided by
three. As part of the severance payment, such employee, at his election, shall
be entitled to a cash payment in respect of all or any portion of options for
Shares held by such employee based on the difference between the exercise price
and the value of the stock determined under a formula. The employee shall also
be entitled to such severance payment if, following a change in control, such
employee terminates his employment with the Company for good reason (as defined
in the Employment Agreements). During the period of employment and thereafter,
each such employee covenants not to divulge or use, directly or indirectly, any
confidential or proprietary information with respect to the Company; each
employee also covenants not to be associated in any manner with any competitive
business within the United States during the term of the Employment Agreement
and for the year following such termination. Under the Employment Agreements,
the current salaries per annum of Messrs. Rosenberry, Harrison, Finch and Mack
are $233,200, $175,000, $135,000, and $135,000, respectively.

10
<PAGE> 12

The Merger Agreement provides that as of the consummation of the Offer, the
Parent shall assume and agree to perform the Employment Agreements in the same
manner and to the same extent that the Company is then required to perform them.

The Company has entered into a supplementary salary continuance agreement
with its Chairman, Mr. Bowman (the "Supplementary Salary Continuance
Agreement"). The Supplementary Salary Continuance Agreement with Mr. Bowman
provides for annual payments of $52,400. Payments to Mr. Bowman will terminate
on December 31, 2003. In the case of Mr. Bowman's death prior to December 31,
2003, an amount equal to 50% of the amount payable under the Supplementary
Salary Continuance Agreement will be payable to Mr. Bowman's spouse if then
living.

The Company and Mr. Russell have also entered into an agreement (the
"Russell Agreement") whereby Mr. Russell is being paid an annual retirement
allowance of $43,348 through January 31, 2008. In the event of Mr. Russell's
death during the period in which he is entitled to receive a retirement
allowance, 50% of the retirement allowance will be paid to his spouse until the
earlier of January 31, 2008 or her death.

The Supplementary Salary Continuance Agreement and the Russell Agreement
will continue to be obligations of the Company following the consummation of the
transactions contemplated by the Merger Agreement.

11
<PAGE> 13

PERFORMANCE GRAPH

The following line graph compares the Company's cumulative total
stockholder return (common stock price appreciation plus dividends, on a
reinvested basis) over the last five fiscal years with the Standard and Poor's
500 Index and a market value peer group.

COMPARATIVE FIVE-YEAR TOTAL RETURNS(1)
THE C.R. GIBSON COMPANY, S&P 500, MARKET VALUE PEER GROUP(2)
(PERFORMANCE RESULTS THROUGH 12/31/94)

<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) GIB S&P 500 PEER GROUP
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 67.19 96.83 85.32
1991 140.06 126.38 107.18
1992 107.46 136.22 110.23
1993 132.44 149.82 118.52
1994 102.53 151.81 113.15
</TABLE>

Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in GIB common stock, S&P 500,
and Market Value Peer Group.
- ---------------
(1) Cumulative total return assumes reinvestment of dividends.

(2) The Company does not believe it can reasonably identify an industry peer
group or a published industry or line of business index which contains
companies in a similar line of business. The market value peer group
presented consists of eighty-one companies, listed on the American Stock
Exchange, with market values similar to the Company (between $50-75
million).

Source: Frank Russell Company

STOCK OPTION PLAN

The Option Plan was approved by stockholders at the 1989 Annual Meeting of
Stockholders. Under the Option Plan options to purchase 575,896 Shares have been
granted by the stock option committee of the Board to 28 key employees of the
Company. Under the Option Plan, the option price shall not be less than 100% of
the fair market value of the Shares on the date the option is granted. The term
of each option is for such period as the stock option committee determines, but
as to any portion of an option the term may not be more than five years from the
first date of exercisability and the term of an option may not be more than ten
years. Notwithstanding the foregoing, options outstanding under the Option Plan
become immediately

12
<PAGE> 14

exercisable in full in the event of a change in control (as defined in the
Option Plan) of the Company. In the event of termination of employment (other
than for cause (as defined in the Option Plan)), retirement, disability or
death, an option under the Option Plan may be exercised for varying periods of
time but only to the extent exercisable at the date of termination of
employment, retirement, disability or death and in no event after the expiration
of the term of the option.

Pursuant to the Merger Agreement as of the Effective Time (as defined in
the Merger Agreement), each option to purchase Shares which is then outstanding
and unexercised, whether pursuant to the Option Plan or otherwise and whether or
not exercisable, by virtue of the Merger (as defined in the Merger Agreement)
automatically shall be converted into the right to receive cash in an amount
equal to (i) the excess of the highest price paid per Share pursuant to the
Offer over the exercise price per Share provided in such option multiplied by
(ii) the number of Shares subject to the option.

STOCK OPTIONS TRANSACTIONS DURING LAST FISCAL YEAR

The following table contains information concerning the grant of stock
options under the Option Plan to the four executive officers of the Company who
are named in the Summary Compensation Table:

STOCK OPTION GRANTS FOR YEAR ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL RATES
-------------------------------------------------------------------- OF STOCK PRICE
NUMBER OF % OF TOTAL STOCK APPRECIATION FOR
SHARES OPTIONS GRANTED EXERCISE OR STOCK OPTION TERM
UNDERLYING TO EMPLOYEES BASE PRICE(3) EXPIRATION --------------------------
NAME OPTIONS(#)(1) IN 1994(2) ($/SH) DATES 5%(4) 10%(4)
- ----------------- ------------- ----------------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
F.A.
Rosenberry..... None -- -- -- -- --
J.M. Harrison.... 15,000 60.0% $7.75 9/99-9/03 $ 55,504 $ 132,942
W.D. Finch....... None -- -- -- -- --
S.P. Mack........ None -- -- -- -- --
</TABLE>

- ---------------
(1) Stock options are exercisable ratably over five years, expiring five years
after the date first exercisable.

(2) A total of 25,000 stock options were granted under the Option Plan in 1994
to 2 employees of the Company.

(3) The exercise price may be paid in cash, Shares valued at the fair market
value on the date of exercise, or pursuant to a cashless exercise procedure
under which the stock option holder provides irrevocable instructions to a
brokerage firm to sell the purchased Shares and to remit to the Company, out
of the sales proceeds, an amount equal to the exercise price plus all
applicable withholding taxes.

(4) The dollar amounts under these columns are the result of calculations at the
5% and 10% annual appreciation rates for the term of the options (8 year
average life) as required by the SEC, and, therefore, are not intended to
forecast possible future appreciation, if any, of the stock price of the
Company.

AGGREGATED OPTION EXERCISES IN 1994 AND YEAR-END OPTION VALUE TABLE

The following information is furnished for the year ended December 31, 1994
with respect to the Company's Chief Executive Officer and each of the other
executive officers of the Company who are named in the Summary Compensation
Table, with respect to options outstanding at December 31, 1994. During 1994

13
<PAGE> 15

there were no stock options exercised by the four executive officers of the
Company who are named in the Summary Compensation Table.

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1994 AT DECEMBER 31, 1994(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
F.A. Rosenberry.... -- -- 65,014 31,253 -- --
J.M. Harrison...... -- -- 11,600 27,400 -- --
W.D. Finch......... -- -- 8,433 9,734 -- --
S.P. Mack.......... -- -- 15,901 9,734 $14,450 --
</TABLE>

- ---------------
(1) This amount is the aggregate of the number of options multiplied by the
difference between the closing price of the Shares on the American Stock
Exchange on December 31, 1994 minus the exercise price for that option.

TRANSACTIONS WITH MANAGEMENT AND OTHERS

In 1992, the Company announced its intention to repurchase up to $2,000,000
of Shares. In accordance with this announced intention, on March 18, 1994, the
Company purchased 35,000 Shares from each of Bradford Venture Partners, L.P. and
Overseas Private Investor Partners at a price of $8 per Share. On January 3,
1995 the ESOP purchased an aggregate of 150,000 Shares at a price of $7 per
Share from Bradford Venture Partners, L.P. and Overseas Private Investor
Partners. The Company advanced funds to the ESOP against future contributions to
facilitate this purchase. Barbara M. Henagan and Robert J. Simon, directors of
the Company, are general partners of the general partner of Bradford Venture
Partners, L.P., and Overseas Private Investor Partners is an affiliate of
Bradford Venture Partners, L.P.