<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
HUBBELL INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
<PAGE> 2
LOGO
HUBBELL INCORPORATED
584 Derby Milford Road, Orange, Connecticut 06477-4024
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 5, 1997
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders of
Hubbell Incorporated (the "Company") will be held at the Holiday Inn Select
Executive Center, 2200 I70 Drive, S.W., Columbia, Missouri 65203, on Monday, May
5, 1997 at 11:00 A.M. local time for the purpose of considering and acting upon
the following:
1. Election of Directors of the Company for the ensuing year, to serve
until the next Annual Meeting of Shareholders of the Company and until
their respective successors may be elected and qualified.
The following persons have been designated by the Board of Directors
for nomination as Directors:
<TABLE>
<S> <C> <C>
E. Richard Brooks Malcolm Wallop Joel S. Hoffman
George W. Edwards, Jr. Daniel J. Meyer G. Jackson Ratcliffe
Andrew McNally IV Horace G. McDonell John A. Urquhart
</TABLE>
2. The ratification of the selection of independent accountants to
examine the annual financial statements for the Company for the year
1997.
3. An amendment to the Company's 1973 Stock Option Plan for Key
Employees (the "1973 Plan").
4. Adoption of the Company's Performance Unit Plan (the "performance
plan").
5. A shareholder proposal on Board diversity.
6. The transaction of such other business as may properly come before
the meeting and any adjournments thereof.
Accompanying this Notice of Annual Meeting is a form of proxy and a proxy
statement. Copies of the Company's Annual Report for the year ended December 31,
1996 have been mailed under separate cover to all shareholders.
- --------------------------------------------------------------------------------
IMPORTANT: IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING.
THEREFORE, PLEASE FILL IN, DATE, AND SIGN THE ENCLOSED PROXY AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE. NO STAMP IS NECESSARY IF MAILED IN THE UNITED
STATES.
- --------------------------------------------------------------------------------
<PAGE> 3
The Board of Directors has fixed the close of business on March 14, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at such meeting and any adjournments thereof. The transfer books will
not be closed.
By order of the Board of Directors
RICHARD W. DAVIES
Vice President,
General Counsel and
Secretary
Dated: March 21, 1997
<PAGE> 4
HUBBELL INCORPORATED
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1997
------------------
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Hubbell Incorporated, a Connecticut corporation (the "Company"), to
be voted at its Annual Meeting of Shareholders to be held at the Holiday Inn
Select Executive Center, 2200 I70 Drive, S.W., Columbia, Missouri 65203, on
Monday, May 5, 1997, and any adjournments thereof. Commencing on or about March
28, 1997, copies of this Proxy Statement and the proxy form are being mailed to
all shareholders. Copies of the Company's Annual Report for 1996 have been
mailed under separate cover to all shareholders.
Any shareholder executing a proxy may revoke it at any time prior to its
use. The Company will treat any duly executed proxy as not revoked until it
receives a duly executed instrument revoking it, or a duly executed proxy
bearing a later date or, in the case of death or incapacity of the person
executing the same, written notice thereof. A proxy also may be revoked by
voting by ballot at the annual meeting.
VOTING RIGHTS AND SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The record date for the determination of shareholders entitled to vote at
the meeting is the close of business on March 14, 1997. On March 14, 1997, the
Company had outstanding 11,384,710 shares of Class A Common Stock, par value
$.01 per share, and 55,827,223 shares of Class B Common Stock, par value $.01
per share, and no other voting securities. Each share of Class A Common Stock is
entitled to twenty votes and each share of Class B Common Stock is entitled to
one vote. The vote required for each proposal to be acted upon at this meeting
is set forth in the description of that proposal.
The following table sets forth as of March 14, 1997, or such other date as
indicated in the table, each of the persons known to the Company to own
beneficially shares representing more than 5% of any class of the Company's
outstanding voting securities, with the percent of class stated therein being
based upon the outstanding shares on March 14, 1997.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- -----------------------
<S> <C> <C> <C>
Class A Common Stock Andrew McNally IV, G. J. Ratcliffe, 2,734,240(1)(2)(4) 24.02%
and John A. Urquhart, as trustees
under a Trust Indenture dated
September 2, 1957 made by Louie E.
Roche (the "Roche Trust"), c/o
Hubbell Incorporated, 584 Derby
Milford Road, Orange, Connecticut
06477
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- -----------------------
<S> <C> <C> <C>
Class A Common Stock Andrew McNally IV, G. J. Ratcliffe, 1,855,840(2)(3)(4) 16.30%
and John A. Urquhart, as trustees
under a Trust Indenture dated
August 23, 1957 made by Harvey
Hubbell (the "Hubbell Trust"), c/o
Hubbell Incorporated, 584 Derby
Milford Road, Orange, Connecticut
06477
Class B Common Stock General Electric Investment 3,979,974(5) 7.13
Corporation and GE Investment
Management Incorporated, 3003
Summer Street, Stamford,
Connecticut 06904
</TABLE>
- ---------------
(1) The beneficiaries of such trust are the issue of Harvey Hubbell and
their spouses.
(2) The Trust Indenture requires that, so long as no bank or trust company
is acting as a trustee, there shall be three individuals acting as trustees,
each of whom, so long as any securities of the Company are held by the trust,
must be an officer or Director of the Company. The Trust Indenture provides that
successor trustees are to be appointed by the trustees then in office. The
trustees have shared voting and investment power with respect to the securities
of the Company held in such trust.
(3) The beneficiaries of such trust are Virginia H. Leighton during her
life and thereafter the issue of Harvey Hubbell.
(4) In addition, Messrs. McNally, Ratcliffe, and Urquhart beneficially own
shares of the Company's Common Stock. Mr. Ratcliffe holds unexercised options
for the purchase of the Company's Common Stock and is a Trustee of the Harvey
Hubbell Foundation which owns 106,304 shares of Class A Common Stock and 29,358
shares of Class B Common Stock. (See "Election of Directors" and table captioned
"Aggregated Options/SAR Exercises During 1996 Fiscal Year and Fiscal Year-End
Option/SAR Values".)
(5) The Company has received a copy of Schedule 13G as filed with the
Securities and Exchange Commission ("SEC") by General Electric Investment
Corporation and GE Investment Management Incorporated (collectively, "GE")
reporting ownership of these shares as of December 31, 1996. As reported in said
Schedule 13G, GE has sole voting power for 3,979,974 of such shares and sole
dispositive power for 3,979,974 of such shares.
------------------
2
<PAGE> 6
The following table sets forth as of March 14, 1997, the equity securities
of the Company beneficially owned by each of the Directors and named executive
officers of the Company, and by all Directors and executive officers of the
Company as a group (14 persons):
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
NAME TITLE OF CLASS OWNERSHIP(1)(2) CLASS
<S> <C> <C> <C>
E. Richard Brooks.................... Class A Common 600 0.01%
George W. Edwards, Jr. .............. Class A Common 1,000 0.01
Class B Common 156 --
Joel S. Hoffman...................... Class A Common 2,510 0.02
Class B Common 458 --
Horace G. McDonell................... Class A Common 1,000 0.01
Class B Common 272 --
Andrew McNally IV.................... Class A Common 4,590,080(3) 40.32
Class B Common 238,016(4) 0.43
Daniel J. Meyer...................... Class B Common 726 --
G. Jackson Ratcliffe................. Class A Common 4,820,672(3)(5) 42.34
Class B Common 699,800(4)(6) 1.25
John A. Urquhart..................... Class A Common 4,590,080(3) 40.32
Class B Common 232,730(4) 0.42
Malcolm Wallop....................... -- -- --
Vincent R. Petrecca.................. Class A Common 102,660 0.90
Class B Common 268,878 0.48
Harry B. Rowell, Jr. ................ Class A Common 168,911(5) 1.48
Class B Common 261,131(6) 0.47
Thomas H. Pluff...................... Class A Common 6,100 0.05
Class B Common 69,494 0.12
Richard W. Davies.................... Class A Common 130,698(5) 1.15
Class B Common 93,408(6) 0.17
All Directors and executive officers
as a group......................... Class A Common 5,039,614(3)(5) 44.27
Class B Common 1,403,357(4)(6) 2.51
</TABLE>
- ---------------
(1) The figures in the table and notes thereto represent beneficial ownership
and sole voting and investment power except where indicated and include the
following shares obtainable within sixty days of March 14, 1997 by the
exercise of stock options pursuant to the Company's 1973 Plan: Mr.
Ratcliffe -- 292,334 shares of Class B Common, Mr. Petrecca -- 58,000 shares
of Class A Common and 202,906 shares of Class B Common, Mr. Rowell -- 20,000
shares of Class A Common and 181,093 shares of Class B Common, Mr.
Pluff -- 67,939 shares of Class B Common, and Mr. Davies -- 40,330 shares of
Class B Common; and all executive officers as a group -- 92,000 shares of
Class A Common Stock and 834,210 shares of Class B Common Stock.
3
<PAGE> 7
(2) Does not include share units (representing shares of Class A Common Stock
and Class B Common Stock) credited to and held under the Company's deferred
compensation program for Directors who are not employees of the Company, as
discussed below under "Compensation of Directors". As of March 14, 1997, the
following have been credited under the deferred compensation program: Mr.
Brooks -- 1,086 shares of Class A Common Stock and 1,086 shares of Class B
Common Stock; Mr. Edwards -- 3,678 shares of Class A Common Stock and 3,678
shares of Class B Common Stock; Mr. Hoffman -- 5,986 shares of Class A
Common Stock and 5,986 shares of Class B Common Stock; Mr. McDonell -- 9,459
shares of Class A Common Stock and 9,459 shares of Class B Common Stock; Mr.
McNally -- 15,872 shares of Class A Common Stock and 15,872 shares of Class
B Common Stock; Mr. Meyer -- 2,954 shares of Class A Common Stock and 2,954
shares of Class B Common Stock; Mr. Urquhart -- 425 shares of Class A Common
Stock and 425 shares of Class B Common Stock; and Mr. Wallop -- 70 shares of
Class A Common Stock and 70 shares of Class B Common Stock.
(3) Includes 2,734,240 shares of Class A Common Stock owned by the Roche Trust
of which Messrs. McNally, Ratcliffe, and Urquhart are co-trustees and have
shared voting and investment power; and 1,855,840 shares of Class A Common
Stock owned by the Hubbell Trust of which Messrs. McNally, Ratcliffe, and
Urquhart are co-trustees and have shared voting and investment power.
(4) Includes 136,712 shares of Class B Common Stock owned by the Roche Trust of
which Messrs. McNally, Ratcliffe, and Urquhart are co-trustees and have
shared voting and investment power; and 92,792 shares of Class B Common
Stock owned by the Hubbell Trust of which Messrs. McNally, Ratcliffe, and
Urquhart are co-trustees and have shared voting and investment power.
(5) Includes 106,304 shares of Class A Common Stock held by the Harvey Hubbell
Foundation of which Messrs. Ratcliffe, Rowell and Davies are co-trustees and
have shared voting and investment power.
(6) Includes 29,358 shares of Class B Common Stock held by the Harvey Hubbell
Foundation of which Messrs. Ratcliffe, Rowell and Davies are co-trustees and
have shared voting and investment power.
ELECTION OF DIRECTORS
The Company's By-Laws provide that the Board of Directors shall consist of
not less than three nor more than eleven Directors who shall be elected annually
by the shareholders. The Board has fixed the number of Directors at nine, and
the following persons are proposed as Directors of the Company to hold office
until the next Annual Meeting of Shareholders and until their respective
successors have been duly elected and qualified. In the event that any of the
nominees for Directors should become unavailable, it is intended that the shares
represented by the proxies will be voted for such substitute nominees as may be
nominated by the Board of Directors, unless the number of Directors constituting
a full Board of Directors is reduced. Directors are elected by plurality vote.
Abstentions and broker non-votes will not be counted for the purposes of the
election of Directors.
<TABLE>
<CAPTION>
YEAR FIRST
BECAME A
NAME AGE(1) PRINCIPAL OCCUPATION DIRECTOR
------- ----------------------------------------------
<S> <C> <C> <C>
G. Jackson Ratcliffe..... 60 Chairman of the Board, President and Chief 1980
Executive Officer of the Company. Director of
Aquarion Company, Praxair, Inc. and Olin
Corporation.
E. Richard Brooks........ 59 Chairman, President and Chief Executive 1993
Officer of Central and South West Corporation
(utility holding company).
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
YEAR FIRST
BECAME A
NAME AGE(1) PRINCIPAL OCCUPATION DIRECTOR
------- ----------------------------------------------
<S> <C> <C> <C>
George W. Edwards, 57 Retired President and Chief Executive Officer 1990
Jr. ................... of The Kansas City Southern Railway Company
(railroad). Chairman of the Board and a
Director of El Paso Electric Company and
Aquarion Company.
Joel S. Hoffman.......... 58 Partner of Simpson Thacher and Bartlett, a New 1989
York City law firm.
Horace G. McDonell....... 68 Retired Chairman and Chief Executive Officer 1985
of The Perkin-Elmer Corporation (manufacturer
of diverse high technology products).
Director of Ethan Allen Interiors Inc.
Andrew McNally IV........ 57 Chairman and Chief Executive Officer of Rand 1980
McNally & Company (printing, publishing and
map-making). Director of Borg Warner
Security Corp., Mercury Finance, Morgan
Stanley Funds, and Zenith Electronics Corp.
Daniel J. Meyer.......... 60 Chairman of the Board and Chief Executive 1989
Officer of Cincinnati Milacron Inc. (factory
automation for metal working and plastics
processing). Director of Star Banc
Corporation and The E. W. Scripps Company.
John A. Urquhart......... 68 President of John A. Urquhart Associates 1991
(management consultant) and Vice Chairman and
a Director of Enron Corp. (natural gas
pipeline system). Director of Teco Energy,
Incorporated, a public utility holding
company, and its subsidiary, Tampa Electric
Company, Aquarion Company, and The Weir
Group plc.
Malcolm Wallop........... 64 Chairman and President of Frontiers of Freedom 1995
Foundation (non-profit foundation). Director
of El Paso Natural Gas Company.
</TABLE>
- ---------------
(1) As of March 14, 1997.
Each of the individuals was elected as a Director by the shareholders of
the Company.
During the five years ended December 31, 1996, Messrs. Brooks, Hoffman,
Edwards, McDonell, Meyer, Ratcliffe and Urquhart have either been retired or
held the principal occupation set forth above opposite their names.
5
<PAGE> 9
Mr. McNally has served as Chairman of the Board of Rand McNally & Company
since May, 1993, Chief Executive Officer since 1978, and President from 1974 to
May, 1993.
Mr. Wallop has served as President of Frontiers of Freedom Foundation since
January 2, 1995. From 1976 until his retirement on January 1, 1995, he served as
a United States Senator from the State of Wyoming.
Messrs. Brooks, Hoffman, McDonell, Meyer, and Wallop serve as members of
the Audit Committee, with Mr. McDonell as Chairman. The Audit Committee, which
consists of Directors who are not employees of the Company, met two times in
1996. The Audit Committee recommends to the Board of Directors of the Company
the appointment of independent accountants to serve as auditors for the
following year, subject to ratification by the shareholders at the Annual
Meeting; meets periodically with the independent accountants, internal auditors,
and appropriate personnel responsible for the management of the Company and
subsidiary companies concerning the adequacy of internal controls and the
objectivity of the financial reporting of the Company; and reviews and approves
the scope of the audit and fees for audit and non-audit services performed by
the independent accountants. The independent accountants and the Company's
internal auditors each meet alone with the Audit Committee and have access at
any time to the Audit Committee.
Messrs. Edwards, Hoffman, McDonell, and Ratcliffe serve as members of the
Executive Committee, with Mr. Ratcliffe as Chairman. The Executive Committee,
which did not meet in 1996, exercises, during the intervals between the meetings
of the Board of Directors, all the powers of the Board of Directors in the
management of the business, properties and affairs of the Company, except
certain powers enumerated in the By-Laws of the Company.
Messrs. Edwards, McDonell, McNally, and Urquhart serve as members of the
Compensation Committee, with Mr. Edwards as Chairman. The Compensation
Committee, which met two times in 1996, is charged with the duties of
recommending to the Board of Directors the remuneration (salary plus additional
compensation and benefits) of the Chief Executive Officer and, after
consultation with him, the remuneration of all other corporate officers;
reviewing the remuneration for senior executives; approving stock option grants;
recommending (for approval) to the Board of Directors pension changes, and other
significant benefits or perquisites; reviewing the existing senior executive
resources of the Company and the plans for the development of qualified
candidates, and reporting to the Board of Directors annually; recommending to
the Board of Directors (for approval) changes proposed by the Chief Executive
Officer pertaining to organization structure or appointment of the Company's
officers; and conducting annually with the Chief Executive Officer an appraisal
of the performance of the Chief Executive Officer and reviewing the latter's
appraisal of the performance of the other members of the Company's key
management group.
Messrs. Brooks, McNally, Meyer, Ratcliffe, Urquhart, and Wallop serve as
members of the Finance Committee, with Mr. McNally as Chairman. The Finance
Committee, which met two times in 1996, recommends to the Board of Directors of
the Company proposals concerning long and short-term financing, material
divestments and acquisitions, cash and stock dividend policies, programs to
repurchase the Company's stock, stock splits, and other proposed changes in the
Company's capital structure; periodically reviews the Company's capital
expenditure policy and recommends changes to the Board of Directors, where
appropriate, and, when requested by the Board of Directors, reviews and makes
recommendations to the Board of Directors with respect to proposals concerning
major capital expenditures and leasing arrangements; reviews annually the
Company's insurance programs and their adequacy to protect against major losses
and liabilities; reviews and monitors the administration and asset management of
the Company's employee benefit plans,
6
<PAGE> 10
including the selection of investment and other advisors, the allocation of
assets between fixed income and equity, and the performance of plan investment
managers; and reviews and monitors the administration of the Company's cash and
investment portfolios, including the Company's investment guideline policies.
The Board of Directors does not have a nominating committee. This function
is performed by the Board of Directors as a whole. The Company's By-Laws contain
time limitations, procedures and requirements relating to shareholder
nominations of Directors. Any shareholder who intends to bring before the annual
meeting of shareholders any nomination for Director shall deliver not less than
fifty days prior to the date of the meeting written notice to the Secretary of
the Company setting forth specified information with respect to the shareholder
and additional information as would be required under SEC regulations for a
proxy statement used to solicit proxies for such nominee.
Five meetings of the Board of Directors of the Company were held during the
year ended December 31, 1996.
7
<PAGE> 11
EXECUTIVE COMPENSATION
CASH AND OTHER FORMS OF COMPENSATION
The following table sets forth the aggregate cash and other compensation
paid or accrued by the Company for services rendered in all capacities to the
Company and its subsidiaries to the Company's Chief Executive Officer and the
four other most highly compensated executive officers of the Company for the
three fiscal years ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPEN-
ANNUAL COMPENSATION SATION
----------------------------- -----------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
COMPEN- OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) SATION SARS(2) SATION(3)
- ----------------------------------- ---- -------- -------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
G.J. Ratcliffe..................... 1996 $600,000 $700,000 $18,360 100,000 $45,550
Chairman of the Board, President 1995 500,000 550,000 4,297 100,000 43,850
and Chief Executive Officer 1994 456,190 450,000 15,034 105,000 42,833
V. R. Petrecca..................... 1996 306,000 336,000 5,455 40,000 3,450
Executive Vice President 1995 293,830 280,000 335 40,000 3,450
1994 282,530 235,000 1,275 40,320 3,833
H. B. Rowell....................... 1996 300,000 336,000 7,258 40,000 3,450
Executive Vice President 1995 287,410 270,000 1,805 40,000 3,450
1994 276,350 210,000 5,945 40,320 3,833
T. H. Pluff........................ 1996 232,900 120,000 3,928 16,000 3,450
Group Vice President 1995 223,910 100,000 3,655 16,000 3,450
1994 215,300 85,000 3,460 12,600 3,833
R. W. Davies....................... 1996 200,000 90,000 5,927 12,000 3,450
Vice President, General Counsel 1995 183,790 75,000 3,927 12,000 3,450
and Secretary 1994 164,700 64,800 3,814 11,340 3,833
</TABLE>
- ---------------
(1) Reflects bonus earned during fiscal year under the Company's incentive
compensation plans.
(2) Class B Common Stock; option grants (a) for 1995 and 1994 adjusted to
reflect the 2-for-1 stock split in the form of a 100% stock dividend paid on
August 9, 1996, and (b) for 1994 adjusted to reflect the 5% stock dividend
effected on February 3, 1995.
(3) Includes (a) premiums under the Company's supplemental medical plan which
provides for reimbursement of certain medical expenses not covered by the
Company's group insurance policy and (b) Director's fees for Mr. Ratcliffe
of $42,100 in 1996, $40,400 in 1995 and $39,000 in 1994.
8
<PAGE> 12
OPTIONS/SAR GRANTS DURING 1996 FISCAL YEAR
The following table provides information on option grants in fiscal 1996 to
the named executive officers of the Company.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------- VALUE AT
NUMBER OF PERCENT OF ASSUMED ANNUAL
SECURITIES TOTAL RATES OF STOCK PRICE
UNDERLYING OPTIONS/SARS EXERCISE APPRECIATION FOR
OPTIONS/ GRANTED TO OR BASE OPTION TERM
SARS EMPLOYEES PRICE EXPIRATION -----------------------
NAME GRANTED(1) IN FISCAL YEAR ($/SHARE) DATE 5%(2) 10%(2)
- ---------------------- -------------- ----------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
G. J. Ratcliffe..... 100,000 12.6% $ 41.688 12/09/06 $2,626,344 $6,628,392
V. R. Petrecca...... 40,000 5.0 41.688 12/09/06 1,050,538 2,651,357
H. B. Rowell........ 40,000 5.0 41.688 12/09/06 1,050,538 2,651,357
T. H. Pluff......... 16,000 2.0 41.688 12/09/06 420,215 1,060,543
R. W. Davies........ 12,000 1.5 41.688 12/09/06 315,161 795,407
</TABLE>
- ---------------
(1) Non-qualified options to acquire shares of Class B Common Stock of the
Company were granted on December 10, 1996 at 100% of the fair market value
of the Class B Common Stock on the date of grant. No portion of the option
is exercisable before the third anniversary of the date of grant; on the
third anniversary of the date of grant the option becomes fully exercisable.
The exercise price of an option may be paid in cash or in shares of either
the Company's Class A Common Stock or Class B Common Stock, or a combination
thereof. The 1973 Plan provides for the acceleration of all options (other
than incentive stock options granted on or after January 1, 1987) in the
event of a "Change of Control" as defined in the 1973 Plan. In the event of
a Change of Control, participants who are officers, and other participants
who are designated by the Compensation Committee, would have the right to
surrender their then exercisable options, including those accelerated within
the thirty-day period following the Change of Control and to receive in cash
the amount by which the highest closing price within the sixty days
preceding the Change of Control of the common stock underlying the option
exceeds the option price for such common stock.
(2) The potential realizable value illustrates value that might be realized upon
exercise of the options immediately prior to the expiration of their
ten-year term, assuming the specified compounded rates of appreciation on
the Company's Class B Common Stock over the term of the options. These
numbers do not take into account provisions of the options providing for
cancellation of the option following termination of employment,
nontransferability, or vesting over periods of up to three years.
9
<PAGE> 13
AGGREGATED OPTIONS/SAR EXERCISES DURING 1996 FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information on stock option exercises in
fiscal 1996 by the named executive officers of the Company and the value of such
officers' unexercised stock options at December 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT
SHARES FISCAL YEAR-END(1) AT FISCAL YEAR-END(2)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G. J. Ratcliffe.......... 104,930(3) $2,473,674 292,334 201,666 $ 4,827,617 $ 1,515,718
V. R. Petrecca........... 3,491(4) 142,986 260,906 80,106 5,393,229 596,463
H. B. Rowell............. 28,207(5) 742,406 201,093 80,106 3,778,563 596,463
T. H. Pluff.............. 0 -- 73,464 30,866 1,371,673 217,960
R. W. Davies............. 0 -- 70,863 23,780 1,424,041 174,523
</TABLE>
- ---------------
(1) Adjusted to reflect the 2-for-1 stock split in the form of a 100% stock
dividend paid on August 9, 1996.
(2) Limited to in-the-money stock options.
(3) Class B Common Stock.
(4) 1,585 shares Class A Common Stock and 1,906 shares Class B Common Stock.
(5) 20,400 shares Class A Common Stock and 7,807 shares Class B Common Stock.
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1996 FISCAL YEAR(1)(2)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
NUMBER OF SHARES, OTHER PERIOD -------------------------------------
UNITS OR UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME OTHER RIGHTS(3) OR PAYOUT ($ OR #) ($ OR #)(3) ($ OR #)(3)
- ----------------------------- ----------------- ----------------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
G. J. Ratcliffe.............. 16,423 1/1/97 - 12/31/99 0 16,423 32,846
V. R. Petrecca............... 7,883 1/1/97 - 12/31/99 0 7,883 15,766
H. B. Rowell................. 7,883 1/1/97 - 12/31/99 0 7,883 15,766
T. H. Pluff.................. 2,816 1/1/97 - 12/31/99 0 2,816 5,632
R. W. Davies................. 2,112 1/1/97 - 12/31/99 0 2,112 4,224
</TABLE>
- ---------------
(1) The performance plan is subject to shareholder approval at the Annual
Meeting; see a description of the performance plan on pages 21 and 22.
(2) The performance unit plan provides for the immediate vesting of the number
of shares of Class B Common Stock payable in respect of a performance unit
which has been awarded as of the date a Change of Control (as defined in the
performance plan) occurs. The number of shares vested shall be equal to the
number of shares represented by the award determined as if a compound growth
rate had been achieved for the entire three-year performance period equal to
the actual compound growth rate for such portion of the performance period
prior to the date of the Change of Control multiplied by a fraction, the
numerator of which is the number of full and partial months from the
beginning of the performance period until the date of the Change of Control,
and the denominator of which is 36. In the event of a Change of Control, and
in the discretion of the Compensation Committee, payment shall be in (a)
cash equal to the product
10
<PAGE> 14
of the number of shares vested times the highest price per share of the
Class B Common Stock during the sixty days preceeding the Change of Control,
(b) in shares of Class B Common Stock or (c) in shares of such other entity
into which shares of Class B Common Stock may have been converted.
(3) Shares of Class B Common Stock.
PENSION PLANS
The Company has in effect a non-contributory defined benefit retirement
plan for salaried employees ("Basic Plan") and a supplemental executive
retirement plan ("SERP") which is an unfunded plan. Pension benefits are earned
under both the Basic Plan and the SERP. The annual benefits under the Basic Plan
are calculated as 1.50% of final compensation per year of total Company service,
which includes both basic compensation and bonuses, reduced by 1.50% of primary
social security benefit per year of service. SERP benefits are calculated as 6%
of final total compensation (basic compensation and bonuses as reflected in the
Salary and Bonus columns under the Summary Compensation Table on page 8 hereof)
per year of SERP service up to a maximum of 60%, offset by benefits payable
under the Basic Plan. No SERP benefit is payable if a participant terminates
employment prior to age 55 with less than 10 years of SERP service. The
following table illustrates annual pension benefits pursuant to the SERP (which
is greater in each instance than benefits payable under the Basic Plan) under
the joint and survivor annuity form upon retirement at age 65 to executive
officers in the specified salary classifications:
<TABLE>
<CAPTION>
TOTAL PENSION (ON 3 HIGHEST IN LAST 10 YEARS) ANNUAL BENEFIT FOR YEARS OF SERVICE
- --------------------------------------------- INDICATED(1)(2)
AVERAGE ANNUAL -----------------------------------------------
COMPENSATION 5 YRS. 10 YRS. 15 YRS. 20 YRS.
- --------------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 200,000 $ 60,000 $120,000 $120,000 $120,000
400,000 120,000 240,000 240,000 240,000
600,000 180,000 360,000 360,000 360,000
800,000 240,000 480,000 480,000 480,000
1,000,000 300,000 600,000 600,000 600,000
1,200,000 360,000 720,000 720,000 720,000
1,400,000 420,000 840,000 840,000 840,000
</TABLE>
- ---------------
(1) The estimated annual benefits are based upon the assumptions that the
individual will remain in the employ of the Company until age 65 and that
the plans will continue in their present form.
(2) Years of SERP Service at December 31, 1996:
<TABLE>
<CAPTION>
OFFICER SERVICE
--------------------------------------------- -------
<S> <C>
Mr. Ratcliffe................................ 22
Mr. Petrecca................................. 12
Mr. Rowell................................... 17
Mr. Pluff.................................... 7
Mr. Davies................................... 14
</TABLE>
11
<PAGE> 15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The total direct compensation package for the Company's executives is made
up of three elements: base salary, a short-term incentive program in the form of
a discretionary, performance-based bonus, and long-term incentive programs in
the form of (i) stock options and (ii) performance units.
Total direct compensation for the Chief Executive Officer and the four
highest paid executive officers is based on the performance of the Company. The
Compensation Committee also reviews compensation data provided by outside
consultants. This data is provided for each element of the total direct
compensation package for comparable positions within (i) companies in the S&P
Electrical Equipment Index of similar size, and (ii) superior performing
companies in general industry of comparable size and complexity.
The Compensation Committee believes that the S&P Electrical Equipment
Index, made up of seven companies, provides limited comparison data and the use
of a broader database, including companies from general industry, ensure more
accurate comparisons and results.
Base salaries are determined by competitive data and individual levels of
responsibility. Target levels for bonuses, stock options, and performance units
for each executive position are determined by competitive data; however, actual
bonuses paid and the number of stock options and performance units granted each
executive are based upon the achievement of Company financial plan goals which
include factors such as net sales, net income, and earnings per share.
In the past few years, the Company has adopted a more aggressive
incentive-pay-for-performance posture. During this period, the competitive
position, or emphasis, on base salaries has been lowered. Bonus and stock option
opportunities thereby represent a greater portion in the total direct
compensation package, enhancing the Company's goal of linking pay more directly
to financial performance.
While these comments are directed towards compensation for the Chief
Executive Officer and the four highest paid executive officers, the Compensation
Committee employs similar procedures to determine the compensation levels of
other executives as well.
BASE SALARY
The Company defines its market competitive position for base salaries as
the 50th percentile. This represents a change over the years from a market
competitive position of the 60th percentile for base salaries. To determine the
salary for the Chief Executive Officer and the four highest paid executive
officers, the Compensation Committee reviewed projected 1997 salary data for
companies within our industry and superior performing companies of comparable
size and complexity. Based upon this data, base salaries were established to
approximate the 50th percentile for comparable positions in companies both
within our industry and superior performing companies from general industry.
BONUS
Bonuses are paid pursuant to the Company's short-term incentive
compensation and senior executive compensation plans. Under the incentive
compensation plan, 5% of the amount by which the Company's consolidated
earnings, as defined in the incentive compensation plan, for each fiscal year
exceeds 10% of the invested capital and long-term debt at the beginning of such
fiscal year is allocated to a bonus pool to be paid out to participating
employees, including the executive officers. Awards in varying amounts may be
made from the pool at the discretion of the Compensation Committee. Under the
senior executive plan, awards may
12
<PAGE> 16
be made based on performance goals including a percentage of the bonus pool
described above. Awards under the senior executive plan may only be reduced by
the Compensation Committee.
To establish target levels for executive officers' bonus awards, the
Compensation Committee uses data provided by outside consultants for comparable
positions at companies within our industry and companies from general industry
with comparable performance characteristics such as return on net sales and
return on equity.
In determining the 1996 bonus award for each executive officer, the
Compensation Committee's primary focus was the review of the 1996 business plan
with regard to net sales, pre-tax profit, and earnings per share, compared to
actual results. The Compensation Committee recognized the success the Company
has had in achieving non-financial goals in the Company's acquisition and
restructuring programs, and in making strategic plan decisions, which are
expected to result in long-term growth and benefit the shareholders. As noted,
however, the Compensation Committee gave greater consideration to short-term
results, recognizing the Company had one of its strongest business years in 1996
in net sales, pre-tax profit, and earnings per share, in each case exceeding
plan targets. As a result, the 1996 bonuses of the executive officers, including
the Chief Executive Officer, have increased over the prior year.
For 1996, the Compensation Committee had designated Mr. Ratcliffe as the
sole participant in the senior executive plan and established his objective
performance goal by designating a percentage of the incentive compensation plan
pool be paid to Mr. Ratcliffe. The Compensation Committee exercised its
discretion pursuant to the senior executive plan to award Mr. Ratcliffe a bonus
of $700,000 which represents an increase over the prior year, recognizing the
financial and non-financial goals achieved by the Company in 1996.
STOCK OPTIONS
The Compensation Committee believes that the holding of Company stock
represents a unity of interest between executives and shareholders. In
determining target levels for stock option grants for each senior executive, the
Compensation Committee reviews data provided by an outside consultant. The data
provided is on comparable position pay levels at companies of comparable size in
financial performance and complexity. The actual number of stock option grants
for each executive officer is based upon the financial performance of the
Company, both in the short- and long-term. The Compensation Committee reviewed
1996 net sales, pre-tax profit and earnings per share. The Compensation
Committee also reviewed long-term strategic plans which will position the
Company for greater growth. In determining awards of stock option grants, the
Compensation Committee does not consider the executive officer's unexercised
stock option grants.
In considering levels of stock option grants for the five highest paid
executive officers, the primary focus was to link the executives' long-term
compensation to the success of the Company's long-term strategic plans. The
Compensation Committee recognized that the Company has been successful in
positioning itself for long-term growth which will benefit shareholders. The
Compensation Committee also recognized that certain strategic plan decisions
previously made have had a positive impact on 1996 financial performance in the
areas of net sales, pre-tax profit and earnings per share. As a result, the
number of shares awarded under the 1996 stock option grants to the five highest
paid executive officers remained at the prior year's level.
13
<PAGE> 17
PERFORMANCE UNITS
This new long-term incentive program also is designed to link the common
interests of the Company's executives and shareholders in maximizing long-term
shareholder value. The performance units, which are awarded in the Company's
Class B Common Stock, are based on earnings per share growth over the three-year
period commencing January 1, 1997 and ending December 31, 1999. Participants may
receive from 0 to 200 percent of the December, 1996 award grant depending upon
whether the average annual compounded earnings per share growth is (a) below the
10% mark (no award), (b) 10% to 12.4% (100% of award), (c) 12.5% to 14.9% (150%
of award), and (d) 15% and above (200% of award). The performance unit awards
were based upon the actual bonuses paid to the participants for the year 1996
under the Company's incentive compensation and senior executive incentive
compensation plans, and converted into Class B Common Stock performance units
utilizing the conversion formula in the performance plan.
GENERAL MATTERS
Code Section 162(m) limits to $1 million annually the amount that can be
deducted by a publicly held corporation for compensation paid to any of its top
five executives (as indicated in the Summary Compensation Table for that year),
unless the compensation in excess of $1 million is performance based or meets
certain other conditions. The Company has qualified the 1973 Plan as a
performance based plan with respect to grants of options made at fair market
value, and adopted the senior executive incentive compensation plan, payments
under which are intended to qualify as performance based compensation, but
decided not to amend the Company's incentive compensation plan. In December,
1996, the Compensation Committee recommended, and the Board of Directors
approved, subject to shareholder approval at this meeting, the performance plan,
payments under which are intended to qualify as performance based compensation.
The Compensation Committee believes that the total direct compensation
package consisting of base salary, bonus, stock options and performance units,
is appropriate for the Company's executive officers and other executives, on the
basis of competitive practice, along with the Company's performance against
established short- and long-term financial performance goals.
Compensation Committee
George W. Edwards, Jr.,
Chairman
Horace G. McDonell
Andrew McNally IV
John A. Urquhart
14
<PAGE> 18
CORPORATE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Class B Common Stock during the five fiscal years ended December 31,
1996, with a cumulative total return on the Standard & Poor's 500 Composite
Stock Index ("S&P 500 Composite Index") and the Standard & Poor's Electrical
Equipment Index ("S&P Electrical Equipment Index"). The comparison assumes $100
was invested on January 1, 1992 in the Company's Class B Common Stock and in
each of the foregoing indices and assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG HUBBELL, S&P 500 COMPOSITE INDEX & S&P ELECTRICAL EQUIPMENT INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) 100 100 100
<S> <C> <C> <C> <C> <C> <C>
1992 107 108 109
1993 107 118 132
1994 108 120 134
1995 137 165 187
1996 196 203 253
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has agreed to employ Mr. Ratcliffe for a three-year period and
Messrs. V.R. Petrecca and H.B. Rowell, Jr., for a two-year period at the
respective salaries (effective January 1, 1997) of $650,000, $318,240 and
$312,000 per annum. The Agreements are automatically extended on a daily basis
until notice of termination is given. The Company may increase their salary and
grant them bonuses (which they presently receive by participation in the
Company's incentive compensation plans described above). If their employment is
terminated (other than for cause), or if the Executive terminates his employment
for any of the reasons below, he is entitled to receive the present value
(discounted at 120% of the short term federal rate) of the amounts which would
be received over the remainder of the term of the Agreement if he received
during that period an annual amount equal to the sum of (i) his current base
salary and (ii) the average of the
15
<PAGE> 19
most recent bonuses that he received for the three prior fiscal years of the
Company. The reasons for which the Executive may terminate his employment
include: diminution in his authority (Mr. Ratcliffe), reduction in his
compensation level or failure to increase his compensation commensurate with
other senior executive officers, relocation or adverse modification of his
benefits under bonus, benefit or other similar plans or of fringe benefits. In
the event of his disability or death during the term of the Agreement he or his
estate will be entitled to his per annum base salary for the remainder of the
term of the Agreement less certain offsets. In addition, in the event of the
Executive's discharge other than for cause or, if the Executive terminates his
employment for any of the reasons described above, Executive would be entitled
for the remainder of the employment term to (i) various medical and health
plans, (ii) death and accidental death benefits, (iii) office, secretarial and
other benefits afforded to senior executives and (iv) continued participation in
the SERP.
SEVERANCE POLICY AND CHANGE OF CONTROL PROVISIONS
The Company has a severance policy which covers corporate officers (other
than Messrs. Ratcliffe, Petrecca and Rowell) and other individuals. The policy
provides that if an eligible individual's employment is terminated (other than
for cause), or if the eligible individual terminates his employment for any of
the reasons noted below within three years after the occurrence of certain
"Change of Control" events, he is entitled to receive the present value
(discounted at 120% of the short term federal rate) of the severance amounts
provided under the policy. The formula in the case of corporate officers is
based upon eight weeks of base salary continuation for each full year of
service, subject to a minimum of 26 weeks and a maximum of 104 weeks, with the
formula amount reduced to 67% and 33% thereof, respectively, if termination
occurs in the second and third year following the Change of Control event. In
addition, upon such termination of employment, the eligible individual would be
entitled to (a) a bonus of no less than his target bonus for the year in which
the Change of Control occurs, pro rated for the number of months to such
termination, and (b) for the period the base salary would have been continued
even though paid as a lump sum (i) various medical and health plans, and (ii)
death and accidental death benefits. The reasons for which the eligible
individual may terminate his employment include: diminution in his authority,
reduction in his compensation level, relocation or adverse modification of his
benefits under bonus, benefit or similar plans.
The Company's 1973 Plan provides for the acceleration of all options (other
than incentive stock options granted on or after January 1, 1987) in the event
of a "Change of Control" as defined in the 1973 Plan. (See footnote (1) to the
table captioned "Options/SAR Grants During 1996 Fiscal Year.") The performance
plan provides for immediate vesting of the number of shares of Class B Common
Stock payable in respect of a performance unit award in the event of a "Change
of Control" as defined in the performance plan (See footnote (2) to the table
captioned "Long-Term Incentive Plans -- Awards in 1996 Fiscal Year.")
Certain provisions of the SERP do not take effect until the occurrence of
certain "Change of Control" events. Among others, provisions in the SERP
providing for (i) the suspension, reduction or termination of benefits in cases
of gross misconduct by a participant (as determined in the sole discretion of
the Compensation Committee); (ii) the forfeiture of benefits should a retired
participant engage in certain proscribed competitive activities; (iii) the
reduction in benefits upon the early retirement of a participant; and (iv) the
off-set of amounts which a participant may then owe the Company against amounts
then owing the participant under the SERP, are automatically deleted upon the
occurrence of a Change of Control event. In addition, neither a participant's
years of service with the Company (as calculated for the purpose of determining
eligibility for benefits under the SERP), nor benefits accrued under the SERP
prior to the Change of Control event, may be reduced after the occurrence of a
Change of Control event.
16
<PAGE> 20
COMPENSATION OF DIRECTORS
Each Director receives $35,000 (plus an additional $3,000 for serving as a
committee chairman) per year compensation from the Company plus $1,500 for each
board and board committee meeting attended, together with the expenses, if any,
of such attendance. Directors also receive $1,500 for each rendition of
consulting services otherwise than as part of a board or committee meeting. No
such consulting services were rendered during 1996. The Company and eight
current Directors have entered into an agreement to defer receipt of all or a
portion of such fees pursuant to a deferred compensation agreement providing for
payment of the fees in cash or stock units (each stock unit consisting of one
share each of the Company's Class A Common Stock and Class B Common Stock),
subject to certain terms and conditions, upon their termination of service as
Directors of the Company. Interest equivalents on payments deferred in the form
of cash accrue quarterly at the prime interest rate. Dividend equivalents are
paid on the stock units and are converted into additional stock units. Certain
provisions of the deferred compensation program do not take effect until the
occurrence of certain "Change of Control" events, as defined in the plan. After
the occurrence of a Change of Control event, the plan may not be amended without
the prior written consent of an affected participant and no termination of the
plan shall have the effect of reducing any benefits accrued under the plan prior
to such termination. Further, in the event of a Change of Control, any stock
unit credited to a Director's account shall be immediately converted into a
right to receive cash and shall thereafter be treated in all respects as part of
such Director's cash account.
The Company also has a retirement plan for Directors who are not employees
or officers of the Company and who do not qualify to receive a retirement
benefit under any pension plan of the Company or its subsidiaries ("Eligible
Directors"). Under this plan, an Eligible Director retiring at or after age 70
with at least ten years of service as a Director is paid annually for life an
amount equal to (i) his regular active service annual base retainer (the "Annual
Retainer") in effect during the calendar year immediately preceding the year in
which the retiring Director was last elected, (ii) an additional 10% of the
Annual Retainer, and (iii) any additional amounts paid for service as Committee
Chairman. A retiring Eligible Director who had reached age 70 and had served for
at least five but less than ten years as a Director would be entitled to a
reduced amount equal to 50% of his Annual Retainer in effect during the calendar
year immediately preceding the year in which the retiring Director was last
elected, plus 10% of such Annual Retainer for each year of service beyond five
years up to a maximum of ten years. An Eligible Director who retires prior to
age 70 with five or more years of service as a Director receives a retirement
benefit commencing at age 70 calculated as described above on the basis of his
Annual Retainer in effect during the calendar year immediately preceding his
actual retirement date. The plan also provides that a Director who was a retiree
of the Company whether or not qualified for a retirement benefit under any
pension plan of the Company but who had at least five years of service as a
Director subsequent to such retirement is entitled to a retirement benefit under
the plan at a reduced amount equal to 25% of the Annual Retainer in effect
during the calendar year immediately preceding the year in which the retiring
Director was last elected. Benefits payable under this plan are not funded but
are paid out of the general funds of the Company. Director contributions to this
plan are not permitted. Certain provisions of the retirement plan do not take
effect until the occurrence of certain "Change of Control" events, as defined in
the plan. Among others, provisions in the plan providing for (i) the suspension,
reduction or termination of benefits in cases of gross misconduct by a
participant (as determined in the sole discretion of the Compensation
Committee); and (ii) the forfeiture of benefits should a retired participant
engage in certain proscribed competitive activities, are automatically deleted
upon the occurrence of a Change of Control event.
17
<PAGE> 21
MATTERS RELATING TO DIRECTORS
Mr. Hoffman, a Director of the Company, is a partner in the law firm of
Simpson Thacher and Bartlett which rendered legal services to the Company during
the fiscal year ended December 31, 1996.
PROPOSAL TO AMEND AND RESTATE THE COMPANY'S
1973 STOCK OPTION PLAN
At its meeting held on March 11, 1997, the Board of Directors of the
Company approved and recommended that the Company's shareholders approve an
amendment to the 1973 Plan to (a) increase by 2,700,000 shares of Class B Common
Stock the number of authorized but unissued shares of the Company set aside for
issuance as needed in the continued operation of the 1973 Plan, (b) extend the
period during which options under the 1973 Plan may be granted to March 10,
2007, (c) make various changes to ensure continued deductibility of compensation
generated upon the exercise of stock options, (d) permit, with the approval of
the Compensation Committee, transferability of stock options and the exercise of
options by individuals other than the optionee and (e) eliminate the need for a
shareholder vote on amendments to the 1973 Plan except for increases in the
number of shares which may be issued as stock options. These amendments are
deemed advisable by management in order to continue the 1973 Plan upon the terms
heretofore approved by the shareholders, and to provide a sufficient number of
shares for future grants. The following is a description of the principal
provisions of the 1973 Plan. A complete text of the 1973 Plan, as proposed to be
amended, is attached to this Proxy Statement as Exhibit A.
INCREASE IN NUMBER OF SHARES ISSUABLE UNDER THE PLAN. The 1973 Plan (after
adjustment for the 5% stock dividend paid on February 3, 1995 and the 2-for-1
stock split paid on August 9, 1996) provides for the issuance of a maximum of
3,600,000 shares of Class A Common Stock and 9,845,670 shares of Class B Common
Stock. As of March 14, 1997, there were available for grant pursuant to the 1973
Plan options to purchase 611,136 shares of Class B Common Stock. In order to
have a sufficient number of shares of Class B Common Stock available for grants
of future options, the proposed amendment would increase the maximum number of
shares which may be issued to 12,545,670 shares of Class B Common Stock.
PLAN ADMINISTRATION. The 1973 Plan is administered by the Compensation
Committee consisting of at least two or more members of the Board of Directors
who are each "non-employee directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Act"). Subject to the express provisions
of the 1973 Plan, the Compensation Committee has the authority to interpret the
1973 Plan, to prescribe, amend and rescind rules and regulations relating to it,
to determine the terms and provisions of the respective option agreements and to
make all other determinations necessary or advisable for the administration of
the 1973 Plan. The Compensation Committee shall contain at least two "outside
directors" as defined in Section 162(m) of the Code.
AMENDMENT AND TERMINATION. The Board of Directors of the Company may at
any time amend, suspend or terminate the 1973 Plan, except that no amendment
which would increase the maximum number of shares which may be issued shall be
effective unless, within twelve months before or after the Board of Directors
adopts such amendment, it is approved by the shareholders. No amendment,
suspension or termination of the 1973 Plan shall, without the consent of the
participant, terminate, or adversely affect the participant's rights under, any
outstanding option.
18
<PAGE> 22
ELIGIBILITY. The Compensation Committee determines the particular
employees within the general class of officers and key employees to whom options
shall be granted. Options may not be granted to any Director who is not an
officer or employee or to any member of the Compensation Committee. No incentive
stock option may be granted to persons who would beneficially own, after the
grant, more than 10% of the voting power of all shares of stock of the Company
unless at the time any such option is granted the option price is not less than
110% of the fair market value of the underlying stock at the date of grant, and
such option expires no more than five years from the date of grant. The number
of shares of stock which may be issued under options granted under the 1973 Plan
to any one individual in any fiscal year shall not exceed 300,000 shares,
subject to adjustment as provided in the 1973 Plan.
OPTION FEATURES. The option price of the stock subject to the 1973 Plan
shall not be less than 100% of the fair market value of the underlying shares on
the date of grant. Options may expire not more than ten years after the date of
grant. Unless otherwise restricted as specified in the option grant delivered to
the participant, the participant is permitted to exercise any option with
respect to both Class A Common Stock and Class B Common Stock in any proportion
as such participant may determine.
The 1973 Plan provides that options are exercisable immediately or in such
installments as the Compensation Committee may prescribe. The Compensation
Committee also is empowered, in its sole discretion, to accelerate the
exercisability of any option at any time.
With respect to incentive stock options granted after December 31, 1986,
the aggregate fair market value (determined at the time the option is granted)
of the stock with respect to which incentive stock options are exercisable for
the first time by a participant during any calendar year (under all such plans
of the individual's employer corporation and its parent and subsidiary
corporations) shall not exceed $100,000.
Unless otherwise determined by the Compensation Committee, no option is
transferable except by will or by the laws of descent and distribution, or may
be exercised during the optionee's life by anyone other than the optionee.
In the event of a participant's termination of employment, including the
sale of a subsidiary employing a participant (for any reason other than death,
retirement with the consent of the Company or permanent disability), a
participant's option expires on the earlier of the expiration date specified in
the option or three months from the date of termination of employment. In the
event of a participant's retirement with the consent of the Company, options
continue to mature in the normal manner and are exercisable until the later of
the date three years after the date of retirement or, in the event that the
participant should die during such three-year period, are exercisable until the
date twelve months after death; but in no event later than the end of the option
exercise period specified in the option. In the case of retirement due to
permanent disability, a participant's options are exercisable, to the extent
exercisable at the date of such retirement, until the date twelve months after
the date of such retirement or, in the event that the participant should die
during such twelve-month period, such participant's options are exercisable
until the date twelve months after death; but in no event later than the end of
the option exercise period specified in the option. If a participant's
employment terminates by reason of death, such participant's options would
become exercisable, to the extent exercisable on the date of death, until the
date twelve months after death; but in no event later than the end of the option
exercise period specified in the option.
Payment for stock must be made in full at the time that an option or any
part thereof is exercised and no stock is issued until full payment therefor is
made. Payment may be made in cash or by delivery to the Company of shares of
either Class A Common Stock or Class B Common Stock or a combination thereof. A
participant may satisfy, pursuant to such rules as may be prescribed by the
Compensation Committee, any
19
<PAGE> 23
income tax withholding obligation that may be imposed in connection with the
exercise of an option by the retention of shares by the Company, or the return
to the Company of shares, in each case equal in fair market value to the amount
of all or any portion of the withholding obligation. With the consent of the
Compensation Committee, a participant may elect to have the Company retain a
number of shares otherwise issuable on exercise of an option, or to deliver
shares, in each case equal in fair market value to the amount of all of any
portion of the participant's federal, state and local income tax obligation
resulting from such exercise determined at the participant's maximum marginal
tax rates.
The 1973 Plan provides for the acceleration of all options (other than
incentive stock options granted on or after January 1, 1987) in the event of a
"Change of Control" as defined in the 1973 Plan. (See footnote (1) to the table
captioned "Options/SAR Grants During 1996 Fiscal Year.")
FEDERAL INCOME TAX CONSEQUENCES. The grant of an incentive stock option
would have no immediate tax consequences to the Company or to the optionee. A
holder of shares pursuant to the exercise of an incentive stock option would
realize no taxable income at the time of exercise (although the exercise may
cause an adjustment to alternative minimum taxable income). If the holder held
his shares for at least two years from the date of grant and at least one year
from the date of exercise, he would realize taxable long-term capital gain or
long-term capital loss upon a subsequent sale of the shares at a price different
from the option price. In the event that the optionee satisfies the holding
period requirement described above, no deduction would be allowed to the Company
for federal income tax purposes in connection with the grant or exercise of the
option or the sale of shares acquired pursuant to such exercise.
If, however, the optionee disposes of the shares within the period
described above (a "disqualifying disposition"), the optionee will generally
recognize ordinary income (and the Company will be entitled to a deduction) at
the time of disposition equal to the excess over the exercise price of the
lesser of (a) the fair market value of the shares acquired on the date of
exercise, or (b) the amount realized upon the disposition. Any excess of the
amount realized upon such disposition over the fair market value at the date of
exercise will be short-term or long-term capital gain, depending on the holding
period.
The grant of a stock option other than an incentive stock option (a
"non-qualified stock option") would have no immediate tax consequences to the
Company or to the optionee. Upon the exercise of such option the optionee will
be treated as receiving compensation taxable as ordinary income in an amount
equal to the excess of the fair market value of the shares at the time of
exercise by the optionee over the option price. This excess will also constitute
wages subject to the withholding of income tax. The amount treated as
compensation taxable as ordinary income may be claimed as a deduction by the
Company at the same time as the optionee is treated as realizing compensation.
The affirmative vote of a majority of the votes cast on the matter by
holders of shares present or represented at the meeting and entitled to vote
thereon is required to adopt the amendments to the 1973 Plan provided that a
majority of the aggregate votes of the outstanding shares are cast on the
proposal. Neither abstentions nor broker non-votes will have an effect on the
vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
PROPOSED AMENDMENTS.
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PROPOSAL TO ADOPT THE COMPANY'S
PERFORMANCE UNIT PLAN
At its meeting held on December 11, 1996, the Board of Directors of the
Company, acting on the recommendation of the Compensation Committee of the Board
of Directors, adopted, subject to shareholder approval at this meeting, the
Hubbell Incorporated Performance Unit Plan, effective as of January 1, 1997. The
purpose of the performance plan is to provide incentive compensation to
executive and administrative employees of the Company and its subsidiaries who
have contributed effectively to the success of the Company by their ability,
industry, loyalty or exceptional services and to encourage continuance of their
services with the Company by a form of recognition of their efforts in
contributing significantly to the success and growth of the Company during the
1997, 1998 and 1999 fiscal years. It is intended that awards under the
performance plan based solely on the achievement of objective performance goals
will be treated as performance based compensation within the meaning of Section
162(m) of the Code that will qualify for exclusion under the $1 million
limitation on deductibility of executive compensation.
The following is a summary of the principal provisions of the performance
plan which is qualified in its entirety by reference to the complete text of the
performance plan which is attached to this proxy statement as Exhibit B as well
as information as to awards made thereunder.
PLAN ADMINISTRATION. The performance plan will be administered by the
Compensation Committee comprised of members of the Board of Directors who are
"non-employee directors" within the meaning of Rule 16b-3 of the Act and
"outside directors" within the meaning of Section 162(m) of the Code, and who
are not eligible to participate in or to receive any benefits pursuant to the
performance plan.
ELIGIBILITY AND PARTICIPATION. The persons eligible to participate in the
performance plan will be those employees who are primarily responsible in an
administrative or executive capacity for the direction of the functions and
operations of the Company or its subsidiaries, some of whom may be or may become
"covered employees" (as defined in Section 162(m) of the Code) of the Company
for the applicable taxable year of the Company. The Compensation Committee shall
designate the employees eligible to participate in the performance plan.
DETERMINATION OF INCENTIVE PAYMENTS. On December 10, 1996, the Compensation
Committee awarded to each participant the right to receive a number of shares of
the Company's Class B Common Stock after December 31, 1999 depending upon
whether the average compounded earnings per share ("EPS") growth rate for the
three-year period of January 1, 1997 through December 31, 1999, is met. The
performance unit awards were calculated by taking the actual 1996 cash bonuses
paid to each of the Compensation Committee designated participants in the
performance plan and dividing them by the average of the high and low prices per
share of a share of Class B Common Stock on the last five trading days in 1996.
If the Company achieves an EPS growth rate equivalent to 10% during the
three-year period, each participant, provided they are still in the employ of
the Company or its subsidiaries on December 31, 1999, will receive 100% of the
performance unit award. If the EPS growth rate is equivalent to 12.5% but less
than 15%, each participant will receive 150% of the performance unit award, and
if the EPS growth rate is equal to, or exceeds, 15%, each participant will
receive 200% of the performance unit award. No awards will be paid if the EPS
growth rate is less than 10% for the three-year period. In the event of a
participant's death or disability during the three-year period, the Compensation
Committee, in its sole discretion, may provide for vesting and payment of the
performance units on an equitable basis reflecting the performance of the
Company and the EPS during the period ending on the date of death or disability.
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AMENDMENT AND TERMINATION. The Board of Directors of the Company may from time
to time amend, suspend or terminate any or all of the provisions of the
performance plan, provided that (i) no such action shall affect the rights of
any participant or the operation of the performance plan with respect to any
payment to which a participant may have become entitled prior to the effective
date of such action, and (ii) no amendment that requires shareholder approval in
order for payments to be deductible under the Code may be made without approval
of the shareholders of the Company.
Ninety-three executive and administrative employees of the Company and its
subsidiaries received awards from the Compensation Committee in December, 1996.
In the absence of shareholder approval, these awards will be rescinded.
The affirmative vote of a majority of the votes cast on the matter by
holders of shares present or represented at the meeting and entitled to vote
thereon is required to adopt the performance plan provided that a majority of
the aggregate votes of the outstanding shares are cast on the proposal. Neither
abstentions nor broker non-votes will have an effect on the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
HUBBELL INCORPORATED PERFORMANCE UNIT PLAN.
SHAREHOLDER PROPOSAL
The American Baptist Home Mission Society, an owner in street name of
11,370 shares of the Company's common stock, has notified the Company that it
will cause the following resolution to be presented at the Annual Meeting, and
has given the following reasons in support thereof:
BOARD INCLUSIVENESS
We believe the employee and board composition of major corporations should
reflect the people in the workforce and marketplace of the 21st century if our
company is going to remain competitive. Our employees, customers and
stockholders are now made up of a greater diversity of backgrounds than ever
before. The report of the Department of Labor's 1995 bi-partisan Glass Ceiling
Commission, "Good For Business: Making Full Use of the Nation's Human Capital,"
confirms diversity and inclusiveness in the workplace has a positive impact on
the bottomline. A report of Standard and Poor 500 companies provided by Covenant
Fund revealed ". . . firms that succeed in shattering their own glass ceiling
racked up stock-market records that were nearly 2 1/2 times better than
otherwise -- comparable companies."
In 1994 the Investor Responsibility Research Center reported inclusiveness
at senior management and board levels was only 9% of the fortune 500 companies
in a comparable workforce of 57% diversity. The Glass Ceiling Commission
reported that companies are selecting from only half of the talent of our
workforce. Therefore we urge our corporation to enlarge its search for qualified
board members by casting a wider net. If we are to be prepared for the 21st
century we must learn how to compete in a growingly diverse global market place
by promoting and selecting the best people regardless of race, gender or
physical challenge. We believe the judgements and perspectives of a diverse
board would improve the quality of corporate decision-making.
Since the board is responsible for representing shareholder interests in
corporate meetings, a growing proportion of stockholders is now attaching value
to board inclusiveness. A 1994 Investor Responsibility
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Research Center survey revealed 37% of respondents cited board diversity as the
influencing factor for supporting votes.
The Teachers Insurance and Annuity Association and College Retirement
Equities Fund, the largest institutional investor in the United States, recently
issued a set of corporate governance guidelines including a call for "diversity
of directors by experience, sex, age and race."
Robert Campbell, CEO of Sun Oil, stated in the Wall Street Journal, August
12, 1996, "Often what a woman or minority person can bring to the board is some
perspective a company hasn't had before -- adding some modern day reality to the
deliberation process. Those perspectives are of great value, and often missing
from an all-white-male gathering. They can also be inspirational to the
company's diverse work force."
Be it resolved that shareholders request:
1. The nominating committee of the Board make a greater effort to find
qualified women and minority candidates for nomination to the Board.
2. The Board issue a statement publicly committing the company to a
policy of board inclusiveness with a program of steps to take and the
timeline expected to move in that direction.
3. The Company issue a report by September 1997 at a reasonable
expense that includes a description of:
(a) efforts to encourage diversified representation on our board
(b) criteria for board qualification
(c) the process of selecting the board candidates
(d) the process of selecting the board committee members
MANAGEMENT'S STATEMENT IN OPPOSITION
Your Board of Directors opposes this proposal for the following reasons:
The Company offers equal employment opportunity to all persons without
regard to race, creed, color, sex, age, religion, national origin, physical or
mental disability, or veteran status, and abides by all applicable Federal and
State statutes and regulations related to equal employment practices. Consistent
with that policy, and in keeping with the expanding global nature of the
Company's operations, the Board recognizes that highly qualified and independent
Board members with diverse backgrounds and perspectives can enhance Company
performance. However, the principle criteria in selecting an individual for
board membership should be that individual's qualifications, experience, skills,
and the ability to contribute to the enhancement of shareholder value, without
regard to gender, minority, or other status. Accordingly, the Board would prefer
to achieve diversity over time, as vacancies occur, by acting in accordance with
the Company's policy of equal employment opportunity in selecting the most
qualified candidates, regardless of gender, minority or other status. In doing
so, the Board believes that it will become more diverse, which will enable it to
better reflect the composition of the Company's global workforce. Many years
ago, the Company embarked on transitioning to a more effective and efficient
outside board of directors, and identified various criteria that it believed
would be constructive in the representation of the shareholders, enhancing
performance, and maximizing value. This resulted in a Board consisting of seven
to nine members with the emphasis on highly successful, knowledgeable, broadly
experienced, forceful outside directors with a cross-section of disciplines to
properly relate to the shareholders' interests.
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<PAGE> 27
The shareholder proposal would require the Board of Directors to issue a
public statement committing the Company to a policy of board inclusiveness and
establishing a timetable for achieving same, and to issue by a deadline date a
report describing its efforts, criteria and process of achieving board
inclusiveness. Your Board of Directors does not believe this proposal would
enhance the current board selection process and, thus, would not serve
shareholder interests. Your Board of Directors believes that the shareholder
proposal is inappropriately restrictive, would unduly limit the Company in its
selection of directors, would involve cost without any commensurate benefit, and
would, therefore, be detrimental to the best interests of the Company and its
shareholders.
The affirmative vote of a majority of the votes cast on the matter by
holders of shares present or represented at the meeting and entitled to vote
thereon is required to approve the shareholder proposal. Neither abstentions nor
broker non-votes will have an effect on the vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THIS
SHAREHOLDER PROPOSAL.
RATIFICATION OF THE SELECTION OF AND
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The selection of independent accountants to examine the financial
statements of the Company made available or transmitted to shareholders and
filed with the SEC for the year 1997 is to be submitted to the meeting for
ratification or rejection. Price Waterhouse L.L.P., 300 Atlantic Street,
Stamford, Connecticut, has been selected by the Board of Directors of the
Company to examine such financial statements.
Price Waterhouse L.L.P. have been independent accountants of the Company
for many years. The Company has been advised that a representative of Price
Waterhouse L.L.P. will attend the Annual Meeting to respond to appropriate
questions and will be afforded the opportunity to make a statement if the
representative so desires. The fees paid in 1996 for professional services
provided by Price Waterhouse L.L.P. to the Company and its subsidiaries were
approximately $735,000.
If the proposal to ratify the selection of Price Waterhouse L.L.P. is not
approved by the shareholders, or if prior to the 1998 Annual Meeting, Price
Waterhouse L.L.P. declines to act or otherwise becomes incapable of acting, or
if its employment is discontinued by the Board of Directors, then the Board of
Directors will appoint other independent accountants whose employment for any
period subsequent to the 1998 Annual Meeting will be subject to ratification by
the shareholders at that meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
SELECTION OF PRICE WATERHOUSE.
GENERAL
The expense of this solicitation is to be borne by the Company. The Company
may also reimburse persons holding shares in their names or in the names of
their nominees for their expenses in sending proxies and proxy material to their
principals. The Company has retained D. F. King & Co., Inc. to assist in the
solicitation of proxies, at an estimated cost of $7,500, plus reasonable
expenses.
Unless otherwise directed, the persons named in the accompanying form of
proxy intend to vote all proxies received by them in favor of (i) the election
of the nominees to the Board named herein, (ii) the
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ratification of the selection of independent accountants, (iii) the amendment to
the Company's 1973 Plan, and (iv) the adoption of the Company's Performance Unit
Plan; and against the shareholder proposal. All proxies will be voted as
specified.
Management does not intend to present any business at the meeting other
than that set forth in the accompanying Notice of Annual Meeting, and it has no
information that others will do so. If other matters requiring the vote of the
shareholders properly come before the meeting and any adjournments thereof, it
is the intention of the persons named in the accompanying form of proxy to vote
the proxies held by them in accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS FOR THE
1998 ANNUAL MEETING
Shareholder proposals for inclusion in the proxy materials related to the
1998 Annual Meeting of Shareholders must be received by the Company no later
than December 1, 1997.
By Order of the Board of
Directors
HUBBELL
INCORPORATED
Orange, Connecticut
March 21, 1997
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EXHIBIT A
HUBBELL INCORPORATED
1973 STOCK OPTION PLAN FOR KEY EMPLOYEES
1. Purpose of the Plan
The purpose of the 1973 Stock Option Plan for Key Employees (the "Plan") is
to further the growth and development of Hubbell Incorporated (the "Company") by
providing an incentive through encouraging ownership of stock of the Company to
officers and other key employees who are in a position to contribute materially
to the prosperity of the Company, to increase their interest in the Company's
welfare and continue their services, and by affording a means through which the
Company can attract to its services, employees of outstanding ability.
2. Administration of the Plan
The Plan shall be administered by the Compensation Committee (the
"Committee") consisting solely of at least two or more members of the Board of
Directors of the Company ("Board of Directors") who are each "non-employee
directors" within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor rule thereto). The members of the Committee shall be
appointed from time to time by the Board of Directors, to serve at the pleasure
of the Board. From and after the first meeting of shareholders at which
directors are to be elected that occurs after July 1, 1994, the Committee shall
contain at least two "outside directors" as that term is defined in Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") (or any
successor section thereto).
Subject to the express provisions of the Plan, the Committee shall have
authority in its discretion to determine the individuals to whom, and the time
or times at which options shall be granted, and the number of shares to be
subject to each option. In making such determinations, the Committee may take
into account the nature of the services rendered by the respective employees,
their present and potential contribution to the Company's success, and such
other factors as the Committee in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall have the
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective option agreements (which need not be identical) and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee shall select one of its members as a Chairman, who shall
preside at meetings and who shall have authority to execute and deliver
documents on behalf of the Committee. Meetings of the Committee shall be held at
such times and places as the members thereof may determine. The majority of its
members shall constitute a quorum, and all determinations of the Committee shall
be made by a majority of its members. No member of the Committee shall be liable
for anything done or omitted to be done by such member or by any other member of
the Committee in connection with this Plan, except for such member's own willful
misconduct or as expressly provided by statute.
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3. Stock Subject to the Plan
Subject to adjustment as provided in Paragraph 5(d) of this Plan, the
aggregate number of shares of stock which may be issued under options granted
under this Plan shall be 3,600,000 shares of the Company's Class A Common Stock,
par value $.01 per share, and 12,545,670 shares of the Company's Class B Common
Stock, par value $.01 per share. The number of shares of stock which may be
issued under options granted under this Plan to any one individual in any fiscal
year shall not exceed 300,000 shares, subject to adjustment pursuant to Section
5.(d) hereof.
Options granted by the Committee may be "incentive stock options" (as
defined in Section 422 of the Code) or options which are not "incentive stock
options", or a combination thereof, as determined by the Committee.
Options may be granted with respect to authorized but unissued shares. In
the event that any option under the Plan expires or is terminated for any reason
prior to the end of the period during which options may be granted, the shares
allocable to the unexercised portion of such option shall again be available for
the purposes of this Plan.
4. Eligibility
Options may be granted only to officers and other key employees of the
Company and subsidiary corporations (as defined in Section 424(f) of the Code).
Directors who are not officers or employees shall not be eligible. Subject to
the other provisions of this Plan, an individual may hold or be granted more
than one option. No incentive stock option shall be granted hereunder which
would permit the person to whom the option is granted to own (within the meaning
of Section 424(d) of the Code), immediately after the option is granted, stock
(including stock issuable upon the exercise of options) possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company, unless at the time any such option is granted the option price is at
least 110 percent of the fair market value of the stock subject to the option,
and such option by its terms is not exercisable after the expiration of five
years from the date such option is granted.
5. Terms and Conditions of Options
Options shall be granted under this Plan upon such terms and conditions as
the Committee shall determine, subject to the following provisions:
(a) Option Price
The option price of the stock subject to each option shall not be less than
100 percent of the fair market value of such stock, as determined in good faith
by the Committee, on the date such option is granted.
(b) Term of Option
Options shall be granted for such term as the Committee shall determine
except that no option shall be exercisable after the expiration of ten years
from the date such option is granted.
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(c) Exercise and Termination of Options
The options granted under the Plan shall be exercisable immediately or in
such installments as the Committee may prescribe. The Committee may accelerate
the exercisability of options at any time in its sole discretion.
Unless otherwise determined by the Committee, during the lifetime of the
individual to whom an option is granted, the option shall be exercisable only by
such individual.
(A) Termination of Employment -- General
If the participant ceases to be an employee of the Company or a subsidiary
for any reason (including, without limitation, the sale of a subsidiary), other
than death, retirement with the consent of the Company or retirement by reason
of "Permanent Disability," such option shall expire on the earlier of (i) the
end of the option exercise period specified in the option or (ii) the date three
months from the date of the participant's termination of employment (even though
such participant is subsequently reemployed). "Permanent Disability" shall mean
that the participant is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve months.
(B) Retirement with Company Consent
If the employment of the participant with the Company or its subsidiaries
shall terminate by reason of the participant's retirement with the consent of
the Company, such participant's stock option shall continue to mature in the
normal manner and the participant (or in the event of his death after the date
of retirement, his estate or the person who acquires his option by bequest or
inheritance or by reason of his death) shall have the right to exercise his
option until the later of (i) the date three years after the date of such
retirement or (ii) in the event that the participant's death occurs during such
three-year period the date twelve months after the death of the participant; but
in no event later than the end of the option exercise period specified in the
option.
(C) Retirement Due to Permanent Disability
If the employment of the participant with the Company or its subsidiaries
shall terminate by reason of the participant's retirement due to Permanent
Disability, the participant (or in the event of his death after the date of
retirement, his estate or the person who acquires his option by bequest or
inheritance or by reason of his death) shall have the right to exercise his
option, to the extent that he could have exercised it at the date of such
disability retirement, until the later of (i) the date twelve months after the
date of such termination of employment or (ii) in the event that the
participant's death occurs during such twelve-month period the date twelve
months after the date of such death; but in no event later than the end of the
option exercise period specified in the option.
(D) Termination Due to Death
If a participant's employment by the Company or any subsidiary terminates
by reason of death, any option held by the participant may thereafter be
immediately exercised, to the extent then exercisable, by his estate or the
person who acquires his option by bequest or inheritance or by reason of his
death for a period of one year from the date of such death or until the end of
the option exercise period specified in the option, whichever period is the
shorter.
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(E) Miscellaneous
A participant who is absent from work with the Company or a subsidiary
because of illness or temporary disability, or who is on leave of absence for
such purpose or reason as the Committee may approve, shall not be deemed during
the period of such absence, by reason of such absence, to have ceased to be an
employee of the Company or a subsidiary. Where a cessation of employment is to
be considered a retirement with the consent of the Company or by reason of
Permanent Disability for the purpose of this Plan shall be determined by the
Committee, which determination shall be final and conclusive.
No option shall be exercisable unless at the time of exercise the shares
are covered by a currently effective registration statement filed under the
provisions of the Securities Act of 1933, as amended, or, in the sole opinion of
the Company and its counsel, the purchase of the shares upon exercise of the
option is otherwise exempt from the registration requirements of that Act.
Each participant shall be required, as a condition of exercising any
option, to make such arrangements with the Company as the Committee shall
determine for withholding (including, but not limited to, the retention of
shares by the Company or the delivery to the Company of shares, in each case
equal in fair market value as described in Paragraph 5(f) to the amount of all
or any portion of the withholding obligation pursuant to such rules as may be
prescribed by the Committee) and, in the event of the death of a participant, a
further condition of such exercise shall be the delivery to the Company of such
tax waivers and other documents as the Committee shall determine. With the
consent of the Committee, a participant may elect to have the Company retain a
number of shares otherwise issuable on exercise of an option, or to deliver
shares, in each case equal in fair market value as described in Paragraph 5(f)
to the amount of all or any portion of the participant's federal, state and
local income tax obligation resulting from such exercise determined at the
participant's maximum marginal tax rates.
(d) Adjustments Upon Changes in Capitalization
If (i) the Company shall at any time be involved in a transaction to which
Section 424(a) of the Code is applicable; (ii) the Company shall declare a
dividend payable in any class of shares, or shall subdivide or combine, its
shares; or (iii) any other event shall occur which in the judgment of the
Committee necessitates action by way of adjusting the terms of the outstanding
options, the Committee shall forthwith take any such action as in its judgment
shall be necessary to preserve the participant's rights substantially
proportionate to the rights existing prior to such event and to the extent that
such action shall include an increase or decrease in the number of shares
subject to outstanding options, the number of shares available under Paragraph 3
above shall be increased or decreased, as the case may be, proportionately. The
judgment of the Committee with respect to any matter referred to in this
Paragraph shall be conclusive and binding upon each participant.
In the event of the proposed dissolution or liquidation of the Company, or
in the event of any proposed reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the Company is not
the surviving corporation, or in the event of a proposed sale of all or
substantially all of the principal and/or assets of the Company to another
corporation, all options granted hereunder shall terminate as of a date to be
fixed by the Committee, provided that not less than 90 days' written notice of
the date so fixed shall be given to each participant, and each participant shall
have the right during such period to exercise his option as to all or any part
of the shares covered thereby to the extent such option is then otherwise
exercisable pursuant to the provisions of this Plan and of the option; and
provided further, however, that the Board of Directors may, in their discretion,
substitute or cause to be substituted new options for each such
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outstanding option, provided each such new option applies to the stock of the
new employer corporation or a parent or subsidiary corporation of such
corporation.
(e) Nontransferability of Options
Unless otherwise determined by the Committee, no option shall be assigned
or transferable, except by will or by the laws of descent and distribution.
(f) Payment for Stock
The option price payable upon exercise of an option shall be payable to the
Company either (i) in cash (including check, bank draft, or money order), (ii)
by delivery to the Company of shares of either class of common stock of the
Company or a combination of common stock and cash, or (iii) to the extent
authorized by the Committee, through the written election of the optionee to
have shares of common stock withheld by the Company from the shares otherwise to
be received. The value of any common stock so delivered or withheld shall be the
fair market value of such common stock, as determined in good faith by the
Committee, on the date of the stock option exercise.
(g) Limitation on Incentive Stock Options
With respect to incentive stock options granted after December 31, 1986,
the aggregate fair market value (determined at the time the option is granted)
of the stock with respect to which incentive stock options are exercisable for
the first time by a participant during any calendar year (under all such plans
of the individual's employer corporation and its parent and subsidiary
corporations) shall not exceed $100,000.
6. Term of Plan
No option shall be granted pursuant to the Plan after March 10, 2007.
7. Termination and Amendment of Plan
The Board of Directors of the Company may at any time amend, suspend or
terminate the Plan, except that no amendment which would increase the maximum
number of shares which may be issued under options granted under this Plan shall
be effective unless, within twelve months before or after the Board adopts such
amendment, it is approved by shareholders. No amendment, suspension or
termination of this Plan shall, without the consent of the participant,
terminate, or adversely affect the participant's rights under, any outstanding
option.
8. Privileges of Stock Ownership
The holder of an option shall not be entitled to the privileges of stock
ownership as to any shares of the Company not actually issued to him. No shares
shall be issued upon the exercise of an option until all applicable legal
requirements shall have been complied with to the satisfaction of the Company
and its counsel.
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9. Time of Granting Options
The granting of an option pursuant to this Plan shall take place at the
time the Committee makes a determination that an employee shall receive an
option.
10. Construction
Words and terms used in this Plan which are defined or used in Sections
421, 422 or 424 of the Code shall, unless the context clearly requires
otherwise, have the meanings assigned to them therein, in the regulations
promulgated thereunder and in the decisions construing the provisions thereof.
The place of administration of this Plan shall be conclusively deemed to be
within the State of Connecticut, and the validity, construction, interpretation
and effect of the Plan, its rules and regulations and the rights of any and all
participants having or claiming to have an interest therein or thereunder, shall
be governed by and determined conclusively and solely in accordance with the
laws of the State of Connecticut without regard to any conflicts of laws
provisions.
11. Provisions Relating to Change of Control
(i) Each option granted under this Plan shall, to the extent then
exercisable determined after applying Paragraph 11 (ii) below, have a limited
right of surrender allowing a participant who is an Officer, or any other
participant in the discretion of the Committee, to surrender his option within
the 30-day period following the Change of Control and to receive in cash, in
lieu of exercising the option, the amount by which the fair market value of the
common stock which the option represents exceeds the option exercise price for
all or part of the shares of common stock which are subject to the related
option. For this purpose, the fair market value of common stock shall be
determined as follows:
(a) if the share was a share of the Company's Class A Common Stock,
the fair market value shall be deemed to be the closing price of one share
of the Company's Class A Common Stock on the New York Stock Exchange on
that day, within the 60 days preceding the date on which the Change of
Control occurs, on which such closing price was the highest. In the event
that the shares are not listed or admitted to trading on such exchange, the
fair market value shall be deemed to be the closing price of one share of
the Company's Class A Common Stock on the principal national securities
exchange on which the shares are listed or admitted to trading, or, if the
shares are not listed or admitted to trading on any national securities
exchange, the average of the highest reported bid and lowest reported asked
prices as furnished by the National Association of Securities Dealers, Inc.
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or similar organization if NASDAQ is no longer reporting
such information. If on any such date the shares are not quoted by any such
organization, the fair market value of the shares on such date, as
determined in good faith by the Board of Directors of the Company, shall be
used; or
(b) if the share was a share of the Company's Class B Common Stock,
the fair market value shall be deemed to be the closing price of one share
of the Company's Class B Common Stock on the New York Stock Exchange on
that day, within the 60 days preceding the date on which the Change of
Control occurs, on which such closing price was the highest. In the event
that the shares are not listed or admitted to trading on such exchange, the
fair market value shall be deemed to be the closing price of one share of
the Company's Class B Common Stock on the principal national securities
exchange on which the shares are listed or admitted to trading, or, if the
shares are not listed or admitted to trading on any national
A-6
<PAGE> 35
securities exchange, the average of the highest reported bid and lowest
reported asked prices as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or similar organization if NASDAQ
is no longer reporting such information. If on any such date the shares are
not quoted by any such organization, the fair market value of the shares on
such date, as determined in good faith by the Board of Directors of the
Company, shall be used.
(ii) Notwithstanding any other provisions of this Plan, in the event of a
Change of Control all outstanding options which are not then exercisable, except
for incentive stock options granted on or after January 1, 1987, shall be
immediately exercisable in full.
For purposes of this section the following definitions shall apply:
"Change of Control" shall mean any one of the following:
(w) Continuing Directors no longer constitute at least 2/3 of the
Directors;
(x) any person or group of persons (as defined in Rule 13d-5 under the
Securities Exchange Act of 1934), together with its affiliates, becomes the
beneficial owner, directly or indirectly, of 20% or more of the voting
power of the then outstanding securities of the Company entitled to vote
for the election of the Company's Directors; provided that this Paragraph
11 shall not apply with respect to any holding of securities by (A) the
trust under a Trust Indenture dated September 2, 1957 made by Louie E.
Roche, (B) the trust under a Trust Indenture dated August 23, 1957 made by
Harvey Hubbell, and (C) any employee benefit plan (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended) maintained by the Company or any affiliate of the Company;
(y) the approval by the Company's stockholders of the merger or
consolidation of the Company with any other corporation, the sale of
substantially all of the assets of the Company or the liquidation or
dissolution of the Company, unless, in the case of a merger or
consolidation, the incumbent Directors in office immediately prior to such
merger or consolidation will constitute at least 2/3 of the Directors of
the surviving corporation of such merger or consolidation and any parent
(as such term is defined in Rule 12b-2 under the Securities Exchange Act of
1934) of such corporation; or
(z) at least 2/3 of the incumbent Directors in office immediately
prior to any other action proposed to be taken by the Company's
stockholders determine that such proposed action, if taken, would
constitute a change of control of the Company and such action is taken.
"Continuing Director" shall mean any individual who is a member of the
Company's Board of Directors on December 9, 1986 or was designated (before such
person's initial election as a Director) as a Continuing Director by 2/3 of the
then Continuing Directors.
"Director" shall mean any individual who is a member of the Company's Board
of Directors on the date the action in question was taken.
"Officer" shall mean each of the officers specified in Section 1 of Article
IV of the by-laws of the Company except for any such officer whose title begins
with the word "Assistant".
A-7
<PAGE> 36
EXHIBIT B
HUBBELL INCORPORATED
PERFORMANCE UNIT PLAN
- --------------------------------------------------------------------------------
ARTICLE I
PURPOSE
The purpose of this Performance Unit Plan (the "Plan") is to provide
incentive compensation to executive and administrative employees of Hubbell
Incorporated (the "Company") and its subsidiaries who have contributed
effectively to the success of the Company by their ability, industry, loyalty or
exceptional services and to encourage continuance of their services with the
Company by a form of recognition of their efforts in contributing significantly
to the success and growth of the Company during the 1997, 1998 and 1999 fiscal
years.
ARTICLE II
ADMINISTRATION
2.1 The Board of Directors of the Company shall appoint from among their
number at least three directors, each of whom shall be a "non-employee director"
(within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, or any successor rule thereto) and an "outside director" (as that term
is defined under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code") or any successor section thereto), to be known as the Compensation
Committee (the "Committee"), to serve at the pleasure of the Board. Vacancies in
the Committee shall be filled by the Board.
2.2 The Committee shall administer the Plan under such rules, regulations
and criteria as it shall prescribe. Its decisions in the administration and
interpretation of the Plan shall be final and binding as to all interested
parties and shall be and constitute acts of the Company.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 The persons eligible to participate in the Plan shall be those
employees who are primarily responsible in an administrative or executive
capacity for the direction of the functions and operations of divisions and
departments within the Company or a subsidiary of the Company. Some of the
foregoing employees may be or may become "covered employees" (as defined in
Section 162(m) of the Code) of the Company or a subsidiary of the Company for
the applicable taxable year of the Company.
3.2 The Committee shall from time to time designate the employees eligible
for participation in the Plan. The persons so designated by the Committee are
hereinafter called "participants".
B-1
<PAGE> 37
ARTICLE IV
AWARD, VALUE AND VESTING OF PERFORMANCE UNITS
4.1 Not later than March 31, 1997, the Committee shall award to each
participant a performance unit (a "Performance Unit") which will represent the
right of the participant to receive a number of shares of the Company's Class B
Common Stock, $.01 par value ("Class B Common Stock") at the conclusion of the
period January 1, 1997 through December 31, 1999 (the "Performance Period")
equal to a multiple (the "Performance Unit Multiple") of the 1996 Share
Equivalent (as hereinafter defined) of the incentive payment received by such
participant under the Hubbell Incorporated Incentive Compensation Plan or the
Hubbell Incorporated Senior Executive Incentive Compensation Plan in respect of
the fiscal year of the Company ending December 31, 1996 (the "1996 Incentive
Payment"). For purposes of this Plan, the term "1996 Share Equivalent" shall
mean a number of shares of Class B Common Stock equal to the 1996 Incentive
Payment divided by the average of the high and low prices per share of a share
of Class B Common Stock on the last five trading days in 1996 rounded out to
three decimal places and rounding up any final fraction to the next whole share
of Class B Common Stock.
4.2 In connection with awards of Performance Units, if annual earnings per
share of the Company's common stock as of December 31, 1999, the last day of the
Performance Period, when compared to the annual earnings per share of the
Company's common stock as of December 31, 1996 increased at the following growth
rates, then the following corresponding Performance Unit Multiples shall apply:
<TABLE>
<CAPTION>
EARNINGS PER SHARE GROWTH RATE PERFORMANCE UNIT MULTIPLE
------------------------------------------------------- -------------------------
<S> <C>
Less than 33.10% (equivalent to 10% compounded
annually)............................................ 0%
33.10% (equivalent to 10% compounded annually), but
less than 42.38% (equivalent to 12.5% compounded
annually)............................................ 100%
42.38% (equivalent to 12.5% compounded annually), but
less than 52.09% (equivalent to 15% compounded
annually)............................................ 150%
52.09% (equivalent to 15% compounded annually) or
greater.............................................. 200%
</TABLE>
As soon as practicable after December 31, 1999, the Committee shall certify the
results of the foregoing formula and shall deliver to the participant that
number of shares of Class B Common Stock which shall equal the product of the
1996 Share Equivalent times the Performance Unit Multiple, rounding up any final
fraction to the next whole share of Class B Common Stock. Earnings per share for
any fiscal year of the Company shall be determined by reference to the published
audited financial statements of the Company by dividing consolidated net income
for the year by the reported average number of fully diluted shares of common
stock outstanding during such year, as determined in accordance with generally
accepted accounting principles as certified in the Company's audited financial
statements. The number of shares of Class B Common Stock represented by a
Performance Unit shall be certified in writing by the Committee prior to any
payment in respect thereof.
4.3 Subject to the provisions of Sections 4.4 and 4.5 hereof, a Performance
Unit shall vest fully in the participant to whom such Performance Unit has been
awarded at the close of business on the last day of the Performance Period, but
only if the participant is in the employ of the Company or any of its
subsidiaries at the conclusion of such period, and the decision of the Committee
with respect to any such determination shall be final and binding as to all
interested parties.
B-2
<PAGE> 38
4.4 If, before the vesting of a Performance Unit, a participant to whom
such Performance Unit has been awarded ceases to be employed by the Company or
any of its subsidiaries for any reason other than death or disability (as
determined under the Company's long term disability plan then covering the
participant) ("Disability"), such Performance Unit shall be forfeited. In the
event of a participant's death or Disability before the vesting of a Performance
Unit, the Committee, in its sole discretion, may provide for the vesting and
payment of any such Performance Unit on an equitable basis reflecting the
performance of the Company and its earnings per share during the period
beginning on the date when such participant was awarded the Performance Unit and
ending on the date of death or Disability.
4.5 If there is an event constituting a Change of Control, as such term is
hereinafter defined, the number of shares of Class B Common Stock payable in
respect of a Performance Unit as hereinafter determined, of any outstanding
Performance Unit shall immediately vest in the participant to whom such
Performance Unit has been awarded as of the date such Change of Control occurs.
Such number of shares shall be equal to (a) the number of shares under Section
4.2 hereof determined as if a compound growth rate had been achieved for the
entire Performance Period equal to the actual compound growth rate for such
portion of the Performance Period prior to the date of the Change of Control
multiplied by (b) a fraction, the numerator of which is the number of full and
partial months from the beginning of the Performance Period until the date of
the Change of Control and the denominator of which is thirty-six(36). For
purposes of the foregoing, the term "Change of Control" shall mean any one of
the following:
(i) Continuing Directors no longer constitute at least two-thirds
( 2/3) of the Directors;
(ii) any person or group of persons (as defined in Rule 13d-5 under
the Securities Exchange Act of 1934), together with its affiliates, becomes
the beneficial owner, directly or indirectly, of twenty percent (20%) or
more of the voting power of the then outstanding securities of the Company
entitled to vote for the election of the Company's Directors; provided that
this clause (ii) shall not apply with respect to any holding of securities
by (A) the trust under a Trust Indenture dated September 2, 1957 made by
Louie E. Roche, (B) the trust under a Trust Indenture dated August 23, 1957
made by Harvey Hubbell, and (C) any employee benefit plan (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended) maintained by the Company or any affiliate of the
Company;
(iii) the approval by the Company's stockholders of the merger or
consolidation of the Company with any other corporation, the sale of
substantially all of the assets of the Company or the liquidation or
dissolution of the Company, unless, in the case of a merger or
consolidation, the incumbent Directors in office immediately prior to such
merger or consolidation will constitute at least two-thirds ( 2/3) of the
Directors of the surviving corporation of such merger or consolidation and
any parent (as such term is defined in Rule 12b-2 under the Securities
Exchange Act of 1934) of such corporation; or
(iv) at least two-thirds ( 2/3) of the incumbent Directors in office
immediately prior to any other action proposed to be taken by the Company's
stockholders determine that such proposed action, if taken, would
constitute a change of control of the Company and such action is taken.
For purposes of the foregoing, the term "Continuing Director" shall mean any
individual who is a member of the Company's Board of Directors on December 9,
1986 or was designated (before such person's initial election as a Director) as
a Continuing Director by two-thirds ( 2/3) of the then Continuing Directors, and
the term "Director" shall mean any individual who is a member of the Company's
Board of Directors on the date the action in question was taken.
B-3
<PAGE> 39
4.6 The Committee shall make adjustments from time to time in the
Performance Unit Multiple, in the 1996 Share Equivalent, in targeted compound
growth rate of earnings per share or in earnings per share in such reasonable
manner as the Committee may determine to reflect (i) any increase or decrease in
the number of issued shares of common stock of the Company resulting from a
subdivision or consolidation of shares or any other capital adjustment, the
payment of stock dividends or other increases or decreases in such shares
effected without receipt of consideration by the Company; (ii) material changes
in the Company's accounting practices or principles, the effect of which would
be to distort earnings per share; (iii) material acquisitions or dispositions,
the effect of which would be to distort earnings per share; (iv) a Change of
Control; or (v) extraordinary, unusual and nonrecurring items (such as
restructuring charges and discontinued operations) which are disclosed in the
published audited financial statements; provided, however, that no such
adjustment shall be made to the extent that the Committee determines that
adjustment would cause payment in respect of a Performance Unit to fail to be
fully deductible by the Company on account of Section 162(m) of the Code.
ARTICLE V
PAYMENTS IN RESPECT OF PERFORMANCE UNITS
5.1 Payment in respect of a Performance Unit that has vested shall be made
to a participant not later than six (6) months following the date of such
vesting and shall be in the form of shares of Class B Common Stock equal to the
value of such Performance Unit at the conclusion of the Performance Period;
provided, however, that in the event of a Change of Control, such payment shall
be made within thirty (30) days following the Change of Control and, in the
discretion of the Committee pursuant to Section 4.6 hereof, shall be (a) in a
cash amount equal to the product of the number of shares issuable pursuant to
the Performance Unit under Section 4.5 hereof times the highest price per share
of the Class B Common Stock during the sixty (60) days prior to the Change of
Control, (b) in shares of Class B Common Stock, or (c) in shares of such other
entity into which shares of Class B Common Stock may have been converted.
5.2 Notwithstanding anything in this Plan to the contrary, in no event
shall the payment to any participant in respect of a Performance Unit exceed
35,000 shares of Class B Common Stock, subject to adjustment pursuant to Section
4.6 hereof.
ARTICLE VI
GENERAL PROVISIONS
6.1 Neither the establishment of the Plan nor the selection of any employee
as a participant shall give any participant any right to be retained in the
employ of the Company or any subsidiary of the Company, or any right whatsoever
under the Plan other than to receive payment in respect of Performance Units
awarded by the Committee.
6.2 The place of administration of the Plan shall be conclusively deemed to
be within the State of Connecticut, and the validity, construction,
interpretation and effect of the Plan, its rules and regulations and the rights
of any and all participants having or claiming to have an interest therein or
thereunder shall be governed by and determined conclusively and solely in
accordance with the laws of the State of Connecticut, without regard to any
conflicts of laws provisions.
B-4
<PAGE> 40
6.3 No member of the Board of Directors of the Company or of the Committee
shall be liable to any person in respect of the Plan for any act or omission of
such member or of any other member or of any officer, agent or employee of the
Company.
6.4 This Plan shall not be deemed the exclusive method of providing
incentive compensation to a participant or any other employee of the Company or
a subsidiary of the Company.
6.5 The Company or any subsidiary making a payment hereunder shall withhold
therefrom such amounts or such number of shares of Class B Common Stock or other
securities as may be required by federal, state or local law.
6.6 Shares of Class B Common Stock distributed hereunder shall be from
authorized but unissued shares of Class B Common Stock.
ARTICLE VII
AMENDMENT, SUSPENSION OR TERMINATION
7.1 The Board of Directors of the Company may from time to time amend,
suspend or terminate, in whole or in part, any or all of the provisions of the
Plan, provided that (i) no such action shall affect the rights of any
participant or the operation of the Plan with respect to any payment to which a
participant may have become entitled, deferred or otherwise, prior to the
effective date of such action, and (ii) no amendment that requires shareholder
approval in order for payments hereunder to be deductible under the Code may be
made without approval of the shareholders of the Company.
ARTICLE VIII
EFFECTIVE DATE OF THE PLAN
8.1 The Plan shall become effective as of January 1, 1997, subject to
approval by shareholders in the manner required by Section 162(m) of the Code.
B-5
<PAGE> 41
HUBBELL INCORPORATED
Proxy Solicited on Behalf of the Board of Directors
For Annual Meeting of Shareholders, May 5, 1997
(For Shares of Class A Common Stock)
PROXY
The undersigned hereby appoints each of G.J. RATCLIFFE and RICHARD W.
DAVIES as proxies of the undersigned, with full power of substitution, to vote
the shares of the undersigned in Hubbell Incorporated at the annual meeting of
its shareholders and at any adjournment thereof upon the matters set forth in
the notice of meeting and Proxy Statement dated March 21, 1997 and upon all
other matters properly coming before said meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS AND FOR ITEMS (2),
(3) AND (4), AND AGAINST ITEM (5) UNLESS A CONTRARY SPECIFICATION IS MADE, IN
WHICH CASE IT WILL BE VOTED IN ACCORDANCE WITH SUCH SPECIFICATION.
PLEASE FILL IN, DATE AND SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY IN
THE ACCOMPANYING ENVELOPE.
(Continued and to be signed on the other side.)
<PAGE> 42
Please mark
your votes / X /
as this
FOR SHARES OF CLASS A COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL THE
NOMINEES IN ITEM 1, AND FOR ITEMS 2, 3 AND 4 AND AGAINST ITEM 5
ITEM 1 -- ELECTION OF DIRECTORS
G. RATCLIFFE, E. BROOKS, G. EDWARDS, J. HOFFMAN,
H. McDONELL, A. McNALLY IV, D. MEYER, J. URQUHART, M. WALLOP
FOR all nominees listed WITHHOLD AUTHORITY
above, (except as marked to vote for all nominees
to the contrary below). listed above.
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
ITEM 2 -- Ratification of the selection of
Price Waterhouse as independent accountants
for the year 1997. / / / / / /
ITEM 3 -- Amendment to the Company's Stock
Option Plan. / / / / / /
ITEM 4 -- Adoption of the Company's
Performance Unit Plan. / / / / / /
ITEM 5 -- Shareholder Proposal on
Board Diversity. / / / / / /
</TABLE>
Signature(s) Date
------------------------------------------------- -----------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR HEREON. PERSONS SIGNING
IN A REPRESENTATIVE CAPACITY SHOULD INDICATE THEIR CAPACITY.
<PAGE> 43
HUBBELL INCORPORATED
Proxy Solicited on Behalf of the Board of Directors
For Annual Meeting of Shareholders, May 5, 1997
(For Shares of Class B Common Stock)
PROXY
The undersigned hereby appoints each of G. J. RATCLIFFE and RICHARD W.
DAVIES as proxies of the undersigned, with full power of substitution, to vote
the shares of the undersigned in Hubbell Incorporated at the annual meeting of
its shareholders and at any adjournment thereof upon the matters set forth in
the notice of meeting and Proxy Statement dated March 21, 1997 and upon all
other matters properly coming before said meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS AND FOR ITEMS (2),
(3) AND (4), AND AGAINST ITEM (5) UNLESS A CONTRARY SPECIFICATION IS MADE, IN
WHICH CASE IT WILL BE VOTED IN ACCORDANCE WITH SUCH SPECIFICATION.
PLEASE FILL IN, DATE AND SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY IN
THE ACCOMPANYING ENVELOPE.
(Continued and to be signed on the other side.)
<PAGE> 44
Please mark
your votes / X /
as this
FOR SHARES OF CLASS B COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL THE
NOMINEES IN ITEM 1, AND FOR ITEMS 2, 3 AND 4, AND AGAINST ITEM 5
ITEM 1 -- ELECTION OF DIRECTORS
G. RATCLIFFE, E. BROOKS, G. EDWARDS, J. HOFFMAN,
H. McDONELL, A. McNALLY IV, D. MEYER, J. URQUHART, M. WALLOP
FOR all nominees listed WITHHOLD AUTHORITY
above, (except as marked to vote for all nominees
to the contrary below). listed above.
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
ITEM 2 -- Ratification of the selection of
Price Waterhouse as independent accountants
for the year 1997. / / / / / /
ITEM 3 -- Amendment to the Company's
Stock Option Plan. / / / / / /
ITEM 4 -- Adoption of the Company's
Performance Unit Plan. / / / / / /
ITEM 5 -- Shareholder Proposal on
Board Diversity. / / / / / /
</TABLE>
Signature(s) Date
------------------------------------------------- -----------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR HEREON. PERSONS SIGNING
IN A REPRESENTATIVE CAPACITY SHOULD INDICATE THEIR CAPACITY.
