SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant ( X )
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of Commission Only (as permitted by Rule 14a-
6(e)(2))
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-
12
JUSTIN INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
...........................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
( X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14 a-6(i)(1), 14a-6(i)(2) or
Investment Company Act Rule 20a-1(c).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
================================================================================
March 11, 1996
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Justin Industries, Inc. The meeting will be held on the 12th Floor of the Fort
Worth Club Building, 306 West Seventh Street, Fort Worth, Texas at 10:30 a.m. on
Thursday, April 11, 1996.
The Notice of Meeting and Proxy Statement on the following pages cover the
formal requirements for the business of the meeting. Whether or not you find it
possible to attend the meeting personally, we hope you will have your stock
represented by signing your proxy exactly as your name appears thereon and
returning it promptly.
We will have a social period prior to the meeting, beginning at 10:00 a.m.,
to provide an opportunity for shareholders to talk informally with our Officers
and Directors.
Sincerely yours,
/S/ John Justin
JOHN JUSTIN
Chairman of the Board and
Chief Executive Officer
================================================================================
JUSTIN INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING THURSDAY, APRIL 11, 1996
10:30 a.m.
TO THE SHAREHOLDERS OF JUSTIN INDUSTRIES, INC.:
Notice is hereby given that the annual meeting of the shareholders of Justin
Industries, Inc., a Texas corporation, will be held at 10:30 a.m., Thursday,
April 11, 1996, on the 12th Floor of the Fort Worth Club Building, 306 West
Seventh Street, Fort Worth, Texas, for the following purposes:
1. To elect a board of nine (9) directors.
2. To approve the Justin Industries, Inc. 1996 Non-Employee Director
Stock Option Plan.
3. To transact such other business as may properly be brought before
the meeting or any adjournments or postponements thereof.
Only Shareholders of record at the close of business on February 28, 1996,
are entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
Shareholders are invited to attend the meeting. Whether or not you expect
to attend, WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE. If you attend the meeting, you may vote your
shares in person, after revoking your proxy.
If your shares are held of record by a broker, bank or other nominee and you
wish to attend the meeting, you should obtain a letter from the broker, bank or
other nominee confirming your beneficial ownership of the shares and bring it to
the meeting. In order to vote your shares at the meeting, you must obtain from
the record holder a proxy issued in your name.
Regardless of how many shares you own, your vote is very important. Please
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TODAY.
BY ORDER OF THE BOARD OF DIRECTORS
Jon M. Bennett
Secretary
March 11, 1996
================================================================================
JUSTIN INDUSTRIES, INC.
P. O. Box 425
2821 West Seventh Street
Fort Worth, Texas 76101
________________
PROXY STATEMENT
_______________
ANNUAL MEETING OF SHAREHOLDERS
April 11, 1996
This Proxy Statement is furnished by Justin Industries, Inc., a Texas
corporation (the "Company"), to the holders of outstanding shares of the Common
Stock, par value $2.50 per share, of the Company (the "Common Stock") in
connection with the solicitation of proxies by the Company for use at the annual
meeting of shareholders (the "Meeting") to be held on April 11, 1996, and at any
and all adjournments or postponements thereof. This Proxy Statement and the
enclosed proxy card are first being mailed to shareholders on or about March 11,
1996.
THE MEETING
Record Date, Quorum and Voting
The Board of Directors (the "Board") has established the close of business on
February 28, 1996 as the record date (the "Record Date") for determining
shareholders entitled to notice of and to vote at the Meeting or any
adjournments or postponements thereof. At the close of business on such record
date, there were 26,631,503 shares of Common Stock and 100 shares of Series Two
Convertible Voting Preferred Stock, par value $2.50 per share (the "Preferred
Stock"), issued and outstanding. Each shareholder of Common Stock or Preferred
Stock will be entitled to one vote for each such share held by him at the close
of business on such record date, and the holders of issued and outstanding
shares having a majority of the votes entitled to be cast at the Meeting must be
represented in person or by proxy in order to constitute a quorum.
Shares represented by the enclosed proxy card will be voted in accordance
with the directions indicated thereon, or, if no direction is indicated, in
accordance with the recommendations of the Board contained in this Proxy
Statement as to all shares represented by that proxy card. Any shareholder
executing and delivering the enclosed proxy card may revoke such action by duly
executing a later-dated proxy or an instrument expressly revoking the proxy, or
by declaring its revocation at the Meeting. The persons named as proxies in the
proxy card were selected by the Board and are currently directors of the
Company.
Management knows of no matters to be presented for action at the Meeting
other than those specified in this Proxy Statement and the accompanying Notice
of Annual Meeting. Should any other matter properly come before the Meeting,
proxies will be voted upon these other matters in accordance with the best
judgment of the persons voting such proxies.
Page 1
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ELECTION OF DIRECTORS
Directors of the Company may be elected by vote of the holders of a majority
of the outstanding Common Stock and Preferred Stock, voting together as a single
class, who are represented at the meeting in person or by proxy, as long as a
quorum is present. A shareholder's abstention from voting or a non-vote by such
shareholder's broker will therefore be counted in determining whether such a
majority vote was cast only if such shareholder is so represented (either in
person or by proxy) at the Meeting. Abstentions or broker non-votes by or on
behalf of shareholders not so represented will be disregarded. Each director
nominee so elected will hold office until such nominee's successor has been
elected and qualified. The proxies given to the persons named in the enclosed
proxy card will be voted for the election of the nominees listed below. In case
of the inability of any of the nominees to serve, such proxies will be voted for
the balance of those named and for substitute nominees, but the Board now knows
of no reason to anticipate that any substitutions will occur. Directors elected
at the Meeting cannot be removed prior to the next annual meeting except by a
majority vote of the shareholders at any meeting at which a quorum of
shareholders is present.
The Board unanimously recommends a vote FOR the nominees listed below.
The Board has the responsibility for establishing broad corporate policies
and for the overall performance of the Company, although it is not involved in
day-to-day operations. Members of the Board are kept informed of the Company's
business by various reports and documents sent to them each month, as well as by
operating and financial reports made by the Chairman and other officers at Board
and Committee meetings. During 1995, the Board held four meetings.
The Board has appointed an Audit Committee consisting of three non-employee
directors, Messrs. Friedman, Glaze and Tucker. This Committee is responsible
for matters relating to accounting policies and practices, financial reporting
and internal controls. Each year it recommends to the Board the appointment of
a firm of independent accountants to examine the financial statements of the
Company. The Committee reviews with representatives of the independent
accountants the scope of the examination of the Company's financial statements,
results of that examination and any recommendations with respect to internal
controls and financial matters. In fulfilling its responsibility, it
periodically meets with and receives reports from the Company's management. The
Audit Committee met twice in 1995.
The Compensation Committee of the Board consists of two non-employee
directors, Messrs. Friedman and Gearhart. This Committee sets the compensation
of all elected officers, administers the Company's Stock Option Plans, including
the granting of awards under the Plans (except for the Director Plan), and
recommends awards of discretionary bonuses, based on earnings or other
performance criteria, for approval by the full Board. The Compensation
Committee met four times in 1995.
Each member of the Board attended 100% of all meetings of the Board, except
for Mr. Roach who attended 75% of all of the Board meetings. Each member of the
Board attended 100% of all meetings of the Committees on which he served.
The names of the Board's director nominees, the year that each nominee first
became a director and certain other information about each nominee are set forth
below:
Page 2
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First
Name, Age and Business Principal Occupation Elected
Address During the Last Five Years Director
------------------------- ------------------------------ --------
John Justin (79) Chairman of the Board and Chief 1968
Justin Industries, Inc. Executive Officer of the Company
2821 West Seventh Street
Fort Worth, Texas 76107
J. T. Dickenson (66) President and Chief Operating 1991
Justin Industries, Inc. Officer of the Company; prior to
2821 West Seventh Street December 1991, Executive Vice-
Fort Worth, Texas 76107 President of the Company
Bayard H. Friedman (69) President of Bayard H. Friedman, 1969
500 Throckmorton Street Inc., Investment Adviser; of
Fort Worth, Texas 76102 counsel in the law firm of
Friedman, Young & Suder; prior
to December 1992, Senior
Chairman, Team Bank, successor
to Texas American Bank-Fort
Worth, N.A. (a commercial bank);
also a director of Texas
Utilities Company (a public
utility)
Marvin Gearhart (68) Chairman of the Board and Chief 1981
7601 Will Rogers Blvd. Executive Officer of Rock Bit
Fort Worth, Texas 76134 International, Inc. (a
manufacturer of drilling bits)
Robert E. Glaze (76) Personal investments; also a 1969
8111 Preston Road director of Calloway's Nursery,
Suite 707 Inc. (a retail nursery)
Dallas, Texas 75225
Dee J. Kelly (67) Shareholder and director of the 1986
2500 Texas Commerce Tower law firm of Kelly, Hart &
201 Main Street Hallman (a professional
Fort Worth, Texas 76102 corporation); also a director of
AMR Corp. (an airline holding
company)
Joseph R. Musolino (58) Vice Chairman of NationsBank of 1986
NationsBank of Texas, N.A. Texas (a commercial bank);
700 Louisiana Street director of Pool Energy
Houston, Texas 77002 Services, Inc. (an energy
services company); and a
director of Paragon Group, Inc.
(a real estate investment trust)
John V. Roach (57) Chairman and Chief Executive 1982
Tandy Corporation Officer, Tandy Corporation (a
1900 One Tandy Center consumer electronics company)
Fort Worth, Texas 76102
Page 3
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Dr. William E. Tucker (63) Chancellor, Texas Christian 1981
Texas Christian University University; also a director of
2800 South University Dr. Tandy Corporation
Sadler Hall, Room 327
Fort Worth, Texas 76109
APPROVAL OF THE JUSTIN INDUSTRIES, INC. 1996 NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN
Subject to approval of the Company's shareholders, the Board adopted the
Justin Industries, Inc. 1996 Non-Employee Director Stock Option Plan (the
"Director Plan") at a meeting on September 18, 1995. The Director Plan will
become effective upon its approval by the shareholders. Approval of the
Director Plan requires the affirmative vote of the holders of a majority of the
outstanding Common Stock and Preferred Stock, voting together as a single class,
represented in person or by proxy, as long as a quorum is present. Abstensions
by or on behalf of shareholders will be treated as a vote against the Director
Plan. Broker non-votes on behalf of shareholders will be disregarded. The
proxies given to the persons named in the enclosed proxy card will be voted for
approval of the Director Plan.
The purpose of the Director Plan is to promote the interests of the
Company, its subsidiary companies and its shareholders by helping to attract and
retain highly qualified independent directors. The Board believes that the
Director Plan is in the best interest of the Company.
The Board unanimously recommends a vote FOR approval of the Director Plan.
The principal features of the Director Plan are described below. This
description is qualified by reference to the text of the Director Plan, attached
as Annex A to the Proxy Statement.
Common Stock that may be issued pursuant to options granted under the
Director Plan shall not exceed two hundred thousand (200,000) shares in the
aggregate. Stock issuable upon the exercise of any option may be authorized but
unissued shares or shares of Common Stock reacquired by the Company.
The Director Plan shall be administered by the Compensation Committee of the
Board (the "Committee"); however, the Committee will have no discretion as to
the selection of the non-employee directors to whom options are to be granted,
the timing of such grants, the number of shares subject to any option, the
exercise price of any option, the periods during which any option may be
exercised and the term of any option. The determination of the Board (or the
Committee) on all matters relating to the Director Plan or any agreement
relating thereto shall be conclusive and final.
Directors of the Company who are not employees of the Company or any
subsidiary of the Company are eligible to participate in the Director Plan.
Currently seven (7) directors are eligible to participate in the Director Plan.
Under the Director Plan, beginning with the Company's Annual Meeting, and on
an annual basis thereafter, each eligible director in office on the first day on
which the Common Stock is publicly traded after the annual meeting of the
Company's shareholders or any special meeting held in lieu thereof, will
automatically receive an option to purchase three thousand (3,000) shares of
Company Common Stock. The exercise price of each share of Company Common Stock
subject to an option will be the fair market value (as defined in the Director
Plan) of a share of Company Common Stock on the date the option is granted.
Upon the exercise of any option, the optionee shall pay the exercise price for
the shares being purchased either (a) in cash or (b) by delivery to the
Company, duly endorsed, shares of Company Common Stock having a fair market
value on the date received by the Company equal to the exercise price.
Page 4
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Each option shall have a term of ten (10) years from the grant date, but
shall not be exercisable earlier than one year after the grant date. However,
upon the cessation of a participant's status as a director of the Company for
any reason (except as a result of the employment of such participant by the
Company or a subsidiary company or as a result of the participant's death), the
participant may exercise any outstanding portion of his or her otherwise
exercisable options within the shorter of the remaining option term or three
months from the date he or she ceases to be a non-employee director. If a
participant's service as a director terminates as the result of becoming an
employee of the Company or a subsidiary company, the period during which such
participant may exercise any otherwise exercisable portion of his or her
outstanding options shall not exceed the shorter of the remaining option term or
one year from the date of such employment. If a participant's service as a
director terminates as the result of participant's death, the participant (or
his or her legal representative) may exercise any outstanding portion of his or
her options within the shorter of the remaining option term or one year from the
date of such death, regardless of the one year vesting requirement.
The Director Plan shall terminate on, and no option shall be granted under
the Director Plan after, the date that occurs ten (10) years after the Director
Plan's effective date. The Board may also terminate the Director Plan or make
such modifications or amendments to the Director Plan as it shall deem
advisable; provided, however, that the Board may not (a) without the affirmative
vote of the holders of a majority of the outstanding shares entitled to vote on
such issues: (i) increase the maximum number of shares for which options may be
granted under the Director Plan either in the aggregate or to any Participant,
(ii) change the provisions of the Director Plan regarding the determination of
the option exercise price, (iii) extend the period during which any options may
be granted or remain outstanding, (iv) change the requirements as to the class
of persons eligible to receive options, or (v) make any other amendment to the
Director Plan for which shareholder approval is required pursuant to any
applicable law or rule, and (b) without the consent of the affected
Participant(s) make any change that would adversely affect grants of options
theretofore made.
The exercise price and the number of shares covered by outstanding options,
as well as the limitation on the aggregate number of shares that may be issuable
under the Director Plan shall be adjusted to prevent any dilution or enlargement
of the rights of the holders of such options that would otherwise result from
any reorganization, stock split, reverse stock split, stock dividend,
combination of shares, merger, consolidation, or any other similar change in the
capital structure of the Company.
The Director Plan is not subject to any provisions of ERISA, nor is the
Director Plan a qualified plan within the meaning of Section 401(a) of the Code.
New Plan Benefits
Director Plan. As of February 28, 1996, the fair market value of a share of
Company Common Stock as reported on The NASDAQ Stock Market was $11.125. No
options have yet been granted under the Director Plan; however, it is estimated
that on the date of the Annual Meeting each Company non-employee director will
receive an option to purchase three thousand (3,000) shares of Company Common
Stock. The following chart sets forth the name, position, and grant information
for currently eligible directors.
Number of Shares
Underlying Each
Name and Position Dollar Value $ Grant of Options
--------------------- --------------------- ---------------------
Bayard H. Friedman, Director (a) 3,000
Marvin Gearhart, Director (a) 3,000
Robert E. Glaze, Director (a) 3,000
Dee J. Kelly, Director (a) 3,000
Joseph R. Musolino, Director (a) 3,000
John V. Roach, Director (a) 3,000
Dr. William E. Tucker, Director (a) 3,000
Page 5
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(a) The respective dollar value of each stock option to be granted under the
Director Plan depends on the exercise price of such stock option and the
fair market value of Company Common Stock at the time of exercise of such
stock option and thus is not determinable at this time.
Certain Federal Income Tax Effects
The grant of a nonqualified option to a director under the Director Plan
will not result in taxable income to the holder of the option ("optionee") or a
deduction to the Company.
When an optionee exercises a nonqualified option, the difference between
the option price and any higher fair market value of the shares of the Company
Common Stock on the date of exercise will be ordinary income to the optionee and
will be allowed as a deduction for federal income tax purposes to the Company.
Any gain or loss by an optionee on disposition of the Company Common Stock
acquired upon exercise of a nonqualified option will be capital gain or loss to
such optionee, long-term or short-term depending on the holding period, and will
not result in any additional tax consequences to the Company. The optionee's
basis in the shares for determining gain or loss on the disposition will be the
fair market value of such shares determined generally at the time of exercise.
Special rules may apply to a participant who is subject to Section 16 of
the Securities Exchange Act. Certain additional special rules apply if the
exercise price for an option is paid in shares of Company Common Stock
previously owned by the optionee rather than in cash and if the award is held,
following the death of an optionee, by the executors of the optionee's estate.
The foregoing discussion summarizes the federal income tax consequences of
the Director Plan based on current provisions of the Code which are subject to
change. The summary does not cover any foreign, state or local tax consequences
of participation in the Director Plan.
Compliance With Section 16(a) Of The Securities Exchange Act
Section 16(a) of the Securities Exchange Act requires the Company's officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission
("SEC") and the National Association of Securities Dealers, Inc. ("NASD").
Officers, directors and greater than ten percent shareowners are required by SEC
regulation to furnish the Company with copies of all Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such forms it has
received and written representations from certain reporting persons that they
were not required to file Forms 5 for specified fiscal years, the Company
believes that all its officers, directors, and greater than ten percent
beneficial owners complied with all filing requirements applicable to them with
respect to transactions during 1995.
Page 6
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VOTING SECURITIES OUTSTANDING
The following table provides information as to the beneficial ownership of
the Company's Common Stock by each director, the Chief Executive Officer and the
four other most highly compensated executive officers, all directors and
executive officers as a group, and each other person who beneficially owns 5% or
more of the outstanding Common Stock as of the Record Date. In addition, John
Justin owns all the 100 outstanding shares of the Company's Preferred Stock.
Shares of Percent
Common Stock of
Name and Address Beneficially Common
of Beneficial Owner Owned Stock
-------------------- -------------- -------
John Justin 5,154,444 (1) 19.33%
J. T. Dickenson 615,402 (2) 2.31
Bayard H. Friedman 13,500 .05
Marvin Gearhart 4,374 .02
Robert E. Glaze 3,532 .01
Dee J. Kelly 280,225 (3) 1.05
Joseph R. Musolino 2,250 .01
John V. Roach 6,750 .03
Dr. William E. Tucker 18,450 .07
Richard J. Savitz 162,330 (4) .61
Edward L. Stout, Jr. 280,057 (5) 1.05
Frank A. Scivetti 62,572 (6) .23
c/o Justin Industries, Inc.
2821 West Seventh Street
Fort Worth, Texas 76107
All Directors and Executive Officers
as a Group (14 persons) 6,773,869 (7) 25.41
Holders of More Than 5% of the Common
Stock: 5,154,444 (1) 19.33
John Justin
Justin Industries, Inc.
2821 West Seventh Street
Fort Worth, Texas 76107
Justin Industries, Inc. Employee Stock
Ownership Plan 2,921,717 (8) 10.96
c/o Merrill Lynch, as Trustee
265 Davidson Avenue, Fourth Floor
Somerset, New Jersey 08873
Pioneering Management Corporation 1,429,000 5.36
60 State Street
Boston, MA 02109
Page 7
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(1) Includes 4,655,799 of which Mr. Justin is owner of record and
beneficially; 790 shares of which Mr. Justin has a vested interest
pursuant to the Justin Industries, Inc. Employee Stock Ownership Plan (the
"ESOP"); 95,128 shares with respect to which Mr. Justin holds currently
exercisable stock options; 2,826 shares which Mr. Justin may acquire upon
conversion of the 100 shares of Preferred Stock held by him; and 399,901
shares owned beneficially by reason of Mr. Justin's position as Trustee of
a charitable trust.
(2) Includes 131,328 shares of which Mr. Dickenson is owner of record and
beneficially; 4,214 shares of which Mr. Dickenson's wife is owner of
record and beneficially to which Mr. Dickenson disclaims beneficial
ownership; 23,559 shares of which Mr. Dickenson has a vested interest
pursuant to the Company's ESOP; 56,400 shares with respect to which Mr.
Dickenson holds presently exercisable stock options; and 399,901 shares
owned beneficially by reason of Mr. Dickenson's position as Trustee of the
charitable trust referred to in (1) above.
(3) Includes 123,400 shares of which Mr. Kelly is owner of record and
beneficially; 90,364 shares owned by the Dee Kelly Corporation with
respect to which Mr. Kelly disclaims beneficial ownership of 30% or 27,109
shares by virtue of the equity interest of Mr. Kelly's three children in
this corporation; and 24,615 shares owned by Kelly Group Investors (a
partnership) of which Mr. Kelly disclaims beneficial ownership of 58.5% or
14,409 shares because of the percentage of this partnership owned by his
three children.
(4) Includes 95,360 shares of which Mr. Savitz is owner of record and
beneficially; 31,270 shares of which Mr. Savitz has a vested interest
pursuant to the Company's ESOP; and 35,700 shares with respect to which
Mr. Savitz holds presently exercisable stock options.
(5) Includes 176,170 shares of which Mr. Stout is owner of record and
beneficially; 16,000 shares of which Mr. Stout's wife is owner of record
and beneficially to which Mr. Stout disclaims beneficial ownership; 33,287
shares of which Mr. Stout has a vested interest pursuant to the Company's
ESOP; and 54,600 shares with respect to which Mr. Stout holds presently
exercisable stock options.
(6) Includes 9,514 shares of which Mr. Scivetti is owner of record and
beneficially; 24,558 shares of which Mr. Scivetti has a vested interest
pursuant to the Company's ESOP; and 28,500 shares with respect to which
Mr. Scivetti holds presently exercisable stock options.
(7) Includes 136,885 shares in which a vested interest is owned pursuant to
the Company's ESOP and 316,528 shares with respect to which currently
exercisable stock options are held. Directors and executive officers
disclaim any beneficial ownership of shares which are beneficially owned
by family members.
(8) The shares of Common Stock held by the Company's ESOP will be voted by
Merrill Lynch Pierce Fenner & Smith, as Trustee of the ESOP, which will
exercise its independent fiduciary judgment as Trustee to act solely in
the interests of the ESOP's participants, taking into account, among other
facts, the provisions of the ESOP to the effect that shares as to which no
voting instructions are received from ESOP participants are to be voted in
the same proportion as are shares for which voting instructions are
received.
Page 8
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COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid during each of the last three years to the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers, based on salary and bonus earned during 1995.
Long-Term All Other
Compen- Compen-
Annual Compensation sation sation
-------------------------------------------
Awards
-------------
No. of
Securities
Name and Underlying
Principal Position Year Salary Bonus Options (b)
- -------------------------------------------------------------------------------
John Justin 1995 $550,000 $175,000 7,500 $ 4,410
Chairman of the Board & 1994 525,000 250,000 7,500 4,410
Chief Executive Officer 1993 475,000 275,000 7,500 2,909
J. T. Dickenson 1995 320,000 160,000 6,000 4,410
President & Chief Operating 1994 305,000 225,000 6,000 4,410
Officer 1993 275,000 225,000 6,000 2,909
Richard J. Savitz 1995 195,000 80,000 5,000 4,410
Vice President - Finance 1994 185,000 115,000 5,000 4,410
and Treasurer 1993 170,000 120,000 5,000 2,909
Edward L. Stout, Jr. 1995 240,000 250,000 5,000 4,410
Vice President - Brick 1994 225,000 250,000 5,000 4,410
1993 200,000 225,000 5,000 2,909
Frank A. Scivetti 1995 215,000 35,000 5,000 4,410
Vice President - Footwear 1994 205,000 50,000 5,000 4,410
(a) 1993 190,000 200,000 5,000 2,909
(a) Mr. Scivetti was elected an Executive Officer of the Company in March 1994.
Since March 1993, Mr. Scivetti has been Chief Executive Officer of the
Company's Footwear operations. Prior to March 1993, Mr. Scivetti served as
President of the Company's Tony Lama division.
(b) Amounts include Company ESOP matching contributions paid or accrued on
behalf of each executive officer of $3,750 in 1995, $3,750 in 1994, and
$2,249 in 1993. In addition, $660 is reflected in each year and for each
named executive officer representing Company paid premiums for $100,000 of
term life insurance coverage.
Page 9
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Option Grants During 1995
The following table provides information related to options granted to the
named executive officers during 1995.
Potential
Individual Grants Realizable
- -------------------------------------------------------- Value
No. of % of at Assumed
Securi- Total Exer- Annual Rates
ties Options cise of Stock
Under- Granted or Base Price Appre-
lying to Price ciation for
Options Employ- Per Expira- Option Term (d)
Granted ees Share tion -----------------
Name (a)(b) in 1995 (c) Date 5% 10%
- -------------------------------------------------------- -----------------
John Justin 7,500 4.7% $11.00 12/12/05 $51,884 $131,484
J. T. Dickenson 6,000 3.7 11.00 12/12/05 41,507 105,187
Richard J. Savitz 5,000 3.1 11.00 12/12/05 34,589 87,656
Edward L. Stout, Jr. 5,000 3.1 11.00 12/12/05 34,589 87,656
Frank A. Scivetti 5,000 3.1 11.00 12/12/05 34,589 87,656
(a) Options vest at 20% per year on the first through the fifth anniversary
dates of the grant. If the optionee dies or retires from the Company for
reasons of age or disability, the Compensation Committee may approve the
exercise of all options, whether or not currently vested. In addition, in
the event of a dissolution or liquidation of the Company or a merger or a
consolidation in which the Company is not the surviving corporation, each
optionee has the right to exercise all options granted at least one year
prior to the event, whether or not vested.
(b) Options granted are for a term of 10 years, subject to earlier termination
in certain events related to termination of employment.
(c) All options above were granted at market value at date of grant. The
exercise price and tax withholding obligations related to exercise may be
paid by cash, delivery of already owned shares, offset of the underlying
shares, or a combination of any of the foregoing, subject to certain
conditions in the case of current stock holdings.
(d) Gains are reported net of the option exercise price, but before taxes
associated with the exercise. These gains are calculated based on the
stated assumed rates of appreciation. Actual gains, if any, on stock
option exercises are dependent on the future performance of the Common
Stock, overall stock market conditions, as well as the optionholders'
continued employment through the vesting period. The amounts reflected in
this table may not be necessarily achieved.
Page 10
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Option Exercises During 1995 and Year End Option Values
The following table provides information related to options exercised and
options available at year end to the named executive officers.
No. of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Fiscal Options at
Shares Year-End Fiscal Year-End
Acquired Value --------------------------------------
on Realized Exer- Unexer- Exer- Unexer-
Name Exercise (a) cisable cisable cisable cisable
- -------------------------------------------------------------------------------
John Justin --- $ --- 95,128 33,000 $515,333 $55,500
J. T. Dickenson --- --- 56,400 25,200 297,767 37,700
Richard J. Savitz --- --- 35,700 22,000 166,323 37,000
Edward L. Stout, Jr. --- --- 54,600 22,000 297,592 37,000
Frank A. Scivetti --- --- 28,500 17,600 126,624 16,900
(a) Market value of underlying securities at exercise date minus the exercise
price, not reduced for taxes payable upon exercise.
Pension Plan Table
The following table provides information related to the Company's defined
benefit pension plan in which the named executive officers participate.
Average
Compen-
sation Years of Service
- ---------- ------------------------------------------------------------------
15 20 25 30 35 40 50
------------------------------------------------------------------
$125,000 $23,438 $31,250 $39,063 $46,875 $54,688 $62,500 $78,125
150,000 28,125 37,500 46,875 56,250 65,625 75,000 93,750
175,000 32,500 43,438 54,375 65,313 76,250 87,188 109,063
200,000 36,875 49,375 61,875 74,375 86,875 99,375 115,236
225,000 41,250 55,313 69,375 83,438 97,500 111,563 115,236
250,000
and up 43,147 57,887 72,627 87,367 102,107 115,236 115,236
Compensation covered by the plan includes salary, bonus and deferred
compensation payments up to $150,000 per participant in 1995. Gains realized
upon exercise of stock options are not covered. The estimated credited years of
service for each of the named executive officers is as follows: Mr. Justin -
59; Mr. Dickenson - 21; Mr. Savitz - 16; Mr. Stout - 46; and Mr. Scivetti - 13.
The normal retirement benefit, at age 65, is calculated based upon each
employee's years of service and final average compensation, reduced by
anticipated social security benefits. Benefit payments are computed using the
straight life annuity method. Certain reductions are made for employees
electing alternative payment options or early retirement. The maximum annual
benefit payable by the Pension Plan to any one employee upon retirement is
limited to $115,236 in 1995, except for Mr. Justin's benefit. Mr. Justin's
benefit was determined under special phase-in rules of the Tax Reform Act of
1986. Payments to Mr. Justin began in April 1988 under minimum distribution
requirements in the annual amount of $114,600. Payments will continue until the
death of either Mr. or Mrs. Justin, with 66.67% thereof payable for the life of
the survivor.
Page 11
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Executive Supplemental Retirement, Death and Disability Income Benefit Program
and Supplemental Executive Retirement Plan of 1992
The Executive Supplemental Retirement, Death and Disability Income Benefit
Program and Supplemental Executive Retirement Plan of 1992 (the "Supplemental
Programs") are applicable to selected key employees of the Company and its
divisions or subsidiaries, including all named executives. Under the
Supplemental Programs, the Company will pay to each named executive upon
retirement, death or disability an estimated $25,000 per year for a period of
ten years. The Supplemental Programs are partially funded by life insurance
policies covering certain participants, with the Company paying all costs of the
policies. The insurance policies covering named executives are designed so that
if assumptions made as to mortality, policy dividends and certain other factors
are realized, the Company will recover substantially all premium payments plus a
factor for the use of the Company's money. The Company is the owner of all such
policies. Mr. Justin's maximum benefits under the Supplemental Programs are
reduced by benefits payable under his employment contract.
Compensation of Directors
Directors who are not also employees of the company are paid $1,250 per month
for each month they serve as a director, $500 per directors' meeting attended
and $500 per committee meeting attended as members of the Audit or Compensation
Committees. In addition, if approved by the shareholders at the Annual Meeting,
each director will annually receive nonqualified stock options on 3,000 shares
of Company Common Stock.
Employment and Severance Contracts
Mr. Justin and the Company have entered into an employment contract,
effective from December 1, 1994 until November 30, 1997, under which Mr. Justin
is to receive an annual salary of not less than $525,000 and is to render such
duties for the Company as are assigned by the Board, subject to certain
limitations. The employment contract may be terminated by the Company if Mr.
Justin resigns, dies, becomes disabled or is discharged for cause. If Mr.
Justin should die or suffer a long-term disability during the term of the
contract, he, his widow or his estate, as applicable, is entitled to receive 50%
of his then current salary, which is currently set at $575,000, for one year.
The Company has severance agreements with four of the five named executive
officers (John Justin did not enter into a severance agreement). The form of
agreement for these executives provides that, in the event of a termination of
the executive's employment with the Company within 24 months following a Change
in Control (as hereinafter defined), the Company will promptly pay to the
executive a lump-sum cash payment equal to three times the average annualized
compensation (including base salary and bonuses or incentives) earned by the
executive for the most recent five taxable years before such Change in Control,
not to exceed the limitations provided in section 280G of the Internal Revenue
Code of 1986, as amended, for Messrs. Dickenson, Savitz, and Stout. Mr.
Scivetti's agreement provides for a lump sum cash payment equal to one year's
current base salary. Each severance agreement has a term of one year, which may
be extended or terminated under certain conditions. As of December 31, 1995,
the maximum payments under such agreements for each named executive officer
would be as follows: Mr. Dickenson -- $1,326,000; Mr. Savitz -- $799,500; Mr.
Stout -- $1,173,000; and Mr. Scivetti -- $215,000.
As used in the severance agreements, a "Change in Control" means any of the
following events: (i) a merger or consolidation to which the Company is a party
if the individuals and entities who were shareholders of the Company immediately
prior to the effective date of such merger or consolidation have beneficial
ownership of less than 50% of the total combined voting power for election of
directors of the surviving corporation following the effective date of such
merger or consolidation, (ii) unless previously approved by a majority of the
Continuing Directors (as defined below), the acquisition of direct or indirect
beneficial ownership in the aggregate of securities of the Company representing
20% or more of the total combined voting power of the Company's then issued and
outstanding securities by any person, entity or group of associated persons or
entities acting in concert, other than any employee benefit plan of the Company
or any subsidiary of the Company or any entity holding such securities pursuant
to the terms of any such plan or Mr. Justin, (iii) the sale of all or
substantially all of the assets of the Company to any person or entity that is
not a wholly-owned subsidiary of the Company, (iv) the approval by the
shareholders of the Company of any plan or proposal for the liquidation of the
Company or (v) a change in the composition of the Board. For purposes of this
clause, "Continuing Directors" means those members of the Board who were either
(a) directors at the beginning of such 24-month period or (b) were elected by,
or on the nomination or recommendation of, at least two-thirds of the then-
existing Board.
Page 12
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Report of the Compensation Committee of the Board of Directors on Executive
Compensation
The Compensation Committee of the Board has furnished the following report on
executive compensation:
Under the direction of the Compensation Committee of the Board, the
Company has developed and administers compensation policies and plans
that are intended to enhance the profitability of the Company, and thus
shareholder value, by aligning closely the financial interests of its
officers and key executives with those of its shareholders.
Remuneration in 1995 for each of the Company's officers consisted of a
base salary, annual discretionary bonus and awards of options to
purchase Company stock, which become exercisable in annual twenty
percent increments and expire after ten years. The discretionary
incentive bonus component was determined in light of the Company's
operating results compared to its financial performance goals. The
Committee, however, had complete discretion in determining all
remuneration amounts (including whether any annual discretionary
incentive bonus or stock option awards are made and, if so, the amounts
thereof) regardless of whether corporate or individual performance
goals are achieved. The Committee exercised its complete discretion in
setting total compensation for 1995.
In evaluating the Company's performance for purposes of setting the
salary and incentive compensation of the Chief Executive Officer and
the Company's other officers, the Committee gave first consideration to
company-wide performance in terms of sales and earnings, and
secondarily has taken special note of management's success in achieving
near record levels of earnings in the Building Materials segment in
markets with less available business than 1994, while maintaining its
strengths in market share despite diminished sales of footwear
products. The Committee viewed all the foregoing items as elements of
company, and not individual, performance. Salary and other
compensation decisions for each officer were based primarily on overall
Company performance, except in the case of the Vice President -- Brick,
whose compensation is based primarily on the performance of Acme Brick
Company, and in the case of the Vice President -- Footwear, whose
compensation is based primarily on the performance of the Footwear
companies.
Although, as stated above, the Committee considered Company
performance as the primary factor in its compensation decisions, the
Committee also considered individual performance. The Committee,
however, neither quantified individual performance nor related
individual performance to any specific goals or targets. Based on its
evaluation of individual performance, the Committee believes that the
Company's officers are dedicated to achieving significant improvements
in long-term financial performance and that the compensation policies,
plans and methods the Company has implemented and administered have in
the past contributed and will continue to contribute to achievement of
these goals in the future. The Committee considered such dedication as
an element of each officer's past and present performance. The
Committee believes that dedication is an intangible element and cannot
be measured; therefore, the Committee does not apply any specific
weighting of this element in relation to total compensation.
Immediately prior to the end of each year, the Committee reviews with
the Chief Executive Officer and the Company's human resources executive
and approves an annual salary plan for the ensuing year. The Committee
considers an officer's total compensation in establishing each element
of compensation.
Annual base salaries are based primarily upon a review of past and
present corporate and individual performance, with reference to salary
data in similar-sized corporations in all industries and in
manufacturing industries, so that such salaries are generally
competitive. The survey data used by the Committee was selected due to
its consistent inclusion of a large number of companies of comparable
size. The Committee also reviewed subsets of this data including All
Industry and All Manufacturing summaries. In addition, Mr. Justin's
employment agreement requires that his annual base salary equal or
exceed $525,000. The Committee has complete discretion in setting Mr.
Justin's compensation above this amount and in setting the compensation
of the other four named executive officers (none of whom have
employment agreements with the Company).
Page 13
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Annual discretionary incentive bonus payments in 1995 were based on
the Company's projected year-end operating results versus the financial
performance goals established at the beginning of the year. Financial
goals consisted primarily of sales and net income targets. Strategic
and management performance are also considered. Strategic performance
consists principally of such factors as new product development, new
business initiatives and increasing market share. Management
performance criteria include productivity and quality improvement,
management development, environmental management and control of
casualty losses. In exercising its discretion with respect to the
annual discretionary incentive amounts, the Committee reviewed
achievement of these performance goals and determined the amount of
bonus awards, if any. The Committee did not, however, use any
predetermined formula or assign any specific weight to the various
factors in awarding such bonuses. The bonuses awarded each year to the
Company's officers appear as "Bonus" compensation in the Summary
Compensation Table on page 9.
In determining the Chief Executive Officer's discretionary bonus
amount for 1995, the Committee considered its evaluation of the
Company's performance in an economic climate less favorable to the
Company's businesses than the prior year, both on an absolute basis and
relative to the performance of similar companies in similar industries.
In determining the bonuses for 1995 for the other officers, the
Committee reviewed with the Chief Executive Officer and the human
resources executive the recommendations of management based on
individual performance and factors comparable to those considered in
establishing the award for the Chief Executive Officer.
With respect to stock option awards, it is the Company's belief that
grants of options to purchase common stock of the Company, at the
market price in effect on the day prior to the date of such grant, has
successfully focused the Company's officers and other key executives on
building profitability and shareholder value. In determining the
grants of stock options to the officers, including the Chief Executive
Officer, the Committee reviewed and recommended individual awards,
taking into account the same qualitative and quantitative factors
discussed above in connection with awarding discretionary incentive
compensation. The Committee does not consider the number of options
already outstanding in determining option awards.
Finally, it is anticipated that all such compensation will be fully
deductible by the Company for federal income tax purposes under Section
162 of the Internal Revenue Code.
The foregoing report has been furnished by the members of the Board's
Compensation Committee.
Bayard H. Friedman
Marvin Gearhart
The foregoing report of the Compensation Committee shall not be deemed
incorporated by reference in any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
Page 14
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STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Stock during the five years
ended December 31, 1995 with the cumulative total return on the NASDAQ Index and
a derived peer group index comprised of companies in the footwear and building
materials industries. The comparison assumes $100 was invested on December 31,
1990 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
CRSP
Justin Peer Group Total Return
------------ ------------ ------------
1990 100 100 100
1991 137 140 196
1992 428 223 228
1993 344 349 262
1994 281 283 256
1995 264 319 362
The broad market index selected for comparison is the CRSP Total Return Index
for The NASDAQ Stock Market (U.S. Companies). The peer group used in the
performance graph above consists of six companies -- three in the footwear
industry and three in the building materials industry. This index is based on
the cumulative total return of each company, assuming reinvestment of dividends,
weighted according to the respective issuer's stock market capitalization at the
beginning of each year and weighted by industry to the Company's actual ratio of
footwear to building materials sales each year. Management believes weighting
by industry is relevant since the ratio of sales by industry within the Company
from year-to-year is subject to the cyclical nature of the building materials
business. The companies used in the peer group index are as follows:
Footwear Building Materials
------------------ ------------------
Genesco, Inc. Elcor Corporation
Timberland Company Morgan Products
Brown Group Republic Gypsum
The foregoing chart shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Page 15
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NationsBank of Texas participates with three other banks in a $52,000,000
revolving credit agreement with the Company. Mr. Joseph R. Musolino, a director
of the Company, is Vice Chairman of NationsBank of Texas. At December 31, 1995,
$22,000,000 was outstanding to the Company under the credit agreement, of which
NationsBank of Texas provided $10,153,800. In addition, NationsBank of Texas
participates with two other banks in a $21,000,000 term loan agreement with the
Company, of which $8,820,000 was owed to NationsBank of Texas at December 31,
1995. During 1995, the Company paid or accrued approximately $1,355,000 in
interest and fees to NationsBank of Texas.
The law firm of Kelly, Hart & Hallman, a professional corporation, of which
Mr. Dee J. Kelly, a director of the Company, is a shareholder and director,
acted as the Company's principal outside legal counsel in 1995 and is continuing
to do so in 1996.
OTHER MATTERS
The Solicitation
The cost of solicitation of proxies will be borne by the Company. Proxies
may be solicited by mail, advertisement, telephone and in person. Directors and
employees of the Company may, without additional compensation, make
solicitations through personal contact or by telephone or telegraph, and
arrangements may be made with brokerage houses or other custodians, nominees and
fiduciaries to send proxy material to their principals. The Company will
reimburse any such persons for their reasonable expenses.
Auditors
Ernst & Young LLP, the Company's independent public accountants for the past
twenty-four years, has been selected by the Board as the Company's independent
public accountants for the current year. Representatives of Ernst & Young LLP
are expected to be present at the Meeting and will be available to respond to
appropriate questions. They will have an opportunity to make a statement if
they desire to do so.
Annual Report
A copy of the Company's 1995 Annual Report is being mailed to shareholders
contemporaneously with the mailing of this Proxy Statement.
Page 16
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Proposals to be Presented at the 1997 Annual Meeting of Shareholders
Any qualified shareholder of the Company wishing to present a proposal for
consideration by all shareholders at the annual meeting currently scheduled to
be held on March 21, 1997, must notify the Company by November 11, 1996 to have
the proposal considered for inclusion in the Proxy Statement and form of proxy
related to that meeting. Any such notification should be addressed to the
Corporate Secretary, Justin Industries, Inc., P. O. Box 425, Fort Worth, Texas
76101. Any such proposal must comply in all respects with the rules and
regulations of the Securities and Exchange Commission.
By Order of the Board of Directors
/S/ John Justin
JOHN JUSTIN
Chairman of the Board and
Chief Executive Officer
March 11, 1996
Page 17
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ANNEX A
JUSTIN INDUSTRIES, INC. 1996
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE. The purpose of this plan (the "Plan") is to promote the
interests of Justin Industries, Inc., its subsidiary companies and its
shareholders by helping to attract and retain highly qualified independent
directors. The Plan shall be interpreted and implemented such that the
eligible directors will not fail, by reason of the Plan or its
implementation, to be "disinterested persons" within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, as such Rule and such Act may
be amended.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms, when used in the Plan, shall have the meanings set forth
in this Section:
(a) "Board" shall mean the board of directors of the Company.
(b) "Company" shall mean Justin Industries, Inc., a Texas corporation, or
its successor.
(c) "Director" shall mean any member of the Board.
(d) "Fair Market Value" shall mean, for any date, the closing price on
such date of the Stock as reported on the NASDAQ National Market
System or, if the Stock is not traded on such system, as reported on
any other securities exchange on which the Stock is traded, or if no
reported sales occurred on such date, on the next preceding date on
which there were reported sales.
(e) "Grant Date" shall mean the first day on which the Stock is publicly
traded after the annual meeting of the Company's shareholders or any
special meeting held in lieu thereof; provided, however, that the
first Grant Date shall be the Grant Date occurring after that
shareholders' meeting held during 1996.
(f) "Non-Employee Directors" shall mean Directors who are not also
employees of the Company or any subsidiary or division of the Company.
(g) "Optionee" shall mean a person granted an Option under the Plan.
(h) "Options" shall mean options granted under the Plan.
(i) "Plan" shall mean this Non-Employee Director Stock Option Plan, as set
forth herein and as amended from time to time.
(j) "Stock" shall mean shares of the Common Stock of the Company.
3. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Section 6 hereof, the Stock that may be issued pursuant to Options granted
under the Plan shall not exceed 200,000 shares in the aggregate. Stock
issuable upon the exercise of any Option may be authorized but unissued
shares or shares of Stock reacquired by the Company. Shares of Stock
subject to an Option that are not issued pursuant to the exercise of such
Option shall be available for subsequent issuance under the Plan.
4. GRANT OF OPTIONS.
(a) Only Non-Employee Directors shall be eligible to receive Options under
the Plan. On each Grant Date each Non-Employee Director holding
office on such date shall automatically receive, without the exercise
of the discretion of any person or persons, an Option under the Plan
for the purchase of 3,000 shares of Stock (subject to adjustment as
provided in Section 6 hereof). In the event that, as of a Grant Date
in any year that the Plan is in effect, there are not sufficient
shares available under the Plan to allow for the grant to each Non-
Employee Director of an Option for the number of shares provided
herein, each Non-Employee Director shall receive an Option for his or
her pro rata share of the total number of shares of Stock then
available under the Plan.
Page A-1
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(b) Subject to adjustment as provided in Section 6 hereof, the exercise
price of each share of Stock subject to an Option shall be equal to
the Fair Market Value of a share of Stock on the Grant Date.
(c) Each Option shall have a term of ten years from the Grant Date, but
shall not be exercisable earlier than one year after the Grant Date,
except as may be otherwise provided in Section 7(c) hereof.
5. EXERCISE OF OPTIONS. Upon the exercise of any Option, the Optionee
shall pay the exercise price for the shares being purchased either (a) in
cash or (b) by delivery to the Company, duly endorsed, shares of Stock
having a Fair Market Value on the date received by the Company equal to the
exercise price. The number of shares that are issued pursuant to the
exercise of an Option shall be charged against the maximum limitation on
shares issuable pursuant to the Plan as set forth in Section 3 hereof.
6. ADJUSTMENTS. The exercise price and the number of shares covered by
outstanding Options, as well as the limitation on the aggregate number of
shares that may be issuable under the Plan (as set out in Section 3 hereof)
shall be adjusted to prevent any dilution or enlargement of the rights of
the holders of such Options that would otherwise result from any
reorganization, stock split, reverse stock split, stock dividend,
combination of shares, merger, consolidation, or any other similar change
in the capital structure of the Company.
7. TERMINATION OF DIRECTORSHIP.
(a) Upon the cessation of an Optionee's status as a Non-Employee Director
of the Company for any reason (except as a result of the employment of
such Optionee by the Company or a subsidiary company or as a result of
the Optionee's death), the Optionee may exercise any outstanding
portion of his or her otherwise exercisable Options within the shorter
of the remaining Option term or three months from the date he or she
ceases to be a Non-Employee Director.
(b) Upon the cessation of the Optionee's status as a Non-Employee Director
as a result of such Optionee's employment by the Company or a
subsidiary company, the period during which such Optionee may exercise
any otherwise exercisable portion of his or her outstanding Options
shall not exceed the shorter of the remaining Option term or one year
from the date of such employment.
(c) Upon the death of the Optionee, the Optionee (or his or her legal
representative) may exercise any outstanding portion of his or her
Options within the shorter of the remaining Option term or one year
from the date of such death, regardless of the one year vesting
requirement of Section 4(c) hereof.
8. GENERAL PROVISIONS.
(a) Each Option grant shall be evidenced by a written instrument
containing terms and conditions consistent with the Plan.
(b) No Optionee, and no beneficiary or other persons claiming under or
through the Optionee, shall have any right, title or interest by
reason of any Option to any particular assets of the Company or any
shares of Stock allocated or reserved for the purposes of the Plan or
subject to any Option except as set forth herein. The Company shall
not be required to establish any fund or make any other segregation of
assets to assure the grant or transfer of any Option or Stock
hereunder.
(c) No Option or right under the Plan shall be subject to anticipation,
sale, assignment, pledge, encumbrance, or charge except by will or the
laws of descent and distribution, and an Option shall be exercisable
during the Optionee's lifetime only by the Optionee. Subject to the
provisions of Section 7 hereof, in the event of an Optionee's death,
his or her Options may be exercised by the Optionee's legal
representative.
(d) Notwithstanding any other provision of the Plan or agreements made
pursuant hereto, the Company shall not be required to issue or deliver
any certificate for shares of Stock under this Plan prior to
fulfillment of all of the following conditions:
(1) Any required listing, or approval for listing upon notice of
issuance, of such shares on any national market system or
securities exchange on which the Stock may then be traded;
Page A-2
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(2) Any registration or other qualification of such shares under any
state or federal law or regulation, or other qualification which
the Board shall , upon the advice of counsel, deem necessary or
advisable;
(3) The obtaining of any other required consent, approval or permit
from any state or federal governmental agency; and
(e) In no event shall the Company be required to issue a fractional share
hereunder.
(f) The issuance of shares to Optionees or to their legal representatives
shall be subject to any applicable taxes and other laws or regulations
of the United States of America or any state or commonwealth having
jurisdiction thereover. The Company may require that an Optionee
remit to the Company an amount sufficient to satisfy any tax
withholding requirements. Alternatively the Optionee may elect to
remit the tax to the Company, or to withhold Stock (valued at its Fair
Market Value on the day prior to exercise of the Option) sufficient to
satisfy all or part of an Optionee's withholding tax.
9. EFFECTIVE DATE; TERMINATION AND AMENDMENT. This Plan shall become
effective on the date of the last to occur of (i) the adoption of the Plan
by the Board and (ii) the approval by a majority of the outstanding voting
shares of stock of the Company, voted either in person or by proxy, at a
duly held shareholders' meeting. The Plan shall terminate on, and no
Option shall be granted under the Plan after, the date that occurs ten (10)
years after the Plan's effective date. The Board may also terminate the
Plan or make such modifications or amendments to the Plan as it shall deem
advisable; provided, however, that the Board may not (a) without the
affirmative vote of the holders of a majority of the outstanding shares
entitled to vote on such issues: (i) increase the maximum number of shares
for which Options may be granted under the Plan either in the aggregate or
to any Optionee (except as provided in Section 6 hereof), (ii) change the
provisions of the Plan regarding the determination of the Option exercise
price, (iii) extend the period during which any Options may be granted or
remain outstanding, (iv) change the requirements as to the class of persons
eligible to receive Options, or (v) make any other amendment to the Plan
for which shareholder approval is required pursuant to any applicable law
or rule, and (b) without the consent of the affected Optionee(s) make any
change that would adversely affect grants of Options theretofore made.
10. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board (the "Committee"). The Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall, from time to time, deem
advisable, to interpret the terms and provisions of the Plan and any
Options issued under the Plan (and any agreement relating thereto) and to
otherwise supervise the administration of the Plan.
Notwithstanding the foregoing, the selection of the Non-Employee Directors
to whom Options are to be granted, the timing of such grants, the number of
shares subject to any Option, the exercise price of any Option, the periods
during which any Option may be exercised and the term of any Option shall
be as hereinafter provided, and the Committee shall have no discretion as
to such matters. The Plan is intended to allow Non-Employee Directors to
receive Options without such Stock Options causing them to cease to be
"disinterested persons" (within the meaning of Rule 16b-3 under the
Exchange Act) with respect to other stock plans of the Company. To the
extent that any provision of the Plan or action by the Committee (or by the
Board) with respect thereto would be inconsistent with such intent, such
provision or action shall be null and void.
The determination of the Board (or such committee) on all matters relating
to the Plan or any agreement relating thereto shall be conclusive and
final. No member of the Board (or such committee) shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option.
Page A-3
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ANNEX B
P R O X Y
JUSTIN INDUSTRIES, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS - APRIL 11, 1996
THE UNDERSIGNED hereby appoints JOHN JUSTIN, BAYARD H. FRIEDMAN and DEE J. KELLY
and each of them, proxies with full power of substitution, to represent and to
vote as set forth herein all the shares of the Common Stock of Justin
Industries, Inc. held of record by the undersigned on February 28, 1996, at the
annual meeting of shareholders to be held at 10:30 a.m. local time on April 11,
1996, at the Fort Worth Club Building, 306 West Seventh Street, Fort Worth,
Texas, and any adjournment thereof.
1. Election of Directors, Nominees:
John Justin, J. T. Dickenson, Bayard H. Friedman, Robert E. Glaze,
Dee J. Kelly, Joseph R. Musolino, Marvin Gearhart, John V. Roach,
Dr. William E. Tucker,
2. Approval of the Justin Industries, Inc. 1996 Non-Employee Director Stock
Option Plan (Director Plan)
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors recommendations. The Board of Directors recommends a
vote "FOR" all nominees in Proposal 1, and "FOR" approval of Proposal 2. The
Proxies cannot vote your shares unless you sign and return this card.
It is important that you vote, date, sign, and return this Proxy promptly using
the enclosed postage prepaid envelope.
SEE REVERSE SIDE
================================================================================
X Please mark your votes as in this example.
- -----
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election 2. Director
of Plan (see
Directors _____ _____ reverse) _____ _____ _____
(see reverse)
For, except vote withheld from
the following nominee(s)
_____________________________________________
This proxy, when properly executed, will be voted in the manner directed by the
undersigned shareholder; if no direction is made this proxy will be voted "FOR"
the election of nominees listed on the reverse side, and "FOR" approval of the
Non-Employee Director Stock Option Plan. As to such other matters as may
properly come before the annual meeting, this proxy will be voted by the proxies
on the reverse hereof according to their discretion. Receipt of the notice of
the meeting and the accompanying proxy statement is hereby acknowledged.
SIGNATURE(S)____________________________________ DATE_______________________
SIGNATURE(S)____________________________________ DATE_______________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
