<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
-------------------------------------------------------------------------------
LaBarge, Inc.
-------------------------------------------------------------------------------
William J. Maender, Vice President-Finance and Secretary
Payment of filing fee by wire:
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $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:(1)
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] 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:
$125
------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
Preliminary Proxy Statement
------------------------------------------------------------------------
(3) Filing party:
LaBarge, Inc.
------------------------------------------------------------------------
(4) Date filed:
August 23, 1995
------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE> 2
NOTICE OF
1995 ANNUAL MEETING
OCTOBER 26, 1995
AND PROXY STATEMENT
<PAGE> 3
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 26, 1995
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of LaBarge, Inc. will be held at the
Adam's Mark Hotel, Fourth and Chestnut Streets, St. Louis, Missouri, on October
26, 1995, at 11:00 A.M., CDT.
At the Annual Meeting, Common Stockholders will be asked:
1. To elect eight Directors, two for a term ending in 1996, three for a
term ending in 1997 and three for a term ending in 1998, unless Proposal
2 is not adopted, in which case all for a term ending in 1996;
2. To consider and act upon a proposal to amend the Company's By-Laws to
divide the Board of Directors into three classes of as nearly equal size
as possible, with Directors in each class being elected, after an
interim period, for terms of three years;
3. To act upon a proposal to amend the Company's Certificate of
Incorporation to add a new article that requires the affirmative vote of
the holders of at least two-thirds of the voting power of the
outstanding shares to approve certain fundamental changes such as
mergers, sales of substantially all of the assets and dissolution of the
Company and amendments to or repeal of the new article;
4. To consider and act upon ratification of the LaBarge, Inc. 1995
Incentive Stock Option Plan.
5. To consider and act upon the ratification of the selection of KPMG Peat
Marwick LLP as independent accountants for 1996;
6. To transact such other business as may properly come before the meeting.
Only stockholders whose names appear of record at the Company's close of
business on September 1, 1995 (the "Record Date") are entitled to receive notice
of and to vote at the Annual Meeting or any adjournment thereof. ALL CAPITALIZED
TERMS NOT OTHERWISE DEFINED IN THIS NOTICE HAVE THE DEFINITIONS GIVEN TO THEM IN
THE ATTACHED PROXY STATEMENT.
If you receive more than one proxy card because you own shares registered
in different names or at different addresses, please complete, sign, date and
return each proxy card as soon as possible in the enclosed envelope, which needs
no postage if mailed in the United States. You must complete and return a proxy
card in order to exercise your proxy voting rights.
By Order of the Board of Directors,
WILLIAM J. MAENDER
Vice President -- Finance and
Secretary
September 20, 1995
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT
YOU INTEND TO BE PRESENT, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY CARD IN THE STAMPED AND ADDRESSED ENVELOPE ENCLOSED FOR YOUR CONVENIENCE.
STOCKHOLDERS CAN HELP THE COMPANY AVOID UNNECESSARY EXPENSE AND DELAY BY
PROMPTLY RETURNING THE ENCLOSED PROXY CARD. THE PRESENCE, IN PERSON OR BY
PROPERLY EXECUTED PROXY, OF A MAJORITY OF THE COMMON STOCK OUTSTANDING ON THE
RECORD DATE IS NECESSARY TO CONSTITUTE A QUORUM AT THE ANNUAL MEETING.
<PAGE> 4
LABARGE, INC.
707 NORTH SECOND STREET
POST OFFICE BOX 14499
ST. LOUIS, MO 63178-4499
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 26, 1995
This Proxy Statement is being furnished to the Common Stockholders of
LaBarge, Inc. (the "Company") on or about September 26, 1995 in connection with
the solicitation of proxies on behalf of the Board of Directors of the Company
for use at the annual meeting of stockholders (the "Annual Meeting") to be held
on October 26, 1995 at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting, and at any adjournment or postponement of
that meeting.
Holders of shares of common stock, par value $.01 per share (the "Common
Stock") of the Company at its close of business on September 1, 1995 (the
"Record Date") will be entitled to receive notice of and vote at the Annual
Meeting. On the Record Date 15,232,746 shares of Common Stock were outstanding.
Holders of Common Stock are entitled to one vote per share of Common Stock they
held of record on the Record Date on each matter that may properly come before
the Annual Meeting.
A plurality of votes of Common Stockholders cast at the Annual Meeting is
required for the election of each Director. The proposed amendments to the
Company's Certificate of Incorporation and By-Laws and approval of the 1995
Incentive Stock Option Plan, respectively, require the affirmative vote of
stockholders holding a majority of the shares of Common Stock entitled to vote
at the Meeting. Ratification of the selection of independent accountants
requires the affirmative vote of Stockholders holding a majority of the shares
of Common Stock voted at the Annual Meeting.
Management of the Company (the "Management"), together with members of the
Board of Directors of the Company, in the aggregate directly or indirectly
controls approximately 39.5% of the Common Stock outstanding on the Record Date.
Stockholders of record on the Record Date are entitled to cast their votes
in person or by properly executed proxy at the Annual Meeting. The presence, in
person or by properly executed proxy, of a majority of the Common Stock
outstanding on the Record Date is necessary to constitute a quorum at the Annual
Meeting. If a quorum is not present at the time the Annual Meeting is convened,
the Company may adjourn or postpone the Annual Meeting. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business. Abstentions are counted in tabulations
of the votes cast on proposals presented to stockholders, whereas broker
non-votes are not counted for purposes of determining whether a proposal has
been approved. Under applicable Delaware law, an abstention or broker non-vote
will have no effect on the outcome of the election of directors or on Proposals
4 and 5. Broker non-votes and abstentions will be the equivalent of negative
votes on Proposals 2 and 3.
All Common Stock represented at the Annual Meeting by properly executed
proxies received prior to or at the Annual Meeting and not properly revoked will
be voted at the Annual Meeting in accordance with the instructions indicated in
such proxies. If no instructions are indicated, such proxies will be voted FOR
election of the Board's nominees as directors and FOR Proposals 2 through 5, and
at the discretion of the named proxies on any other matters that may come before
the Meeting. The Board of Directors of the Company does not know of any matters
other than the matters described in the Notice of Annual Meeting attached to
this Proxy Statement that will come before the Annual Meeting.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the Annual Meeting, a written
notice of revocation bearing a date later than the date of the proxy, (ii) duly
executing a subsequent proxy relating to the Common Stock and delivering it to
the Secretary of the Company at or before the Annual Meeting, or (iii) attending
the Annual Meeting and voting in person (although attendance at the
2
<PAGE> 5
Annual Meeting will not in and of itself constitute a revocation of a proxy).
Any written notice revoking a proxy should be sent to: Corporate Secretary,
LaBarge, Inc., 707 North Second Street, St. Louis, Missouri 63102 [telephone
number (314) 231-5960].
The proxies are solicited by the Board of Directors of the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone, facsimile transmission or telegraph, by Directors, officers or
regular employees of the Company. The cost of solicitation of proxies will be
borne by the Company.
A copy of the Company's Annual Report for the fiscal year ended July 2,
1995 is being mailed to each stockholder along with this Proxy Statement.
THE DATE OF THIS PROXY STATEMENT IS SEPTEMBER 20, 1995.
PROPOSAL 1: ELECTION OF DIRECTORS
A Board of Directors of eight members is to be elected at the Annual
Meeting. If Proposal 2 is adopted by the stockholders at the Annual Meeting, the
Board of Directors will be divided into three classes, designated as Class A,
Class B and Class C, with terms expiring on the dates of the 1996, 1997 and 1998
Annual Meetings of Stockholders, respectively, and in each case when their
successors have been elected and qualified. The nominees for election as
Directors have been assigned to the following Classes: Class A, Craig E. LaBarge
and James P. Shanahan, Jr.; Class B, R. Hal Dean, J. C. Kuhn, Jr. and Edward J.
Nestor, Jr.; and Class C, Gus G. Casten, Richard P. Conerly and Pierre L.
LaBarge, Jr. The nominees receiving the greatest number of votes at the Annual
Meeting will be elected.
If Proposal 2 is not adopted by the stockholders, all Directors elected at
the Annual Meeting will be elected for a term of one year, to serve until the
Annual Meeting of Stockholders in 1996 and until their successors are elected
and qualified.
The nominees for election as Directors at the Annual Meeting set forth in
the table below are all incumbent Directors. Each of the nominees has consented
to serve as a Director if elected. Unless authority to vote for any of the
Directors is withheld in a proxy, it is intended that each proxy will be voted
FOR such nominees. In the event that any of the nominees for Director should,
before the Annual Meeting, become unable to serve if elected, it is intended
that shares represented by proxies which are executed and returned will be voted
for such substitute nominees as may be recommended by the Company's existing
Board of Directors. The accompanying form of Proxy contains a discretionary
grant of authority with respect to this matter. To the best of the Company's
knowledge, all nominees will be available to serve.
The following biographical information is furnished with respect to each of
the eight nominees for election at the Annual Meeting.
<TABLE>
<CAPTION>
TERM
EXPIRATION DIRECTOR POSITIONS WITH THE
DATE AGE SINCE COMPANY
---------- --- -------- ------------------------------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION AS CLASS A
DIRECTORS
Craig E. LaBarge..................... 1996 44 1981 Chief Executive Officer,
President and Director
James P. Shanahan, Jr................ 1996 34 1987 Director
NOMINEES FOR ELECTION AS CLASS B
DIRECTORS
R. Hal Dean.......................... 1997 78 1981 Director
J. C. Kuhn, Jr....................... 1997 55 1989 Executive Vice President,
Chief Operating Officer and
Director
Edward J. Nestor, Jr................. 1997 70 1972 Director
NOMINEES FOR ELECTION AS CLASS C
DIRECTORS
Gus G. Casten........................ 1998 70 1971 Director
Richard P. Conerly................... 1998 71 1975 Director
Pierre L. LaBarge, Jr................ 1998 70 1967 Chairman Emeritus and Director
</TABLE>
3
<PAGE> 6
EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES FOR DIRECTOR
The following table sets forth certain information, as of September 1,
1995, with respect to the executive officers, directors whose term of office
will continue after the Annual Meeting and nominees for directors of the
Company:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
----------------------------------- --- ---------------------------------------------------
<S> <C> <C>
Pierre L. LaBarge, Jr.............. 70 Chairman Emeritus and Director
Craig E. LaBarge................... 44 Chief Executive Officer, President and Director
J. C. Kuhn, Jr..................... 55 Executive Vice President, Chief Operating Officer
and Director
William J. Maender................. 49 Vice President -- Finance, Treasurer & Secretary
Gus G. Casten...................... 70 Director
Richard P. Conerly................. 71 Director
R. Hal Dean........................ 78 Director
Edward J. Nestor, Jr............... 70 Director
James P. Shanahan, Jr.............. 34 Director
</TABLE>
Pierre L. LaBarge, Jr. is the founder of the predecessor of the Company and
Chairman of the Board. On July 1, 1995, Mr. LaBarge retired from day-to-day
business operations. He will remain as Chairman Emeritus. Mr. LaBarge has been a
Director since 1967.
Craig E. LaBarge is the son of Pierre L. LaBarge, Jr. He assumed the
positions of Chief Executive Officer and President in August 1991. Prior to that
time, he was Vice President -- Marketing of the Electronics Division of the
Company (October 1975 to September 1979), President of the Electronics Division
of the Company (September 1979 to present), Vice President of the Company
(January 1981 to August 1986) and President and Chief Operating Officer of the
Company (August 1986 to August 1991). He has been a Director since 1981.
Mr. Kuhn assumed his current position with the Company in August 1991. He
has been Executive Vice President -- Operations of the Electronics Division of
the Company for more than five years and was Vice President -- Operations of the
Company (August 1986 to August 1991). He has been a Director since 1989.
Mr. Maender joined the Company in February 1984. He has been Vice President
-- Finance, Treasurer and Secretary for more than five years.
Dr. Casten became a Director in 1971 and serves as a member of the Human
Resources Committee of the Board of Directors. He is retired and was formerly a
physician with Montclair Cardiology Associates, P.A., Birmingham, Alabama.
Mr. Conerly became a director in 1975 and serves as a member of the Audit
Committee of the Board of Directors. He was formerly Chairman and Chief
Executive Officer of Orion Capital Inc. (a private company) from 1987 to 1994;
President of Pott Industries Inc., St. Louis, Missouri, a marine services
company, from 1969 to 1987; and Vice Chairman of Coal-Marine, Houston Natural
Gas Corporation, parent company of Pott Industries Inc., from 1979 to 1985. Mr.
Conerly is also a director of Mercantile Bancorporation, Inc. and Kellwood
Company, an apparel manufacturer.
Mr. Dean became a Director in 1981 and serves as a member of the Audit and
Human Resources Committees of the Board of Directors. He has been retired for
more than the past five years and was formerly Chairman of the Board, President
and Chief Executive Officer of Ralston Purina Company.
Mr. Nestor became a Director in 1972 and serves as a member of the Audit
Committee of the Board of Directors. Mr. Nestor joined the predecessor of the
Company in 1961 and served as Executive Vice President -- Finance and Treasurer
from 1975 to June 1987, Secretary from June 1985 to June 1988 and Senior Vice
President -- Administration from June 1987 to June 1988. Mr. Nestor retired as
an officer and employee of the Company in June 1988.
4
<PAGE> 7
Mr. Shanahan became a Director in 1987 and serves as a member of the Audit
and Human Resources Committees of the Board of Directors. He has been Executive
Vice President and General Counsel of Pacholder Associates, Inc., an investment
advisory firm, since April 1986. He was engaged in the private practice of law
from May 1984 to April 1986. Mr. Shanahan is also a director of USF&G Pacholder
Fund, Inc.
The Board of Directors of the Company held six meetings in fiscal 1995. The
Company has a standing Audit Committee of its Board of Directors, which held
four meetings in fiscal 1995. This Committee performed the following principal
functions: (i) reviewed financial statements with the Company's chief financial
officer and independent accountants, (ii) reviewed the independent accountants'
"management letters," and (iii) approved the appointment of the independent
accountants for fiscal 1995. The Company also has a standing Human Resources
Committee of its Board of Directors, which held four meetings in fiscal 1995.
This Committee performs the principal function of acting as a compensation
committee. The Company has no standing nominating committee or any committee
which performs similar functions. Each Director attended at least 75% of the
meetings of the Board and its Committees on which he served in fiscal 1995.
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of
the Chief Executive Officer and the four other most highly compensated
executives who served in such capacities as of July 2, 1995, for the fiscal
years indicated.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION(1)
-------------------------------
ANNUAL
COMPENSATION AWARDS
--------------------------- --------------------- PAYOUTS
OTHER RESTRICTED ------- ALL
ANNUAL STOCK OPTIONS/ LTIP OTHER
NAME AND FISCAL SALARY BONUS COMP. AWARDS SARS PAYOUTS COMP.
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($) ($)(2) (#)(2) ($) ($)(3)
----------------------------- ------ -------- ------- ------ ---------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Craig E. LaBarge............. 1995 $230,000 $ 43,00 0 0 40,000 0 $ 20,003
CEO & President 1994 222,702 0 0 0 65,000 0 21,732
1993 190,581 46,000 0 0 0 0 21,998
Pierre L. LaBarge, Jr. (4)... 1995 175,000 0 0 0 0 0 112,310
Chairman Emeritus 1994 178,365 0 0 0 0 0 110,116
1993 177,886 20,000 0 0 0 0 104,726
J. C. Kuhn, Jr............... 1995 170,000 23,000 0 0 20,000 0 21,570
Executive Vice 1994 167,154 0 0 0 30,000 0 0 23,202
President & COO 1993 153,346 30,000 0 0 0 23,676
William J. Maender........... 1995 150,000 19,000 0 0 15,000 0 18,467
Vice President-Finance, 1994 146,769 0 0 0 20,000 0 22,338
Secretary & Treasurer 1993 136,785 22,000 0 0 0 0 19,791
J. Barry Pipkin.............. 1995 129,269 0 0 0 0 0 20,934
Vice President 1994 128,261 0 0 0 10,000 0 34,046
1993 121,715 20,000 0 0 0 0 21,732
</TABLE>
-------------------------
(1) Includes compensation amounts earned during the fiscal years shown but
deferred pursuant to individual deferred compensation agreements with the
Company.
(2) No SARs were granted during the fiscal year.
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<PAGE> 8
(3) Includes the following by individual for the fiscal year ended July 2, 1995:
<TABLE>
<CAPTION>
SPLIT $ DEFERRED
LIFE COMPENSATION COMPANY MATCH ON
NAME PREMIUM(A) EARNINGS 401(K) DEFERRALS
-------------------------------------------- ---------- ------------ ----------------
<S> <C> <C> <C>
Craig E. LaBarge............................ $ 20,003 $ 0 $ 0
Pierre L. LaBarge, Jr....................... 112,310 0 0
J. C. Kuhn, Jr.............................. 21,570 0 0
William J. Maender.......................... 16,702 0 1,675
J. Barry Pipkin............................. 19,243 0 1,691
</TABLE>
------------------------------
(a) By agreement, these "split dollar life" premiums will be substantially
recovered upon the surrender of the policy or death of the executive.
(4) Mr. P. L. LaBarge retired July 1, 1995. For the Company's benefit, he has
signed a long-term consulting agreement with the Company. In consideration
of the agreement, the Company has loaned to Mr. LaBarge $600,000 which is
covered by a 15-year interest-free note. In the event of certain conditions
or upon the death of Mr. LaBarge, the note is due on demand.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth all stock options granted to the named
executives during the fiscal year ended July 2, 1995.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE AT
----------------------------------------------------- ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
OPTIONS/ OPTIONS/SARS PRICE APPRECIATION
SARS GRANTED TO EXERCISE OR FOR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -------------------
NAME (#)(A) FISCAL YEAR ($/SH) DATE(B) 5%($) 10%($)
--------------------------------- -------- ------------ ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Craig E. LaBarge................. 40,000 34.8% $1.4438 8/24/99 $ 9,252 $26,796
Pierre L. LaBarge................ 0 -- -- -- -- --
J. C. Kuhn, Jr................... 20,000 17.4% 1.3125 8/24/04 16,508 41,834
William J. Maender............... 15,000 13.0% 1.3125 8/24/04 12,381 31,375
J. Barry Pipkin.................. 0 -- -- -- -- --
</TABLE>
-------------------------
(a) No SARs were granted during the fiscal year.
(b) The date of exercisability of the options granted in fiscal 1995 is August
24, 1996.
AGGREGATE OPTION EXERCISES AND YEAR END OPTION VALUES
The following table sets forth all stock options exercised by the named
executives during the fiscal year ended July 2, 1995 and the number and value of
unexercised options held by such executives at fiscal year end.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED "IN THE MONEY"
NO. SHARES OPTIONS AT YEAR END OPTIONS AT YEAR END(A)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED(B) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Craig E. LaBarge.......... 35,000 $35,840 0 105,000 $ 0 $98,061
Pierre L. LaBarge, Jr. ... 0 0 0 0 0 0
J. C. Kuhn, Jr. .......... 23,000 45,195 0 50,000 0 52,500
William J. Maender........ 0 0 15,000 35,000 23,850 36,563
J. Barry Pipkin........... 0 0 13,000 10,000 20,670 11,250
</TABLE>
-------------------------
(a) Options are "in the money" if the market value of the shares covered thereby
is greater than the option exercise price. Market value of a share at July
2, 1995 was $2.25.
(b) Value realized is the difference between market value of a share on the
exercise date and the exercise price per share, times the number of shares
exercised.
6
<PAGE> 9
EMPLOYEE RETIREMENT BENEFIT PLAN
The Company maintains an Employees Savings Plan (the "Benefit Plan"). The
Benefit Plan allows an employee to contribute up to the lesser of 15% of his or
her taxable compensation or an amount equal to $9,240 (which amount is adjusted
each year). The Company matches such contributions at the rate of 50% of the
first $25 contributed per month plus 25% of the excess. Company matching
contributions are not made with respect to employee contributions in excess of
8% of an employee's taxable compensation. The Benefit Plan covers all Company
employees who meet minimum length of service requirements, are at least 21 years
of age and elect to participate. The Benefit Plan allows participants to elect
that their contributions be invested in Common Stock. Since July 1, 1990, the
Company match is required to be invested in Common Stock. In addition, the
Company may contribute a discretionary amount each year, dependent on profits,
which will be allocated to the accounts of eligible employees in proportion to
compensation regardless of whether the eligible employees elect to participate
in and contribute to the Plan. No such discretionary contributions were made or
accrued in fiscal 1994 or 1995.
RETIREMENT SAVINGS PLAN
On August 15, 1991, the Board of Directors approved a Management Retirement
Savings Plan which is an unfunded, non-qualified retirement savings plan for
certain key employees (totaling 15 executives and other employees). The
Management Retirement Savings Plan allows eligible employees to defer
compensation in excess of the limitations under the Internal Revenue Code for
401(k) plans. Such deferrals will earn an annual rate of interest of 2% over the
prime interest rate and provide a life annuity with a 15-year term, certain
retirement benefit based on the amount deferred by each individual. The earnings
rates ranged from 9.25% to 11% during fiscal 1995; 8% in fiscal 1994 and 1993;
and 11% in fiscal 1992. A lump sum survivor benefit equal to or greater than the
account balance is payable in the event of death prior to retirement. In
conjunction with this Plan, the Company purchases life insurance policies on
those individuals making deferrals, with the Company as beneficiary. The
proceeds of such policies will be used to recover premiums paid and provide the
survivor benefits under the Plan. The Company paid premiums in fiscal 1995 of
$123,620 for such insurance.
HUMAN RESOURCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
LaBarge, Inc. has had an independent Human Resources Committee (the
"Committee") since 1981. The Committee is made up of three outside directors
appointed annually by the Board of Directors (the "Board"). The principal
responsibilities of the Committee include the following:
- review and recommend to the Board the annual salary, incentive
compensation and other benefits of the chief executive officer and other
members of executive management.
The Company's compensation practices are designed to achieve certain
fundamental objectives, including:
- to attract and retain talented key executives;
- to set competitive compensation levels;
- to provide incentives which focus performance on the achievement of
Company objectives; and
- to align executive compensation with the interests of the stockholders.
To assist the Committee, the Company has, for more than ten years,
contracted with an independent compensation and benefits consulting firm. This
firm periodically evaluates each of the key management positions within the
Company. The evaluation is based upon such criteria as the size and scope of the
job, specific technical and managerial skills required, and the impact of the
specific job on Company results.
Using the evaluations of each job and data on the compensation practices of
over 500 industrial companies in the U.S., the consultants recommend ranges for
both base salary and bonus opportunity. The range for base salary is wide (plus
or minus 20% from a mid-point) to accommodate a variety of individual criteria,
including competitive factors and specific job performance over time. The
recommended range for bonus opportunity is also wide, plus or minus 50% from a
mid-point. The Committee believes that executives
7
<PAGE> 10
should be paid a base salary that is within the recommended range. Actual bonus
payments may range from zero to the recommended high point or greater.
Each year the CEO makes recommendations to the Committee regarding proposed
salary changes and bonus payments, if any. The recommendations, and the
Committee's evaluation of them, are based upon a variety of criteria including
profit performance to plan, cash flow, debt reduction, customer development, the
accomplishment of specific important objectives such as the 1992
recapitalization, and many subjective factors. All of these factors were
considered in determining the salary and bonuses for 1995. Since the management
team is small, this approach has worked well and has been adequate to achieve
the stated objectives.
Committee members: R. Hal Dean, Chairman
G. G. Casten
James P. Shanahan, Jr.
VOTING SECURITIES AND OWNERSHIP THEREOF BY CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Set forth below is information as of September 1, 1995, concerning all
persons known to the Company to be beneficial owners of more than 5% of the
Common Stock outstanding on the Record Date, and ownership of Common Stock
beneficially owned by each Director and nominee for Director of the Company, and
all executive officers and Directors as a group (unless otherwise indicated,
such ownership represents sole voting and sole investment power).
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES PERCENT
BENEFICIAL OWNERS(1) BENEFICIALLY OWNED OF CLASS
-------------------------------------------------------- ------------------ --------
<S> <C> <C>
Gus G. Casten........................................... 272,443 1.8%
Richard P. Conerly...................................... 51,704 *
R. Hal Dean............................................. 108,621 *
J. C. Kuhn, Jr. ........................................ 107,217(7) *
Pierre L. LaBarge, Jr. ................................. 4,098,987(2)(3)(4)(5) 26.9%
Craig E. LaBarge........................................ 4,131,972(3)(4)(5)(6)(7) 18.1%
(8)(9)(10)(11)
William J. Maender...................................... 1,172,678(5)(7)(12) 7.7%
Edward J. Nestor, Jr. .................................. 26,591(13) *
James P. Shanahan, Jr. ................................. 80,000 *
All executive officers and directors as a group (9
persons).............................................. 6,069,548 39.5%
</TABLE>
-------------------------
* Less than 1%.
(1) The address of each executive officer and Director is c/o LaBarge, Inc.,
707 North Second Street, St. Louis, MO 63102.
(2) Includes 1,196,000 shares owned in Pierre L. LaBarge, Jr.'s individual
capacity. The remaining 2,902,987 shares represent shared voting and shared
investment power.
(3) Includes 456,500 shares owned by L B Investment Company, the directors of
which are Pierre L. LaBarge, Jr.; Pierre L. LaBarge, III; Craig E. LaBarge
and Mark J. LaBarge. The three latter-named LaBarges are sons of Pierre L.
LaBarge, Jr.
(4) Includes 1,368,809 shares held by a revocable living trust for Pierre L.
LaBarge, Jr. of which trust Pierre L. LaBarge, Jr. and Craig E. LaBarge are
the co-trustees and in which shares Mr. Craig E. LaBarge disclaims
beneficial ownership.
(5) Includes 1,077,678 shares held in the Benefit Plan as to which the three
members of the Benefit Plan administrative committee have shared voting
power; comprising an aggregate of 313,148 shares which are held in accounts
of executive officers of the Company and an aggregate of 764,530 shares
which are held in accounts of other employees of the Company.
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<PAGE> 11
(6) Includes 400,000 shares held by a trust for the former wife of Pierre L.
LaBarge, Jr., of which trust Craig E. LaBarge, Mark J. LaBarge, and Pierre
L. LaBarge, III are the co-trustees and in which shares the co-trustees
disclaim beneficial ownership.
(7) Includes options exercisable within 60 days for the following number of
shares under the 1987 and 1993 Incentive Stock Option Plans: J. C. Kuhn,
Jr. -- 30,000; Craig E. LaBarge -- 65,000; William J. Maender -- 35,000;
all executive officers and directors as a group -- 130,000.
(8) Includes 30,422 shares held by six trusts, one for each of Pierre L.
LaBarge, Jr.'s six grandchildren, of which trusts Craig E. LaBarge, Mark J.
LaBarge and Pierre L. LaBarge, III are the co-trustees and in which shares
the co-trustees disclaim beneficial ownership.
(9) Includes 70,548 shares held by Craig E. LaBarge's spouse in her name,
34,000 shares held in her IRA, and 342 shares as custodian for their two
minor children. Craig E. LaBarge disclaims beneficial ownership of these
shares.
(10) Includes 18,172 shares held by a trust for two minor children of Craig E.
LaBarge, of which trust Craig E. LaBarge and Mark J. LaBarge are
co-trustees and in which shares the co-trustees disclaim beneficial
ownership.
(11) Includes 590,501 shares owned in Craig E. LaBarge's individual capacity.
(12) Includes 60,000 shares owned in William J. Maender's individual capacity.
(13) Includes 15,816 shares owned in Edward J. Nestor, Jr.'s individual
capacity, 10,263 shares of Common Stock owned by his spouse and 512 shares
held as custodian for three minor children. Mr. Nestor disclaims beneficial
ownership of all but the shares owned in his individual capacity.
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<PAGE> 12
PERFORMANCE GRAPHS
Five-Year Total Return. The following graph compares the cumulative total
stockholder return (stock price appreciation plus dividends) on the Company's
Common Stock with the cumulative total return of the American Stock Exchange
Market value and a peer group.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG LABARGE, INC., THE AMEX MARKET VALUE INDEX AND A PEER GROUP
<TABLE>
<CAPTION>
LB AMEX PEER GROUP
-- ---- ----------
<S> <C> <C> <C>
100 100 100
1991 150 99 114
1992 400 105 113
1993 133 120 133
1994 238 117 144
1995 450 138 208
</TABLE>
* $100 INVESTED ON 06/30/90 IN STOCK OR INDEX --
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
The peer group consists of the following companies selected on the basis of
their market capitalization and similarity of businesses: AEL Industries, Inc.;
Miltope Group, Inc.; Sparton Corporation; Tech Sym Corporation; Esterline
Technologies Corporation; EDO Corporation; Whittaker Corporation; Cubic
Corporation; GRC International, Inc. and Aydin Corporation.
PROPOSALS NO. 2 AND 3: ANTI-TAKEOVER PROPOSALS
There have been a number of cases in which public companies have been
subjected to hostile takeover attempts -- offers not determined to be in the
best interests of a targeted company by its Board of Directors -- through
purchases of control by means of tender offers or other purchases of outstanding
shares. Such purchases which result in the acquisition of less than all of the
targeted company's outstanding shares often have been followed by a
non-negotiated merger or other form of complete unilateral acquisition of the
remaining shares by the company. In some instances, a purchaser has used its
controlling interest either to effect other transactions having an adverse
impact on the company or to direct the company's business without purchasing the
remaining minority interest.
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<PAGE> 13
The Board believes that circumstances could exist where a hostile takeover
attempt would be detrimental to the Company's stockholders and that, to fulfill
its fiduciary duty, it needs adequate time to evaluate the matter. The
suddenness and short time period inherent in hostile takeover attempts may not
allow the Board adequate time to: (i) consider fully the proposal; (ii) identify
other viable alternatives; (iii) compare the proposal to the possible
alternatives; and (iv) make a determination recommending acceptance or rejection
of the proposal or expressing no opinion and remaining neutral. An informed
decision with respect to a hostile takeover attempt requires careful assessment
and consideration of often-complex issues regarding the proposal's "fairness and
adequacy," including but not limited to its tax implications for stockholders,
all in comparison with other alternatives which are or may become available.
The Board also believes that holders of shares not purchased pursuant to
the initial takeover offer may be faced with substantial inequities either
because they did not tender their shares in a timely manner or the offer did not
allow all the Company's shares to be tendered.
While the Board has no knowledge of any specific effort to accumulate the
Company's Common Stock or to obtain control of the Company by other means, it
believes that it is prudent to be prepared in advance and, for that reason, it
has carefully considered what measures might be taken to protect against
takeover attempts which the Board is unable to recommend as being in the best
interests of the Company and its stockholders.
The principal purpose of Proposals 2 and 3 (collectively, the "Amendments")
is to attempt to influence persons who might wish to make a bona fide offer for
the Company to negotiate in good faith with the Board and to ensure that any
offer is fair to the Company and its stockholders, and to emphasize that the
Directors have a significant degree of authority with respect to the protection
of the Company.
Proposal 3, which requires the affirmative vote of two-thirds of the
outstanding shares entitled to vote to approve certain business combinations, is
designed to make it more difficult for a person making a hostile takeover
attempt to obtain shareholder approval for a business combination, particularly
in transactions not recommended for stockholder approval by the Board of
Directors as fair to the Company and its stockholders.
The overall effect of the adoption of Proposals 2 and 3 could, under
certain circumstances, be to deter or discourage hostile takeover attempts by
making it more difficult for a person who has gained a substantial equity
interest in the Company effectively to exercise control. Because of this, the
opportunity for stockholders to dispose of their shares at the higher prices
generally available in takeover attempts may be limited. In addition, the
proposed Amendments may result in the then incumbent Directors of the Company
retaining their positions even though a person holding a majority of shares
might desire a change. Such Amendments also may make the accomplishment of
certain corporate transactions more difficult even if they are desired by a
person holding a majority of the shares.
The Board has concluded unanimously that the potential benefits of the
proposed Amendments outweigh the possible disadvantages.
PROPOSAL 2: AMENDMENT TO BY-LAWS
TO PROVIDE FOR CLASSIFIED BOARD OF DIRECTORS
GENERAL
The Company's Board of Directors has unanimously approved an amendment to
the Company's By-Laws (the "By-Law Amendment") and has voted to recommend that
the stockholders adopt the By-Law Amendment. The proposed By-Law Amendment would
classify the Board of Directors into three classes, as nearly equal in number as
possible, each of which, after an interim arrangement, will serve for three
years, with one class being elected each year. The Board of Directors believes
the proposed By-Law Amendment, taken together with the proposed amendment to the
Company's Certificate of Incorporation (Proposal 3), would, if adopted,
effectively reduce the possibility that a third party could effect a sudden or
surprised change in majority control of the Company's Board of Directors without
the support of the incumbent Board.
Adoption of this By-Law Amendment may have significant effects on the
ability of stockholders of the Company to change the composition of the
incumbent Board of Directors and to benefit from certain
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<PAGE> 14
transactions which are opposed by the incumbent Board. Accordingly, stockholders
are urged to read carefully the following sections of this Proxy Statement,
which describe this By-Law Amendment and its purpose and effects, and Exhibit A
hereto which sets forth the full text of the proposed By-Law Amendment, before
voting on the proposed By-Law Amendment to provide for a classified Board of
Directors.
PURPOSES AND EFFECTS OF THE PROPOSED BY-LAW AMENDMENT
The Board of Directors of the Company is asking stockholders to consider
and adopt the proposed By-Law Amendment in order to discourage certain types of
transactions described below, which involve an actual or threatened change of
control of the Company. The proposed By-Law Amendment is designed to make it
more difficult and time-consuming to change majority control of the Board and
thus to reduce the vulnerability of the Company to an unsolicited offer to take
over the Company, particularly an offer that does not contemplate the
acquisition of all of the Company's outstanding shares, or for the restructuring
or sale of all or part of the Company. As more fully described below, the Board
believes that, as a general rule, such unsolicited offers are not in the best
interests of the Company and its stockholders.
There have been a number of cases in which the accumulation of substantial
stock positions in public companies by third parties has been a prelude to
proposing a takeover or restructuring or sale of all or part of the company or
other similar extraordinary corporate action. Such actions are often undertaken
by the third party without advance notice to or consultation with management of
the company. In many cases, the purchaser seeks representation on the company's
Board of Directors in order to increase the likelihood that his proposal will be
implemented by the company. If the company resists the effort of the purchaser
to obtain representation on the company's Board, he may commence a proxy contest
to have himself or his nominees elected to the Board in place of certain
Directors, or the entire Board. In some cases, the purchaser may not truly be
interested in taking over the company, but use the threat of a proxy fight
and/or a bid to take over the company as a means of forcing the company to
repurchase his equity position at a substantial premium over market price.
The Board of Directors of the Company believes that an imminent threat of
removal of the Company's Management severely curtails its ability to negotiate
effectively with such purchasers. Management is deprived of the time and
information necessary to evaluate the takeover proposal, to study alternative
proposals and to help ensure that the best price is obtained in any transaction
involving the Company which may ultimately be undertaken. If the real purpose of
a takeover bid is to force the Company to repurchase an accumulated stock
interest at a premium price, Management faces the risk that if it does not
repurchase the purchaser's stock interest, the Company's business and Management
will be disrupted, perhaps irreparably. On the other hand, such a repurchase
diverts valuable corporate resources to the benefit of a single stockholder.
Takeovers or changes in Management of the Company which are proposed and
effected without prior consultation and negotiation with the Company's
Management are not necessarily detrimental to the Company and its stockholders.
However, the Board feels that the benefits of seeking to protect its ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to take
over or restructure the Company outweigh the disadvantages of discouraging such
proposals.
The adoption of the proposed By-Law Amendment would make more difficult or
discourage a proxy contest or the assumption of control by a holder of a
substantial block of the Company's stock or the removal of the incumbent Board
and could thus have the effect of entrenching incumbent Management. At the same
time, the By-Law Amendment would help ensure that the Board, if confronted by a
surprise proposal from a third party who has recently acquired a block of the
Company's stock, will have sufficient time to review the proposal and
appropriate alternatives to the proposal and to seek a premium price for the
stockholders.
The proposed By-Law Amendment is intended to encourage persons seeking to
acquire control of the Company to initiate such an acquisition through
arms'-length negotiations with the Company's Management and Board of Directors.
The By-Law Amendment, if it is adopted, could also have the effect of
discouraging a third party from making a tender offer or otherwise attempting to
obtain control of the Company, even though such an attempt might be beneficial
to the Company and its stockholders. In addition, since the By-Law
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<PAGE> 15
Amendment is designed to discourage accumulations of large blocks of the
Company's stock by purchasers whose objective is to have such stock repurchased
by the Company at a premium, adoption of the By-Law Amendment could tend to
reduce the temporary fluctuations in the market price of the Company's stock
which are caused by such accumulations. Accordingly, stockholders could be
deprived of certain opportunities to sell their stock at a temporarily higher
market price.
The Company's Certificate of Incorporation does not permit cumulative
voting in the election of Directors. Accordingly, the holders of a majority of
the outstanding shares entitled to vote for the election of Directors can elect
all of the Directors then being elected in any annual or special meeting of the
Company's stockholders.
The proposed By-Law Amendment is permitted under Delaware law and is
consistent with the rules of the American Stock Exchange, upon which the
Company's Common Stock is listed and traded. The By-Law Amendment is not the
result of any specific efforts of which the Company is aware to accumulate the
Company's securities or to obtain control of the Company. The Board, which
unanimously approved the By-Law Amendment and recommended that it be submitted
to the Company's stockholders for adoption, does not presently contemplate
recommending the adoption of any further amendments to the Certificate of
Incorporation or the By-Laws which would affect the ability of third parties to
take over or change control of the Company, except for the next-described
proposal in this Proxy Statement to amend the Certificate of Incorporation to
provide for higher voting requirements with respect to certain business
combinations.
DESCRIPTION OF THE PROPOSED BY-LAW AMENDMENT
The full text of the proposed By-Law Amendment to provide for a classified
Board of Directors is contained in Exhibit A attached to this Proxy Statement.
The following description of the By-Law Amendment is qualified in its entirety
by reference to Exhibit A.
Classification of the Board of Directors. The Company's By-Laws now provide
that all Directors are to be elected to the Company's Board of Directors
annually for a term of one year. The Board has set the number of Directors at
eight. The proposed By-Law Amendment provides that the Board shall be divided
into three classes of Directors, each class to be as nearly equal in number of
Directors as possible. If the proposed By-Law Amendment is adopted, the
Company's Directors will be divided into three classes and two Directors will be
elected for a term expiring at the 1996 Annual Meeting, three Directors will be
elected for a term expiring at the 1997 Annual Meeting and the remaining three
Directors will be elected for a term expiring at the 1998 Annual Meeting (and,
in each case, until their respective successors are duly elected and qualified).
Starting with the 1996 Annual Meeting, one class of Directors will be elected
each year for a three-year term.
The classification of Directors will have the effect of making it more
difficult to change the composition of the Board of Directors. At least two
stockholder meetings, instead of one, will be required to effect a change in the
majority control of the Board, except in the event of vacancies resulting from
removal for cause or other reason (in which case the remaining Directors will
fill the vacancies so created -- see "Removal of Directors; Filling Vacancies on
the Board of Directors" below). The longer time required to elect a majority of
a classified Board will also help to assure continuity and stability of the
Company's management and policies, since a majority of the Directors at any
given time will have prior experience as Directors of the Company. It should
also be noted that the classification provision will apply to every election of
Directors, whether or not a change in the Board would be beneficial to the
Company and its stockholders and whether or not a majority of the Company's
stockholders believes that such a change would be desirable.
Removal of Directors; Filling Vacancies on the Board of Directors. The
Board of Directors, at the meeting at which it proposed the By-Law Amendment to
provide for a classified Board of Directors, also amended the By-Laws to provide
that a Director, or the entire Board of Directors, may be removed by the
stockholders only for cause, whereas prior to such amendment, a Director, or the
entire Board of Directors, could be removed by the stockholders with or without
cause.
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<PAGE> 16
The By-Laws provide that a vacancy on the Board, including a vacancy
created by an increase in the number of Directors, may be filled by the
remaining Directors, though less than a quorum and that the newly-elected
Directors shall serve for the remainder of the full term of the class in which
the vacancy occurred.
The provisions of the By-Law relating to the removal of Directors and the
filling of vacancies on the Board will preclude a third party from removing
incumbent Directors without cause and simultaneously gaining control of the
Board by filling the vacancies created by removal with his own nominees.
Increased Stockholder Vote for Amendment, Repeal, Etc. of By-Law
Provision. The Board of Directors has also amended the By-Laws to provide that
amendment or repeal of the By-Law providing for a classified Board of Directors
may only be accomplished by vote of the holders of two-thirds of the shares
outstanding and entitled to vote, such amendment to take effect only if and
after the proposal to establish a classified Board of Directors is adopted by
the stockholders. If this amendment had not been adopted by the Directors, the
provision for a classified Board could have been amended or repealed by vote of
the holders of a majority of the outstanding shares entitled to vote. The
requirement for an increased stockholder vote is designed to prevent a
stockholder with a majority of the voting power of the Company from avoiding the
requirements of the proposed By-Law Amendment by simply amending or deleting the
provision for a classified Board.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE PROPOSED AMENDMENT TO THE BY-LAWS FOR A CLASSIFIED
BOARD OF DIRECTORS.
PROPOSAL 3: AMENDMENT TO CERTIFICATE OF INCORPORATION
PROVIDING FOR HIGHER VOTING REQUIREMENTS
WITH RESPECT TO CERTAIN BUSINESS COMBINATIONS
The Company's Board of Directors has unanimously approved an amendment to
the Company's Certificate of Incorporation (the "Certificate Amendment") and has
voted to recommend that the stockholders approve the Certificate Amendment. The
proposed Certificate Amendment would require the affirmative vote of holders of
two-thirds of the outstanding shares of the Company entitled to vote for the
approval of certain Fundamental Changes (defined below) in the Company.
Adoption of the Certificate Amendment may have significant effects on the
ability of stockholders of the Company to benefit from certain transactions.
Accordingly, stockholders are urged to read carefully the following sections of
this Proxy Statement, which describe the Certificate Amendment and its purpose
and effects, and Exhibit A hereto which sets forth the full text of the proposed
Certificate Amendment, before voting on the proposed Certificate Amendment to
provide for a super-majority voting requirement for certain Fundamental Changes.
PURPOSES AND EFFECTS OF THE PROPOSED CERTIFICATE AMENDMENT
The Board of Directors of the Company is asking stockholders to consider
and adopt the proposed Certificate Amendment in order to discourage certain
types of transactions described below, which involve an actual or threatened
change of control of the Company. The proposed Certificate Amendment is designed
to make it more difficult for a person who acquires a substantial portion of the
Company's outstanding shares to effect a merger, sale of assets or similar
transaction with the Company on terms not approved by the Board of Directors.
While the Certificate Amendment will also make it more difficult for the Company
to engage in such a transaction even if approved and recommended to stockholders
by the Board of Directors, the Company believes such transactions are generally
approved by substantial majorities of stockholders when they are approved and
recommended by such companies' Boards of Directors.
As is the case with the By-Law Amendment, the proposed Certificate
Amendment is intended to encourage persons seeking to acquire control of the
Company to initiate such an acquisition through arms'-length negotiations with
the Company's Management and Board of Directors. The Certificate Amendment, if
it is adopted, could also have the effect of discouraging a third party from
making a tender offer or otherwise attempting to obtain control of the Company,
even though such an attempt might be beneficial to the
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<PAGE> 17
Company and its stockholders. In addition, since the Certificate Amendment is
designed to discourage accumulations of large blocks of the Company's stock by
purchasers whose objective is to have such stock repurchased by the Company at a
premium, adoption of the Certificate Amendment could tend to reduce the
temporary fluctuations in the market price of the Company's stock which are
caused by such accumulations. Accordingly, stockholders could be deprived of
certain opportunities to sell their stock at a temporarily higher market price.
The proposed Certificate Amendment is permitted under Delaware law and is
consistent with the rules of the American Stock Exchange. As is the case with
the By-Law Amendment, the Certificate Amendment is not the result of any
specific efforts to which the Company is aware to accumulate the Company's
securities or to obtain control of the Company.
DESCRIPTION OF THE PROPOSED CERTIFICATE AMENDMENT
The full text of the proposed Certificate Amendment to provide for a
super-majority voting requirement for certain Fundamental Changes is contained
in Exhibit A attached to this Proxy Statement. The following description of the
Certificate Amendment is qualified in its entirety by reference to Exhibit A.
Delaware law currently requires the affirmative vote of a majority of the
shares of the Company entitled to vote to approve certain transactions involving
fundamental changes of the Company, including mergers, consolidations, sale by
the Company of all or substantially all of its assets or dissolution of the
Company (each, a "Fundamental Change"). The proposed Certificate Amendment
provides that such transactions must be approved by the holders of two-thirds of
the shares of the Company entitled to vote. The super-majority vote requirement
will have the effect of making it more difficult for the Company to engage in a
Fundamental Change. It should be noted that the Certificate Amendment will apply
to every Fundamental Change, whether or not approved and recommended to
stockholders by the Company's Board of Directors. However, the Board of
Directors believes that corporations generally are able to obtain the
affirmative vote by holders of at least two-thirds of shares of companies
entitled to vote in situations in which such transactions are approved and
recommended by the Board of Directors.
The proposed Certificate Amendment also provides that amendment or repeal
of the requirement for two-thirds affirmative vote, or repeal of the provision
in the Certificate of Incorporation providing that the Company's Board of
Directors may adopt and amend the Company's By-Laws (except the provision in the
By-Laws relating to a classified Board of Directors) may only be amended or
repealed by the affirmative vote of holders of two-thirds of the Company's
outstanding shares entitled to vote. Without this provision, such an amendment
or repeal would require the affirmative vote of holders of a majority of the
shares of the Company entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
REQUIRING A TWO-THIRDS AFFIRMATIVE VOTE BY SHAREHOLDERS
TO APPROVE CERTAIN FUNDAMENTAL CHANGES.
PROPOSAL 4: APPROVAL OF THE LABARGE, INC.
1995 INCENTIVE STOCK OPTION PLAN
PURPOSE
The LaBarge, Inc. 1995 Incentive Stock Option Plan (the "Plan") was adopted
to promote the interests of the Company and its stockholders by providing a
method whereby employees of the Company may purchase Common Stock in the Company
and thereby provide additional incentive for them to remain in the Company's
employ and increase their personal interest in the Company's continued success.
The options issued under the Plan are intended to be incentive stock options
within the meaning of Section 422A of the Internal Revenue Code of 1986 (the
"Code"). A copy of the Plan is attached hereto as Exhibit B. The following
description of the Plan is qualified in its entirety by reference to Exhibit B.
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<PAGE> 18
ADMINISTRATION
The Plan is administered by The Company's Human Resources Committee (the
"Committee") which consists of three outside members of the Company's Board of
Directors.
The Committee has the final power to construe and interpret the Plan and
options granted thereunder, and to determine all questions that may arise in the
administration of the Plan. The Committee has the power, subject to the
provisions of the Plan, to determine the persons to whom and the dates on which
options will be granted, the number of shares to be subject to each option, the
time or times during the term of each option within which all or a portion of
such option may be exercised, and the other terms of the options. The Board has
the right to adopt, amend, and repeal rules and regulations governing the
administration of the Plan.
SHARES SUBJECT TO THE PLAN
An aggregate of 400,000 shares of the Company's Common Stock is subject to
the Plan. Such shares may be either authorized but unissued shares or treasury
shares. In the event that any option under the Plan expires unexercised or is
terminated, surrendered or canceled, the shares previously subject to such
option shall again become available for the issuance of options under the Plan.
ELIGIBILITY
Options may be granted under the Plan to those employees deemed appropriate
by the Committee. In making such determination, the Committee may take into
account the nature of the services rendered or expected to be rendered by an
employee, present and potential contributions to the Company's success, the
anticipated number of years of service remaining, and such other factors as the
Committee deems relevant.
Under the Plan, no option may be granted to a person who, at the time of
the grant, owns, directly or indirectly, stock constituting more than 10% of the
total combined voting power of all classes of stock entitled to vote of the
Company or of any parent or subsidiary unless the price of the stock subject to
the option is at least 110% of the fair market value of such stock at the date
the option is granted and the term of the option does not exceed five years from
the date such option is granted.
The aggregate fair market value (determined at the time the option is
granted) of stock subject to option which any employee may be granted in any
calendar year under the Plan cannot exceed $100,000 plus any carryover amount.
DURATION, AMENDMENT AND TERMINATION
The Plan was adopted by the Company's Board of Directors on August 15,
1995, subject to approval within twelve months by the holders of a majority of
the Company's outstanding Common Stock. If such approval is not obtained within
such time, the Plan shall become null and void and all options granted shall be
automatically cancelled. The Board of Directors may terminate the Plan at any
time. Unless terminated earlier, the Plan will terminate on August 15, 2005.
The Board of Directors may amend the Plan from time to time, except that
without shareholder approval there shall be no amendment which would: (a)
abolish the Committee without designating another such committee, change the
qualifications of its members, or withdraw the administration of the Plan from
its supervision; (b) increase the maximum number of shares for which options may
be granted under the Plan; (c) amend the formula for determination of the
purchase price of shares for which options may be granted; (d) extend the term
of the Plan or change the minimum option price; or (e) amend the requirements as
to the employees eligible to receive options.
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<PAGE> 19
TERMS OF THE OPTIONS
The following is a description of the terms of options permitted by the
Plan. Individual option grants in any given case may be more restrictive as to
any or all of the terms of options permitted by the Plan as described below:
Option Term. Options granted under the Plan may have a maximum term of ten
years, except that options granted to persons owning more than 10% of the total
combined voting power of all classes of stock of the Company may have a maximum
term of five years. An option may not by exercised before two years of continued
employment with the Company or a subsidiary immediately following grant of the
option.
Under the Plan, in the event of (1) a dissolution of the Company, or (2) a
merger or consolidation in which the Company is not the surviving corporation,
options outstanding under the Plan shall terminate; provided, however, that in
the case of dissolution, merger or consolidation, then during the thirty-day
period prior to the effective date of such event, each holder of an option shall
have the right to exercise the option in whole or in part.
Option Exercise Price and Payment Terms. The exercise price for any option
granted under the Plan may not be less than the fair market value of the stock
subject to the option on the date of grant, and in some cases (see
"Eligibility," above), may not be less than 110% of fair market value on the
date of grant.
The exercise price of options granted under the Plan must be tendered by
cashier's or certified check or LaBarge, Inc. Common Stock already owned by the
employee having a fair market value equal to the option price, or a combination
thereof, at the time notice of exercise is given.
Nonassignability. Under the Plan, an option may not be transferred by the
optionee other than by will or by the laws of descent and distribution. During
the lifetime of an optionee, an option may be exercised only by the optionee.
Expiration Following Termination of Employment. Under the Plan, an option
will generally terminate three months after the optionee ceases to be employed
by the Company or in accordance with its terms if earlier. In the event of
termination for cause, an option may be terminated immediately. In the event of
death or disability, an option terminates one year after such event or in
accordance with its terms if earlier.
Adjustment Provisions. If there is any change in the Common Stock subject
to the Plan (through reorganization, recapitalization, stock dividend, stock
split, combination or other increase or decrease in such shares effected without
receipt of consideration by the Company), the Board of Directors may make
appropriate adjustments to the maximum number of shares subject to the Plan and
shall make appropriate adjustments to the price per share of stock subject to
the Plan and to outstanding options.
FEDERAL INCOME TAX CONSEQUENCES
Favorable income tax treatment is currently provided for stock options that
qualify as "incentive stock options" under Section 422A of the Code. Options
granted under the Plan are intended to be eligible for the federal income tax
treatment accorded incentive stock options under the Code.
The discussion in this proxy statement of the federal income tax
consequences associated with incentive stock options is based on the Code, as it
is currently enacted, and temporary and proposed regulations published by the
Treasury Department.
Grant. There are no federal income tax consequences to the optionee by
reason of the grant of an incentive stock option.
Exercise. Upon exercise of an incentive stock option, the optionee does not
recognize taxable income. The amount by which the fair market value of the stock
acquired at the time of exercise exceeds the option exercise price is an
adjustment in computing the optionee's alternative minimum tax.
Disposition. Under current law, the federal income tax consequences of
disposing of stock acquired through the exercise of an incentive stock option
depend on the timing of the disposition in relation to the date
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<PAGE> 20
on which the option was granted and the date on which the shares were
transferred to the employee on exercise of the option.
Qualifying Disposition. Under the current law, if the optionee holds stock
acquired through exercise of an incentive stock option for more than two years
from the date on which the option was granted and more than one year from the
date on which the shares were transferred to the optionee upon exercise of the
option, any gain or loss on a subsequent disposition of such stock would be
taxed to the optionee as a long-term capital gain or loss equal to the
difference between the amount received upon such disposition and the optionee's
basis in such stock. The optionee's basis in the stock is the exercise price
under the option pursuant to which he or she purchased the stock. For tax years
beginning after December 31, 1987, capital gains income will be taxed at a
maximum federal income tax rate of 28%.
Disqualifying Disposition. Generally, if the optionee disposes of the stock
before the expiration of either of the holding periods described above, at the
time of disposition the optionee would realize taxable ordinary income equal to
the lesser of the excess, if any, of the stock's fair market value on the date
of exercise over the optionee's basis in the stock, or the optionee's actual
gain, if any, on the purchase and sale (i.e., the excess, if any, of the amount
received upon disposition over the optionee's basis in the stock).
A "disposition" means a sale, exchange, gift or transfer of legal title to
the stock. It does not include a transfer from a decedent to an estate or a
transfer by bequest or inheritance, a change pursuant to certain types of
corporate reorganization, a pledge or hypothecation or a transfer pursuant to a
divorce. Also, the acquisition of stock in joint tenancy is not a disposition,
but a transfer out of joint tenancy is a disposition.
The optionee's additional gain, if any, will be a capital gain under
current law. If the optionee has incurred a loss on the purchase and sale, then
the optionee will realize no ordinary income and the loss will be a capital
loss. Such capital gain or loss will be long-term or short-term depending on
whether the stock was held for more than the applicable long-term capital gain
holding period (which is currently six months) from the date exercise.
The Company will be required to report to the Internal Revenue Service any
ordinary income realized by the optionee by reason of a disqualifying
disposition of stock acquired through exercise of an incentive stock option if
such information is available to the Company.
Consequences to the Company. There are no federal income tax consequences
to the Company by reason of the grant or exercise of an incentive stock option.
To the extent an optionee recognized ordinary income by reason of a
disqualifying disposition, the Company is entitled (subject to the requirement
of reasonableness) to a corresponding business expense deduction in the tax year
in which the disposition occurs. Otherwise, there are no federal income tax
consequences to the Company by reason of the disposition of stock acquired
through exercise of an incentive stock option.
Alternative Minimum Tax. The exercise of an option or disposition of stock
acquired on such exercise may potentially subject the optionee to the
alternative minimum tax (or additional minimum tax if the optionee is already
subject to such tax). The difference between the exercise price of an incentive
stock option and the fair market value of the stock on the date of exercise is
an "item of adjustment" for purposes of computing an optionee's potential
alternative minimum tax.
LIMITATION ON ISSUANCE OF STOCK
The Company is not obligated to issue any stock upon exercise of an option
under the Plan if such issuance would violate any loan agreement or other
contract to which the Company is subject. There are no such restrictions at this
time. The issuance of stock upon exercise of any option under the Plan is also
subject to compliance with any applicable stock exchange listing requirement and
applicable state and federal securities laws.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
RATIFICATION OF THE LABARGE, INC. 1995 INCENTIVE STOCK
OPTION PLAN.
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PROPOSAL 5: SELECTION OF INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP ("Peat Marwick") has been appointed as independent
accountants for the Company for the fiscal year ending June 30, 1996 by the
Board of Directors with the approval of the Audit Committee. Peat Marwick was
the Company's independent accountants for fiscal 1994 and 1995. Although the
appointment of independent accountants is not required to be approved by Common
Stockholders, the Board of Directors believes Common Stockholders should
participate in the appointment through ratification. A representative of Peat
Marwick is expected to be present at the Annual Meeting of Stockholders with the
opportunity to make a statement, if he so desires, and he is expected to be
available to respond to appropriate questions raised orally at the meeting.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock casting a vote at the Annual Meeting is necessary for the
ratification of the selection of the independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK LLP
AS INDEPENDENT ACCOUNTANTS FOR FISCAL 1996.
STOCKHOLDER PROPOSALS
Any stockholder proposals to be presented at the next Annual Meeting, which
is expected to be held in October 1996, must be received by the Company at its
principal office at the address listed on page 2 hereof no later than May 23,
1996.
By Order of the Board of Directors,
WILLIAM J. MAENDER
Vice President -- Finance and
Secretary
St. Louis, Missouri
September 20, 1995
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<PAGE> 22
EXHIBIT A
1. PROPOSAL 2 -- Amendment to Section 3 of ARTICLE II of the By-Laws to provide
for a classified Board:
"3. ELECTION AND TERM. The directors shall be divided into three
classes: Class A, Class B and Class C. Such classes shall be as nearly
equal in number as possible. The term of office of the initial Class A
directors shall expire at the Annual Meeting of Stockholders in 1996; the
term of office of the initial Class B directors shall expire at the Annual
Meeting of Stockholders in 1997; and the term of office of the initial
Class C directors shall expire at the Annual Meeting of Stockholders in
1998, or thereafter in each case when their respective successors are
elected and have qualified. At each annual election held after
classification and the initial election of directors according to classes,
the directors chosen to succeed those whose terms then expire shall be
identified as being of the same class as the directors they succeed and
shall be elected for a term expiring at the third succeeding annual meeting
or thereafter when their respective successors in each case are elected and
have qualified. If the number of directors is changed, any increase of
decrease in directors shall be apportioned among the classes so as to
maintain all classes as nearly equal in number as possible and any
individual director elected to any class shall hold office for a term which
shall coincide with the term of such class. If the office of any director
becomes vacant at any time by reason of death, resignation, retirement,
disqualification, removal from office or otherwise, or if any new
directorship is created by any increase in the authorized number of
directors, a majority of the directors then in office, although less than a
quorum, or the sole remaining director, may choose a successor of fill the
newly created directorship, and the director so chosen shall hold office,
subject the provisions of these By-Laws, until the expiration of the term
of the class to which he has been chosen and until his successor shall be
duly elected and qualified."
2. PROPOSAL 3 -- Proposed addition of a new Article TENTH to the Company's
Certificate of Incorporation to require affirmative vote of two-thirds of the
shares entitled to vote to approve certain fundamental changes of the
Company, to read as follows:
"TENTH: As to the following matters, the affirmative vote of
two-thirds (2/3's) of the shares entitled to vote shall be required to
approve any proposed stockholder action which otherwise requires
stockholder approval under the Delaware General Corporation Law: (a) to
sell, exchange, transfer or otherwise dispose of all or substantially all
of the corporation's property and assets; (b) to dissolve or liquidate the
corporation; (c) to merge or consolidate the corporation with or into
another corporation; or (d) to amend, alter or delete from the Certificate
of Incorporation this Article TENTH or the paragraph numbered "2" of
Article EIGHTH hereof."
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<PAGE> 23
EXHIBIT B
LABARGE, INC.
1995 INCENTIVE STOCK OPTION PLAN
I.
PURPOSE OF THE 1995 INCENTIVE STOCK OPTION PLAN
The purpose of the 1995 Incentive Stock Option Plan (the "Plan") is to
promote the interests of LaBarge, Inc. ("Company") and its stockholders by
providing a method whereby Company employees may be encouraged to invest in the
Company's Common Stock, thereby increasing their proprietary interest in its
business, providing them with additional incentive to remain in the employ of
the Company and increasing their personal interest in its continued success and
progress. These employees will be granted options ("Options") to purchase shares
of the Common Stock, $.01 par value, of the Company ("Common Stock"). It is
intended that Options issued hereunder will constitute Incentive Stock Options
within the meaning of Section 422A of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").
II.
ADMINISTRATION OF THE 1995 PLAN
A. The Committee. The Plan shall be administered by the Human Resources
Committee of the Board of Directors of the Company or such other committee as
shall be designated by the Board of Directors (the "Committee"). The Committee
shall consist of not less than four Directors of the Company, and shall be
appointed by the Board of Directors. A majority of the members of the Committee
shall constitute a quorum. Any decision or determination reduced to writing and
signed by all the members of the Committee shall be fully as effective as if it
had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a chairman from among the members and a secretary (who
need not be a member) and make such rules and regulations for the conduct of its
business as it shall be deemed advisable. No member of the Committee shall be
liable in the absence of bad faith, for any act or omission with respect to his
or her service on the Committee. Service on the Committee shall constitute
service as a Director of the Company so that members of the Committee shall be
entitled to identification and reimbursement as Directors of the Company.
B. Authority of the Committee. Subject to the expressed provisions of the
Plan, the Committee shall have plenary authority to determine, in its
discretion, the employees to whom options are granted, and the time or times
within which (during the term of the Option) all or a portion of such Options
may be exercised. In making such determination, the Committee may take into
account the nature of the services rendered or expected to be rendered by the
respective employees, their present and potential contributions to the Company's
success, the anticipated number of years of effective service remaining and such
other factors as the Committee in its discretion shall deem relevant. Subject to
the express provisions of the Plan, Section 422A of the Code and any regulations
or rulings thereunder, the Committee shall also have plenary authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and conditions of the respective Options
(which terms and conditions need not be the same in each case), to impose
restrictions on any shares issued upon the exercise of any Option and to
determine the manner in which such restrictions may be removed, and to make all
other determinations deemed necessary or advisable in administering the Plan.
The Committee may specify in the original terms of any option or, if not so
specified, shall determine whether any authorized leave of absence or absence of
military or governmental service or for any other reason shall constitute a
termination of employment for purposes of the Plan. Subject to the provisions of
Article X, the determination of the Committee on the matters referred to in the
Plan shall be conclusive; provided that it shall be the Board of Directors of
the Company which shall determine whether unissued or treasury shares shall be
issued upon the exercise of any Option.
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<PAGE> 24
C. Each option shall be evidenced by an option agreement which shall
contain such terms and conditions as may be approved by the Committee, and the
said agreement shall be signed by an officer of the Company and the employee.
III.
SHARES SUBJECT TO THE 1995 PLAN
An aggregate of 400,000 shares of Common Stock shall be subject to the
Plan, subject to adjustment in accordance with Section VIII hereof. Such shares
may be either authorized but unissued shares or shares now or hereafter held in
the treasury of the Company.
In the event that any Option under the Plan expires unexercised or is
terminated, surrendered or canceled, the shares theretofore subject to such
Option, or the unexercised portion thereof, shall again become available for
Option under the Plan, including to the former holder of such Option, upon such
terms as the Committee shall determine in accordance with the Plan and which
terms may be more or less favorable than those applicable to such former Option.
IV.
GRANTING DATE
The action of the Committee with respect to the granting of an Option shall
take place on such date as a majority of the members of the Committee at a
meeting shall make a determination with respect to the granting of an Option or,
in the absence of a meeting, on such date as of which written designation
covering such Option shall have been executed by all members of the Committee.
The effective date of the grant of an Option (the "Granting Date") shall be the
date specified by the Committee in its determination or designation relating to
the award of such Option or, in the absence of such a Specification, the date on
which the action of the Committee relating to the award of such Option took
place.
V.
ELIGIBILITY
Options may be granted only to those employees who are deemed appropriate
by the Committee.
VI.
TERMS AND CONDITIONS OF OPTIONS
A. Option Price. Subject to the provision of subparagraph VI.F. below, the
purchase price of the stock under each Option shall be determined by the
Committee, but shall not be less than 100% of the fair market value of the stock
on the Granting Date for such option; provided, however, that the option price
shall not be less than the par value of the stock subject to the Option. The
fair market value of the stock shall be, for purposes of the Plan, determined
under the regulations or rulings under Section 422A of the Code.
B. Term of Option. Subject to the provisions of subparagraph VI.F below,
the term of each Option granted under the Plan shall be for a period not
exceeding ten years from the Granting Date. Each Option granted under the Plan
may be exercised by the employee as stated in his individual Option, but in no
event may any Option be exercised before two years of continued employment with
the Company, or a subsidiary, immediately following the Granting Date.
C. Restrictions on Transfer and Exercise.
(1) Except as hereinafter provided, no Option granted pursuant to the Plan
may be exercised at any time unless the holder thereof is then an employee of
the Company. Options granted under the Plan shall not be affected by any change
of employment so long as the grantee continues to be an employee of the Company.
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<PAGE> 25
(2) The Option of any optionee whose employment is terminated for any
reason, other than for death, disability (as defined in Section 105(d) (4) of
the Code) or discharged for cause, shall terminate on the earlier of three
months after termination of employment or the date that such Option expires in
accordance with its term.
(3) In the event of the death of an optionee (a) while an employee of the
Company or a subsidiary or (b) within three months after the termination of the
employment of the optionee, or in the event of the termination of employment by
an optionee for permanent disability, the Option may be exercised as follows:
(a) In the event of the death of an optionee during employment or
within three months after the termination of employment, each Option
granted to such optionee shall be exercisable or payable (at the option of
the Company and, if paid, at a price equal to the excess of the fair market
value over the option price) to the extent provided therein but not later
than one year after his or her death (but not beyond the stated duration of
the Option). Any such exercise or payment shall be made only: (1) by or to
the executor or administrator of the estate of the deceased optionee or
person or persons to whom the deceased optionee's rights under the Option
shall pass by will or the laws of descent and distribution; and (2) to the
extent, if any, that the deceased optionee was entitled at the date of his
or her death.
(b) In the case of an optionee who becomes disable, the Option shall
terminate on the earlier of one year after termination or employment or the
date that such Option expires in accordance with its terms. During such
period, the Option may be exercised by an optionee who becomes disabled
with respect to the same number of shares, in the same manner and to the
same extent as if the optionee had continued employment during such period.
(4) The Option shall lapse immediately upon termination of employment of
the optionee through discharge for cause as determined by the Committee in its
sole discretion.
(5) Each Option granted under the Plan shall, by its terms, not be
transferable otherwise than by will or the laws of descent and distribution.
During the optionee's lifetime, an Option granted under the Plan can be
exercised only by him or her.
D. Manner of Exercise. An Option shall be exercised by giving a written
notice to the President of the Company stating the number of shares of Common
Stock with respect to which the Option is being exercised and containing such
other information as may be requested and by tendering payment in full therefore
with a cashier's or certified check; Common Stock already owned by the Employee
having a fair market value equal to the option price; or a combination of a
cashier's or certified check and Common Stock already owned by the Employee
having an aggregate fair market value equal to the option price. For purposes of
this Subsection 4 (d), "fair market value" is the closing price per share of
Common Stock on the American Stock Exchange on the day immediately preceding the
day on which an Option is exercised, or if there is no sale on such day, the
closing price per share on the last previous day which a sale is reported. If
Common Stock is not listed on the American Stock Exchange on the day immediately
preceding the day an Option is exercised, the closing price of a share of Common
Stock as reported by the exchange upon which it is then listed, or if it is not
then listed on any exchange, the closing price per share of Common Stock as
reported by an automated quotation system shall be used to determine fair market
value. If Common Stock is not listed on any exchange or its price reported by an
automated quotation system on the day immediately preceding the day an Option is
exercised, the Committee shall determine the fair market value of Common Stock
for purposes of this Subsection 4(d) on the date of exercise of the Option.
E. Limitations on Issuance of Stock Option Shares. The Company shall not be
required, upon the exercise of any Option, to issue or deliver any shares of
stock prior to (a) the authorization of such shares for listing on any stock
exchange on which the Company's stock may then be listed, and (b) such
registration or other qualification of such shares under applicable securities
laws as the Company shall determine to be necessary or advisable. If shares
issuable on the exercise of Options have not been registered under the
Securities Act of 1933 ("the Act") or there is not available a current
Prospectus meeting the requirements of the Act with respect thereto, optionees
may be required to represent at the time of each exercise of Options that the
shares purchased are being acquired for investment and not with a view to
distribution; and the
23
<PAGE> 26
Company may place a legend on the stock certificate to indicate that the stock
may not be sold or otherwise disposed of except in accordance with the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
F. Limitation on Options.
(1) Notwithstanding the provision of paragraph VI.A and B above, if any
optionee, at the time an Option is granted, owns (as defined in Section 425(d)
or the Code) Common Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, any subsidiary thereof or of the
Company's parent (if any), the option price for such Option shall be at least
110% of the fair market value of the stock subject to such Option, and such
Option by its terms shall not be exercisable after the expiration of 5 years
from the date such Option is granted.
(2) The aggregate fair market value (determined as of the time the Option
is granted) of the stock with respect to which Incentive Stock Options (as
defined in Section 422A of the Code) are exercisable for the first time by an
employee during any calendar year (under this Plan or any other plan of the
Company) shall not exceed $100,000.
VII.
STOCKHOLDER AND EMPLOYMENT RIGHTS
A holder of an Option shall have none of the rights of a stockholder with
respect to any of the shares subject to Option until such shares shall be issued
upon the exercise of the Option.
Nothing in the Plan or in any Option granted pursuant to the Plan shall, in
the absence of an express provision to the contrary, confer on any individual
any right to be or to continue in the employ of the Company or its subsidiaries
or shall interfere in any way with the right of the Company or any of its
subsidiaries to terminate the employment of any individual at any time.
VIII.
ADJUSTMENTS TO COMMON STOCK
The aggregate number of shares of Common Stock of the Company on which
Options may be granted hereunder, the number of shares thereof covered by each
outstanding Option and the price per share thereof in each such Option may all
be appropriately adjusted, as the Board of Directors may determine, for any
increase or decrease in the number of shares of stock of the Company resulting
from a subdivision or consolidation of shares whether through reorganization,
recapitalization, stock split or combination of shares, or the payment of a
stock dividend or the increase or decreasing such shares effected without
receipt of consideration by the Company. No fractional shares of stock shall be
issued upon exercise of any Option, and in case fractional share shall become
subject to an Option by reason of a stock dividend or otherwise, the optionee
holding such Option shall not be entitled to exercise it with respect to such
fractional share.
Subject to any required action by the stockholders, if the Company shall be
the surviving corporation in any merger or consolidation, any Option granted
hereunder shall pertain to and apply to the securities to which a holder of the
number of shares of stock subject to the Option would have been entitled. Upon a
dissolution of the Company, or a merger or consolidation in which the Company is
not the surviving corporation, every Option outstanding hereunder shall
terminate, provided, however, that the case of such dissolution, merger or
consolidation, then during the period thirty days prior to the effective date of
such event, each holder of an Option granted pursuant to the Plan shall have a
right to exercise the Option, in whole or in part.
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<PAGE> 27
IX.
EFFECTIVE DATE AND TERMINATION EFFECTIVE DATE
A. Effective Date. The Plan shall become operative and in effect on the
date the Plan is approved by a vote of majority of all members of the Board of
Directors, provided, however that the Plan shall be submitted to the Stockholder
of the Company for approval within twelve months of the date of adoption of the
Plan, and if such approval shall not be obtained by a vote of the holders of a
majority of the total outstanding capital stock of the Company entitled to vote,
voting as a single class, the Plan shall be null and void and all Options, if
any, granted thereunder shall automatically be canceled.
B. Termination. The Plan shall remain in effect until and shall terminate
within 10 years from the date the Plan is adopted or the Plan was approved by
the shareholders, whichever is earlier, but it may be terminated at an earlier
date by action of the Board of Directors. Except as provided in subparagraph A
above, termination of this Plan shall not affect the rights of grantees under
Options theretofore granted to purchase stock under the Plan, and, all such
Options shall continue in force and in operation after termination of the Plan,
except as provided in subparagraph A above and except as may be terminated
through death or other termination of employment in accordance with the terms of
the Plan.
X.
AMENDMENTS
The Board of Directors shall have complete power and authority to amend the
Plan, provided, however, that except as expressly permitted in the Plan, the
Board of Directors shall not, without the affirmative vote of the holders of a
majority of the voting stock of the Company, make any amendment which would (a)
abolish the Committee without designating such other committee, change the
qualifications of its members, or withdraw the administration of the 1995 Plan
from its supervision, (b) increase the maximum number of shares for which
options may be granted under the Plan, (c) amend the formula for determination
of the purchase price of shares on which options may be granted, (d) extend the
term of the Plan or change the minimum option price, or (e) amend the
requirements as to the employees eligible to receive Options.
XI.
GOVERNMENT AND OTHER REGULATIONS
The obligation of the Company to sell or deliver shares under Options
granted pursuant to the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by the registrations with any governmental
agencies as may be required.
XII.
LOAN AGREEMENTS
Each Option shall be subject to the condition that the Company shall not be
obliged to issue or transfer any of its stock to a holder of an Option, in the
exercise thereof, if at any time the Committee or the Board of Directors shall
determine that the issuance or transfer of such stock would be in violation of
any covenant in any of the Company's loan agreements or other contracts.
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<PAGE> 28
The Company hereby agrees to the provisions of this Plan, and in witness
thereof, has caused this Agreement to be executed on this 2nd day of May, 1995.
ATTEST:
------------------------------------------------
Secretary
LaBARGE, INC.
By
-------------------------------------------
President
26
<PAGE> 29
<TABLE>
<S> <C>
[X] PLEASE MARK YOUR VOTES SHARES IN YOUR NAME
AS IN THIS EXAMPLE.
FOR WITHHELD FOR AGAINST WITHHELD
1. Election of Directors [ ] [ ] 2. Proposal to amend the By-Laws to [ ] [ ] [ ]
(see reverse) classify the Directors into three
classes, each with 3-year terms.
For, except vote withheld from the following nominee(s):
3. Proposal to amend the Certificate [ ] [ ] [ ]
-------------------------------------------------------- of Incorporation to require a two-
thirds vote to approve certain
fundamental changes.
4. Proposal to ratify the LaBarge, [ ] [ ] [ ]
Inc. 1995 Incentive Stock Option
Plan.
5. Proposal to ratify the selection [ ] [ ] [ ]
of KPMG Peat Marwick LLP as
independent Accountants for the
fiscal year ending June 30, 1996.
Change
of [ ]
Address
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, give
your full title as such.
-----------------------------------------------------------------------------------------------------------------------
PROXY
LABARGE, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 26, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, UNLESS OTHERWISE INDICATED,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1 THROUGH 5.
The undersigned hereby appoints Pierre L. LaBarge, Jr., Craig E. LaBarge and William J. Maender, or any one or more of them
acting in the absence of the others, proxies for the undersigned, with full power of substitution, to vote all shares of the
undersigned at the Annual Meeting of Stockholders of LaBarge, Inc. to be held at the Adam's Mark Hotel, Fourth and Chestnut Streets,
St. Louis, Missouri, on October 26, 1995, at 11:00 A.M., St. Louis time, and at any adjournments thereof. In accordance with the
instructions noted below, and with discretionary authority with respect to such other matters, not known or determined at the time
of the solicitation of this proxy, as may properly come before said meeting or any adjournment thereof.
The undersigned hereby revokes any proxies heretofore given in connection with the Annual Meeting and directs said persons
to use this proxy to act or vote as follows:
Election of Directors, Nominees: (change of address)
Class A: Craig E. LaBarge; James P. Shanahan, Jr.
--------------------------------------------------
Class B: R. Hal Dean; J.C. Kuhn, Jr.; Edward J. Nestor, Jr.
--------------------------------------------------
Class C: Gus G. Casten; Richard P. Conerly; Pierre L. LaBarge, Jr.
--------------------------------------------------
--------------------------------------------------
(If you have written in the above space, please
mark the corresponding box on the reverse side
of this card.)
SEE REVERSE SIDE
00010
</TABLE>
