<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 [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
LaBarge, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[LABARGE INC LOGO]
NOTICE OF
1998 ANNUAL MEETING
OCTOBER 20, 1998
AND PROXY STATEMENT
<PAGE> 3
[LABARGE INC LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 20, 1998
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
20, 1998, at 11:00 A.M., CDT.
At the Annual Meeting, Common Stockholders will be asked:
1. To elect three Directors for a term ending in
2001 and two Directors for a term ending in 2000;
2. To consider and act upon a proposal to approve
the LaBarge, Inc. Employee Stock Purchase Plan;
3. To consider and act upon the ratification of the
selection of KPMG Peat Marwick LLP as independent
accountants for fiscal 1999;
4. 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 August 28, 1998 (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.
You may vote via Internet, telephone or mail.
If you receive more than one proxy card because you own shares registered
in different names or at different addresses, please vote each proxy as soon as
possible by following the instructions on the proxy card sheet regarding voting
by Internet, telephone or mail.
By Order of the Board of Directors,
WILLIAM J. MAENDER
Vice President - Finance and Secretary
September 21, 1998
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU
INTEND TO BE PRESENT, PLEASE VOTE YOUR PROXY. STOCKHOLDERS CAN HELP THE
COMPANY AVOID UNNECESSARY EXPENSE AND DELAY BY PROMPTLY VOTING 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.
9900A CLAYTON ROAD
POST OFFICE BOX 14499
ST. LOUIS, MISSOURI 63178-4499
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 20, 1998
This Proxy Statement is being furnished to the Common Stockholders of
LaBarge, Inc. (the "Company") on or about September 21, 1998 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 20, 1998 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 August 28, 1998 (the "Record
Date") will be entitled to receive notice of and vote at the Annual Meeting.
On the Record Date, 15,540,278 shares of Common Stock were outstanding.
Holders of Common Stock are entitled to one vote per each share of Common Stock
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. Approval of the Employee Stock
Purchase Plan and ratification of the selection of independent accountants each
require 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 32.7% 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 and 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 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, FOR approval of the
Employee Stock Purchase Plan, FOR the ratification of the recommended
independent accountants and, at the discretion of the named proxies, on any
other matters that may properly 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 subsequently dated 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 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., 9900A Clayton Road, St. Louis, Missouri 63124
[telephone number (314) 997-0800].
2
<PAGE> 5
The proxies are solicited by the Board of Directors of the Company. In
addition to the use of the Internet, telephone and mail, proxies may be
solicited personally or by facsimile transmission 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 June 28,
1998 is being mailed to each stockholder along with this Proxy Statement.
-------------------------------------------------------
The date of this Proxy Statement is September 21, 1998.
-------------------------------------------------------
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes,
designated Class A, Class B and Class C. Each Director is elected for a
three-year term and the term of each Class expires in a different year. Since
the 1997 Annual Meeting of Stockholders, there have been several changes and
prospective changes in the Board of Directors. Gus G. Casten, currently
serving as a Class C Director, has indicated to the Company that he will not
stand for reelection at the Annual Meeting. R. Hal Dean and Edward J. Nestor,
Jr., currently serving as Class B Directors, have indicated that they will
resign as Directors effective December 31, 1998, and the Board of Directors
currently intends to reduce the size of the Board to nine members on that date.
In addition, the Board of Directors has elected three new Directors: Messrs.
Lawrence J. LeGrand and John G. Helmkamp, Jr. as Class B Directors and Mr.
Robert H. Chapman as a Class C Director. Because of these changes,
shareholders will be asked at the Annual Meeting to elect two Class B Directors
in addition to the three Class C Directors whose terms will expire at the
Annual Meeting.
The Board of Directors has nominated for election as Class C Directors
Messrs. Robert H. Chapman, Richard P. Conerly and Pierre L. LaBarge, Jr., and
as Class B Directors Messrs. John G. Helmkamp, Jr. and Lawrence J. LeGrand.
Each of the nominees is currently serving as a Director of the Company and each
has consented to continue to serve as a Director if elected. Unless proxy
cards are marked to withhold authority to vote for any of the Director
nominees, the proxies intend to vote all properly executed proxies FOR
election of each of the Director nominees.
The following biographical information is furnished with respect to each
nominee and each current Director whose term continues after 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 C DIRECTORS
ROBERT H. CHAPMAN 2001 52 1998 DIRECTOR
RICHARD P. CONERLY 2001 74 1975 DIRECTOR
PIERRE L. LABARGE, JR. 2001 73 1967 CHAIRMAN EMERITUS AND
DIRECTOR
- --------------------------------------------------------------------------------
Continuing Class A Directors
Craig E. LaBarge 1999 47 1981 Chief Executive Officer,
President and Director
James P. Shanahan, Jr. 1999 37 1987 Director
Jack E. Thomas, Jr. 1999 46 1997 Director
- --------------------------------------------------------------------------------
CONTINUING CLASS B
DIRECTORS AND NOMINEES
R. Hal Dean * 2000 82 1981 Director
JOHN G. HELMKAMP, JR. 2000 51 1998 DIRECTOR
J. C. Kuhn, Jr. 2000 58 1989 Director
LAWRENCE J. LEGRAND 2000 47 1998 DIRECTOR
Edward J. Nestor, Jr. * 2000 73 1972 Director
- --------------------------------------------------------------------------------
</TABLE>
* Will retire as director effective December 31, 1998.
3
<PAGE> 6
-------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR ELECTION OF ITS NOMINEES FOR DIRECTOR.
-------------------------------------------------
EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES FOR DIRECTOR
The following table sets forth certain information, as of August 28, 1998,
with respect to the executive officers, directors whose term of office will
continue after the Annual Meeting and nominees for directors of the Company:
NAME AGE POSITION(S)
- --------------------------------------------------------------------------------
Pierre L. LaBarge, Jr. 73 Chairman Emeritus and Director
Craig E. LaBarge 47 Chief Executive Officer, President and
Director
William J. Maender 52 Vice President - Finance, Treasurer and
Secretary
Harvey Baker 47 Vice President - Operations
Thomas L. Hubbard 45 Vice President - Telecommunications
Business Unit
Robert H. Chapman 52 Director
R. Hal Dean 82 Director
John G. Helmkamp, Jr. 51 Director
J. C. Kuhn, Jr. 58 Director
Lawrence J. LeGrand 47 Director
Edward J. Nestor, Jr. 73 Director
James P. Shanahan, Jr. 37 Director
John A. Sturm 46 Vice President - Geophysical Business
Unit
Jack E. Thomas, Jr. 46 Director
Pierre L. LaBarge, Jr., Chairman Emeritus, is the founder of the
predecessor of the Company. Mr. LaBarge retired from day-to-day business
operations in 1995. He has been a Director since 1967.
Craig E. LaBarge is the son of Pierre L. LaBarge, Jr. and has been a
Director since 1981. He assumed the positions of Chief Executive Officer and
President in 1991. Prior to that time, he was Vice President - Marketing of
the Electronics Division of the Company (1975 to 1979), President of the
Electronics Division of the Company (1979 to present), Vice President of the
Company (1981 to 1986) and President and Chief Operating Officer of the Company
(1986 to 1991). Mr. LaBarge is also a director and member of the Audit
Committee of TALX Corporation and a director of Young Innovations, Inc.
Mr. Maender joined the Company in 1984. He has been Vice President -
Finance, Treasurer and Secretary for more than five years.
Mr. Baker joined the Company in 1996 as Vice President - Operations.
Prior to joining the Company, he was Vice President of Manufacturing and
Customer Service for the Broadcast Division of Harris Corporation for more than
five years.
Mr. Hubbard joined the Company in 1980. He became Vice President -
Telecommunications Business Unit in 1996. Prior to that time, he was Sales
Manager for the Joplin facility for more than five years.
4
<PAGE> 7
Mr. Sturm joined the Company in 1994 as Vice President - Business Planning
and Development. He was named to the position of Vice President - Geophysical
Business Unit in 1996. Prior to joining the Company, Mr. Sturm was Account
Manager for Digital Equipment Corporation for more than five years.
Mr. Chapman became a Director in 1998. He has served as Chairman of the
Board and Chief Executive Officer of Barry-Wehmiller Companies, Inc. since
1975. Mr. Chapman has been a Board member of BWI, PLC since 1987 and of Intrav
since 1997. He has also served as an Advisory Board member of Mercantile Bank
since 1988 and of AON Risk Services of Missouri since 1993.
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. He
is also a director of Young Innovations, Inc.
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 is retired and was
formerly Chairman of the Board, President and Chief Executive Officer of
Ralston Purina Company, for more than five years.
Mr. Helmkamp became a Director in 1998. He retired from the positions of
Chairman of the Board and Chief Executive Officer of Illinois State Bank and
Trust in 1996, where he served in those capacities for more than five years.
Mr. Helmkamp also serves on the Board of Directors of the United Way of Greater
St. Louis.
Mr. Kuhn became a Director in 1989. He retired from the positions of
Executive Vice President and Chief Operating Officer of the Company in 1996.
Mr. Kuhn has served in a consulting capacity for the Company since retirement.
Mr. LeGrand became a director in 1998. He has been Chief Operating
Officer of LMI Aerospace, Inc. since April 1998. Prior to that time, Mr.
LeGrand was a partner of KPMG Peat Marwick LLP for more than five years.
Mr. Nestor became a Director in 1972. He joined the predecessor of the
Company in 1961 and served as Executive Vice President - Finance and Treasurer
from 1975 to 1987, Secretary from 1985 to 1988 and Senior Vice President -
Administration from 1987 to 1988. Mr. Nestor retired as an officer and
employee of the Company in 1988.
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 1986. Mr. Shanahan is also a director of
Pacholder Fund, Inc.
Mr. Thomas became a Director in 1997 and serves as a member of the Audit
and Human Resources Committees of the Board of Directors. He has been
President, Chief Executive Officer and Chairman of the Board of Coin Acceptors,
Inc. since 1982. Mr. Thomas serves on the Board of Directors of Mercantile
Trust Company, is Chairman of Royal Vendors, Inc. (a private company), and
serves on the Advisory Board of AON Risk Services and ALTO U.S., Inc.
5
<PAGE> 8
The Board of Directors of the Company held five meetings in fiscal 1998.
The Company has a standing Audit Committee of its Board of Directors, which
held four meetings in fiscal 1998. 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 1999. The Company also
has a standing Human Resources Committee of its Board of Directors, which held
one meeting in fiscal 1998. 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 1998, with the exception of Mr. Dean.
DIRECTORS' FEES
Members of the Board of Directors who are not employees of the Company
("Non-employee Directors") receive $1,500 for each Board meeting attended, $750
for each committee meeting attended and $500 for attendance at the Company's
Annual Meeting. Directors are reimbursed for expenses incurred in attending
meetings of the Board of Directors and Committees.
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of
the Chief Executive Officer and the four other most highly compensated
executives who served in such capacities as of June 28, 1998, for the fiscal
years indicated.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION (1)
--------------------------------------------
AWARDS
-----------------
ALL OTHER
NAME AND SALARY BONUS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION FISCAL YEAR ($) (1) ($) (1) (#) (2) ($) (3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Craig E. LaBarge 1998 300,014 160,000 15,513 20,003
CEO & President 1997 275,002 120,000 16,775 20,003
1996 250,000 45,000 25,000 20,003
- ---------------------------------------------------------------------------------------------------------------
William J. Maender 1998 168,500 77,000 12,000 16,702
Vice President - Finance, 1997 162,500 45,000 12,500 16,702
Secretary & Treasurer 1996 156,000 21,000 10,000 18,531
- ---------------------------------------------------------------------------------------------------------------
Harvey Baker (4) 1998 155,654 80,000 12,000 31,900
Vice President - Operations 1997 147,441 0 12,500 17,286
- ---------------------------------------------------------------------------------------------------------------
Thomas L. Hubbard (4) 1998 145,000 59,000 12,000 23,085
Vice President - Telecom 1997 138,462 47,500 12,500 13,480
Business Unit
- ---------------------------------------------------------------------------------------------------------------
J. Barry Pipkin 1998 140,000 85,000 12,000 19,243
Vice President 1997 129,500 14,000 10,000 19,243
1996 129,500 0 0 20,937
- ---------------------------------------------------------------------------------------------------------------
</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.
6
<PAGE> 9
(3) Includes the following by individual for the fiscal year ended June 28,
1998:
<TABLE>
<CAPTION>
SPLIT $ LIFE COMPANY MATCH ON
NAME PREMIUM ($) (a) 401(k) DEFERRALS ($)
- -----------------------------------------------------------
<S> <C> <C>
Craig E. LaBarge 20,003 0
- -----------------------------------------------------------
William J. Maender 16,702 2,526
- -----------------------------------------------------------
Harvey Baker 31,900 1,656
- -----------------------------------------------------------
Thomas L. Hubbard 23,085 2,269
- -----------------------------------------------------------
J. Barry Pipkin 19,243 2,291
- -----------------------------------------------------------
</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. Baker and Mr. Hubbard became officers of the Company during fiscal
1997.
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 June 28, 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- --------------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) (a) FISCAL YEAR (a) ($/SH) DATE (b) 5% ($) 10% ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Craig E. LaBarge 15,513 20.5 6.44 8/12/02 27,627 61,049
- --------------------------------------------------------------------------------------------------
William J. Maender 12,000 15.9 5.86 8/12/07 44,224 112,072
- --------------------------------------------------------------------------------------------------
Harvey Baker 12,000 15.9 5.86 8/12/07 44,224 112,072
- --------------------------------------------------------------------------------------------------
Thomas L. Hubbard 12,000 15.9 5.86 8/12/07 44,224 112,072
- --------------------------------------------------------------------------------------------------
J. Barry Pipkin 12,000 15.9 5.86 8/12/07 44,224 112,072
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) No SARs were granted during the fiscal year.
(b) The options granted in fiscal 1998 first become exercisable on August 12,
1999.
AGGREGATE OPTION EXERCISES AND YEAR END OPTION VALUES
The following table sets forth all stock options exercised by the named
executives during the fiscal year ended June 28, 1998 and the number and value
of unexercised options held by such executives at fiscal year end.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED "IN THE MONEY"
NO. SHARES OPTIONS AT YEAR END (#) OPTIONS AT YEAR END ($) (a)
ACQUIRED ON VALUE --------------------------- ------------------------------
NAME EXERCISE (#) REALIZED ($) (b) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Craig E. LaBarge 0 0 130,000 32,288 242,436 0
- ---------------------------------------------------------------------------------------------------------------
William J. Maender 0 0 40,000 24,500 79,163 0
- ---------------------------------------------------------------------------------------------------------------
Harvey Baker 0 0 0 24,500 0 0
- ---------------------------------------------------------------------------------------------------------------
Thomas L. Hubbard 0 0 0 24,500 0 0
- ---------------------------------------------------------------------------------------------------------------
J. Barry Pipkin 0 0 0 22,000 0 0
- ---------------------------------------------------------------------------------------------------------------
</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 June 28, 1998 was $3.625.
(b) Value realized is the difference between the market value of a share on
the exercise date and the exercise price per share, times the number of
shares exercised.
7
<PAGE> 10
HUMAN RESOURCES 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 interest 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 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 new
acquisitions, divestitures, refinancing and many subjective factors. All of
these factors were considered in determining the CEO's total compensation
package for fiscal 1998 and the recommended salary and bonuses for the other
officers for fiscal 1998. 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
James P. Shanahan, Jr.
Jack E. Thomas, Jr.
8
<PAGE> 11
VOTING SECURITIES AND OWNERSHIP THEREOF BY CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Set forth below is information as of August 28, 1998, 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>
Harvey Baker 13,500 (5) *
- ------------------------------------------------------------------------------------------
Robert H. Chapman 0 -
- ------------------------------------------------------------------------------------------
Richard P. Conerly 51,704 *
- ------------------------------------------------------------------------------------------
R. Hal Dean 108,621 *
- ------------------------------------------------------------------------------------------
John G. Helmkamp, Jr. 519,230 (14) 3.3%
- ------------------------------------------------------------------------------------------
Thomas L. Hubbard 34,207 (5)(12) *
- ------------------------------------------------------------------------------------------
J. C. Kuhn, Jr. 35,000 (5) *
- ------------------------------------------------------------------------------------------
Pierre L. LaBarge, Jr. 3,055,166 (2)(3)(4) 19.7%
- ------------------------------------------------------------------------------------------
Craig E. LaBarge 2,922,742 (3)(4)(5)(6) 18.7%
(7)(8)(9)
- ------------------------------------------------------------------------------------------
Lawrence J. LeGrand 0 -
- ------------------------------------------------------------------------------------------
William J. Maender 1,015,326 (4)(5)(10) 6.5%
- ------------------------------------------------------------------------------------------
Edward J. Nestor, Jr. 26,000 (11) *
- ------------------------------------------------------------------------------------------
James P. Shanahan, Jr. 209,200 (13) 1.4%
- ------------------------------------------------------------------------------------------
John A. Sturm 33,000 (5)(15) *
- ------------------------------------------------------------------------------------------
Jack E. Thomas, Jr. 1,000 *
- ------------------------------------------------------------------------------------------
All executive officers and
directors as a group (15 persons) 5,142,989 32.7%
- ------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%.
(1) The address of each executive officer and Director is c/o LaBarge, Inc.,
9900A Clayton Road, St. Louis, Missouri 63124.
(2) Includes 1,062,100 shares owned in Pierre L. LaBarge, Jr.'s individual
capacity. The remaining 2,132,130 shares represent shared voting and
shared investment power.
(3) Includes 1,104,425 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.
(4) Includes 888,641 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 296,151 shares which are held in
accounts of executive officers of the Company and an aggregate of 592,490
shares which are held in accounts of other employees of the Company.
9
<PAGE> 12
(5) Includes options exercisable within 60 days for the following number of
shares under the 1987, 1993 and 1995 Incentive Stock Option Plans: Harvey
Baker - 12,500; Thomas L. Hubbard - 12,500; J. C. Kuhn, Jr. - 15,000;
Craig E. LaBarge - 81,775; William J. Maender - 52,500; John A. Sturm -
30,000. All executive officers and directors as a group - 204,275 shares.
(6) Includes 30,422 shares held by five trusts, for the benefit of four
nephews and one niece, of which trusts Craig E. LaBarge, Mark J. LaBarge
and Pierre L. LaBarge, III are co-trustees and in which shares the
co-trustees disclaim beneficial ownership.
(7) Includes 70,548 shares held by Craig E. LaBarge's spouse in her name,
34,000 shares held in her IRA, and 2,042 shares as custodian for their two
minor children. Craig E. LaBarge disclaims beneficial ownership of these
shares.
(8) 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.
(9) Includes 672,717 shares owned in Craig E. LaBarge's individual capacity
and 20,000 shares held in his IRA.
(10) Includes 74,185 shares owned in William J. Maender's individual capacity.
(11) Includes 15,816 shares owned in Edward J. Nestor, Jr.'s individual
capacity, 10,263 shares 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.
(12) Includes 1,707 shares held by Thomas L. Hubbard's spouse in her name.
Mr. Hubbard disclaims beneficial ownership of these shares.
(13) Includes 183,500 shares owned by a limited partnership of which James P.
Shanahan is a general partner with a pro-rata interest of less than 0.5%.
Mr. Shanahan disclaims beneficial ownership of these shares.
(14) Includes 2,500 shares held by John G. Helmkamp, Jr.'s spouse in her name,
5,911 shares in her IRA and 35,000 shares held in a trust, of which she
acts as trustee. Also includes 57,900 shares held in three trusts for the
benefit of Mr. Helmkamp's children and 20,000 shares held in a trust for
the benefit of his mother; Mr. Helmkamp is trustee of the aforesaid
trusts. Mr. Helmkamp disclaims beneficial ownership of all of these
shares.
(15) Includes 500 shares held by John A. Sturm's spouse in her IRA, of which
shares Mr. Sturm disclaims beneficial ownership, and 2,500 shares held in
his IRA.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
To the Company's knowledge, based solely on review of copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements were met during
fiscal 1998.
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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
La Barge Inc
CUMULATIVE TOTAL RETURN
------------------------------------------------------
6/93 6/94 6/95 6/96 6/97 6/98
LABARGE, INC. 100.00 146.15 276.92 1,130.77 753.85 400.00
PEER GROUP 100.00 106.60 149.07 194.24 168.35 172.66
AMEX MARKET VALUE 100.00 97.66 115.19 132.83 147.06 172.57
The peer group consists of the following companies selected on the basis
of their market capitalization and similarity of businesses: Miltope Group,
Inc.; Sparton Corporation; Tech Sym Corporation; Esterline Technologies
Corporation; EDO Corporation; Whittaker Corporation; Cubic Corporation; GRC
International, Inc. and Aydin Corporation.
PROPOSAL 2: APPROVAL OF THE LABARGE, INC. EMPLOYEE STOCK PURCHASE PLAN
At the Annual Meeting, Common Stockholders will be presented with a
proposal to approve the adoption of the LaBarge, Inc. Employee Stock Purchase
Plan (the "Plan"). The Plan was adopted by the Company's Board of Directors in
January, 1998, subject to approval by the Company's stockholders.
The Plan is intended to promote the interests of the Company and its
Common Stockholders by providing a method for employees to acquire a
proprietary interest in the Company through the purchase of shares of Common
Stock. The Board believes that ownership of Common Stock by its employees will
assist the Company to retain, motivate and attract dedicated employees
committed to the Company. The Board believes that providing employees the
opportunity to purchase Common Stock at a desirable purchase price is an
appropriate method for aligning the interests of the Company's employees with
its stockholders.
A brief description of the material features of the Plan follows; the
description is qualified in its entirety by reference to the Plan, a copy of
which is attached hereto as Exhibit A.
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GENERAL
The Plan provides employees of the Company, through payroll deductions,
the opportunity to purchase shares of Common Stock at below-market prices. The
Plan may be wholly or partially amended or otherwise modified, suspended or
terminated at any time by the Board of Directors. The Plan is designed to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Plan is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
SECURITIES SUBJECT TO THE PLAN
The aggregate number of shares which may be issued under the Plan shall
not exceed 1,000,000.
ADMINISTRATION OF THE PLAN
The Plan provides for administration by the Human Resources Committee (the
"Committee"). In addition to administering the Plan, the Committee is also
authorized to interpret the Plan, to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. The Committee may delegate all or a
portion of its duties to an Administrator.
ELIGIBILITY AND PARTICIPATION
Any employee of the Company who has completed at least 90 consecutive days
of employment with the Company is eligible to participate in the Plan beginning
with the Plan period commencing after such 90th day of employment. However,
employees who own 5% or more of the combined voting power or value of all
classes of Company stock, or who hold options to purchase such amount, are not
eligible to participate. No employee may purchase in a Plan year shares of
Common Stock having a value in excess of $25,000.
ENROLLMENT AND PAYROLL DEDUCTIONS
Enrollment in the Plan is offered to eligible employees four times per
year, effective on the quarterly commencement dates (January 1, April 1, July 1
and October 1). Participating employees may elect to contribute between 1% and
10% of their base pay (subject to a minimum contribution of $5.00 per week)
during the quarter. Contributions are made only through payroll deductions.
PURCHASE PRICE OF SHARES
At the end of each quarterly Plan period, aggregate employee contributions
are used to purchase from the Company shares of Common Stock at a purchase
price equal to 85% of the last sale price of the Common Stock on the American
Stock Exchange on the first day of the offering period or the last day of the
offering period, whichever is less.
TERMINATION OF RIGHTS/WITHDRAWALS
Employees may withdraw all, but not less than all, of their contributions
to the Plan at any time prior to the time such contributions are used to
purchase shares of Common Stock. If a participating employee's employment
terminates for any reason before the last day of a Plan period, he or she will
not be eligible to purchase stock during such period, and amounts withheld
during the period will be refunded, without interest.
OVERSUBSCRIPTION
The Company's Board of Directors will determine the number of shares of
Common Stock to be offered during each quarterly Plan period. If the offering
is oversubscribed, shares will be allocated pro rata to participating employees
according to amounts contributed by each, and any amounts withheld and not used
to purchase shares of Common Stock will be refunded to participating employees,
without interest.
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<PAGE> 15
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a general summary of the material federal
income tax consequences to participants in the Plan. The discussion is based
on the Code, regulations thereunder, rulings and decisions now in effect, all
of which are subject to change. The summary does not discuss all aspects of
federal income taxation that may be relevant to a particular participant in
light of such participant's personal investment circumstances. Also, state and
local income taxes are not discussed and may vary from locality to locality.
Participants in the Plan do not realize income as a result of their
participation, or as a result of purchase of Common Stock under the Plan. If
shares of Common Stock acquired during a Plan period are sold more than 18
months after the termination date of the period, the tax effect to the
participant depends on the fair market value of the Common Stock upon which the
purchase was based [that is, the lower of the fair market value of the Common
Stock on the first or last day of a Plan period ("Purchase Value")]. If a
participant realizes more than the Purchase Value when he or she sells the
Common Stock, an amount equal to 15% of the Purchase Value will be taxed as
ordinary income and any amount realized in excess of the Purchase Value is
taxed as capital gain. If the participant realizes an amount less than the
Purchase Value but more than 85% of the Purchase Value, the difference between
the amount realized and 85% of the Purchase Value is taxed as ordinary income.
If the participant realizes less than 85% of the Purchase Value, no portion of
the sale proceeds is taxed and the difference is treated as a capital loss. If
a participant sells Common Stock acquired in a Plan period before the
expiration of the 18-month holding period described above, the participant will
recognize ordinary income in an amount equal to the difference between the
purchase price for the Common Stock and the market value of the Common Stock on
the date it was purchased. If the sale proceeds are more or less than the fair
market value on the date the Common Stock was purchased, the participant will
recognize capital gain or loss, as appropriate. The gain or loss will be long
or short term, depending on how long the Common Stock was held before it was
sold.
----------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN.
----------------------------------------------------------
PROPOSAL 3: 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 27, 1999 by the
Board of Directors with the approval of the Audit Committee. Peat Marwick has
been the Company's independent accountants since 1980. Although the appointment
of independent accountants does not require the approval of 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 1999.
----------------------------------------------------------
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<PAGE> 16
STOCKHOLDER PROPOSALS
Any stockholder proposal to be presented at the next Annual Meeting, which
is expected to be held in October 1999, must be received by the Company at its
principal office at the address listed on page 2 hereof no later than May 17,
1999.
By Order of the Board of Directors,
WILLIAM J. MAENDER
Vice President - Finance and Secretary
St. Louis, Missouri
September 21, 1998
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<PAGE> 17
EXHIBIT A
LABARGE, INC. EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I - PURPOSE
1.01 Purpose
The LaBarge, Inc. Employee Stock Purchase Plan (the "Plan") is intended
to provide a method whereby Employees of LaBarge, Inc., a Delaware corporation,
and its subsidiary corporations (hereinafter collectively referred to as (the
"Company") will have an opportunity to acquire a proprietary interest in
LaBarge, Inc. through the purchase of shares of the Common Stock of LaBarge,
Inc. It is the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"). The provisions of the Plan shall be
construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
ARTICLE II - DEFINITIONS
2.01 Administrator
"Administrator" means the Company's agent for administering the Plan.
The Administrator shall be appointed by the Committee pursuant to Section
11.02.
2.02 Base Pay
"Base Pay" shall mean regular, straight-time earnings excluding
payments for overtime, shift premium, bonuses and other special payments,
commissions and other marketing incentive payments.
2.03 Board
"Board" means the board of directors of LaBarge, Inc.
2.04 Committee
"Committee" means the Compensation Committee of the Board.
2.05 Employee
"Employee" means any person who is customarily employed on a full-time
or part-time basis by the Company and is regularly scheduled to work more than
twenty hours per week.
2.06 Offering
"Offering" means the Company's offer to sell Stock during an Offering
Period.
2.07 Offering Period
"Offering Period" means the period commencing the first day of each
calendar quarter and ending the last day of such calendar quarter commencing
with the calendar quarter starting July 1, 1998.
2.08 Offering Commencement Date
"Offering Commencement Date" means the first day of each Offering
Period.
2.09 Offering Termination Date
"Offering Termination Date" means the last day of each Offering Period.
2.10 Option
"Option" means the right to purchase Stock pursuant to this Plan.
2.11 Participant
"Participant" means an Employee who elects to participate in the Plan.
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<PAGE> 18
2.12 Plan Account
"Plan Account" means the record of a Participant's full and fractional
shares of Stock held by the Administrator. A Participant's Plan Account and
the shares held in such account will be fully vested in the Participant and
non-forfeitable by the Participant. A Participant's Plan Account will be held
in his or her name as beneficial owner; provided, however, that a Participant
may cause the Administrator to add his or her Spouse as a co-owner of the Plan
Account and may specify the type of ownership such as tenants in common, joint
tenants with the right of survivorship or tenants by the entireties.
2.13 Plan Year
"Plan Year" means the annual accounting period for the Plan beginning
and ending on January 1 and December 31 of each year except that the first Plan
Year shall be the period beginning July 1, 1998 and ending December 31, 1998.
2.14 Spouse
"Spouse" means a person who is alive and married to the Participant
within the meaning of the laws of the State of the Participant's residence as
evidenced by a valid marriage certificate or other proof acceptable to the
Committee.
2.15 Stock
"Stock" means Common Stock of LaBarge, Inc., par value $.01 per share.
2.16 Subsidiary Corporation
"Subsidiary Corporation" means any present or future corporation which
(i) would be a "subsidiary corporation" of LaBarge, Inc. as that term is
defined in Sectioin 424 of the Code, and (ii) is designated as a participating
company in the Plan by the Committee.
ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.01 Initial Eligibility
An Employee who shall have completed ninety days of consecutive
employment with and shall be employed by the Company on the date his or her
participation in the Plan is to become effective shall be eligible to
participate in Offerings which commence on or after such ninety-day period has
concluded.
3.02 Leave of Absence
For purposes of participation in the Plan, a person on leave of absence
shall be deemed to be an Employee for the first ninety days of such leave of
absence and such Employee's employment with the Company shall be deemed to have
terminated at the close of business on the ninetieth day of such leave of
absence unless such Employee shall have returned to regular employment of the
Company (as the case may be) prior to the close of business on such ninetieth
day. Termination by the Company of any Employee's leave of absence, other than
termination of such leave of absence on return to employment with the Company,
shall terminate an Employee's employment for all purposes of the Plan and shall
terminate such Employee's participation in the Plan and right to exercise any
Option.
3.03 Restrictions on Participations
Notwithstanding any provisions of the Plan to the contrary, no Employee
shall be granted an Option to participate in the Plan:
(a) if, immediately after the grant, such Employee would own
Stock, and/or hold outstanding options to purchase Stock, possessing five
percent or more of the total combined voting power or value of all classes of
Stock of LaBarge, Inc. (for purposes of this paragraph, the rules of Section
424(d) of the Code shall apply in determining such Stock ownership of any
Employee); or
(b) which permits his or her rights to purchase Stock under all
employee stock purchase plans, as defined in Section 423 of the Code, of the
Company to accrue at a rate which exceeds $25,000 in fair market value of the
stock (determined at the time such Option is granted) for each calendar year in
which such Option is outstanding.
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3.04 Commencement of Participation
An eligible Employee may become a Participant by completing an
authorization for a payroll deduction on the form provided by the Company and
filing it with the office of the Treasurer of LaBarge, Inc. on or before the
date set therefore by the Committee, which date shall be prior to the Offering
Commencement Date for the Offering (as such terms are defined below). Payroll
deductions for a Participant shall commence on the applicable Offering
Commencement Date when his or her authorization for a payroll deduction becomes
effective and shall end on the Offering Termination Date of the Offering to
which such authorization is applicable unless sooner terminated by the
Participant as provided in Article VIII.
ARTICLE IV - OFFERINGS
4.01 Stock Subject to Options
The aggregate number of shares of stock which may be issued under
Options under this Plan shall not exceed 1,000,000 shares of stock, except for
adjustments under Section 12.04. Shares optioned and not accepted, or, if
accepted, not purchased, shall continue to be available for inclusion in any
subsequent Options which may be granted under the Plan.
4.02 Quarterly Offerings
The Board shall determine the number of shares of stock, subject to the
aggregate limits of Section 4.01, to be offered under the Plan before the first
day of each Offering Period commencing with the Offering Period starting July
1, 1998.
ARTICLE V - PAYROLL DEDUCTIONS
5.01 Amount of Deduction
At the time a Participant files his or her authorization for payroll
deduction, he or she shall elect to have deductions made from his or her pay on
each payday during the time he or she is a Participant in an Offering at the
rate of 1, 2, 3, 4, 5, 6, 7, 8, 9 or 10 percent of his or her Base Pay in
effect at the Offering Commencement Date of such Offering, provided, however,
that such payroll deduction must not be less than $5.00 for a payroll period.
In the case of an hourly Employee, such Employee's Base Pay during an Offering
shall be determined by multiplying such Employee's hourly rate of pay in effect
on the Offering Commencement Date by the number of regularly scheduled hours of
work for such Employee during such Offering.
5.02 Participant's Account
All payroll deductions made for a Participant shall be credited to his
or her account under the Plan. A Participant may not make any separate cash
payment into such account. Payroll deductions shall be deposited with the
Company's general funds.
5.03 Changes in Payroll Deductions
A Participant may discontinue his or her participation in the Plan as
provided in Article VIII, but no other change can be made during an Offering
and, specifically, a Participant may not alter the amount of his or her payroll
deductions for that Offering.
5.04 Leave of Absence
If a Participant goes on a leave of absence, such Participant shall have
the right to elect: (a) to withdraw the balance in his or her account pursuant
to Section 7.02, (b) to discontinue contributions to the Plan but remain a
Participant in the Plan, or (c) remain a Participant in the Plan during such
leave of absence, authorizing deductions to be made from payments by the
Company to the Participant during such leave of absence.
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ARTICLE VI - GRANTING OF OPTION
6.01 Number of Option Shares
On the Offering Termination date of each Offering, a Participant shall
purchase a number of full and fractional shares of stock equal to the amount
withheld from his or her Base Pay during the Offering divided by the Option
Price as determined under Section 6.02.
6.02 Option Price
The Option Price of Stock purchased with payroll deductions made during
such Offering for a Participant therein shall be the lower of:
(a) eighty-five percent of the closing price of the Stock on the
Offering Commencement Date or the nearest prior business day on which trading of
Stock occurred on the American Stock Exchange; or
(b) eighty-five percent of the closing price of the Stock on the
Offering Termination Date or the nearest prior business day on which trading of
Stock occurred on the American Stock Exchange. If the Stock is not admitted to
trading on any of the aforesaid dates for which closing prices of the Stock are
to be determined, then reference shall be made to the fair market value of the
Stock on that date, as determined on such basis as shall be established or
specified for the purpose by the Committee.
ARTICLE VII - EXERCISE OF OPTION
7.01 Automatic Exercise
Unless a Participant gives written notice to the Company as hereinafter
provided, his or her Option for the purchase of Stock with payroll deductions
made during any Offering will be deemed to have been exercised automatically on
the Offering Termination Date applicable to such Offering, for the purchase of
the number of full shares of Stock which the accumulated payroll deductions in
his or her account at that time will purchase at the applicable Option price.
7.02 Withdrawal of Account
By written notice to the Treasurer of the Company, at any time prior to
the Offering Termination Date applicable to any Offering, a Participant may
elect to withdraw all the accumulated payroll deductions in his or her account
at such time.
7.03 Transferability of Option
During a Participant's lifetime, Options held by such Participant shall
be exercisable only by that Participant.
7.04 Delivery of Stock
As promptly as practicable after the Offering Termination Date of each
Offering, the Company will cause to be transferred to each Participant's Plan
Account the shares evidencing Stock purchased upon exercise of his or her
Option.
ARTICLE VIII - WITHDRAWAL
8.01 In General
As provided in Section 7.02, a Participant may withdraw payroll
deductions credited to his or her account under the Plan at any time by giving
written notice to the Treasurer of LaBarge, Inc. All of the Participant's
payroll deductions credited to his or her account will be paid to him promptly
after receipt of his or her notice of withdrawal, and no further payroll
deductions will be made from his or her pay during such Offering. The Company
may, at its option, treat any attempt to borrow by a Employee on the security of
his or her accumulated payroll deductions as an election to withdraw such
deductions.
8.02 Effect on Subsequent Participation
A Participant's withdrawal from any Offering will not have any effect
upon his or her eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by the Company.
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8.03 Termination of Employment
Upon termination of the Participant's employment for any reason,
including retirement (but excluding death while in the employ of the Company or
continuation of a leave of absence for a period beyond ninety days), the
payroll deductions credited to his or her account will be returned to him or
her, or, in the case of his or her death subsequent to the termination of his
or her employment, to the person or persons entitled thereto under Section
12.01.
8.04 Termination of Employment Due to Death
Upon termination of the Participant's employment because of his or her
death, his or her beneficiary (as defined in Section 12.01) shall be paid
within sixty days commencing with the date of the death of the Participant the
payroll deductions credited to the Participant's account under the Plan.
8.05 Leave of Absence
A Participant on leave of absence shall, subject to the election made by
such Participant pursuant to Section 5.04, continue to be a Participant in the
Plan so long as such Participant is on continuous leave of absence. A
Participant who has been on leave of absence for more than ninety days and who
therefore is not an Employee for the purpose of the Plan shall not be entitled
to participate in any Offering commencing after the ninetieth day of such leave
of absence. Notwithstanding any other provisions of the Plan, unless a
Participant on leave of absence returns to regular full-time or part-time
employment with the Company at the earlier of: (a) the termination of such
leave of absence or (b) three months from the ninetieth day of such leave of
absence, such Participant's participation in the Plan shall terminate on
whichever of such dates first occurs.
ARTICLE IX - INTEREST
9.01 Payment of Interest
No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any Participant.
ARTICLE X - STOCK
10.01 Maximum Shares
If the total number of shares of Stock for which Options are exercised
on any Offering Termination Date in accordance with Article VI exceeds the
maximum number of shares of Stock for the applicable Offering, the Company
shall make a pro rata allocation of the shares of Stock available for delivery
and distribution in a nearly uniform a manner as shall be practicable and as it
shall determine to be equitable, and the balance of payroll deductions credited
to the account of each Participant under the Plan shall be returned to him or
her as promptly as possible.
10.02 Participant's Interest in Option Stock
The Participant will have no interest in Stock covered by his or her
Option until such Option has been exercised at the Offering Termination Date
for any offering.
10.03 Registration of Stock
Stock to be delivered to a Participant's Plan Account will be registered
in the name of the Participant as the beneficial, or, if the Participant so
directs by written notice to the Treasurer of the Company, in the names of the
Participant and his or her Spouse, as provided by Section 2.12.
10.04 Restrictions on Exercise
The Board may, in its discretion, require as conditions to the exercise
of any Option that the shares of Stock reserved for issuance upon the exercise
of the Option shall have been duly listed, upon official notice of issuance,
upon a stock exchange, and that either:
(a) a Registration Statement under the Securities Act of 1933,
as amended, with respect to said shares shall be effective, or
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<PAGE> 22
(b) the Participant shall have represented at the time of
purchase, in form and substance satisfactory to the Company, that it is his or
her intention to purchase the shares for investment and not for resale or
distribution.
ARTICLE XI - ADMINISTRATION
11.01 Appointment of Committee
The Committee shall administer the Plan.
11.02 Authority of Committee
Subject to the express provisions of the Plan, the Committee shall have
plenary authority in its discretion to interpret and construe any and all
provisions of the Plan, to adopt rules and regulations for administering the
Plan, and to make all other determinations deemed necessary or advisable for
administering the Plan. The Committee's determination on the foregoing matters
shall be conclusive. The Committee may delegate all or a portion of its duties
to an Administrator to facilitate the purchase and transfer of shares of Stock
and to otherwise assist in the administration of the Plan.
ARTICLE XII - MISCELLANEOUS
12.01 Designation of Beneficiary
A Participant may file a written designation of a beneficiary who is to
receive any cash credited to his or her account at the time of his or her
death. Such designation of beneficiary may be changed by the Participant at
any time by written notice to the Treasurer of LaBarge, Inc. Upon the death of
a Participant and upon receipt by the Company of proof of identity and
existence at the Participant's death of a beneficiary validly designated by him
under the Plan, the Company shall pay such cash to the beneficiary in
accordance with Section 8.04. In the event of the death of a Participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such Participant's death, the Company shall pay cash to the
executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may pay cash to the Spouse or to any one or
more dependents of the Participant as the Company may designate. No
beneficiary shall, prior to the death of the Participant by whom he or she had
been designated, acquire any interest in the Stock or cash credited to the
Participant under the Plan.
12.02 Transferability
Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an Option or to receive Stock under the
Plan may be assigned, transferred, pledged, or otherwise disposed of in any way
by the Participant other than by will or the laws of descent and distribution.
Any such attempted assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Section 7.02.
12.03 Use of Funds
All payroll deductions received or held by the Company under this Plan
may be used by the Company for any corporate purpose and the Company shall not
be obligated to segregate such payroll deductions.
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12.04 Adjustment Upon Changes in Capitalization
(a) If, while any Options are outstanding, the outstanding
shares of Stock of the Company have increased, decreased, changed into, or been
exchanged for a different number or kind of shares or securities of the Company
through reorganization, merger, recapitalization, reclassification, stock split,
reverse stock split or similar transaction, appropriate and proportionate
adjustments may be made by the Committee in the number and/or kind of shares
which are subject to purchase under outstanding Options and on the Option
exercise price or prices applicable to such outstanding options. In addition,
in any such event, the number and/or kind of shares of Stock which may be
offered in the Offerings described in Article IV hereof shall also be
proportionately adjusted. No adjustments shall be made for stock dividends. For
the purposes of the Paragraph, any distribution of shares of stock to
shareholders in an amount aggregating twenty percent or more of the outstanding
shares of stock shall be deemed a stock split and any distributions of shares
aggregating less than twenty percent of the outstanding shares of Stock shall be
deemed a stock dividend.
(b) Upon the dissolution or liquidation of LaBarge, Inc., or
upon a reorganization, merger or consolidation of LaBarge, Inc. with one or more
corporations as a result of which LaBarge, Inc. is not the surviving
corporation, or upon a sale of substantially all of the property or Stock of
LaBarge, Inc. to another corporation, the holder of each Option then outstanding
under the Plan will thereafter be entitled to receive at the next Offering
Termination Date upon the exercise of such Option for each share of Stock as to
which such option shall be exercised, as nearly as reasonably may be determined,
the cash, securities and/or property which a holder of one share of the Stock
was entitled to receive upon and at the time of such transactions. The Board
shall take such steps in connection with such transactions as the Board shall
deem necessary to assure that the provisions of this Section 12.04 shall
thereafter be applicable, as nearly as reasonably may be determined, in relation
to the said cash, securities and/or property as to which such holder of such
Option might thereafter be entitled to receive.
12.05 Amendment and Termination
The Board shall have complete power and authority to terminate or amend
the Plan; provided, however, that the Board shall not, without the approval of
the stockholders of LaBarge, Inc. (i) increase the maximum number of shares
which may be issued under any Offering (except pursuant to Section 12.04); (ii)
amend the requirements as to the class of Employees eligible to purchase stock
under the Plan or permit the members of the Committee to purchase stock under
the Plan. No termination, modification or amendment of the Plan may, without
the consent of an Employee then having an Option under the Plan to purchase
Stock, adversely affect the rights of such Employee under such Option.
12.06 Effective Date
The Plan shall become effective as of July 1, 1998, subject to approval
by the holders of the majority of the Stock present and represented at a special
or annual meeting of the shareholders of LaBarge, Inc. held on or before
December 31, 1998. If the Plan is not so approved, the Plan shall not become
effective and all funds withheld from the Base Pay of Participants shall be
returned to such Participants without interest.
12.07 No Employment Rights
The Plan does not, directly or indirectly, create any right for the
benefit of any Employee or class of Employees to purchase any shares of stock
under the Plan, or create in any Employee or class of Employees any right with
respect to continuation of employment by the Company, and it shall not be
deemed to interfere in any way with the Company's right to terminate, or
otherwise modify, an Employee's employment at any time.
12.08 Effect of Plan
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each Participant,
including, without limitation, such Participant's estate and the executors,
administrators or trustees thereof, heirs and legatees, and any receiver,
trustee in bankruptcy or representative of creditors of such Participant.
21
<PAGE> 24
12.09 Headings
The headings are inserted for convenience only and shall not affect the
meaning or interpretation of the Plan.
12.10 Terms
Terms in the singular shall be deemed to include the plural, and vice
versa, wherever the context so permits or requires.
12.11 Governing Law
The law of the State of Delaware will govern all matters relating to
this Plan except to the extent it is superseded by the laws of the United
States.
IN WITNESS WHEREOF, this Plan is adopted this 28th day of January, 1998.
LABARGE, INC.
By: /s/Craig E. LaBarge
22
<PAGE> 25
LABARGE, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. VOTE BY INTERNET.
2. VOTE BY PHONE.
3. VOTE BY MAIL.
VOTE BY INTERNET
Your Internet vote is quick, convenient and your vote is immediately submitted.
Just follow these easy steps:
1. Read the accompanying Proxy Statement.
2. Visit our Internet Voting site at http://www.umb.com/proxy and follow
the instructions on the screen.
Please note that all votes cast by Internet must be submitted prior to 5:00 p.m.
Central Time, October 19, 1998.
Your Internet vote authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated and returned the proxy card.
IF YOU VOTE BY INTERNET, PLEASE DO NOT RETURN YOUR PROXY BY MAIL.
VOTE BY TELEPHONE
Your Telephone vote is quick, easy and immediate. Just follow these easy steps:
1. Read the accompanying Proxy Statement.
2. Using a Touch-Tone Telephone, call Toll Free 800-758-6973 and follow
the instructions.
3. When instructed, enter the three digit code-- 107-- followed by your
Proxy Number which is printed on the lower right-hand corner of
your proxy card below.
OPTION 1 - PRESS 1 to vote as the Board of Directors recommends on ALL
proposals:
OPTION 2 - PRESS 2 to vote on each proposal SEPARATELY, and follow the
instructions for each proposal:
TO VOTE FOR - PRESS 1 TO VOTE AGAINST - PRESS 2 TO ABSTAIN - PRESS 3
PRESS 1 to confirm your vote.
Your telephone vote authorizes the named proxies to vote your shares to the same
extent as if you marked, signed, dated and returned the proxy card.
IF YOU VOTE BY TELEPHONE, PLEASE DO NOT RETURN
YOUR PROXY BY MAIL.
VOTE BY MAIL
To vote by mail, complete, sign and date the proxy card below. Detach the card
and return it in the envelope provided herein.
IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE, DETACH PROXY CARD AND RETURN.
- --------------------------------------------------------------------------------
LABARGE, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 20, 1998
The undersigned hereby appoints Craig E. LaBarge and William J. Maender, or
either of them acting in the absence of the other, 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 20, 1998, 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 adjournments
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:
<TABLE>
<C> <C> <C>
1. Election of Directors Class B: 01- John G. Helmkamp, Jr. Class C: 03- Robert H. Chapman
02- Lawrence J. LeGrand 04- Richard P. Conerly
05- Pierre L. LaBarge, Jr.
/ / FOR all nominees listed / / WITHHOLD AUTHORITY to vote for all nominees / / FOR all nominees EXCEPT nominees
written in space below.
</TABLE>
- --------------------------------------------------------------------------------
2. Proposal to approve the adoption of the LaBarge, Inc. Employee Stock
Purchase Plan.
3. Proposal to ratify the selection of KPMG Peat Marwick LLP as Independent
Accountants for the fiscal year ending June 27, 1999.
(See Reverse Side)
<PAGE> 26
THANK YOU FOR YOUR VOTE
IF YOU ARE NOT VOTING BY INTERNET OR BY TELEPHONE, DETACH PROXY CARD AND RETURN.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS
OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
NOTE: Please sign exactly as name
appears hereon. Joint owners
should each sign. When
, signing as attorney, executor
administrator, trustee or
guardian, please give full
title as such.
DATE:
-----------------------------
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SIGNATURE(S)
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SIGNATURE(S)
