<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
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
The L. E. Myers Co. Group
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
[NAME]
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[THE L.E. MYERS CO. LETTERHEAD]
April 4, 1995
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to be
held on Thursday, May 11, 1995, in the English Room, Meadows Corporate Center,
2850 West Golf Road, Rolling Meadows, Illinois, commencing at 10:00 a.m.
Chicago time.
We hope you will be able to join us at this year's meeting; but whether or not
you plan to attend in person, please take a few minutes now to sign, date and
return your proxy in the enclosed pre-addressed postage prepaid envelope.
Regardless of the number of shares of common stock of Myers that you may own,
your vote is important.
Thank you for your continued interest in our Company.
Sincerely,
Charles M. Brennan III
Chairman and
Chief Executive Officer
<PAGE> 3
THE L. E. MYERS CO. GROUP
SUITE 200
2550 WEST GOLF ROAD
ROLLING MEADOWS, ILLINOIS 60008
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, MAY 11, 1995
The 1995 annual meeting of the stockholders of The L. E. Myers Co. Group,
a Delaware corporation (the "Company"), will be held at the Meadows Corporate
Center, English Room, 2850 West Golf Road, Rolling Meadows, Illinois on
Thursday, May 11, 1995 commencing at 10:00 a.m., Chicago time, for the
following purposes:
1. To elect one Class III director.
2. To consider and vote upon a proposal to approve the Company's 1995
Stock Option Plan as described in and attached to the accompanying
proxy statement as Appendix A.
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The close of business on March 23, 1995 has been fixed as the record date
for the meeting. Only stockholders of record at that date are entitled to
notice of and to vote at the meeting. A list of such stockholders will, for
ten days prior to the meeting, be open for examination by any stockholder, for
any purpose germane to the meeting, at the office of the Secretary of the
Company, Suite 200, 2550 West Golf Road, Rolling Meadows, Illinois during
regular business hours. You are cordially invited to attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Byron D. Nelson
Secretary
Rolling Meadows, Illinois
April 4, 1995
THE FORM OF PROXY IS ENCLOSED. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE
MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING.
<PAGE> 4
THE L. E. MYERS CO. GROUP
SUITE 200
2550 WEST GOLF ROAD
ROLLING MEADOWS, ILLINOIS 60008
(708) 290-1891
PROXY STATEMENT
This proxy statement is furnished to the stockholders of The L. E. Myers
Co. Group, a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Company's Board of Directors for use at the 1995
annual meeting of stockholders (the "Annual Meeting") to be held at the Meadows
Corporate Center, English Room, 2850 West Golf Road, Rolling Meadows, Illinois
on Thursday, May 11, 1995 commencing at 10:00 a.m., Chicago time, and at any
adjournment or adjournments thereof. This proxy statement and the accompanying
form of proxy are first being mailed to stockholders on or about April 4, 1995.
Only holders of record of common stock, $1.00 par value, of the Company
("Common Stock") as of the close of business on March 23, 1995, the record date
fixed for the Annual Meeting, are entitled to notice of and to vote at the
Annual Meeting.
The voting securities of the Company consist solely of its shares of
Common Stock, 2,379,156 of which were issued and outstanding and entitled to
vote at the close of business on March 23, 1995, the record date for the Annual
Meeting. Each holder of record of shares of Common Stock at the record date is
entitled to one vote for each share held on every matter submitted to the
Annual Meeting. The election of one Class III director will be determined by a
plurality of the shares present and entitled to vote at the meeting. The
approval of the 1995 Stock Option Plan and other business which may be properly
brought before the meeting, will be determined by a majority of the shares
present and entitled to vote at the meeting.
Shares of Common Stock cannot be voted at the Annual Meeting unless the
holder of record is present in person or is represented by proxy. The enclosed
proxy is a means by which a stockholder may authorize the voting of his shares
at the Annual Meeting. When the stockholder has properly executed the proxy,
the shares represented thereby will be voted in accordance with the
instructions thereon. The enclosed proxy may be revoked by the stockholder
giving it at any time before it is exercised, either in person at the meeting,
by written notice to the Secretary of the Company or by delivery of any
later-dated proxy.
Proxies will be solicited principally by mail. Arrangements have been
made with brokerage houses, custodians, nominees and fiduciaries to forward the
proxy materials to the beneficial owners of Common Stock held of record by
those firms. The Company will reimburse banks, brokers or other nominees for
the expenses incurred in forwarding proxy material to beneficial owners. In
addition, certain directors and officers and other employees may solicit
proxies, without additional remuneration therefor, by personal contact, mail,
telephone, telegraph, or electronic communication. The Company will bear the
cost of this solicitation which it estimates will be approximately $6,000.
<PAGE> 5
ELECTION OF DIRECTOR
The Company's certificate of incorporation provides that the Board of
Directors shall be divided into three classes, such classes to be as nearly
equal in number as possible. On January 3, 1995, in accordance with provisions
of the Agreement and Plan of Merger dated October 5, 1994 (as amended) (the
"Merger Agreement") by and among the Company, HMM Corporation (a wholly owned
subsidiary of the Company) and Harlan Electric Company ("Harlan"), the Board of
Directors amended the bylaws of the Company to provide that the number of
directors which shall constitute the whole Board of Directors be increased from
four to five and elected Mr. John M. Harlan as a Class I director to become the
fifth director of the Company. Mr. Harlan was elected to serve a term from
January 3, 1995 until the term of the Class I directors expires at the 1996
annual meeting of stockholders. The Board of Directors, currently consists of
two Class I directors (whose terms shall expire at the 1996 annual meeting of
stockholders), two Class II directors (whose terms shall expire at the 1997
annual meeting of stockholders) and one Class III director (whose term shall
expire at the Annual Meeting).
The Board of Directors has nominated Mr. Charles M. Brennan III for
election as a Class III director at the Annual Meeting. Mr. Brennan is the
incumbent Class III director. It is intended that shares represented by
properly executed proxies will be voted at the Annual Meeting, in the absence
of contrary instructions, for the election of Mr. Brennan as a Class III
director. Should Mr. Brennan be unavailable for election for any reason, such
proxies will be voted for a substitute nominated by the Board of Directors.
The following information is set forth below with respect to the nominee
and the incumbent directors: (i) his name, (ii) his age, (iii) all of his
positions and offices with the Company, (iv) his business experience during the
past five years, (v) his directorships in other publicly held companies, and
(vi) the period during which he has served as a director of the Company.
Class III (Nominee) - Term expires 1998
CHARLES M. BRENNAN III (53) Director since 1986. Chairman (since 1988) and
Chief Executive Officer (since 1989) of the Company. Mr. Brennan is also a
director of UNR Industries, Inc. and Control Devices, Inc.
Class I Directors - Term expires 1996
WILLIAM G. BROWN (52) Director since 1990. Partner in the law firm of Bell,
Boyd & Lloyd, Chicago, Illinois since 1976. Mr. Brown is also a director of
Medicus Systems Corporation and Dovenmeuhle Mortgage, Inc.
JOHN M. HARLAN (61) Director since 1995. Former Chairman and President of
Harlan Electric Company (since 1963).
Class II Directors - Term expires 1997
ALLAN E. BULLEY, JR. (62) Director since 1992. Chairman (since 1991) and Chief
Executive Officer (since 1970) of Bulley and Andrews, a general construction
firm, Chicago, Illinois.
BIDE L. THOMAS (59) Director since 1993. Former President and Chief Operating
Officer of Commonwealth Edison Electric Company, an investor owned electric
utility, Chicago, Illinois. Mr. Thomas is also a director of Northern Trust
Corporation, The Northern Trust Company and R. R. Donnelley & Sons Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION OF CHARLES M. BRENNAN III AS A CLASS III DIRECTOR OF THE
COMPANY.
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<PAGE> 6
GOVERNANCE OF THE COMPANY BY ITS BOARD OF DIRECTORS
The bylaws of the Company require the Board of Directors to have an Audit
Committee and permit the Board of Directors to designate, by resolution, other
committees of the Board to have and exercise certain of the powers of the Board
of Directors in the management of the business and affairs of the Company. The
primary functions of the Audit Committee are to review the Company's interim
and annual financial statements and the reports of its management and auditors
thereon, and to report its findings and recommendations to the Board of
Directors. The current members of the Audit Committee are Mr. Brown
(Chairman), Mr. Bulley, Mr. Thomas and Mr. Brennan (ex-officio). During 1994
the Board of Directors established a Compensation Committee. The primary
purposes of the Compensation Committee are to administer the Company's stock
option plans and incentive plans and set the compensation of the Chief
Executive Officer and other executive officers. During 1994 the Board of
Directors held seven meetings and the Audit Committee held two meetings. The
Compensation Committee held two meetings in 1994 in conjunction with meetings
of the Board of Directors.
COMPENSATION OF DIRECTORS
Each director of the Company who is not an employee of the Company or any
of its subsidiaries is paid a fee of $12,000 annually plus $500 for each
meeting of the Board of Directors or committee of the Board which he attends,
with a maximum of one meeting fee payable for any calendar day.
Under the terms of the 1993 Non-Employee Directors' Stock Option Plan each
non-employee director, upon his or her first election to the Board of
Directors, receives an option to purchase 10,000 shares of Common Stock. The
plan further provides that each director shall receive an option to purchase an
additional 1,000 shares of Common Stock on the date each annual meeting of
stockholders is held after the year in which the non-employee director was
first elected to Board of Directors. The terms of the initial 10,000 share
grant and of each of the subsequent 1,000 share grants are: (i) the option
price shall be the average of the high and low prices of a share of common
stock on the New York Stock Exchange on the date of grant; (ii) the option
shall vest with respect to 25% of the shares six months after the date of
grant, with respect to an additional 25% of the shares one year after the date
of grant, with respect to an additional 25% of the shares two years after the
date of the grant, and with respect to the final 25% of the shares three years
after the date of the grant; (iii) the option shall expire ten years after the
date of the grant. On May 12, 1994, the date of the Company's 1994 annual
meeting of stockholders, Messrs. Brown, Bulley and Thomas were granted an
option to purchase 1,000 shares of Common Stock at an exercise price of $11.32
per share. On January 3, 1995, Mr. Harlan was granted an option to purchase
10,000 shares of Common Stock at an exercise price of $10.82 per share.
Messrs. Brown, Bulley and Thomas will be granted an option to purchase 1,000
shares of Common Stock on the date of the Annual Meeting in accordance with the
terms of the plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 3, 1995, the Company acquired all of the issued and outstanding
shares of capital stock of Harlan in accordance with the terms of the Merger
Agreement for a total consideration of $19,291,097 consisting of $13,611,557 of
cash, $3,737,430 in non-escrow notes and $1,942,110 in escrow notes. The
non-escrow notes may be converted into shares of Common Stock at a conversion
price of $12.6212 at any time after January 4, 1996 and before January 3, 2002.
The escrow notes may be converted into shares of Common Stock at a conversion
price of $12.6212 at any time after the expiration of the representations and
warranties of Harlan under the Merger Agreement and before January 3, 2002.
John M. Harlan and his five brothers and sisters (the "Noteholders") received
all of the escrow and non-escrow notes, aggregating $5,679,540 which are
convertible into 450,000 shares of Common Stock under the terms of the Merger
Agreement. Both the escrow and non-escrow notes are for a term of seven years
with interest being paid semi-annually and the principal being repaid in three
equal payments on the fifth, sixth and seventh anniversary dates of the notes
respectively. The escrow and the non-escrow notes may be redeemed by the
Company at any time after January 3, 2000 or at any early time with the consent
of the
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<PAGE> 7
Noteholder. To the extent provided in the Merger Agreement the Company may
setoff against the escrow notes the amount of any damages the Company may have
as a result of claims related to inaccurate representations or warranties of
Harlan under the Merger Agreement. In exchange for his 61,223 shares of stock
of Harlan, John M. Harlan, as trustee, received cash in the amount of $989,417,
a 7% convertible subordinated non-escrow note in the amount of $537,098 and a
7% convertible subordinated escrow note in the amount of $279,096.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For the year ended December 31, 1994, the Company incurred legal fees
for services rendered in the amount of $419,683 to Bell, Boyd & Lloyd of which
Mr. Brown, a Director and member of the Compensation Committee, is a partner.
The Company anticipates that Bell, Boyd & Lloyd will continue to provide legal
services to the Company in 1995.
APPROVAL OF 1995 STOCK OPTION PLAN
General. The Board of Directors unanimously adopted and recommends that
the stockholders approve The L. E. Myers Co. Group 1995 Stock Option Plan (the
"1995 Plan"), a copy of which is attached as Appendix A to this proxy
statement. The Board of Directors believes it is important to have the ability
to grant stock options to assist it in attracting, retaining, rewarding, and
motivating key individuals. In this regard, the Committee which administers
the Company's 1990 and 1992 stock option plans issued stock options covering,
in the aggregate, 46,500 shares of Common Stock, to key employees of Harlan
and its subsidiaries. In addition, stock options covering 14,500 shares of
Common Stock in the aggregate were granted to two key employees of The L. E.
Myers Co., a wholly owned subsidiary of the Company. One of the grantees of
these options is an executive officer of the Company. It also granted options
covering, in the aggregate 4,500 shares of Common Stock, to two new key
employees on February 23, 1995. In adopting the 1995 Plan the Board of
Directors took into consideration the number of key employees increased as a
result of the merger and that no shares except for those available as a result
of canceled options would be available for future grants under the Company's
1990 and 1992 plans. The following summary of the 1995 Plan is qualified in
its entirety by reference to the text of the 1995 Plan.
Purpose. The purpose of the 1995 Plan is to benefit the Company through
maintenance and development of its business by offering certain present and
future key employees a favorable opportunity to become stockholders, thereby
giving them a permanent stake in the growth and prosperity of the Company and
encouraging their maximum efforts for and continued involvement with the
Company.
Administration. The 1995 Plan shall be administered by a committee of the
Board of Directors (the "Committee") which consists of not less than two
members of the Board of Directors who are not employees or officers of the
Company. Members of the Committee shall be appointed from time to time by the
Board of Directors. Subject to the terms of the 1995 Plan, the Committee shall
have the authority, among other things, to determine (i) the persons to be
granted options; (ii) the number of shares subject to each option; (iii) the
exercise price of the option (which price shall not be less than the fair
market value of the option at the time of grant); (iv) the time or times when
the option may be exercised; (v) the date the option terminates (which shall
not be more than 10 years after the grant date); (vi) whether the option may be
transferred (as limited by the 1995 Plan); (vii) the form of payment for the
exercise price; and (viii) whether the option shall include a right to receive
dividend equivalent payments.
Shares subject to the 1995 Plan. The 1995 Plan provides for the delivery
of shares of Common Stock of the Company upon the exercise of options. The
number of shares of Common Stock which may be issued under the 1995 Plan may
not exceed, in the aggregate, 300,000. A proportionate or equitable adjustment
of the number of shares subject to the 1995 Plan and options granted
thereunder, and of the purchase price per share, will be made
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<PAGE> 8
in the event of any stock split, stock dividend, merger or similar event. In
the event that a stock option granted under the 1995 Plan expires or is
terminated or canceled unexercised as to any shares, such released shares may
again be issued under the 1995 Plan.
Eligibility. All key employees of the Company are eligible to be
considered as recipients of a grant or grants of options to purchase shares of
Common Stock under the 1995 Plan. There are currently approximately sixty such
key employees.
Termination of employment. In the event that an optionee ceases to be an
employee of the Company or any subsidiary for any reason except death,
permanent disability, retirement or termination for cause, his options may be
exercised at any time during their specified term for a period of 90 days after
the date of such termination. If his employment is terminated by death,
permanent disability or retirement his options may be him (or in the event of
his death, by his heirs, legatees, or legal representatives) during their
specified term for a period of up to 3 years following such event to the extent
that such options were exercisable at the date of termination, unless otherwise
accelerated by the Committee in its discretion. In the event of termination of
employment for cause, the optionee's options shall expire and all rights to
purchase shares of Common Stock pursuant thereto shall cease immediately.
Non-transferability of options. Except to the extent provided below, no
option granted under the 1995 Plan may be transferred by the optionee (except,
in the event of the optionee's death, by will or the laws of descent and
distribution, to the limited extent described in "Termination of Employment".)
The Committee may, however, in its discretion, grant an option which would
permit the optionee, at any time prior to his or her death, to transfer all or
a portion of such option to: (i) his or her spouse or lineal descendants or the
spouse or spouses of his or her lineal descendants; (ii) the trustee of a trust
established for the benefit of his or her spouse or lineal descendants or the
spouse or spouses of his or her lineal descendants; or (iii) a partnership
whose only partners are the spouse and/or lineal descendants and/or the spouse
or spouses of the lineal descendants of the optionee; provided that the form of
such transfer sets forth the transfer limitations, the optionee receives no
consideration from the transferee, and the transferee is subject to all of the
terms of the option. The transfer shall be evidenced by an appropriate written
document received by the Company on or prior to the date of the transfer.
Amendment of the 1995 Plan. The Board of Directors may amend or
discontinue the 1995 Plan at any time. However, no such amendment or
discontinuance may change or impair any option previously granted without the
consent of the optionee.
Federal income tax consequences. Options granted under the 1995 Plan are
not intended to qualify as "incentive stock options" within the meaning of
Section 422A of the Internal Revenue Code. The Company understands that under
current federal income tax law that (i) no income will be recognized by the
optionee at the time of grant of an option; (ii) upon exercise of an option,
the optionee will be required to treat as ordinary income the difference
between the option price and the fair market value of the stock purchased on
the date of exercise; and (iii) the Company will be entitled to treat as a
deduction the amount recognized as income by the optionee at the time of
exercise.
Effective date. If the 1995 Plan is approved by the stockholders of the
Company at the Annual Meeting, it shall be deemed to have become effective on
January 3, 1995. Options set forth in the table "NEW PLAN BENEFITS" were
granted on January 3, 1995 under the 1995 Plan subject to approval of the 1995
Plan by stockholders at the Annual Meeting. Each of the options granted will
vest with respect to one-fourth of the shares of Common Stock covered thereby
on the anniversary date of the grant in 1996, 1997, 1998 and 1999,
respectively, and expire ten years after the date of grant. The exercise price
per share of Common Stock covered by such options is $10.88. If the 1995 Plan
is not approved by stockholders, these options shall be canceled. On March
20, 1995, the last reported sales price of the Company's Common Stock on the
New York Stock Exchange, as reported in The Wall Street Journal (Midwest
Edition), was $11.50 per share.
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<PAGE> 9
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
1995 STOCK OPTION PLAN
Name and Position Number of Units
----------------- ---------------
<S> <C>
Charles M. Brennan III 30,000
Chairman and Chief Executive Officer
James F. Kimsey (1) 25,000
President, Sturgeon Electric Company, Inc.
Elliott C. Robbins 12,500
Senior Vice President, Chief Financial Officer and Treasurer
Executive Group (the three individuals named above) 67,500
Non-Executive Officer 2,500
Employee Group
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE APPROVAL OF THE COMPANY'S 1995 STOCK OPTION PLAN.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company, their respective ages, positions
held and tenure as officers are set forth below:
<TABLE>
<CAPTION>
Position(s) Held Officer of the
Name Age with the Company Company Since
---- --- ---------------- -------------
<S> <C> <C> <C>
Charles M. Brennan III 53 Chairman 1988
Chief Executive Officer 1989
James F. Kimsey (1) 46 President of Sturgeon Electric Company, Inc. (a 1995
wholly owned subsidiary)
William S. Skibitsky (2) 45 President of The L. E. Myers Co. (a wholly owned 1994
subsidiary) and Executive Vice President of the
Company
Byron D. Nelson 48 Senior Vice President, General Counsel and Secretary 1984
Elliott C. Robbins 48 Senior Vice President, Chief Financial Officer 1984
and Treasurer
</TABLE>
(1) Sturgeon Electric Company, Inc. was acquired by the Company on January 3,
1995 pursuant to the Merger Agreement. Mr. Kimsey is responsible for the
western operations of the Company.
(2) Mr. Skibitsky was elected Executive Vice President of the Company and
President of The L. E. Myers Co. (a wholly owned subsidiary of the
Company) on May 12, 1994. Mr. Skibitsky is responsible for the eastern
operations of the Company.
-6-
<PAGE> 10
EXECUTIVE COMPENSATION
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
In 1994, the Board of Directors established a Compensation Committee (the
"Committee") which consists of Mr. Thomas (Chairman), Mr. Brown and Mr. Bulley.
The Committee administers the Company's 1989, 1990 and 1992 Stock Option Plans,
and the Company's Management Incentive Plan ("MIP"). In addition, the
Compensation Committee recommends to the Board of Directors for its approval
the compensation for the Chief Executive Officer and for the other named
executive officers of the Company. The purpose of the overall compensation
program of the Company is to attract and incent key operating and management
personnel. The principal components of the compensation of the Chief Executive
Officer and the other named executive officers are base salary, short term
incentive awards under the Company's MIP, and long term incentives under the
Company's stock option plans.
The Committee bases its decisions regarding compensation of the Chief
Executive Officer on the philosophy that a significant portion of his
compensation must be determined by the performance of the Company against its
business plan. It believes generally that base salaries should be competitive
within the industries in which the Company conducts its business and should be
within the range of mean and mid-points for comparable positions as determined
by various industry compensation analysts and studies. In addition, incentive
compensation awards and stock options should provide an opportunity based upon
performance for the Chief Executive Officer, Executive Officers and other key
management personnel to earn additional compensation which would place them in
the upper quartile of compensation ranges for comparable positions within the
industries in which the Company conducts its businesses.
The MIP provides that the Chief Executive Officer, the other named
Executive Officers, and certain other key management personnel are eligible for
an award for each calendar year in which the Company achieves at least 75% of
its planned earnings per share goal for the year. This minimum performance
requirement may be amended, from time to time, by the Board of Directors.
Awards may be granted to all, some, or none of the aforementioned eligible
participants and may vary from 10% to 115% of the individual's base salary.
The amount of the award for the Chief Executive Officer is determined by the
Committee based upon an evaluation of the Company's performance against its
business plan in terms of revenue, net income, return on net assets and the
Committee's overall evaluation of the Chief Executive Officer's performance.
In addition to the evaluation of the Company's overall performance against
plan, the amount of the awards for the other named executive officers who are
responsible for divisions of the Company's operations are determined by the
Committee based upon an evaluation of each such Executive Officer's division's
performance compared to its business plan revenues, contract margins and
operating income. The Committee also considers in its determination of awards,
the evaluation of performance against certain other specific goals, such as
safety, an element of which is measured by a reduction in lost time accidents,
established at the time of the business plans for the year are finalized, and
the evaluation of the executive officer's overall performance in his position.
Awards for Executive Officers who are not responsible for division operations
are determined by the Committee based upon the Company's overall financial
performance against its business plan in the same manner as for the Chief
Executive Officer and an evaluation of such Executive Officer's overall
performance in his or her position, considering the responsibilities of such
executive officer. The Board of Directors may grant discretionary awards
notwithstanding the terms of the MIP. Awards, if any, to the named Executive
Officers under the MIP (or a predecessor plan) for 1992, 1993 and 1994 are set
forth in the Summary Compensation Table.
The Company utilizes stock options as longer term compensation vehicles.
The outside directors believe that significant linkage between the compensation
of the Chief Executive Officer, the named executive officers and key management
personnel and the maximization of stockholder wealth through appreciation in
the value of Common Stock is created through the use of stock options. Options
are generally priced at the fair market value of the underlying stock on the
date of the grant of the option and vest incrementally over four to five years.
The Committee believes the incremental vesting provides a longer term incentive
to its executive officers thereby
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<PAGE> 11
providing a compensation vehicle by which to retain successful managers. In
1992 the outside directors awarded Mr. Brennan a stock option to purchase
75,000 shares of Common Stock as a longer term incentive. Mr. Brennan's option
was granted at the fair market value of the underlying stock on the date of
grant vests approximately nine years from the date of grant subject to
acceleration at the sole discretion of the outside directors. The vesting
schedule may be accelerated from time to time by the outside directors based
upon Mr. Brennan's progress in achieving the Company's strategic objectives.
In February, 1995 the Committee accelerated the date upon which the option
could be exercised with respect to 20,000 of the shares to February 22, 1995.
COMPENSATION COMMITTEE
Bide L. Thomas, Chairman
William G. Brown
Allan E. Bulley, Jr.
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<PAGE> 12
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table, including footnotes, shows for the years 1994, 1993,
and 1992, the cash compensation paid by the Company, as well as certain other
compensation paid or accrued for those years, to the named Executive Officers
in all capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
- -------------------------------------------------------------------------------------------------------------------------------
Other Annual All Other
Name and Principal Salary Bonus Compensation Options/SARs Compensation
Position Year ($) (1) ($) ($) (2) (#) ($) (3)
---------------------- ---- ------- ------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Charles M. Brennan III 1994 250,000 99,500 69,440 (4) 0 64,865
Chairman and 1993 250,000 0 69,495 (4) 0 56,027
Chief Executive Officer 1992 250,000 0 76,340 (4) 75,000 52,027
William S. Skibitsky (5) 1994 101,540 40,000 5,352 25,000 27,413 (6)
Executive Vice President
and President -
The L. E. Myers Co.
Elliott C. Robbins 1994 135,000 50,000 6,765 0 26,426
Senior Vice President 1993 133,270 0 6,724 10,000 (7) 17,607
Treasurer and Chief 1992 125,000 15,000 6,696 10,000 (7) 21,576
Financial Officer
Byron D. Nelson 1994 130,000 50,000 6,730 0 25,699
Senior Vice President 1993 128,270 0 6,688 10,000 (7) 17,114
General Counsel 1992 120,000 35,520 6,661 10,000 (7) 20,837
and Secretary
</TABLE>
-9-
<PAGE> 13
Notes to Summary Compensation Table
(1) Includes amounts deferred at the election of the named executive officers
under the 401(k) feature of the Company's Profit Sharing and Thrift Plan.
(2) Includes automobile allowances of $600, $500, and $500 per month for
Messrs. Skibitsky, Robbins, and Nelson respectively. Mr. Brennan was
provided with an automobile by the Company commencing in 1993. The table
includes the $600 per month automobile allowance for Mr. Brennan in 1992.
Includes income related to premium costs of group term life insurance in
excess of $ 50,000 provided by the Company.
(3) Includes: (i) the vested portion Company contributions to the Profit
Sharing and Thrift Plan and (ii) dividend equivalent payments under the
Company's Stock Option Plans on stock options held by the named executive
officers for all reported years. Includes amounts accrued by the Company
as unfunded liabilities for Mr. Robbins and Mr. Nelson pursuant to
Supplemental Retirement and Death Benefit Agreements (SRDB Agreements)
with them. Under the SRDB Agreements these named executive officers are
entitled, upon retirement or permanent disability, to an aggregate amount
equal to two times their highest base salary (Benefit Amount) payable in
120 equal monthly installments over a period of 10 years (or, in the event
of death, to their beneficiary over 15 years). The Benefit Amount is
reduced by 15%, 25%, 33.33%, 40% and 45% in the event the named executive
officer retires at age 64, 63, 62, 61, or 60, respectively. No benefit
shall be paid in the event of the named executive officer's retirement
prior to age 60.
(4) In 1991, in lieu of any other retirement not available generally to all
employees, Mr. Brennan was granted an option to purchase 50,000 shares of
Common Stock and borrowed the exercise price from the Company to exercise
the option. Included in the amount set forth is a payment of $68,000 to
Mr. Brennan which is equal to the amount of principal payment payable to
the Company by Mr. Brennan on December 31, 1992, 1993 and 1994 under the
terms of the promissory note evidencing the loan. Upon receipt, Mr.
Brennan immediately paid these amounts to the Company as payment of the
principal due on the note. The amount does not include an additional
payment of $42,549 for 1994, $48,222 for 1993, and $54,926 for 1992 which
is equal to the amount of interest accrued on the promissory note at the
applicable Federal rate under Section 1274(d) of the Internal Revenue Code
of 1986, as amended. On December 31, 1994, December 31, 1993 and December
31, 1992 respectively, Mr. Brennan received payments equal to these
amounts which he immediately paid to the Company as payment of the
interest amount due on the note. There is no net income or expense effect
from these interest payments since the interest income earned by the
Company offsets the payment expense. (See EMPLOYMENT AGREEMENT - C. M.
BRENNAN III.)
(5) Mr. Skibitsky was first employed by the Company and elected an executive
officer on May 12, 1994 and his compensation amounts are based upon his
employment with the company since May 1994.
(6) Includes $23,288 of relocation related expenses paid by the Company which
expenses were associated with Mr. Skibitsky's relocation to the Chicago,
Illinois area following his employment by the Company.
(7) Option granted in 1992 was canceled in exchange for option granted in
1993.
-10-
<PAGE> 14
STOCK OPTIONS
The following tables contain information concerning the stock options
granted to, exercised by and held by the named executive officers in 1994. The
Company's Stock Option Plans do not provide for the grant of SARs. The
Potential Realizable Values set forth result from calculations assuming 5% and
10% growth rates as set by the Securities Exchange Commission. The value of
unexercised in-the-money options is calculated using the difference between
fair market value of the Common Stock at December 31, 1994 ($10-7/8 per share)
and the exercise price of the options.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
% of Total Potential Realizable
Options/SARs Exercise Value at Assumed
Granted to or Base Annual Rates of Stock
Options/SARs Employees in Price Expiration Price Appreciation for
Name Granted(#) Fiscal Year ($/Sh) Date Option Term
------------------ ------------ ------------ -------- ---------- ----------------------
5% ($) 10% ($)
------ -------
<S> <C> <C> <C> <C> <C> <C>
William S. Skibitsky 25,000 91% $11.32 05/11/04 $182,000 $492,750
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
------------- -------------
No. Shares
Acquired Dollar Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
---------------------- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Charles M. Brennan III 0 $ 0 E - 143,750 $ 745,344
U - 75,000 $ 0
William S. Skibitsky 0 $ 0 E - 0 $ 0
U - 25,000 $ 0
Elliott C. Robbins 0 $ 0 E - 12,500 $ 64,813
U - 10,000 $ 14,350
Byron D. Nelson 0 $ 0 E - 12,500 $ 64,813
U - 10,000 $ 14,350
</TABLE>
-11-
<PAGE> 15
PERFORMANCE GRAPH
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG THE L. E. MYERS CO. GROUP, THE NYSE MARKET INDEX
THE DOW JONES HEAVY CONSTRUCTION INDUSTRY GROUP INDEX
[GRAPH]
FISCAL YEAR ENDING
(in dollars)
<TABLE>
<CAPTION>
COMPANY 1989 1990 1991 1992 1993 1994
--------------------------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
The L. E. Myers Co. Group 100 226.38 227.00 234.92 167.38 170.64
DJ Heavy Construction Group 100 94.05 114.75 117.21 119.04 116.16
NYSE Market Index 100 95.92 124.12 129.96 147.56 144.69
</TABLE>
The above graph compares the performance of The L. E. Myers Co. Group with
that of the New York Stock Exchange Market Index and the Dow Jones Heavy
Construction Industry Group Index (DJHCI) which is a published industry index.
The companies which comprise the DJHCI are: Abrams Industries, Inc.; Ameron
Inc.; Astec Industries; Guy F. Atkinson Company; Michael Baker Company;
Banister, Inc.; Blount Inc. (A); Blount Inc. (B); CRSS, Inc.; Devcon
International; Dycom Inc.; Enviroq Corporation; Flour Corporation; Foster
Wheeler; Gencor Industries Inc.; Gilbert Associates, Inc.; Goldfield
Corporation; Graham Corporation; Greiner Engineering; Huntway Partners LP;
Insituform East, Inc.; Institform Mid-America Inc.; Instituform Technologies;
Jacobs Engineering; JLG Industries, Inc.; Kasler Corporation; Morrison Knudsen;
Rexworks Inc.; Stone and Webster; TRC Companies, Inc.; Turner Corporation; and
Zurn Industries.
The comparison of total return on investment based upon the changes in
year end price plus reinvested dividends for each period is calculated assuming
$100 was invested on January 1, 1989 in The L. E. Myers Co. Group, the
companies which comprise the NYSE Market Index and the companies which comprise
the DJHCI. For the NYSE and the DJHCI comparison, the assumed investment is
based upon a market weighted calculation.
-12-
<PAGE> 16
EMPLOYMENT AGREEMENT - C. M. BRENNAN III
The Company and Charles M. Brennan III entered into an amended and
restated employment agreement dated as of December 23, 1991 ("Brennan
Agreement"). The Brennan Agreement covers the period from December 23, 1991 to
December 31, 1996 and provides that the Company agrees to employ Mr. Brennan as
Chairman and Chief Executive Officer at a base compensation of not less than
$250,000 per year. The Brennan Agreement provides that Mr. Brennan is entitled
to receive a bonus for each of the years 1991 through 1996 in accordance with
the terms of any incentive compensation plan as such plan may exist from time
to time during the term of the Brennan Agreement.
The Brennan Agreement provides that, in the event Mr. Brennan's employment
terminates, as a result of his death or disability, the Company is obligated to
pay to him or his estate the base compensation then accrued but unpaid and the
proportionate bonus for the year in which such termination occurs. The
proportionate bonus is to be calculated assuming the Company's performance
equals 100% of its targeted performance in the Company's business plan for such
year.
The Brennan Agreement further provides that the Company shall have the
right to terminate Mr. Brennan's employment for Good Cause (as defined) with no
liability to Mr. Brennan except the obligation to pay him his accrued but
unpaid base compensation. The Brennan Agreement also provides that Mr. Brennan
may terminate his employment for Good Reason (as defined). In such event, Mr.
Brennan is entitled to receive a cash payment equal to the greater of (i) the
present value of all amounts he would have been entitled to under the Brennan
Agreement including bonuses calculated on the basis that the Company
performance would equal 100% of its targeted performance provided for in the
Company's business plan or (ii) the sum of (a) Mr. Brennan's salary for one
year at the highest rate in effect after December 23, 1991 and (b) the bonus
which would have been paid for the year in which such termination occurs
calculated as if the Company achieved 100% of targeted performance provided in
its business plan. In the event of the termination of Mr. Brennan's employment
by the Company other than for Good Cause (as defined), the Brennan Agreement
provides that Mr. Brennan will be entitled to the same amount as if Mr. Brennan
had terminated his employment for Good Reason.
INDEBTEDNESS OF MANAGEMENT
During 1991, the Board of Directors granted to Mr. Brennan, in lieu of any
retirement benefit generally not available to all salaried employees, a stock
option to purchase 50,000 shares of Common Stock under the Company's 1990 Stock
Option Plan (the "Brennan Option") and the Board of Directors provided Mr.
Brennan a cash grant of $731,500 restricted in its use to the exercise of the
Brennan Option. As part of the Brennan Agreement, the Company agreed to lend
$680,000 to Mr. Brennan and to provide him a cash grant of $51,500 upon
execution of the Brennan Agreement. Mr. Brennan used the proceeds of the loan
and the $51,500 to return to the Company the $731,500 previously received by
him and used for the exercise of the stock option. The loan of $680,000 is
evidenced by a promissory note delivered to the Company by Mr. Brennan and is
payable in equal installments of $68,000 (plus interest thereon at the
applicable Federal rate under Section 1274(d) of the Internal Revenue Code of
1986) on December 31 of each year commencing on December 31, 1992 and
thereafter through December 31, 2001. The promissory note is secured by shares
of Common Stock. The Brennan Agreement provides that Mr. Brennan is entitled
to receive, on December 31 on each of the years 1992 through 1996, a payment in
an amount equal to the principal and interest payment due to the Company from
Mr. Brennan for such years under the above described promissory note. The
Brennan Agreement provides that, in the event Mr. Brennan's employment
terminates as a result of his death or disability, the Company will forgive all
remaining unpaid principal and interest under the promissory note described
above.
On July 24, 1994, the Company made a loan to William S. Skibitsky and his
wife in the amount of $150,000 to assist them in the purchase of a home in the
Chicago area. The loan is evidenced by a promissory note dated July 24, 1994
executed by Mr. and Mrs. Skibitsky. The terms of the note provide that the
principal is due and payable five working days following the sale of their
former residence in Connecticut, or on July 24, 1995, whichever first occurs.
-13-
<PAGE> 17
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF MANAGEMENT
The table set forth below contains information as of March 23, 1995
concerning beneficial ownership of Common Stock by directors, named executive
officers, all directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares Exercisable Percentage
Beneficially Stock of the Shares
Owned Options Outstanding
----- ------- -----------
<S> <C> <C> <C>
Charles M. Brennan II 392,750 163,750 21.9%
William G. Brown 50,000 7,750 2.4%
Allan E. Bulley, Jr. 6,000 7,750 (1)
John M. Harlan - 0 - - 0 - (1)
Bide L. Thomas 1,500 5,250 (1)
James F. Kimsey - 0 - - 0 - (1)
William S. Skibitsky - 0 - - 0 - (1)
Elliott C. Robbins 12,600 12,500 1.0%
Byron D. Nelson 12,500 12,500 1.0%
All directors and executive officers 475,350 209,500 26.4%
</TABLE>
(1) Less than 1%.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table set forth below, including footnotes which are set forth on the
following page, contains information as of December 31, 1994 concerning other
principal stockholders known to the Company to own beneficially more than five
percent of the Company's outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Shares Percentage
Beneficially of the Shares
Owned Outstanding
----- -------------
<S> <C> <C>
Heartland Advisors, Inc. 212,000 8.9%
790 N. Milwaukee St.
Milwaukee, WI 53202
Shufro, Rose & Ehrman, Inc. 174,000 7.3%
745 Fifth Avenue
New York, NY 10151-2600
T. Rowe Price Associates, Inc. 140,000 5.9%
P. O. Box 89000
Baltimore, MD 21289-1009
</TABLE>
-14-
<PAGE> 18
OTHER INFORMATION
FINANCIAL STATEMENTS AND AUDITORS
Stockholders are referred to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 for financial and other information about the
Company, but the report is not incorporated in this statement and is not deemed
to be a part of the proxy soliciting material.
Deloitte & Touche was the Company's auditor for 1994. The Board of
Directors has not selected the Company's auditors for 1995. Auditors will be
selected by the Board upon a recommendation by the Audit Committee. A
representative of Deloitte & Touche will be present at the Annual Meeting. He
will have the opportunity to make a statement, if he desires to do so, and will
be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Proposals specified in the Company's proxy materials. Any proposal which
a stockholder wishes to have considered by the Company for inclusion in the
proxy materials of the Board of Directors for the 1996 annual meeting of
stockholders should be sent to the Secretary of the Company in writing and must
be received before December 31, 1995.
Proposals otherwise properly brought before a meeting. Stockholders
wishing to present proposals for action at a meeting of the Company's
stockholders must do so in accordance with the Company's bylaws. A stockholder
must give timely notice of the proposed business to the Secretary of the
Company. To be timely, a stockholder's notice must be in writing, delivered to
or mailed, postage prepaid, to and received by the Secretary of the Company not
less than 45 days nor more than 60 days prior to the meeting, provided,
however, that if less than 50 days' notice or prior public disclosure of the
date of the meeting is given to stockholders, notice by the stockholder, to be
timely, must be received by the Secretary not later than the close of business
on the seventh day following the day on which notice of the date of the meeting
was mailed or public disclosure was made. For each matter the stockholder
proposes to bring before the meeting, the notice to the Secretary must include:
(i) a brief description of the business desired to be brought before the
meeting; (ii) the name and address of the stockholder proposing the business;
(iii) the class and number of shares of the Company which are beneficially
owned by the stockholder; and (iv) any material interest of the stockholder in
such business.
The Chairman of the meeting may, if the facts warrant, determine and
declare that business was not properly brought before the meeting in accordance
with the Company's bylaws. If the Chairman does so, the business shall not be
transacted.
STOCKHOLDER NOMINATIONS FOR DIRECTOR
Nominations specified in the Company's proxy materials. The Board of
Directors will consider any candidate recommended by a stockholder of the
Company for nomination as a director for election at the 1996 annual meeting of
stockholders provided that written notice of such recommendation is received by
the Secretary of the Company before December 31, 1995. The notice is required
to set forth: (i) the name and address of the stockholder making the
recommendation; (ii) the name, age, business address and, if known, residence
address of each proposed nominee; (iii) the principal occupation or employment
of each proposed nominee and other relevant biographical information concerning
the proposed nominee; (iv) a detailed statement of the proposed nominee's
qualifications; (v) the number of shares of stock of the Company which are
beneficially owned by each proposed nominee and by the stockholder making the
recommendation; (vi) a description of all arrangements or understandings
between the stockholder making the recommendation and each proposed nominee and
any other person or persons (naming such person or persons) pursuant to which
the proposed nomination or nominations are to be made; (vii) any other
-15-
<PAGE> 19
information concerning the proposed nominee that must be disclosed with respect
to nominees in proxy solicitations pursuant to Regulation 14A of the Securities
Exchange Act of 1934; and (viii) the executed consent of each proposed nominee
to serve as a director of the Company if nominated and elected.
Nominations to be made directly by a stockholder at a meeting. In
accordance with the Company's bylaws, stockholders wishing to directly nominate
candidates for the Board of Directors must do so in writing, delivered to or
mailed, postage prepaid, to and received by the Secretary of the Company not
less than 45 days or more than 60 days prior to any meeting of stockholders
called for the election of directors, provided, however, that if less than 50
days' notice or prior public disclosure of the date of the meeting is given to
stockholders, the nomination must be received by the Secretary not later than
the close of business on the seventh day following the day on which the notice
of the meeting was mailed. The notice is required to set forth: (i) the name
and address of the stockholder who intends to make the nomination; (ii) the
name, age, business address and, if known, residence address of each nominee;
(iii) the principal occupation or employment of each nominee; (iv) the number
of shares of stock of the Company which are beneficially owned by each nominee
and by the nominating stockholder; (v) a description of all arrangements or
understandings between the nominating- stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made; (vi) any other information concerning
the nominee that must be disclosed with respect to nominees in proxy
solicitations pursuant to Regulation 14A of the Securities Exchange Act of
1934; and (vii) the executed consent of each nominee to serve as a director of
the Company if elected.
The Chairman of the meeting of stockholders may, if the facts warrant,
determine that a nomination was not made in accordance with the proper
procedures. If the Chairman does so, the Chairman shall so declare to the
meeting and the defective nomination shall be disregarded.
BY ORDER OF THE BOARD OF DIRECTORS
Byron D. Nelson
Secretary
Suite 200
2550 West Golf Road
Rolling Meadows, Illinois 60008
April 4, 1995
-16-
<PAGE> 20
APPENDIX A
THE L. E. MYERS CO. GROUP
1995 STOCK OPTION PLAN
1. STATEMENT OF PURPOSE. The purpose of this Stock Option Plan (the
"Plan") is to benefit The L. E. Myers Co. Group (the "Company") and its
subsidiaries through the maintenance and development of management by offering
certain present and future key individuals a favorable opportunity to become
holders of stock in the Company over a period of years, thereby giving them a
permanent stake in the growth and prosperity of the Company and encouraging
them to continue their involvement with the Company or its subsidiaries.
2. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") of the Board of Directors of the Company (the "Board"), consisting
of not less than two members of the Board who are not employees or officers of
the Company or any of its subsidiaries. Each member of the Committee shall be
appointed from time to time by the Board and shall serve at the pleasure of the
Board. Only "disinterested persons", as such term is defined in Section
16b-3(c)(2)(i) of the Securities Exchange Act of 1934 (as amended), shall serve
as members of the Committee. The Board of Directors may from time to time,
create a management subcommittee consisting of officers of the Company, and
delegate to such subcommittee the authority to grant options to non- officer
employees of the Company subject to subsequent ratification of the grants by
the Committee.
Subject to the terms of the Plan, the Committee shall have the authority,
in its sole discretion, (a) to determine the individuals to whom options are
granted under the Plan; (b) to determine the number of shares subject to each
option; (c) to determine the exercise price per share of each option (subject
to Section 5 of the Plan); (d) to determine the time or times when options are
granted; (d) to determine the time or times when, or conditions upon which,
each option becomes exercisable; (e) to accelerate the exercisability of any
option granted pursuant to the Plan including with respect to options held by
employees whose employment has been terminated by reason of death, permanent
disability or retirement; (f) to determine the term of each option (subject to
Section 6 of the Plan); (g) to prescribe the form or forms of agreements which
evidence options granted under the Plan; and (h) to interpret the Plan and to
adopt rules or regulations (consistent with the terms of the Plan) which, in
the Committee's opinion, may be necessary or advisable for the administration
of the Plan. Any action taken or decision made by the Committee in connection
with the administration and interpretation of the Plan shall, to the extent
permitted by law, be conclusive and binding upon grantees of options under the
Plan, including any transferee or assignee of any option granted under the Plan
or any person claiming rights under or through such optionee.
3. ELIGIBILITY. Options may be granted to key employees of the Company
and its subsidiaries selected initially and from time to time thereafter by the
Committee in its sole discretion on the basis of their importance to the
business of the Company or its subsidiaries.
4. GRANTING OF OPTIONS. Options may be granted under the Plan under
which a total of not in excess of 300,000 shares of common stock of the
Company, $1.00 par value, ("Common Stock") may be purchased from the Company,
subject to adjustment as provided in Section 10. Options granted under the
Plan will not be treated as incentive stock options as defined in Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code").
In the event that an option expires or is terminated or canceled
unexercised as to any shares, such released shares may be made the subject of
options granted hereunder (including without limitation options granted in
substitution for canceled options). Shares subject to options may be made
available from unissued or reacquired shares of Common Stock.
-1-
<PAGE> 21
5. OPTION EXERCISE PRICE. The option exercise price of each option
shall be determined by the Committee and, subject to the provisions of Section
10 hereof, shall be not less than 100% of the fair market value, at the time
the option is granted, of the shares of Common Stock subject to the option.
Any determination of the fair market value or of the method of computing fair
market value of a share of Common Stock made by the Committee pursuant to any
provision of this Plan shall be final, binding and conclusive on all parties.
6. DURATION OF OPTIONS, INCREMENTS, AND EXTENSIONS. (a) Subject to the
provisions of Paragraph 8, each option shall be for a term of not more than ten
years as shall be determined by the Committee at the date of the grant. The
Committee shall have the authority to determine with respect to each option the
time or times at which, or the conditions upon which, any option, or portions
thereof, shall become exercisable.
(b) The Committee, in its discretion, may accelerate the exercisability
of all or any portion of any option; or (ii) at any time prior to the
expiration or termination of any option previously granted, extend the term of
any option for such additional period as the Committee in its discretion shall
determine, except that the aggregate term of any such option, including the
original term of the option and any extensions thereof, shall in no event
exceed ten years from the date of the original grant.
7. EXERCISE OF OPTIONS. (a) An option may be exercised by giving
written notice to the Company, attention of the Secretary, specifying the
number of shares to be purchased, accompanied by the full purchase price for
the shares to be purchased in cash or by check, except that the Committee may
permit, in its discretion, the purchase price to be paid in any other manner,
including but not limited to, payment, in whole or in part, by the delivery to
the Company of shares of Common Stock in such manner as the Committee may
specify. Shares of the Common Stock delivered upon exercise of an option shall
be valued at their fair market value as of the close of business on the date
preceding the date of exercise as determined by the Committee.
(b) At the time of any exercise of any option, the Company may, if it
shall determine it necessary or desirable for any reason, require the optionee
(or his heirs, legatees, or legal representative, as the case may be) as a
condition upon the exercise thereof, to deliver to the Company a written
representation of present intention to purchase the shares for investment and
not for distribution. In the event such representation is required to be
delivered, an appropriate legend may be placed upon each certificate delivered
to the optionee upon his exercise of part or all of the option and a stop
transfer order may be placed with the transfer agent.
(c) Each option shall also be subject to the requirement that, if at any
time the Company determines, in its discretion, that the listing, registration
or qualification of the shares subject to the option upon any securities
exchange or under any state or federal law or approval of any regulatory body
is necessary or desirable as a condition of or in connection with, the issue or
purchase of shares thereunder, the option may not be exercised in whole or in
part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.
(d) At the time of the exercise of any option, the Company may require,
as a condition of the exercise of such option, that the optionee pay to the
Company, in such manner and under such conditions as the Committee may specify,
an amount equal to the amount of the tax the Company may be required to
withhold as a result of the exercise of such option by the optionee.
8. EXERCISE AFTER TERMINATION OF EMPLOYMENT. (a) Any optionee whose
employment is terminated for any reason other than death, permanent disability,
or retirement may exercise his or her option to the extent exercisable at the
date of such termination at any time during its specified term prior to the
90th day after the date of such termination, provided, however, that if the
optionee's employment is terminated for cause such optionee's option shall
expire and all rights to purchase shares pursuant thereto shall terminate
immediately. Temporary absence from employment because of illness, vacation,
approved leaves of absence, and transfers of employment among the Company and
its subsidiaries, shall not be considered to terminate employment or to
interrupt continuous employment.
(b) In the event of termination of employment because of death, permanent
disability (as that term is
-2-
<PAGE> 22
defined in Section 22(e) (3) of the Code, as now in effect or as subsequently
amended) or retirement (as hereinafter defined), the option may be exercised to
the extent exercisable at the date of such termination (or to the extent
exercisability has been accelerated by the Committee in its sole discretion) by
the optionee or, if the optionee is not living, by the optionee's heirs,
legatees, or legal representative, as the case may be, at any time during its
specified term prior to the third anniversary of the date of death, permanent
disability or retirement (as hereinafter defined). Retirement as used herein
shall mean termination of employment (other than for death or disability) at
any date after (i) the employee reaches age 60 and (ii) the sum of the
terminated employee's age added to the number of years such employee was
employed by the Company or any of its subsidiaries is equal to or greater than
75.
(c) Notwithstanding the provisions of 8(a) and 8(b) above, the Committee
may specify other provisions in the form of agreement evidencing an option with
respect to the exercise of such option after the optionee's termination of
employment.
9. NON-TRANSFERABILITY OF OPTIONS. Except as provided below, no option
shall be transferable by the optionee otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code of 1986 (as amended), and each option
shall be exercisable during an optionee's lifetime only by such optionee.
Notwithstanding the above, the Committee may, in its discretion, grant an
option which would permit the optionee, at any time prior to his or her death,
to transfer or assign all or any portion of such option to: (i) his or her
spouse or lineal descendants or the spouse or spouses of his or her lineal
descendants; (ii) the trustee of a trust established for the benefit of his or
her spouse or lineal descendants or the spouse or spouses of his or her lineal
descendants; or (iii) a partnership whose only partners are the spouse and/or
lineal descendants and/or the spouse or spouses of the lineal descendants of
the optionee; provided that the form of agreement evidencing such option
specifically sets forth the transfer limitations, the optionee receives no
consideration from the transferee or assignee, and the transferee or assignee
is subject to all the conditions applicable to the option prior to the grant.
Any such transfer or assignment shall be evidenced by an appropriate written
document executed by the optionee and a copy of such document shall be
delivered to the Committee on or prior to the effective date of the transfer or
assignment.
10. ADJUSTMENT. (a) In the event that the Company's outstanding Common
Stock is changed by any stock dividend, stock split or combination of shares,
the number of shares subject to this Plan and to options under this Plan shall
be proportionately adjusted.
(b) In case of any capital reorganization, or of any reclassification of
the Common Stock or in case of a consolidation of the Company with or the
merger of the Company with or into any other corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification of outstanding shares of Common
Stock) or of the sale of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation, the Company, or the
corporation resulting from such consolidation or surviving such merger or to
which such sale shall be made, as the case may be, shall determine that upon
exercise of options granted under the Plan after such capital reorganization,
reclassification, consolidation, merger or sale there shall be issuable upon
exercise of an option a kind and amount of shares of stock or other securities
or property (which may, as an example, be a fixed amount of cash equal to the
consideration paid to stockholders of the Company for shares transferred or
sold by them) which the holders of the Common Stock (immediately prior to the
time of such capital reorganization, reclassification, consolidation, merger or
sale) are entitled to receive in such transaction as in the judgement of the
Board of Directors is required to compensate equitably for the effect of such
event upon the exercise rights of the optionees. The above provisions of this
paragraph shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers and sales.
(c) In the event of any such adjustment the purchase price per share
shall be appropriately adjusted.
11. DIVIDEND EQUIVALENT PAYMENTS. The Committee, in its sole discretion,
may provide with respect any option granted under the Plan that, on each date
on which cash dividends are paid on shares of Common Stock the Company will pay
to the optionee holding such option an amount in cash equal to the amount of
the dividends that would have been paid to such optionee had the optionee owned
that number of shares of Common Stock for
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<PAGE> 23
which such option is then currently exercisable or for that number of shares
for which such option was granted regardless of whether or not such option is
currently exercisable.
12. AMENDMENT OF PLAN. The Board may amend or discontinue the Plan at
any time. However, no such amendment or discontinuance shall change or impair
any option previously granted without the consent of the optionee, increase the
maximum number of shares which may be purchased by all optionees, change the
minimum purchase price, or permit granting of options to the members of the
Committee.
13. CONTINUED EMPLOYMENT. Nothing contained in the Plan or in any option
granted pursuant thereto shall confer upon any optionee any right to continue
to be employed by the Company or any subsidiary of the Company, or interfere in
any way with the right of the Company or its subsidiaries to terminate such
optionee's employment at any time.
14. EFFECTIVE DATE. On March 22, 1995, the Plan as previously authorized
was approved, effective January 3, 1995, by the Board of Directors who directed
that the Plan be submitted to the stockholders of the Company for approval. If
the Plan is approved by the affirmative vote of the holders of a majority of
the shares of Common Stock of the Company voting in person or by proxy at a
duly held stockholders' meeting, the Plan shall be deemed to have become
effective on January 3, 1995. Options may be granted under the Plan prior to
approval by stockholders of the Company and, in each such case, the date of
grant shall be determined without reference to the date of approval of the Plan
by stockholders of the Company; provided, however, that if the Plan has not
been approved by stockholders at or prior to the 1995 annual meeting of
stockholders of the Company (or any adjournments thereof), then all options
granted hereunder shall be canceled and void.
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<PAGE> 24
PROXY PROXY
THE L.E. MYERS CO. GROUP
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- MAY 11, 1995
The stockholder(s) of The L.E. Myers Co. Group signing and dating such
signature(s) on the reverse side hereof (the "STOCKHOLDER(S)") hereby appoint
Charles M. Brennan III, Byron D. Nelson and Elliott C. Robbins proxies, with
full authority, which may be exercised by any one or more of them, with power of
substitution, to vote and act for the STOCKHOLDER(S) at the Annual Meeting of
Stockholders to be held at the Meadows Corporate Center, English Room, 2850
West Golf Road, Rolling Meadows, Illinois, 60008-4099 at 10:00 a.m. on
Thursday, May 11, 1995, and at any adjournment thereof, as designated on the
reverse side hereof, and in their discretion, the proxies are authorized to
vote upon such other business as may properly come before the meeting.
/ / Check here for address change / / Check here if you plan to
attend the meeting
New Address:______________________________
______________________________
______________________________
(Continued and to be signed on reverse side)
<PAGE> 25
THE L.E. MYERS CO. GROUP
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
[ ]
<TABLE>
<S> <C> <C>
For Withheld For Against Abstain
1. Election of Class III, Director / / / / 2. Approval of 1995 Stock / / / / / /
Nominee: Charles M. Brennan III Option Plan
THE BOARD OF DIRECTORS RECOMMENDS THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE APPROVAL
VOTING FOR THE ELECTION OF THE 1995 STOCK OPTION PLAN
OF MR. BRENNAN
Dated: __________________________________________, 1995
______________________________________________________
______________________________________________________
Signature(s)
Please sign exactly as your name appears. Joint owners
should each sign personally. Where applicable, indicate
your official position or representation capacity.
</TABLE>
