THOMAS NELSON, INC.
501 Nelson Place
P.O. Box 141000
Nashville, Tennessee 37214-1000
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------
The Annual Meeting of Shareholders (the "Annual
Meeting") of Thomas Nelson, Inc. will be held at the Loews
Vanderbilt Plaza, 2100 West End Avenue, Nashville,
Tennessee, at 11:00 a.m., local time, on Thursday, August
19, 1999, for the following purposes:
1. To elect three directors in Class
Three to serve for a term of three years or
until their respective successors are elected
and take office.
2. To transact such other business as
may properly come before the Annual Meeting or
any adjournment thereof.
Only shareholders of record at the close of business
on June 28, 1999, will be entitled to notice of and to vote
at the Annual Meeting.
Whether or not you plan to attend the meeting in
person, please complete, date, sign, and return promptly
the enclosed proxy. The proxy may be revoked at any time
prior to the exercise thereof, and the giving of the proxy
will not affect your right to attend the Annual Meeting and
vote in person.
By order of the
Board of Directors.
/s/ Sam Moore
SAM MOORE
President
Nashville, Tennessee
July 7, 1999
THOMAS NELSON, INC.
501 Nelson Place
P.O. Box 141000
Nashville, Tennessee 37214-1000
------------
PROXY STATEMENT
------------
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Thomas
Nelson, Inc., a Tennessee corporation (the "Company"), to be
voted at the Annual Meeting of Shareholders to be held on August
19, 1999 (the "Annual Meeting"), at the time and place and for
the purposes set forth in the accompanying notice, and at any
adjournment thereof. It is expected that this proxy statement,
the form of proxy and the Company's Annual Report to Shareholders
will be mailed to shareholders on or about July 7, 1999.
Only shareholders of record at the close of business on June
28, 1999 (the "Record Date") are entitled to notice of and to
vote at the Annual Meeting. On such date, the issued and
outstanding voting securities of the Company consisted of
13,123,260 shares of Common Stock (the "Common Stock") and
1,101,524 shares of Class B Common Stock (the "Class B Common
Stock"). Each share of Common Stock and Class B Common Stock
entitles the holder thereof to one vote and ten votes,
respectively, on each matter presented for action at the Annual
Meeting.
All proxies delivered pursuant to this solicitation may be
revoked at any time prior to the voting thereof by attending the
Annual Meeting and electing to vote in person, by filing with the
Secretary of the Company a written revocation, or duly executing
a proxy bearing a later date. The giving of the proxy will not
affect the right of the shareholder to attend the Annual Meeting
and vote in person. If not revoked, all proxies that are
properly signed and returned to the Company will be voted in
accordance with instructions contained thereon. If no
instructions are given, the persons named in the proxy will vote
the shares represented thereby FOR the approval of the election
as directors of all nominees set forth under PROPOSAL NO. 1.
The Board of Directors knows of no other matters that are to be
brought to a vote at the Annual Meeting. If any other matter
does come before the Annual Meeting, the persons appointed in the
proxy or their substitutes will vote in accordance with the
recommendation of the Board of Directors or, if no recommendation
is given, in their best judgment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of the
Record Date with respect to those persons known to the Company to
be the beneficial owners (as defined either by the rules of the
Securities and Exchange Commission (the "Commission")) of more
than five percent (5%) of either Common Stock or the Class B
Common Stock and with respect to the beneficial ownership of the
Common Stock and Class B Common Stock by all directors and
nominees, each of the executive officers named in the Summary
Compensation Table and all executive officers and directors of
the Company as a group. Except as otherwise specified, the
shares indicated are presently outstanding, and the Company
believes the beneficial owner has sole voting and investment
power over the indicated shares.
<TABLE>
<CAPTION>
Amount of
Amount of Class B
Common Stock Percent Common Stock Percent
Beneficially of Beneficially of
Name of Beneficial Owner Owned #<F1><F2> Class Owned #<F1><F2> Class
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sam Moore **** <F3> 2,517,878 16.6% 1,441,911 71.7%
Thomas Nelson Employee
Stock Ownership Plan-
Investment Committee <F4> 831,984 5.8 18,497 1.7
Gabelli Funds, Inc. <F5> 1,530,000 10.8 0
S. Joseph Moore**** <F6> 379,270 2.6 218,594 17.8
Brownlee O. Currey, Jr.** <F7> 188,754 1.3 4,035 *
W. Lipscomb Davis, Jr.** <F8> 17,843 * 2,531 *
Robert J. Niebel, Sr.** <F8> 28,054 * 3,692 *
Millard V. Oakley** <F9> 389,659 2.7 19,542 1.8
Joe M. Rodgers** <F10> 21,885 * 0
Andrew J. Young** <F7> 10,610 * 0
Charles Z. Moore*** <F11> 239,864 1.7 120,533 10.5
Joe L. Powers*** <F12> 190,800 1.3 137,316 11.7
Raymond T. Capp*** <F13> 94,616 * 65,000 5.6
All Executive Officers and
Directors as a
group (14 persons) <F14> 4,139,766 26.5 2,018,617 86.4
- -----------
* Indicates less than 1%.
** Director.
*** Named Officer.
**** Director and Named Officer.
<FN>
<F1> Pursuant to the rules of the Commission, the shares subject
to options held by directors and executive officers of the
Company which are exercisable within 60 days of the Record
Date are all deemed outstanding for the purpose of computing
such director's or executive officer's percentage ownership
and the percentage ownership of all directors and executive
officers as a group, but are not deemed outstanding for the
purpose of computing the percentage ownership of the other
beneficial owners in the table. The share information
assumes further that when such individuals can elect to
receive either Common Stock or Class B Common Stock, an
election is made to receive Class B Common Stock.
<F2> Shares of Class B Common Stock are convertible into an equal
number of shares of Common Stock at the option of the
holder, and, wherever applicable, share information set
forth above with respect to the Common Stock assumes the
conversion of all Class B Common Stock, including options
convertible into either Common Stock or Class B Common Stock
at the holder's option, by the holders thereof for an
equivalent number of shares of Common Stock that may be so
acquired by conversion during the 60-day period commencing
on the Record Date.
<F3> Includes shares issuable upon exercise of outstanding
options to purchase 20,000 shares of Common Stock and
910,000 shares of Class B Common Stock under the Company's
Amended and Restated 1992 Stock Incentive Plan (the "Stock
Incentive Plan"), 559,473 shares of Common Stock held by
four trusts of which Mr. Moore is trustee, and 24,738 shares
of Common Stock and 1,642 shares of Class B Common Stock
held by the Company's Employee Stock Ownership Plan (the
"ESOP"), as to which Sam Moore has sole voting power. Sam
Moore's spouse owns 55,741 shares of Common Stock and 3,435
shares of Class B Common Stock. Sam Moore's address is 501
Nelson Place, P.O. Box 141000, Nashville, Tennessee
37214-1000.
<F4> Pursuant to the terms of the ESOP, the investment committee
shares dispositive power with the the ESOP participants.
The address of Thomas Nelson Employee Stock Ownership
Plan-Investment Committee is 501 Nelson Place, P.O. Box
141000, Nashville, Tennessee 37214-1000.
<F5> As reflected in a Schedule 13D filed with the Commission on
April 12, 1999 by Gabelli Funds, Inc. The address of
Gabelli Funds, Inc. is One Corporate Center, Rye, New York
10580-1434.
<F6> Includes shares issuable upon exercise of outstanding
options to purchase 13,333 shares of Common Stock and
126,666 shares of Class B Common Stock under the Stock
Incentive Plan, 22,750 shares of Common Stock and 36,785
shares of Class B Common Stock held by a trust of which S.
Joseph Moore is a trustee and the sole beneficiary, 13,000
shares of Common Stock and 1,000 shares of Class B Common
Stock owned by S. Joseph Moore as custodian for certain of
S. Joseph Moore's children, 2,842 shares of Common Stock
held by a trust for the benefit of S. Joseph Moore's sister
of which S. Joseph Moore is trustee, and 8,526 shares of
Common Stock and 92 shares of Class B Common Stock held by
the ESOP, as to which S. Joseph Moore has sole voting power.
S. Joseph Moore's spouse owns 7,625 shares of Common Stock.
S. Joseph Moore's address is 501 Nelson Place, P.O. Box
141000, Nashville, Tennessee 37214-1000.
<F7> Includes 1,650 and 8,000 shares of Common Stock issuable
upon exercise of outstanding options under the Company's
1990 Deferred Compensation Plan for Outside Directors (the
"Outside Directors Plan") and the Stock Incentive Plan,
respectively.
<F8> Includes 8,000 shares of Common Stock issuable upon exercise
of outstanding options under the Stock Incentive Plan.
<F9> Includes 1,650 and 8,000 shares of Common Stock issuable
upon exercise of outstanding options under the Outside
Directors Plan and the Stock Incentive Plan, respectively,
12,500 shares of Common Stock, for which Mr. Oakley
disclaims any voting or dispositive power, held by Mr.
Oakley's spouse and 140,000 shares of Common Stock and 937
shares of Class B Common Stock held by a grantor trust of
which Mr. Oakley is trustee and the sole beneficiary.
<F10>Includes 1,650 and 8,000 shares of Common Stock
issuable upon exercise of outstanding options under the
Outside Directors Plan and the Stock Incentive Plan,
respectively, and 10,075 shares of Common Stock held by a
limited partnership of which Mr. Rodgers is Chairman and his
spouse is the general partner and majority owner.
<F11>Includes shares issuable upon exercise of outstanding
options to purchase 6,667 shares of Common Stock and 51,667
shares of Class B Common Stock under the Stock Incentive
Plan, 24,112 shares of Common Stock and 2,490 shares of
Class B Common Stock held by Charles Z. Moore's spouse,
8,437 shares of Common Stock and 2,371 shares of Class B
Common Stock held by Transcontinental Industries, Inc., of
which Charles Z. Moore is President, 1,000 shares of Class B
Common Stock held by a Unitrust of which Charles Z. Moore is
trustee, 300 shares of Class B Common Stock held by a
Private Foundation of which Charles Z. Moore is trustee, and
20,301 shares of Common Stock and 201 shares of Class B
Common Stock held by the ESOP, as to which Charles Z. Moore
has sole voting power. Charles Z. Moore's address is 501
Nelson Place, P.O. Box 141000, Nashville, TN 37214-1000.
<F12>Includes shares issuable upon exercise of outstanding
options to purchase 10,000 shares of Common Stock and 76,667
shares of Class B Common Stock under the Stock Incentive
Plan and 36,964 shares of Common Stock and 2,160 shares of
Class B Common Stock held by the ESOP, as to which
Mr. Powers has sole voting power. Mr. Powers' address is
501 Nelson Place, P.O. Box 141000, Nashville, TN 37214-
1000.
<F13>Includes shares issuable upon exercise of outstanding
options to purchase 12,500 shares of Common Stock under the
1986 Plan and 15,667 shares of Common Stock and 65,000
shares of Class B Common Stock under the Stock Incentive
Plan and 1,449 shares of Common Stock held by the ESOP, as
to which Mr. Capp has sole voting power. Mr. Capp's address
is 501 Nelson Place, P.O. Box 141000, Nashville, TN 37214-
1000.
<F14>Includes an aggregate of 103,824 shares of Common Stock
and 4,359 shares of Class B Common Stock held by the ESOP,
and shares issuable upon exercise of options to purchase
156,599 shares of Common Stock and 1,234,999 shares of
Class B Common Stock.
</TABLE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Amended and Restated Charter of the Company provides
that the Board of Directors shall be divided into three classes
with the classes to be as nearly equal in size as possible. The
current Board of Directors consists of eight members, with the
terms of office of the directors in Class Three expiring at the
Annual Meeting. The incumbent directors whose terms of office
extend beyond this Annual Meeting are as follows:
<TABLE>
<CAPTION>
Annual Meeting
Director at which
Name Class term expires
-------------------------------------------------------
<S> <C> <C>
Sam Moore One 2001
Andrew J. Young One 2001
S. Joseph Moore Two 2000
Robert J. Niebel, Sr. Two 2000
Millard V. Oakley Two 2000
</TABLE>
The Board of Directors has nominated the following three
persons for election as directors in Class Three with terms of
office of three years expiring at the Annual Meeting of
Shareholders to be held in 2002:
Brownlee O. Currey, Jr.
W. Lipscomb Davis, Jr.
Joe M. Rodgers
Each of the nominees is currently a member of the Board of
Directors and was previously elected as a director by the
shareholders.
It is intended that proxies received in response to this
solicitation will, unless otherwise specified, be voted in favor
of the election of the above persons as directors of the Company
for the terms set forth above and until their successors are
elected and qualified. In case any of these persons is unable or
declines to serve, it is intended, in the absence of contrary
direction, that the proxies will be voted for the balance of
those named above and for substitute nominees selected by the
Board of Directors. The Board of Directors has no reason to
expect that any of the nominees will not be available for
election at the Annual Meeting, and therefore does not at this
time have any substitute nominees under consideration.
A plurality of the votes cast by the shares entitled to vote
in the election is required to elect a director. Shareholders
have no right to vote cumulatively for directors, but rather each
shareholder may cast one vote for each share of Common Stock and
ten votes for each share of Class B Common Stock held by such
shareholder for each director to be elected. The Board of
Directors recommends a vote FOR all nominees.
On September 30, 1997, the Commission filed civil
proceedings against incumbent director Sam Moore alleging that
Mr. Moore violated certain provisions and rules under the
Securities Exchange Act of 1934 by "marking the close" through
executing on behalf of a relative at the end of the trading day
purchases of the Company's Common Stock and by failing to file
timely a Form 4 reporting an unrelated sale of the Common Stock
by a charitable remainder trust of which Mr. Moore was the
beneficial owner. Without a hearing and without admitting or
denying the Commission's allegations or findings, Mr. Moore
consented to the entry of a cease and desist order before the
Commission and paid a $50,000 civil penalty.
The following table contains additional information
concerning the incumbent directors who will remain in office and
the director nominees. Except as indicated below, each director
and nominee has been an employee of the firm(s) listed below as
his principal occupation for more than the past five years.
<TABLE>
<CAPTION>
Director
Name Principal Occupation Age Since
- ----------------------------------------------------------------
<S> <C> <C> <C>
Brownlee President, Currey 70 1984
O. Currey, Jr. Investments. Previously
(C, N & A) served as Chairman of the
Board of The Nashville
Banner Publishing Co. from
January 1980 to May 1998.
W. Lipscomb Partner of Hillsboro 67 1984
Davis, Jr. Enterprises; Director of
(A & C) American General Corpor-
ation and Genesco, Inc.
Sam Moore Chairman of the Board, 69 1961
(E & N) Chief Executive Officer
and President of the
Company; Sam Moore is the
father of S. Joseph Moore
and brother of Charles
Z. Moore.
S. Joseph Moore Executive Vice President 36 1995
(E) of the Company and
President of Thomas Nelson
Gift Division. Previously
served as Divisional Vice
President of the Company
in various capacities
since 1991. S. Joseph
Moore is the son of Sam
Moore and the nephew of
Charles Z. Moore.
Robert J. Senior Vice President of 60 1973
Niebel, Sr. 21st Century Christian,
(E & A) Inc.
Millard V. Oakley Businessman managing 69 1972
(C & N) private investments.
Joe M. Rodgers Chairman of JMR Invest- 65 1992
(E) ments; Director of AMR/
American Airlines,
Inc., American Construc-
tors, Inc., American
Endoscopy Services, Inc.,
Gaylord Entertainment
Company, Lafarge Corpor-
ation, Towne Services,
Inc. and Tractor Supply
Co.
Andrew J. Young Vice Chairman of Law 67 1993
(E) Companies Group;
Chairman of GoodWorks
International; Director
of Archer-Daniels-Midland
Company, Cox Communi-
cations, Inc., Delta
Airlines, Inc., and Host
Marriott Corporation.
Previously served as Co-
Chairman of Atlanta
Committee for Olympic
Games as well as Mayor of
Atlanta, Georgia from 1980
to 1990.
- -----------
Member of Executive (E), Compensation (C), Nominating (N), Audit
(A) Committee
</TABLE>
Nominations
In accordance with the Company's Amended Bylaws (the
"Amended Bylaws"), nominations of the persons for election to the
Board of Directors may be made at a meeting of shareholders by or
at the direction of the Board of Directors, by any nominating
committee or by any shareholder of the Company entitled to vote
for the election of directors at such meeting who complies with
the notice procedures set forth in the Amended Bylaws. To be
timely, a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of the Company not
less than 60 days nor more than 90 days prior to the meeting of
shareholders; provided, however, that in the event that less than
70 days' notice or prior public disclosure of the date of such
meeting is given or made to the shareholders, notice by the
shareholder to be timely must be so received not later than the
close of business on the 10th day following the date on which
such notice of the day of the meeting was mailed or such public
disclosure was made. The Amended Bylaws require that the notice
contain certain information with respect to the proposed nominee
and as to the shareholder giving the notice. The Company will
furnish on request to any shareholder a copy of the relevant
section of the Amended Bylaws.
Board and Committee Meetings
The Board of Directors has four standing committees--the
Executive Committee, the Compensation Committee, the Audit
Committee, and the Nominating Committee, the members of which are
indicated in the previous table. The Executive Committee has all
powers and authority vested in the Board of Directors, except the
power to declare dividends or other corporate distributions or to
remove members of the Board of Directors, but including the power
to amend or repeal bylaws, to submit to shareholders matters that
require shareholders' approval, and to fill vacancies on the
Board of Directors or any committee of the Board of Directors.
The Compensation Committee reviews and approves management
compensation and administers the Company's retirement and
incentive plans. The Nominating Committee recommends to the
Board of Directors nominees for election to the Board of
Directors. The Nominating Committee will consider nominees
recommended by the holders of the Common Stock and Class B Common
Stock provided such proposed nominees are submitted to the
Company in the manner and within the time limit for shareholder
proposals as set forth in the immediately preceding paragraph.
The Audit Committee recommends to the Board of Directors the
appointment of the independent auditors and reviews with the
auditors' representatives the scope of their examination, their
fees, the results of their examination, and any problems
identified by the independent auditors regarding internal
controls, together with their recommendations.
During the last fiscal year, the Board of Directors held
five meetings. The Compensation Committee held three meetings
and the Audit Committee held five meetings. The Executive
Committee and the Nominating Committee held no meetings during
the fiscal year. Each of the incumbent directors attended at
least 75% of the aggregate of all Board of Director meetings and
meetings of committees on which he served during the last fiscal
year, except Mr. Young.
EXECUTIVE COMPENSATION
The following table provides information as to annual,
long-term and other compensation during fiscal years 1999, 1998
and 1997 for the Company's Chief Executive Officer and the
persons who, in fiscal 1999, were the other four most highly
compensated executive officers of the Company (collectively, the
"Named Officers"):
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
Awards
----------
Annual Compensation Securities All
------------------------------ Underlying Other
Name and Other Annual Options/ Compen-
Principal Bonus Compensation SARs sation
Position Year Salary($) ($) ($) (#)<F1> ($)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sam Moore 1999 $400,000 $128,000 $169,635<F2> 0 $23,117<F3>
President and 1998 390,000 610,000 169,635 830,000 21,239
Chief Executive 1997 325,000 415,000 169,635 30,000 4,817
Officer
S. Joseph Moore 1999 265,000 40,000 0 0 11,659<F4>
Executive Vice 1998 250,000 170,000 0 70,000 11,152
President 1997 250,000 176,000 0 20,000 5,289
Charles Z. Moore 1999 219,000 40,000 0 25,000 12,215<F5>
Senior Vice 1998 188,000 96,000 0 10,000 10,497
President 1997 175,000 95,000 0 10,000 5,029
Joe L. Powers 1999 210,000 48,000 0 0 11,629<F6>
Executive Vice 1998 207,000 293,000 0 65,000 10,456
President and 1997 190,000 242,000 0 10,000 4,859
Secretary
Raymond T. Capp 1999 197,000 56,000 0 0 9,600<F7>
Senior Vice 1998 180,000 165,000 0 65,000 8,035
President, 1997 150,000 124,000 0 15,000 0
Operations
<FN>
<F1> Represents the number of stock options granted under the
Company's Stock Incentive Plan.
<F2> Represents amounts paid (net of taxes) to Sam Moore to
enable him to pay the after income tax cost of the
premiums on life insurance maintained on the joint lives
of Sam Moore and his wife. Such payments are contemplated
by an agreement between Sam Moore and the Company, dated
May 17, 1991. See "Employment and Termination
Agreements."
<F3> Includes $9,600 contributed to the ESOP and $2,035
contributed to the Company's 401(k) Plan by the Company on
behalf of Sam Moore.
<F4> Includes $9,600 contributed to the ESOP and $2,059
contributed to the Company's 401(k) Plan by the Company on
behalf of S. Joseph Moore.
<F5> Includes $9,600 contributed to the ESOP and $2,615
contributed to the Company's 401(k) Plan by the Company on
behalf of Charles Z. Moore.
<F6> Includes $9,600 contributed to the ESOP and $2,029
contributed to the Company's 401(k) Plan by the Company on
behalf of Mr. Powers.
<F7> Includes $9,600 contributed to the ESOP by the Company on
behalf of Mr. Capp.
</TABLE>
Option/SAR Grants in Last Fiscal Year
This table provides information as to options granted to the
Named Officers during fiscal year 1999. No Stock Appreciation
Rights were granted during fiscal year 1999.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------
Percent of Potential
Total Realizable Value at
Number of Options Assumed Annual Rates
Securities Granted Exercise of Stock Price
Underlying to of Appreciation For
Option Employees Base Expira- Option Term <F3>
Granted in Fiscal Price ation --------------------
Name (#)<F1> Year<F2> ($/Sh)<F3> Date 5% 10%
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles Z. 25,000 40.3% $14.625 8/20/03 $101,015 $223,218
Moore
<FN>
<F1> Option to purchase at the election of the optionee shares
of either Common Stock or Class B Common Stock granted on
August 20, 1998, pursuant to the Stock Incentive Plan.
This option vests on the first anniversary of the date of
grant.
<F2> Excludes grants to employees whose employment terminated
prior to the end of the fiscal year.
<F3> Assumes exercise of option to purchase shares of Class B
Common Stock when either Common Stock or Class B Common
Stock may be purchased.
</TABLE>
Fiscal Year-End Option Values
The following table provides information as to the aggregate
number of shares of Common Stock and Class B Common Stock covered
by both exercisable and unexercisable stock options as of
March 31, 1999, and the values for the "in-the-money" options,
which represent the positive spread between the exercise price of
any such existing stock options and the year-end price of the
Common Stock or Class B Common Stock. No options were exercised
by the Named Officers during the fiscal year ended March 31,
1999.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options
at Fiscal Year-End(#) at Fiscal Year-End($)<F1>
-------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sam Moore 911,250 140,000 $0 $0
S. Joseph Moore 119,166 93,334 0 0
Charles Z. Moore 32,708 51,667 0 0
Joe L. Powers 84,375 30,000 0 0
Raymond T. Capp 83,375 18,125 0 0
<FN>
<F1> Certain outstanding options are exercisable for either
Common Stock or Class B Common Stock and, where
appropriate, the value of unexercised options reflects
gains based on the closing price of either stock depending
on which option to purchase stock was "in-the-money" at
fiscal year end. On March 31, 1999, the closing price of
the Common Stock and Class B Common Stock on the New York
Stock Exchange was $10.00 and $9.25, respectively, and no
outstanding options were "in-the-money."
</TABLE>
Directors Compensation
Directors not otherwise employed by the Company receive $1,200
per month plus $1,000 for attending, in person, each meeting of
the Board of Directors or any committee, when such committee
meetings are separately called and held. Directors attending
such meetings by means of a telephone conference call receive
$500 for each meeting. Board members who are employed as
officers by the Company receive no extra compensation for their
services as directors or committee members. All directors are
reimbursed by the Company for expenses incurred by them in
connection with their service on the Board of Directors and
committees.
In fiscal 1998, the Company adopted the 1997 Deferred
Compensation Plan for Non-Employee Directors (the "Non-Employee
Directors Plan"). Pursuant to the Non-Employee Directors Plan,
beginning in September 1997 directors who are not employed as
officers of the Company may file with the Company an irrevocable
election to defer payment of not less than fifty percent (50%) of
the retainer fees to be earned during each fiscal year. Deferred
amounts are invested in an account reflected in Company stock
equivalent units, the number of which is computed by dividing the
amount of the deferred retainer fees by the fair market value of
the Company's shares on the date of deferral. Directors may
elect the form and timing of payments of deferred amounts (and
any earnings reflecting dividends thereon), to be paid in cash
from the Company in a lump sum or installment payments after such
director's sixty-fifth or seventieth birthday, based on the
number of stock equivalent units in such director's account and
the fair market value of the Company's shares on the first
business day of the year in which payments are made. In addition,
pursuant to the Stock Incentive Plan, each outside director
receives a non-qualified stock option to purchase 2,000 shares of
Common Stock on the date of each annual meeting of shareholders
with an exercise price equal to the fair market value of the
Common Stock on such date. The shares subject to such options
vest on the first anniversary of the date of grant and are
exercisable for a period of ten years.
Employment and Termination Agreements
The Company has multi-year employment agreements with each
Named Officer that provide for an annual base salary, fringe
benefits, life insurance and the opportunity to receive incentive
and bonus compensation. The employment agreement of each of Sam
Moore, S. Joseph Moore, Charles Z. Moore and Joe Powers contains
certain provisions that entitle them to receive certain payments
including a severance payment and (at the employee's election)
the cash out of certain stock and stock-based awards under
Company incentive plans in the event they are involuntarily
terminated or resign with good reason within contracted time
periods following a change in control of the Company. Sam Moore's
severance payment is equal to 2.99 times his then current base
salary, and each of S. Joseph Moore's, Charles Z. Moore's and Joe
Powers' severance payment is equal to 2 times their respective
then current base salaries. In addition, if Sam Moore retires
after the expiration of his employment agreement (March 31,
2001), he will be entitled to a lump sum payment by the Company
equivalent to two years' base salary, in special recognition of
his service to the Company.
The Company also has an agreement with Sam Moore which provides
that upon termination of employment by the Company for any reason
other than for serious misconduct, death, disability, or
voluntary action by Mr. Moore, Mr. Moore will receive severance
compensation equal to an amount necessary to fund certain
insurance survivorship policies until a net death benefit of
$10,000,000 is attained or December 31, 2006, whichever is
earlier. The policy proceeds will be paid to a trust established
for the benefit of Mr. Moore's family.
Compensation Committee Report
Decisions concerning the compensation of the Company's
executives are made by the Compensation Committee of the Board of
Directors. Each member of the Compensation Committee is a non-
employee director. The Compensation Committee is responsible for
reviewing and setting the compensation of the Company's senior
executives and for establishing general executive compensation
policies for the Company.
Compensation Philosophy and Policies for All Executive Officers
The Compensation Committee believes that the primary objectives
of the Company's executive compensation policy should be:
-- to attract and retain talented executives by providing a
compensation program that is competitive with the
compensation provided to executives at companies of
comparable size and position in the publishing and gift
business, while maintaining compensation within levels that
are consistent with the Company's business plan, financial
objectives and operating performance;
-- to provide appropriate incentives for executives to work
towards the achievement of the Company's annual performance
targets established in the Company's business plan; and
-- to more closely align the interests of its executives with
those of shareholders by providing long-term incentive
compensation in the form of stock awards and options or
other equity-based, long-term incentive compensation.
The Compensation Committee believes that the Company's
executive compensation policies should be reviewed during the
first quarter of the fiscal year when the financial results of
the prior fiscal year become available. The policies should be
reviewed in light of their consistency with the Company's
financial performance, its business plan and its position within
the publishing and gift industry, as well as the compensation
policies of similar companies in the publishing and gift
business. The compensation of individual executives should then
be reviewed annually by the Compensation Committee in light of
its executive compensation policies for that year.
In setting and reviewing compensation for the executive
officers, the Compensation Committee considers a number of
different factors designed to assure that compensation levels are
properly aligned with the Company's business strategy, corporate
culture and operating performance. Among the factors considered
are the following:
-- Comparability--The Compensation Committee considers the
compensation packages of similarly situated executives at
companies deemed to be most comparable to the Company. The
objective is to maintain competitiveness in the marketplace
in order to attract and retain the highest quality
executives. This is a principal factor in setting base
levels of compensation.
-- Payment for Performance--The Compensation Committee believes
that compensation should be in part directly linked to
operating performance. To achieve this link with regard to
short-term performance, the Compensation Committee has
relied on cash bonuses which have been determined on the
basis of certain objective and subjective factors after
receiving the recommendations of senior management.
-- Equity Ownership--The Compensation Committee believes that
an integral part of the executive compensation program at
the Company is equity-based compensation plans which
encourage and create ownership of the Company's stock by its
executives, thereby aligning executives' long-term interests
with those of the shareholders. These long-term incentive
programs are principally reflected in the Company's stock-
based incentive plans. The Compensation Committee believes
that significant stock ownership is a major incentive in
building shareholder value and reviews awards of equity-
based incentives with that goal in mind.
-- Qualitative Factors--The Compensation Committee believes
that in addition to corporate performance and specific
division performance, it is appropriate to consider in
setting and reviewing executive compensation the personal
contributions that a particular individual may make to the
success of the corporate enterprise. Such qualitative
factors as leadership skills, planning initiatives,
development skills, public affairs and civic involvement
have been deemed to be important qualitative factors to take
into account in considering levels of compensation.
In connection with the annual review of the Company's executive
compensation policies, the Compensation Committee deemed it
appropriate to engage a nationally recognized compensation
consulting firm (the "Consultant") to assist the Compensation
Committee in its review and to provide advice with respect to the
Company's compensation arrangements for the Company's senior
executive officers for fiscal 1999. The peer group, which the
Compensation Committee utilized for purposes of evaluating
compensation for executive officers, consisted of publishing and
gift companies that are similar to the Company in size. The
companies in the Company's peer group are reflected in the
Performance Graph included in this Proxy Statement (the "Peer
Group Index") and were used for purposes of reviewing
compensation policies for executive officers for fiscal 1999.
Compensation of Executive Officers
The Compensation Committee believes that the compensation for
each of its executive officers should consist of a base salary,
the potential for an annual cash bonus and equity-based long-term
incentive compensation. The Compensation Committee has applied
the policies described herein to fiscal 1999 compensation for
executive officers, including the Named Officers.
Base Compensation. In determining whether an increase in base
compensation for its executive officers was appropriate for
fiscal 1999, the Compensation Committee reviewed salary ranges
recommended by the Consultant and sought the advice of the Chief
Executive Officer. The Compensation Committee subjectively
determined base compensation on the basis of discussions with the
Chief Executive Officer, a review of the base compensation of
executive officers of comparable companies, the advice of the
Consultant, the committee's experience with the Company and in
business generally, and what it viewed to be appropriate levels
of base compensation after taking into consideration the
performance of the Company and the contributions of each
executive officer. As a result of this review, increases
averaging approximately 6% in the base salaries for the Named
Officers for fiscal 1999 were made, with specific increases
varying from 1% to approximately 16%, reflecting the Compensation
Committee's subjective judgment as to the competitive level of
the compensation being paid to each executive, the executive's
contribution to the Company's performance and the
responsibilities undertaken by the executive officer. As a result
of these increases, base salaries for the Named Officers were set
for fiscal 1999 at approximately the 50th to the 75th percentile
of the base compensation of executives with similar respons-
ibilities at comparable companies. The Compensation Committee
did not assign any relative weight to the quantitative and
qualitative factors which it applied subjectively in reaching
its base compensation decisions.
Annual Incentive and Bonus Compensation. For fiscal 1999, the
Compensation Committee established performance goals for awarding
cash incentive payments, including targeted pre-tax profits for
the Company, improvements in the Company's return on assets ratio
and, for certain Named Officers, pre-determined margin
contributions for specific divisions of the Company. The amount
of any potential award varied with each executive officer. Based
on satisfying certain of these performance goals, the Named
Officers earned annual incentive payments aggregating $312,000
for fiscal 1999.
Long-Term Incentive Compensation. The Compensation Committee
believes the Company should make it a part of its regular
executive compensation policies to grant annual awards of long-
term, equity based incentives to executive officers and other key
employees as part of the compensation package that is reviewed
annually for each executive officer. In making these awards, the
Compensation Committee establishes guidelines at the time of the
annual review and takes into account the recommendations of the
Chief Executive Officer prior to approving annual awards of long-
term, equity-based incentive compensation to the other executive
officers.
In connection with the fiscal 1999 Compensation Committee's
annual review of the Company's executive compensation policies
and based upon the recommendation of the Consultant, the
Compensation Committee determined that the total outstanding
options for each of the Named Officers, other than Charles Z.
Moore, including the annual options and special options made to
certain Named Officers in fiscal 1998, provided sufficient long-
term, equity-based incentive compensation to all of the Named
Officers, with the exception of Charles Z. Moore. The
Compensation Committee granted to Charles Z. Moore a one-time
grant ("Special Option") to purchase 25,000 shares of Common
Stock or Class B Common Stock. The Special Option vests one year
from the date of grant and has an exercise price of 100% of the
fair market value on the date of grant. The Special Option is a
non-qualified option and was granted under the 1992 Stock
Incentive Plan. See "--Option/SAR Grants in Last Fiscal Year."
The size and term of the option grant to Charles Z. Moore was
determined by the Compensation Committee, after receiving the
advice of the Consultant, based primarily upon an analysis of
comparable companies, a subjective assessment of Charles Z.
Moore's performance and his respective level of responsibility in
the organization.
Chief Executive Officer Compensation. During fiscal 1998, in
connection with the grant of special one-time options, the
Compensation Committee executed an agreement with Sam Moore as
the Company's Chairman, Chief Executive Officer and President to
receive no increase in base compensation and no further option
awards for the fiscal years 1999 through 2003. Accordingly, Sam
Moore received no increase in base compensation or option awards
for fiscal 1999. Therefore, his base compensation remained
$400,000. The Compensation Committee also took into account that
as part of Sam Moore's compensation the Company paid him an
additional $169,635 to enable him to pay the after income tax
cost of premiums for life insurance maintained on the joint lives
of Sam Moore and his wife. This payment was made pursuant to a
previously executed agreement and is conditioned upon Sam Moore
maintaining in excess of 3,000,000 votes of Common Stock and
Class B Common Stock at all times. See "--Employment and
Termination Agreements." The life insurance is designed to
ensure sufficient liquidity for Sam Moore's estate so that the
estate would not be forced to sell its significant stock position
in the Company to fund its estate tax liability, thus providing
stability in the market for the Company's securities.
Sam Moore was eligible to receive a cash incentive payment if
the Company achieved certain targeted pre-tax profits and
improved its return on assets ratio as set by the Compensation
Committee for fiscal 1999. Based on such criteria, Sam Moore
received a cash incentive payment award for fiscal 1999 in the
amount of $128,000.
Federal Income Tax Deductibility Limitations. Section 162(m)
of the Internal Revenue Code of 1986, enacted as part of the
Omnibus Budget Reconciliation Act in 1993 ("OBRA"), generally
disallows a tax deduction to public companies for compensation
over $1,000,000 paid to the Company's Chief Executive Officer and
four other most highly compensated executive officers. The
statute, however, exempts qualifying performance-based
compensation from the deduction limit if certain requirements are
met.
The Compensation Committee believes it is appropriate to take
into account the $1,000,000 limit on the deductibility of
executive compensation and to seek to qualify executive compen-
sation awards as performance-based compensation excluded from
the $1,000,000 limit. Stock options and other equity-based
incentives granted under the Company's stock incentive plans
are intended to qualify as performance-based compensation;
however, the Compensation Committee recognizes that interpre-
tations of the Internal Revenue Service with respect to
Section 162(m) matters may result in compensation related to
certain options not qualifying for exclusion from the $1,000,000
limit. During fiscal 1999, none of the executive officers other
than Sam Moore received compensation that exceeded the $1,000,000
limit on deductibility. Compensation deemed paid to Sam Moore
for fiscal 1999 exceeded the $1,000,000 limit by approximately
$195,000 due to the timing of the fiscal 1999 payment of a
$225,000 accrued bonus awarded to him in fiscal 1998 as the
result of the sale of the Company's music division in fiscal
1997.
June 4, 1999
Millard V. Oakley, Chairman
Brownlee O. Currey, Jr.
W. Lipscomb Davis, Jr.
Performance Graph
The following graph compares the five-year cumulative returns
of $100 invested on March 31, 1994 in (i) the Common Stock,
(ii) the Class B Common Stock, (iii) Standard & Poor's MidCap
400 Index (the "S&P MIDCAP 400 Index") and (iv) an index compiled
by the Company and composed of the publicly traded common stock
of the companies comprising the Peer Group (the "Peer Group
Index") assuming the reinvestment of all dividends. The returns
on the common stock of each member of the Peer Group Index have
been weighted to reflect relative stock market capitalization.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among Thomas Nelson, Inc. Common Stock,
Thomas Nelson, Inc. Class B Common Stock,
the S&P MidCap 400 Index,
and the Peer Group Index<F1>
[Line graph placed here representing data below.]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas Nelson, Inc.-Common
Stock (TNM) $ 100 $ 128 $ 98 $ 69 $ 92 $ 68
Thomas Nelson, Inc.-Class B
Common Stock (TNM.B) 100 109 101 111 91 55
Peer Group Index 100 113 130 135 196 161
S&P MIDCAP 400 Index 100 108 139 154 230 222
- ----------
<FN>
<F1> The Peer Group Index is comprised of the following 11
publicly traded companies:
American Greetings Corp. Jostens, Inc.
Courier Corp. Meredith Corp.
Day Runner, Inc. Scholastic Corp.
Gibson Greetings, Inc. Value Line, Inc.
Golden Books Family John Wiley &
Entertainment, Inc. Sons, Inc.
Houghton Mifflin Co.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's executive officers, directors and
persons who own more than 10% of a registered class of the
Company's equity securities to file reports of ownership and
changes in ownership with the Commission. Executive officers,
directors and greater than 10% beneficial owners are required by
regulations of the Commission to furnish the Company with copies
of all Section 16(a) reports so filed.
Based solely upon a review of the Forms 3, 4 and 5 and
amendments thereto, and certain written representations furnished
to the Company, the Company believes that, during the fiscal year
ended March 31, 1999, its executive officers, directors and
greater than 10% beneficial owners complied with all applicable
filing requirements.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's financial statements for the year ended March 31,
1999, were examined by Arthur Andersen LLP, independent certified
public accountants. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting. Such
representatives will have the opportunity to make a statement if
they desire to do so, and will be available to respond to
appropriate questions.
In keeping with its past practice, the Board of Directors does
not intend to select independent auditors for the year ending
March 31, 2000 until after the Annual Meeting.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS TO BE
PRESENTED AT 2000 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals intended to be presented at the Annual
Meeting of Shareholders to be held in 2000 must be received in
writing by the Company at its executive offices at 501 Nelson
Place, Nashville, Tennessee 37214-1000, not later than March 9,
2000, in order to be included in the Company's proxy statement
and proxy for that meeting.
For other shareholder proposals to be timely (but not
considered for inclusion in the Company's proxy statement), a
shareholder's notice must be received in writing by the Company
at its executive offices not less than 60 days nor more than
90 days prior to the meeting of shareholders; provided, however,
that in the event that less than 70 days' notice or prior public
disclosure of the date of such meeting is given or made to the
shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the 10th day
following the date on which such notice of the day of the meeting
was mailed or such public disclosure was made.
For proposals that are timely filed, the Company retains
discretion to vote proxies it receives provided (i) it includes
in the proxy statement advice on the nature of the proposal and
how the Company intends to exercise its voting discretion and
(ii) the proponent does not issue a proxy statment.
METHOD OF COUNTING VOTES
Pursuant to rules promulgated by the Commission, boxes and a
designated blank space are provided on the proxy card for
shareholders to mark if they wish to vote "for," "against" or
"withhold authority" (or abstain) to vote for one or more of the
director nominees, and to vote "for," "against" or "abstain" from
voting on any other matters submitted to the shareholders. Under
applicable securities laws, Tennessee law and the Company's
charter and bylaws, an abstention or withholding of authority to
vote will have no effect on the outcome of the election of
directors, as such election is determined by the number of votes
cast. Shares represented at the Annual Meeting by proxies
containing instructions to "withhold authority" or abstain will
nonetheless be counted as present for purposes of determining
whether a quorum exists at the Annual Meeting.
A broker non-vote occurs when a broker holding shares
registered in a street name is permitted to vote, in the broker's
discretion, on routine matters without receiving instructions
from the client, but is not permitted to vote without
instructions on non-routine matters, and the broker returns a
proxy card with no vote (the "non-vote") on the non-routine
matter. Under Tennessee law and the Company's charter and
bylaws, broker non-votes will have no impact on any of the
matters to be submitted to the shareholders at the Annual
Meeting, but shares represented by a proxy card marked with a
non-vote would be counted as present for purposes of determining
the existence of a quorum. Under New York Stock Exchange rules,
the election of directors is a matter on which a broker has the
discretion to vote if instructions are not received from the
client at least 10 days prior to the Annual Meeting, but brokers
may not have the discretion to vote on any other proposal in the
absence of instructions from their clients.
MISCELLANEOUS
The cost of this solicitation of proxies will be borne by the
Company. It is anticipated that the solicitation will be made
primarily by mail, but regular employees or representatives of
the Company may, without additional compensation, also solicit
proxies by telephone, telegram, or personal interview and arrange
for brokerage houses and other custodians, nominees, and
fiduciaries to send proxies and proxy material to their
principals at the Company's expense.
The Board of Directors is not aware of any business other than
that described in this Proxy Statement to be presented for action
at the Annual Meeting, but the persons named in the proxy intend
to vote or act with respect to any other proposal that may be
properly brought before the Annual Meeting in accordance with
their judgment.
The Annual Report to Shareholders for the year ended March 31,
1999, is being mailed to all shareholders entitled to vote at the
Annual Meeting. Additional information is contained in the
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999, filed with the Commission. The Company will
furnish without charge to any shareholder a copy of its complete
Annual Report on Form 10-K, including the financial statements
and schedules thereto, upon written request to Joe L. Powers,
Executive Vice President and Secretary, Thomas Nelson, Inc., P.
O. Box 141000, Nashville, Tennessee 37214-1000.
By order of the Board of
Directors.
THOMAS NELSON, INC.
By Sam Moore, President
July 7, 1999
APPENDIX A
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THOMAS NELSON, INC.
501 Nelson Place
Nashville, TN 37214-1000
The undersigned hereby appoints SAM MOORE and JOE L. POWERS, or
either of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote,
as designated below, all the shares of Common Stock and Class B
Common Stock of Thomas Nelson, Inc. held of record by the
undersigned on June 28, 1999, at the Annual Meeting of
Shareholders to be held at the Loews Vanderbilt Plaza, 2100 West
End Avenue, Nashville, Tennessee 37203 on Thursday, August 19,
1999, at 11:00 a.m., local time, or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY (Abstain)
below (except as marked to vote for all nominees
to the contrary below): listed below:
Brownlee O. Currey, Jr. Brownlee O. Currey, Jr.
W. Lipscomb Davis, Jr. W. Lipscomb Davis, Jr.
Joe M. Rodgers Joe M. Rodgers
[ ] AGAINST all nominees
listed below:
Brownlee O. Currey, Jr.
W. Lipscomb Davis, Jr.
Joe M. Rodgers
INSTRUCTION: To vote FOR, AGAINST or to WITHHOLD AUTHORITY
(Abstain) to vote for any individual nominee, write that
nominee's name on the space provided below and indicate whether
your vote is FOR, AGAINST or to WITHHOLD AUTHORITY (Abstain) to
vote for that nominee.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
2. By executing this proxy, the undersigned authorizes the
proxies to vote, in their discretion, upon such other
business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this proxy will be voted FOR the election as directors
of all the nominees named above.
PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY CARD
PROMPTLY USING THE
ENCLOSED ENVELOPE.
Please sign exactly as
name appears below. When
shares are held by joint
tenants, both should
sign. When signing as
attorney, executor,
administrator, trustee,
or guardian, please give
full title as such. If a
corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign
in partnership name by
authorized persons.
-------------------------
Signature
-------------------------
Signature
DATED: , 1999
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