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 Sheraton Nashville Downtown,
623 Union Street, Nashville, Tennessee, at 11:00 a.m., local time,
on Thursday, August 17, 2000, for the following purposes:
1. To elect three directors in Class Two 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 26, 2000 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/ Joe L. Powers
Joe L. Powers
Executive Vice
President and Secretary
Nashville, Tennessee
July 6, 2000
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 17, 2000 (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 6, 2000.
Only shareholders of record at the close of business on June 26, 2000
(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 13,144,794 shares of Common Stock (the "Common Stock")
and 1,085,801 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 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> 2,127,638 15.2% 831,949 60.0%
Gabelli Asset Mgmt., Inc.
& Subsidiaries <F4> 1,669,300 12.7 0 0
Dimensional Funds Advisors,
Inc. <F5> 822,987 6.3 0 0
Thomas Nelson Employee Stock
Ownership Plan-Investment
Committee <F6> 983,794 7.5 0 0
S. Joseph Moore**** <F7> 283,001 2.1 116,835 10.5
Brownlee O. Currey, Jr.** <F8> 190,754 1.5 4,035 *
W. Lipscomb Davis, Jr.** <F9> 19,843 * 2,531 *
Robert J. Niebel, Sr.** <F9> 30,054 * 3,692 *
Millard V. Oakley** <F10> 640,249 4.9 19,542 1.8
Andrew J. Young** <F8> 12,610 * 0 0
Charles Z. Moore*** <F11> 253,231 1.9 126,998 11.0
Joe L. Powers*** <F12> 149,728 1.1 83,539 7.5
Raymond T. Capp*** <F13> 91,614 * 65,000 5.6
All Executive Officers and
Directors as a group
(12 persons) <F14> 3,843,754 26.7 1,259,121 80.2
----------------------
* 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
30,000 shares of Common Stock and 300,000 shares of Class B Common Stock
under the Company's Amended and Restated 1992 Stock Incentive Plan (the
"Stock Incentive Plan"), 611,798 shares of Common Stock held by four
trusts of which Mr. Moore is trustee, and 29,776 shares of 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> As reflected in a Schedule 13D/A filed with the Commission on April 19,
1999 by Gabelli Asset Management, Inc. The address of Gabelli Funds, Inc.
is One Corporate Center, Rye, New York 10580-1434.
<F5> As reflected in Schedule 13G filed with the Commission on February 3,
2000 by Dimensional Funds Advisors, Inc. The address for Dimensional
Funds Advisors, Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica,
CA 90401.
<F6> Pursuant to the terms of the ESOP, the investment committee shares
dispositive power with 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.
<F7> Includes shares issuable upon exercise of outstanding options to
purchase 20,000 shares of Common Stock and 25,000 shares of Class B
Common Stock under the Stock Incentive Plan, 25,592 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, 10,000 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 11,650 shares of
Common Stock held by the ESOP, as to which S. Joseph Moore has sole
voting power. S. Joseph Moore's spouse owns 6,625 shares of Common Stock.
S. Joseph Moore's address is 501 Nelson Place, P.O. Box 141000,
Nashville, Tennessee 37214-1000.
<F8> Includes 606 and 10,000 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.
<F9> Includes 10,000 shares of Common Stock issuable upon exercise of
outstanding options under the Stock Incentive Plan.
<F10> Includes 606 and 10,000 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.
<F11> Includes shares issuable upon exercise of outstanding options to purchase
10,000 shares of Common Stock and 65,000 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
23,869 shares of 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
15,000 shares of Common Stock and 25,000 shares of Class B Common Stock
under the Stock Incentive Plan and 42,841 shares of 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
22,333 shares of Common Stock and 65,000 shares of Class B Common Stock
under the Stock Incentive Plan and 4,281 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 121,556 shares of Common Stock held by the ESOP,
and shares issuable upon exercise of options to purchase 125,832 shares
of Common Stock and 478,333 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 seven members, with the terms of office of the directors in Class Two
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>
Brownlee O. Currey, Jr. Three 2002
W. Lipscomb Davis, Jr. Three 2002
Sam Moore One 2001
Andrew J. Young One 2001
</TABLE>
The Board of Directors has nominated the following three persons for
election as directors in Class Two with terms of office of three years
expiring at the Annual Meeting of Shareholders to be held in 2003:
S. Joseph Moore
Robert J. Niebel, Sr.
Millard V. Oakley
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 O. Currey, Jr. President, Currey Investments. 71 1984
(C, N & A) Previously served as Chairman
of the Board of The Nashville
Banner Publishing Co. from
January 1980 to May 1998.
W. Lipscomb Davis, Jr. Partner of Hillsboro Enterprises; 68 1984
(A & C) Director of American General
Corporation and Genesco, Inc.
Sam Moore Chairman of the Board, Chief 70 1961
(E & N) 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 of the 37 1995
(E) 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. Niebel, Sr. Senior Vice President of 61 1973
(E & A) 21 Century Christian, Inc.
Millard V. Oakley Businessman managing private 70 1972
(C & N) investments.
Andrew J. Young Vice Chairman of Law Companies 68 1993
(E) Group; Chairman of GoodWorks
International; Director of
Archer-Daniels-Midland Company,
Cox Communications, 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 four meetings.
The Compensation Committee held one meeting, the Nominating Committee held
one meeting and the Audit Committee held six meetings during the fiscal year.
The Executive 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 2000, 1999 and 1998 for the Company's Chief
Executive Officer and the persons who, in fiscal 2000, were the other four
most highly compensated executive officers of the Company (collectively, the
"Named Officers"):
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Awards
----------
Annual Compensation Securities
------------------------ Underlying
Name and Other Annual Options/ All Other
Principal Salary Bonus Compensation SARs Compensation
Position Year ($) ($) ($) (#)<F1> ($)
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sam Moore 2000 $400,000 $ 0 $169,635<F2> 0 $27,407<F3>
President and 1999 400,000 128,000 169,635 0 23,117
Chief Executive 1998 390,000 610,000 169,635 830,000 21,239
Officer
S. Joseph Moore 2000 270,000 0 0 0 12,178<F4>
Executive Vice 1999 265,000 40,000 0 0 11,659
President 1998 250,000 170,000 0 70,000 11,152
Charles Z. Moore 2000 240,000 0 0 0 11,915<F5>
Senior Vice 1999 219,000 40,000 0 25,000 12,215
President 1998 188,000 96,000 0 10,000 10,497
Joe L. Powers 2000 210,000 30,000<F8> 0 0 11,837<F6>
Executive Vice 1999 210,000 48,000 0 0 11,629
President and 1998 207,000 293,000 0 65,000 10,456
Secretary
Raymond T. Capp 2000 208,000 30,000<F8> 0 0 9,600<F7>
Senior Vice 1999 197,000 56,000 0 0 9,600
President, 1998 180,000 165,000 0 65,000 8,035
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 $2,731 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 $2,578 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 $2,315 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 $2,237 contributed to the
Company's 401(k) Plan by the Company on behalf of Mr. Powers.
<F7> Includes $9,600 contributed to the ESOP by the Company on behalf of
Mr. Capp.
<F8> Represents Y2K compliance bonus.
</TABLE>
Option/SAR Grants in Last Fiscal Year
No options or Stock Appreciation Rights were granted during fiscal year 2000.
Fiscal Year-End Option Values
The following table provides information as to the aggregate number of shares
of Common Stock and Class B Common Stock covered by both exercisable and
unexercisable stock options as of March 31, 2000, and the values for the
"in-the-money" options, which represent the positive spread between the
exercise price of any such existing stock options and the year-end price of
the Common Stock or Class B Common Stock. No options were exercised by the
Named Officers during the fiscal year ended March 31, 2000.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options at
at Fiscal Year-End (#)<F1> Fiscal Year-End ($)<F2>
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sam Moore 930,000 90,000 $0 $0
S. Joseph Moore 140,000 60,000 0 0
Charles Z. Moore 58,333 16,667 0 0
Joe L. Powers 86,667 18,333 0 0
Raymond T. Capp 80,667 8,333 0 0
<FN>
<F1> Does not reflect cancellation of certain options subsequent to March 31,
2000, as described in the Compensation Committee Report below.
<F2> 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, 2000, the closing price of the Common Stock and
Class B Common Stock on the New York Stock Exchange was $7.94 and $8.25,
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
or 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, 2003), 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 2000. 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 2000.
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
2000 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 2000, 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 3% in the base
salaries for the Named Officers for fiscal 2000 were made, with specific
increases varying from 0% to approximately 10%, 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 2000 at approximately the 50th to the 75th
percentile of the base compensation of executives with similar
responsibilities at comparable companies, except that Sam Moore's salary was
not changed. 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 2000, 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, meeting Y2K system compliance, 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 $60,000 for
fiscal 2000.
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 2000 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 provided
sufficient long-term, equity-based incentive compensation to all of the Named
Officers.
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 2000. Subsequent to the end of fiscal 2000, certain of
Sam Moore's stock options, including certain options granted in fiscal 1998,
were cancelled, as described below. 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 2000. Based on such
criteria, Sam Moore did not receive a cash incentive payment award for fiscal
2000.
Other Compensation Committee Actions. Subsequent to the end of fiscal 2000,
in May 2000, the Compensation Committee considered the request of certain
executive officers, including Sam Moore, to cancel certain outstanding
options granted under the 1992 Employee Stock Incentive Plan
(the "1992 Plan"). The Compensation Committee noted that the exercise price
of each of these grants was significantly above the trading price of the
Common Stock and Class B Common Stock over recent periods and that the
cancellation would result in approximately 910,000 additional shares being
available for grant under the 1992 Plan. The Compensation Committee determined
to accept the proposal to cancel the above options. No consideration was given
in connection with the cancellation.
Also subsequent to the end of fiscal 2000, the Compensation Committee
approved the extension of the terms of the employment agreements of Sam Moore,
S. Joseph Moore and Joe L. Powers for an additional two years, such that the
amended terms will expire on March 31, 2003. The employment agreements are
described above under "Employment and Termination Agreements." No other
terms of the agreements were modified. The Compensation Committee believes
that the extension of these agreements will provide for stability of the
senior executive management team as the Company executes its business strategy.
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 compensation 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 interpretations 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 2000, none of the executive officers received compensation that
exceeded the $1,000,000 limit on deductibility.
June 6, 2000
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, 1995 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 5 Year Cumulative Total Return*
Among Thomas Nelson, Inc., the S&P MIDCAP 400 Index
and a Peer Group
[Line graph placed here representing data below.]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
--------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas Nelson, Inc. -
Common Stock (TNM) $100 $ 77 $ 54 $ 72 $ 53 $ 43
Thomas Nelson, Inc. - Class B
Common Stock (TNM.B) 100 97 102 85 50 46
Peer Group Index 100 115 117 171 144 132
S&P MIDCAP 400 Series 100 128 142 212 204 282
_________________
<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 Entertainment, Inc. John Wiley & 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, 2000, its executive
officers, directors and greater than 10% beneficial owners complied with all
applicable filing requirements, except that Mr. Oakley did not timely report
a stock acquisition in February 2000. This transaction was reported to the
Commission on an amended form in the next available reporting period. Also,
all non-employee directors have inadvertently not reported acquisitions of
phantom stock equivalents under the 1997 Deferred Compensation Plan for Non-
Employee Directors. The correction of this omission is in process.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's financial statements for the year ended March 31, 2000, 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, 2001 until after
the Annual Meeting.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS TO BE
PRESENTED AT 2001 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals intended to be presented at the Annual Meeting of
Shareholders to be held in 2001 must be received in writing by the Company
at its executive offices at 501 Nelson Place, Nashville, Tennessee 37214-1000,
not later than March 8, 2001, 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 statement.
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, 2000, 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, 2000, 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 Joe L. Powers
Executive Vice President and Secretary
July 6, 2000
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, W. LIPSCOMB DAVIS, JR. and JOE L.
POWERS, or any 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 26, 2000, at
the Annual Meeting of Shareholders to be held at the Sheraton Nashville
Downtown, 623 Union Street, Nashville, Tennessee 37219 on Thursday, August 17,
2000 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 contary below: listed below:
S. Joseph Moore S. Joseph Moore
Robert J. Niebel, Sr. Robert J. Niebel, Sr.
Millard V. Oakley Millard V. Oakley
[ ] AGAINST all nominees
listed below:
S. Joseph Moore
Robert J. Niebel, Sr.
Millard V. Oakley
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.
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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: , 2000
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