SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
OAK INDUSTRIES INC.
(Name of Registrant as Specified In Its Charter)
OAK INDUSTRIES INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
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4) Proposed maximum aggregate value of transaction:
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
OAK INDUSTRIES INC.
To the Shareholders of Oak Industries Inc.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Oak Industries Inc. to be held at State Street Bank & Trust Company, 225
Franklin Street, Boston, Massachusetts, on Wednesday, May 3, 1995 at 9:30
a.m., Eastern Daylight Time. Official notice of the meeting and Oak's proxy
statement are attached. A proxy card is also enclosed.
Whether or not you attend the meeting, please sign and return the enclosed
proxy card promptly; your vote is important.
On behalf of the Board of Directors and the management of your company,
thank you for your cooperation and continued support.
Sincerely,
WILLIAM S. ANTLE III
President and
Chief Executive Officer
Waltham, MA
March __, 1995
<PAGE>
OAK INDUSTRIES INC.
1000 Winter Street
Waltham, MA 02154
Telephone (617) 890-0400
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 3, 1995
To The Shareholders of Oak Industries Inc.:
The Annual Meeting of Shareholders of Oak Industries Inc., a Delaware
corporation (the "Company"), will be held at State Street Bank & Trust
Company, 225 Franklin Street, Boston, Massachusetts, on Wednesday, May 3, 1995
at 9:30 a.m., Eastern Daylight Time, for the following purposes:
1. To fix the number of directors at eight and to elect a Board of
Directors for the ensuing year;
2. To consider and act upon a proposal to approve the adoption of the
1995 Stock Option and Restricted Stock Plan;
3. To ratify the appointment of Price Waterhouse as the independent
accountants of the Company for fiscal year 1995; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 13, 1995 will be
entitled to vote at the meeting and at any adjournment thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, THE
COMPANY URGES YOU TO ASSURE YOUR REPRESENTATION AT THE MEETING BY SIGNING AND
RETURNING THE ENCLOSED PROXY IN THE POSTAGE PREPAID ENVELOPE PROVIDED AS
PROMPTLY AS POSSIBLE. THE GIVING OF YOUR PROXY DOES NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON IF YOU ATTEND THE MEETING.
By order of the Board of Directors,
PAUL J. HALAS
Sr. Vice President,
General Counsel and Secretary
March __, 1995
<PAGE>
OAK INDUSTRIES INC.
1000 Winter Street
Waltham, MA 02154
Telephone (617) 890-0400
PROXY STATEMENT
March 31, 1995
SOLICITATION OF PROXY, REVOCABILITY AND VOTING
THE ENCLOSED PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF OAK
INDUSTRIES INC. (THE "COMPANY"), FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS
(THE "ANNUAL MEETING") TO BE HELD AT STATE STREET BANK & TRUST COMPANY, 225
FRANKLIN STREET, BOSTON, MASSACHUSETTS, ON WEDNESDAY, MAY 3, 1995 AT 9:30
A.M., EASTERN DAYLIGHT TIME, OR ANY ADJOURNMENTS THEREOF. A shareholder giving
a proxy has the power to revoke it at any time before it is exercised by
filing with the Secretary of the Company either an instrument revoking the
proxy or a duly executed proxy bearing a later date. A proxy will be revoked
automatically if the stockholder who executed it is present at the meeting and
votes in person. Unless contrary instructions are indicated on the proxy, all
shares represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted for (i) the election of
the nominees for director named below (ii) the adoption of the 1995 Stock
Option and Restricted Stock Plan, and (iii) the ratification of the
appointment of Price Waterhouse as independent auditors for the Company's
fiscal year 1995. This proxy statement and the accompanying proxy are being
mailed to shareholders on or about March __, 1995.
Holders of record of the Company's common stock, $0.01 par value per share
(the "Common Stock"), outstanding at the close of business on March 13, 1995
are entitled to one vote for each share of Common Stock held. At that time,
__________ shares of Common Stock were outstanding, each entitling its holder
to one non-cumulative vote on each matter properly brought before the Annual
Meeting. Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the election inspector appointed for the meeting and will
determine whether or not a quorum is present. The election inspector treats
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of
determining the approval of any matter submitted to the shareholders for a
vote. If a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter, those shares
will not be considered as present and entitled to vote with respect to that
matter. Where a choice has been specified on the proxy with respect to the
matters set forth above, the shares represented by the proxy will be voted in
accordance with the specification and will be voted FOR if no specification is
indicated.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 3, 1995, the name of each person
who, to the knowledge of the Company, may be deemed to own beneficially more
than 5% of the shares of Common Stock of the Company outstanding at such date,
the number of shares owned by each of such persons and the percentage of the
outstanding shares represented thereby.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent
Beneficial Owner Ownership of Class
- ------------------- ---------- --------
<S> <C> <C>
FMR Corp. 1,934,600 (1) 11.07%
82 Devonshire Street
Boston, Massachusetts 02109
George D. Bjurman & Associates 937,106 (2) 5.36
10100 Santa Monica Boulevard
Suite 1200
Los Angeles, California 90067
<FN>
(1) Based on Amendment No. 2 to Schedule 13G filed on February 10, 1995
indicating that: FMR Corp., its wholly owned subsidiary, Fidelity
Management & Research Company ("Fidelity"), and Edward C. Johnson 3d
may be deemed to own these shares beneficially (having only sole
dispositive power) as a result of Fidelity acting as investment adviser
to several investment companies, one of which (Fidelity Magellan Fund)
may be deemed to own beneficially 1,628,900 shares or 9.32% of the
Company's total Common Stock outstanding at March 3, 1995.
(2) Based on Schedule 13G filed on February 15, 1995 indicating that
George D. Bjurman & Associates ("GDBA") may be deemed to own these
shares beneficially (having shared voting and dispositive power) and
that George Andrew Bjurman and Owen Thomas Barry III may be deemed to
own these shares beneficially as a result of their ownership in and
positions with GDBA.
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 3, 1995, certain information
with respect to the number of shares of the Company owned by the directors and
executive officers of the Company and the percentage of the outstanding shares
represented thereby.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned
as of March 3, 1995 (1)
------------------------------
Number of Percent of
Name of Beneficial Owner Shares Class
------------------------ ---------------- ----------
<S> <C> <C>
The Lord Stevens of Ludgate............. 20,000(2) *
Roderick M. Hills....................... 48,353(2)(3) *
William S. Antle III.................... 404,150(2)(4) 2.27%
Daniel W. Derbes........................ 36,000(2)(5) *
George W. Leisz......................... 28,220(2) *
Gilbert E. Matthews..................... 22,000 *
Christopher H.B. Mills.................. 292,449(2)(6) 1.67
Elliot L. Richardson.................... 20,000(2) *
William C. Weaver....................... 118,224(7) *
John D. Richardson...................... 99,154(8) *
Paul J. Halas........................... 86,180(9) *
All current officers and directors
as a group (13 persons)............... 1,200,030(10) 6.63%
<FN>
* Constitutes less than 1% of the total shares outstanding.
(1) Nature of beneficial ownership is direct and arises from sole voting
and investment power, unless otherwise indicated by footnote.
(2) Includes the following shares subject to options exercisable within
sixty days: Lord Stevens, 20,000 shares; Mr. Hills, 20,000 shares;
Mr. Derbes, 20,000 shares; Mr. Leisz, 20,000 shares; Mr. Mills, 20,000
shares; Mr. Richardson, 20,000 shares; and Mr. Antle, 301,900 shares.
(3) Includes 466 shares held by his spouse as to which Mr. Hills disclaims
beneficial ownership and 4,100 shares held indirectly in trust.
(4) Includes 1,200 shares held by his spouse as to which Mr. Antle disclaims
beneficial ownership and 200 shares held directly in trust.
(5) Includes 10,000 shares held indirectly in trust.
(6) As a Director of North American Smaller Companies Trust PLC and
J O Hambro, Mr. Mills may be deemed to hold shared voting and investment
power of 272,449 shares.
(7) Includes 62,630 shares subject to options exercisable within sixty days
and 5,400 shares owned by Mr. Weaver's daughter as to which Mr. Weaver
disclaims beneficial ownership.
(8) Includes 74,154 shares subject to options exercisable within sixty days.
(9) Includes 71,880 shares subject to options exercisable within sixty days.
(10) In addition to the footnotes discussed above, includes 17,000 shares
subject to options exercisable within sixty days by an officer of the
Company and 8,300 shares beneficially owned by such officer.
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
A board of eight directors is to be elected at the Annual Meeting. The term
of office for each person elected as a director will continue until the 1996
Annual Meeting of Shareholders or until his successor has been elected and
qualified. All nominees have consented to be named and have indicated their
intent to serve if elected. If, for any reason, any nominee for director shall
become unavailable for election, which management does not anticipate,
discretionary authority may be exercised to vote for a substitute nominee. The
nominees who receive the highest number of votes cast at the Annual Meeting by
the holders of shares entitled to vote will be elected as directors.
Accordingly, abstentions and broker non-votes will not affect the outcome of
the election of directors. Unless otherwise instructed, proxy holders will
vote the proxies received by them for the eight nominees named below. Each of
the nominees is currently serving as a director.
Names of the eight nominees and certain information about them are set
forth below:
<TABLE>
<CAPTION>
NOMINEES
Director
Name, Principal Occupation and Directorships Age Since
- -------------------------------------------- --- --------
<S> <C> <C>
The Lord Stevens of Ludgate............................. 58 1989
Chairman of the Company's Board of Directors since June
1989; also, Chairman, United Newspapers plc (newspaper
publisher) since 1981; Director since February 1972 and
Chairman since July 1976, Proudfoot PLC (management
consultancy); Director and Chairman since January 1988,
Mid-States PLC (automotive parts distributor); Director,
1986-1993 and Chairman 1989-1993, INVESCO PLC (investment
advisory company).
Roderick M. Hills....................................... 64 1985
Vice Chairman of the Company's Board of Directors since
June 1989; Counselor to Hills & Company (advisory and
consulting firm); Partner, Mudge Rose Alexander & Ferdon
(Washington, D.C.) since May 1994; Chairman of the
International Practice Group of the law firm of Shea &
Gould (Washington, D.C.), 1992 to 1994; Chairman and
Managing Director of the Manchester Group, Ltd.
(investment consulting firm), 1983 to 1992; Managing
Partner of the law firm of Donovan Leisure, Rogovin,
Huge & Schiller (Washington, D.C.), 1989 to 1992; also
Director of Federal-Mogul Corporation, Sunbeam-Oster
Company, Inc., and Mayflower Group, Inc.
William S. Antle III.................................... 50 1990
President and Chief Executive Officer of the Company
since December 1989; also, Director of ESCO Electronics
Corporation.
Daniel W. Derbes........................................ 64 1989
President of Signal Ventures (venture capital company
investing in emerging Southern California businesses)
since 1989; also, Director of San Diego Gas & Electric
Co., Pacific Diversified Capital, WD-40 Company, and
Wahlco Environmental Systems, Inc.; Chairman, Board of
Trustees of the University of San Diego.
George W. Leisz......................................... 71 1989
Managing Partner, Carlisle Enterprises, L.P. (a mergers
and acquisitions firm) since 1989; Director, Precision
Aerotech, Inc. (manufacturer of machined parts and
electro-optics) from 1986 to 1994; also, Director of
American Innovision (bioscience equipment manufacturer),
1992, Impact Solutions Corp. (producer of software
for law enforcement agencies) since 1994, Quantum
Magnetics Inc. (producer of magnetic resonance equipment)
since 1994, and CFC Aviation, Inc. (aircraft services
company) since 1994.
Gilbert E. Matthews..................................... 64 1989
Senior Managing Director of Bear, Stearns & Co. Inc.
(investment banking firm) since 1986.
Christopher H. B. Mills................................. 42 1989
Managing Director, North Atlantic Smaller Companies
Trust PLC (investment trust company; formerly
Consolidated Venture Trust plc) since 1985; Chief
Executive Officer, Growth Financial Services Ltd.
(consulting firm) since 1984; also, Director of J O
Hambro and D.S. Bancorp.
Elliot L. Richardson.................................... 74 1989
Retired partner at the law firm of Milbank, Tweed,
Hadley & McCloy (Washington, D.C.), partner from 1980
to 1993; Director of Crop Genetics International, Riedel
Environmental Technologies, Inc., and British Nuclear
Fuels plc.
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company has standing Audit, Compensation and
Nominating Committees.
The Audit Committee held three meetings during 1994. The functions
performed by the Committee include the recommendation to the Board of
Directors of the selection of independent certified public accountants,
reviewing the quarterly results of the Company's operations, reviewing the
plan of audit and the audit results, and consulting with the auditors on the
adequacy of internal controls. Directors Richardson (Chairman), Leisz,
Matthews and Mills are members of the Audit Committee.
The Compensation Committee held five meetings during 1994. The functions
performed by the Compensation Committee include the setting and approval of
salaries of all officers and key employees whose annual base salary is
$125,000 or more, as well as bonus awards of officers and key employees of the
Company and its divisions and subsidiaries, and the administration of stock
option grants under the Company's existing stock option plans. Directors Leisz
(Chairman), Derbes and Mills are members of the Compensation Committee.
The Nominating Committee held one meeting during 1994. It is the function
of the Nominating Committee to consider and nominate persons to serve as
directors of the Company. Directors Antle, Hills and Stevens are members of
the Nominating Committee. The Nominating Committee will consider nominees
recommended by shareholders pursuant to the procedures set forth in the
Company's By-laws which require that notice of a stockholder nomination be
given to the Company not less than 60 days before the Annual Meeting over the
signature of at least five shareholders holding an aggregate of at least 5% of
the total outstanding stock of the Company.
The Board of Directors of the Company held four meetings during 1994.
Except for director Christopher H.B. Mills, who attended 67% of all meetings
of the Board and the committees on which he served, all of the Company's
directors attended 75% or more of the meetings of the Board and of the
committees on which they served.
COMPENSATION OF DIRECTORS
Fees. The Company has a standard arrangement whereby a director who is not
a regular employee of the Company or any of its subsidiaries (the "Outside
Director") is compensated at the rate of $24,000 annually. The Chairman of the
Board receives additional compensation of $5,000 annually, and the Chairman of
the Audit Committee and the Chairman of the Compensation Committee each
receives additional compensation of $2,000 annually. Employee members of the
Board are not paid for their services as directors. Outside Directors are
eligible to participate in the Deferred Compensation Plan, the 1988 Non-
Employee Director Stock Option Plan, and the 1992 and 1995 Stock Option and
Restricted Stock Plans, each as described below.
Deferred Compensation Plan. The Company has a deferred compensation plan
for Outside Directors. Any Outside Director wishing to participate in this
plan must give written notice to the Company. A participant may defer all or
any part of his compensation earned as an Outside Director. The deferred
compensation is then converted into stock units quarterly by dividing the
amount of the deferred compensation by the closing price per share of the
Common Stock on the last day of such calendar quarter. The number of stock
units are then credited to a separate stock unit account established for the
participant. When a participant ceases to be a director of the Company or upon
the date he retires from his principal employment, whichever date occurs
first, the Company will distribute to the participant, in five equal annual
installments (or at his election in ten installments) within sixty (60) days
after the end of each fiscal year, the number of shares represented by his
accrued stock units or, at the election of the Company, cash equal to the then
prevailing market value of such shares. Such distributions are subject to
forfeiture in certain events. During the year ending December 31, 1994, no
fees were deferred for Outside Directors.
Director Stock Option Plans. The purpose of the Company's director stock
option plans is to provide a means whereby non-employee directors may acquire
an equity interest in the Company and to secure for the Company and its
shareholders the benefits inherent in such equity ownership by persons whose
advice and counsel are important to the continued growth and success of the
Company.
1995 Stock Option and Restricted Stock Plan. On December 8, 1994, upon
recommendation of the Compensation Committee, the Company's Board of Directors
adopted, subject to shareholder approval, the 1995 Stock Option and Restricted
Stock Plan (the "1995 Plan"). Pursuant to the 1995 Plan, 2,000,000 shares of
Common Stock have been reserved for issuance upon exercise of options or in
connection with awards or authorizations to make direct purchases of stock. By
its terms, the 1995 Plan must be approved by the shareholders of the Company
by December 7, 1995. See "Proposal to Approve the 1995 Stock Option and
Restricted Stock Plan." All options granted to date under the 1995 Plan are
subject to approval of the 1995 Plan by the shareholders of the Company.
1992 Stock Option and Restricted Stock Plan. On December 5, 1991, the
Company's Board of Directors adopted, subject to shareholder approval, the
1992 Stock Option and Restricted Stock Plan (the "1992 Plan"). The 1992 Plan
was approved by the shareholders of the Company on June 3, 1992. Pursuant to
the 1992 Plan, 1,000,000 shares of Common Stock were reserved for issuance
upon the exercise of options or in connection with awards or authorizations to
make direct purchases of stock. The 1992 Plan contemplates grants to both
employees and directors. All grants to non-employee directors are made
automatically pursuant to the terms of the 1992 Plan. Each non-employee
director serving at the time of the 1992 Plan's adoption was granted a one-
time option to purchase 16,000 shares of common stock. New non-employee
directors will receive an option to purchase 4,000 shares on the first
business day following appointment or election and 4,000 shares on the first
business day of each subsequent quarter of the Company's fiscal year, up to a
maximum of 16,000 shares. The exercise price of each option granted under the
1992 Plan is equal to the fair market value of the common stock on the date of
the grant. The options granted under the 1992 plan are exercisable in three
installments: 34% on the first anniversary of the grant, 33% on the second
anniversary and 33% on the third anniversary. Other than in the event of a
director's death or the Company's merger, consolidation, acquisition,
liquidation or dissolution, in which case shorter exercise periods apply, the
option may be exercised for a period of ten years and one day from its grant
date. Options are not transferable except by will or the applicable laws of
descent and distribution.
1988 Non-Employee Director Stock Option Plan. The 1988 Stock Option Plan
for Non-Employee Directors (the "1988 Directors' Plan") is designed to work
automatically, without administration. Each non-employee director is granted
an option to purchase 1,000 shares of Common Stock on the first business day
of the month following the date on which such person first becomes a director,
whether through election by the shareholders of the Company or appointment by
the Board of Directors to fill a vacancy, and an additional 1,000 shares on
the first business day of the second, third and fourth month following the
date on which such person first becomes director.
The exercise price of each option granted under the 1988 Directors' Plan is
equal to the fair market value of the Common Stock on the date of grant. An
option granted under the 1988 Directors' Plan is immediately exercisable as to
25 percent of the number of shares subject to the options in the first year
following the date of grant. Thereafter, the options become exercisable
cumulatively as to an additional 25 percent in each succeeding year. The
exercise price of an option is payable in cash at the time of exercise of such
option.
If the optionee ceases to serve as a director of the Company for any reason
other than death or permanent disability, the right to exercise the option
expires thirty days after the optionee ceases to serve as a director of the
Company. However, in the event of death, any outstanding option may be
exercised (subject to the expiration date of the option) during the one year
period after the date of death, but only to the extent it was exercisable on
the date of such death. In the event of permanent disability, any outstanding
option may be exercised (subject to the expiration date of the option) during
a period of one year after such disability but only to the extent it was
exercisable on the date of such disability. Options granted under the 1988
Directors' Plan are non-transferable except in the case of death (where the
option may be exercised by the optionee's estate or any person who acquired
the right to exercise the option by bequest or inheritance or by reason of the
death of the optionee). In any event, an option will expire no later than ten
years and one day following grant.
As of the date of this proxy statement, all current eligible directors had
received the full grant of 4,000 shares. Of the total 100,000 shares
originally reserved for issuance pursuant to the 1988 Directors' Plan, 68,000
shares remain available for grant of issuance.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation for each of the last three fiscal years awarded to or
earned by the Chief Executive Officer and the other named executive officers
of the Company.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- ------------
Name Other Annual(2) Securities Underlying All Other
and Principal Salary Bonus(1) Compensation Options/ Compensation(4)
Position Year ($) ($) ($) SARs(#)(3) ($)
- ---------------------------------------------------------------------------- --------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William S. Antle III, 1994 $415,000 $500,000 - 150,000 $59,634(5)
President and 1993 365,000 380,000 - 35,000 26,426(6)
Chief Executive Officer 1992 350,000 250,000 - 20,000 8,074(7)
William C. Weaver, 1994 195,000 170,000 - 44,000 25,606
Senior Vice President 1993 185,000 145,000 - 12,000 17,368
and Chief Financial 1992 180,000 85,000 - 10,000 3,898
Officer
John D. Richardson, 1994 190,000 170,000 - 44,000 25,613
Senior Vice President, 1993 178,000 150,000 - 12,000 16,890
Human Resources 1992 170,000 85,000 - 10,000 3,898
Paul J. Halas, 1994 200,000 145,000 - 44,000 26,400
Senior Vice President, 1993 178,000 150,000 - 12,000 16,890
General Counsel & 1992 170,000 110,000 - 10,000 3,898
Secretary
- ---------------------------------------------------------------------------- --------------------- ---------------
<FN>
(1) The bonus amounts are payable pursuant to the Oak Bonus Program described
under the caption "Compensation Committee Report on Executive
Compensation".
(2) While the Company's executive officers enjoy certain perquisites, such
perquisites do not exceed the lesser of $50,000 or 10% of such officer's
salary and bonus.
(3) The Company has not issued any stock appreciation rights or restricted
stock awards; accordingly, these amounts reflect stock options granted in
the fiscal year indicated.
(4) The compensation reported represents Company contributions under the
Company's Retirement Savings Plan which is qualified under Sections
401(a) and 401(k) of the Internal Revenue Code and the Company's non-
qualified Supplemental Retirement Income Plan.
(5) Includes $5,881 in term life insurance premiums paid by the Company for
the benefit of Mr. Antle.
(6) Includes $4,685 in term life insurance premiums paid by the Company for
the benefit of Mr. Antle.
(7) Includes $4,176 in term life insurance premiums paid by the Company for
the benefit of Mr. Antle.
</TABLE>
Stock Option/Stock Appreciation Right Grants. The following table
summarizes option grants during fiscal 1994 to the executive officers named in
the preceding Summary Compensation Table and the potential realizable value of
such options determined by formulas prescribed by the Securities and Exchange
Commission. The assumed rates of stock price appreciation are hypothetical;
the actual value of the options, if any, will depend on the future performance
of the Company's stock. No SARs were granted or exercised during fiscal 1994.
Option/SAR Grants in Fiscal 1994
<TABLE>
<CAPTION>
Individual Grants
-----------------
Potential
Realizable Value At
Number of % of Total Assumed Annual
Securities Underlying Options/SARs Rate of Stock Price
Options/SARs Granted to Exercise or Appreciation For
Granted Employees in Base Price Expiration Option Term
Name (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---------------------------------------------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
William S. Antle III, 3,755(1) .64% $26.625 12/7/2004 $ 62,875 $ 159,337
President and 26,245(2) 4.48 26.625 12/8/2004 439,454 1,113,665
Chief Executive Officer 120,000(3) 20.49 26.625 12/8/2004 2,009,316 5,092,008
William C. Weaver, 5,056(4) .86 26.625 12/7/2004 84,659 214,543
Senior Vice President and 6,944(5) 1.19 26.625 12/8/2004 116,272 294,658
Chief Financial Officer 32,000(3) 5.46 26.625 12/8/2004 535,818 1,357,869
John D. Richardson, 5,056(4) .86 26.625 12/7/2004 84,659 214,543
Senior Vice President, 6,944(5) 1.19 26.625 12/8/2004 116,272 294,658
Human Resources 32,000(3) 5.46 26.625 12/8/2004 535,818 1,357,869
Paul J. Halas, 5,056(4) .86 26.625 12/7/2004 84,659 214,543
Senior Vice President, 6,944(5) 1.19 26.625 12/8/2004 116,272 294,658
General Counsel 32,000(3) 5.46 26.625 12/8/2004 535,818 1,357,869
& Secretary
<FN>
(1) These incentive stock options were granted pursuant to the Company's 1992
Stock Option and Restricted Stock Option Plan and are exercisable subject
to the following vesting schedule: 0 shares on December 7, 1995; 0 shares
on December 7, 1996; and 3,755 shares on December 7, 1997.
(2) These non-qualified stock options were granted pursuant to the Company's
1992 and 1995 Stock Option and Restricted Stock Option Plans and are
exercisable subject to the following vesting schedule: 10,200 shares on
December 7, 1995; 9,900 shares on December 7, 1996; and 6,145 shares on
December 7, 1997. The non-qualified stock options granted pursuant to
the 1995 Stock Option and Restricted Stock Option Plan are subject to
shareholder approval.
(3) These options were granted pursuant to the Company's 1995 Stock Option
and Restricted Stock Option Plan subject to shareholder approval, and
become exercisable on December 7, 2004 or on such earlier date on or
prior to December 7, 1997 as shall mark the tenth consecutive trading day
on which the closing price of the Company's stock on the New York Stock
Exchange shall have equaled or exceeded $40.00 per share.
(4) These incentive stock options were granted pursuant to the Company's 1992
Stock Option and Restricted Stock Option Plan and become exercisable
subject to the following vesting schedule: 0 shares on December 7, 1995;
1,301 shares on December 7, 1996; and 3,755 shares on December 7, 1997.
(5) These non-qualified stock options were granted pursuant to the Company's
1992 Stock Option and Restricted Stock Option Plan and are exercisable
subject to the following vesting schedule: 4,080 shares on December 7,
1995; 2,659 shares on December 7, 1996; and 205 shares on December 7,
1997.
</TABLE>
The following table summarizes information with respect to options held by
each of the named executive offices at the end of fiscal 1994. The values
shown may never be realized and depend on the future performance of the
Company's stock. Options were exercised by certain of such officers during
1994 as indicated below.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises During Fiscal Year 1994
and Fiscal Year-End Option/SAR Values
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options/SARs at FY-End Money Options/SARs at FY-End
Shares Acquired Value Realized (#) ($22.875/share)($)(2)
Name on Exercise (#) ($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William S. Antle III, 66,000(3) $1,439,285 301,900 179,700 $5,225,015 $240,487
President and
Chief Executive Officer
William C. Weaver 28,194(4) 382,008 66,186 55,220 1,150,589 97,108
Senior Vice President and
Chief Financial Officer
John D. Richardson, 11,300(5) 234,409 74,154 60,146 1,314,230 189,773
Senior Vice President,
Human Resources
Paul J. Halas, 18,500(6) 352,531 71,880 59,220 1,271,779 172,353
Senior Vice President,
General Counsel
& Secretary
<FN>
(1) Based on market value of the Company's Common Stock at exercise minus the
exercise price.
(2) Based on market value of the Company's Common Stock at the end of fiscal
1994 minus the exercise price.
(3) Of these shares acquired upon exercise, Mr. Antle holds 26,000 shares as
of March 3, 1995.
(4) Of these shares acquired upon exercise, Mr. Weaver holds 28,194 shares as
of March 3, 1995.
(5) Of these shares acquired upon exercise, Mr. Richardson holds 5,000 shares
as of March 3, 1995.
(6) Of these shares acquired upon exercise, Mr. Halas holds 12,500 shares as
of March 3, 1995.
</TABLE>
Pension Plans. The Company maintains defined benefit pension plans (the
"Pension Plans") for its employees and the employees of some of its
subsidiaries. The Company's annual contribution to the Pension Plans is made
to various funds (which were managed by the Frank Russell Trust Co. until
December 31, 1993, after which substantially all plan assets were transferred
to SEI Capital Resources Inc. for management), and is determined for the total
of all participants covered by such plans. Benefits payable under most of the
Pension Plans are based upon average career salary and years of credited
service. Vesting of participant benefits occurs upon the completion of five
years with the Company.
The amounts shown in the following table are illustrative of the maximum
amounts payable under the Pension Plans for employees in the specified salary
and years of service classifications, and are based upon the assumption that
the Company's retirement benefits will be continued and that the employee will
continue employment with the Company until retirement at age 65. Benefits
shown are computed as a straight line annuity with no deduction for Social
Security benefits or other offset amounts. The Internal Revenue Code (the
"Code") places maximum limitations on the amounts which may be payable to any
participant.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------
Remuneration* 15 20 25 30 35
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 125,000 35,040 46,720 58,400 70,080 81,760
150,000 42,165 56,220 70,275 84,330 98,385
175,000 49,290 65,720 82,150 98,580 115,010
200,000 56,415 75,220 94,025 112,830 131,635
225,000 63,540 84,720 105,900 127,080 148,260
250,000 70,665 94,220 117,775 141,330 164,885
300,000 84,915 113,220 141,525 169,830 198,135
350,000 99,165 132,220 165,275 198,330 231,385
400,000 113,415 151,220 189,025 226,830 264,635
450,000 127,665 170,220 212,775 255,330 297,885
500,000 141,915 189,220 236,525 283,830 331,135
<FN>
* Based upon base salary (exclusive of bonuses)
</TABLE>
Remuneration covered by the Pension Plans for the named executive officers
generally corresponds with the aggregate of the base salary as reported in the
Summary Compensation Table. Remuneration of the named executive officers in
the Summary Compensation Table after fiscal 1992 do not enter into the
calculation of benefits under the Pension Plan; instead, effective fiscal
1993, the named executive officers became eligible to participate in the
Company's Supplemental Retirement Income Plan. The years of credited service
in the Company's Pension Plans for the executive officers named in the Summary
Compensation Table are as follows: Mr. Antle, three years; Mr. Weaver, three
years; Mr. Halas, two years; and Mr. Richardson, two years. Upon the fifth
anniversary of employment of each of the foregoing executive officers, each
such officer will vest in accrued benefits which as of this date total the
following amounts: Mr. Antle, $12,881.50; Mr. Weaver, $9,573; Mr. Halas,
$6,212.83; and Mr. Richardson, $6,145.49.
Employment Agreements. Each of the executive officers named in the Summary
Compensation Table has entered into an employment agreement (each, an
"Employment Agreement") with the Company. The Employment Agreement provides
that the executive officer's employment shall be at will, terminable by the
Company or the executive officer with or without cause, or by death or
disability. In the event of a termination by the Company without cause, or by
the executive officer with cause, the executive officer is entitled to receive
benefits as follows: Mr. Antle, two years' then-current base salary with
continued fringe benefits and perquisites for a period of two years after the
date of termination; and each of Messrs. Halas, Richardson and Weaver, one
year's then-current base salary with continued fringe benefits and perquisites
for period of one year after the date of termination. Mr. Antle's Employment
Agreement also provides that in the event of his termination by the Company
with cause, or by Mr. Antle without cause, Mr. Antle shall make himself
available as a consultant to the Company for up to ten hours with respect to
Company matters. In the event of a change of control of the Company, each of
the Employment Agreements provides that the executive officer has the option
of either having the Employment Agreement assigned to and assumed by the
surviving or resulting corporation or transferee of the Company's assets, or
treating the event as a termination of the executive officer without cause.
Under the Employment Agreements, a "change of control" occurs upon (i) the
acquisition by a party of more than 50% of the voting power of the Company's
outstanding securities, (ii) a change in control of the Company of a kind
which would be required to be reported under Schedule 14A of Regulation 14A of
the Securities Act of 1934, (iii) a merger, consolidation or other
reorganization involving the Company, except in certain instances as set forth
in the Employment Agreements, or (iv) a change in the individuals constituting
the Board of Directors as of the date of the Employment Agreements such that
such individuals no longer constitute a majority of the Board.
Compensation Committee Report on Executive Compensation. The Company's
Board of Directors has appointed a Compensation Committee consisting of
Messrs. Leisz (Chairman), Derbes, and Mills. None of such persons is a current
or former employee of the Company. The Board and the Compensation Committee
believe that the Company's compensation system has served and will serve to
attract and retain executives necessary to the Company's continued improvement
and development, with capacity to improve the Company's earnings and therefore
the Company's value to its shareholders.
The charter of the Compensation Committee provides for Compensation
Committee review and recommendation of all compensation changes for those
employees receiving an annual base salary of $125,000 or greater. The
recommendations are submitted to the Board of Directors for consideration and
final approval. Except for those considerations involving the President and
Chief Executive Officer (CEO), salary change recommendations are submitted by
the President and CEO to the Compensation Committee. The Compensation
Committee also grants all stock options to employees.
The Board intends for the Company to perform over time within the top
quartile of manufacturing companies included in the S&P Industrials Index. The
Committee reviews measures such as return on sales, return on assets and
equity and earnings per share in evaluating the Company's attainment of the
Board's objectives. In light of this, we intend to encourage and recognize
such performance by providing senior executives the opportunity to earn
compensation at the top quartile levels as determined by recognized national
compensation surveys. The Compensation Committee has selected the
independently-prepared Project 777 Annual Survey of manufacturing companies as
the primary basis for establishing total compensation targets, which are
attainable by the executives through base salary and bonuses based on Company
performance. To further encourage top quartile performance, the Compensation
Committee has emphasized bonus targets and awards as a percentage of total
compensation to a greater extent than the survey data base. In all cases, base
salaries and bonus payment targets are established at the start of the year.
While bonus targets for divisional personnel are based on divisional and
corporate income goals, bonus targets for corporate personnel are based on
Company net income goals approved by the Board. Bonus payments at the end of
the year are based in part on the Company's performance against these goals
and in part on the overall performance of the individual as determined by the
Compensation Committee and the Board. Consistent with the forgoing, in the
case of the President and CEO, an annual bonus is developed by the
Compensation Committee for recommendation to the Board based on the
performance of the Company and of the President and CEO in the previous year.
Factors influencing the Committee's recommendation of Mr. Antle's 1994 bonus
include the increased profitability of the Company in 1994 and its continuing
improved performance against each of the measures noted, including return on
sales, return on assets and return on equity. The Company's performance placed
it within the top quartile in each category, and exceeded budgeted objectives.
The bonuses reflected in the tables above reflect the satisfaction of the
Committee and the Board with the performance of the Company and the named
executives during the period. The Committee believes that total compensation
to the named executives approximates top quartile compensation, against
performance well within the top quartile. The Committee intends to continue to
emphasize performance bonus payments as an increasing percentage of total pay,
thus tying compensation even more closely with increased net income and
shareholder value.
Stock options are awarded by the Compensation Committee in accordance with
plans approved by the shareholders of the Company. Each award is intended to
tie long-term compensation with the interests of our shareholders, and is
based on consideration of the individual executive's potential impact on the
growth and profitability of the Company, the executive's level of
responsibility within the organization and previous grants made to the
individual. The Committee also intends to provide the Company's executives
with equity positions roughly competitive with those available from other
companies, particularly as compared with Project 777 data. The options awarded
to the President and CEO and other named executives in 1994 and preceding
years reflect the excellent performance of the Company and the Compensation
Committee's belief in the ability of these executives to continue improving
long-term shareholder value. As supported by the data in the graph below, the
Compensation Committee believes that the performance of the management group
has resulted in a significant increase in shareholder value since 1990. To
provide additional incentive to the management group to seek such significant
gains, the Compensation Committee has determined that a portion of the option
shares which would otherwise have been granted as ordinary stock options in
1994 should be granted as "performance shares" which will become exercisable
prior to the tenth anniversary of grant only if the Company's Common Stock
closes at or above $40 per share for ten consecutive trading days within the
three-year period following the grant. See "Proposal to Approve the 1995 Stock
Option and Restricted Stock Plan".
<PAGE>
Establishment of and changes to benefit plans and perquisite programs are
also reviewed by the Compensation Committee with recommendation to the Board
for consideration and final approval.
COMPENSATION COMMITTEE
George W. Leisz (Chairman)
Daniel W. Derbes
Christopher H.B. Mills
Common Stock Performance Graph. The graph below compares the cumulative
total shareholder return on the Common Stock of the Company for each of the
Company's last five fiscal years with the cumulative total return on the S&P
Industrials Index and the Dow Jones Equity market over the same periods. The
Company has chosen such indices because the Company's operating units serve a
wide variety of industries and because, given the Company's intention to
acquire businesses in a variety of industries, comparison with a narrow
industry sub-group would not be meaningful.
(Graph Filed With Form S-E)
<TABLE>
OAK INDUSTRIES INC.
Total Cumulative Shareholder Return For
Five-Year Period Ending December 31, 1994
<CAPTION>
Measurement Period Dow Jones
(Fiscal Year Covered) Oak Industries S&P Industrials Equity
- --------------------- -------------- --------------- ---------
<S> <C> <C> <C>
Measurement Pt-12/31/89 $100.00 $100.00 $100.00
-12/31/90 75.00 99.10 96.07
-12/31/91 93.80 129.54 127.24
-12/31/92 237.50 136.94 138.19
-12/31/93 332.50 149.29 151.93
-12/31/94 457.50 155.05 153.10
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Company's December 1993 secondary public offering
(the "Offering"), certain officers of the Company, including those set forth
below, purchased Offering shares with loans from the Company at a price of
$14.50 per share, which was the price at which shares were sold to the public
in the Offering. The loans are evidenced in the form of promissory notes (the
"Promissory Notes"), and are secured by the Common Stock purchased from the
amounts advanced. Additionally, the Company may offset amounts due under each
Promissory Note against any amounts owing by the Company to the officer in
question. The Promissory Notes are repayable in full on February 21, 1997, and
prepayable in certain circumstances, including the termination of employment,
with interest on such loans accruing at a rate of 1/2% per annum above the rate
from time to time announced by the First National Bank of Boston as its base
rate, payable annually in February of each year beginning in 1995 until
maturity.
<TABLE>
<CAPTION>
<PAGE>
Amount of
Largest Aggregate Indebtedness
Amount of Indebtedness Oustanding as
Name Title Outstanding During 1994 of March 3, 1995
- ---- ----- ---------------------------------------------
<S> <C> <C> <C>
William S. Antle III President and $388,158 $306,287
Chief Executive Officer
William C. Weaver Senior Vice President and 148,713 0
Chief Financial Officer
John D. Richardson Senior Vice President, 156,086(1) 126,808
Human Resources
Paul J. Halas Senior Vice President, 156,086 0
General Counsel and
Secretary
<FN>
(1) In addition to funds advanced for the purchase of the Offering shares,
the Company advanced funds in the amount of $55,000 in July of 1993 to
Mr. Richardson in connection with certain relocation costs. The loan is
evidenced in the form of an unsecured demand promissory note with
interest accruing at a rate of 6% per annum. Principal and interest with
respect to the loan will be forgiven over a period of three years
provided that Mr. Richardson remains employed by the Company. As of the
date hereof, $36,666 remains outstanding.
</TABLE>
<PAGE>
PROPOSAL TO APPROVE THE 1995
STOCK OPTION AND RESTRICTED STOCK PLAN
On December 7, 1994, the Compensation Committee of the Company's Board of
Directors recommended, and on December 8, 1994, the Board of Directors
adopted, the 1995 Stock Option and Restricted Stock Plan (the "1995 Plan"),
subject to the approval of the Company's shareholders. Options granted under
the 1995 Plan may be either (i) options intended to qualify as incentive stock
options under Section 422 of the Code ("ISOs"), or (ii) non-qualified stock
options. ISOs and non-qualified stock options may be granted under the 1995
Plan to executive officers and other key employees of the Company and its
subsidiaries. Non-qualified stock options are automatically issued to non-
employee directors of the Company pursuant to a formula described below.
Additionally, awards of stock appreciation rights in tandem with options, and
direct grants of restricted stock (together, the "Awards"), may be made to
executive officers and other key employees of the Company and its
subsidiaries. ISOs, non-qualified options and Awards are collectively referred
to as "Stock Rights". The 1995 Plan authorizes the grant of Stock Rights to
acquire 2,000,000 shares of Common Stock. The complete text of the 1995 Plan
is attached hereto as Exhibit A. The principal features of the 1995 Plan are
summarized below; such summary is qualified in its entirely by the full text
of the 1995 Plan.
New Plan Benefits
The following table sets forth, as of March 3, 1995, the benefits under the
1995 Plan which will be received by each of the following, subject to
shareholder approval of the 1995 Plan:
<TABLE>
<CAPTION>
1995 Stock Option and Restricted Stock Plan
-------------------------------------------
Number of Shares
Name and Position Dollar Value ($)(1) Subject to Options
- -------------------------------------------------------------------------------------------
<S> <C> <C>
William S. Antle III, $33,354 133,415
President and Chief Executive Officer
William C. Weaver 8,000 32,000
Senior Vice President and Chief Financial Officer
John D. Richardson, 8,000 32,000
Senior Vice President, Human Resources
Paul J. Halas, 8,000 32,000
Senior Vice President,
General Counsel & Secretary
Executive Group (5 persons) 141,354 285,415
Non-Executive Director Group (7 persons) 21,875 87,500
Non-Executive Officer Employee Group (25 persons) 61,900 247,600
<FN>
(1) Based on the difference between the closing price of the Company's Common
Stock on the New York Stock on March 3, 1995 and the exercise price as
determined by the closing price of the Company's Common Stock on the
New York Stock Exchange on the grant date. However, the shares granted to
date under the 1995 Plan, with the exception of 2,500 shares granted to
each non-employee director, will become exercisable prior to December 7,
2004 only at such time as the Company's Common Stock closes at or above
$40 per share for ten consecutive days within the three-year period
following grant.
</TABLE>
Description of the 1995 Plan
The 1995 Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee"). Subject to the terms of the 1995 Plan, the
Committee has the authority to determine the persons to whom the grant of
stock options and Awards will be granted, the number of shares to be covered
by each option or Award, whether the options are intended to be ISOs, the
duration and rate of exercise of each option or Award, the price per share
(which in the case of ISOs may not be less than the fair market value of the
Company's Common Stock on the date of the grant), and the manner of exercise,
the time, manner and form of payment upon exercise of an option or Award, as
the case may be, and such other terms and provisions, consistent with the 1995
Plan, as the Committee may approve. In no event shall any individual be
granted options to purchase more than 1,000,000 shares of Common Stock
pursuant to the 1995 Plan, nor shall any individual be granted shares subject
to Stock Appreciation Rights in excess of 1,000,000 pursuant to the 1995 Plan.
These per-participant limitations are intended to be construed and
administered in accordance with the requirements of Section 162(m) of the
Code. See "Federal Income Tax Consequences" below. Additionally, in no event
shall more than 200,000 shares of Restricted Stock be awarded pursuant to the
terms of the 1995 Plan. Shares subject to options or Awards that are
forfeited to the Company for any reason shall once again become available for
grant under the 1995 Plan.
With respect to grants to non-employee directors, the 1995 Plan is designed
to work automatically. With respect to new directors, the 1995 Plan provides
for the grant of a stock option covering 2,500 shares of Common Stock on the
first business day following election or appointment, and an additional 2,500
shares on the first and second anniversaries of such date. With respect to
current directors, the 1995 Plan provides for a grant, as of the date of the
approval of the 1995 Plan by the Committee, of a stock option covering 2,500
shares of Common Stock, and additional options exercisable for 2,500 shares on
each of the first and second anniversaries of such date. Each director shall
also receive, on the first business day following election or appointment in
the case of a new director, or as of the date of the approval of the 1995 Plan
by the Committee in the case of a current director, a stock option covering
10,000 shares of Common Stock at an exercise price equal to the fair market
value of the Common Stock as of the date of such grant (the "Additional
Option"). The Additional Option shall become exercisable in its entirety upon
the earlier of (i) the tenth anniversary of the grant date or (ii) such
earlier date on or prior to the third anniversary of the grant date as shall
mark the tenth consecutive trading day on which the fair market value of the
Common Stock shall have equaled or exceeded 150% of the exercise price of such
Additional Option. Options automatically granted to directors under the 1995
Plan, other than the Additional Options, become exercisable in annual
installments over three years from the date of the grant, at an exercise price
equal to the fair market value of the Common Stock on the date of the
automatic grant.
Stock options granted to executive officers and other employees pursuant to
the 1995 Plan are intended to be ISOs, except to the extent that any ISO grant
would exceed the limitations set forth with respect to ISOs in the Code, or
such stock option is specifically designated at the time of grant as not being
an ISO. ISOs may not be granted at a price less than the fair market value of
the Common Stock on the date of the grant. The Committee has determined that
certain options granted to executive officers (as set forth in the above
table) and certain other employees of the Company will become exercisable
under the 1995 Plan only upon the tenth anniversary of the grant date of the
option, or such earlier trading date on or prior to the third anniversary of
the grant date of such option as shall mark the tenth consecutive trading day
on which the closing price of the Company's stock as traded on the New York
Stock Exchange shall have equaled or exceeded $40.00 per share (the
"Performance Options"). All Performance Options granted pursuant to the 1995
Plan will be non-qualified stock options. Additionally, all options granted to
non-employee directors are non-qualified options. An option granted under the
1995 Plan is exercisable, during the optionholder's lifetime, only by the
optionholder and is not transferable except by will or by the laws of descent
and distribution. The market value of the shares of Common Stock reserved for
issuance under the 1995 Plan is $53,750,000, based on the closing price on
March 3, 1995, as reported on the New York Stock Exchange. It is estimated
that approximately 72 persons will initially be eligible for grants under the
1995 Plan.
In the event of a merger or consolidation of the Company with or into
another corporation as a result of which the Company's stock is no longer
outstanding, or the acquisition by another corporation or person of all or
substantially all of the Company's assets or fifty percent (50%) or more of
the Company's then outstanding voting stock, or the liquidation or dissolution
of the Company, all options outstanding pursuant to the 1995 Plan shall become
immediately exercisable on the 45th day prior to the proposed effective date
of such event (as determined by the Committee). Upon the consummation of any
merger, consolidation, or sale of assets, all options outstanding under the
1995 Plan shall terminate, unless the Committee shall have arranged that the
surviving or acquiring corporation or affiliate thereof grant to participants
replacement options.
Stock appreciation rights may be granted in tandem with options. The holder
of a stock appreciation right, may, in lieu of exercising all or any part of
an option, receive from the Company an amount equal to the lesser of (i) the
difference between the fair market value of the applicable shares and the
exercise price of the option and (ii) twice the exercise price of the
applicable option. Any grant of stock appreciation rights may specify that the
amount payable upon exercise thereof may be paid by the Company in cash or, in
the discretion of the Committee, shares of Common Stock. A stock appreciation
right will not be exercisable except at a time when the related option is also
exercisable, and when the then current value of the optioned shares exceeds
the option exercise price.
Upon issuance, recipients of restricted stock have the right to vote the
shares and to receive all dividends or distributions paid or made with respect
to the shares; however, restricted stock is held in escrow and, except in
certain instances, may not be sold, transferred or encumbered until
restrictions imposed are terminated or expire. Although the term of the
restrictions are fixed by the Committee, all restrictions expire within ten
years of issuance of the stock. Restricted stock is forfeited back to the
Company immediately upon a termination of employment for any reason; however,
provision may be made that no forfeiture will occur in circumstances of normal
retirement, death, total disability or early retirement with the consent of
the Committee.
The Committee may at any time, with the consent of the holder of any Stock
Right, cancel an existing grant in whole or in part and make another grant for
such number of shares as the Committee may specify. Additionally, the
Committee may at any time or times amend the 1995 Plan or any outstanding
grant for the purpose of satisfying the requirements of Section 422 of the
Code or of any changes in applicable laws or regulations or for any other
purpose that may at the time be permitted by law. The Committee may at any
time terminate the 1995 Plan as to further grants, provided that no such
amendment shall adversely affect the rights of any holder of a previously
granted Stock Right without such individual's consent.
Federal Income Tax Consequences
The following summarizes the principal federal income tax consequences
associated under the law as in effect on the date of this Proxy Statement with
respect to the stock options awarded under the 1995 Plan.
ISOs. The following general rules are applicable for federal income tax
purposes under existing law to the Company and to employees who receive and
exercise ISOs granted under the 1995 Plan:
1. Neither the grant nor, in general, the exercise of an ISO results in
ordinary income taxable to the optionee or in a deduction to the Company.
However, the exercise of an ISO does increase the optionee's alternative
minimum taxable income ("AMTI") by an amount equal in general to the excess of
the fair market value of the shares acquired upon exercise over the option
price. This increase in AMTI may result in liability for the alternative
minimum tax.
2. If shares acquired upon exercise of an ISO are not disposed of prior to
the later of (i) two years from the date the option was granted or (ii) one
year after exercise, any gain or loss recognized on a subsequent sale of the
shares will be treated as long term capital gain or loss.
3. If shares acquired upon exercise of an ISO are disposed of before the
expiration of one or both of the requisite holding periods (a "disqualifying
disposition"), then in most cases the lesser of (i) any excess of the fair
market value of the shares at the time of exercise of the option over the
exercise price or (ii) the actual gain on disposition, will be treated as
compensation to the optionee and will be taxed as ordinary income in the year
of such disposition.
4. In any year that an optionee recognizes compensation income on a
disqualifying disposition of stock acquired by exercising an ISO, the Company
will generally be entitled to a corresponding deduction for income tax
purposes.
5. Any excess of the amount realized by the optionee as the result of a
disqualifying sale over the sum of (i) the exercise price and (ii) the amount
of ordinary income recognized under the above rules will be treated as either
long-term or short-term capital gain, depending upon the time elapsed between
receipt and disposition of such shares disposed of.
6. In general, ISOs awarded to an optionee will be treated for tax
purposes as non-qualified stock options (see below) to the extent that they
first become exercisable in any calendar year for shares of stock having a
fair market value, determined at time of grant, in excess of $100,000.
Non-qualified stock options. The following general rules are applicable to
holders of non-qualified stock options granted under the 1995 Plan:
1. The optionee does not realize any taxable income upon the grant of an
option, and the Company is not allowed a deduction by reason of such grant.
2. The optionee will recognize ordinary income, subject to withholding, at
the time of exercise of the option in an amount equal to the excess, if any,
of the fair market value of the shares on the date of exercise over the
exercise price.
3. When the optionee sells the shares, any gain or loss recognized in the
sale (such gain or loss being equal, in general, to the difference between the
amount realized upon the sale and the optionee's basis in the shares) will be
treated as a capital gain or loss, long-term or short-term depending on
whether the shares have been held for more than one year. An optionee's basis
in any shares acquired upon exercise of a non-qualified stock option will
include any ordinary income recognized in connection with the exercise.
4. In general, the Company will be entitled to a tax deduction in the year
in which compensation income is recognized by the optionee, provided it
satisfies applicable withholding and reporting requirements.
Other Rules. Special rules may apply where the option price is paid by
delivering shares of previously acquired stock, or where an option is
exercised within six months of the date of grant by a person subject to
Section 16(b) of the Securities Exchange Act of 1934. The Company's ability
to claim deductions for amounts paid under the 1995 Plan is subject to Section
162(m) of the Code, which in general limits to $1,000,000 the deduction a
public corporation may claim for annual remuneration paid to any of the
corporation's top five officers. It is intended that stock options granted
under the 1995 Plan qualify for a statutory "performance-based compensation"
exception to the $1,000,000 limit. However, final rules under Section 162(m)
of the Code have not yet been issued. The Company's ability to deduct the
ordinary income amount associated with the exercise of a non-qualified stock
option or with the disqualifying disposition of an ISO may also be limited in
the event of a change in control of the Company.
BOARD RECOMMENDATION & VOTE REQUIRED
The Board of Directors has approved the adoption of the 1995 Plan. The
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock present in person or by proxy and entitled to vote at the Annual
Meeting is required to approve the 1995 Plan. Therefore, broker non-votes will
have no effect on the vote, and abstentions shall have the effect of a vote
against the approval of the 1995 Plan.
The Board of Directors recommends a vote FOR this proposal.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Based upon the recommendation of the Audit Committee, the Board of
Directors has selected Price Waterhouse to serve as the Company's independent
auditors for the year ending December 31, 1995. Price Waterhouse has served as
the Company's auditors since the fiscal year ended December 31, 1990. A
representative of Price Waterhouse will be present at the Annual Meeting and
will have the opportunity to make a statement and be available to respond to
appropriate questions.
The Board of Directors recommends a vote FOR the ratification of this
selection.
<PAGE>
STOCKHOLDER PROPOSAL DEADLINE
A stockholder proposal intended to be presented at the Company's 1996
Annual Meeting of Shareholders must be received by the Secretary of Oak
Industries Inc. at Bay Colony Corporate Center, 1000 Winter Street, Waltham,
Massachusetts 02154 no later than December __, 1995.
Expenses of Solicitation
The cost of preparing, assembling and mailing this proxy statement and form
of proxy and the cost of soliciting proxies relating to the Annual Meeting
will be borne by the Company. In addition to using the mails, proxies may be
solicited by officers, directors and regular employees of the Company in
person or by telephone or telegraph. In addition, the Company has retained
Morrow & Co. to aid in the solicitation of proxies. The Company estimates that
it will pay Morrow & Co. fees of $12,500 for these services, plus related
expenses. The Company will reimburse brokers and other persons holding stock
in their names or in the names of nominees for their expenses incurred in
sending proxy material to and obtaining the proxies of their principals.
OTHER MATTERS
The Board of Directors does not intend to bring any other matters before
the Annual Meeting and is not aware of any other matters to be brought before
the Annual Meeting by others. However, if other matters come before the Annual
Meeting, it is the intention of the proxy holders named in the enclosed form
of proxy to vote in accordance with their discretion on such matters.
PAUL J. HALAS
Sr. Vice President,
General Counsel and Secretary
Waltham, Massachusetts
March __, 1995
<PAGE>
EXHIBIT A
OAK INDUSTRIES INC.
1995 STOCK OPTION AND RESTRICTED STOCK PLAN
OAK INDUSTRIES INC., a corporation organized under the laws of the State of
Delaware, hereby adopts this 1995 Stock Option and Restricted Stock Plan. The
purposes of this Plan are as follows:
1. To further the growth, development and financial success of the Company
by providing additional incentives to certain of its executive and other key
Employees who have been or will be given responsibility for the management or
administration of the Company's business affairs, and to its non-employee
Directors by assisting them to become owners of capital stock of the Company
and thus to benefit directly from its growth, development and financial
success; and
2. To enable the Company to obtain and retain the services of the type of
individuals considered essential to the long-range success of the Company by
providing and offering them an opportunity to become owners of capital stock
of the Company.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
Section 1.1 - Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Committee
"Committee" shall mean the Compensation Committee of the Board, appointed
as provided in Section 9.1.
Section 1.4 - Company
"Company" shall mean Oak Industries Inc. In addition, "Company" shall mean
any corporation assuming, or issuing new employee stock options in
substitution for, Options outstanding under the Plan, in a transaction to
which Section 424(a) of the Code applies.
Section 1.5 - Director
"Director" shall mean a member of the Board.
Section 1.6 - Employee
"Employee" shall mean any employee (as defined in accordance with the
Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Parent Corporation
or a Subsidiary, whether such employee is so employed at the time this Plan is
adopted or becomes so employed subsequent to the adoption of this Plan.
Section 1.7 - Fair Market Value
"Fair Market Value" of a share of the Stock for purposes of the Plan, of a
given date, shall be: (i) the closing price of a share of the Stock on the
principal exchange on which shares of the Stock are then trading, if any, on
such date, or, if shares were not traded on such date, then on the next
preceding trading day during which a sale occurred; (ii) if such Stock is not
traded on an exchange but is quoted on NASDAQ or a successor quotation system,
(1) the last sales price (if the Stock is then listed as a National Market
Issue under the NASD National Market System), or (2) the mean between the
closing representative bid and asked prices (in all other cases) for the Stock
on such date as reported by NASDAQ or such successor quotation system; or
(iii) if such Stock is not publicly traded on an exchange and not quoted on
NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the Stock on such date as determined in good faith by the
Committee; or (iv) if the Stock is not publicly traded, the fair market value
established by the Committee acting in good faith.
Section 1.8 - Incentive Stock Option
"Incentive Stock Option" shall mean an Option which qualifies under Section
422 of the Code and which is designated as an Incentive Stock Option by the
Committee. In the event that an Option is not designated by the Committee, it
shall be an Incentive Stock Option.
Section 1.9 - Non-Qualified Option
"Non-Qualified Option" shall mean an Option which is not an Incentive Stock
Option and which is designated as a Non-Qualified Option by the Committee.
Section 1.10 - Officer
"Officer" shall mean an officer of the Company, any Parent Corporation or
any Subsidiary.
Section 1.11 - Option
"Option" shall mean an option to purchase Stock of the Company, granted
under the Plan. "Option" includes both Incentive Stock Options and Non-
Qualified Options.
Section 1.12 - Optionee
"Optionee" shall mean an Employee or a Director to whom an Option is
granted under the Plan.
Section 1.13 - Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
<PAGE>
Section 1.14 - Plan
"Plan" shall mean this 1995 Stock Option and Restricted Stock Plan of Oak
Industries Inc.
Section 1.15 - Restricted Stock
"Restricted Stock" shall mean Stock of the Company issued pursuant to
Article VII of the Plan.
Section 1.16 - Restricted Stockholder
"Restricted Stockholder" shall mean an Employee or a Director to whom
Restricted Stock has been issued under the Plan.
Section 1.17 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.18 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.19 - Stock
"Stock" shall mean shares of the Company's common stock, $.01 par value.
Section 1.20 - Stock Appreciation Right
"Stock Appreciation Right" shall mean a stock appreciation right granted
under the Plan.
Section 1.21 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
Section 1.22 - Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company, a Parent Corporation or a
Subsidiary is terminated for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death or retirement, but
excluding terminations where there is a simultaneous reemployment by the
Company, a Parent Corporation or a Subsidiary. Without limiting its
discretion under Section 9.2, the Committee shall determine the effect of all
other matters and questions relating to Termination of Employment resulted
from a discharge for good cause, and all questions of whether particular
leaves of absence constitute Terminations of Employment; provided, however,
that, with respect to Incentive Stock Options, a leave of absence shall
constitute a Termination of Employment if, and to the extent that, such leave
of absence interrupts employment for the purposes of Section 422(a)(2) of the
Code and the then applicable regulations and revenue rulings under said
Section.
<PAGE>
ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 - Shares Subject to Plan
The shares of stock which may be awarded under the Plan shall be shares of
the Company's $0.01 par value common stock. Shares delivered under the Plan
shall be authorized but unissued Stock or, if the Committee so decides in its
sole discretion, previously issued Stock acquired by the Company and held in
its treasury. The aggregate number of such shares which may be delivered
pursuant to the Plan shall not exceed 2,000,000. The aggregate number of
shares which may be awarded as Restricted Stock under the Plan shall not
exceed 200,000.
The maximum number of shares for which Options may be granted to any
individual over the life of the Plan shall be 1,000,000. The maximum number
of shares subject to Stock Appreciation Rights granted to any individual over
the life of the plan shall likewise be 1,000,000. The per-individual
limitations described in this paragraph shall be construed and applied
consistent with the rules and regulations under Section 162(m) of the Code.
Section 2.2 - Unexercised Options
If any Option expires or is canceled without having been fully exercised,
the number of shares subject to such Option but as to which such Option was
not exercised prior to its expiration or cancellation may again be optioned
hereunder, subject to the limitations of Section 2.1.
Section 2.3 - Exercised Stock Appreciation Rights
To the extent that a Stock Appreciation Right shall have been exercised for
cash, the number of shares subject to the related Option, or portion thereof,
may again be optioned hereunder, subject to the limitations of Section 2.1.
To the extent that a Stock Appreciation Right shall have been exercised for
Stock, the number of shares actually issued shall be counted against the
maximum number of shares which may be delivered pursuant to the Plan and the
balance of the shares subject to the related Option, or portion thereof, may
again be optioned hereunder, subject to the limitations of Section 2.1.
Section 2.4 - Forfeited Restricted Stock
Any shares of Restricted Stock forfeited to the Company pursuant to the
restrictions thereon may again be optioned or issued as Restricted Stock
hereunder, subject to the limitations of Section 2.1.
Section 2.5 - Changes in Company's Shares
In the event that the outstanding shares of Stock are hereafter changed
into or exchanged for a different number or kind of shares or other securities
of the Company, or of another corporation, by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split-up,
stock dividend or combination of shares, appropriate adjustments shall be made
by the Committee in the number and kind of shares subject to Options, Stock
Appreciation Rights and Restricted Stock then outstanding or subsequently
granted under the Plan, including but not limited to adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares which may
be issued under the Plan.
<PAGE>
ARTICLE III
GRANTING OF OPTIONS
Section 3.1 - Eligibility
Any non-employee Director of the Company, or any executive or other key
Employee of the Company or of any corporation which is then a Parent
Corporation or a Subsidiary shall be eligible to be granted Options, subject
to Section 3.2.
Section 3.2 - Qualification of Incentive Stock Option
Incentive Stock Options shall be granted only to Employees.
Section 3.3 - Granting of Options to Executive or Key Employees
(a) The Committee shall from time to time, in its absolute discretion:
(i) Determine which Employees are executive or key employees and select
from among the executive or key employees (including those to whom Options
and/or Stock Appreciation Rights have been previously granted and/or
Restricted Stock has previously been issued under the Plan) such of them as in
its opinion should be granted Options; and
(ii) Determine the number of shares to be subject to such Options
granted to such selected executive or key Employees, and determine whether
such Options are to be Incentive Stock Options or Non-Qualified Options; and
(iii) Determine the terms and conditions of such Options, consistent
with the Plan.
(b) Upon the selection of an Employee to be granted an Option, the
Committee shall instruct the Secretary to issue such Option and may impose
such conditions on the grant of such Option as it deems appropriate. Without
limiting the generality of the preceding sentence, the Committee may, in its
discretion and on such terms as it deems appropriate, require as a condition
on the grant of an Option to an Employee that the Employee surrender for
cancellation some or all of the unexercised Options which have been previously
granted to such Optionee. An Option the grant of which is conditioned upon
such surrender may have an option price lower (or higher) than the option
price of the surrendered Option, may cover the same number of shares (or fewer
or greater) as the surrendered Option, may contain such other terms as the
Committee deems appropriate and shall be exercisable in accordance with its
terms, without regard to the number of shares, price, option period or any
other term or condition of the surrendered Option.
Section 3.4 - Granting of Options to Non-Employee Directors
Each Director who is not an employee shall be granted Options under the
following formula:
(a) (i) Each current Director shall be granted an Option as of the date of
the approval of the Plan by the Board, and shall be granted additional Options
on the first and second anniversaries of such date (or on the next preceding
business day in the event either of such anniversaries is not a business day).
Each such Option shall permit such Director to acquire 2,500 shares at an
exercise price equal to the Fair Market Value per share on the date of such
grant and shall become exercisable in three installments: 34% on the first
anniversary of such grant, 33% on the second anniversary and 33% on the third
anniversary. (ii) Each current Director shall also be granted an Option as of
the date of the approval of the Plan by the Committee pursuant to which such
Director may acquire 10,000 shares at an exercise price equal to the Fair
Market Value per share on such date, such Option to become exercisable in its
entirety on the tenth anniversary of such date or on such earlier date on or
prior to the third anniversary of such date as shall mark the tenth
consecutive trading day on which the Fair Market Value shall have equaled or
exceeded 150% of the exercise price of such Option.
(b) (i) Each newly elected Director who is not an employee shall be
granted an Option on the first business day following such Director's
election, and shall be granted additional Options on the first and second
anniversaries of such date (or on the next preceding business day in the case
either of such anniversaries is not a business day). Each such Option shall
permit such Director to acquire 2,500 shares at an exercise price equal to the
Fair Market Value per share on the date of each such grant and shall become
exercisable in three installments: 34% on the first anniversary of such grant,
33% on the second anniversary and 33% on the third anniversary. (ii) Each
such newly elected Director shall also be granted an Option as of the first
business day following such Director's election pursuant to which such
Director may acquire 10,000 shares at an exercise price equal to Fair Market
Value as of the date of such grant, such Option to become exercisable in its
entirety on the tenth anniversary of such date or on such earlier date on or
prior to the third anniversary of such date as shall mark the tenth
consecutive trading day on which Fair Market Value shall have equaled or
exceeded 150% of the exercise price of such Option.
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 - Option Agreement
Each Option shall be evidenced by a written stock option agreement, which
shall be executed by the Optionee and an authorized Officer of the Company and
which shall contain such terms and conditions as the Committee shall
determine, consistent with the Plan. Stock option agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options" under Section
422 of the Code.
Section 4.2 - Option Price
The price of the shares subject to each Option shall be set by the
Committee; provided, however, that the price per share shall not be less than
100% of the Fair Market Value of such shares on the date such Option is
granted; provided, further, that, in the case of an Incentive Stock Option,
the price per share shall not be less than 110% of the Fair Market Value of
such shares on the date such Option is granted in the case of an individual
then owning (within the meaning of Section 424(d) of the Code) more than 10%
of the total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation.
Section 4.3 - Commencement of Exercisability
Options shall become exercisable at such times and in such installments
(which may be cumulative) as the Committee shall provide in the terms of each
individual Option; provided, however, that by a resolution adopted after an
Option is granted the Committee may, on such terms and conditions as it may
determine to be appropriate accelerate the time at which such Option or any
portion thereof may be exercised.
Section 4.4 - Expiration of Options
The Committee shall provide, either at the time of the grant or any time
thereafter, in the terms of each individual Option, when such Option expires
and becomes unexercisable; and (without limiting the generality of the
foregoing) the Committee may provide in the terms of individual Options that
said Options expire immediately upon a Termination of Employment for any
reason.
Section 4.5 - Employment
Nothing in this Plan or in any stock option agreement hereunder shall
confer upon any Optionee any right to continue in the employ of the Company,
any Parent Corporation or any Subsidiary or shall interfere with or restrict
in any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to discharge any Optionee
at any time for any reason whatsoever, with or without cause.
Section 4.6 - Merger, Consolidation, Acquisition, Liquidation or Dissolution
In the event of the merger or consolidation of the Company with or into
another corporation as a result of which the Company's stock is no longer
outstanding, the acquisition by another corporation or person of all or
substantially all of the Company's assets or 50% or more of the Company's
then outstanding voting stock, or the liquidation or dissolution of the
Company, all outstanding Options shall become immediately exercisable on the
45th day prior to the proposed effective date of any such merger,
consolidation, acquisition, liquidation or dissolution. Upon the consummation
of such merger, consolidation or sale of assets all outstanding Options shall
terminate unless the Committee shall have arranged that the surviving or
acquiring corporation or an affiliate of that corporation grant to
participants replacement Options, which in the case of incentive options shall
satisfy, in the determination of the Committee, the requirements of Section
424(a) of the Code; and provided further that the Committee may not make such
provision for Options granted to Non-Employee Directors if the Committee
determines that such action would cause the Non-Employee Directors not to
remain disinterested within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934, as amended.
ARTICLE V
EXERCISE OF OPTIONS
Section 5.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only the Optionee may exercise an
Option granted to such Optionee, or any portion thereof. After the death of
the Optionee, any exercisable portion of any Option may, prior to the time
when such portion becomes unexercisable, be exercised by his personal
representative or by any person empowered to do so under the deceased
Optionee's will or under the then applicable laws of descent and distribution.
Section 5.2 - Partial Exercise
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable, such Option or
portion thereof may be exercised in whole or in part; provided, however, that
the Company shall not be required to issue fractional shares and the Committee
may, by the terms of the Option, require any partial exercise to be with
respect to a specified minimum number of shares.
Section 5.3 - Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or the Secretary's office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under Section 4.4:
(a) Notice in writing signed by the Optionee or other person then entitled
to exercise such Option or portion, stating that such Option or portion is
exercised, such notice complying with all applicable rules established by the
Committee; and
(b) Full payment:
(i) (in cash or by check) for the shares with respect to which such
Option or portion is thereby exercised; or
(ii) With the consent of the Committee, shares of the Stock owned by
the Optionee (which in the case of Stock acquired from the Company, shall have
been held for at least six months) duly endorsed for transfer to the Company
with a Fair Market Value (as determined under Section 4.2), on the date of
delivery equal to the aggregate Option price of the shares with respect to
which such Option or portion is thereby exercised; or
(iii) With the consent of the Committee, a full recourse promissory
note bearing interest (at a rate at least sufficient to preclude the
imputation of interest under the Code or any successor provision) and payable
upon such terms as may be prescribed by the Committee. The Committee may also
prescribe the form of such note and the security to be given for such note.
No Option may, however, be exercised by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of credit is
prohibited by law; or
(iv) Any combination of the consideration provided in the foregoing
subsections (i), (ii) and (iii); provided, that if the Stock delivered upon
exercise of the Option is an original issue of authorized Stock, at least so
much of the exercise price as represents the par value of such Stock shall be
paid other than with a personal check or promissory note of the person
exercising the option; or
(v) By delivery of an unconditional and irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay the exercise
price; and
(c) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and
registrars; and
(d) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.
Section 5.4 - Conditions to Issuance of Stock Certificates
The Company shall not be required to issue or deliver any certificate or
certificates for shares of Stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which the Stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company of all amounts which it, any Parent
Corporation or any Subsidiary is required to withhold under federal, state or
local law in connection with the exercise of the Option. If permitted by the
Committee, either at the time of the grant of the Option or at the time of
exercise, the participant may elect at such time and in such manner as the
Committee may prescribe, to satisfy such withholding obligation by (i)
delivering to the Company Stock owned by such individual having a Fair Market
Value equal to such withholding obligation, or (ii) requesting that the
Company withhold from the shares of Stock to be delivered upon exercise of
such Option a number of shares of Stock having a Fair Market Value equal to
such withholding obligation; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may establish from time to time for reasons of
administrative convenience.
Section 5.5 - Rights as Shareholders
The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
holders.
Section 5.6 - Transfer Restrictions
Except as expressly provided therein, an Option granted under the Plan is
personal to the Optionee and is not transferable by the Optionee in any manner
other than by will or the laws of descent and distribution. The Committee, in
its absolute discretion, may impose such other restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
stock option agreement and may be referred to on the certificates evidencing
such shares. The Committee may require the Employee to give the Company
prompt notice of any disposition of shares of Stock, acquired by exercise of
an Incentive Stock Option, within two years from the date of granting such
Option or one year after the transfer of such shares to such Employee. The
Committee may direct that the certificates evidencing shares acquired by
exercise of an Option refer to such requirement to give prompt notice of
disposition.
<PAGE>
ARTICLE VI
STOCK APPRECIATION RIGHTS
Section 6.1 - Grant of Stock Appreciation Rights
A Stock Appreciation Right may be granted to any Employee who receives a
grant of an Option under the Plan. A Stock Appreciation Right may be granted
in connection and simultaneously with the grant of an Option or with respect
to a previously granted Option. A Stock Appreciation Right shall be subject
to such terms and conditions not inconsistent with the Plan as the Committee
shall impose, including the following:
(a) A Stock Appreciation Right shall be related to a particular Option and
shall be exercisable only to the extent the related Option is exercisable.
(b) A Stock Appreciation Right shall be granted to the Optionee to the
maximum extent of 100% of the number of shares subject to the simultaneously
or previously granted Option.
(c) A Stock Appreciation Right shall entitle the Optionee (or other person
entitled to exercise the Option pursuant to Section 5.1) to surrender
unexercised a portion of the Option to which the Stock Appreciation Right
relates to the Company and to receive from the Company in exchange therefor an
amount payable in cash or, in the discretion of the Committee, shares of the
Stock, determined by multiplying the lesser of (i) the difference obtained by
subtracting the Option exercise price per share of the Stock subject to the
related Option from the Fair Market Value (as determinable under Section 4.2)
of a share of the Stock on the date of exercise of the Stock Appreciation
Right, or (ii) twice the Option exercise price per share of the Stock subject
to the related Option, by the number of shares of Stock subject to the related
Option with respect to which the Stock Appreciation Right shall have been
exercised.
ARTICLE VII
ISSUANCE OF RESTRICTED STOCK
Section 7.1 - Eligibility
Any executive or other key Employee of the Company or of any corporation
which is then a Parent Corporation or a Subsidiary shall be eligible to be
issued Restricted Stock.
Section 7.2 - Issuance of Restricted Stock
(a) The Committee shall from time to time, in its absolute discretion:
(i) Determine which Employees are executive or key Employees and select
from among the executive or key Employees (including those to whom Options
and/or Stock Appreciation Rights have been previously granted and/or
Restricted Stock has been previously issued) such of them as in its opinion
should be issued Restricted Stock; and
(ii) Determine the number of shares of Restricted Stock to be issued to
such selected executive or key Employees, and
(iii) Determine the terms and conditions applicable to such Restricted
Stock, consistent with the Plan.
(b) Shares issued as Restricted Stock may be either previously authorized
but unissued shares or issued shares which have been reacquired by the
Company. Legal consideration, but no cash payment, will be required for each
issuance of Restricted Stock.
(c) Upon the selection of an executive or key Employee to be issued
Restricted Stock, the Committee shall instruct the Secretary to issue such
Restricted Stock and may impose such conditions on the issue of such
Restricted Stock as it deems appropriate. Restricted Stock may not be issued
by the Committee to executive or key Employees who are then Directors or
Officers of the Company unless such issuance has been recommended by the
Committee. Such recommendation shall be in writing and shall specify the
Directors or Officers to whom such issuance is recommended and the recommended
number of shares of Restricted Stock to be issued.
ARTICLE VIII
TERMS OF RESTRICTED STOCK
Section 8.1 - Restricted Stock Agreement
Restricted Stock shall be issued only pursuant to a written restricted
stock agreement, which shall be executed by the Restricted Stockholder and an
authorized Officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with the Plan.
Section 8.2 - Employment
Nothing in this Plan or in any Restricted Stock Agreement hereunder shall
confer upon any Restricted Stockholder any right to continue in the employ of
the Company, any Parent Corporation or any Subsidiary or shall interfere with
or restrict in any way the rights of the Company, its Parent Corporations and
its Subsidiaries, which are hereby expressly reserved, to discharge any
Restricted Stockholder at any time for any reason whatsoever, with or without
cause.
Section 8.3 - Rights as Shareholders
Upon delivery of the shares of Restricted Stock to the escrow holder
pursuant to Section 8.7, the Restricted Stockholder shall have all the rights
of a stockholder with respect to said shares, subject to the restrictions in
such Restricted Shareholder's restricted stock agreement, including the right
to vote the shares and to receive all dividends or other distributions paid or
made with respect to the shares.
Section 8.4 - Restrictions
All shares of Restricted Stock issued under this Plan (including any shares
received by holders thereof as a result of stock dividends, stock splits or
any other forms of recapitalization) shall be subject to such restrictions as
the Committee shall provide in the terms of each individual Restricted Stock
Agreement; provided, however, that by a resolution adopted after the
Restricted Stock is issued, the Committee may, on such terms and conditions as
it may determine to be appropriate and subject to Section 10.3, remove any or
all of the restrictions imposed by the terms of the Restricted Stock
Agreement. All restrictions imposed pursuant to this Section 8.4 shall expire
within ten years of the date of issuance. Restricted Stock may not be sold or
encumbered until all restrictions are terminated or expire.
Section 8.5 - Forfeiture of Restricted Stock
The Committee shall provide in the terms of each individual restricted
stock agreement that the Restricted Stock then subject to restrictions under
the restricted stock agreement be forfeited by the Restricted Stockholder back
to the Company immediately upon a Termination of Employment for any reason;
provided, however, that provision may be made that no such forfeiture shall
occur in the event of a Termination of Employment because of the Employee's
normal retirement, death, total disability or early retirement with the
consent of the Committee.
Section 8.6 - Merger, Consolidation, Acquisition, Liquidation or Dissolution
Upon the merger or consolidation of the Company with or into another
corporation, as a result of which the Company's stock is no longer
outstanding, the acquisition by another corporation or person of all or
substantially all of the Company's assets or 50% or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
the Committee may determine, at its sole discretion, that the restrictions
imposed under the Restricted Stock Agreement on some or all shares of
Restricted Stock shall immediately expire and/or that some or all of such
shares shall cease to be subject to forfeiture under Section 8.5.
Section 8.7 - Escrow
The Secretary or such other escrow holder as the Committee may appoint
shall retain physical custody of the certificates representing Restricted
Stock until all of the restrictions imposed under the Restricted Stock
Agreement expire or shall have been removed; provided, however, that in no
event shall any Restricted Stockholder retain physical custody of any
certificates representing Restricted Stock issued to such Restricted
Shareholder.
Section 8.8 - Legend
In order to enforce the restrictions imposed upon shares of Restricted
Stock hereunder, the Committee shall cause a legend or legends to be placed on
certificates representing all shares of Restricted Stock that are still
subject to restrictions under restricted stock agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
ARTICLE IX
ADMINISTRATION
Section 9.1 - Committee
The Committee shall consist of at least two directors and all Committee
members shall be disinterested persons within the meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee shall be filled by the Board.
Section 9.2 - Duties and Powers of Committee
It shall be the duty of the Committee to conduct the general administration
of the Plan in accordance with its provisions. The Committee shall have the
power to interpret the Plan, the Options, the Stock Appreciation Rights and
the Restricted Stock and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Any such interpretations and rules
in regard to Incentive Stock Options shall be consistent with the basic
purpose of the Plan to grant "incentive stock options" within the meaning of
Section 422 of the Code. In its absolute discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan.
Section 9.3 - Majority Rule
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
Section 9.4 - Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
incurred by members of the Committee in connection with the administration of
the Plan shall be borne by the Company. The Committee may, with the approval
of the Board, employ attorneys, consultants, accountants, appraisers, brokers
or other persons. The Committee, the Company, Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Optionees, holders
of Stock Appreciation Rights and Restricted Stockholders, the Company and all
other interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, the Options, the Stock Appreciation Rights or the
Restricted Stock and all members of the Committee shall be fully protected by
the Company in respect to any such action, determination or interpretation.
ARTICLE X
OTHER PROVISIONS
Section 10.1 - Options, Stock Appreciation Rights and Restricted Stock Not
Transferable
No Option, Stock Appreciation Right or Restricted Stock or interest or
right therein or part thereof shall be liable for the debts, contracts or
engagements of the Optionee or the Restricted Stockholder, as the case may be,
or his or her successors in interest, or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that
nothing in this Section 10.1 shall prevent transfers by will or by the
applicable laws of descent and distribution.
Section 10.2 - Amendment, Suspension or Termination of the Plan
The Committee may at any time discontinue making grants under the Plan.
With the consent of the holder, the Committee may at any time cancel an
existing grant in whole or in part and grant another award for such number of
shares as the Committee specifies. The Committee may at any time or times
amend the Plan or any outstanding grant for the purpose of satisfying the
requirements of Section 422 of the Code or of any changes in applicable laws
or regulations or for any other purpose that may at the time be permitted by
law, or may at any time terminate the Plan as to further grants, but no such
amendment shall adversely affect the rights of any holder (without such
person's consent) of any Option, Stock Appreciation Right or Restricted Stock
previously granted. No Option or Stock Appreciation Right may be granted and
no Restricted Stock may be issued during any period of suspension nor after
termination of the Plan, and in no event may any Option or Stock Appreciation
Right be granted or any Restricted Stock issued under this Plan after the
first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted; or
(b) The expiration of ten years from the date the Plan is approved by the
Company's shareholders under Section 10.3.
Section 10.3 - Approval of Plan by Shareholders
This Plan will be submitted for approval of the Company's shareholders
within 12 months after the date of the Board's initial adoption of the Plan.
Options and Stock Appreciation Rights may be granted and Restricted Stock may
be issued prior to such shareholder approval; provided, however, that such
Options and Stock Appreciation Rights shall not be exercisable prior to the
time when the Plan is approved by the shareholders; provided, further, that if
such approval has not been obtained at the end of said 12-month period, all
Options and Stock Appreciation Rights previously granted and all Restricted
Stock previously issued under the Plan shall thereupon be canceled and become
null and void.
Section 10.4 - Effect of Plan Upon Other Option and Compensation Plans
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary (a) to establish any other
forms of incentives or compensation for employees of the Company, any Parent
Corporation or any Subsidiary, or (b) to grant or assume options or to issue
Restricted Stock otherwise than under this Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of Options or the issuance of Restricted Stock in connection with
the acquisition, by purchase, lease, merger, consolidation or otherwise, of
the business, stock or assets of any corporation, firm of association.
Section 10.5 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
<PAGE>
PROXY
OAK INDUSTRIES INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
March ___, 1995
The undersigned hereby appoints Paul J. Halas, William C. Weaver, and John D.
Richardson, or any of them, proxies, with full power of substitution, to vote
all shares of the Common Stock of Oak Industries Inc. (the "Company") held of
record by the undersigned as of March 13, 1995, at the Annual Meeting of
Shareholders to be held on Wednesday, May 3, 1995, at 9:30 a.m., Eastern
Daylight Time, at State Street Bank & Trust Company, 225 Franklin Street,
Boston, Massachusetts, or any adjournment thereof.
IMPORTANT: To secure a quorum and to avoid the expense and delay of sending
follow-up letters, please mail this proxy promptly in the envelope provided.
Your vote is important whether your holdings are large or small. Execution of
a proxy will not in any way affect a stockholder's right to attend the Annual
Meeting and vote in person. Any stockholder giving a proxy has the right to
revoke it by written notice to the Secretary of the Company at any time before
it is exercised or by delivering a later exercised proxy to the Secretary of
the Company at any time before the original proxy is exercised.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF EACH NOMINEE AND FOR PROPOSALS 2 AND 3.
1. ELECTION OF DIRECTORS:
ELECTION OF EIGHT DIRECTORS FOR TERMS OF ONE YEAR:
NOMINEES: WILLIAM S. ANTLE III, DANIEL W. DERBES, RODERICK M. HILLS
GEORGE W. LEISZ, GILBERT E. MATTHEWS, CHRISTOPHER H. B. MILLS
ELLIOT L. RICHARDSON, THE LORD STEVENS OF LUDGATE
/ / FOR ALL NOMINEES / / WITHHOLD AUTHORITY FOR
ALL NOMINEES
/ /-------------------------------------------------
WITHHOLD AUTHORITY FOR NOMINEE(S) INDICATED ABOVE
2. APPROVAL OF THE ADOPTION OF THE 1995 STOCK OPTION AND RESTRICTED STOCK
PLAN.
FOR / / AGAINST / / ABSTAIN / /
3. RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR 1995.
FOR / / AGAINST / / ABSTAIN / /
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
SIGNATURES SHOULD AGREE WITH THE NAME OR NAMES ON THE STOCK CERTIFICATE AS
THEY APPEAR ABOVE. EXECUTORS, ADMINISTRATORS, TRUSTEES, ATTORNEYS OR
GUARDIANS SHOULD GIVE FULL TITLE.
SIGNATURE: ----------------------------------------DATE------------------
SIGNATURE: ----------------------------------------DATE------------------
<PAGE>
OAK INDUSTRIES INC.
1000 Winter Street
Waltham, MA 02154
March 6, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Judciary Plaza
Washington, D.C. 20549
Re: Oak Industries Inc., File No. 1-4474
------------------------------------
Ladies and Gentlemen:
Pursuant to Rule 14a-6(b) under the Securities Exchange Act of 1934, as
amended, submitted herewith for filing with the Commission on behalf of Oak
Industries Inc. (the "Company") is a preliminary version of the Company's
proxy statement and proxy card which are proposed to be furnished to
stockholders of the Company in connection with the Annual Meeting of
Shareholders to be held on May 3, 1995.
In addition to the election of directors and the ratification of the
selection of auditors, the proxy statement includes a proposal to approve the
Company's 1995 Stock Option and Restricted Stock Plan.
It is anticipated that the definitive proxy materials will be mailed to
the stockholders of the Company on or about March 22, 1995. The Company
further expects to register the shares of common stock issuable under the 1995
Stock Option and Restricted Stock Plan by filing a registration statement on
Form S-8 with respect to such shares as soon after the Annual Meeting as may
be reasonably practicable, after approval of such plan by the Company's
stockholders.
This filing is being effected by direct transmission to the Commission's
EDGAR System. On March 6, 1995, in anticipation of this filing, the Company
caused the requisite $125.00 filing fee to be wire transferred to the
Commission's Account No. (910-8739) at The Mellon Bank in Pittsburgh. The
bankers were instructed to note that the Company's IRS identification number
is 36-1569000, that its SEC file number is 1-4474, that its Central Index Key
(CIK) number is 0000073568, that its SEC filing fees account number is
910-8739, and that the payment was intended as the filing fee for the
Company's preliminary proxy statement and proxy card.
Please do not hesitate to telephone the undersigned, or Mela Lew of this
office, collect at (617) 890-0400, for any further information or assistance
in the review of the preliminary materials.
Very truly yours,
Paul J. Halas
Senior Vice President, General
Counsel and Secretary
