<PAGE>
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- - - - - - --------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DREW INDUSTRIES INCORPORATED
- - - - - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- - - - - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- - - - - - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - - - - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
- - - - - - --------------------------------------------------------------------------------
(5) Total fee paid:
- - - - - - --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DREW INDUSTRIES INCORPORATED
200 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10601
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 13, 1995
------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of DREW
INDUSTRIES INCORPORATED (the 'Company') will be held at Hotel Crescent Court,
400 Crescent Court, Dallas, Texas 75201 on June 13, 1995 at 9:30 A.M., for the
following purposes:
(1) To elect a Board of five Directors;
(2) To consider and act upon a proposal to adopt an amended and
restated stock option plan providing for the grant of stock options that
qualify as incentive stock options as an alternative to non-qualified stock
options, and to provide for the automatic award of options to members of
the Stock Option Committee under certain circumstances;
(3) To consider and approve the 1995 Employee Stock Purchase Plan;
(4) To consider and act upon a proposal to adopt an amendment to the
Company's Restated Certificate of Incorporation eliminating Preferred Stock
from the Company's authorized capital stock;
(5) To ratify the selection of KPMG Peat Marwick LLP as independent
auditors for the Company for the year ending December 31, 1995; and
(6) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Holders of record of the Company's Common Stock at the close of business on
the 20th day of April, 1995 shall be entitled to vote on all matters to be
considered at the meeting or any adjournment or postponement thereof.
A list of all stockholders entitled to vote at the meeting will be
available for inspection for the ten days prior to the meeting at the office of
the Company and at the offices of the Company's transfer agent, Chemical Bank,
450 West 33rd Street--15th Floor, New York, N.Y. 10001, and will be available
for inspection at the time of the meeting, at the place thereof.
By Order of the Board of Directors
EDWARD W. ROSE, III
Chairman of the Board of Directors
Dated: May 10, 1995
White Plains, N.Y.
NOTICE TO HOLDERS OF COMMON STOCK
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE ENCLOSED
PROXY SO THAT YOU WILL BE REPRESENTED. A POST-PAID ENVELOPE IS ENCLOSED
FOR YOUR CONVENIENCE.
<PAGE>
DREW INDUSTRIES INCORPORATED
200 MAMARONECK AVENUE
WHITE PLAINS, NEW YORK 10601
------------------------
PROXY STATEMENT
------------------------
The accompanying Proxy is solicited by Management of Drew Industries
Incorporated, a Delaware corporation (the 'Company'), for use at the Annual
Meeting of Stockholders to be held at Hotel Crescent Court, 400 Crescent Court,
Dallas, Texas 75201 on June 13, 1995 at 9:30 A.M., or any adjournment or
postponement thereof, at which holders of record of the Company's Common Stock,
par value $0.01 per share (the 'Common Stock'), at the close of business on
April 20, 1995 shall be entitled to vote on all matters considered at the
meeting.
The cost of solicitation by Management, including postage, printing and
handling, and the expenses incurred by brokerage firms, custodians, nominees and
fiduciaries in forwarding proxy material to beneficial owners will be borne by
the Company. The solicitation is to be made primarily by mail, but may be
supplemented by telephone calls, telegrams and personal solicitation. Management
may also use the services of directors and employees of the Company to solicit
Proxies, without additional compensation.
Each Proxy executed and returned by holders of the Common Stock may be
revoked at any time thereafter, except as to matters upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority conferred by
such Proxy. A Proxy may be revoked by giving written notice of revocation to the
Secretary of the Company or to any of the other persons named as proxies, or by
giving a Proxy with a later date. The Proxies will be voted at the meeting for
the Directors set forth herein in the manner indicated (see 'ELECTION OF
DIRECTORS'), and if no contrary instructions are indicated, in favor of the
other matters set forth herein; if specific instructions are indicated, the
Proxies will be voted in accordance therewith. This Statement and the form of
Proxy solicited from holders of the Common Stock are expected to be sent or
given to stockholders on or about May 10, 1995.
The Annual Report to Stockholders of the Company for the year ended
December 31, 1994 is being mailed herewith to each stockholder of record.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1994, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE SCHEDULES THERETO) WILL BE FURNISHED
TO ANY STOCKHOLDER WITHOUT CHARGE UPON REQUEST TO THE COMPANY AT 200 MAMARONECK
AVENUE, WHITE PLAINS, NEW YORK 10601, TELEPHONE (914) 428-9098.
THE COMPANY
The Company was incorporated under the laws of Delaware on March 20, 1984
and is the successor to Drew National Corporation, which was incorporated under
the laws of Delaware in 1962. The Company's principal executive and
administrative offices are located at 200 Mamaroneck Avenue, White Plains, New
York 10601; telephone number (914) 428-9098.
On April 19, 1994, the Board of Directors of the Company approved a plan to
transfer the stock of Leslie-Locke, Inc. ('Leslie-Locke'), its home improvement
building products subsidiary, to Leslie Building Products, Inc., a newly formed
subsidiary ('Leslie Building Products'), and to distribute the common stock of
Leslie Building Products to the Company's stockholders on a one-for-one basis
(the 'Spin-off'). The transfer of the stock of Leslie-Locke to Leslie Building
Products was effective May 10, 1994, and the Spin-off was effective July 29,
1994. Since the Spin-off, Leslie Building
<PAGE>
Products has been a stand-alone company, the common stock of which is publicly
traded on the OTC Bulletin Board under the symbol LBPI.
Pursuant to the Shared Services Agreement, dated July 29, 1994, between the
Company and Leslie Building Products, for a period of two years following the
Spin-off, the Company and Leslie Building Products will share certain
administrative functions and employee services, such as management overview and
planning, tax preparation, financial reporting, coordination of independent
audit, stockholder relations, and regulatory matters. The Company will be
reimbursed by Leslie Building Products for the fair market value of such
services. The agreement may be extended under certain circumstances. See
'ELECTION OF DIRECTORS--Executive Compensation.'
On February 8, 1995, the Common Stock of the Company was listed for trading
on the American Stock Exchange under the symbol DW.
On March 8, 1995, the Board of Directors authorized the repurchase of up to
500,000 shares of the Company's Common Stock. Purchases will be made from time
to time in the open market or in privately negotiated transactions during the
next twelve months at market prices prevailing at the time of purchase. The
Company has no commitment or obligation to purchase any minimum number of
shares, and actual purchases will depend upon market conditions. The repurchase
program may be discontinued or suspended at any time. To date, 5,700 shares have
been purchased.
VOTING SECURITIES
The Company had outstanding on the record date 4,933,624 shares of Common
Stock. Each holder of Common Stock is entitled to one vote for each share of
stock held.
PRINCIPAL HOLDERS OF VOTING SECURITIES
Set forth below is information with respect to each person known to the
Company on April 20, 1995 to be the beneficial owner of more than five percent
of any class of the Company's voting securities, which consists of Common Stock
only (including options):
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF APPROXIMATE
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- - - - - - ---------------------------------------- ---------- -----------
<S> <C> <C>
Edward W. Rose, III(1) ................. 1,684,140 (2) 32.2%
500 Crescent Court
Dallas, Texas 76102
FMR Corp.(3) ........................... 308,800 5.9%
82 Devonshire Street
Boston, Massachusetts 02108
Trust Company of the West(3) ........... 277,000 5.3%
865 South Figueroa Street
Los Angeles, California 90017
</TABLE>
- - - - - - ------------------
(1) The person named has sole voting and investment power with respect to such
shares.
(2) See 'VOTING SECURITIES--Security Ownership of Management.'
(3) As of December 31, 1994.
To the knowledge of the Company, other than persons acting as nominees or
custodians for various stock brokerage firms and banks, which persons do not
have beneficial ownership of the Common Stock, no other person owns of record or
beneficially more than five percent of the voting securities of the Company.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is information with respect to beneficial ownership at
April 20, 1995 of the Common Stock (including options) by each Director and
nominee and by all Directors, nominees and Executive Officers of the Company as
a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF APPROXIMATE
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- - - - - - ---------------------------------------- ---------- -----------
<S> <C> <C>
Leigh J. Abrams(1) ..................... 111,473 (2) 2.1%
200 Mamaroneck Avenue
White Plains, New York 10601
Edward W. Rose, III(1) ................. 1,684,140 (3) 32.2%
500 Crescent Court
Dallas, Texas 76102
David L. Webster(1) .................... 123,920 (4) 2.4%
4381 Green Oaks Blvd.
Arlington, Texas 76016
James F. Gero(1) ....................... 24,580 (5) 0.5%
38F-4 Anna Cade Road
Rockwall, Texas 75087
Gene H. Bishop(6) ...................... 10,000 0.2%
200 Crescent Court, Suite 1650
Dallas, Texas 75201
All Directors and Executive Officers as
a group (7 persons including the
above-named).......................... 2,009,999 (7) 38.5%
</TABLE>
- - - - - - ------------------
(1) Pursuant to Rules 13-1 (f)(1)-(2) of Regulation 13-D of the General Rules
and Regulations under the Exchange Act, on February 17, 1995, the persons
indicated, together with certain other persons, jointly filed a single
amendment to the Schedule 13-D Statement, filed on May 31, 1989, with
respect to the securities listed in the foregoing table. Such persons made
the single, joint filing because they may be deemed to constitute a 'group'
within the meaning of Section 13(d)(3) of the Exchange Act, although neither
the fact of the filing nor anything contained therein shall be deemed to be
an admission by such persons that a group exists.
(2) Mr. Abrams has sole voting and investment power with respect to the shares
owned by him. Includes 4,003 shares of Common Stock held by Mr. Abrams as
Custodian under the New York Uniform Gifts to Minors Act for the benefit of
his children. Mr. Abrams disclaims any beneficial interest in the shares
held as Custodian. In January 1994, Mr. Abrams was granted an option
pursuant to the Company's Non-Qualified Stock Option Plan to purchase 17,370
shares of Common Stock at $7.341 per share. Although no part of such option
has been exercised, all shares subject to such option are included in the
above table as beneficially owned.
(3) Mr. Rose has sole voting and investment power with respect to the shares
owned by him. Includes 42,000 shares owned by each of Cardinal Investment
Company, Inc. Pension Plan and Cardinal Investment Company, Inc. Profit
Sharing Plan, of each of which Mr. Rose is Trustee.
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued from previous page)
Includes 2,500 shares held by Cardinal Partners, a general partnership of
which Mr. Rose is Managing Partner. Excludes 72,200 shares of Common Stock
held in trusts for the benefit of Mr. Rose's children. Mr. Rose disclaims
any beneficial interest in such shares. Mr. Rose's wife has sole voting and
investment power with respect to such shares.
(4) Mr. Webster has sole voting and investment power with respect to such
shares. In December 1992, Mr. Webster was granted an option pursuant to the
Company's Non-Qualified Stock Option Plan to purchase 2,316 shares of Common
Stock at $6.045 per share, and in March 1994, Mr. Webster was granted an
option to purchase 34,738 shares of Common Stock at $8.528 per share.
Although no part of such option has been exercised, all shares subject to
such option are included in the above table as beneficially owned.
(5) Mr. Gero shares voting and investment power with respect to such shares with
his wife. In December 1993, Mr. Gero was granted an option pursuant to the
Company's Non-Qualified Stock Option Plan to purchase 11,580 shares of
Common Stock at $7.233 per share. Although no part of such option has been
exercised, all such shares subject to such option are included in the above
table as beneficially owned.
(6) Mr. Bishop has sole voting and investment power with respect to such shares.
(7) Includes 96,690 shares subject to options.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who beneficially own more than ten percent of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the exchange on which
the securities are traded. Officers, directors and greater than ten-percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, the Company
believes that during 1994 all such filing requirements applicable to its
officers and directors (the Company not being aware of any ten percent holder
other than Edward W. Rose, III, a director) were complied with.
I. ELECTION OF DIRECTORS
It is proposed to elect a Board of five directors to serve until the next
annual election or until their successors are elected and qualify.
Unless contrary instructions are indicated, the persons named as proxies in
the form of Proxy solicited from holders of the Common Stock will vote for the
election of the nominees indicated below. All such nominees are presently
Directors of the Company. If any such nominees should be unable or unwilling to
serve, the persons named as proxies will vote for such other person or persons
as may be proposed by Management. Management has no reason to believe that any
of the named nominees will be unable or unwilling to serve. Election of
Directors by holders of the Common Stock will be by a plurality of the votes
cast at the meeting, in person or by proxy, by holders of the Common Stock
entitled to vote at the meeting.
The following table lists the current Directors of the Company and the
nominees proposed by Management for election by the holders of the Common Stock,
all other positions and offices with
4
<PAGE>
the Company presently held by them and their principal occupations, in each case
as furnished by them to the Company.
<TABLE>
<CAPTION>
NAME AND AGE DIRECTOR
OF NOMINEE POSITION SINCE
- - - - - - ----------------------------------- ------------------------------ ----------
<S> <C> <C>
Leigh J. Abrams ................... President, Chief Executive
(Age 52) Officer and Director. 1984
Edward W. Rose, III ............... Chairman of the Board of
(Age 54) Directors. 1984
David L. Webster .................. President of Kinro, Inc. and
(Age 58) Director. 1984
James F. Gero ..................... Director. 1992
(Age 50)
Gene H. Bishop .................... Director. 1995
(Age 65)
</TABLE>
LEIGH J. ABRAMS, served as President, Chief Executive Officer and a
Director of Drew National Corporation, predecessor of the Company, from October
1979 to May 31, 1985. Since July 1994, Mr. Abrams has been President, Chief
Executive Officer and a Director of Leslie Building Products.
EDWARD W. ROSE, III, served as Chairman of the Board of Directors of Drew
National Corporation from October 1979 to May 31, 1985. For more than the past
five years, Mr. Rose has been President and sole stockholder of Cardinal
Investment Company, Inc., an investment management firm and a non-clearing
broker-dealer. Mr. Rose also serves as Co-Managing General Partner of the Texas
Rangers Baseball Team and as a director of the following public companies:
Osprey Holding, Inc., previously engaged in selling computer software for
hospitals; ACE Cash Express, Inc. engaged in check cashing services; D.F. & R.,
Inc., engaged in the operation of restaurants; and as a trustee of
Liberte-Investors, engaged in real estate loans and investments. Since, July
1994, Mr. Rose has been Chairman of the Board of Leslie Building Products.
DAVID L. WEBSTER, served as a Director and Vice President of Drew National
Corporation from November 1980 until February 1983. Since November 1980, Mr.
Webster has been President of Kinro, Inc., a subsidiary of the Company, and has
been Chairman of Kinro, Inc. since November 1984.
JAMES F. GERO, since March 1992, has been Chairman and Chief Executive
Officer of Sierra Technologies, Inc., a manufacturer of defense systems
technologies. From July 1987 to October 1989, Mr. Gero was Chairman and Chief
Executive Officer of Varo, Inc., a manufacturer of defense electronics, and from
1985 to 1987, Mr. Gero was President and Chief Executive Officer of Varo, Inc.
Mr. Gero also serves as a director of the following public companies:
Recognition Equipment, Inc., engaged in providing hardware, software and
services to automate work processing systems; American Medical Electronics,
Inc., engaged in manufacturing and distributing orthopedic and neurosurgical
medical devices; and D.F. & R., Inc., engaged in the operation of restaurants.
Since July 1994, Mr. Gero has been a Director of Leslie Building Products.
GENE H. BISHOP was appointed as a Director by the Board of Directors on
April 13, 1995. From March 1975 until July 1990, Mr. Bishop was Chief Executive
Officer of MCorp, a bank holding company, and from October 1990 to November
1991, Mr. Bishop was Vice Chairman and Chief Financial Officer of Lomas
Financial Corporation, a financial services company. From November 1991 until
his retirement in October 1994, Mr. Bishop served as Chairman and Chief
Executive Officer of Life Partners Group, Inc., a life insurance holding
company, of which he continues to serve as a director. Mr. Bishop also serves as
a director of the following publicly-owned
5
<PAGE>
companies: First USA, Inc., engaged in the credit card business;
Liberte-Investors, engaged in real estate loans and investments; Southwest
Airlines Co., a regional airline; and Southwestern Public Service Company, a
public utility.
RALPH C. PEPPER, not a nominee for election as a Director, was a Director
of the Company from September 1990 until July 1994 when he resigned in
connection with the Spin-off. Since July 1994, Mr. Pepper has been a Director of
Leslie Building Products and continues to serve as President of Leslie-Locke.
FREDRIC M. ZINN, not a nominee for election as a Director, has been Chief
Financial Officer of the Company since June 1986. Since July 1994, Mr. Zinn has
been Chief Financial Officer of Leslie Building Products.
HARVEY J. KAPLAN, not a nominee for election as a Director, has been
Secretary and Treasurer of the Company since May 1985. Since July 1994, Mr.
Kaplan has been Secretary and Treasurer of Leslie Building Products. Mr. Kaplan
is a Certified Public Accountant.
Directors of the Company serve until the Company's next annual meeting of
stockholders, and until their successors are elected and qualified. Executive
officers serve at the discretion of the Board of Directors. To the knowledge of
the Company, no Executive Officer or Director is related by blood, marriage or
adoption to any other. Except for Mr. Bishop, each of the nominees named above
was elected to his present term of office at the Annual Meeting of Stockholders
held on May 12, 1994. Mr. Bishop was appointed as a Director on April 13, 1995.
During the year ended December 31, 1994, the Board of Directors held five
meetings. All Directors (excluding Mr. Bishop) attended all meetings of the
Board of Directors.
The Company has an Audit Committee of the Board of Directors consisting of
Messrs. Rose, Abrams and Gero. The functions of the Audit Committee are to
review the Company's annual and quarterly reports, review the independence of
and ratify the selection of the independent auditors for the Company, conduct
pre-audit and post-audit reviews with both financial management and the
independent auditors, and assist in the development of the Company's annual
business plan. The Audit Committee held two meetings during the year ended
December 31, 1994.
The Company has a Stock Option Plan Committee, consisting of Messrs. Rose
and Gero, to determine and designate employees and Directors of the Company who
are to be granted options, the number of shares subject to options, the nature
and terms of the options to be granted, and to otherwise administer the
Non-Qualified Stock Option Plan. Mr. Gero became a member of the Stock Option
Plan Committee subsequent to the resignation of Ralph C. Pepper as a member of
such Committee. See 'ELECTION OF DIRECTORS--Executive Compensation.' The Stock
Option Plan Committee held three meetings during the year ended December 31,
1994.
The Company has a Compensation Committee of the Board of Directors
consisting of Messrs. Rose and Gero. The functions of the Compensation Committee
are to develop compensation policies with respect to the Company's executive
officers based, in part, on performance-related criteria, and to make
recommendations to the Board of Directors regarding compensation of executive
officers in accordance with such policies.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth the annual and long-term cash and noncash
compensation for each of the last three calendar years awarded to or earned by
the President and Chief Executive Officer of the Company and the Company's four
other most highly compensated executive officers (such five executive officers
collectively, the 'named executive officers') during the year ended December 31,
1994.
A portion of the cash and noncash compensation set forth in the table paid
to Messrs. Leigh J. Abrams, Fredric M. Zinn and Harvey J. Kaplan during the year
ended December 31, 1994 was charged to Leslie Building Products pursuant to the
Shared Services Agreement. See footnote 6 below and 'The Company.'
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ---------------
NAME AND PRINCIPAL CALENDAR OTHER ANNUAL NUMBER OF STOCK ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS AWARDED COMPENSATION
- - - - - - ------------------------ -------- -------- -------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Leigh J. Abrams(1) ..... 1994(6) $180,000 $264,181(2) $ 5,490 17,370 $2,248
President and Chief 1993 180,000 184,350(2) 4,307 2,248
Executive Officer 1992 180,000 106,411(3) 3,335 2,857
Fredric M. Zinn ........ 1994(6) $125,000 $ 85,300(2) $ 9,309 17,370 $2,248
Chief Financial 1993 125,000 59,650(2) 8,659 4,000 2,248
Officer 1992 120,000 42,000 6,891 2,256
Harvey J. Kaplan ....... 1994(6) $100,000 $ 65,296(2) $ 2,869 5,790 $2,248
Secretary and 1993 100,000 53,648(2) 3,723 2,500 2,248
Treasurer 1992 100,000 42,000 3,326 1,813
David L. Webster(4) .... 1994 $125,000 $777,719(2) $ 2,581 34,738 $2,248
President of Kinro, 1993 125,000 529,351(2) 2,077 2,000 2,698
Inc. 1992 125,000 438,629(3) 1,968 2,815
Ralph C. Pepper ........ 1994(5) $ 87,500 $ 25,000 $ 1,390 5,000 $ 682
President of 1993 150,000 100,000 8,600 1,152
Leslie-Locke, Inc. 1992 150,000 100,000(3) 11,772 1,162
</TABLE>
- - - - - - ------------------
(1) Mr. Abrams receives incentive compensation for each fiscal year equal to
2 1/2% of each of the Company's and Leslie Building Products' income before
income taxes and extraordinary items, subject to certain adjustments.
(2) Beginning in 1993, Messrs. Abrams, Zinn, Kaplan and Webster received
payments pursuant to a discretionary retirement bonus program. These bonuses
must be used to purchase specified tax deferred annuities and/or cash value
life insurance contracts. For 1994, Mr. Abrams received $30,000, Mr. Zinn
received $15,300, Mr. Kaplan received $13,296 and Mr. Webster received
$50,000 pursuant to this discretionary retirement bonus program.
(3) For Messrs. Abrams, Webster and Pepper, 1992 bonuses are for the fiscal year
ended August 31, 1992. Bonuses for the four month transition period ended
December 31, 1992 (resulting from a change of the Company's year end) are
not included in the Summary Compensation Table.
(Footnotes continued on next page)
7
<PAGE>
(Footnotes continued from previous page)
(4) Effective September 1, 1986, Kinro entered into an employment agreement with
Mr. Webster which, as amended, provides for Mr. Webster's employment through
August 31, 1996 at a salary of $125,000 per annum plus, for fiscal 1992 and
1993, a performance bonus equal to 5% of Kinro's Operating Profit (as
defined) in excess of Operating Profit (as defined) for fiscal 1991. Mr.
Webster received $129,440 as a performance bonus for fiscal 1992, of which
$96,033 was applied to reduce a loan due from Mr. Webster to Kinro. Mr.
Webster also receives a discretionary bonus determined by the Compensation
Committee based upon Kinro's Operating Profit (as defined) for each fiscal
year.
(5) Since the July 1994 Spin-off, Leslie Building Products (parent of
Leslie-Locke, Inc.) has been a stand-alone company. The compensation shown
for Mr. Pepper is applicable to the seven-month period prior to the
Spin-off.
(6) Of the aggregate compensation paid to Messrs. Abrams, Zinn and Kaplan, an
aggregate of $201,000 was charged to Leslie Building Products for the
five-month period subsequent to the Spin-off pursuant to the Shared Services
Agreement, of which $114,000 was applicable to Mr. Abrams, $54,000 was
applicable to Mr. Zinn, and $33,000 was applicable to Mr. Kaplan. For the
seven-month period prior to the Spin-off, the Company allocated to
Leslie-Locke corporate overhead, including compensation paid to the
foregoing officers, based upon a percentage of combined net sales.
STOCK OPTION PLAN
See 'ADOPTION OF AMENDED AND RESTATED STOCK OPTION PLAN' for a discussion
of the proposal to approve and adopt an amended and restated stock option plan.
In January 1988, stockholders approved the Drew Industries Incorporated
1988 Non-Qualified Stock Option Plan (the 'Non-Qualified Plan') which was
amended with stockholder approval in January 1993 and May 1994.
Since 1988, options to purchase 609,489 shares of Common Stock were granted
to approximately 65 employees in addition to seven Executive Officers and
Directors at exercise prices ranging from $2.483 to $8.528 per share. Of such
options, options to purchase 262,570 shares of Common Stock have been exercised.
The aggregate shares issued and issuable upon exercise of such options,
including 170,511 shares available for grant, represented on March 31, 1995
approximately 14% of the aggregate Common Stock outstanding.
Employees of the Company and any of its subsidiaries, and Directors of the
Company, whether or not they are employees, are eligible to receive options
under the Non-Qualified Plan. The Board of Directors appointed a Committee,
which consists of Messrs. Rose and Gero to administer the Non-Qualified Plan and
to determine and designate employees and Directors who are to be granted stock
options under the Non-Qualified Plan. For so long as they serve as members of
the Committee, Messrs. Rose and Gero cannot receive further options pursuant to
the Non-Qualified Plan. If the Amended and Restated Stock Option Plan is
adopted, members of the Committee will automatically be granted options under
certain circumstances.
The option price under the Non-Qualified Plan is 100% of the fair market
value (the closing market price) of the Common Stock on the date of grant of the
stock option. No stock option granted under the Non-Qualified Plan may be
exercised more than ten years from the date it is granted.
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<PAGE>
OPTION GRANTS IN 1994
The following table summarizes stock options granted during 1994 to the named
executive officers.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
------------------------------------------------- ------------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED 1994 PRICE DATE 5% 10%
- - - - - - ------------------------------------- ---------- ------------ -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Leigh J. Abrams...................... 17,370 7.1% $7.341 1/31/99 $35,230 $ 77,848
Fredric M. Zinn...................... 17,370 7.1% $7.341 1/31/99 $35,230 $ 77,848
Harvey J. Kaplan..................... 5,790 2.4% $8.528 5/31/99 $13,642 $ 30,145
David L. Webster..................... 34,738 14.3% $8.528 3/31/99 $81,847 $180,861
</TABLE>
OPTION EXERCISES IN 1994 AND YEAR-END VALUES
The following table presents the value of unexercised options held by the
named executive officers at December 31, 1994. No stock options were exercised
by the named executive officers during 1994.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
DECEMBER 31, 1994 DECEMBER 31, 1994(1)
EXERCISABLE (E) EXERCISABLE (E)
NAME UNEXERCISABLE (U) UNEXERCISABLE (U)
- - - - - - ------------------------------ ---------------------- --------------------
<S> <C> <C>
Leigh J. Abrams............... 17,300(U) $ 17,961(U)
Frederic M. Zinn.............. 17,370(U) $ 17,961(U)
4,632(E) $ 10,792(E)
Harvey J. Kaplan.............. 5,790(U) 0
2,894(E) $ 6,743(E)
David L. Webster.............. 34,738(U) 0
2,316(E) $ 5,396(E)
</TABLE>
- - - - - - -----------------------
(1) Market value of Common Stock at December 31, 1994 ($8.375) minus the
exercise price.
COMPENSATION OF DIRECTORS
Edward W. Rose, III, Chairman of the Board of Directors, receives an annual
director's fee of $24,000, payable $2,000 per month, plus $1,000 for attendance
at each meeting of the Board of Directors and $500 for attendance at each
Committee Meeting. In 1994, Mr. Rose received a $30,000 payment pursuant to a
discretionary retirement bonus program intended to provide retirement income.
Messrs. James F. Gero and Gene H. Bishop each receive an annual director's fee
of $9,000, payable $750 per month, plus $500 for attendance at each meeting of
the Board of Directors and $500 for attendance at each meeting of Committees of
the Board of Directors on which they serve.
EMPLOYMENT CONTRACTS
See footnote 4 to Summary Compensation Table for a description of the
employment agreement between Kinro, Inc., a subsidiary of the Company, and David
L. Webster, President of Kinro, Inc. and a Director of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company serves on the Compensation Committee,
and there are no 'interlocks,' as defined by the Securities and Exchange
Commission.
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REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION POLICY
The Compensation Committee of the Board of Directors (the 'Committee')
consists of two non-employee directors, Edward W. Rose, III and James F. Gero.
The Committee has the responsibility of developing the policies which govern
compensation for executive officers, and making recommendations to the Board of
Directors regarding compensation of executive officers in accordance with such
policies.
The Company's executive compensation policy is designed to enable the
Company to attract, motivate and retain senior management by providing a
competitive compensation opportunity based significantly on performance. The
objective is to provide fair and equitable compensation to senior management in
a way that rewards management for reaching and exceeding objectives. The
compensation policy links a significant portion of executive compensation to the
Company's performance, recognizes individual contribution as well as overall
business results, and aligns executive and stockholder interest. The primary
components of the Company's executive compensation are base salary,
performance-related incentive compensation, stock options and discretionary
bonuses. While the components of compensation are considered separately in this
report, the Committee takes into account the full compensation package provided
by the Company to each of its executives, including pension benefits, severance
obligations, insurance and other benefits.
Each year the Committee will review the Company's compensation policy
utilizing both internal and external sources of information and analysis
relating to corporate performance, total return to stockholders of comparable
companies, and compensation afforded to executives by competitors of the
Company. If appropriate, changes will be recommended.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER IN 1994
The compensation policy applied by the Company in establishing the
compensation for Leigh J. Abrams, the Company's President and Chief Executive
Officer, is essentially the same as for other senior executives of the
Company--to provide a competitive compensation opportunity that rewards Company
performance and recognizes individual contribution.
Pursuant to the Shares Services Agreement entered into between the Company
and Leslie Building Products in connection with the Spin-off, a portion of Mr.
Abrams' compensation for the five-month period subsequent to the Spin-off in the
approximate amount of $114,000, representing 60.5% of his total compensation for
that period, was charged to Leslie Building Products as the fair market value of
services rendered by Mr. Abrams to Leslie Building Products.
For calendar 1994, Mr. Abrams received base compensation of $180,000, plus
incentive compensation of $234,181, equal to 2 1/2% of the Company's and Leslie
Building Products' income before income taxes and extraordinary items, subject
to certain adjustments. Mr. Abrams receives medical and life insurance, and
certain other benefits. In 1994, Mr. Abrams was also awarded an additional
payment of $30,000 pursuant to a discretionary retirement bonus program intended
to provide retirement income. This bonus must be used to purchase specified tax
deferred annuities or cash value life insurance contracts.
COMPENSATION OF EXECUTIVE OFFICERS IN 1994
As with the Chief Executive Officer, compensation of other executive
officers is intended to reward performance and recognize individual
contribution. Accordingly, the chief executive officer of the Company's
subsidiary receives compensation based upon the results of operations of such
subsidiary.
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<PAGE>
For calendar 1994, David L. Webster, President of Kinro, received base
salary of $125,000, and a discretionary bonus of $727,719 based on Kinro's
results of operations. For 1994, Mr. Webster also received a payment of $50,000
pursuant to a discretionary retirement bonus program intended to provide
retirement income. Bonuses received pursuant to this program must be used to
purchase either specified tax deferred annuities or cash value life insurance
contracts.
Other Executive Officers of the Company and its subsidiaries receive
bonuses based upon their respective levels of organizational responsibility and
the performance of the Company or the subsidiary by which they are employed.
STOCK OPTIONS
The Company's Non-Qualified Stock Option Plan (the 'Non-Qualified Plan')
provides for the grant of options to employees of the Company and its
subsidiaries, and to Directors of the Company, to purchase the Company's Common
Stock. The exercise price of the option is 100% of the fair market value (the
closing market price) of the Company's Common Stock on the date of grant of the
options. A Stock Option Committee consisting of Edward W. Rose, III and James F.
Gero administers the Non-Qualified Plan and determines and designates employees
and Directors who are to be granted options. For so long as they serve as
members of the Stock Option Committee, Messrs. Rose and Gero cannot receive
options under the Non-Qualified Plan. See 'Adoption of Amended and Restated
Stock Option Plan' for a discussion of the proposal to amend the Non-Qualified
Plan to provide, among other things, for automatic awards of options to members
of the Stock Option Committee under certain circumstances.
Because all options under the Non-Qualified Plan are granted at fair market
value, any value which is ultimately realized by Executive Officers through
stock options is based entirely on the Company's performance, as perceived by
investors in the Company's Common Stock who establish the price for the Common
Stock on the open market.
BENEFITS
The Company maintains certain broad-based employee benefit plans in which
Executive Officers participate, including an employee retirement savings plan
(401(k) Plan) and other retirement, life and health insurance plans. The Company
also provides an automobile or automobile allowance to its Executive Officers.
The incremental cost to the Company of these benefits is less than 10% of the
Executive Officers' 1994 base salaries.
CONCLUSION
A significant portion of the Company's executive compensation is linked
directly to individual performance and Company earnings. The Committee intends
to continue to determine compensation based upon these factors.
COMPENSATION COMMITTEE
Edward W. Rose, III
James F. Gero
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<PAGE>
COMPARATIVE STOCK PERFORMANCE
The following graph compares, for the last five calendar years, the
cumulative stockholder return on the Common Stock of the Company with the
cumulative return on the Russell 2000 Index and on the common stocks of the
companies included in the AMEX Housing Construction and Land Development Index.
This Index was selected because, as a result of the Spin-Off, the Company is no
longer engaged in the business conducted by Leslie-Locke, and the representative
peer group of companies with which the Company's performance was compared in the
prior year is not appropriate.
The graph assumes investment of $100 on December 31, 1989 in the Company's
Common Stock, the Russell 2000 Index, the AMEX Housing Construction and Land
Development Index, and the common stocks of the peer group companies, and
assumes that any dividends were reinvested. As required when peer groups are
changed, the graph also reflects a comparison of the Company's performance to
the peer group for the prior year.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG DREW INDUSTRIES INCORPORATED, THE RUSSELL 2000 INDEX,
THE AMEX HOUSING CONSTRUCTION & LAND DEVELOPMENT INDEX AND A PEER GROUP
Drew Industries Russell AMEX Housing Construction Peer
Incorporated 2000 Index & Land Development Group
--------------- ---------- ------------------------- -----
December 31:
1989.......... 100 100 100 100
1990.......... 59 80 52 67
1991.......... 166 117 63 85
1992.......... 510 139 77 106
1993.......... 462 166 113 203
1994.......... 523 163 116 159
* $100 INVESTED ON 12/31/89 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
INDEMNIFICATION
Section 145 of the Delaware General Corporation Law empowers a domestic
corporation to indemnify any of its officers, directors, employees or agents
against expenses, including reasonable attorney's fees, judgments, fines and
amounts paid in settlement which were actually and reasonably incurred by such
person in connection with any action, suit or similar proceeding brought against
them because of their status as officers, directors, employees or agents of the
Company if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Company. If the claim was brought against any such person by or in the right of
the Company, the Company may indemnify such person for such expenses if such
person acted in good faith and in a manner reasonably believed by such person to
be in or not opposed to the best interests of the Company, except no indemnity
shall be paid if such
12
<PAGE>
person shall be adjudged to be liable for negligence or misconduct unless a
court of competent jurisdiction, upon application, nevertheless permits such
indemnity (to all or part of such expenses) in view of all the circumstances.
The Company's Restated Certificate of Incorporation provides that the
Company may indemnify its officers, directors, employees or agents to the full
extent permitted by Section 145 of the Delaware General Corporation Law.
Accordingly, no director of the Company is liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
II. ADOPTION OF AMENDED AND RESTATED STOCK OPTION PLAN
INTRODUCTION
At the Annual Meeting, there will be presented to stockholders a proposal
to approve the adoption of an amended and restated Stock Option Plan (the
'Plan') which was adopted by the Board of Directors on January 26, 1995, subject
to stockholder approval.
Since 1988, options to purchase an aggregate of 609,489 shares of Common
Stock were granted to approximately 65 employees in addition to seven Executive
Officers and Directors at exercise prices ranging from $2.483 to $8.528 per
share. Of such options, options to purchase 262,570 shares of Common Stock have
been exercised. The aggregate shares issued and issuable upon exercise of such
options, including 170,511 shares available for grant, represented on March 31,
1995 approximately 14% of the aggregate Common Stock outstanding.
Management believes that the Company's long-term success is dependent upon
the ability of the Company to attract and retain qualified employees and
Directors and to motivate their best efforts on behalf of the Company's
interest. It is the view of Management that stock options constitute an
important part of the Company's compensation of its officers and other
employees, and will make service on the Board of Directors and its Committees
more attractive by providing an incentive to increase participation in the
Company's long-term success.
At the Annual Meeting, there will be presented to stockholders a proposal
to approve the adoption of an amended and restated stock option plan. The full
text of the proposed plan appears as Exhibit 'A' to this Proxy Statement.
STOCK OPTION PLAN
On March 29, 1995, the Board of Directors adopted, subject to stockholder
approval, amendments to the Drew Industries Incorporated 1988 Non-Qualified
Stock Option Plan and restated it as the Drew Industries Incorporated Stock
Option Plan (the 'Plan'). The Plan enables the Company to grant to Directors and
key employees of the Company and its subsidiaries options to purchase the
Company's Common Stock, and reflects changes in applicable laws since 1988. The
Plan provides for the grant of stock options that qualify either as incentive
stock options ('ISOs') under Section 422 of the Code or non-qualified stock
options ('NQSOs').
The amendments make the following material changes to the existing
Non-Qualified Plan: (i) ISOs may be granted under the Plan; (ii) members of the
Stock Option Plan Committee (the 'Committee') will receive Formula Options,
enabling them to maintain their disinterested status under the securities and
tax laws; (iii) the Plan limits the number of shares for which options may be
granted to any individual; (iv) the Plan provides rules governing the exercise
of options by deceased, disabled or terminated employees and Directors, and (v)
the Plan makes available a number of alternative methods for grantees of options
to pay for the Common Stock purchased pursuant to options. The amendments apply
only to the 170,511 shares which remain available for grant under the plan.
Under the Plan, since 1988 the Committee has granted options to purchase
609,489 shares of Common Stock and is authorized to grant options to purchase up
to an additional 170,511 shares (representing an aggregate of 780,000 shares or
approximately 14% of the Company's issued and
13
<PAGE>
outstanding Common Stock). The remaining 170,511 shares available for grant have
been allocated 25,000 shares to Non-Employee Directors and members of the
Committee and 145,511 shares to eligible employees, provided that no grantee,
whether or not now a participant in the Plan, can be hereafter granted options
to purchase more than an aggregate of 25,000 shares under the Plan.
The Committee has sole and complete authority to determine the individuals
eligible to receive stock options under the Plan, and to determine the number of
stock options to be granted to eligible individuals, as well as the terms and
conditions under which grants will be made (including limitations, restrictions
or prohibitions upon the exercise of stock options), except that Non-Employee
Directors are not eligible for ISOs. The Committee will determine the period for
which each stock option may be exercisable, but in no event may a stock option
be exercisable more than 10 years from the date of grant thereof. The number of
shares available under the Plan, and the exercise price of options granted under
the Plan, are subject to adjustments that may be made by the Committee to
reflect stock splits, stock dividends, recapitalizations, mergers, or other
major corporate action.
The exercise price for options granted under the Plan will be determined by
the Committee in its sole discretion, provided that the exercise price in the
case of incentive stock options will be at least equal to 100% of the fair
market value of the Common Stock subject to such option on the date of grant.
The exercise price may be paid in cash or in shares of Common Stock. Options
granted under the Plan become exercisable in annual installments determined by
the Committee and are also subject to performance criteria. An ISO may not be
granted to an individual who is treated as a '10% Shareholder' of the Company
under Section 422 of the Code, unless the exercise price is 110% of fair market
value on the date of grant and the ISO is exercisable for a period not longer
than five years from the date of grant.
The Board of Directors is authorized to terminate, suspend or amend the
Plan; provided that the amendment or termination cannot affect the validity of
any then outstanding stock option previously granted under the Plan, and
provided further that the Board of Directors cannot without stockholder
approval; (a) increase the maximum number of shares covered by the Plan or
change the class of employees eligible to receive stock options; (b) reduce the
option price for ISO's below the fair market value of the Common Stock on the
date of the grant of such option; or (c) extend beyond l0 years from the date of
the grant the period within which an option may be exercised. The Plan will
terminate on December 31, 2003 and no option may be granted after its
termination date. Options granted prior to the termination date may be exercised
in accordance with their terms beyond the termination date.
Each member of the Committee will automatically be awarded an option
('Formula Option') to purchase 2,500 shares of Common Stock on the December 31st
of each year in which such Committee Member has served not less than twelve
consecutive months as a Director of the Company. Such Formula Options will
immediately vest and will be exercisable during the five-year period following
the date of grant. The purchase price of the Common Stock subject to the Formula
Options shall be not less than 100% of the fair market value of the Common Stock
on the date such Formula Option is granted, subject to adjustment as provided in
the Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following are the tax consequences resulting from the receipt and
exercise of the options granted under the Plan:
Under Section 422 of the Code, no regular income tax consequences result
from the grant of an ISO or the exercise of an ISO by the employee provided the
employee continues to hold the Common Stock acquired on the exercise of an ISO
for the requisite holding periods described below. The employee will be taxed
only upon the sale or disposition of the Common Stock acquired under an ISO and
the gain recognized at the time will be long-term capital gain. The holding
period requirements necessary for ISO treatment are as follows: (i) such Common
Stock must not have been disposed of within two years from the date the ISO was
granted, and (ii) such Common Stock must have been held for at least one year
from the date the Common Stock was transferred to the employee upon the exercise
of the ISO. In addition, to receive ISO treatment, the option holder
14
<PAGE>
generally must be an employee of the Company or its subsidiaries from the date
the stock option was granted until three months before the date of exercise.
The amount by which the fair market value of the Common Stock received upon
exercise of an ISO exceeds the option price constitutes an item of tax
preference that may be subject to the alternative minimum tax. If an employee is
subject to the alternative minimum tax as a result of the exercise of any ISO,
for purposes of calculating the gain on a disposition of such Common Stock
solely for purposes of the alternative minimum tax, the amount treated as a
preference item will be added to his tax basis for the Common Stock.
If an employee disposes of Common Stock acquired through exercise of an ISO
before expiration of the applicable holding periods, the employee will realize
compensation income on the date of disposition measured by the lesser of: (i)
the fair market value of the Common Stock on the date of exercise of the ISO
minus the option price, or (ii) the amount realized on disposition minus the
option price. Any additional gain would be treated as either long-term or
short-term capital gain, depending on whether or not the Common Stock was held
by an employee for at least one year prior to sale or disposition.
Gain realized by an employee upon the disposition of the Common Stock
acquired by exercise of an ISO is taxable in the year of disposition, but such
income is not subject to income tax withholding if the requisite holding periods
have been satisfied. If either of the holding periods is not satisfied, however,
disposition of the Common Stock may result in taxable income to the employee as
additional compensation which is subject to withholding. The employee must
reimburse the Company (or the employer subsidiary) at the rate of 28% of that
compensation, as determined by the Company to satisfy the Company's withholding
tax liability for Federal income taxes, in addition to any state or local
government withholding taxes.
With regard to NQSO's, the participant will recognize ordinary income at
the time of the exercise of the option in an amount equal to the difference
between the exercise price and the fair market value of the Common Stock
received on the date of exercise. If the exercising participant is an employee,
such income will be subject to withholding. When the participant disposes of the
Common Stock acquired upon the exercise of the option, any amount received in
excess of the fair market value of the shares on the date of exercise will be
treated as long or short-term capital gain, depending upon the holding period of
the shares. If the amount received is less than the fair market value of the
Common Stock on the date of exercise, the loss will be treated as long or short-
term capital loss, depending upon the holding period of the Common Stock.
The Company or its subsidiary (if the subsidiary is the employer) will not
be entitled to a deduction upon the exercise of an ISO or the later sale of
Common Stock acquired on exercise of an ISO unless the employee recognizes
compensation income upon such exercise or sale. In this case, the Company or the
employer subsidiary will be entitled to a deduction equal to the amount of
compensation income recognized by the employee. With regard to NQSOs, the
Company or the employer subsidiary will be entitled to a deduction equal to the
amount of compensation income recognized by the participant upon exercise of the
option.
The foregoing discussion is merely a summary of the more significant
effects of the Federal income tax on an employee and the Company with respect to
the receipt and exercise of options granted under the Plan and does not purport
to be a complete analysis of the tax laws dealing with this subject. Reference
should be made to the applicable provisions of the Code and the Regulations
promulgated thereunder. In addition, this summary does not discuss the
provisions of the income tax laws of any state or foreign country in which an
employee may reside. Each employee will be advised to consult his or her own tax
advisor concerning the Federal (and any state and local) income tax consequences
of receipt and exercise of options.
VOTE
The favorable vote of a majority of the votes cast at the Annual Meeting is
required to approve the adoption of the Plan.
Management recommends that you vote FOR approval of the adoption of the
Plan.
15
<PAGE>
III. APPROVAL OF 1995 EMPLOYEE STOCK PURCHASE PLAN
INTRODUCTION
At the Annual Meeting, there will be presented to stockholders a proposal
to approve the adoption of the 1995 Employee Stock Purchase Plan (the 'Stock
Purchase Plan'), which was adopted by the Board of Directors on March 29, 1995,
subject to stockholder approval.
The Stock Purchase Plan is summarized below. However, the summary is
qualified in all respects by the full text of the Stock Purchase Plan which
appears as Exhibit 'B' to this Proxy Statement.
The Stock Purchase Plan provides all regular full-time employees of the
Company and its subsidiaries a convenient and cost-effective means to purchase
shares of the Company's Common Stock on a voluntary basis through payroll
deductions, without paying commissions. The Company does not make any
contributions to the Stock Purchase Plan. Management believes that the Stock
Purchase Plan provides employment incentive, and encourages stock ownership by
employees, thereby increasing the employees' interest and participation in the
success of the Company.
SHARES SUBJECT TO THE STOCK PURCHASE PLAN
A total of 250,000 shares of Common Stock of the Company will be available
for issuance under the Stock Purchase Plan. In the event of a stock split, stock
dividend or other subdivision, combination or reclassification of the Company's
Common Stock, appropriate adjustments will be made with respect to the maximum
number of shares subject to, and the purchase price for the shares under, the
Stock Purchase Plan.
OPERATION OF THE PURCHASE PLAN
The Stock Purchase Plan provides eligible employees with the opportunity to
purchase shares of Common Stock, without paying commissions, pursuant to a
payroll deduction program. The Stock Purchase Plan provides for six offering
periods (the 'Offering Periods') during which employee contributions may be made
to purchase shares of Common Stock. Generally, each Offering Period be will for
one year, except the initial Offering Period which will be for the six month
period beginning July 1, 1995 and the last Offering Period which will be for the
six month period beginning January 1, 2000. Each Offering Period is divided into
interim three-month purchase periods (the 'Interim Purchase Period'). At the end
of each Interim Purchase Period, shares will be purchased automatically at 85%
of the market price at the beginning of each Offering Period or on the last day
of each Interim Purchase Period, whichever is lower.
The number of shares purchased pursuant to the Stock Purchase Plan will be
credited to the participant's plan account and held in the name of a nominee for
the participant. Notice of each purchase will be furnished to the participant.
Certificates representing shares purchased pursuant to the Stock Purchase Plan
will be issued and delivered to the participant upon the participant's written
request or upon withdrawal from the Stock Purchase Plan.
A participant will have all rights as a stockholder with respect to any
shares purchased under the Stock Purchase Plan from the date such shares are
credited to the participant's plan account. A participant will be entitled to
exercise any and all voting rights with respect to any shares held on behalf of
the participant by the nominee, and will be entitled to all dividends or other
distributions made with respect to any such shares held by the nominee.
An employee may have up to 10% of his total compensation (including
commissions, overtime and bonuses, but excluding benefits) withheld and applied
to the purchase of shares under the Stock Purchase Plan. However, during any
Offering Period no employee is entitled to purchase Common Stock under the Stock
Purchase Plan which together with Common Stock which the employee may purchase
under any other qualified stock purchase plan maintained by the Company, has a
fair market value (regardless of purchase price) in excess of $25,000 (or
$12,500
16
<PAGE>
for the first and last Offering Periods), or more than 5,000 shares (or 2,500
shares for the first and last Offering Periods). Aggregate purchases by all
employees during any Offering Period may not exceed 50,000 shares (or 25,000
shares for the first and last Offering Periods). Shares available but not
purchased during any Offering Period are carried over to and may be purchased
during subsequent Offering Periods.
ELIGIBILITY AND ENROLLMENT
All employees of the Company and its subsidiaries who have been
continuously employed for a period of at least six months prior to the
commencement of each Interim Purchase Period may participate in the Stock
Purchase Plan. However, employees who are customarily employed for less than 20
hours per week or for less than five months in any calendar year are not
eligible to partici-pate. Further, any employee who owns, or holds options to
acquire, or who, as a result of participation in the Stock Purchase Plan, would
own or hold options to acquire an aggregate of five percent or more of the
Company's Common Stock is not eligible to participate in the Stock Purchase
Plan.
An employee may enroll in the Stock Purchase Plan on January 1st or July
1st of each Offering Period. An employee who joins the Stock Purchase Plan after
the beginning of the Offering Period will have a purchase price equal to 85% of
the market price on the effective date of joining the Stock Purchase Plan or on
the date of purchase, whichever is lower.
WITHDRAWAL; TERMINATION; RE-ENROLLMENT
A participant may withdraw from the Stock Purchase Plan at any time. The
Stock Purchase Plan allows for re-enrollment on the first entry date occurring
after six months following withdrawal. Termination of a participant's employment
for any reason, including retirement or death, or the participant's failure to
remain an eligible employee, also terminates participation in the Stock Purchase
Plan. In the event of termination, all payroll deductions previously credited to
the participant's account and not applied to the purchase of shares will be
returned, without interest. Certificates representing shares purchased prior to
such termination will be furnished to the participant.
ADMINISTRATION
The Stock Purchase Plan is administered by the Board of Directors of the
Company, or by a Committee appointed by the Board. The Board or any Committee so
appointed has the power to make, amend and repeal rules and regulations for the
interpretation and administration of the Stock Purchase Plan, all of which are
final and binding upon each participant.
DURATION AND MODIFICATION
The Stock Purchase Plan will remain in effect until June 30, 2000 unless
terminated earlier by action of the Board of Directors or until all of the
shares reserved for issuance thereunder have been issued. The Stock Purchase
Plan may be terminated or amended from time to time by the Board of Directors,
provided that a participant's existing rights cannot be adversely affected
thereby, nor may any amendment be made without the approval of stockholders of
the Company if such amendment would authorize a sale of more shares than are
authorized for issuance, materially modify the requirements for eligibility to
participate in the Stock Purchase Plan, increase the maximum number of shares
which a participant may purchase during any Offering Period, extend the term of
the Stock Purchase Plan, alter the purchase price formula so as to reduce the
price per share to be purchased under the Stock Purchase Plan, materially
increase the benefits accorded to participants under the Stock Purchase Plan, or
cause the Stock Purchase Plan to fail to meet the requirements of an 'employee
stock purchase plan' under Section 423 of the Code. If the stockholders of the
Company do not approve the Stock Purchase Plan, it will automatically terminate.
17
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The Stock Purchase Plan is intended to qualify under the provisions of
Sections 421 and 423 of the Code. Under these provisions, no income will be
taxable to an employee at the time shares are purchased under the Stock Purchase
Plan. An employee will be subject to tax upon disposition or sale of the shares
acquired under the following rules:
1. If the shares are sold at least two years after the first day of
the Offering Period (or such employee's entry date, if later) during which
the employee purchases the shares, and more than one year after the
purchase of the shares by the employee, the employee will recognize
ordinary income equal to the lesser of (a) the excess of the fair market
value of the shares on the first day of the Offering Period (or entry date)
over the purchase price of the shares, or (b) the excess of the fair market
value of the shares at the time such shares are disposed of over their
purchase price. Any additional gain recognized upon such sale will be
treated as long-term capital gain. If the shares are sold and the sale
price is less than the purchase price, the employee will not recognize any
ordinary income and he or she will recognize a long-term capital loss equal
to the difference.
2. If the shares are sold or disposed of prior to the expiration of
two years after the first day of the Offering Period (or the employee's
entry date, if later) during which the employee purchases the shares or
less than one year after the employee acquired the shares, the excess of
the fair market value of the shares at the date of purchase over the
purchase price will be treated as ordinary income to the employee. The
balance of any gain will be treated as a capital gain and will qualify for
long-term capital gain treatment if the shares have been held more than one
year following the purchase. If the shares are not held for the requisite
time and are later sold for less than their fair market value on the date
of purchase, the employee will recognize the same amount of ordinary
income, and he or she will have a capital loss equal to the difference
between the sale price and the fair market value of the shares on such
purchase date.
The amount of ordinary income recognized by the employee will be added to
the actual purchase price of the shares to determine the employee's tax basis of
the shares for the purpose of calculating capital gain or loss.
The Company is entitled to a deduction for amounts treated as ordinary
income to an employee if the employee disposes of the shares prior to the
expiration of the two-year or one-year periods described above. The Company will
not be entitled to any deduction if the employee satisfies both of these holding
periods.
In the event an employee dies while owning stock acquired under the Stock
Purchase Plan, the employee's final income tax return will reflect income in an
amount equal to the lesser of (a) the excess of the fair market value of the
shares at the time the shares were purchased over the purchase price of the
shares or (b) the excess of the fair market value of the shares at the time of
the employee's death over the purchase price of the shares.
The foregoing discussion is merely a summary of the more significant
effects of the Federal income tax on an employee and the Company with respect to
the shares purchased under the Stock Purchase Plan and does not purport to be a
complete analysis of the tax laws dealing with this subject. Reference should be
made to the applicable provisions of the Code and the Regulations promulgated
thereunder. In addition, this summary does not discuss the provisions of the
income tax laws of any state or foreign country in which an employee may reside.
Each employee will be advised to consult his or her own tax advisor concerning
the Federal (and any state and local) income tax consequences of participation
in the Stock Purchase Plan.
18
<PAGE>
VOTE
The favorable vote of a majority of the votes cast at the Annual Meeting is
required to approve the adoption of the Stock Purchase Plan.
Management recommends that you vote FOR approval of the adoption of the
Stock Purchase Plan.
IV. AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
It is proposed that the stockholders approve and adopt an amendment to the
Company's Restated Certificate of Incorporation which would eliminate Preferred
Stock from the Company's authorized capital stock. The full text of the
amendment appears as Exhibit 'C' to this Proxy Statement.
At present, the Company is authorized to issue 20,000,000 shares of Common
Stock, par value $0.01 per share, of which 4,933,624 shares are issued and
outstanding, and 10,000,000 shares of Preferred Stock, par value $5.00 per
share, none of which have been issued. Under Delaware law, the Company is
required to pay a franchise tax based on its authorized capital stock.
Accordingly, the Company has been paying franchise taxes of approximately
$10,000 per year allocable to its authorized Preferred Stock. Management does
not anticipate the need to issue Preferred Stock in the future. The effect of
the amendment will be to eliminate the Preferred Stock thereby avoiding payment
of the applicable franchise taxes.
The favorable vote of a majority of the votes cast at the Annual Meeting is
required to approve the adoption of the amendment.
Management recommends that you vote FOR approval of the adoption of the
amendment.
V. APPOINTMENT OF AUDITORS
It is proposed that the stockholders ratify the appointment by the Board of
Directors of KPMG Peat Marwick LLP as independent auditors for the purpose of
auditing and reporting upon the consolidated financial statements of the Company
for the year ending December 31, 1995. It is expected that a representative of
that firm will be present at the Annual Meeting of Stockholders to be held on
June 13, 1995 and will be afforded the opportunity to make a statement and
respond to appropriate questions from stockholders present at the meeting.
Management recommends that you vote FOR ratification of the appointment of
KPMG Peat Marwick LLP, as independent auditors for the year ending December 31,
1995.
VI. TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the only business which Management
intends to present or knows that others will present at the meeting is that set
forth herein. If any other matter or matters are properly brought before the
meeting, or any adjournment or postponement thereof, it is the intention of the
persons named in the form of Proxy solicited from holders of the Common Stock to
vote the Proxy on such matters in accordance with their judgment.
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<PAGE>
STOCKHOLDER PROPOSALS
All proposals which stockholders of the Company desire to have presented at
the Annual Meeting of Stockholders to be held in June, 1996 must be received by
the Company at its principal executive offices on or before March 1, 1996.
By Order of the Board of Directors
EDWARD W. ROSE, III
Chairman of the Board of Directors
May 10, 1995
20
<PAGE>
EXHIBIT 'A'
DREW INDUSTRIES INCORPORATED STOCK OPTION PLAN
Dated March 29, 1995
1. Purpose.
Drew Industries Incorporated, a Delaware corporation (the 'Corporation'),
desires to attract and retain directors, officers and employees of outstanding
talent. This Drew Industries Incorporated Stock Option Plan (the 'Plan') amends
and restates the Drew Industries Incorporated 1988 Non-Qualified Stock Option
Plan. As amended and restated, the Plan affords eligible directors, officers and
employees of the Corporation and its Subsidiaries the opportunity to acquire
proprietary interests in the Corporation and thereby encourages their continued
employment and highest levels of performance.
2. Scope and Duration.
(a) Awards under the Plan may be granted in the form of incentive stock
options ('incentive stock options') as provided in Section 422 of the Internal
Revenue Code of 1986, as amended (the 'Code'), and non-qualified stock options
('non-qualified options') (the term 'options' includes incentive stock options
and non-qualified options) to acquire shares of common stock of the Corporation,
par value $.01 per share (the 'Common Stock')
(b) The maximum aggregate number of shares of Common Stock as to which
awards of options may be made from time to time under the Plan is 780,000 shares
of which 170,511 shares are available for grant as of the date hereof, which
shall be allocated (i) 25,000 shares to 'Non-Employee Directors' (as defined
herein), and to members ('Committee Member') of the Committee (as defined in
Section 3(a)) only in accordance with Section 4(e) and (ii) 145,511 shares to
eligible employees. The maximum number of shares of Common Stock with respect to
which options may be hereafter granted to any existing or future participant
during the remaining term of the Plan shall not exceed 25,000 shares. Options
may be awarded under this Plan until December 31, 2003. Shares issued pursuant
to exercise of an option granted under this Plan may be, in whole or in part, as
the Board of Directors of the Corporation (the 'Board of Directors') shall from
time to time determine, authorized but unissued shares or issued shares
reacquired by the Corporation. If for any reason any shares as to which an
option (other than those described in Section 4(e)) has been granted cease to be
subject to purchase thereunder, or to the extent that any awards under the Plan
denominated in shares are surrendered to the Corporation upon the exercise of an
option in partial or complete payment of the option shares then being acquired
upon such exercise, then (unless the Plan shall have been terminated) such
shares, and any shares surrendered to the Corporation upon such exercise, shall
become available for subsequent awards under the Plan unless such shares, if so
made available for subsequent awards under the Plan, would not be exempt from
Section 16(b) of the Securities Exchange Act of 1934, as amended (the 'Exchange
Act') pursuant to Rule 16b-3, as amended, thereunder ('Rule 16b-3'); provided,
however, that shares surrendered to the Corporation upon the exercise of an
incentive stock option shall not be available for subsequent award of additional
options under the Plan. For purposes of this Plan, a 'Non-Employee Director'
shall mean a director of the Corporation or a subsidiary (as defined in Section
4(a)) who is not also an employee of the Corporation or a subsidiary and who is
not a Committee Member.
3. Administration.
(a) The Plan shall be administered by a Committee (the 'Committee')
designated by the Board of Directors consisting of members of the Board of
Directors who qualify as 'disinterested persons,' within the meaning of Rule
16b-3, and as 'outside directors' within the meaning of Section 162(m) of the
Code as may be determined by the Board of Directors.
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(b) Subject to Section 4(e), the Committee shall have plenary authority in
its sole discretion, subject to and not inconsistent with the express provisions
of this Plan: (i) to grant options, to determine the purchase price of the
Common Stock covered by each option, the term of each option, the persons
('participants') to whom options shall be granted, the time or times at which
options shall be granted and vest, and the number of shares to be covered by
each option; (ii) to establish the terms and conditions under which grants will
be made (including limitations, restrictions or prohibitions upon the exercise
of options); (iii) to designate options as incentive stock options or
non-qualified options; (iv) to interpret the Plan; (v) to prescribe, amend and
rescind rules and regulations relating to the Plan; (vi) to determine the terms
and provisions of the option agreements (which need not be identical) entered
into in connection with awards under the Plan; and (vii) to make all other
determinations deemed necessary or advisable for the administration of the Plan.
(c) The Committee may delegate to one or more of its members (or to one or
more agents) such administrative duties as it may deem advisable, and the
Committee (or any person to whom it has delegated duties as aforesaid) may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan; provided, that the
Committee may not delegate any duties to a member of the Board of Directors who
would not qualify as a 'disinterested person' to administer the Plan as
contemplated by Rule 16b-3, or other applicable rules under the Exchange Act.
The Committee may employ attorneys, consultants, accountants or other persons
and the Committee, the Corporation and its 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 participants, the
Corporation and all other interested persons. No member or agent of the
Committee shall be personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan or awards made
hereunder, and all members and agents of the Committee shall be fully
indemnified and held harmless by the Corporation in respect of any such action,
determination or interpretation.
4. Eligibility; Factors to be Considered in Making Awards.
(a) Only directors, officers and employees of the Corporation or its
subsidiaries may receive awards under the Plan. The term 'subsidiary' means any
corporation fifty-one percent (51%) or more of the common stock of which is
owned, directly or indirectly, by the Corporation. A Committee Member shall be
entitled to receive only a Formula Option in accordance with the provisions of
Section 4(e).
(b) In determining the employees and Non-Employee Directors to whom awards
shall be granted and the number of shares to be covered by each award, the
Committee shall take into account the nature and performance of such person's
duties, his or her present and potential contributions to the success of the
Corporation and such other factors as it shall deem relevant in connection with
accomplishing the purposes of the Plan.
(c) Awards may be granted singly, in combination or in tandem and may be
made in combination or in tandem with or in replacement of, or as alternatives
to, awards or grants under any other compensation plan maintained by the
Corporation or its subsidiaries.
(d) The Committee, in its sole discretion, may grant to an employee or
Non-Employee Director who has been granted an award under the Plan or any other
compensation plan maintained by the Corporation, one of its subsidiaries, or any
successor thereto, in exchange for the surrender and cancellation of such award,
a new award in the same or a different form and containing such terms, including
without limitation a price which is different (either higher or lower) than any
price provided in the award so surrendered and canceled, as the Committee may
deem appropriate.
(e) Each Committee Member who is a director of the Corporation shall
automatically be awarded an option ('Formula Option') to purchase 2,500 shares
of Common Stock, on the terms
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<PAGE>
and conditions set forth herein, on the December 31st of each year in which such
Committee Member has served not less than twelve (12) consecutive months as a
director of the Corporation. Such Formula Options shall immediately vest and
shall be exercisable during the five year period following the date of grant.
The purchase price of Common Stock subject to such Formula Options shall be not
less than 100% of the fair market value (as defined in Section 5(c)) of the
Common Stock on the date such Formula Option is granted. Such price shall be
subject to adjustment provided in paragraph 11(b).
(f) Non-Employee Directors covered by this Plan shall not be eligible for
incentive stock options.
5. Option Price.
(a) Except as set forth in Section 4(e), the purchase price of the Common
Stock covered by each option shall be determined by the Committee in its sole
discretion; provided, however, that in the case of incentive stock options, the
purchase price shall be not less than 100% of the fair market value of the
Common Stock on the date the option is granted, provided, however, that the
purchase price of an incentive stock option which is granted to an individual
who is treated as a '10% Shareholder', within the meaning of Section 422 of the
Code, shall be not less than 110% of fair market value or the date of grant.
Such price shall be subject to adjustment as provided in paragraph 11(a).
(b) The purchase price of the shares of Common Stock as to which an option
is exercised shall be paid in full at the time of exercise; payment may be made
in cash, which may be paid by check or other instrument acceptable to the
Corporation, or (if permitted by the Committee and subject to such terms and
conditions as it may determine) in shares of the Common Stock, valued at their
fair market value or by surrender of outstanding awards under the Plan. In
addition, an employee shall pay any amount necessary to satisfy applicable
federal, state or local withholding tax requirements promptly upon notification
of the amount due. The Committee may permit such withholding tax to be paid in
shares of Common Stock previously owned by the employee (but not in shares of
Common Stock that would otherwise be distributed to such employee upon exercise
of the option), or a combination of cash and shares of such previously owned
Common Stock, and any such shares shall be valued at their fair market value.
(c) For purposes of the Plan 'fair market value' of the Common Stock shall
mean:
(i) If the Common Stock is listed or admitted to trading on any
exchange or quoted through NASDAQ or any similar organization, the average
of the daily closing prices per share for the fifteen (15) consecutive
trading days immediately preceding the day as of which 'fair market value'
is being determined. The closing price for each day shall be the last sale
price regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices regular way, in either case, on
the principal national securities exchange on which the Common Stock is
listed or admitted to trading, or if the Common Stock is not so listed or
admitted to trading, the average of the highest reported bid and lowest
reported asked prices as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or through a similar organization
if NASDAQ is no longer reporting such information.
(ii) If the Common Stock is not listed or admitted to trading on any
exchange or quoted through NASDAQ or any similar organization, 'fair market
value' shall be as determined in good faith by the Board of Directors as of
a date which is within fifteen days of the date as of which the
determination is to be made.
6. Term of Options.
The term of each incentive stock option granted under the Plan shall be
such period of time as the Committee shall determine, but not more than ten
years from the date of grant, subject to earlier termination as provided in
paragraphs 9 and 10; provided, however, that the terms of an
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<PAGE>
option granted to a 10% Shareholder shall not exceed five years. The term of
each non-qualified stock option granted to an employee or Non-Employee Director
under the Plan shall be such period of time as the Committee shall determine,
subject to earlier termination as provided in paragraphs 9 and 10. The term of
each Formula Option shall be as set forth in Section 4(e).
7. Exercise of Options.
(a) Except as provided in Section 4(e), each option shall vest and become
exercisable in whole or in part, at such time and upon such criteria as the
Committee shall determine in its discretion from time to time, not inconsistent
with the express provisions of this Plan, as set forth in an option agreement to
be signed by each participant, provided that no shares into which an option has
been exercised may be sold or otherwise transferred within six months following
such option's grant date.
(b) Subject to the provisions of the Plan and unless otherwise provided in
the option agreement, an option granted under the Plan shall vest and become
exercisable in full at the earliest of the participant's death, Eligible
Retirement (as defined below), or Total Disability (as defined in paragraph 10).
For purposes of this Plan, the term 'Eligible Retirement' shall mean the date
upon which a participant, having attained the age of retirement then utilized by
the Corporation, terminates his or her employment or service as an officer or a
director with the Corporation or its subsidiary.
(c) An option may be exercised, at any time or from time to time (subject,
in the case of an incentive stock option, to such restrictions as may be imposed
by the Code), as to any or all full shares of Common Stock as to which the
option has become exercisable; provided, however, that an option may not be
exercised at any one time as to less than 100 shares of Common Stock (or less
than the number of shares as to which the option is then exercisable, if that
number is less than 100 shares).
(d) Subject to the provisions of paragraphs 9 and 10, in the case of
incentive stock options, no option may be exercised at any time unless the
holder thereof is then an employee of the Corporation or its subsidiaries. For
purposes of this subparagraph 7(d), subsidiary shall include, as under Treasury
Regulations Section 1.421-7(h)(3) and (4), example (3), any corporation which is
a subsidiary of the Corporation during the entire portion of the requisite
period of employment during which it is the employer of the holder.
(e) Upon the exercise of an option, in whole or in part, in accordance
with the Plan, the option agreement and such rules and regulations as may be
established by the Committee, the holder thereof shall have the rights of a
stockholder with respect to the shares issued as a result of such exercise.
8. Non-Transferability of Options Granted.
Options granted under the Plan shall not be transferable by the grantee
thereof otherwise than by will or the laws of descent and distribution;
provided, however, that the designation of a beneficiary by an employee, a
Non-Employee Director or a Committee Member shall not constitute a transfer; and
options may be exercised during the lifetime of such person only by such person
or, unless such exercise would disqualify an option as an incentive stock
option, by such person's guardian or legal representative.
9. Termination of Employment and Service as a Non-Employee Director.
In the event that the employment of an employee, or the service of a
Non-Employee Director or Committee Member, to whom an option has been granted
under the Plan shall be terminated for any reason other than as set forth in
paragraph 10, such option may, subject to the provisions of the Plan, be
exercised (but only to the extent that the employee or Non-Employee Director was
entitled to do so at the termination of his or her employment) at any time
within thirty (30) days
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<PAGE>
after such termination, but in no case later than the date on which the option
terminates; provided, however, that if employment of an employee or the service
of a Non-Employee Director or Committee Member is terminated for Cause (as
defined below), the Option hereunder shall lapse immediately upon such
termination and shall not thereafter be exercisable. For purposes of this
Agreement, 'Cause' shall mean willful misconduct or gross negligence which has
an adverse effect, financial or otherwise, on the Corporation or any of its
subsidiaries; dishonesty, embezzlement, fraud, accepting bribery or kickbacks or
similar acts involving the Corporation or any of its subsidiaries or in
connection with employment by the Corporation; conviction of, or a plea of
guilty or nolo contendre to, a felony or any crime involving moral turpitude; or
habitual absenteeism as a result of substance abuse.
Except with respect to Formula Options of Committee Members, any option
agreement or any rules and regulations relating to the Plan may contain such
provisions as the Committee shall approve with reference to the determination of
the date employment terminates and the effect of leaves of absence. Any such
rules and regulations with reference to any option agreement shall be consistent
with the provisions of the Code and any applicable rules and regulations
thereunder. Nothing in the Plan or in any award granted pursuant to the Plan
shall confer upon any employee or director any right to continue in the employ
or service of the Corporation or any of its subsidiaries or interfere in any way
with the right of the Corporation or any such subsidiary to terminate such
employment at any time.
10. Eligible Retirement, Death or Total Disability of Participant.
If any participant shall die, or suffer a Total Disability, while employed
by, or acting as an officer or a director of, the Corporation or its
subsidiaries or if any such participant terminates his or her employment or
service as an officer or a director pursuant to an Eligible Retirement, such
option may be exercised, as set forth herein, whether or not the participant was
otherwise entitled at such time to exercise such option. Subject to the
restrictions otherwise set forth in the Plan, such option shall be exercisable
by the participant, a legatee or legatees of the participant under the
participant's last will, or by the participant's personal representatives or
distributees, whichever is applicable, at any time (but in no case later than
the date on which the option terminates in accordance with the terms of grant)
before the earlier of (i) one year following the date of the participant's death
or Total Disability (if the participant shall have died or suffered a Total
Disability while employed by, or acting as a director of, the Corporation or its
subsidiaries), or (ii) three months following the date of such participant's
Eligible Retirement.
For purposes of this plan, 'Total Disability' means the incapacity of the
participant, as a result of accident or sickness, which results in termination
of employment or service as a Non-Employee Director or Committee member.
11. Adjustments Upon Changes in Capitalizations, etc.
(a) Notwithstanding any other provision of the Plan, except as set forth
in Section 11(b), the Committee may at any time make or provide for such
adjustments to the Plan, to the number and class of shares available thereunder
or to any outstanding options as it shall deem appropriate to prevent dilution
or enlargement of rights, including adjustments in the event of distributions to
holders of Common Stock other than a normal cash dividend, changes in the
outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchange of shares,
separations, reorganizations, liquidations and the like. In the event of any
offer to holders of Common Stock generally relating to the acquisition of their
shares, the Committee may make such adjustment as it deems equitable in respect
of outstanding options, including in the Committee's discretion revision of
outstanding options so that they may be exercisable for or payable in the
consideration payable in the acquisition transaction. Any such determination by
the Committee shall be conclusive. No adjustment shall be made in the minimum
number of shares with respect to which an option may be exercised at any time.
Any fractional shares resulting from such adjustments to options shall be
eliminated.
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(b) If any of the adjustments referred to in Section 11(a) are required
with respect to the Formula Options, then any such adjustment shall be
determined in a manner which reflects the least favorable adjustment made with
respect to the Common Stock subject to options then held by participants.
12. Effective Date; Listing; Registration.
(a) The amendments to, and restatement of, the Drew Industries Incorporated
1988 Non-Qualified Stock Option Plan contained herein shall become effective as
of March 29, 1995, provided that such amendments are approved and adopted by the
stockholders of the Corporation at the next meeting of stockholders, or any
adjournment thereof. The Plan shall terminate at the close of business on
December 31, 2003 and no Option may be granted under the Plan thereafter, but
such termination shall not affect any Option theretofore granted.
(b) Except with respect to the Formula Options, the Committee may, in its
discretion, grant awards under the Plan, the grant, exercise or payment of which
shall be expressly subject to the conditions that to the extent required at the
time of grant, exercise or payment (i) the shares of Common Stock covered by
such awards of options shall be duly listed, upon official notice of issuance,
on any securities exchange as may at the time be the principal market for the
Common Stock, and (ii) if the Corporation deems it necessary or desirable a
registration statement under the Securities Act of 1933, as amended, with
respect to such shares shall be effective.
13. Termination and Amendment.
The Board of Directors of the Corporation may suspend, terminate or amend
the Plan, except no such action may (a) increase the maximum number of shares
covered by the Plan or change the class of employees eligible to receive
options; (b) reduce the exercise price for incentive stock options below the
fair market value of the Common Stock on the date of the grant of such option;
(c) extend beyond 10 years from the date of the grant the period within which an
option may be exercised; (d) extend the period during which options may be
granted; or (e) increase the maximum number of shares with respect to which
options may be granted to any employee; provided, further, that if any such
amendment requires stockholder approval to meet the requirements of the then
applicable rules under Section 16(b) of the Exchange Act, such amendment shall
be subject to the approval of the Corporation's stockholders. If the Plan is
terminated, the terms of the Plan shall, notwithstanding such termination,
continue to apply to awards granted prior to such termination and options
granted prior to termination of the Plan may be exercised in accordance with
their terms after the Plan's termination. In addition, no suspension,
termination, modification or amendment of the Plan may, without the consent of
the participant to whom an award shall theretofore have been granted, adversely
affect the rights of such participant under such award or affect the validity of
any then outstanding option previously granted under the Plan.
14. Written Agreements.
Each award of options shall be evidenced by a written option agreement,
executed by the employee and the Corporation, which shall contain such
restrictions, terms and conditions as the Committee may require.
15. Governing Law.
This Plan shall be governed and construed in accordance with the laws of
the State of Delaware, without regards to the conflict of law principles
thereof.
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EXHIBIT 'B'
DREW INDUSTRIES INCORPORATED
1995 EMPLOYEE STOCK PURCHASE PLAN
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. Establishment of the Plan; Purpose................ B-1
2. Definitions....................................... B-1
(a) 'Board of Directors'......................... B-1
(b) 'Code'....................................... B-1
(c) 'Committee'.................................. B-1
(d) 'Company'.................................... B-1
(e) 'Compensation'............................... B-1
(f) 'Eligible Employee'.......................... B-1
(g) 'Entry Date'................................. B-1
(h) 'Fair Market Value'.......................... B-1
(i) 'Interim Purchase Period'.................... B-1
(j) 'Offering Date'.............................. B-1
(k) 'Offering Period'............................ B-1
(l) 'Option'..................................... B-1
(m) 'Participant'................................ B-1
(n) 'Plan Account'............................... B-2
(o) 'Purchase Price'............................. B-2
(p) 'Stock'...................................... B-2
(q) 'Subsidiary '................................ B-2
3. Administration.................................... B-2
4. Number of Shares to be Offered.................... B-2
5. Eligibility and Participation..................... B-2
(a) Initial Participation........................ B-2
(b) Continued Participation...................... B-3
(c) Payroll Deduction Rate....................... B-3
(d) Approvals.................................... B-3
(e) Purchase Price............................... B-3
(f) Contributions................................ B-3
(g) Purchase of Stock............................ B-3
(h) Withdrawal................................... B-4
(i) Pro Rata Allocation.......................... B-4
(j) Suspension of Deductions..................... B-4
6. Effect of Termination of Employment............... B-4
7. Rights Not Transferable........................... B-4
8. Recapitalization, Etc............................. B-5
9. Limitation on Stock Ownership..................... B-5
10. Rights as an Employee............................. B-5
11. Rights as a Stockholder........................... B-5
12. Amendment or Termination of the Plan.............. B-6
i
<PAGE>
1995 EMPLOYEE STOCK PURCHASE PLAN
1. Establishment of the Plan; Purpose.
This Employee Stock Purchase Plan (the 'Plan') is established to provide
Eligible Employees with an opportunity through regular payroll deductions to
purchase Common Stock of Drew Industries Incorporated so that they may increase
their proprietary interest in the Company. The Plan is intended to qualify as an
'employee stock purchase plan' under Section 423 of the Internal Revenue Code.
2. Definitions.
(a) 'Board of Directors' means the Board of Directors of the Company.
(b) 'Code' means the Internal Revenue Code of 1986, as amended from time
to time.
(c) 'Committee' means the committee appointed by the Board of Directors to
administer the Plan in accordance with Section 3 below. If no Committee is
appointed, the Board of Directors shall act as the Committee.
(d) 'Company' means Drew Industries Incorporated and such present or
future Subsidiaries, as defined in Section 424 of the Code, of the Company as
the Board of Directors shall from time to time designate.
(e) 'Compensation' means the annual rate of pay of a Participant,
including commissions, overtime and bonuses, determined in accordance with
nondiscriminatory rules adopted by the Committee, but excluding income resulting
from the exercise of stock options or similar incentive compensation
arrangements, moving expense reimbursements or other employee benefit plans.
(f ) 'Eligible Employee' means any regular employee of the Company whose
date of hire was at least six (6) months prior to an Entry Date and who is
customarily employed for at least 20 hours per week and more than five (5)
months in any calendar year.
(g) 'Entry Date' means the first day of July following the adoption of
this Plan by the Board of Directors and each July 1 and January 1 thereafter
during the term of this Plan.
(h) 'Fair Market Value' of a share of Stock means the closing price on the
American Stock Exchange on the applicable date. In the event the Stock is not
traded on the American Stock Exchange on the date as of which the Fair Market
Value is to be determined, Fair Market Value shall mean the last reported sale
price on the applicable date on any securities exchange on which the stock is
traded on such date or the average of the closing bid and asked prices as
reported by the National Association of Securities Dealers on such date if the
Stock is traded in the over-the-counter market. If Fair Market Value cannot be
determined as of the applicable date, it shall be determined as of the next
preceding date on which the Stock is traded.
(i) 'Interim Purchase Period' means each three month period elapsing
within an Offering Period, beginning on each January 1, April 1, July 1 and
October 1 during the term of this Plan.
(j) 'Offering Date' means the first day of each Offering Period.
(k) 'Offering Period' means, in the absence of a specific determination to
the contrary by the Board of Directors or the Committee, (i) the six (6) month
period beginning July 1, 1995 and ending December 31, 1995, and, (ii) thereafter
each consecutive twelve (12) month period beginning January 1 and ending
December 31 to, including December 31, 1999, and (iii) the six (6) month period
beginning January 1, 2000 and ending June 30, 2000.
(l) 'Option' means the right of a Participant to purchase Stock during
the applicable Offering Period.
(m) 'Participant' means an Eligible Employee who elects to participate in
the Plan.
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(n) 'Plan Account' means the account established for each Participant
pursuant to the Plan.
(o) 'Purchase Price' means the price at which Participants may purchase
Stock as determined pursuant to the Plan.
(p) 'Stock' means the Common Stock, par value $0.01 per share, of the
Company.
(q) 'Subsidiary' means a corporation a majority of whose voting shares are
owned by the Company.
3. Administration.
The Plan shall be administered by the Board of Directors or by the
Committee, duly appointed by the Board of Directors. The Committee shall consist
of two (2) or more persons, at least two (2) of which shall be members of the
Board of Directors, which may from time to time remove members from, or add
members to, the Committee. The Committee shall select one of its members as
Chairman, shall hold meetings at such times and places as it may determine, and
shall have such powers as specified by the Board of Directors. The
interpretation and construction by the Board of Directors or the Committee of
any provisions of the Plan or of any right to purchase Stock shall be conclusive
and binding on all persons.
4. Number of Shares to be Offered.
(a) The maximum aggregate number of shares which shall be offered under
the Plan is 250,000 shares of Stock, subject to adjustment as provided in
Section 8 hereof. In the event that any Option granted under the Plan expires or
is terminated for any reason, such shares allocable to the unexercised portion
of such Option shall again be subject to an Option under the Plan.
(b) In each Offering Period, the maximum aggregate number of shares of
Stock offered under the Plan shall be 50,000, except that the maximum aggregate
number of shares for the six month Offering Periods commencing July 1, 1995 and
January 1, 2000, respectively, shall be 25,000. If 50,000 shares (or 25,000
shares for the first and last Offering Periods) exceeds the number of shares
purchased under the Plan in any Offering Period, the difference ('Carryover')
between 50,000 shares (or 25,000 shares for the first and last Offering Periods)
and the number of shares purchased under the Plan during such Offering Period
shall be carried to the next Offering Period and added to 50,000 (or 25,000 for
the last Offering Period) to determine the maximum number of shares which are
available for purchase under the Plan in such subsequent Offering Period. In the
event that the number of shares purchased under the Plan in the subsequent
Offering Period is less than the maximum number then available for purchase, the
difference between such maximum (as increased by the Carryover) and the shares
actually purchased during such subsequent Offering Period shall be carried to
the following Offering Period and added to 50,000 (or 25,000 for the last
Offering Period) to determine the maximum number of shares available in such
following Offering Period. If applicable, this procedure shall be used with
respect to each subsequent Offering Period until either (i) all of the available
shares, subject to the maximum limit as determined hereunder, are purchased in
an Offering Period, or (ii) the Plan shall have terminated.
(c) The maximum number of shares which any one employee may purchase in
each Offering Period is the lesser of 5,000 (or 2,500 for the first and last
Offering Periods), or such number of shares having a Fair Market Value
(regardless of purchase price), together with Common Stock which the Participant
may purchase under any other qualified stock purchase plan maintained by the
Company, of $25,000 (or $12,500 for the first and last Offering Periods),
determined as of the Offering Date or the Participant's Entry Date, if later.
5. Eligibility and Participation.
(a) Initial Participation. An Eligible Employee shall become a
Participant on an Entry Date after satisfying the eligibility requirements by
delivering to the Company's payroll office an
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enrollment form authorizing payroll deductions not less than ten (10) business
days prior to such Entry Date. An Eligible Employee who did not enroll in the
Plan prior to the Entry Date, or a person who becomes an Eligible Employee after
an Entry Date, may enroll in the Plan as of the next Entry Date by completing
and filing an enrollment form prior to the next Entry Date.
(b) Continued Participation. A Participant shall automatically
participate in each successive Offering Period until such time as such
Participant withdraws from the Plan as set forth below. A Participant is not
required to file any additional enrollment forms for subsequent Offering Periods
in order to continue participation in the Plan.
(c) Payroll Deduction Rate. The Participant shall designate on the
enrollment form the amount of Compensation which he or she elects to have
withheld for the purchase of Stock, which may be fixed either in dollars per
payroll period (but not less than $10 per period) or in any whole percentage
from 1% to 10% of the Participant's Compensation, but in no event more than 10%
of such Participant's Compensation. A Participant may reduce (but not increase)
the rate of payroll withholding during an Offering Period by filing an amended
enrollment form with the Committee at any time prior to the last day of any
Interim Purchase Period (for which such change is to be effective), but not more
than two (2) changes may be made in any Offering Period (or such other number of
changes as may be approved by the Board or the Committee). A Participant may
increase or decrease the rate of payroll deduction for any subsequent Offering
Period by filing with the Company a new authorization for payroll deductions not
less than ten (10) days prior to the Entry Date for such subsequent Offering
Period.
By enrolling in the Plan, a Participant shall be deemed to have elected to
purchase the maximum number of whole shares of Stock which can be purchased with
the amount of the Participant's Compensation which is withheld during the
Offering Period.
(d) Approvals. Any Options granted pursuant to the Plan shall be subject
to the Company obtaining all necessary governmental approvals and/or
qualifications of the sale and/or issuance of Options and/or Stock.
(e) Purchase Price. The Purchase Price for each share of Stock to be
purchased under the Plan shall be the lesser of eighty-five percent (85%) of the
Fair Market Value of such share on either (i) the Offering Date (or the Entry
Date for new or re-enrolling employees) or (ii) the last day of each Interim
Purchase Period.
(f) Contributions. The Purchase Price of the Stock shall be accumulated
by payroll deductions throughout the Offering Period, which shall be applied
automatically to purchase Stock at the end of each Interim Purchase Period. In
the absence of a contrary determination prior to the commencement of an Offering
Period, each Interim Purchase Period shall have the duration described in
Section 2(i) of the Plan. At the end of each Interim Purchase Period, accrued
payroll deductions will be automatically applied to the purchase of Stock at the
Purchase Price as hereinabove defined. Payroll deductions shall commence on the
first payday following each Participant's initial Entry Date (or, in the case of
a re-enrolling employee, on the first payday following the commencement of the
applicable Entry Date) and shall continue to the end of the Offering Period
unless sooner altered or terminated as provided in the Plan.
(g) Purchase of Stock. The Company will maintain a Plan Account on its
books in the name of each Participant. On each payday the amount deducted from
the Participant's Compensation will be credited to the Participant's Plan
Account. No interest shall accrue or shall be payable on any such payroll
deductions. As of the last day of each Interim Purchase Period the amount then
in the Participant's Plan Account will be divided by the Purchase Price and the
amount in the Participant's Plan Account shall be used to purchase the number of
whole shares of Stock which result. The number of shares purchased pursuant to
the Plan shall be credited to the Participant's Plan Account. Share certificates
representing the number of shares of Stock so purchased shall be
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represented by a certificate issued in the name of the Committee, or its
designee, as nominee ('Nominee') for the Participant (and other Participants).
The Committee shall promptly notify the Participant as to the number of shares
so credited. Notwithstanding the preceding sentence, if the Participant so
requests in writing, the Committee shall issue and deliver to such Participant a
certificate representing all of the shares credited to the Participant in his or
her Plan Account. Any cash amounts remaining in the Participant's Plan Account
at the end of an Offering Period or Interim Purchase Period after deducting the
amount of the Purchase Price for the number of whole shares issued to the
Participant (or to the Nominee on his or her behalf) shall remain in the
Participant's Plan Account, without any accrual of interest, and shall be
applied against the purchases to be made during the next Interim Purchase
Period.
(h) Withdrawal. A Participant may elect to withdraw from participation in
the Plan at any time up to the last day of an Interim Purchase Period by filing
the prescribed form with the Committee. Upon withdrawal, (i) certificates
representing the number of shares then held on behalf of such Participant by the
Nominee shall be delivered to the Participant as soon as practicable after the
filing of notice of withdrawal, (ii) the remaining amount credited to the
Participant's Plan Account will be refunded in cash, without interest, and (iii)
the withdrawn Participant's interest in the Plan shall terminate. In the event a
Participant voluntarily elects to withdraw from the Plan, such Participant may
not resume participation in the Plan until the first Entry Date occurring after
six months following the date of withdrawal. Re-enrollment in the Plan shall be
made in the same manner as set forth above for initial participation in the
Plan.
(i) Pro Rata Allocation. In the event that the aggregate number of shares
which all Participants elect to purchase during an Interim Purchase Period shall
exceed the number of shares remaining available for issuance under the Plan for
the Offering Period which includes such Interim Purchase Period, the number of
shares which each Participant may purchase shall be determined by multiplying
the aggregate number of shares available for issuance by a fraction, the
numerator of which is the sum of the number of shares the Participant has
elected to purchase and the denominator of which is the sum of the number of
shares which all Participants have elected to purchase.
(j) Suspension of Deductions. In the event that the maximum number of
shares available for issuance in any Offering Period are purchased at the end of
an Interim Purchase Period, the Company shall immediately cease making payroll
deductions from the compensation of each Eligible Employee under this Plan until
the beginning of the next Offering Period, but each Participant shall be treated
as continuing to participate in the Plan and shall not thereby be deemed to have
withdrawn therefrom.
6. Effect of Termination of Employment.
Termination of a Participant's employment for any reason, including
retirement or death, or the failure of the Participant to remain as Eligible
Employee shall be treated as a withdrawal under the Plan. In the event of the
Participant's death, the refund of the Participant's Plan Account shall be paid,
without interest, to the representative of the Participant's estate. A transfer
by a Participant from the Company to a Subsidiary, from one Subsidiary to
another, or from a Subsidiary to the Company shall not be treated as a
termination of employment.
7. Rights Not Transferable.
The rights or interests of any Participant in the Plan, in any Option
granted under the Plan, or in any Stock or moneys to which he or she may be
entitled under the Plan, shall not be transferable by voluntary or involuntary
assignment or by operation of law, or by any other manner otherwise than by will
or the applicable laws of descent and distribution. If the Participant shall in
any manner attempt to transfer, assign or otherwise encumber his or her rights
or interests under the Plan, other than by will, such act shall be treated as a
withdrawal from the Plan.
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<PAGE>
8. Recapitalization, Etc.
Subject to any required action by the stockholders of the Company, the
number of shares of Stock covered by each Option under the Plan which has not
yet been exercised and the number of shares of Stock which have been authorized
for issuance under the Plan but have not yet been placed under an Option
(collectively the 'Reserves'), as well as the price per share of Stock covered
by each Option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a stock split, reverse stock split, stock
dividend in excess of ten (10%) percent of the outstanding Stock, combination or
reclassification of Stock, or any other increase or decrease in the number of
shares of Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been 'effected without receipt of consideration.'
Such adjustment shall be made by the Board of Directors or the Committee, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of the shares of Stock of any
class shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board of Directors or the
Committee. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, each Option under the Plan shall be assumed or an equivalent option
shall be substituted by such successor corporation, unless the Board of
Directors or the Committee determines, in the exercise of its sole discretion
and in lieu of such assumption or substitution, that the Participant shall have
the right to exercise the Option as to all of the optioned Stock, including
shares as to which the Option would not otherwise be exercisable. If the Board
of Directors or the Committee makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Board
of Directors or the Committee shall notify the Participant that the Option shall
be fully exercisable for a period of thirty (30) days from the date of such
notice, and the Option will terminate upon the expiration of such period.
9. Limitation on Stock Ownership.
Notwithstanding any provision to the contrary, (i) no Participant shall be
granted a right to purchase Stock pursuant to Section 5 if such Participant,
immediately after electing to purchase such Stock, would own Stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or any parent or Subsidiary of the Company and
(ii) no Participant shall be allowed to purchase Stock under this Plan to the
extent that the aggregate Fair Market Value (determined at the time such right
is granted) of such Stock which may be acquired by such Participant under rights
granted by this Plan and which accrue under all other qualified employee stock
purchase plans of the Company or its Subsidiaries exceeds $25,000 in each
calendar year. For purposes of this Section 9, ownership of Stock shall be
determined by the attribution rules of Section 424(d) of the Code and
Participants shall be considered to own any Stock which they have a right or
option to purchase under this or any other plan.
10. Rights as an Employee.
Nothing in the Plan shall be construed to give any Participant the right to
remain in the employ of the Company or a Subsidiary or to affect the right of
the Company and its Subsidiaries or the Participant to terminate such employment
at any time with or without cause.
11. Rights as a Stockholder.
A Participant shall have all rights as a stockholder only with respect to
shares of Stock purchased for the Participant's account under the Plan from the
date such shares are credited to
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the Participant's Plan Account. A Participant shall be entitled to exercise any
and all voting rights with respect to such shares and shall be entitled to all
dividends or other distributions made with respect to any such shares held by
the Nominee.
12. Amendment or Termination of the Plan.
(a) The Board of Directors shall have the right to amend, modify or
terminate the Plan at any time without notice, provided that no Participant's
existing rights are adversely affected thereby, and provided further that no
amendment to the Plan shall be effective until such amendment is approved by a
vote of the holders of a majority of the outstanding voting stock of the Company
voting at a duly held stockholders meeting at which a quorum is present, within
twelve (12) months before or after the date upon which such action is taken by
the Board of Directors, if such amendment would:
(i) Increase the aggregate number of shares of Stock to be issued
under the Plan (except as provided in Section 8 hereof);
(ii) Materially modify the requirements for eligibility to
participate in the Plan;
(iii) Increase the maximum number of shares of Stock which a
Participant may purchase in any Offering Period;
(iv) Extend the term of the Plan;
(v) Alter the Purchase Price formula so as to reduce the price for
shares of Stock to be purchased under the Plan;
(vi) Otherwise materially increase the benefits accruing to
Participants under the Plan; or
(vii) Cause the Plan to fail to meet the requirements of an 'employee
stock purchase plan' under Section 423 of the Code.
(b) The Plan shall terminate on June 30, 2000, unless it has been earlier
terminated pursuant to this Section 12, but the Plan shall remain in full force
and effect until the end of the Offering Period then in effect.
Adopted by the Board of Directors
on March 29, 1995.
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EXHIBIT 'C'
Article FOURTH of the Restated Certificate of Incorporation of Drew
Industries Incorporated, as amended, relating to the aggregate number, class and
par value of shares which the Corporation is authorized to issue, is hereby
amended to eliminate preferred stock as an authorized stock of the Corporation
and such Article FOURTH shall hereby read in its entirety as follows:
'FOURTH: Section A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 20,000,000 Shares of
Common Stock, par value $0.01 per share ('Common Stock').
Section B. Each holder of Common Stock shall be entitled to
one vote for each share of Common Stock held of record on all matters on which
stockholders generally are entitled to vote. Subject to the provisions of law,
dividends may be paid on the Common Stock at such times and in such amounts as
the Board of Directors shall determine.
<PAGE>
DREW INDUSTRIES INCORPORATED
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS--JUNE 13, 1995
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned, revoking any proxy heretofore given, hereby appoints
LEIGH J. ABRAMS and HARVEY J. KAPLAN, or either of them, proxies of the
undersigned, with full power of substitution, with respect to all the shares of
the Common Stock which the undersigned is entitled to vote at the Annual Meeting
of Stockholders of Drew Industries Incorporated, to be held at Hotel Crescent
Court, 400 Crescent Court, Dallas, Texas 75201 on June 13, 1995 at 9:30 A.M. and
at any adjournment or postponement thereof, upon the following items as set
forth in the Notice of Annual Meeting and Proxy Statement, and in their
discretion on any other matter that may properly come before the meeting or any
adjournment or postponement thereof.
(Continued and to be signed on the reverse side)
<PAGE>
________________________
COMMON
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AUTHORITY TO VOTE FOR DIRECTORS AND
FOR PROPOSITIONS '2,' '3,' '4' AND '5'
1. ELECTION OF DIRECTORS FOR all named WITHHOLD
NOMINEES: EDWARD W. ROSE, nominees AUTHORITY
III, LEIGH J. ABRAMS, DAVID L. (except as from
WEBSTER, JAMES F. GERO, GENE indicated nominees
H. BISHOP. to the contrary
below)
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
2. TO APPROVE THE FOR AGAINST ABSTAIN
AMENDED AND RESTATED / / / / / /
STOCK OPTION PLAN.
3. TO APPROVE THE FOR AGAINST ABSTAIN
1995 EMPLOYEE STOCK / / / / / /
PURCHASE PLAN.
4. TO APPROVE THE AMENDMENT FOR AGAINST ABSTAIN
TO THE RESTATED / / / / / /
CERTIFICATE OF
INCORPORATION.
5. TO RATIFY THE APPOINTMENT FOR AGAINST ABSTAIN
OF KPMG PEAT MARWICK LLP / / / / / /
AS INDEPENDENT AUDITORS.
Please sign exactly as name appears hereon. If the stock is registered in the
names of two or more persons each should sign. Executors, Administrators,
Trustees, Guardians, Attorneys, and corporate officers should add their titles.
Please check if you plan to attend the meeting / /
___________________________ __________________________ Dated: __________, 1995
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
Please mark boxes /x/ in blue or black ink. This Proxy should be returned to:
Chemical Bank, 450 West 33rd Street, New York, N.Y. 10001
