ASTEC INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1994
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of
Shareholders (the "Annual Meeting") of Astec Industries,
Inc., a Tennessee corporation (the "Company") will be held
at the Company's executive offices, 4101 Jerome Avenue,
Chattanooga, Tennessee, on April 29, 1994, at 10:00 A.M.,
Chattanooga time, for the following purposes:
1. To elect four directors in Class II to serve until
the annual meeting of shareholders in 1997, or in
the case of each director until his successor is
duly elected and qualified; and
2. To transact such other business as may properly
come before the Annual Meeting or any adjournments
thereof.
Only shareholders of record at the close of business on
March 10, 1994 are entitled to notice of, and to vote at,
the Annual Meeting. The transfer books will not be closed.
A complete list of shareholders entitled to vote at the
Annual Meeting will be available for inspection by
shareholders at the offices of the Company from March 14,
l994 through the Annual Meeting.
By Order of the Board of Directors
[signature]
ALBERT E. GUTH,
Secretary
Dated: March 18, 1994
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN
PERSON, PLEASE VOTE, SIGN, DATE, AND RETURN THE ENCLOSED
PROXY APPOINTMENT CARD PROMPTLY IN THE ENCLOSED BUSINESS
REPLY ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY, IF
YOU WISH, WITHDRAW YOUR PROXY APPOINTMENT AND VOTE IN
PERSON.
<PAGE>
ASTEC INDUSTRIES, INC.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
(615) 867-4210
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1994
The enclosed proxy appointment is solicited by and on
behalf of the Board of Directors of Astec Industries, Inc.
(the "Company") for use at its Annual Meeting of
Shareholders (the "Annual Meeting") to be held on April 29,
1994, and at any adjournments thereof. The appointment of
proxy is revocable at any time prior to its exercise at the
Annual Meeting by (i) written notice to the Secretary of the
Company, (ii) properly submitting to the Company a duly
executed proxy appointment bearing a later date, or
(iii) attending the Annual Meeting and voting in person.
This Proxy Statement is being mailed by the Company to
its shareholders on or about March 18, 1994. The Company's
Annual Report to Shareholders for the fiscal year ended
December 31, 1993, including financial statements, is being
sent to the shareholders with this Proxy Statement.
Only holders of record of the Company's Common Stock as
of the close of business on March 10, 1994 (the "Record
Date") will be entitled to notice of, and to vote at, the
Annual Meeting. As of the Record Date there were 9,796,402
shares of Common Stock outstanding and entitled to be voted
at the Annual Meeting. A shareholder is entitled to one
vote for each share of Common Stock held.
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into
three classes, with the term of office of each class ending
in successive years. The terms of directors of Class II
expire with this Annual Meeting. The directors of Class III
and Class I will continue in office until the 1995 and 1996
annual meetings of shareholders, respectively. At the
present time there are three directors in Class I, four
directors in Class II, and four directors in Class III. The
shareholders are being asked to vote for the re-election of
the four directors in Class II.
If the enclosed proxy appointment card is properly
executed and returned, the persons appointed as proxies will
vote the shares represented by the proxy appointment in
favor of the election to the Board of Directors of each of
the four Class II nominees whose names appear below, unless
either authority to vote for any or all of the nominees is
withheld or such appointment has previously been revoked.
It is anticipated that management shareholders of the
Company will grant authority to vote for the election of all
the nominees. Each Class II director will be elected to
hold office until the 1997 annual meeting of shareholders
and thereafter until his successor has been elected and
qualified. In the event that any nominee is unable to serve
(which is not anticipated), the persons appointed as proxies
will cast votes for the remaining nominees and for such
other persons as they may select.
The Board of Directors recommends that shareholders
check "Authority Granted" to vote for the election of all of
the nominees. The affirmative vote of the holders of a
majority of the shares of Common Stock represented and
entitled to vote at the Annual Meeting at which a quorum is
present is required for the election of the nominees.
Certain Information Concerning Nominees and Directors
The following table sets forth the names of the nominees
and of the directors continuing in office, their ages, the
year in which they were first elected directors, their
position(s) with the Company, their principal occupations
and employers for at least the last five years, any other
directorships held by them in companies that are subject to
the reporting requirements of the Securities Exchange Act of
1934 or any company registered as an investment company
under the Investment Company Act of 1940, the number of
shares of the Company's Common Stock beneficially owned by
them on March 10, 1994, and the percentage of the 9,796,402
total shares of Common Stock outstanding on such date that
such beneficial ownership represents. For information
concerning membership on Committees of the Board of
Directors, see "Other Information About the Board and its
Committees" below.
<TABLE>
NOMINEES FOR DIRECTOR
Class II
For Three-Year Term Expiring Annual Meeting 1997
<CAPTION>
<S> <C> <S>
Positions with the Company, Shares of Common Stock
<S> <C> <S>
Name, Age, and Principal Occupations During Beneficially Owned and
Year First At Least Past Five Years, Percent of Common
Elected Director and Other Directorships Stock Outstanding (1)
<S> <C>
Daniel K. Frierson
(51)
<C> <C> <S>
(nominated 1994) Mr. Frierson has been the Chief
Executive Officer of Dixie Yarns,
Incorporated, a public company in NONE
the textile manufacturing business,
since 1979 and has served as
Chairman of the Board of such company
since 1987. Mr. Frierson also serves
as a director on the board of
American National Bank.
E. D. Sloan, Jr.
(64)
(1978) Mr. Sloan is Chairman of the Board
of Nolas Trading Company, Inc., a
privately owned investment concern, and
served from 1984 through 1987 as the
Chairman of the Board of Sloan
Construction Co., Inc. 251,000 (2)
2.56%
George C. Dillon
(71)
(1986) Mr. Dillon was a director
of the Barber-Greene Company from
1981 to December 1986 when the Company
acquired Barber-Greene. Mr. Dillon
is also currently a director of
Phelps Dodge Corporation, Newhall
Land & Farming Company, and was
formerly the Chairman of the Board
of Butler Manufacturing Co. (3) 2,200
<PAGE>
NOMINEES FOR DIRECTOR
Class II (continued)
For Three-Year Term Expiring Annual Meeting 1997
<CAPTION>
<S> <C> <S>
Positions with the Company, Shares of Common Stock
<S> <C> <S>
Name, Age, and Principal Occupations During Beneficially Owned and
Year First At Least Past Five Years, Percent of Common
Elected Director and Other Directorships Stock Outstanding (1)
Robert G. Stafford
(53)
(1988) Mr. Stafford has served as
President of Telsmith,Inc., a
subsidiary of the Company, since
April 1991. Previously, he served
as President of the Company's Telsmith
division from January 1991 until April
1991, and as President of the
predecessor Telsmith, Inc., a subsidiary of
the Company's Barber-Greene subsidiary,
from January 1987 until December 1990.
Mr. Stafford served as Vice President-
Operations of Barber-Greene and General
Manager of Telsmith from 1984 until
the Company's acquisition of Barber-Greene
in December 1986.(5) 58,619(4)
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
Class III
Term Expiring Annual Meeting 1995
<CAPTION>
<S> <C> <S>
Positions with the Company, Shares of Common Stock
<S> <C> <S>
Name, Age, and Principal Occupations During Beneficially Owned and
Year First At Least Past Five Years, Percent of Common
Elected Director and Other Directorships Stock Outstanding (1)
J. Don Brock
(55)
(1972) Dr. Brock has been President
and Treasurer of the Company
since its incorporation in 1972,
and assumed the additional position
of Chairman of the Board in 1975.
He earned his Ph.D. degree in
mechanical engineering from the
Georgia Institute of Technology
and also serves as a director of
Crown Andersen Inc. 2,220,000(6)
22.66%
Albert E. Guth
(54)
(1972) Mr. Guth has been Chief Financial
Officer of the Company since 1987,
Senior Vice President of the Company
since 1984, and Secretary of the Company
since 1972. 32,000 (7)
W. Norman Smith
(54)
(1982) Mr. Smith has served as the President
of Heatec, Inc., a subsidiary of the
Company, since 1977. 166,570 (8)
1.7%
<PAGE>
Class III (continued)
Term Expiring Annual Meeting 1995
<CAPTION>
<S> <C> <S>
Positions with the Company, Shares of Common Stock
<S> <C> <S>
Name, Age, and Principal Occupations During Beneficially Owned and
Year First At Least Past Five Years, Percent of Common
Elected Director and Other Directorships Stock Outstanding (1)
James R. Spear
(72)
(1978) Mr. Spear served as a financial
consultant to the Company from
1986 to 1989. Previously, he served
as Executive Vice President and Chief
Financial Officer of Gifford-Hill &
Company, Inc., a cement and construction
materials company. 10,000 (9)
Class I
Term Expiring Annual Meeting 1996
<CAPTION>
<S> <C> <S>
Positions with the Company, Shares of Common Stock
<S> <C> <S>
Name, Age, and Principal Occupations During Beneficially Owned and
Year First At Least Past Five Years, Percent of Common
Elected Director and Other Directorships Stock Outstanding (1)
Joseph Martin, Jr.
(78)
(1986) Mr. Martin has been a partner
in the law firm of Pettit &
Martin in San Francisco, California
since 1955. He served as a
director of Barber-Greene Company
from February 1984 until December
1986 when the Company acquired Barber-
Greene. (3) 2,000
Jerry F. Gilbert
(48)
(1991) Mr. Gilbert has served as the
President of Trencor Jetco, Inc.,
a subsidiary of the Company, since
1988 when the Company acquired
all of the outstanding stock of its
predecessor corporation, Trencher
Corporation of America. Mr. Gilbert
had served as President of Trencher
Corporation of America since 1981. 17,827(10)
G. W. Jones
(67)
(1993) Mr. Jones has served as a director of
the Company since July, 1993. While
currently retired, Mr. Jones served
as president of APAC, Inc., a subsidiary
of Ashland Oil, Inc., and as Senior Vice
President of Ashland Oil, Inc., from 1987
to 1992. 2,000
<FN>
(1) The amounts of the Company's Common Stock beneficially owned
are reported on the basis of regulations of the Securities
and Exchange Commission governing the determination of
beneficial ownership of securities. The beneficial owner has both
voting and dispositive power over the shares of Common Stock,
unless otherwise indicated. As indicated, certain of the shares
included are beneficially owned by the holders by virtue
of their ownership of options to purchase Common Stock under the
1986 Stock Option Plan or the 1992 Stock Option Plan and
such shares issuable upon currently exercisable options have been
taken into account in determining the percent of Common Stock
owned. Unless indicated in the table, the number of shares
included in the table as beneficially owned by a director or
nominee does not exceed one percent of the Common Stock of the
Company outstanding on March 10, 1994.
(2) Includes 100,000 shares held of record by Nolas Trading
Company, Inc., a corporation of which Mr. Sloan owns all
of the issued and outstanding shares of common stock, and
150,000 shares held of record by Nolas Trading Company,
Inc. Pension Trust.
(3) In connection with the acquisition of Barber-Greene in
1986, the Company entered into an oral agreement with
B.V. Oceanic Finance Company, an affiliate of Overseas
Lending Corporation, to nominate Messrs. Martin and
Dillon to serve on the Company's Board of Directors.
Messrs. Martin and Dillon no longer serve or are
nominated pursuant to any agreement.
(4) Includes 37,000 shares subject to
options under the Company's 1986 Stock Option Plan,
20,000 shares subject to options under the Company's 1992
Stock Option Plan, and 1,377 shares held in the Company's
401(k) Plan over which Mr. Stafford has no voting power.
(5) Telsmith, Inc., a Wisconsin corporation
and wholly owned subsidiary of Barber-Greene, was merged
into Barber-Greene effective January 1, 1991 to form the
Telsmith division of the Company. On April 17, 1991 the
Barber-Greene paving equipment business was sold to
Caterpillar Paving Products Inc. Following such sale,
Barber-Greene, a Delaware corporation, changed its name
to Telsmith, Inc.
(6) Does not include 443,800 shares held
beneficially by Edna F. Brock, Dr. Brock's mother, over
which shares he has no voting or dispositive power. Does
include 40,000 shares subject to options under the
Company's 1986 Stock Option Plan.
(7) Includes 10,000 shares subject to
options under the Company's 1992 Stock Option Plan.
(8) Includes 10,000 shares subject to
options under the Company's 1986 Stock Option Plan,
8,000 shares subject to options under the Company's 1992
Stock Option Plan, and 5,000 shares owned by Mr. Smith's
children.
(9) All 10,000 shares are owned beneficially by Mr. Spear
through a living trust pursuant to which he and his
spouse are joint trustees with sole voting and
dispositive power.
(10) Includes 10,000 shares subject to options under the
Company's 1992 Stock Option Plan and 1,027 shares held in
the Company's 401(k) Plan over which Mr. Gilbert has no
voting power.
</TABLE>
Other Information about the Board and its Committees
Meetings. During 1993, the Board of Directors held 5
meetings, and the Board's Committees held the meetings
described below. Each incumbent director attended at least
75% of the aggregate number of meetings of the Board of
Directors.
Committees. The Company's Board of Directors has an
Executive Committee, an Audit Committee, a Compensation
Committee, and a Technical Committee. The Company does not
have a nominating committee. The full Board of Directors
performs the function which would be performed by a
nominating committee. Certain information regarding the
Board's Committees is set forth below.
Executive Committee. The Executive Committee is
authorized to act on behalf of the Board of Directors
on matters that may arise between regular meetings of
the Board upon which the Board of Directors would be
authorized to act. The current members of the
Executive Committee are Dr. Brock (Chairman) and
Messrs. Smith and Guth. The Executive Committee did
not meet during 1993, all action of the Executive
Committee was taken by unanimous written consent.
Audit Committee. The Audit Committee annually reviews
and recommends to the Board the firm to be engaged as
independent auditors for the next fiscal year, reviews
with the independent auditors the plan and results of
the auditing engagement, reviews the scope and results
of the Company's procedures for internal auditing, and
inquires as to the adequacy of the Company's internal
accounting controls. The current members of the Audit
Committee are Messrs. Spear (Chairman), Martin, Dillon,
and Jones. During 1993, the Audit Committee held three
meetings.
Compensation Committee. The Compensation Committee is
authorized to consider and recommend to the full Board
the executive compensation policies of the Company and
to administer both of the Company's stock option plans.
The current members of the Compensation Committee are
Messrs. Sloan (Chairman), Spear, Dillon, Martin and
Jones. During 1993, the Compensation Committee did not
meet.
Technical Committee. The Technical Committee met one
time in 1993 to review the Company's product lines and
to consider new areas of technical design. The current
members of the Technical Committee are Dr. Brock
(Chairman) and Messrs. Mize, Stafford, and Smith.
Common Stock Ownership of Management
Based on available information, the Company believes that
its directors and executive officers as a group beneficially
owned the following number of shares of Common Stock as of
March 10, 1994:
<TABLE>
Title of Class Shares Beneficially Owned Percent of Class
<CAPTION>
<S> <C> <C>
Common Stock, $.20 Par Value 2,824,316 28.83%
The table includes 157,000 shares which the executive
officers have the right to acquire pursuant to currently
exercisable options under the Company's stock option plans.
Such shares issuable upon exercise of all currently
exercisable options are assumed to be outstanding for
purposes of determining the percent of shares owned by the
group.
</TABLE>
Common Stock Ownership of Certain Beneficial Owners
The following table sets forth information as of the dates
indicated with respect to the only persons who are known by
the Company to be the beneficial owners of more than 5% of
the outstanding shares of the Company's Common Stock.
<TABLE>
Amount and
Nature of
Beneficial Percent
Name and Address of Beneficial Owner Date Ownership of Class(1)
<CAPTION>
<S> <C> <C> <C>
J. Don Brock March 10, 2,220,000(2) 22.66%
Astec Industries, Inc. 1994
P.O. Box 72787
4101 Jerome Avenue
Chattanooga, Tennessee 37407
Overseas Lending Corporation March 10, 554,000 (3) 5.66%
c/o Enpro International N.V. 1994
345 Avenue of the Americas
New York, New York 10105
FMR Corp. March 10, 838,700 (4) 8.56%
82 Devonshire Street 1994
Boston, Massachusetts 02109
<FN>
(1) The amounts of the Company's Common Stock
beneficially owned are reported on the basis of regulations
of the Securities and Exchange Commission governing the
determination of beneficial ownership of securities. The
beneficial owner has both voting and dispositive power over
the shares of Common Stock, unless otherwise indicated.
(2) Includes 40,000 shares subject to options under the
1986 Stock Option Plan. The shares of Common Stock issuable
upon exercise of such options held by Dr. Brock are assumed
to be outstanding for purposes of determining percent of
shares owned by Dr. Brock. Does not include 443,800 shares
held beneficially by Edna F. Brock, Dr. Brock's mother, over
which shares he has no voting or dispositive power. This
information is based on the filing of a Form 13G with the
Securities and Exchange Commission, a copy of which has been
provided to the Company.
(3) Overseas Lending Corporation ("Overseas") received
400,000 shares of the Company's Common Stock pursuant to an
Assignment and Assumption Agreement, dated December 29,
1986, under which B.V. Oceanic Finance Company (OFC)
("Oceanic"), an affiliate of Overseas, transferred to
Overseas its right to receive 400,000 shares of Common
Stock. Oceanic acquired the right to receive such shares of
Common Stock in connection with the Company's acquisition of
Barber-Greene and pursuant to a Debenture Settlement
Agreement dated October 20, 1986 among the Company, Barber-
Greene, and Oceanic and pursuant to which Oceanic cancelled
approximately $15 million in Barber-Greene indebtedness.
Overseas acquired an additional 77,000 shares of Common
Stock in open market purchases during December 1990 and sold
200,000 shares in connection with the Company's secondary
stock offering last year.
(4) Fidelity Management & Research Company
("Fidelity"), a wholly owned subsidiary of FMR Corp. and an
investment advisor registered under Section 203 of the
Investment Advisers Act of 1940, is the beneficial owner of
825,400 of such shares as a result of acting as investment
advisor to several investment companies registered under
Section 8 of the Investment Company Act of 1940, and as a
result of acting as sub-advisor to Domestic Values Fund
("FMR Account"). Edward C. Johnson 3d, Chairman of FMR
Corp., FMR Corp., through its control of Fidelity, and the
funds each has sole dispositive power over 821,300 shares
owned by the funds, however, the funds' Board of Trustees
have sole voting power which is carried out by Fidelity
under written guidelines established by the funds' Board of
Trustees. FMR Corp., through its control of Fidelity, and
the FMR Account each has sole voting and dispositive power
over the 4,100 shares owned by the FMR Account. Fidelity
Management Trust Company ("FMTC"), a wholly owned subsidiary
of FMR Corp. and a bank as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, is the beneficial owner of
13,300 shares, over which FMR Corp., through its control of
FMTC, has sole voting and dispositive power. The foregoing
information is based on the filing of a Form 13G with the
Securities and Exchange Commission, a copy of which has been
provided to the Company.
</TABLE>
Executive Compensation
The following table presents certain summary
information concerning compensation paid or accrued by the
Company for services rendered in all capacities during the
fiscal years ended December 31, 1991, 1992 and 1993 for (i)
the President of the Company and (ii) each of the four other
most highly compensated executive officers of the Company
(determined as of the end of the last fiscal year) whose
total annual salary and bonus exceeded $100,000
(collectively, the "Named Executive Officers").
<TABLE>
Summary Compensation Table
<CAPTION>
Name and Annual Compensation All Other
Principal Position Year Salary ($) Bonus ($) Compensation
($)(1)(2)
<CAPTION>
<S> <C> <C> <C> <C>
J. Don Brock 1993 220,000 110,000 4,590
Chairman of the
Board, President 1992 214,200 69,079 5,496
and Treasurer 1991 210,000 38,850
Robert G. Stafford 1993 134,885 62,775 2,561
President of
Telsmith, Inc. 1992 127,442 63,750 3,683
1991 119,981 51,000
Jerry F. Gilbert 1993 130,000 24,050 2,998
President of Trencor
Jetco, Inc. 1992 125,000 18,750 3,342
1991 100,808 27,500
Albert E. Guth 1993 125,000 40,000 2,864
Chief Financial
Officer, Senior 1992 120,500 15,000 3,498
Vice President
and Secretary 1991 120,211 15,000
W. Norman Smith 1993 107,000 39,055 3,219
President of
Heatec, Inc. 1992 105,086 51,036 3,666
1991 103,419 42,543
<FN>
(1) In accordance with the transitional provisions applicable
to the revised rules on executive officer and director
compensation disclosure adopted by the Securities and
Exchange Commission, amounts of All Other Compensation
are excluded for the Company's 1991 fiscal year.
(2) The compensation reported under All Other Compensation
represents (a) contributions to the Company's 401(k)
Plan on behalf of the Named Executive Officers to match
1993 pre-tax elective contributions (included under
salary and bonus) made by each Named Executive Officer
to such plan; and (b) insurance premiums on term life
insurance policies for the benefit of each of the Named
Executive Officers. Company contributions under the
401(k) Plan for the 1993 fiscal year were as follows:
$4,497 to Dr. Brock; $2,249 to Mr. Stafford; $2,975 to
Mr. Gilbert; $2,800 to Mr. Guth; and $3,161 to Mr.
Smith. The amount of insurance premium paid for the
benefit of each of the Named Executive Officers for the
1993 fiscal year was: $93 for Dr. Brock; $312 for Mr.
Stafford; $23 for Mr. Gilbert; $64 for Mr. Guth; and
$58 for Mr. Smith. The Named Executive Officers have
no interest in the cash surrender value of the term
life insurance policies.
The Company did not grant any stock options to its Named
Executive Officers or other employees during 1993, however,
due to a 2-for-1 share split in the form of a 100% share
dividend distributed to the shareholders of the Company on
September 10, 1993, all outstanding stock option grants
under both of the Company's stock option plans were adjusted
to reflect a 2-for-1 increase in the number of shares of the
Company's Common Stock purchasable upon exercise of the
options.
There were no stock option exercises by the Named
Executive Officers during 1993. The following table shows
the number of shares covered by both exercisable and non-
exercisable stock options as of December 31, 1993. Also
reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of
any such existing stock options and the year-end price of
the Company's Common Stock.
</TABLE>
<TABLE>
Fiscal Year-End Option Values
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year-End (#) at Fiscal Year-End($)
<CAPTION>
Name Exercisable Unexercisable Exercisable Unexercisable
<CAPTION>
<S> <C> <C> <C> <C>
J. Don Brock 40,000 $560,000
Robert G. Stafford 57,000 $737,400
Jerry F. Gilbert 10,000 $121,250
Albert E. Guth 10,000 $121,250
W. Norman Smith 18,000 $237,000
</TABLE>
Pension Plan. The Company does not operate any defined
benefit or actuarial plans for its employees, other than the
defined benefit plan for the Telsmith plant or shop union
employees. Formerly, the Barber-Greene Company (now
Telsmith, Inc.), a subsidiary of the Company, operated a
defined benefit plan under which one of the Named Executive
Officers, Mr. Stafford, retains some benefits. This Pension
Plan was frozen in August of 1986, and no additional
benefits are scheduled to accrue thereunder. As of the end
of the 1993 fiscal year, Mr. Stafford had eight and one-
third years of credit under the Pension Plan, with an
estimated annual benefit payable upon retirement of $8,385.
<PAGE>
Compensation of Directors. The Company's current policy
regarding the compensation of directors is to pay directors
who are not full-time employees of the Company a fee of
$6,000 per year for services as a director, plus $1,000 for
each Board meeting attended. Further, directors are paid
$500 per Committee meeting attended or $300 if the Committee
meeting occurs on the day of a Board meeting. The Company
also reimburses the directors for travel and other out-of-
pocket expenses incurred in connection with their duties as
directors. Directors who are full-time employees of the
Company receive no additional compensation for services as
directors.
Employment Contracts. The Company 's subsidiary, Trencor
Jetco, Inc. ("Trencor Jetco") has an employment agreement
with Mr. Jerry F. Gilbert expiring on December 31, 1994.
The agreement provides for a base salary of $125,000,
$130,000 and $135,000 per year for the calendar years ending
December 1992, 1993 and 1994, respectively. The agreement
further provides for an annual bonus to be paid pursuant to
the Company's Performance Rating Management Bonus Plan. In
the event that the Company sells or otherwise disposes of
Trencor Jetco as a going concern, Mr. Gilbert is entitled to
receive the full compensation provided for in the agreement
from the Company through the term of the agreement.
Compensation Committee Interlocks and Insider
Participation. The current members of the Company's
Compensation Committee are Messrs. Sloan (Chairman), Spear,
Dillon, Martin, and Jones, none of which served as an
officer or employee of the Company during the 1993 fiscal
year. Mr. Spear did serve as a financial consultant to the
Company from 1986 to 1989.
Five-Year Shareholder Return Comparison. The following
line-graph presentation compares cumulative, five-year
shareholder returns of the Company with the Nasdaq Stock
Market (US Companies) and an industry group composed of
manufacturers of industrial and commercial machinery and
computer equipment over the same period (assuming the
investment of $100 in the Company's Common Stock , the
Nasdaq Stock Market (US Companies) and the industry group on
December 31, 1988, and reinvestment of all dividends).
GRAPH APPREARS HERE ON PAPER COPY
<TABLE>
Comparison of Five Year-Cumulative Total Returns
Astec Industries, Inc.
<CAPTION>
Year-End Cumulative Returns
<CAPTION>
1988 1989 1990 1991 1992 1993
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Astec Industries, Inc. 100 51.5 19.1 38.2 119.1 180.9
Nasdaq Stock Market 100 121.2 103.0 165.2 192.1 219.2
Peer Index 100 102.9 101.3 141.0 185.9 190.3
</TABLE>
Total return calculations for the Nasdaq Stock Market (US
Companies) and the Peer Index were prepared by the Center
for Research in Security Prices, The University of Chicago.
The Peer Index is composed of the approximately 536
companies, including the Company, in the Standard Industrial
Classification ("SIC") Code Group 35 - industrial and
commercial machinery and computer equipment. Information
with regard to SIC classifications in general can be found
in the Standard Industrial Classification Manual published
by the Executive Office of the President, Office of
Management and Budget. Specific information regarding the
companies comprising the Peer Index, SIC Code Group 35, will
be provided to any shareholder upon request to the Secretary
of the Company.
Compensation Committee Report on Executive Compensation.
The Compensation Committee of the Board of Directors has
furnished the following report on executive compensation:
Overview and Philosophy
The Compensation Committee of the Board of Directors (the
"Compensation Committee") is composed entirely of outside
directors and is responsible for making recommendations to
the Board with respect to the Company's executive
compensation policies. In addition, the Compensation
Committee, pursuant to authority delegated by the Board,
recommends the compensation to be paid to the Company's
executive officers.
The objectives of the Company's executive compensation
program are to:
Approve compensation policies and guidelines that will
attract and retain qualified personnel and reward
performance.
Encourage the achievement of Company performance by
utilizing a performance rated bonus plan.
The executive compensation program provides an overall
level of compensation opportunity that is competitive within
the construction equipment manufacturing industry, as well
as with a broader group of companies of comparable size and
complexity. Actual compensation levels may be greater or
less than average competitive levels in similar companies
based upon annual and long-term Company performance as well
as individual performance. The Compensation Committee will
use its discretion to recommend executive compensation where
in its judgment external, internal or an individual's
circumstances so warrant.
Executive Officer Compensation Program
The Company's executive officer compensation program is
comprised of base salary, annual cash performance rating
bonus plan compensation, long-term incentive compensation in
the form of stock options and various benefits, including
medical and 401(k) plans generally available to all
employees of the Company.
Base Salary
Base salary for the Company's executive officers is
determined by the Compensation Committee based on the
individual's education, experience and performance. The
Compensation Committee periodically reviews each executive
officer's compensation.
Annual Cash Incentive Compensation
The Performance Rating Management Bonus Plan is the
Company's annual incentive program for executive officers
and key managers, and all non-union employees. The purpose
of the plan is to provide direct financial incentive in the
form of an annual cash bonus to those who achieve their
business units' annual goals. Budgeted goals for the
Company and each business unit are set at the beginning of
each fiscal year. In 1988, the following measures of
Company performance were selected: return on capital
employed, cash flow on capital employed, growth, and safety.
Each year the relative value of these is adjusted based on
the circumstance and goals defined. Individual performance
may also be taken into account in determining bonuses, but
no bonus is paid unless the above criteria have been
achieved. A performance score which is weighted two-thirds
for the current year and one-third for the prior year is
applied to ten percent of earnings by division after
consideration of income taxes. The performance rating
earned may vary from 5% to 100% of the 10%.
Stock Option
The stock option program is the Company's long-term
incentive plan for executive officers and key managers. The
objectives of the program are to relate executive and
shareholder long-term interests by creating a strong and
direct link between executive pay and shareholder return,
and to enable executives to develop and maintain a long-term
stock position in the Company's Common Stock. The Company's
stock option plans authorize the Compensation Committee to
award key personnel stock options and stock appreciation
rights. Awards are granted at the discretion of the
Compensation Committee based on Company performance,
individual performance and the employee's position with the
Company. On January 12, 1994, the Compensation Committee
granted options totaling 74,000 to certain executive
officers of the Company based on the foregoing criteria.
Benefits
The Company provides medical and 401(k) benefits to the
executive officers that are generally available to Company
employees. The amount of prerequisites, as determined in
accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not
exceed 10% of salary for fiscal 1993 and are very minimal.
Chief Executive Officer Compensation
Dr. Brock has served as President of the Company since he
founded it in 1972. His base salary prior to the beginning
of the fiscal year was $214,200, a level believed to be
competitive with that of other similarly situated companies
in the construction equipment industry. During the year,
the Compensation Committee increased Dr. Brock's base salary
by $5,800 in recognition of the significant improvement in
the performance of the Company based both on profitability
and shareholder return. His base salary at the end of the
fiscal year was $220,000.
Dr. Brock's bonus in fiscal 1993 was $110,000. The bonus
was determined in accordance with the Performance Rating
Management Bonus Plan discussed above. On January 12, 1994,
the Compensation Committee also granted Dr. Brock an option
to acquire 20,000 shares of Company stock under the
Company's 1992 Stock Option Plan in recognition of Dr.
Brock's contribution to the Company's outstanding financial
performance in 1993. The Compensation Committee believes
Dr. Brock has managed the Company well in a challenging
business climate and has achieved above-average results in
comparison to others in 1993.
COMPENSATION COMMITTEE
E. D. Sloan, Jr., Chair
James R. Spear
George C. Dillon
Joseph Martin, Jr.
G.W. Jones
Section 16(a) Filing Requirements
Based solely on a review of the copies of the Forms 3, 4
and 5 received by it, or written representations from
certain reporting persons that no Forms 5 were required to
be filed, the Company believes that, during 1993 all filing
requirements applicable to its officers, directors, and
greater than ten-percent beneficial owners were complied
with except that Mr. F. McKamy Hall failed to file a Form 4
to report the (i) exercise of an option in connection with
the purchase of shares of the Company's Common Stock, and
(ii) the sale of such shares of the Company's Common Stock
acquired through exercise of the option. Each of the
foregoing deficiencies were corrected on a Form 5 filed by
Mr. Hall on January 25, 1994.
AUDITORS
Ernst & Young served as the Company's auditors for the
year ended December 31, 1993, and that firm of independent
accountants is serving as auditors for the Company for the
current calendar year. Representatives of Ernst & Young are
expected to be present at the Annual Meeting and will have
an opportunity to make a statement if they so desire and
will be available to respond to appropriate questions.
The reports of Ernst & Young on the financial statements
of the Company for the three most recent fiscal years
contained no adverse opinion or disclaimer of opinion and
were not qualified or modified as to audit scope or
accounting principles. The reports of Ernst & Young on the
financial statements of the Company for each of the three
most recent fiscal years were modified as to uncertainties
as follows: "As discussed in Note 9 to the consolidated
financial statements, the Company is a defendant in two
patent infringement lawsuits and various other claims and
lawsuits. The ultimate amount of liability cannot be
determined at this time."
SOLICITATION OF PROXIES
The cost of soliciting proxy appointments will be borne by
the Company. In addition to solicitation by mail, officers
of the Company may solicit proxy appointments by personal
interview, and by telephone and telegraph, and may request
brokers holding stock in their names, or the names of
nominees, to forward proxy soliciting material to the
beneficial owners of such stock and will reimburse such
brokers for their reasonable expenses.
OTHER MATTERS
Management does not know of any other matters to be
brought before the meeting other than those referred to
above. If any matters which are not specifically set forth
in the form of proxy appointment and this proxy statement
properly come before the meeting, the persons appointed as
proxies will vote thereon in accordance with their best
judgment.
Whether or not you expect to be present at the meeting in
person, please vote, sign, date, and return promptly the
enclosed proxy appointment card in the enclosed envelope.
No postage is necessary if the proxy appointment card is
mailed in the United States.
SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company intended to be
presented for consideration at the 1994 Annual Meeting of
Shareholders of the Company must be received by the Company
at its principal executive offices on or before November 25,
1994 in order to be included in the Company's Proxy
Statement and Form of Proxy Appointment relating to the 1995
Annual Meeting of Shareholders.
FORM OF PROXY APPOINTMENT-FRONT
ASTEC INDUSTRIES, INC.
PROXY APPOINTMENT SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS
For Annual Meeting of Shareholders to be Held on April 29,
1994
The undersigned hereby appoints J. Don Brock and Albert
E. Guth, and each of them, with individual power of
substitution, proxies to vote all shares of the Common Stock
of Astec Industries, Inc. (the "Company") that the
undersigned may be entitled to vote at the Annual Meeting of
Shareholders of the Company to be held in Chattanooga,
Tennessee on April 29, 1994, and at any adjournment thereof,
as follows:
1. Authority Granted (except as indicated to the
contrary below)
Authority Withheld
to vote for the election as directors
of the Company in Class II of the
three nominees set forth below to
serve until the 1997 Annual Meeting of
Shareholders, or in the case of each
nominee until his successor is duly
elected and qualified, as set forth in
the accompanying Proxy Statement:
Daniel K. Frierson; E.D. Sloan, Jr.; George C.
Dillon; Robert G. Stafford
(INSTRUCTION: To withhold authority to vote
for any individual nominee(s), list name(s)
below.)
2. To vote in accordance with their best judgment upon
such other matters as may properly come before the
meeting or any adjournments thereof.
(Continued and to be signed and dated on other
side)
FORM OF PROXY APPOINTMENT-BACK
THIS PROXY APPOINTMENT, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED
SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
APPOINTMENT WILL BE VOTED AFFIRMATIVELY ON PROPOSALS 1 AND
2.
IMPORTANT: Please date this proxy appointment card and sign
exactly as your name or names appear(s) hereon. If the
stock is held jointly, signatures should include both names.
Executors, administrators, trustees, guardians, and others
signing in a representative capacity should give full title.
In order to insure that your shares will be represented at
the Annual Meeting of Shareholders, please vote, sign, date,
and return this proxy appointment card promptly in the
enclosed business reply envelope. If you do attend the
meeting, you may, if you wish, withdraw your proxy
appointment and vote in person.
Signature of Shareholder
DATED: , 1994
Signature of Shareholder
DATED: , 1994
