ASTEC INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1995
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 27, 1995, at 10:00
A.M., Chattanooga time, for the
following purposes:
1. To elect four directors in Class III to serve until the annual
meeting of shareholders in 1998,
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,
1995 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 17, 1995 through the Annual Meeting.
By Order of the Board of Directors
ALBERT E. GUTH,
Secretary
Dated: March 17, 1995
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.
ASTEC INDUSTRIES, INC.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
(615) 867-4210
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1995
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 27, 1995, 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 17,
1995. The Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1994, 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,
1995 (the "Record Date") will be entitled to notice of, and to vote at, the
Annual Meeting. As of the Record
Date there were 10,001,858 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 III expire with this Annual Meeting. The
directors of Class I and Class II will continue in office until the 1996 and
1997 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 election of the four
directors in Class III.
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 III 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 III director will be elected to hold office until the
1998 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. Withholding
authority to vote with respect to any one or more nominees will
constitute a vote against such nominee(s).
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, 1995, and the percentage
of the 10,001,858 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 III
For Three-Year Term Expiring Annual Meeting 1998
<CAPTION>
<S> <C> <S> <C> <S>
Name, Age, and Positions with the Company, Shares of Common Stock
Year First Principal Occupations During Beneficially Owned and
Elected Director At Least Past Five Years, Percent of Common
and Other Directorships Stock Outstanding 1
<S>
J. Don Brock
(56)
<C> <S>
(1972) Dr. Brock has been President 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 2
<S> <C>
Andersen Inc. 2,240,000
22.40%
Albert E. Guth
(55)
(1972)
Mr. Guth has been Chief Financial Officer of the
Company since 1987, Senior Vice President of the
Company since 1984, Treasurer of the Company
since 1994 and Secretary of the Company since 3
1972. 45,000
W. Norman Smith
(55)
(1982)
Mr. Smith has served as the President of Astec,
Inc., a subsidiary of the Company, since its
formation in January 1995. Previously, he served as
the President of Heatec, Inc., a subsidiary of the 4
Company, since 1977. 173,140
1.73%
William B. Sansom
(53)
(Nominated 1995)
Mr. Sansom has served as the Chairman and Chief
Executive Officer of H.T. Hackney Co., a diversified
wholesale grocery, gas and oil, and furniture
manufacturing company, since 1983. Formerly, Mr.
Sansom served as the Tennessee Commissioner of
Transportation from 1979 to 1981, and as
Tennessee Commissioner of Finance and
Administration from 1981 to 1983. Mr. Sansom also
serves as a director on the boards of Martin
Marietta Materials and First Tennessee National 0
Corporation.
</TABLE>
<TABLE>
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
<CAPTION>
Class I
Term Expiring Annual Meeting 1996
<CAPTION>
Positions with the Company, Shares of Common Stock
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
<CAPTION>
<S> <C> <S>
Joseph Martin, Jr.
(79)
<C> <S> <C> <S>
(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
<S> <C> <C>
when the Company acquired Barber-Greene. 2,000
Jerry F. Gilbert
(49)
(1991) Mr. Gilbert has served as the President of Trencor,
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 5
since 1981. 25,827
G. W. Jones
(68)
(1993) Mr. Jones has served as a director of the Company
since 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 1969 to 1992. 2,000
</TABLE>
<TABLE>
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
Class II
Term Expiring Annual meeting 1997
<CAPTION>
Positions with the Company, Shares of Common Stock
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
<CAPTION>
<S> <C>
Daniel K. Frierson
(53)
<C> <S>
(1994) Mr. Frierson has been the Chief Executive Officer of
Dixie Yarns, Incorporated, a public company in 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
<S> <C> <C>
the board of American National Bank. 1,500
E. D. Sloan, Jr.
(65)
(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., 6
Inc. 251,000
2.51%
George C. Dillon
(72)
(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. 2,200
Robert G. Stafford
(56)
(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- 8
Greene in December 1986. 7 73,377
</TABLE>
[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,
1995.
2 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 and 20,000 shares subject to options under the
Company's 1992 Stock Option Plan.
3 Includes 13,000 shares subject to options under the Company's 1992 Stock
Option Plan.
4 Includes 10,000 shares subject to options under the Company's 1986 Stock
Option Plan, 16,000 shares subject to options under the Company's 1992 Stock
Option Plan, and 4,770 shares owned by Mr. Smith's children.
5 Includes 18,000 shares subject to options under the Company's 1992 Stock
Option Plan and 1,577 shares held in the Company's 401(k) Plan over which
Mr. Gilbert has no voting power.
6 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.
7 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.
8 Includes 37,000 shares subject to options under the Company's 1986 Stock
Option Plan, 35,000 shares subject to options under the Company's 1992 Stock
Option Plan, and 1,545 shares held in the Company's 401(k) Plan over which
Mr. Stafford has no voting power.
Other Information about the Board and its Committees
Meetings. During 1994, the Board of Directors held 8 meetings, and
the Board's Committees held the
meetings described below. Except for Messrs. Martin and Gilbert, who each
attended 5 meetings, and Mr.
Frierson, who became a director in April 1994 and attended 3 meetings, 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 1994, 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
1994, the Audit Committee held three meetings and except for Mr. Martin,
who attended 2 of the 3 meetings,
each committee member attended at least 75% of the aggregate number of
audit committee 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 1994, the Compensation Committee
held two meetings and except
for Mr. Martin, who attended 1 of the 2 meetings, each committee member
attended at least 75% of the
aggregate number of compensation committee meetings.
Technical Committee. The Technical Committee met one time in
1994 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. Stafford and Smith.
Transactions With Management
In September 1991, the Company's Chairman, its Senior Vice
President and the President of its Telsmith,
Inc. subsidiary formed a general partnership which acquired 25% of the
common stock of American Rock
Products, Inc., an Ohio corporation engaged in the business of supplying
crushed rock to concrete and
asphalt producers in the southeastern Oklahoma area ("Amrock"). Dr. Brock
and Messrs. Guth and Stafford
own interests in the partnership of 50%, 25% and 25%, respectively. In
December 1992, exclusive of two
used rock crushing machines and certain other miscellaneous inventory and
equipment, the rock crushing
business of Amrock was sold to a competitor.
In August 1994, Amrock sold its remaining two used rock crushing
machines to Telsmith for $50,000
and $70,000, respectively. The purchase price for each of these machines was
determined by Mr. Stafford
based on his opinion of their fair market value at the time of purchase.
Telsmith intends to market both rock
crushing machines to its customers for sale in the ordinary course of business.
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, 1995:
Title of Class Shares Beneficially Owned Percent of Class
Common Stock, $.20 Par Value 2,836,144 28.36%
The table includes 209,000 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.
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>
Name and Address of Amount and Nature of 1
Beneficial Owner Date Beneficial Ownership Percent of Class
<CAPTION>
<S>
J. Don Brock
Astec Industries, Inc
4101 Jerome Avenue
Chattanooga, 2
<S> <C> <C> <C>
Tennessee 37407 March 10, 1995 2,240,000 22.40%
Overseas Lending Corporation
c/o Enpro International N.V.
345 Avenue of the Americas
New York,
New York 10105 March 10, 1995 554,000 5.54%
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, 3
Wisconsin 53202 March 10, 1995 696,500 6.96%
</TABLE>
[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
and 20,000 shares subject to
options under the 1992 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.
3 Based on information provided by such investor to the Company, Heartland
Advisors, Inc. is an
investment advisor with voting and dispositive power over such shares.
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,
1992, 1993 and 1994 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 $100,000 (collectively, the "Named
Executive Officers").
<TABLE>
Summary Compensation Table
Annual Compensation
Name and
Principal Position Year Salary ($) Bonus ($) All Other Compensation ($)1
<CAPTION>
<S> <C> <C> <C> <C>
J. Don Brock 1994 225,000 120,000 5,734
Chairman of the Board,
President 1993 220,000 110,000 4,590
and Treasurer 1992 214,200 69,079 5,496
Robert G. Stafford 1994 141,865 30,530 3,421
President of Telsmith,
Inc. 1993 134,885 62,775 2,561
1992 127,442 63,750 3,683
Jerry F. Gilbert 1994 135,000 24,975 3,455
President of Trencor,
Inc. 1993 130,000 24,050 2,998
1992 125,000 18,750 3,342
Albert E. Guth 1994 130,000 45,000 4,170
Chief Financial
Officer, Senior 1993 125,000 40,000 2,864
Vice President
and Secretary 1992 120,500 15,000 3,498
W. Norman Smith 1994 115,877 48,160 3,794
President of Heatec,
Inc. 1993 107,000 39,055 3,219
1992 105,086 51,036 3,666
</TABLE>
[FN]
1 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 1994 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 1994 fiscal year were as follows:
$4,620 to Dr. Brock; $3,000 to Mr.
Stafford; $3,181 to Mr. Gilbert; $3,400 to Mr. Guth; and $3,099 to Mr.
Smith. The amount of insurance
premium paid for the benefit of each of the Named Executive Officers for the
1994 fiscal year was: $1,114 for
Dr. Brock; $421 for Mr. Stafford; $274 for Mr. Gilbert; $770 for Mr. Guth;
and $695 for Mr. Smith. The Named
Executive Officers have no interest in the cash surrender value of the term
life insurance policies.
Option Grants in Last Fiscal Year
The following table provides details regarding stock options granted
to the Named Executive Officers in 1994. In addition there are shown the
hypothetical gains or "option spreads" that would exist
for the respective options. These gains are based on assumed rates of annual
compound price appreciation of 5% and 10% from the date the options were
granted over the full option term.
<TABLE>
Individual Option Grants
Potential Realizable
Value at Assumed Annual
Securities % of Total Rates of Stock Price
Underlying Options Granted Exercise Appreciation for
Options to Employees in or Base Expiration Option Term ($)
Name Granted (#)1 Fiscal Year (%) Price ($/Sh)2 Date 5% 10%
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
J. Don Brock 3 20,000 23.0 16.363 1/11/99 52,434 151,867
Robert G. Stafford 15,000 17.2 14.875 1/11/04 140,322 355,604
Jerry F. Gilbert 8,000 9.2 14.875 1/11/04 74,838 189,655
Albert E. Guth 10,000 11.5 14.875 1/11/04 93,548 237,069
W. Norman Smith 8,000 9.2 14.875 1/11/04 74,838 189,655
</TABLE>
[FN]
1 All of the options are incentive stock options granted under the Astec
Industries, Inc. 1992 Stock Option Plan (the "Plan") and are currently
exercisable. If the Company is a party to ny reorganization under which
the Company will not remain in existence or substantially all of its Common
Stock will be purchased by a single purchaser or group of purchasers acting
together, the Compensation Committee of the Board of
Directors (the "Committee") may, in its discretion, (i) declare all options
outstanding under the Plan exercisable immediately and terminate any options
not so exercised within a time period specified by the
Committee; (ii) adjust the outstanding options as appropriate so that they
apply to the securities of the corporation resulting from such
reorganization; or (iii) take some combination of (i) and (ii). If the
Committee believes an event is likely to lead to a change in control of
stock ownership of the Company, whether or not
any such change in control actually occurs, the Committee may declare all
options granted under the Plan immediately exercisable.
2 The exercise price may be paid by delivery of already-owned shares and tax
withholding obligations related to exercise may be paid by offset of the
underlying shares, subject to certain conditions.
3 As a ten percent or greater stockholder of the Company, as required by the
Plan, the incentive stock options to Dr. Brock were granted for a five-year
term with an exercise price equal to the market value of the
Common Stock on the date of the grant plus ten percent.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table shows stock option exercises by the Named
Executive Officers during 1994, including the aggregate value of gains on
the date of exercise. In addition, this table includes the number of
shares underlying both exercisable and non-exercisable stock options as of
December 31, 1994. 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>
Number of Securities
Underlying Value of Unercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at Fiscal Yea-End(#) at Fiscal Year-End ($)
Name Exercise (#) Realized ($) Exercisable Unexcisable Exercisable Unexercisable
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
J. Don Brock 0 0 40,000 20,000 $455,000 0
Robert G. Stafford 0 0 57,000 15,000 $587,775 0
Jerry F. Gilbert 0 0 10,000 8,000 $ 95,000 0
Albert E. Guth 7,000 $105,000 3,000 10,000 $ 28,500 0
W. Norman Smith 0 0 18,000 8,000 $189,750 0
</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 1994 fiscal year, Mr. Stafford had nine and
one-third years of credit under the Pension Plan, with an
estimated annual benefit payable upon retirement of $8,385.
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. During 1994, the Company's subsidiary,
Trencor, Inc., had an employment
agreement with Mr. Jerry F. Gilbert which expired on December 31, 1994.
The agreement provided for a base
salary of $125,000, $130,000 and $135,000 per year for the calendar years
ended December 1992, 1993 and
1994, respectively. The agreement further provided for an annual bonus to be
paid pursuant to the
Company's Performance Rating Management Bonus Plan.
Compensation Committee Interlocks and Insider Participation. The
current members of the
Company's Compensation Committee are Messrs. Sloan (Chairman), Spear,
Dillon, Martin, Frierson, and
Jones, none of which served as an officer or employee of the Company during
the 1994 fiscal year.
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, 1989, and reinvestment of all
dividends).
Comparison of Five Year-Cumulative Total Returns
Astec Industries, Inc.
[GRAPH]
Year-End Cumulative Returns
1989 1990 1991 1992 1993 1994
Astec Industries, Inc. 100 37.1 74.3 231.4 351.4 291.4
Nasdaq Stock Market 100 84.9 136.3 158.6 180.9 176.9
Peer Index 100 97.7 133.3 174.3 179.6 198.9
Legend
Symbol Index Description
----- Astec Industries, Inc.
- - - - - Nasdaq Stock Market (US companies)
- - - - - - - Peer Index (Standard Industrial
Classification Code Group 35)
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 of the Company's subsidiaries, 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 circumstances 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.
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 1994 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 in 1994
was $225,000, a level believed to be competitive with that of other similarly
situated companies in the
construction equipment industry.
Dr. Brock's bonus in fiscal 1994 was $120,000. This bonus was
based on the subjective determination of
the Compensation Committee in recognition of Dr. Brock's contribution to
the Company in 1994. On March
1, 1995, 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. 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 1994.
COMPENSATION COMMITTEE
E. D. Sloan, Jr., Chair
James R. Spear
George C. Dillon
Joseph Martin, Jr.
Daniel K. Frierson
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
1994 all filing requirements applicable to its officers, directors, and greater
than ten-percent beneficial
owners were complied with except that Mr. W. Norman Smith failed to file a
Form 4 to report (i) two separate
sales transactions in shares of the Company's Common Stock, and (ii) the gift
of certain shares of the
Company's Common Stock to his son. Each of the foregoing deficiencies
were corrected on a Form 5 filed
by Mr. Smith on February 14, 1995.
AUDITORS
Ernst & Young served as the Company's auditors for the year ended
December 31, 1994, 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 the fiscal years ended 1992 and 1993 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 1996
Annual Meeting of Shareholders of the Company must be received by the
Company at its principal
executive offices on or before November 20, 1995 in order to be included in
the Company's Proxy Statement
and Form of Proxy Appointment relating to the 1996 Annual Meeting of
Shareholders.
<PAGE>
[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 27, 1995
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 27, 1995, 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 III of the
four nominees set forth below to serve until the
1998 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:
J. Don Brock; Albert E. Guth; W. Norman Smith; William B. Sansom
(INSTRUCTION: To withhold authority to vote for any individual
nominee(s), list name(s) below.)
1. / / Authority Granted
2. / / Authority Withheld
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)
<PAGE>
[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 ensure 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.
(SEAL)
Signature of Shareholder
DATED: , 1995
(SEAL)
Signature of Shareholder
DATED: , 1995
