ASTEC INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
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 25, 1996, at 10:00
A.M., Chattanooga time, for the following purposes:
1. To elect three directors in Class I to serve until the annual
meeting of shareholders in 1999, 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 11,
1996 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 18, 1996 through
the Annual Meeting.
By Order of the Board of Directors
ALBERT E. GUTH,
Secretary
Dated: March 18, 1996
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
(423) 867-4210
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1996
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 25, 1996, 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, 1996. The Company's Annual Report
to Shareholders for the fiscal year ended December 31, 1995, 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 11, 1996 (the "Record Date") will be entitled
to notice of, and to vote at, the Annual Meeting. As of the Record Date
there were 10,037,199 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 I expire with this Annual Meeting. The
directors of Class II and Class III will continue in office until the 1997
and 1998 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 three directors in Class I.
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 three Class I 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 I director will be elected to
hold office until the 1999 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 11, 1996, and the percentage of the
10,037,199 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 I
For Three-Year Term Expiring Annual Meeting 1999
<CAPTION>
Positions with the Company, Shares of Common Stock
<CAPTION>
<S> <C> <C>
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
Jerry F. Gilbert
(50)
(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 since 1981. 42,565 2
G. W. Jones
(69)
(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
Ronald W. Dunmire
(58)
(Nominated in 1996)
Mr. Dunmire served as President and Chief
Executive Officer of Cedarapids, Inc., a
manufacturer of rock crushing and road
building equipment and a subsidiary of
Raytheon Company, from 1983 until 1993.
Mr. Dunmire is currently retired. 0
</TABLE>
<TABLE>
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
Class II
Term Expiring Annual Meeting 1997
Positions with the Company, Shares of Common Stock
<CAPTION>
<S> <C> <C>
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
Daniel K. Frierson
(54)
(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 the board of SunTrust Bank of
Chattanooga, N.A., which was formerly American
National Bank. 1,500
E. D. Sloan, Jr.
(66)
(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 3
2.50%
George C. Dillon
(73)
(1986)
Mr. Dillon has served as a director of the Company
since 1986. While currently retired, Mr. Dillon
formerly served as a director of the Phelps Dodge
Corporation, Newhall Land & Farming Company,
and Butler Manufacturing Co. 2,200
Robert G. Stafford
(57)
(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. 4 78,7645
</TABLE>
<TABLE>
MEMBERS OF BOARD OF DIRECTORS
CONTINUING IN OFFICE
Class III
Term Expiring Annual meeting 1998
Positions with the Company, Shares of Common Stock
<CAPTION>
<S> <C> <C>
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
(57)
(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
Andersen Inc.
2,260,0006
22.34%
Albert E. Guth
(56)
(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 1972.
45,000 7
W. Norman Smith
(56)
(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
Company, since 1977. 148,210 8
1.47%
William B. Sansom
(54)
(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 Corporation. 1,000
</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 11, 1996.
2 Includes 23,000 shares subject to options under the Company's 1992
Stock Option Plan and 2,765 shares held in the Company's 401(k) Plan
over which Mr. Gilbert has no voting power.
3 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.
4 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.
5 Includes 37,000 shares subject to options under the Company's 1986
Stock Option Plan, 40,000 shares subject to options under the Company's
1992 Stock Option Plan, and 1,764 shares held in the Company's 401(k)
Plan over which Mr. Stafford has no voting power.
6 Does not include 431,884 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 40,000 shares subject to options
under the Company's 1992 Stock Option Plan. Also includes 1,110,000
shares over which Dr. Brock has voting but not dispositive power pending
an appeal of a Final Judgment filed in the Chancery Court of Hamilton
County, Tennessee on October 5, 1995 in connection with a divorce
proceeding in which Lynne W. Brock, Dr. Brock's former spouse, was
awarded such shares.
7 Includes 15,000 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, 26,000 shares subject to options under the Company's
1992 Stock Option Plan, and 7,440 shares owned by Mr. Smith's children.
Other Information about the Board and its Committees
Meetings. During 1995, the Board of Directors held six meetings,
and the Board's Committees held the meetings described below. Except
for Messrs. Dillon and Frierson, each incumbent director attended at least
75% of the aggregate of: (1) the total number of meetings of the Board of
Directors held during the period for which he has been a director; and (2)
the total number of meetings held by all committees of the Board on
which he served during the periods that he served.
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 1995, and 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. Dillon (Chairman), Sloan,
Martin, Jones, Frierson and Sansom, and during 1995, 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), Martin, Dillon, Jones, Frierson
and Sansom, and during 1995, the Compensation Committee held two
meetings.
Technical Committee. The Technical Committee met twice in 1995
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
On March 20, 1995, the Company acquired all of the issued and
outstanding shares of Trace Industries, Inc., a New Mexico corporation
doing business as CEI Enterprises ("CEI"), in exchange for $852,004 in
cash and 87,333 shares of Company Common Stock. This purchase price
was determined by the Senior Vice President of the Company based on his
opinion of the fair market value of CEI following arm's length
negotiation. Prior to this acquisition, CEI was a closely held company
with four shareholders including Mr. Brent England, its President. In
connection with this transaction, CEI was merged into a wholly owned
subsidiary of the Company with Mr. England continuing to serve as
President of the successor corporation and, as such, is now an executive
officer of the Company. In lieu of providing registration rights to the
former shareholders of CEI with respect to the shares of Company
Common Stock being issued in this transaction, the Company granted
each such shareholder the right to require the Company to redeem the
shares at any time within two years of the closing date at a price of $12.00
per share. Mr. England received 23,333 shares of Company Common
Stock in connection with this transaction and, consistent with the rights
granted to each other former shareholder of CEI, has the right to require
the redemption of such shares by the Company for $12.00 per share at any
time on or before March 20, 1997.
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 11, 1996:
Title of Class Shares Beneficially Owned 1 Percent of Class
Common Stock, $.20 Par Value 2,869,3392 27.84%
1 The foregoing table includes 268,000 shares which the directors and
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.
2 Includes 1,110,000 shares over which Dr. Brock has voting but not
dispositive power pending an appeal of a Final Judgment filed in the
Chancery Court of Hamilton County, Tennessee on October 5, 1995 in
connection with a divorce proceeding in which Lynne W. Brock, his
former spouse, was awarded such shares.
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
<CAPTION>
<S> <C> <C> <C>
Beneficial Owner Date Beneficial Ownership Percent of Class
J. Don Brock
Astec Industries, Inc.
4101 Jerome Avenue
Chattanooga, Tennessee
37407 March 11, 1996 2,260,0002 22.34%
Heartland Advisors, Inc.
790 North Milwaukee Street
Milwaukee, Wisconsin
53202 March 11, 1996 1,774,6003 17.68%
Overseas Lending Corporation
c/o Enpro International N.V.
345 Avenue of the Americas
New York, New York
10105 March 11, 1996 554,000 5.52%
</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 40,000 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
431,884 shares held beneficially by Edna F. Brock, Dr. Brock's mother,
over which shares he has no voting or dispositive power. Also includes
1,110,000 shares over which Dr. Brock has voting but not dispositive
power pending an appeal of a Final Judgment filed in the Chancery Court
of Hamilton County, Tennessee on October 5, 1995 in connection with a
divorce proceeding in which Lynne W. Brock, Dr. Brock's former spouse,
was awarded such shares.
3 Based on information previously 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,
1993, 1994 and 1995 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 $100,000 (collectively, the "Named Executive
Officers").
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation
Name and All Other
<CAPTION>
<S> <C> <C> <S> <C> <S>
Principal Position Year Salary($) Bonus($) Compensation($)1
J. Don Brock 1995 $232,000 $50,000 $33,965
Chairman of the Board,
President 1994 225,000 120,000 5,734
and Treasurer 1993 220,000 110,000 4,590
Robert G. Stafford 1995 147,885 54,760 3,421
President of Telsmith,
Inc. 1994 141,865 30,530 3,421
1993 134,885 62,775 2,561
Jerry F. Gilbert 1995 140,000 11,900 3,274
President of Trencor,
Inc. 1994 135,000 24,975 3,455
1993 130,000 24,050 2,998
Albert E. Guth 1995 135,000 25,000 3,770
Chief Financial
Officer, Senior 1994 130,000 45,000 4,170
Vice President and
Secretary 1993 125,000 40,000 2,864
W. Norman Smith 1995 140,000 70,000 3,695
President of Astec,
Inc. 1994 115,877 48,160 3,794
1993 107,000 39,055 3,219
</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 1995 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 1995 fiscal year were as follows: $3,000 to
Dr. Brock; $3,000 to Mr. Stafford; $3,000 to Mr. Gilbert; $3,000 to Mr.
Guth; and $3,000 to Mr. Smith. The amount of insurance premium paid
for the benefit of each of the Named Executive Officers for the 1995 fiscal
year was: $30,965 for Dr. Brock; $421 for Mr. Stafford; $274 for Mr.
Gilbert; $770 for Mr. Guth; and $695 for Mr. Smith. The Named
Executive Officers have no interest in the cash surrender value of the term
life insurance policies.
Option Grants in Last Fiscal Year
The following table provides details regarding stock options
granted to the Named Executive Officers in 1995. In addition, the
hypothetical gains or "option spreads" that would exist for the respective
options are reflected. These gains are based on assumed rates of annual
compound price appreciation of 5% and 10% from the date the options
were granted over the full option term.
<TABLE>
Individual Option Grants
Securities % of Total Potential Realizable
Underlying Options Granted Exercise Value at Assumed Annual
Options to Employees in or Base Expiration Rates of Stock Price
<CAPTION>
<S> <C> <C> <S> <C> <S> <C> <C> <S> <C>
Name Granted (#) 1 Fiscal Year (%) Price ($/Sh) 2 Date Appreciation for Option Term ($)
5% 10%
J. Don Brock 3 20,000 29.9 14.163 2/28/00 45,383 131,446
Robert G. Stafford 5,000 7.5 12.875 2/28/05 40,485 102,597
Jerry F. Gilbert 5,000 7.5 12.875 2/28/05 40,485 102,597
Albert E. Guth 5,000 7.5 12.875 2/28/05 40,485 102,597
W. Norman Smith 10,000 14.9 12.875 2/28/05 80,970 205,194
</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 any 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 110% of the market value of the
Common Stock on the date of grant.
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 1995, 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, 1995. 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 Unexercised
Shares Unexercised Options In-the-Money Options
Acquired on Value at Fiscal Year-End(#) at Fiscal Year-End(#)
<CAPTION>
<S> <C> <S> <C> <S> <S> <S> <S>
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
J. Don Brock 0 0 80,000 0 $340,000 0
Robert G. Stafford 0 0 77,000 0 $423,900 0
Jerry F. Gilbert 0 0 23,000 0 $ 66,250 0
Albert E. Guth 3,000 $25,500 15,000 0 $ 0 0
W. Norman Smith 0 0 36,000 0 $138,000 0
</TABLE>
Pension Plan. The Company formerly operated a defined benefit plan
for the Barber-Greene shop, Barber-Greene office and Telsmith office
employees. In December 1995, all assets in this plan were finally
distributed to Transamerica, Inc. for the establishment of annuities for the
benefit of its participants. At the time of this distribution, Mr. Stafford
had nine and one-third years of credit under the plan and has 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.
Compensation Committee Interlocks and Insider Participation. The
current members of the Company's Compensation Committee are Messrs.
Sloan (Chairman), Messrs. Martin, Dillon, Jones, Frierson and Sansom,
none of which served as an officer or employee of the Company during the
1995 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, 1990,
and reinvestment of all dividends).
GRAPH HERE
Year-End Cumulative Returns
1990 1991 1992 1993 1994 1995
Astec Industries, Inc. 100 200.0 623.1 946.2 784.6 607.7
Nasdaq Stock Market 100 160.6 186.9 214.5 209.7 296.3
Peer Index 100 136.5 178.5 183.8 203.8 313.6
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. The Company does not have a policy that
requires or encourages the Board of Directors to limit executive
compensation to that deductible under Section 162(m) of the Internal
Revenue Code. The Board of Directors will consider various alternatives
for preserving the deductibility of compensation payments and benefits to
the extent necessary and to the extent consistent with its other
compensation objectives.
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 values of these measures are
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 1995 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 1995 was $232,000, a level believed to be
competitive with that of other similarly situated companies in the
construction equipment industry.
Dr. Brock's bonus in fiscal 1995 was $50,000. This bonus was based
on the subjective determination of the Compensation Committee in
recognition of Dr. Brock's contribution to the Company in 1995. 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 continued to manage the Company well in a challenging
business climate and has achieved above-average results in comparison to
others in 1995.
COMPENSATION COMMITTEE
E. D. Sloan, Jr., Chair
Joseph Martin, Jr.
George C. Dillon
G. W. Jones
Daniel K. Frierson
William B.Sansom
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 1995 all filing requirements applicable to its officers, directors,
and greater than ten-percent beneficial owners were satisfied, except that
Mr. Brent England failed to file a Form 3 to report becoming an executive
officer of the Company and Mr. Sansom failed to file a Form 3 to report
becoming a director of the Company. These deficiencies were corrected
on Form 3's filed by Mr. England and by Mr. Sansom on March 6, 1996.
AUDITORS
Ernst & Young served as the Company's auditors for the year ended
December 31, 1995, 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.
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 1997 Annual Meeting of Shareholders of the
Company must be received by the Company at its principal executive
offices on or before November 19, 1996 in order to be included in the
Company's Proxy Statement and Form of Proxy Appointment relating to
the 1997 Annual Meeting of Shareholders.
