<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ASTEC INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[ASTEC INDUSTRIES, INC. LOGO]
ASTEC INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 2000
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Astec Industries, Inc., a
Tennessee corporation, will be held at the Company's executive offices, 4101
Jerome Avenue, Chattanooga, Tennessee, on April 27, 2000, 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 2003, or in the case of each
director, until his successor is duly elected and qualified.
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 15, 2000
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
Company's offices from March 27, 2000 through the Annual Meeting.
By Order of the Board of Directors
/s/ Richard W. Bethea, Jr.
------------------------------------------
RICHARD W. BETHEA, JR.
Secretary
Dated: March 27, 2000
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> 3
ASTEC INDUSTRIES, INC.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
(423) 867-4210
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2000
The enclosed proxy appointment is solicited by and on behalf of the
Board of Directors of Astec Industries, Inc. for use at its Annual Meeting of
Shareholders to be held on April 27, 2000, 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 27, 2000. The Company's Annual Report to Shareholders for the
fiscal year ended December 31, 1999, 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 15, 2000 (the "Record Date") will be entitled to notice of,
and to vote at, the Annual Meeting. As of the Record Date there were 19,134,915
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.
1. 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 I
and Class III will continue in office until the 2002 and 2001 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 four directors to serve
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 2003 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 "FOR" TO VOTE
FOR THE ELECTION OF ALL OF THE NOMINEES. THE AFFIRMATIVE VOTE OF THE HOLDERS OF
A PLURALITY 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
EACH OF THE NOMINEES. WITHHOLDING AUTHORITY TO VOTE WITH RESPECT TO ANY ONE OR
MORE NOMINEES WILL CONSTITUTE A VOTE AGAINST SUCH NOMINEE(S).
-2-
<PAGE> 4
CERTAIN INFORMATION CONCERNING NOMINEES AND DIRECTORS
The following table sets forth the names of the nominees and of the
Company's current directors, their ages, the year in which they were first
elected directors, their positions 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 15, 2000, and the
percentage of the 19,134,915 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.
NOMINEES FOR DIRECTOR
CLASS II
FOR THREE-YEAR TERM EXPIRING ANNUAL MEETING 2003
<TABLE>
<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)
---------------- ---------------------------- ----------------------
<S> <C> <C>
Daniel K. Frierson Mr. Frierson has been the Chief Executive 3,000
(58) Officer of The Dixie Group, Inc., a public
(1994) 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 boards of
Printpack, Inc. and SunTrust Bank of
Chattanooga, N.A., which was formerly American
National Bank.
Robert G. Stafford Mr. Stafford was appointed Group Vice President 347,466(2)
(61) - Aggregate in December 1998 and served as 1.81%
(1988) President of Telsmith, Inc., a subsidiary of the
Company from April 1991 to December 1998.
J. Wade Gilley Mr. Gilley has served as the President of the --
(61) University of Tennessee since May 7, 1999.
Prior to that date, Mr. Gilley had served as the
President of Marshall University since 1991.
Robert H. West Mr. West served as Chairman of the Board and 1,000
(61) Chief Executive Officer of Butler Manufacturing
Company from 1968 to 1999. Mr. West currently
serves on the Boards of Directors of Burlington
Northern Santa Fe Corporation, Kansas City Power
and Light, and Commerce Bancshares, Inc. Mr.
West is currently retired.
</TABLE>
-3-
<PAGE> 5
MEMBERS OF THE BOARD OF DIRECTORS
NOT CONTINUING IN OFFICE
CLASS II
<TABLE>
<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)
---------------- ---------------------------- ----------------------
<S> <C> <C>
E.D. Sloan, Jr. While currently retired, Mr. Sloan was Chairman 177,024(3)
(70) of the Board of Nolas Trading Company, Inc.,
(1978) which until 1987 was named Sloan Construction
Co., Inc.
George C. Dillon While currently retired, Mr. Dillon formerly 5,072(4)
(77) served as a director of Phelps Dodge
(1986) Corporation, Newhall Land & Farming Company,
and Butler Manufacturing Co.
</TABLE>
MEMBERS OF THE BOARD OF DIRECTORS
CONTINUING IN OFFICE
CLASS I
TERM EXPIRING ANNUAL MEETING 2002
<TABLE>
<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)
---------------- ---------------------------- ----------------------
<S> <C> <C>
William D. Gehl Mr. Gehl is Chairman of the Board, President, 333
(53) and Chief Executive Officer of Gehl Company, a
1999 manufacturer of agricultural and industrial
construction equipment. Prior to joining Gehl
Company in 1992 as President and Chief Executive
Officer, Mr. Gehl served as Executive Vice
President and Chief Operating Officer of The
Ziegler Companies, Inc., a financial services
holding company.
Ronald W. Dunmire Mr. Dunmire served as President and Chief 2,368
(62) Executive Officer of Cedarapids, Inc., a
(1996) manufacturer of rock crushing and road building
equipment and a subsidiary of Raytheon Company,
from 1983 until 1993. Mr. Dunmire is currently
retired.
</TABLE>
-4-
<PAGE> 6
<TABLE>
<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)
---------------- ---------------------------- ----------------------
<S> <C> <C>
Robert Dressler Mr. Dressler has served as a Managing Director 2,368
(74) since December, 1996 and previously served as a
(1997) Senior Vice President in the Corporate Finance
Department of Raymond James and Associates, Inc.
since 1987. Mr. Dressler also serves as director
of Crown Andersen, Inc.
</TABLE>
CLASS III
TERM EXPIRING ANNUAL MEETING 2001
<TABLE>
<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)
---------------- ---------------------------- ----------------------
<S> <C> <C>
J. Don Brock Dr. Brock has been President of the Company 2,623,092(5)
(61) since its incorporation in 1972 and assumed the 13.71%
(1972) additional position of Chairman of the Board in
1975. He earned his Ph.D. degree in mechanical
engineering from the Georgia Institute of
Technology. Dr. Brock also serves as a director
on the board of The Dixie Group, Inc., a public
company in the textile manufacturing business.
Albert E. Guth Mr. Guth has served as the President of Astec 94,354(6)
(60) Financial Services, Inc., a subsidiary of the
(1972) Company since June 1996. Previously he served
as Chief Financial Officer of the Company since
1987, Senior Vice President of the Company since
1984 and Secretary of the Company since 1972.
W. Norman Smith Mr. Smith was appointed Group Vice President - 364,442(7)
(61) Asphalt in December 1998 and has served as the 1.90%
(1982) President of Astec, Inc., a subsidiary of the
Company, since January 1995. Previously, he
served as the President of Heatec, Inc., a
subsidiary of the Company, since 1977.
William B. Sansom Mr. Sansom has served as the Chairman and Chief 2,000
(58) Executive Officer of H.T. Hackney Co., a
(1995) 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.
</TABLE>
-5-
<PAGE> 7
(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 that are exercisable within 60 days of March 15, 2000
under the 1986 Stock Option Plan, the 1992 Stock Option Plan, the 1998 Long-Term
Incentive Plan or the Non-Employee Directors Stock Incentive 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 15, 2000. All share amounts reflect a two-for-one stock
split of the Common Stock effective January 18, 1999.
(2) Includes outstanding options to purchase 340,000 shares of Common Stock to
the extent such options are either currently exercisable or will become
exercisable within 60 days after March 15, 2000. Also includes 4,106 shares held
in the Company's Supplemental Executive Retirement Plan and 3,360 shares held in
the Company's 401(k) Plan.
(3) Includes 150,000 shares held in Mr. Sloan's Individual Retirement Account
and outstanding options to purchase 1,024 shares of Common Stock that are
currently exercisable or will become exercisable within 60 days after March 15,
2000.
(4) Includes 4,000 shares held in Mr. Dillon's Individual Retirement Account and
outstanding options to purchase 1,024 shares of Common Stock that are currently
exercisable or will become exercisable within 60 days after March 15, 2000.
(5) Does not include 293,508 shares held by Edna F. Brock, Dr. Brock's mother,
over which shares he has no voting or dispositive power. Includes outstanding
options to purchase 230,000 shares of Common Stock that are currently
exercisable or will become exercisable within 60 days after March 15, 2000. Also
includes 6,669 shares held in the Company's Supplemental Executive Retirement
Plan.
(6) Includes outstanding options to purchase 66,000 shares of Common Stock that
are currently exercisable or will become exercisable within 60 days after March
15, 2000. Also includes 3,055 shares held in the Company's Supplemental
Executive Retirement Plan and 3,299 shares held in the Company's 401(k) Plan.
(7) Includes outstanding options to purchase 222,000 shares of Common Stock that
are currently exercisable or will become exercisable within 60 days after March
15, 2000. Also includes 3,453 shares held in the Company's Supplemental
Executive Retirement Plan.
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
Meetings. During 1999, the Board of Directors held seven meetings, and the
Board's Committees held the meetings described below. 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. During 1999, the Company's Board of Directors had an Executive
Committee, an Audit Committee, a Compensation Committee, a Nominating Committee
and a Technical 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. During
1999, the members of the Executive Committee were Dr. Brock (Chairman) and
Messrs. Smith, Frierson and Guth. The Executive Committee held no formal
meetings during 1999, but conducted all
-6-
<PAGE> 8
necessary business through written consent of the Executive Committee. The
current members of the Executive Committee are Dr. Brock (Chairman) and Messrs.
Smith, Frierson and Guth.
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. In 1999, the members of the Audit Committee were Messrs.
Dillon (Chairman), Sansom, Frierson and Dunmire. During 1999, the Audit
Committee held three meetings. The current members of the Audit Committee are
Messrs. Sansom (Chairman), Dunmire and Gehl. Mr. West will be appointed to the
Audit Committee if he is elected to the Board of Directors at this Annual
Meeting.
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 the Company's stock option plans. In 1999, the
members of the Compensation Committee were Messrs. Dunmire (Chairman), Dressler,
Gehl and Sloan (whose term as director expires with this Annual Meeting and is
not being considered for re-election), and during 1999, the Compensation
Committee held two meetings. The current members of the Compensation Committee
are Messrs. Dunmire (Chairman), Dressler and Gehl. It is expected that Mr.
Gilley will be appointed to the Compensation Committee if he is elected to the
Board of Directors at this Annual Meeting.
Nominating Committee. The Nominating Committee is authorized to recommend
candidates for election. During 1999, the members of the Nominating Committee
were Messrs. Sansom (Chairman), Frierson and Dressler. The Nominating Committee
met once in 1999. The current members of the nominating committee are Messrs.
Frierson (Chairman), Sansom and Dressler.
Technical Committee. The Technical Committee met once in 1999 to review the
Company's product lines and to consider new areas of technical design. In 1999,
the members of the Technical Committee were Dr. Brock (Chairman) and Messrs.
Stafford, Smith, Dressler and Dunmire. The current members of the Technical
Committee are Dr. Brock (Chairman), and Messrs. Smith, Stafford, Dunmire and
Dressler.
COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock, as of March 15, 2000, by (i) the Named Executive Officers (who are
not directors of the Company) and (ii) the Company's directors and executive
officers as a group.
<TABLE>
<CAPTION>
NAME SHARES BENEFICIALLY OWNED PERCENT OF CLASS
---- ------------------------- ----------------
<S> <C> <C>
Richard W. Bethea, Jr. 97,234(1) *
F. McKamy Hall 94,735(2) *
All executive officers and 4,090,916(3) 20.07%
directors as a group
</TABLE>
- -------------------
* less than one percent
(1) Includes outstanding options to purchase 94,000 shares of Common Stock that
are currently exercisable or will become exercisable within 60 days after March
15, 2000 and 99 shares of Common Stock held in the Company's 401(k) Plan. Also
includes 3,135 shares held in the Company's Supplemental executive Retirement
Plan.
-7-
<PAGE> 9
(2) Includes outstanding options to purchase 92,000 shares of Common Stock that
are currently exercisable or will become exercisable within 60 days after March
15, 2000 and 200 shares held in Mr. Hall's Individual retirement Account. Also
includes 2,535 shares held in the Company's Supplemental Executive Retirement
Plan.
(3) Includes 1,245,800 shares which the directors and executive officers have
the right to acquire pursuant to currently exercisable options or options
exercisable within 60 days after March 15, 2000 under the Company's stock option
plans. Such shares issuable upon exercise of such 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>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL OWNER SHARES BENEFICIALLY OWNED(1) PERCENT OF CLASS
------------------- ------------------------- ----------------
<S> <C> <C>
J. Don Brock 2,623,092(2) 13.71%
Astec Industries, Inc.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
Lynne W. Brock 1,684,893 8.81%
6454 Howard Adair Road
Chattanooga, Tennessee 37416
</TABLE>
- -------------------
(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. All share amounts reflect a two-for-one stock split of the
Common Stock effective January 18, 1999.
(2) Includes outstanding options to purchase 230,000 shares of Common Stock to
the extent such options are currently exercisable or will become exercisable
within 60 days after March 15, 2000. Also includes 6,669 shares held in the
Company's Supplemental Executive Retirement 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 293,508 shares held beneficially by Edna F. Brock, Dr. Brock's
mother, over which shares he has no voting or dispositive power.
-8-
<PAGE> 10
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, 1997, 1998 and 1999 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 $100,000
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ---------------------
Name and ----------------------- Securities Underlying All Other
Principal Position Year Salary ($) Bonus ($) Options (# of shares) Compensation ($)(1)
- ------------------- ---- ---------- --------- --------------------- ----------------
<S> <C> <C> <C> <C> <C>
J. Don Brock 1999 $ 350,000 $ 180,000 50,000 $ 73,652
Chairman of the Board 1998 300,000 160,000 60,000 50,659
and President 1997 247,000 125,000 -- 65,466
Robert G. Stafford 1999 $ 190,096 $ 95,000 40,000 $ 34,985
Group Vice President - Aggregate 1998 165,000 82,500 60,000 32,494
1997 159,000 74,240 -- 26,971
W. Norman Smith 1999 $ 190,000 $ 95,000 50,000 $ 35,943
Group Vice President - Asphalt 1998 165,000 82,500 60,000 30,833
and President of Astec, Inc. 1997 159,000 79,500 -- 22,022
Richard W. Bethea, Jr. 1999 $ 210,000 $ 95,000 38,000 $ 39,137
Vice President and 1998 190,000 75,000 36,000 30,593
General Counsel 1997 165,000 60,000 10,000 --
F. McKamy Hall 1999 $ 160,000 $ 80,000 38,000 $ 35,522
Vice President, Chief Financial 1998 130,000 72,500 36,000 21,805
Officer and Treasurer 1997 120,000 50,000 -- --
</TABLE>
- -------------------
(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 1999 pre-tax elective contributions (included under salary and
bonus) made by each Named Executive Officer to such plan; (b) contributions to
the Company's Supplemental Executive Retirement Plan on behalf of the Named
Executive Officers; and (c) insurance premiums on health insurance policies and
term life insurance policies for the benefit of each of the Named Executive
Officers. Company contributions under the 401(k) Plan for the 1999 fiscal year
were as follows: $4,800 to Dr. Brock; $4,800 to Mr. Stafford; $4,800 to Mr.
Smith; $4,800 to Mr. Bethea; and $4,800 to Mr. Hall. For the 1999 fiscal year,
Company contributions under the Supplemental Executive Retirement Plan were:
$61,159 to Dr. Brock; $25,873 to Mr. Stafford; $27,347 to Mr. Smith; $30,012 to
Mr. Bethea; and $23,465 to Mr. Hall. The amount of insurance premium paid for
the benefit of each of the Named Executive Officers for the 1999 fiscal year
was: $7,693 for Dr. Brock; $4,312 for Mr. Stafford; $5,270 for Mr. Smith; $4,325
for Mr. Bethea; and $7,257 for Mr. Hall.
-9-
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides details regarding stock options granted to
the Named Executive Officers in 1999. In addition, the hypothetical gains or
"option spreads" that would exist for the respective options are reflected.
These gains are based on assumed rates of annual compound price appreciation of
5% and 10% from the date the options were granted over the full option term.
INDIVIDUAL OPTION GRANTS
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Securities % of Total Appreciation for
Underlying Options Granted Exercise Option Term ($)
Options to Employees in Or Base -----------------------
Name Granted (#)(1) Fiscal Year (%) Price ($/Sh)(2) Expiration Date 5% 10%
---- ----------- ---------------- ------------ --------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
J. Don Brock 50,000 8.06% $ 32.55 03/08/09 $ 782,625 $ 2,210,311
Robert G. Stafford 40,000 6.45% $ 29.59 03/08/09 $ 744,460 $ 1,886,609
W. Norman Smith 50,000 8.06% $ 29.59 03/08/09 $ 930,575 $ 2,358,261
Richard W. Bethea, Jr. 38,000 6.13% $ 29.59 03/08/09 $ 707,237 $ 1,792,278
F. McKamy Hall 38,000 6.13% $ 29.59 03/08/09 $ 707,237 $ 1,792,278
</TABLE>
- -------------------
(1) All of the options were granted under the 1998 Long-Term Incentive Plan and
became exercisable on March 9, 2000. 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 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 Compensation 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 Compensation 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 Compensation Committee may declare all
options granted under the Plan immediately exercisable. All amounts reflect a
two-for-one stock split of the Common Stock effective January 18, 1999.
(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.
-10-
<PAGE> 12
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 1999, 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, 1999. 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. All amounts reflect a two-for-one
stock split of the Common Stock effective January 18, 1999.
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at Fiscal Year-End (#) at Fiscal Year-End ($)
Acquired on Value --------------------------- ---------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Don Brock 80,000 $ 2,819,995 180,000 50,000 $ 1,630,560 $ 0
Robert G. Stafford -- -- 300,000 40,000 $ 3,720,100 $ 0
W. Norman Smith -- -- 172,000 50,000 $ 1,622,068 $ 0
Richard W. Bethea, Jr. -- -- 56,000 38,000 $ 336,768 $ 0
F. McKamy Hall -- -- 54,000 38,000 $ 264,518 $ 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. During 1999, the Company's policy regarding
the compensation of directors was to pay directors who were not full-time
employees of the Company a fee of $10,000 per year, plus $1,000 for each Board
meeting attended. In accordance with the Company's Non-Employee Directors Stock
Incentive Plan, the Company's non-employee directors can elect to be paid their
fee in either Common Stock, deferred stock or stock options. 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. In 1999, the
members of the Company's Compensation Committee were Messrs. Dunmire (Chairman),
Gehl, Dressler and Sloan, none of which served as an officer or employee of the
Company during the 1999 fiscal year. The current members of the Compensation
Committee are Messrs. Dunmire (Chairman), Dressler, and Gehl. Mr. Gilley will be
appointed to the Compensation Committee if he is elected to the Board of
Directors at this Annual Meeting. There are no "interlocks," as defined by the
SEC, with respect to any member of the Compensation Committee.
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<PAGE> 13
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 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, 1994,
and reinvestment of all dividends).
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR ASTEC INDUSTRIES, INC.
[GRAPHIC]
YEAR-END CUMULATIVE RETURNS
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ASTEC INDUSTRIES, INC. 100.0 77.5 74.5 131.4 436.3 295.1
NASDAQ STOCK MARKET 100.0 141.3 173.9 213.1 300.2 545.7
PEER INDEX 100.0 84.3 99.0 92.7 60.0 65.4
</TABLE>
LEGEND
<TABLE>
<CAPTION>
Symbol Index Description
------ -----------------
<S> <C>
___________ Astec Industries, Inc.
__ __ __ __ _ Nasdaq Stock Market (US companies)
- - - - - - - - - - Peer Index (Standard Industrial Classification Code
Group 3590-3599)
</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 10
companies in the Standard Industrial Classification Code Group 3590-3599
(manufacturers of industrial and commercial machinery and 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 3590-3599, will be
provided to any shareholder upon request to the Secretary of the Company.
-12-
<PAGE> 14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.
Decisions and recommendations regarding the compensation of the
Company's executive officers are made by the Compensation Committee of the Board
of Directors, which during 1999 was comprised of Messrs. Dunmire, Dressler, Gehl
and Sloan. Set forth below is a report of the members of the Compensation
Committee during 1999 concerning the Company's compensation policies for 1999.
The following report is not subject to incorporation by reference in any filings
made by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.
Overview and Philosophy
The Compensation Committee of the Board of Directors 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, contributions to
the Supplemental Executive Retirement Plan, 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. In 2000, based on the proposed
Executive Officer Annual Bonus Equity Election Plan, the
-13-
<PAGE> 15
Company's Executive Officers will have the option to receive up to 100% of their
bonus in Common Stock or stock options. 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. In 1998, the growth
goal was replaced by an income before income tax goal. 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 is applied to ten percent of earnings by subsidiary after
consideration of income taxes. The performance rating earned may vary from 5% to
100% of the 10%.
Stock Options
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 1999 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 1999 was $350,000, a level believed to be competitive
with that of other similarly situated companies in the construction equipment
industry.
Dr. Brock's bonus for fiscal 1999 was $180,000. This bonus was based on the
subjective determination of the Compensation Committee in recognition of Dr.
Brock's contribution to the Company in 1999. The Compensation Committee believes
Dr. Brock has continued to manage the Company well in a challenging business
climate.
COMPENSATION COMMITTEE
Ronald W. Dunmire, Chairman
Robert Dressler
William D. Gehl
E.D. Sloan, Jr.
SECTION 16(A) FILING REQUIREMENTS
Based solely on a review of the copies of the Forms 3, 4 and 5 received by
it, the Company believes that during 1999 all filing requirements applicable to
its officers, directors, and greater than 10% beneficial owners were satisfied,
except that Albert E. Guth failed to timely file a Form 4 with respect to the
sale of 10,000 shares of Common Stock in November 1999.
-14-
<PAGE> 16
AUDITORS
Ernst & Young LLP served as the Company's auditors for the year ended
December 31, 1999, and that firm of independent accountants is serving as
auditors for the Company for the current calendar year. Representatives of Ernst
& Young LLP 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 LLP 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 costs of soliciting proxy appointments will be paid 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 2001 Annual Meeting of Shareholders of the Company must be
received by the Company at its principal executive offices on or before November
23, 2000 in order to be included in the Company's Proxy Statement and Form of
Proxy Appointment relating to the 2001 Annual Meeting of Shareholders.
-15-
<PAGE> 17
[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, 2000
The undersigned hereby appoints J. Don Brock and Richard W. Bethea, Jr.,
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, 2000, and at any
adjournment thereof, as follows:
For participants in the Company's 401(k) Retirement Plan, as amended and
restated on March 1, 1987 ("Plan"), this card also provides voting instructions
to the Trustee under the Plan for the undersigned's allowable portion, if any,
of the total number of shares of Common Stock of the Company held by such Plan
as indicated on the reverse side hereof. These voting instructions are solicited
and will be carried out in accordance with the applicable provisions of the
Plan.
(Continued and to be signed and dated on other side)
<PAGE> 18
[FORM OF PROXY APPOINTMENT-BACK]
1. To vote for the election as directors of the Company in Class II of the
four nominees set forth below to serve until the 2003 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, Robert G. Stafford, J. Wade Gilley,
Robert H. West
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE(S), LIST NAME(S) BELOW.)
---------------------------------------------------
---------------------------------------------------
[ ] FOR all nominees (except as marked to the contrary)
[ ] AUTHORITY WITHHELD to vote for all nominees
2. To vote in accordance with their best judgment upon such other matters
as may properly come before the meeting or any adjournments thereof.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
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 PROPOSAL 1.
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: , 2000
---------------------------------------
(SEAL)
---------------------------------------------
Signature of Shareholder
DATED: , 2000
----------------------------------------
