SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
THE GENLYTE GROUP INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
(SC14A-07/98)
<PAGE>
THE GENLYTE GROUP INCORPORATED
4360 Brownsboro Road, Suite 300
P.O. Box 35120
Louisville, KY 40232
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on April 21, 1999
----------
March 19, 1999
To Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The
Genlyte Group Incorporated ("Genlyte") will be held at the Camberley Brown
Hotel, Bluegrass Room, 4th & Broadway, Louisville, Kentucky 40202, on Wednesday,
April 21, 1999 at 10:00 AM, local time, for the following purposes:
(1) to elect one member of the Board of Directors; and
(2) to transact such other business as may properly come before the
meeting and any adjournments or postponements thereof.
Stockholders of record at the close of business on March 1, 1999 are
entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
Your attention is directed to the attached Proxy Statement. Whether or not
you expect to be present at the meeting, please complete, sign, date and mail
the enclosed Proxy as promptly as possible in order to save the Company further
solicitation expense. There is enclosed with the Proxy an addressed envelope for
which no postage is required if mailed in the United States.
By Order of the Board of Directors,
R. L. ZACCAGNINI
Secretary
<PAGE>
THE GENLYTE GROUP INCORPORATED
4360 Brownsboro Road, Suite 300
P.O. Box 35120
Louisville, KY 40232
----------
ANNUAL MEETING OF STOCKHOLDERS
to be held on April 21, 1999
March 19, 1999
----------
PROXY STATEMENT
----------
INTRODUCTION
The Annual Meeting of Stockholders (the "Annual Meeting") of The Genlyte
Group Incorporated ("Genlyte") will be held on April 21, 1999 at the Camberley
Brown Hotel, Bluegrass Room, 4th & Broadway, Louisville, Kentucky 40202 at 10:00
AM, local time, for the purposes set forth in the accompanying notice. This
proxy statement and the accompanying form of proxy are being furnished in
connection with the solicitation by Genlyte's Board of Directors of proxies to
be voted at such meeting and at any and all adjournments or postponements
thereof.
This proxy statement and accompanying form of proxy are first being sent to
stockholders on or about March 19, 1999.
ACTION TO BE TAKEN UNDER THE PROXY
All proxies properly executed, duly returned and not revoked will be voted
at the Annual Meeting (including any adjournments or postponements thereof) in
accordance with the specifications therein, or, if no specifications are made,
will be voted FOR the nominee to the Board of Directors named in this proxy
statement and listed in the accompanying form of proxy.
If a proxy in the accompanying form is executed and returned, it may
nevertheless be revoked at any time prior to the exercise thereof by executing
and returning a proxy bearing a later date, by giving notice of revocation to
the Secretary of Genlyte, or by attending the Annual Meeting and voting in
person.
ELECTION OF DIRECTOR
The Board of Directors of Genlyte currently consists of Avrum I. Drazin
(Chairman), Glenn W. Bailey, Robert B. Cadwallader, David M. Engelman, Fred
Heller, Frank Metzger and Larry K. Powers. The director elected at the Annual
Meeting will hold office for a term ending at the Annual Meeting of Stockholders
to be held in April of 2002 and until his successor has been duly elected and
qualified. Mr. Avrum I. Drazin has been nominated to the Board of Directors for
re-election at the Annual Meeting.
If, for any reason, Mr. Drazin is not a candidate when the election occurs,
which is not anticipated, it is intended that the proxies will be voted for the
election of a substitute nominee designated by the Board of Directors.
The Board of Directors recommends a vote FOR the election of the nominee as
director.
1
<PAGE>
Genlyte Thomas Group LLC
On August 27, 1998, the Shareholders of Genlyte and Thomas Industries Inc.
(NYSE: TII, "Thomas"), respectively, approved the formation of a new lighting
company to be jointly owned by them as outlined below. This company, a Delaware
Limited Liability Company, is named Genlyte Thomas Group LLC ("Genlyte Thomas
Group").
Genlyte contributed substantially all of its assets to Genlyte Thomas Group
in exchange for a 68% interest therein and the assumption by Genlyte Thomas
Group of substantially all of Genlyte's liabilities. Thomas contributed
substantially all of its lighting assets to Genlyte Thomas Group in exchange for
a 32% interest therein and the assumption by Genlyte Thomas Group of certain of
its liabilities. (Reference herein to "employees of the company" shall mean
employees of the Genlyte Thomas Group unless stated otherwise.)
The day-to-day operations of Genlyte Thomas Group are managed by its
executive officers under the supervision of a Management Board. The Management
Board is comprised of six (6) Representatives, four (4) of whom were appointed
by Genlyte and two (2) of whom were appointed by Thomas. Messrs. Drazin,
Engelman, Heller and Powers (see below) are the Representatives from Genlyte.
Actions of the Management Board require the approval of a majority of the
Representatives, except that certain actions, as outlined in the Proxy Statement
dated July 23, 1998, require the approval of a majority of the Management Board
including at least one Representative appointed by Thomas. (For further details,
see the company's Proxy Statement dated July 23, 1998.)
Information about the nominee for election as director, including
biographical and employment information, is set forth below.
Nominee for Election as Director
Avrum I. Drazin (70) ........... Mr. Drazin was elected Chairman of the Board
of Genlyte in January 1994 and has served as
a Director of Genlyte since January 1991.
Mr. Drazin served as President of Genlyte
from February 1992 until December 1993 and
served as President of Canlyte, Inc.
("Canlyte"), now a wholly owned subsidiary
of Genlyte Thomas Group, since its
incorporation in July 1984 until January
1999. He remains Chairman of Canlyte's
Board. He served as President of Lightolier
Canada from January 1965 until June 1984.
Mr.Drazin is Chairman of the Nominating
Committee and is a member of the
Compensation Committee of the Genlyte Board
of Directors. He also serves as a
Representative on the Genlyte Thomas Group
Management Board.
Incumbent Directors
Glenn W. Bailey (73) ........... Mr. Bailey was Chairman of the Board of
Genlyte from its incorporation in January
1985 until July 1989, when he resigned as
Chairman but retained his position as
Director of Genlyte. He was Chairman and
President of Bairnco Corporation ("Bairnco")
from its incorporation in January 1981 until
May 1990. Bairnco was Genlyte's corporate
parent until Genlyte was spun off to
Bairnco's shareholders in 1988. Mr. Bailey
is a member of the Nominating Committee of
the Genlyte Board of Directors. Mr. Bailey
has tendered his resignation from the Board
of Directors effective April 21, 1999. If
the Nominating Committee identifies an
appropriate candidate, the Board of
Directors will consider appointing the
candidate to fill such vacancy.
Robert B. Cadwallader (69) ..... Mr. Cadwallader was elected a Director of
Genlyte at the January 1985 meeting of the
Genlyte Board of Directors. Mr. Cadwallader
is currently President of Cadwallader
Company, Inc., a furniture industry
consulting firm. Mr. Cadwallader was
President of Cadwallader and Sangiorgio
Associates, a manufacturer of office
furniture, from October 1986 until September
1989. From November 1983 to March 1985 he
served as Vice Chairman of SunarHauserman,
Inc., a manufacturer of movable partitions,
fabrics and systems. During the same period
he served as Director of Hauserman, Inc.,
2
<PAGE>
the parent corporation of SunarHauserman,
Inc. Mr. Cadwallader is a member of the
Audit Committee of the Genlyte Board of
Directors. Mr. Cadwallader's term will
expire on April 21, 1999 and he will not
stand for re-election. If the Nominating
Committee identifies an appropriate
candidate, the Board of Directors will
consider appointing the candidate to fill
such vacancy.
David M. Engelman (66) ......... Mr. Engelman was elected a Director of
Genlyte at the December 1993 meeting of the
Board of Directors. This appointment took
effect on January 1, 1994. Mr. Engelman was
employed by General Electric Company from
1954 through 1993 and held a variety of
general management positions. He was elected
as a Vice President of General Electric in
1982 and was in charge of international
electrical distribution and control
operations. Mr. Engelman is a member of the
Board of Directors of The Mayer Electric
Supply Company, Incorporated. He is a member
of the Compensation Committee of the Genlyte
Board of Directors. He also serves as a
Representative on the Genlyte Thomas Group
Management Board.
Fred Heller (74) ............... Mr. Heller was Chairman of the Board of
Genlyte from July 1989 until December 1993,
when he resigned as Chairman but retained
his position as a Director of Genlyte and
holds the honorary title of Chairman
Emeritus. He served as President of Genlyte
from its incorporation in January 1985 until
July 1989 and served as acting President of
Genlyte from January 1991 to August 1991.
From August 1981 to September 1985, Mr.
Heller was President and Chief Executive
Officer of Lightolier Incorporated. Mr.
Heller is a member of the Board of Directors
of Concord Fabrics, Inc. He is Chairman of
the Audit Committee of the Genlyte Board of
Directors. He also serves as a
Representative on the Genlyte Thomas Group
Management Board.
Frank Metzger (70) ............. Dr. Metzger was elected a Director of
Genlyte at the January 1985 meeting of the
Genlyte Board of Directors. Dr. Metzger has
been President of Metzger & Company,
management consultants, since June 1988. He
served as Senior Vice
President-Administration for Bairnco from
July 1986 until his retirement from Bairnco
in May 1988 and Vice
President-Administration for Bairnco from
its organization in 1981 until June 1986. He
is Chairman of the Compensation Committee of
the Genlyte Board of Directors.
Larry K. Powers (56) ........... Mr. Powers was appointed President and Chief
Executive Officer of Genlyte in January 1994
and President and Chief Executive Officer of
Genlyte Thomas Group LLC in August 1998. He
has served as a Director of Genlyte since
July 1993. He has held a variety of sales,
marketing and general management positions
in the lighting industry. From September
1979 until April 1989, Mr. Powers was
President of Hadco. Hadco was acquired by a
predecessor of Genlyte in July 1983. Mr.
Powers served as President of the
HID/Outdoor Division of Genlyte from May
1989 until June 1993. From July 1993 to
December 1993, he served as President of
Genlyte U.S. Operations and Executive Vice
President of Genlyte. Mr. Powers is a member
of the Nominating Committee of the Genlyte
Board of Directors. He also serves as a
Representative on the Genlyte Thomas Group
Management Board.
Board and Committee Meetings
During 1998, Genlyte's Board of Directors met eight times for regular
meetings and once for a special meeting. In addition, the directors received and
reviewed monthly reports of the financial performance of Genlyte and Genlyte
Thomas Group and management conferred frequently with its directors on an
informal basis to discuss company affairs. During 1998, each of the directors
(except for Glenn W. Bailey) attended at least 75 percent of the meetings of the
Board and the Board Committees of which such director was a member.
3
<PAGE>
The Board has established standing Audit, Compensation and Nominating
Committees. The Board has established the Audit Committee to recommend the firm
to be appointed as independent accountants to audit Genlyte's and Genlyte Thomas
Group's financial statements and to perform services related to the audit,
review the scope and results of the audit with the independent accountants, and
consider the adequacy of the internal accounting and control procedures of
Genlyte. Members of this committee are Messrs. Cadwallader and Heller, with Mr.
Heller serving as Chairman. During 1998, the Audit Committee met two times.
During 1998 the Compensation Committee reviewed and recommended the
compensation arrangements for all executive officers, approved such arrangements
for other senior level employees, and administered and took such other action as
required in connection with certain compensation plans of Genlyte and Genlyte
Thomas Group. Members of the Compensation Committee are Messrs. Drazin, Engelman
and Dr. Metzger, with Dr.Metzger serving as Chairman. During 1998, the
Compensation Committee met two times; it also reviewed and recommended all stock
options to be granted, subject to Board approval.
The Nominating Committee reviews and recommends to the Board of Directors
the appropriate size and composition of Genlyte's Board of Directors as well as
the Boards of Directors of Genlyte Thomas's various subsidiaries. The Nominating
Committee will not consider recommendations from Genlyte's stockholders because
the Committee believes it has sufficient resources and contacts to fulfill its
obligations without considering such stockholder recommendations. Members of the
Nominating Committee are Messrs. Bailey, Drazin, and Powers, with Mr. Drazin
serving as Chairman. During 1998, the Nominating Committee met one time.
Compensation of Directors
During 1998 each director, other than any employee director, and other than
the Chairman, received a retainer of $8,000 and $2,000 for each Board meeting
attended and each committee meeting attended on a day on which the Board of
Directors did not meet. The Chairman of the Board received a retainer of $12,000
and $3,000 for each Board meeting attended and each committee meeting attended
on a day on which the Board of Directors did not meet. Except as set forth in
the preceding sentence, directors employed by the company are not paid any fees
or additional compensation for services rendered as members of the Board or any
of its committees. Directors (excluding employees of Canlyte, a wholly-owned
subsidiary of Genlyte Thomas Group) who also serve on the Board of Directors of
Canlyte are compensated for attendance at such meetings at the rate of $2,000
(Canadian) per Board meeting, or for committee meetings held on days other than
regular Board meeting days.
Compensation Committee Interlocks and Insider Participation
As noted above, Messrs. Avrum I. Drazin, David M. Engelman and Dr. Frank
Metzger served as members of the Board's Compensation Committee during 1998. Mr.
Drazin is Chairman of Genlyte, was formerly President of Genlyte and is Chairman
of Canlyte, one of the Genlyte Thomas Group's subsidiaries. Directors Heller and
Powers also serve on the Canlyte Board of Directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Number of Shares Outstanding and Record Date
Only holders of record of Genlyte Common Stock, par value $.01 per share
("Genlyte Common Stock"), at the close of business on March 1, 1999 are entitled
to notice of, and to vote at, the Annual Meeting. Holders of Genlyte Common
Stock are entitled to one vote for each share held on the matters properly
presented at the Annual Meeting.
On March 1, 1999, there were 13,561,298 shares of Genlyte Common Stock
issued and outstanding. The holders of a majority of the shares entitled to
vote, present in person or represented by proxy, will constitute a quorum for
the transaction of business at the Annual Meeting. The affirmative vote of a
majority of the shares of Genlyte Common Stock present in person or by proxy at
the Annual Meeting is required to elect a director.
Abstentions and broker non-votes are counted for purposes of determining
the presence or absence of a quorum for the transaction of business. Abstentions
are counted in tabulations of the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved. Under applicable Delaware law,
a broker non-vote will have no effect on the outcome
4
<PAGE>
of the matters to be acted upon at the Annual Meeting, and an abstention will
have the effect of a vote against any proposal requiring an affirmative vote of
a majority of the shares present and entitled to vote thereon.
Common Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding the beneficial
ownership of Genlyte Common Stock by the only persons (other than Glenn W.
Bailey as discussed below) known to Genlyte to be the beneficial owners of more
than 5% of the issued and outstanding Genlyte Common Stock as of March 1, 1999:
Amount and Nature
of Beneficial
Name and Address Ownership of Percent
of Beneficial Owner Common Stock of Class
------------------- -------------- ---------
Southeastern Asset Management Inc. ........ 1,909,100(l) 14.1%
6410 Poplar Ave., Suite 900
Memphis, TN 38119
Marvin C. Schwartz ........................ 1,200,890(2) 8.9%
c/o Neuberger Berman
605 Third Avenue
New York, NY 10158-3698
Neuberger Berman LLC ...................... 923,240(3) 6.8%
605 Third Avenue
New York, NY 10158-3698
- ----------
1) According to the Schedule 13G furnished to Genlyte by Southeastern Asset
Management Inc., Southeastern Asset Management is a registered investment
advisor acting as investment counsel to the Longleaf Partners Small Cap
Fund, the beneficial owner of such shares. All of the securities covered by
Southeastern's 13G are owned legally by the Longleaf Partners Small Cap
Fund and none are owned directly or indirectly by Southeastern. This
statement was also filed as a disclosure by O. Mason Hawkins, Chairman of
the Board and CEO of Southeastern Asset Management, Inc., in the event he
could be deemed to be a controlling person of that firm as the result of
his official position with or ownership of its voting securities. The
existence of such control is expressly disclaimed therein by O. Mason
Hawkins, who also expressly disclaims direct and indirect ownership of any
of Genlyte's shares.
2) According to the Schedule 13D furnished to Genlyte by Marvin C. Schwartz,
he held sole power to vote and to dispose of 337,400 of such shares through
his personal account in which he holds 252,400 of such shares and through
his management of an individual account for the benefit of a partner of
Neuberger Berman with respect to 85,000 of such shares. The Schedule 13D
also reports 238,990 shares owned by the Neuberger Berman Profit Sharing
Trust (the "Plan") of which Marvin C. Schwartz is co-trustee. The power to
vote and dispose of the shares held by such funds is shared with the Plan's
trustees. In addition, 624,500 shares are held in several accounts for the
benefit of Mr. Schwartz's family. Mr. Schwartz is the beneficial owner of
such shares based on his discretionary and shared dispositive power over
such accounts.
3) According to the Schedule 13G furnished to Genlyte by Neuberger Berman LLC
("NB"), NB has sole power to vote and to dispose of 726,740 of such shares
and shared power to dispose of 923,240 shares. NB disclaims beneficial
ownership of 410,600 shares owned by principals of NB, including those
reported by Marvin C. Schwartz.
5
<PAGE>
The following table presents information regarding beneficial ownership of
Genlyte Common Stock by each member of the Board of Directors, the Named
Officers (defined infra), and all directors and executive officers as a group as
of March 1, 1999.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership of Percent
Name Genlyte Common Stock of Class
---- -------------------- --------
<S> <C> <C>
Glenn W. Bailey ........................................ 1,435,000(1) 10.6%
14 Bassett Creek Trail, Hobe Sound, FL 33455
Robert B. Cadwallader .................................. 10,300(2) *
Avrum I. Drazin ........................................ 201,399(3) 1.5%
Zia Eftekhar ........................................... 72,811(4) *
David M. Engelman ...................................... 16,500(5) *
Fred Heller ............................................ 114,000(6) *
Frank Metzger .......................................... 145,750(7) 1.1%
Dennis W. Musselman .................................... 8,553(8) *
Larry K. Powers ........................................ 153,797(9) 1.1%
Donna R. Ratliff ....................................... 51,262(10) *
--------- ----
All directors and executive officers as a group
(13 persons including those named) ................... 2,209,372(11) 16.3%
========= ====
</TABLE>
- ----------
* The percentage of shares owned by such director or named officer does not
exceed 1% of the issued and outstanding Genlyte Common Stock.
1) Includes 210,000 shares of Genlyte Common Stock owned by Mr. Bailey's
spouse as to which Mr. Bailey disclaims beneficial ownership and 10,000
shares of Genlyte Common Stock which may be acquired upon the exercise of
options which are presently exercisable.
2) Includes 10,000 shares of Genlyte Common Stock which may be acquired upon
the exercise of options which are presently exercisable.
3) Includes 1,000 shares of Genlyte Common Stock owned by Mr. Drazin's spouse
as to which Mr. Drazin disclaims beneficial ownership and 12,500 shares of
Genlyte Common Stock which may be acquired upon the exercise of options
which are presently exercisable.
4) Includes 8,750 shares of Genlyte Common Stock which may be acquired upon
the exercise of options which are presently exercisable.
5) Includes 7,500 shares of Genlyte Common Stock owned by Mr. Engelman's
spouse as to which Mr. Engelman disclaims beneficial ownership.
6) Includes 60,266 shares of Genlyte Common Stock owned by Mr. Heller's spouse
as to which Mr. Heller disclaims beneficial ownership.
7) Includes 28,000 shares of Genlyte Common Stock owned by Dr. Metzger's
spouse as to which Dr. Metzger disclaims beneficial ownership and 5,000
shares of Genlyte Common Stock which may be acquired upon the exercise of
options which are presently exercisable.
8) Includes 2,500 shares of Genlyte Common Stock which may be acquired upon
the exercise of options which are presently exercisable.
9) Includes 61,250 shares of Genlyte Common Stock which may be acquired upon
the exercise of options which are presently exercisable.
10) Includes 6,000 shares of Genlyte Common Stock owned by Ms. Ratliff's spouse
as to which Ms. Ratliff disclaims beneficial ownership and 15,500 shares of
Genlyte Common Stock which may be acquired upon the exercise of options
which are presently exercisable.
11) Includes an aggregate of 312,766 shares of Genlyte Common Stock owned by
the spouses of certain executive officers and directors as to which each
such executive officer or director disclaims beneficial ownership and
125,500 shares of Genlyte Common Stock which may be acquired upon the
exercise of options which are presently exercisable.
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was comprised during
fiscal 1998 of Messrs. Avrum I. Drazin, David M. Engelman and Dr. Frank Metzger,
with Dr. Metzger serving as Chairman. All Committee members except Mr. Drazin
are outside directors. Generally, the Committee reviews and recommends the
compensation arrangements for all executive officers, approves such arrangements
for other senior level employees, and administers and takes such other actions
as may be required in connection with certain compensation plans for employees
of the company. The Board of Directors reviews for approval any recommendations
made by the Compensation Committee relating to the compensation of executive
officers.
The Compensation Committee has prepared the following report with respect
to executive officers and other executives of the company.
Compensation Philosophy
The company's employee compensation philosophy is to provide competitive
pay for competitive performance and superior pay for superior performance. The
company seeks to ensure that its executive compensation programs and policies
relate to and support its overall objective to enhance stockholder value through
the profitable management of its operations. To achieve this goal, the following
objectives serve as guidelines for compensation decisions:
o Provide a competitive total compensation framework that enables the
company to attract, retain and motivate key executives who will
contribute to the company's success;
o Ensure that compensation programs are linked to performance on both an
individual and operating unit level; and
o Align the interests of employees with the interests of Genlyte
stockholders by encouraging employee stock ownership in Genlyte.
Components of Compensation
The company's employee compensation strategy incorporates a combination of
cash and equity-based compensation as follows:
o A performance management system that relates individual base salary
changes to a formal process in which individual performance is
reviewed, discussed and evaluated.
o Short-term incentive programs that provide executives with the
opportunity to add substantial variable compensation to their annual
base salaries through attainment of specific, measurable goals
intended to encourage high levels of organizational performance and
superior achievement of individual objectives.
o Long-term incentive opportunities in the form of stock options in
which rewards are linked directly to stockholder gains.
For fiscal year 1998, compensation programs consisted of:
Base Salary
Salary pay levels at Genlyte and Genlyte Thomas Group were competitive with
the marketplace. When establishing salary pay levels, the company uses
commercially published surveys prepared by established compensation consulting
firms to assure that base compensation levels are positioned relative to the
range that is generally paid to executives having similar levels of experience
and responsibility at companies of comparable size and complexity. Data is drawn
from the electric lighting equipment and supply industry as well as general
industry survey data. Consideration is also given to other factors such as
individual performance and potential.
Short-Term Incentives
Executives and key employees of Genlyte and Genlyte Thomas Group
participate in a short-term incentive program which rewards the achievement of
profit and profit-related objectives. These employees are afforded an
opportunity to earn substantial variable compensation through participation in
the Management Incentive Compensation (MIC) Program.
7
<PAGE>
This program combines elements of profit sharing, in which total management
performance is rewarded only to the extent also realized by stockholders as
measured in Earnings Per Share (EPS), Earnings Before Interest and Taxes (EBIT),
and Return on Capital Employed (ROCE), and in terms of individual performance,
as measured by achievement of specific, measurable and written goals established
in the beginning of the fiscal year by participants and approved by management.
Funding for MIC awards is formula-driven based on achievement of financial goals
for each operating unit. The Board of Directors reviews and approves profit and
profit-related objectives at the beginning of the year.
By policy, the level of funding which results from the MIC formulas cannot
be modified and the total payout of awards for all MIC participants is limited
to a maximum 15 percent of the company's profit before taxes each year. In order
to maximize results, objectives are typically established at a level of
performance above normal expectations. Consideration is also given to past
financial performance as a means to ensure that consistent and sustained
business results are achieved. Actual individual MIC awards are dependent upon
three factors: (1) the requirement that stated objectives be met by both
individual participants and their operating units; (2) the relative success and
extent to which those objectives are achieved; and (3) the participant's
relative level within the organization as determined annually according to
policy guidelines.
In 1998, the Compensation Committee and the Board of Directors reviewed and
approved the renewal of the MIC Program, related policies, and all recommended
MIC awards.
Long-Term Incentives
Genlyte believes that the interests of stockholders and executives become
more closely aligned when such executives are provided an opportunity to acquire
a proprietary interest through ownership of Genlyte Common Stock. Through the
Genlyte 1998 Stock Option Plan, officers and key employees of the company are
granted options to purchase Genlyte Common Stock and maintain significant share
ownership within the parameters of the program. Most grants are exercisable in
installments commencing two years after the date of grant. The exercise price of
options is set, and has at all times in the past been set, at fair market value
or book value, whichever is higher.
Benefits
Genlyte Thomas Group generally assumed all of Genlyte's benefit plans and
other benefit liabilities relating to former Genlyte employees. All Genlyte
executive officers have participated in the same pension, health and benefit
programs generally available to other employees who were not the subject of
collective bargaining agreements. Historically, Genlyte did not have special
executive officer plans with the exception of a now inactive Supplemental
Employee Retirement Plan in which two long-term executive officers still
participate. Additionally, for a period of six to eighteen months following the
closing of the Genlyte Thomas transaction (the "transition period"), certain
former salaried and clerical Thomas employees will continue to participate in
certain tax-qualified Thomas retirement plans. As of the conclusion of the
transition period, those former Thomas salaried and clerical employees will
participate in retirement plans of Genlyte Thomas Group and their account
balances under those two Thomas plans will be transferred to the appropriate
plan or plans of the Genlyte Thomas Group.
Chief Executive Officer Compensation
Mr. Powers served as Chief Executive Officer of Genlyte and Genlyte Thomas
Group in 1998 at a salary of $350,000 per annum. Mr. Powers received $403,750 in
incentive compensation for 1998 recognizing a significant improvement in the EPS
over the prior year, as well as the level of achievement of Mr. Powers'
individual objectives. In 1998, the Compensation Committee recommended and the
Board of Directors approved stock option grants totaling 35,000 shares for Mr.
Powers in recognition of its assessment of his ability to enhance the long-term
value of Genlyte for the stockholders. These grants were consistent with the
overall design of the option program.
8
<PAGE>
Conclusion
In summary, the company continued its policy in fiscal year 1998 of linking
executive compensation to company performance. The outcome of this process is
that stockholders receive a fair return on their investment while executives are
rewarded in an appropriate manner for meeting or exceeding performance
objectives. The Committee believes that the company's compensation levels
adequately reflect its philosophy of providing competitive pay for competitive
performance and superior pay for superior performance. Likewise, the Committee
believes that the company's executive compensation programs and policies are
supportive of its overall objective to enhance stockholder value through the
profitable management of its operations.
Frank Metzger, Chairman
Avrum I. Drazin
David M. Engelman
Executive Compensation
The following table sets forth information concerning annual, long-term and
other compensation for services in Genlyte of those persons who were, on
December 31, 1998, Genlyte's (i) chief executive officer and (ii) other four
most highly compensated executive officers (together, the "Named Officers"):
For 1998 the annual compensation for this table was determined by the
officers, while they were employees of Genlyte (primarily the period January 1
to August 30, 1998), and reflects their compensation with Genlyte Thomas (August
31 to December 31, 1998).
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payout
--------------------------------------------- ---------------------- -------------------------
Other Stock All
Name and Annual Restricted Options/ Long-term Other
Principal Position Year Salary ($) Bonus ($) Comp ($) Awards ($) SARs (#) Payout ($) Comp ($)
- ------------------ ---- ---------- --------- ------------- ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry K. Powers ......... 1998 350,014 403,750 17,912(1,2,3) 0 35,000 0 0
President & CEO ....... 1997 310,000 303,400 2,923(1,2) 0 27,500 0 0
1996 309,423 232,400 4,380(1,2) 0 52,500 0 0
Avrum I. Drazin ......... 1998 216,256(2) 32,739 36,000(4) 0 0 0 13,041(2,5)
President, Canlyte; ... 1997 222,000(2) 25,474 36,000(4) 0 10,000 0 12,018(2,5)
Chairman of the ....... 1996 230,733(2) 17,498 36,000(4) 0 5,000 0 11,823(2,5)
Board/Genlyte
Zia Eftekhar ............ 1998 215,000 206,360 0 0 15,500 0 65,950(5)
President ............. 1997 214,423 159,014 0 0 12,500 0 22,367(5)
Lightolier Division ... 1996 200,000 63,263 0 0 7,500 0 46,050(5)
Dennis W. Musselman ..... 1998 150,192 155,399 0 0 4,100 0 0
Vice President ........ 1997 144,615 118,170 0 0 0 0 0
Hadco/Bronzelite ...... 1996 135,000 141,308 0 0 5,000 0 0
Donna R. Ratliff ........ 1998 167,500 193,800 0 0 5,000 0 0
Sr. Vice President .... 1997 162,567 136,500 0 0 8,000 0 0
& Corp. Sec'y ......... 1996 158,000 107,520 0 0 5,000 0 0
</TABLE>
- ----------
1) Director's fees for Canlyte, Inc., a wholly owned subsidiary of Genlyte
Thomas Group.
2) These figures were converted from Canadian dollars to U.S. dollars using
the exchange rate as of the last day of the fiscal year for that period.
3) Includes $14,992 in expenses for relocation and related fees.
4) Director's retainer and fees in U.S. dollars.
5) Represents service and interest expense accrual for Supplemental Employee
Retirement Plan benefit.
Option Grants
Shown below is further information on grants of stock options pursuant to
the 1998 Stock Option Plans during the fiscal year ended December 31, 1998 to
the Named Officers reflected in the Summary Compensation Table. No stock
appreciation rights were granted under that Plan during fiscal 1998.
9
<PAGE>
Option Grants in Fiscal 1998
<TABLE>
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value of Assumed
% of Annual Rates of Stock
Total Options Price Appreciation
Granted to Exercise or for Option Term (2)
Options Employees in Base Price Expiration --------------------------
Name Granted (#)(1) Fiscal Year ($/share) Date 5% ($) 10%($)
----- ----------- ---------- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Larry K. Powers ...... 10,000 4.2% $25.750 6/18/2005 $104,828 $244,295
Larry K. Powers ...... 25,000 10.6% $18.469 12/17/2005 $187,966 $438,042
Zia Eftekhar ......... 10,000 4.2% $25.750 6/18/2005 $104,828 $244,295
Zia Eftekhar ......... 5,500 2.3% $18.469 12/17/2005 $ 41,353 $ 96,369
Dennis W. Musselman .. 4,100 1.7% $18.469 12/17/2005 $ 30,826 $ 71,839
Donna R. Ratliff ..... 5,000 2.1% $25.750 6/18/2005 $ 52,414 $122,147
</TABLE>
- ----------
1) These options were granted to the Named Officer seven years prior to the
indicated expiration date and are exercisable at the rate of 50% per year
commencing two years after the date of grant. In the event of certain
mergers, consolidations or reorganizations of Genlyte or any disposition of
substantially all the assets of Genlyte or any liquidation or dissolution
of Genlyte, then in most cases all outstanding options not exercisable in
full shall be accelerated and become exercisable in full for a period of 30
days. In addition, in the event of certain changes in control of Genlyte or
of its Board of Directors, then any outstanding option not exercisable in
full shall in most cases be accelerated and become exercisable in full for
the remaining term of the option.
2) Realizable value is shown net of option exercise price, but before taxes
associated with exercise. These amounts represent assumed compounded rates
of appreciation and exercise of the options immediately prior to the
expiration of their term. Actual gains, if any, are dependent on the future
performance of the Common Stock, overall stock market conditions, and the
optionee's continued employment through the exercise period. The amounts
reflected in this table may not necessarily be achieved.
Option Exercises and Fiscal Year-End Values
Shown below is information with respect to the exercised/unexercised
options to purchase Genlyte's Common Stock granted in fiscal 1998 and prior
years under Genlyte's 1988 and 1998 Stock Option Plans to the Named Officers and
held by them on December 31, 1998.
OPTION EXERCISES AND YEAR-END VALUE TABLE
Aggregated Option Exercises in Fiscal Year 1998
and FY-End Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options at
Shares Options at FY-End (#) FY-End ($) (1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry Powers ............ 10,000 151,900 61,250 88,750 660,625 309,219
Avrum I. Drazin ......... -- -- 12,500 12,500 139,375 39,375
Zia Eftekhar ............ 5,000 60,625 8,750 31,750 97,813 57,797
Dennis Musselman ........ 5,000 75,638 9,500 6,600 106,000 29,278
Donna R. Ratliff ........ -- -- 15,500 15,500 184,250 37,125
</TABLE>
- ----------
1) Based upon the 12/31/98 closing price of $18.75 for Genlyte stock on the
NASDAQ National Market System. Realizable value is shown net of option
exercise price, but before taxes associated with exercise.
10
<PAGE>
Retirement Plan
During fiscal 1998, each of the Named Officers was a participant in a
qualified noncontributory defined benefit plan (the "Plan"), except Mr. Drazin,
who is a participant in a Canadian Pension Plan.
The following table presents information regarding estimated annual
benefits payable under the Plan upon normal retirement at age 65 in the form of
a single life annuity to persons in specified remuneration and years of service
classifications:
For Employees Retiring at age 65 in 1999(1)
<TABLE>
<CAPTION>
Years of Service at Retirement(2)
Average Compensation -------------------------------------------------------------------
at Retirement 5 10 15 20 25 or more
----------------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C>
$50,000 ......................... $ 3,424 $ 6,847 $10,271 $13,694 $17,118
$100,000 ........................ 7,674 15,347 23,021 30,694 38,368
$156,000(3) ..................... 12,434 24,867 37,301 49,734 62,168
Greater than $156,000(3) ........ 12,434 24,867 37,301 49,734 62,168
</TABLE>
- ----------
1) For employees retiring at ages under 65, the estimated annual benefits
would be lower.
2) The amounts are based on the formula which became effective January 1,
1995.
3) In accordance with provisions of the Omnibus Budget Reconciliation Act of
1993, effective January 1, 1994, the maximum allowable compensation
permitted in computing a benefit was $150,000, subject to annual cost of
living increases. For 1999, the maximum allowable compensation as provided
under IRS 401(a)(17) is $160,000. Therefore, the highest possible final
average compensation for a participant retiring in 1999 is $156,000.
However, any accrued benefit as of December 31, 1994 which is based on
compensation in excess of $150,000 for years prior to 1994 will be
protected.
Remuneration covered by the defined Contribution Plan in effect for the
named officers in a particular year includes (1) that year's salary (base pay,
overtime and commissions), and (2) compensation received in that year under the
Management Incentive Compensation Plan. The 1998 remuneration covered by the
Retirement Plan includes, for the recipients thereof, Management Incentive
Compensation paid during 1998 with respect to 1997 awards.
For each of the following Named Officers of Genlyte, the credited years of
service under the Plan, as of December 31, 1998, and the remuneration received
during 1998 covered by the Plan were, respectively, as follows:
Covered Years of
Name Compensation Service
----- ------------ --------
Larry K. Powers .................. $160,000* 19
Zia Eftekhar ..................... $160,000* 31
Dennis W. Musselman .............. $160,000* 4
Donna R. Ratliff ................. $160,000* 16
- ----------
* As limited by the maximum allowable compensation provided under IRS 401
(a)(17) of $160,000 for 1998.
Pension benefits at age 65 (normal retirement age) for active participants
as of January 1, 1999 are calculated as follows: 1.2% of final five-year average
pay up to covered compensation level, plus 1.7% of final five-year average pay
over the covered compensation level, multiplied by the total years of recognized
service, to a maximum of 25 years. All such participants will receive the
greater of their benefit under the new formula or the benefit accrued under a
prior plan formula as of December 31, 1994. In addition, certain maximum benefit
limitations are incorporated in the Plan. The final five-year average pay is
determined by taking the average of the highest consecutive five-year period of
earnings within a ten-year period prior to retirement. The term "covered
compensation", as defined by the Internal Revenue Service, refers to the 35-year
average of the Social Security taxable wage bases applicable to a participant
for each year projected to Social Security normal retirement age.
11
<PAGE>
EMPLOYMENT PROTECTION AGREEMENTS
Genlyte has entered into contracts with a group of key employees, including
Messrs. Powers, Drazin, Eftekhar and Musselman, and Ms. Ratliff that become
effective if the employee is employed on the date a change of control (as
defined in the agreement) occurs and that provide each such employee with a
guarantee that his duties, compensation and benefits will generally continue
unaffected for two (2) years following the change of control. In the event that
an eligible employee's employment is terminated without cause by the company or
if the employee is constructively terminated within two (2) years following the
change of control, such employee will receive either ( i ) the sum of (x) two
(2) times the aggregate amount of his then current base salary, plus (y) two (2)
times the average of his last three (3) annual awards paid under the company's
Management Incentive Compensation Plan plus (z) the present value of any
unvested benefits under the company's qualified plans and the annual cost of the
employee's participation in all employee benefit plans of the company or (ii) if
it would result in the employee receiving a greater net-after tax amount, a
lesser amount equal to the amount that produces the greatest net-after tax
amount for the employee. (An employee will be treated as having been
constructively terminated if he quits after being removed from office or
demoted, his compensation or benefits are reduced, his duties are significantly
changed, his ability to perform his duties is substantially impaired or his
place of employment is relocated a substantial distance from his principal
residence.) These agreements will continue in effect at least until December 31,
1999 and automatically renew for an additional year as of each January 1 after
December 31, 1999, unless the company or the employee provides sixty (60) days
written notice of non-renewal prior to such January 1.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Genlyte's directors and company executive officers, and persons who own more
than ten percent of Genlyte's Common Stock, to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports of changes
in ownership of Common Stock and other equity securities of Genlyte. Officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish Genlyte with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1998, Genlyte understands that Messrs. Richard J. Crossland
(Executive Vice President and Chief Operating Officer of Genlyte Thomas Group),
Raymond L. Zaccagnini (Secretary of Genlyte, and Vice President Administration
and Secretary of Genlyte Thomas Group), and David Stumler (Controller of Genlyte
Thomas Group) each inadvertently failed to file on a timely basis his initial
beneficial ownership statement with respect to Genlyte common stock upon the
formation of and their employment by Genlyte Thomas Group.
INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP as Genlyte and Genlyte Thomas Group LLC's
principal independent public accountants for the year 1999.
A representative of Arthur Andersen LLP, the Company's auditor for 1998, is
expected to be present at the Annual Meeting and will have an opportunity to
respond to appropriate questions and make a statement if desired to do so.
2000 PROPOSALS BY HOLDERS OF GENLYTE COMMON STOCK
Any proposal which a stockholder of Genlyte desires to have included in the
proxy statement relating to the 2000 Annual Meeting of Stockholders must be
received by Genlyte at its executive offices by no later than November 20, 1999.
The executive offices of Genlyte are located at 4360 Brownsboro Road, Suite 300,
P.O. Box 35120, Louisville, Kentucky 40232. Proxies solicitated by the Board of
Directors for the 2000 Annual Meeting may be voted at the discretion of the
persons named in such proxies (or their substitutes) with respect to any
stockholder proposal not included in the Company's proxy statement if Genlyte
does not receive notice of such proposal on or before February 3, 2000.
12
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total return on the Common Stock of
Genlyte with the cumulative total return on the NASDAQ Stock Market Index (U.S.
companies) and the Electric Lighting & Wiring Equipment Index (SIC Group 364)
from December 31, 1993(1). The graph assumes the investment of $100 in Genlyte
Common Stock, the NASDAQ Stock Market Index, and the Electric Lighting & Wiring
Equipment Index on January 1, 1994.
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
NASDAQ Stock
The Genlyte Group Electric Lighting & Market Index
Incorporated Wiring Equipment Index (U.S. Companies)
------------ ---------------------- ----------------
1993 100 100 100
1994 117.2 102.7 104.9
1995 186.2 135.8 136.1
1996 344.8 169.3 169.2
1997 489.6 201.6 207
1998 517.2 161.2 291.9
- ----------
1) Total return calculations for the NASDAQ Stock Market Index, Electric
Lighting & Wiring Equipment Index (consisting of approximately 20
companies), and Genlyte Stock were performed by Media General Financial
Services.
13
<PAGE>
EXPENSES AND OTHER MATTERS
Expenses of Solicitation
Genlyte will pay the costs of preparing, assembling and mailing this proxy
statement and the material enclosed herewith. Genlyte has requested brokers,
nominees, fiduciaries and other custodians who hold shares of its common stock
in their names to solicit proxies from their clients who own such shares and
Genlyte has agreed to reimburse them for their expenses in so doing.
In addition to the use of the mails, certain officers, directors and other
employees of Genlyte, at no additional compensation, may request the return of
proxies by personal interview or by telephone or telegraph.
Other Items of Business
The Board of Directors does not intend to present any further items of
business to the meeting and knows of no such items which will or may be
presented by others. However, if any other matter properly comes before the
meeting, the persons named in the enclosed proxy form will vote thereon in such
manner as they may in their discretion determine.
By Order of the Board of Directors,
R.L. ZACCAGNINI
Secretary
March 19, 1999
14
<PAGE>
THE GENLYTE GROUP INCORPORATED
PROXY
Annual Meeting of Shareholders, April 21, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE GENLYTE GROUP INCORPORATED
The undersigned hereby authorizes and appoints WILLIAM G. FERKO and R. L.
ZACCAGNINI and each of them, the proxies of the undersigned, with power of
substitution in each, to vote all shares of Common Stock, par value $.01 per
shares, of the Genlyte Group Incorporated held of record on March 1, 1999 by the
undersigned at the Annual Meeting of Stockholders to be held at the Camberley
Brown Hotel, The Bluegrass Room, 4th & Broadway, Louisville, Kentucky 40202 on
April 21, 1999 at 10:00 AM, local time, and at any adjournment thereof on all
matters that may properly come before such meeting.
(Continued and to be dated and signed on the reverse side.)
THE GENLYTE GROUP INCORPORATED
P.O. BOX 11194
NEW YORK, N.Y. 10203-0194
<PAGE>
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no contrary specification is indicated, the
shares represented by this proxy will be voted FOR the election of the nominee
as director. Please mark box |x| in black or blue ink.
The Board of Directors recommends a vote FOR the election of the nominee as
director.
1. Election of Director OR the nominee |_| WITHHOLD AUTHORITY to vote |_|
listed below for the nominee listed below.
Nominee: Avrum I. Drazin
Check here if you plan to |_| Have written comments or |_|
attend the Annual Meeting change of address on this card.
The Proxies will vote your shares in accordance with your
directions on this card. If no contrary instructions are
specified on this card, the Proxies will vote your shares FOR
proposal 1.
Please sign exactly as name appears at
the left. Joint owners should each sign.
When signing as attorney, executor,
administrator, trustee or guardian, give
your full title as such. If the signer
is a corporation, please sign in full
corporate name by duly authorized
officer.
Dated: __________________________, 1999
________________________________________
Signature
________________________________________
Signature
Votes must be indicated (x)
in Black or Blue ink. |X|
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
