SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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|_| Preliminary Proxy Statement
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|X| Definitive Proxy Statement
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|_| Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
The Genlyte Group Incorporated
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<PAGE>
THE GENLYTE GROUP INCORPORATED
4360 Brownsboro Road, Suite 300
P.O. Box 35120
Louisville, KY 40232
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on April 27, 2000
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March 20, 2000
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 Thursday,
April 27, 2000 at 10:00 AM, local time, for the following purposes:
(1) to elect two members 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 6, 2000 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,
/s/ R.L. Zaccagnini
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 27, 2000
March 20, 2000
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PROXY STATEMENT
----------------------
INTRODUCTION
The Annual Meeting of Stockholders (the "Annual Meeting") of The Genlyte
Group Incorporated ("Genlyte") will be held on April 27, 2000 at the Camberley
Brown Hotel, Bluegrass Room, 4th & Broadway, Louisville, Kentucky 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 20, 2000.
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 nominees 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 DIRECTORS
The Board of Directors of Genlyte currently consists of Avrum I. Drazin
(Chairman), David M. Engelman, Fred Heller, Frank Metzger and Larry K. Powers.
The directors elected at the Annual Meeting will hold office for a term ending
at the Annual Meeting of Stockholders to be held in April of 2003 and until his
successor has been duly elected and qualified. Mr. David M. Engelman and Mr.
Frank Metzer have been nominated to the Board of Directors for re-election at
the Annual Meeting.
If, for any reason, Messr. Engleman and Metzger are not candidates 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 nominees as
directors.
<PAGE>
Genlyte Thomas Group LLC
On August 27, 1998, the Shareholders of Genlyte and Thomas Industries.
(NTSE: TII, "Thomas), respectively, approved the formation of a new lighting
company to be jointly owned by them as outline 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.
Action 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
David M. Engelman (67) 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 Audit and Compensation Committees, and
Chairman of the Nominating Committee of the Genlyte
Board of Directors. He also serves as a Representative
on the Genlyte Thomas Group Management Board.
Frank Metzger (71) 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 a member of
the Audit Committee and Chairman of the Compensation
Committee of the Genlyte Board of Directors.
Incumbent Directors
Avrum I. Drazin (71) 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"), a
subsidiary of the Company, since its incorporation in
July 1984 until October 1999. He served as President of
Lightolier Canada from January 1965 until June 1984. Mr.
Drazin is a member of the Compensation and Nominating
Committees of the Genlyte Board of Directors. He also
serves as a Representative on the Genlyte Thomas Group
Management Board.
Fred Heller (75) 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
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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. Mr. Heller's term will expire on April 27, 2000
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.
Larry K. Powers (57) 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, and has served as a Director 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 then 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 1999, Genlyte's Board of Directors met six times for regular
meetings and twice for special meetings. In addition, the directors received and
reviewed monthly reports of the financial performance of Genlyte and Genlyte
Thomas, and management confers frequently with its directors on an informal
basis to discuss company affairs. During 1999, each of the directors attended at
least 75 percent of the meetings of the Board and the Board Committees of which
such director was a member.
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. Engelman, Metzger and Heller,
with Mr. Heller serving as Chairman. During 1999, the Audit Committee met two
times.
During 1999 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 Thomas Group.
Members of the Compensation Committee are Messrs. Drazin, Engelman and Dr.
Metzger, with Dr. Metzger serving as Chairman. During 1999, the Compensation
Committee met three times and 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'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. Drazin, Engelman and Powers, with Mr. Engelman
serving as Chairman. During 1999, the Nominating Committee met one time.
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<PAGE>
Compensation of Directors
During 1999 each director, other than any director employed by Genlyte,
which for purposes of this section does not include employees of its
subsidiaries, received a retainer of $12,000 and $1,714 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 $18,000
and $2,571 for each Board meeting attended and each committee meeting attended
on a day on which the Board of Directors did not meet. Directors employed by
Genlyte are not paid any fees or additional compensation for services rendered
as members of the Board or any of its Review committees. Directors who also
serve on the Board of Directors of Canlyte, Genlyte's subsidiary are compensated
for attendance at such meetings at the rate of $2,000 (Canadian) per Board
meeting, or for committee meetings held on days other than regular Board meeting
days.
Effective on January 1, 1999, Avrum I. Drazin resigned as President of
Canlyte, Inc. Mr. Drazin received compensation and benefits until September 30,
1999. As of October 1, 1999, Mr Drazin became a consultant under a consulting
agreement with the Company for a two year period. Mr. Drazin's compensation as a
consultant will be US$ 1,600 per day for a maximum of 100 days in the first year
and 50 days in the second year.
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 1999. Mr.
Drazin is Chairman of Genlyte, was formerly President of Genlyte and was former
Chairman of Canlyte, one of the Company'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 6, 2000 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 6, 2000, there were 13,686,190 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 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.
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<PAGE>
Common Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding the beneficial
ownership of Genlyte Common Stock known to Genlyte to be the beneficial owners
of more than 5% of the issued and outstanding Genlyte Common Stock as of March
6, 2000:
Amount and
Nature
of Beneficial
Name and Address Ownership of Percent
of Beneficial Owner Common Stock of Class
- ------------------- ------------ --------
Southeastern Asset Management Inc.... 2,407,500 (l) 17.6%
6410 Poplar Ave., Suite 900
Memphis, TN 38119
Artisan Partners Limited Partnership. 1,512,300 (2) 11.1%
1000 North Water Street, 1770
Milwaukee, WI 53202
Glenn Baily.......................... 1,435,000 (3) 10.5%
14 Basset Creek Trail
Hobe Sound, FL 33455
Marvin C. Schwartz................... 1,200,890 (4) 8.8%
c/o Neuberger & Berman
605 Third Avenue
New York, NY 10158-3698
Neuberger & Berman LLC............... 886,623 (5) 6.5%
605 Third Avenue
New York, NY 10158-3698
FMR Corp............................. 714,500 (6) 5.2%
82 Devonshire Street
Boston, Massachusetts 02109
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(1) According to the Schedule 13G furnished to Genlyte by Southeastern Asset
Management Inc., Southeastern Asset Management is an investment adviser to
of Longleaf Partners Small Cap Fund, the beneficial owner of such shares.
All of the securities covered by this report are owned legally by
Southeastern's investment advisory clients and none are owned directly or
indirectly by Southeastern.
(2) According to the Schedule 13G filed on February 29, 2000 with the
Securities and Exchange Commission and furnished to Genlyte by Artisan
Partners Limited Partnership, Artisan Partners serves as an investment
adviser to Artisan Funds, Inc. and other clients of Artisan Partners. The
Schedule 13G states that the shares reported therein were acquired on
behalf of discretionary clients of Artisan Funds, Inc., and that persons
other than Artisan Partners are entitled to receive all dividends from,
and all proceeds from the sale of these shares.
(3) Retired member of Board of Directors and Chairman of The Genlyte Group,
Incorporated. Includes 210,000 shares of Genlyte Common Stock owned by Mr.
Bailey's spouse as to which Mr. Bailey disclaims beneficial ownership.
(4) 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.
(5) According to the Schedule 13G furnished to Genlyte by Neuberger & Berman
LLC ("N&B"), N&B has sole power to vote and to dispose of 715,223 of such
shares and shared power to dispose of 886,323 shares. N&B disclaims
beneficial ownership of 441,700 shares owned by principals of N&B,
including those reported by Marvin C. Schwartz.
(6) FMR Corp. held as of March 6, 2000, 714,500 shares through Fidelity
Management & Research Company, (Fidelity) a wholly owned subsidiary of FMR
Corp. and an Investment Advisor registered under Section 203 of the
Investment Advisors Act of 1940. Fidelity held the shares as a result of
acting as and investment advisor to various Investment Companies (Fidelity
Funds).
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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 6, 2000.
Amount and
Nature of
Beneficial
Ownership of
Genlyte Percent
Name Common Stock of Class
- ---- ------------ --------
Avrum I. Drazin 207,975 (1) 1.5%
Zia Eftekhar 76,674 (2) *
David M. Engelman 16,500 (3) *
William G. Ferko 5,100 *
Fred Heller 108,000 (4) *
Frank Metzger 145,750 (5) 1.1%
Dennis W. Musselman 8,162 (6) *
Larry K. Powers 199,509 (7) 1.5%
-------- ----
All directors and executive officers
as a group
(10) persons including those named) 767,670 (8) 5.6%
======== ===
- ----------
* 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 1,000 shares of Genlyte Common Stock owned by Mr. Drazin's spouse
as to which Mr. Drazin 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 7,500 shares of Genlyte Common Stock owned by Mr. Engelman's
spouse as to which Mr. Engelman disclaims beneficial ownership.
(4) Includes 60,266 shares of Genlyte Common Stock owned by Mr. Heller's
spouse as to which Mr. Heller disclaims beneficial ownership.
(5) Includes 28,000 shares of Genlyte Common Stock owned by Dr. Metzger's
spouse as to which Dr. Metzger disclaims beneficial ownership.
(6) Includes 5,000 shares of Genlyte Common Stock which may be acquired upon
the exercise of options which are presently exercisable.
(7) Includes 101,250 shares of Genlyte Common Stock which may be acquired upon
the exercise of options which are presently exercisable.
(8) Includes an aggregate of 96,766 shares of Genlyte Common Stock owned by
the spouses of certain of Genlyte's executive officers and directors as to
which each such executive officer or director disclaims beneficial
ownership and 126,250 shares of Genlyte Common Stock which may be acquired
upon the exercise of options which are presently exercisable.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was comprised during
fiscal 1999 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. 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 of Genlyte and its
operating subsidiaries. The Board of Directors reviews and approves
recommendations made by the Compensation Committee relating to the compensation
of Genlyte's executive officers.
The Compensation Committee has prepared the following report with respect
to executive compensation at Genlyte.
Compensation Philosophy
Genlyte and Genlyte Thomas Group's compensation philosophy is to provide
competitive pay for competitive performance and superior pay for superior
performance. Genlyte and Genlyte Thomas Group seek to ensure that its executive
compensation programs and policies relate to and support its overall objective
to enhance
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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 Genlyte to
attract, retain and motivate key executives who will contribute to Genlyte
and Genlyte Thomas Group'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 stockholders by
encouraging employee stock ownership in Genlyte.
Components of Compensation
Genlyte and Genlyte Thomas Group's 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. These short-term incentive payments for 1999 were
made during the first quarter of calendar 2000.
o Long-term incentive opportunities in the form of stock options in which
rewards are linked directly to stockholder gains.
For fiscal year 1999, Genlyte's compensation programs consisted of:
Base Salary
Salary pay levels at Genlyte and Genlyte Thomas Group are competitive with
the marketplace. The Compensation Committee 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
Executive 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.
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 participants relative
level within the organization as determined annually according to policy
guidelines.
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In 1999, 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 its Common Stock. Through the
Genlyte 1988 Stock Option Plan and the Genlyte 1998 Stock Option Plan, officers
and key employees are granted options to purchase Genlyte 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 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 two inactive plans in which two
long-term executive officers still participate (Messers Drazin and Eftekhar).
Additionally, for a period of six to eighteen months following the closing of
Genlyte Thomas transaction (the "transition period"), certain tax-qualified
salaried and clerical Thomas employees continued to participate in certain
tax-qualified Thomas Retirement plans. With the conclusion of the transition
period, effective January 1, 2000, these former Thomas salaried and clerical
employees began participating in the retirement plans of Genlyte Thomas Group
that have been modified to provide an integrated retirement program. Their
account balances under the Thomas plans have been or will be transferred to the
appropriate plan or plans of the Genlyte Thomas Group during the first Quarter
of calendar 2000.
Chief Executive Officer Compensation
Mr. Powers served as Chief Executive Officer of Genlyte and Genlyte Thomas
Group in 1999 at a salary of $400,000 per annum. Mr. Powers received $502,988 in
incentive compensation for 1999 recognizing a significant improvement in the EPS
over the prior year, as well as the level of achievement of Mr. Powers'
individual objectives. In 1999, the Compensation Committee recommended and the
Board of Directors approved a stock option grant of 25,000 shares for Mr. Powers
in recognition of its assessment of his ability to enhance the long-term value
of Genlyte for the stockholders. That grant was consistent with the overall
design of the option program.
Conclusion
In summary, the Compensation Committee continued its policy in fiscal year
1999 of linking executive compensation to Genlyte performance. The outcome of
this process is that stockholders receive a fair return on their investment
while executives are rewarded in an appropriate manner for meeting or exceeding
performance objectives. The Committee believes that Genlyte's compensation
levels adequately reflect the Company's philosophy of providing competitive pay
for competitive performance and superior pay for superior performance. Likewise,
the Committee believes that the Company's executive compensation programs and
policies are supportive of its overall objective to enhance stockholder value
through the profitable management of its operations.
Frank Metzger, Chairman
Avrum I. Drazin
David M. Engelman
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Executive Compensation
The following table sets forth information concerning annual, long-term
and other compensation for services in Genlyte Thomas of those persons who were,
on December 31, 1999, Genlyte Thomas' (i) chief executive officer and (ii) other
four most highly compensated executive officers (together, the "Named
Officers"):
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payout
------------------------------------------------ ---------- ---------------
Other Stock All
Name and Annual Options/ Other
Principal Year Salary ($) Bonus ($) Comp ($) SARs (#) Comp ($)
Position
- ----------------- -------- ---------- ---------- ----------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Larry K. Powers 1999 400,000 502,988 37,363(1,2,3) 25,000 0
President & CEO 1998 350,014 403,750 17,912(1,2,3) 35,000 0
1997 310,000 303,400 2,923(1,2) 27,500 0
Zia Eftekhar 1999 230,000 220,894 0 7,500 58,603(4)
President 1998 215,000 206,360 0 15,500 65,950(4)
Lightolier Division 1997 214,423 159,014 0 12,500 22,367(4)
William G. Ferko 1999 200,000 203,562 23,058(3) 10,000 0
Chief Financial Officer
Dennis Musselman 1999 155,000 193,545 0 4,500 0
Vice President 1998 150,192 155,399 0 4,100 0
Hadco/Bronzelite 1997 144,615 118,170 0 0 0
Ronald D. Schneider 1999 191,000 109,355 0 4,500 0
Vice President
Operations
</TABLE>
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(1) Director's fees for Canlyte, Inc., a subsidiary of the Company.
(2) These figures were converted from Canadian dollars to U.S. dollars using
the exchange rate as of the last day of the fiscal year for that period.
(3) Represents expenses for relocation and related fees
(4) Represents service and interest expense accrual for Supplemental Employee
Retirement Plan benefit.
9
<PAGE>
Option Grants
Shown below is further information on grants of stock options pursuant
to the 1998 Stock Option Plan during the fiscal year ended December 31, 1999 to
the Named Officers reflected in the Summary Compensation Table. No stock
appreciation rights were granted under that Plan during fiscal 1999.
Option Grants in Fiscal 1999
Individual Grants
<TABLE>
<CAPTION>
Potential Realizable
Value of Assumed
% of Annual Rates of Stock
Total Options Price Appreciation
Options Granted to Exercise or for Option Term (2)
Granted Employees in Base Price Expiration -----------------------
Name (#)(1) Fiscal Year ($/share) Date 5% ($) 10%($)
---- ------ ----------- --------- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Larry K. Powers............ 25,000 12.3% $20.375 12/15/2006 $207,367 $483,253
Zia Eftekhar............... 7,500 3.7% $20.375 12/15/2006 $62,210 $144,976
William G. Ferko........... 10,000 4.9% $20.375 12/15/2006 $82,947 $193,301
Dennis W. Musselman........ 4,500 2.2% $20.375 12/15/2006 $37,326 $ 86,980
Ronald D. Schneider........ 4,500 2.2% $20.375 12/15/2006 $37,326 $ 86,980
</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 1999 and prior
years under Genlyte's 1988 and 1998 Stock Option Plans to the Named Officers and
held by them on December 31, 1999.
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<PAGE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
Aggregated Option Exercises in Fiscal Year 1999 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 .............. 0 0 101,250 73,750 1,213,125 149,218
Zia Eftekhar .............. 8,750 90,156 10,000 29,250 75,469 46,922
William G. Ferko........... 0 0 0 20,000 0 39,062
Dennis W. Musselman........ 7,000 70,000 5,000 8,600 69,375 16,415
Ronald D. Schneider........ 0 0 0 9,260 0 18,334
</TABLE>
- -------
(1) Based upon the 12/31/99 closing price of $21.375 for Genlyte stock on the
NASDAQ National Market System. Realizable value is shown net of option
exercise price, but before taxes associated with exercise.
Retirement Plan
During fiscal 1999, Messers Eftekhar and Powers were participants in a
qualified noncontributory defined benefit plan (the "Retirement Plan"). The
Retirement Plan was amended effective January 1, 2000 to freeze the benefits of
all participants except "grandfathered participants" based on age and service as
of December 31, 1999. Commencing in 2000, participants whose benefits were
frozen will be eligible for matching contributions and discretionary
contributions under the Genlyte Thomas Group Retirement Savings and Investment
Plan (the "Savings Plan"), a defined contribution 401(k) plan. Participants who
met certain age and service requirements as of December 31, 1999, the
"grandfathered participants," will continue to participate in the Retirement
Plan. "Grandfathered participants" will be eligible for matching contributions
but not discretionary contributions under the Savings Plan. Messers Powers and
Eftekhar as grandfathered participants will remain active participants in the
Retirement Plan.
For Employees Retiring at age 65 in 2000 (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.............................. $ 3,373 $ 6,745 $10,118 $13,490 $16,863
$100,000............................. 7,626 15,245 22,868 30,490 38,113
$160,000 (3)......................... 12,723 25,445 38,168 50,890 63,613
Greater than $160,000 (3)............ 12,723 25,445 38,168 50,890 63,613
</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 2000, the maximum allowable compensation as provided
under IRS 401(a)(17) is $170,000. Therefore, the highest possible final
average compensation for a participant retiring in 2000 is $160,000.
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 Retirement Plan 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 1999 remuneration covered by the Retirement Plan includes, for the
recipients thereof, Management Incentive Compensation paid during 1999 with
respect to 1998 awards.
11
<PAGE>
For each of the following Named Officers of Genlyte Thomas, the
remuneration received during 1999 and the credited years of service under the
Retirement Plan, as of December 31, 1999, recognized by the Retirement Plan
were, respectively, as follows:
Years of
Name Compensation Service
----------------------------- --------------------- ----------
Larry K. Powers $160,000* 20
Zia Eftekhar $160,000* 32
* As limited by the maximum allowable compensation provided under Code
401 (a)(17) of $160,000 for 1999.
Pension benefits at age 65 (normal retirement age) for active
participants as of January 1, 2000 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 Retirement
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.
EMPLOYMENT PROTECTION AGREEMENTS
Genlyte has entered into contracts with a group of key employees,
including Messrs. Powers, Eftekhar, Ferko, and Musselman, 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 Genlyte 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 Genlyte' s Management
Incentive Compensation Plan plus (z) the present value of any unvested benefits
under Genlyte's qualified plans and the annual cost of the employee's
participation in all employee benefit plans of Genlyte 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, 2000 and automatically renew
for an additional year as of each January 1 after December 31, 2000, unless
Genlyte 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 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.
Messrs. Avrum I. Drazin, and Frank Metzger each inadvertently failed to
file on a timely basis a report of change in beneficial ownership in connection
with their exercise of options to purchase Genlyte common stock during 1999.
12
<PAGE>
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 2000.
A representative of Arthur Andersen LLP, the Company's auditor for
1999, 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.
2001 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 2001 Annual Meeting of Stockholders must be
received by Genlyte at its executive offices by no later than November 17, 2000.
The executive offices of Genlyte are located at 4360 Brownsboro Road, Suite 300,
P.O. Box 35120, Louisville, Kentucky 40232. Proxies solicited by the Board of
Directors for the 2001 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 Genlyte's proxy statement unless Genlyte
receives notice of such proposal on or before February 2, 2001.
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, 1994(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, 1995.
[The following table was depicted as a line chart in the printed material]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
The Genlyte Group Incorporated 100.0 158.8 294.1 417.7 441.2 502.9
Electric Lighting & Wiring Equipment Index 100.0 132.2 164.8 196.2 156.9 132.2
NASDAQ Stock Market Index (U.S. Companies) 100.0 129.7 161.2 197.2 278.1 490.5
</TABLE>
[GRAPHIC OMITTED]
(1) Total return calculations for the NASDAQ Stock Market Index, Electric
Lighting & Wiring Equipment Index (consisting of approximately 16
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,
/s/ R.L. Zaccagnini
R. L. ZACCAGNINI
Secretary
March 20, 2000
14
