<PAGE>
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
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ELJER INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
ELJER INDUSTRIES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:/1/
(4) Proposed maximum aggregate value of transaction:
- - --------
/1/Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
17120 Dallas Parkway
Dallas, Texas 75248
Tel: (214) 407-2600
[ELJER INDUSTRIES LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 1994
Dallas,
Texas
May 6,
1994
To the Stockholders of ELJER INDUSTRIES, INC.:
Notice is hereby given that the annual meeting of stockholders of Eljer
Industries, Inc., a Delaware corporation (the "Company"), will be held at The
Addison Conference & Theatre Centre at 15650 Addison Road, Addison, Texas, on
Tuesday, June 21, 1994, at 9:00 a.m., local time, for the following purposes:
1. To elect one director to serve for a term of three years;
2. To ratify the appointment of Arthur Andersen & Co. as the
independent auditors of the Company; and
3. To transact any other business which may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on April 29, 1994 are
entitled to notice of and to vote at the annual meeting or any adjournment
thereof. A complete list of such stockholders will be available for examination
at the offices of the Company in Dallas, Texas, during normal business hours
for a period of 10 days prior to the meeting.
A record of the Company's activities during 1993 and financial statements for
the fiscal year ended January 2, 1994 are contained in the Company's 1993
Annual Report. The Annual Report, which has previously been delivered to
stockholders, does not form any part of the material for solicitation of
proxies.
By Order of the Board of Directors
Edward W. Fordyce, Jr.
Vice President--General Counsel
and Secretary
<PAGE>
[ART LOGO]
. Place of Annual Meeting
The Addison Conference & Theatre Centre is located at 15650 Addison Road,
Addison, Texas, approximately 18 miles northeast of Dallas/Ft. Worth
International Airport.
Stockholders attending the meeting who will be using LBJ Freeway (I-635)
should exit north onto the Dallas North Tollway, travel north to the Belt Line
Road exit. Turn west (left) on Belt Line to Addison Road, turn north (right) on
Addison Road. The Addison Conference & Theatre Centre is located on the right.
<PAGE>
[ELJER INDUSTRIES LOGO]
17120 Dallas Parkway
Dallas, TX 75248
Tel: (214) 407-2600
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 1994
This proxy statement is furnished to stockholders of Eljer Industries, Inc.
(the "Company") in connection with the solicitation by the Board of Directors
of the Company of proxies for use at the annual meeting of stockholders to be
held at the time and place and for the purposes set forth in the accompanying
notice. The approximate date of mailing of this proxy statement and the
accompanying proxy is May 6, 1994.
The Company will bear the cost of soliciting proxies. In addition to
solicitations by mail, certain officers, directors or employees of the Company
or its subsidiaries may solicit proxies in person or by mail, telephone,
facsimile telecommunication or telegraph without special compensation for their
services. Arrangements will also be made with brokerage firms and other
custodians, nominees and fiduciaries to forward solicitation material to the
beneficial owners of Common Stock (as defined below) held of record by such
brokerage firms and other custodians, nominees and fiduciaries and the Company
will reimburse such firms and persons for reasonable out-of-pocket expenses
incurred by them in connection therewith. The Company has retained Morrow &
Co., Inc. to assist in the solicitation of proxies at a fee of $3,500 plus
certain expenses.
Proxy Cards. The enclosed proxy card serves to appoint proxies for record
holders of Common Stock of the Company. Shares represented by a proxy in such
form, duly executed and returned to the Company and not revoked, will be voted
at the meeting in accordance with the directions given. IF NO INSTRUCTIONS ARE
INDICATED, THE PROXY WILL BE VOTED FOR ELECTION OF THE DIRECTOR NAMED IN THE
PROXY AND FOR RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN & CO. AS
INDEPENDENT AUDITORS. Any stockholder giving a proxy may revoke it at any time
before it is exercised by giving written or oral notice of such revocation to
the Secretary of the Company.
Voting Procedures and Tabulation. The Company will appoint one or more
inspectors of election to act at the meeting and to make a written report
thereof. Prior to the meeting, the inspectors will sign an oath to perform
their duties in an impartial manner and according to the best of their ability.
The inspectors will ascertain the number of shares outstanding and the voting
power of each, determine the shares represented at the meeting and the validity
of proxies and ballots, count all votes and ballots and perform certain other
duties as required by law.
The inspectors will tabulate (i) the number of votes cast for or withheld as
to the vote on the nominee for director and (ii) the number of votes cast for,
against or withheld, as well as the number of broker abstentions and non-votes,
as to the ratification of the appointment of independent auditors. The
treatment and effect of abstentions and broker non-votes under Delaware law and
the Company's Certificate of Incorporation and By-laws are described below. An
abstention or broker non-vote with respect to the election of directors will
have no effect on the voting on such matter, provided a quorum is present,
because directors are elected by a plurality of the shares of Common Stock
present in person or by proxy at the meeting and entitled to vote. An
abstention with respect to the proposal on ratification of the appointment of
auditors will
<PAGE>
as a vote against the proposal. The shares represented by a broker non-vote (or
other limited proxy) as to such proposal will be counted toward the meeting
quorum but will not be entitled to be voted on the proposal at the meeting and
therefore will not be considered a part of the voting power present with
respect thereto. This will have the effect of reducing the number of shares
required to be voted in favor of the proposal in order to approve it.
YOUR VOTE IS IMPORTANT TO THE COMPANY. EVEN IF YOU EXPECT TO ATTEND THE 1994
ANNUAL MEETING, WE URGE YOU TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. COMPLETING THE ENCLOSED PROXY WILL
NOT PREVENT YOU FROM VOTING YOUR SHARES IN PERSON IF YOU DO ATTEND THE MEETING.
VOTING SECURITIES
The only voting security of the Company outstanding is its Common Stock, par
value $1.00 per share ("Common Stock"). Only holders of record of Common Stock
at the close of business on April 29, 1994, the record date for the meeting,
are entitled to notice of and to vote at the meeting. On the record date for
the meeting, there were 7,107,326 shares of Common Stock outstanding and
entitled to be voted at the meeting. A majority of such shares, present in
person or represented by proxy, is necessary to constitute a quorum. Each share
of Common Stock is entitled to one vote.
ELECTION OF DIRECTORS
The Company's By-laws provide that the directors are to be divided into three
classes with respect to the time for which they hold office. At each annual
meeting of stockholders of the Company, successors of the class whose term of
office expires in that year are to be elected for a three-year term or until
their successors have been duly elected and qualified. The terms of two
directors, C. A. Rundell, Jr. and Jerre L. Stead, will expire at the 1994
Annual Meeting. Mr. Stead has declined to stand for re-election. The Company's
By-laws also provide that the number of directors constituting the entire Board
of Directors shall be fixed from time to time by a resolution adopted by a
majority of the whole Board. The Board of Directors has determined that it will
not nominate a person to serve as a director to succeed Mr. Stead and has
adopted a resolution reducing the number of directors from seven to six,
effective at the expiration of Mr. Stead's term. Mr. Rundell has been nominated
for re-election. If re-elected, Mr. Rundell will serve until the 1997 annual
meeting of stockholders of the Company or until his successor has been duly
elected and qualified.
The Company's By-laws establish certain procedures for stockholder
nominations of candidates for directors. Those procedures are set forth below
in the section entitled "Notice Provisions for Stockholder Proposals and
Stockholder Nominations of Directors."
The parties named in the enclosed proxy intend to vote the shares represented
thereby FOR the election of Mr. Rundell unless the proxy is marked otherwise.
Mr. Rundell has agreed to serve as a director if elected and the Company has no
reason to believe that he will be unable to serve. In the event Mr. Rundell
becomes
2
<PAGE>
unwilling or unable to serve, however, the persons named in the enclosed proxy
will vote such proxy for such other person as the Board of Directors may
nominate for director.
Set forth below is information regarding each of the directors and the
nominee for director of the Company. Directors in each class are elected at the
annual meeting of stockholders held in the year in which the term for such
class expires and will serve thereafter for three years.
CLASS WHOSE TERM EXPIRES IN 1994
C. A. RUNDELL, JR.,
age 62, director since Mr. Rundell serves as a consultant to and/or
October 1992 as a member of the boards of directors of a
number of companies. His business is
conducted under the name Rundell Enterprises,
a sole proprietorship. Mr. Rundell is also a
director of Bollinger Industries, Inc.,
Inter-Regional Financial Group, Inc., NCI
Building Systems, Inc., Redman Industries,
Inc., Tandy Brands Accessories, Inc. and
Tyler Corporation.
CLASS WHOSE TERM EXPIRES IN 1995
SCOTT G. ARBUCKLE,
age 62, director since Mr. Arbuckle has served as President and
February 1990 Chief Executive Officer of the Company since
February 1990. Mr. Arbuckle served as
Executive Vice President of the Company from
April 1989 to February 1990. He served as
Group Vice President-HVAC of Household
Manufacturing, Inc. and President of its
Selkirk division from 1987 to April 1989.
From 1982 to 1987, Mr. Arbuckle served as an
Executive Vice President of Household
Manufacturing. He held various positions with
Household Manufacturing and its predecessors
from 1963 to 1982.
WALTER C. MINNICK,
age 51, director since April Since 1979, Mr. Minnick has been President
1993 and Chief Operating Officer and a director,
and since 1986, Chief Executive Officer, of
TJ International Inc., a manufacturer and
distributor of specialty building products.
From 1974 to 1979, Mr. Minnick was employed
by TJ International in various other
capacities, including Corporate Secretary,
National Manufacturing Manager and Vice
President, Division Operations. Prior
thereto, he was Deputy Assistant Director of
the Office of Management and Budget of the
United States in 1972 and 1973 and a member
of the White House staff, serving as Staff
Assistant to the President, Domestic Council,
in 1971 and 1972. He is also a director of
MacMillan Bloedel, Ltd.
3
<PAGE>
PAUL E. PRICE,
age 59, director since Mr. Price served in various capacities with
February 1993 The Quaker Oats Company from 1972 until his
retirement in June 1991 and most recently,
served as its Senior Vice-President, Finance
and Chief Financial Officer from 1988 until
his retirement. He also served as President
of the Fisher Price Toys division during 1990
and in 1987 and 1988 as Executive Vice-
President of the International Grocery
Products division of Quaker Oats. Mr. Price
is also a director of DeSoto, Inc. and
Xytronyx, Inc.
CLASS WHOSE TERM EXPIRES IN 1996
FRANK J. MORGAN,
age 68, director since April Mr. Morgan has served as Chairman of the
1989 Board of the Company since December 1990. Mr.
Morgan served as President and Chief
Operating Officer of The Quaker Oats Company,
an international marketer of foods, pet foods
and toys, from 1983 to 1990. Prior thereto,
he held various positions with Quaker Oats
since 1964. He is also a director of The
Molson Companies Limited.
JOHN H. DEININGER,
age 62, director since April In October 1993, Mr. Deininger became
1989 President, Chief Executive Officer and a
director of Union City Body Co., L.P., a
manufacturer of custom delivery van bodies.
He previously served as Senior Advisor of
Manufacturing and Industrial Mergers and
Acquisitions Projects for Mancuso & Co., an
investment banking firm, from 1990 to
September 1993. He served as Executive Vice
President of Illinois Tool Works, Inc., a
manufacturer of industrial products and
components from 1986 through 1990. Prior
thereto, he was President, Chief Operating
Officer and a director of Signode Industries,
Inc., a supplier of industrial packaging. Mr.
Deininger is also a director of Joslyn Corp.
BOARD MEETINGS AND COMMITTEES
During 1993, the Board of Directors of the Company held seven meetings and
took one action by unanimous written consent in lieu of a meeting. Each of the
directors of the Company attended at least 75 percent of the aggregate total
number of meetings of the Board of Directors and meetings of any committee of
the Board on which that director served and which took place subsequent to his
election as a director, except Jerre Stead, who attended more than 50 percent
of such meetings. The Board of Directors has standing Audit, Compensation and
Executive Committees. It does not have a standing nominating committee.
4
<PAGE>
The Audit Committee reviews the scope and results of the audit by the
Company's independent auditors, makes recommendations to the Board as to the
selection of independent auditors and has approval authority with respect to
services provided by the independent auditors. In addition, it reviews systems
of internal control, reviews accounting policies and procedures and directs and
supervises investigations into matters within the scope of its duties. The
members of this committee are Messrs. Deininger (chairperson), Morgan, Rundell,
Stead, Minnick and Price. The Audit Committee met three times in 1993.
The Compensation Committee reviews the cash compensation of management
personnel and takes action on all salary changes for certain management
personnel. In addition, it administers all aspects of the various management
stock incentive plans and awards stock-based compensation to executive officers
and employees of the Company. The members of this committee are Messrs. Stead
(chairperson), Morgan, Deininger, Rundell, Minnick and Price. The Board of
Directors will choose a chairperson from among the remaining members of the
committee to replace Mr. Stead. The Compensation Committee met three times in
1993. The Board of Directors had a separate Stock Option Committee until June
of 1993 when the committee was dissolved because its membership was identical
to the membership of the Compensation Committee.
DIRECTORS' FEES AND COMPENSATION
Directors who are not employees of the Company or any of its subsidiaries
receive for their services a retainer fee currently payable in shares of the
Company's Common Stock at the rate of approximately $16,000 in market value per
annum and a fee of $800 in cash for each Board or committee meeting attended.
In addition, each chairperson of a committee of the Board who is not an
employee of the Company or any subsidiary receives for his services as
chairperson a retainer fee payable in shares of the Company's Common Stock at
the rate of approximately $2,000 in market value per annum. The Company
transfers shares of treasury stock to the directors in payment of such fees at
the time of, or shortly after, the first meeting of the Board of Directors
following the annual meeting of stockholders of the Company based on the market
value of the Company's Common Stock at that time. Non-employee directors who
are elected to the Board between annual stockholder meeting dates are entitled
to receive a pro rata portion of the retainer fees for their services based on
the number of days from the date of their election until the next annual
meeting of stockholders. Directors who are employees of the Company or any
subsidiary do not receive any fees for Board or committee service. The Company
reimburses all directors for travel, lodging and related expenses they may
incur in attending Board and committee meetings.
In 1992, the Company adopted a retirement plan for directors of the Company
who are not employees of the Company or any of its subsidiaries. Under the
plan, an eligible director who has three or more years of credited service as a
director is entitled to receive upon his or her retirement from the Board of
Directors an annual payment in cash equal to the amount of the per annum
director retainer fee in effect for the year in which he or she retired. The
annual retirement entitlement is payable for a period of years equal to the
number of years he or she served as a Board member but not to exceed 10 years.
Frank J. Morgan, a director of the Company since April 1989, became Chairman
of the Board and an employee of the Company in December 1990. In 1991 and 1992,
Mr. Morgan received cash compensation of $150,000 and $200,000, respectively,
for his services as Chairman and participated in the Executive Incentive
5
<PAGE>
Compensation Program and the Long-Term Executive Incentive Compensation Plan.
In 1993, the Board of Directors restructured the Chairman's office from that of
a salaried executive officer position to one occupied by an independent non-
employee director. Mr. Morgan has continued to serve as Chairman of the Board
as a non-employee director and is compensated, effective January 1, 1993, at
the rate of $100,000 annually for his services. Mr. Morgan also receives the
retainer fee and cash payments for meetings as a non-employee director of the
Company. As a non-employee director, Mr. Morgan participates in the retirement
plan for directors of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Frank J. Morgan, Chairman of the Board of the Company, and who was an
employee until February 16, 1993, serves on the Compensation Committee.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the only persons
known to the Company to be the beneficial owners of more than five percent of
the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-----------------------
NAME AND ADDRESS NUMBER PERCENT
OF BENEFICIAL OWNER OF SHARES OF CLASS(1)
- - ------------------- --------- -----------
<S> <C> <C>
Gabelli Funds, Inc..................................... 853,900(2) 12.0%
655 Third Avenue
New York, New York 10017
James P. Lennane....................................... 493,100(3) 6.9%
4820 Bayshore Drive
Suite D
Naples, Florida 33962
</TABLE>
- - --------
(1) As of April 29, 1994, there were outstanding 7,107,326 shares of Common
Stock, the only class of voting stock of the Company outstanding.
(2) The number of shares is based on information contained in a Schedule 13D,
as amended through Amendment No. 11 thereto, filed with the SEC by Gabelli
Funds, Inc. and certain of its affiliates, which reflects their beneficial
ownership of shares of Common Stock as of March 22, 1994. Gabelli Funds and
such affiliates reported that they may be deemed to have sole voting power
with respect to 816,400 shares and sole dispositive power over 853,900
shares.
(3) The number of shares is based on information contained in a Schedule 13D,
as amended through Amendment No. 2 thereto, filed with the Securities and
Exchange Commission (the "SEC") by James P. Lennane, Bette M. Byouk and
Susan Kahl Lennane which reflects their beneficial ownership of shares of
Common Stock as of February 7, 1994. According to the filing, Mr. Lennane
has sole voting and dispositive power over the entire 493,100 shares.
7
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 31, 1994 the beneficial ownership
of Common Stock (the only equity security of the Company) by each director of
the Company, each named executive officer listed in the Summary Compensation
Table appearing in this Proxy Statement and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED(1)
-------------------
NUMBER
OF PERCENT
SHARES OF CLASS
------- --------
<S> <C> <C>
Directors
Scott G. Arbuckle........................................ 87,125(2) 1.2%
John H. Deininger........................................ 21,553 *
Walter C. Minnick........................................ 3,521 *
Frank J. Morgan.......................................... 23,765(3) *
Paul E. Price............................................ 2,804 *
C. A. Rundell, Jr........................................ 6,223 *
Jerre L. Stead........................................... 6,799 *
Named Executive Officers (excluding any director named
above) and Group
Edward W. Fordyce, Jr.................................... 2,000(4) *
James A. Harris.......................................... 29,947(5) *
James F. Thomason........................................ 26,217(6) *
Charles R. Wackenhuth.................................... 28,791(7) *
All directors and executive officers as a group (13 per-
sons)................................................... 262,896(8) 3.6%
</TABLE>
- - --------
*Beneficial ownership represents less than one percent of the outstanding
Common Stock.
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to all shares listed.
(2) Includes 71,796 shares Mr. Arbuckle currently has the right to acquire
pursuant to stock options; 8,079 shares held for the account of Mr.
Arbuckle under the Eljer Tax Reduction Investment Plan ("TRIP"), with
respect to which Mr. Arbuckle has sole voting power and dispositive power,
subject to the terms of the TRIP; and 1,600 shares held jointly by Mr.
Arbuckle and his wife with respect to which they share voting and
dispositive power.
(3) Includes 760 shares held for the account of Mr. Morgan under the TRIP, with
respect to which Mr. Morgan has sole voting power and dispositive power,
subject to the terms of the TRIP.
(4) Consists of 2,000 shares Mr. Fordyce currently has the right to acquire
pursuant to stock options.
(5) Includes 18,100 shares Mr. Harris currently has the right to acquire
pursuant to stock options; 1,697 shares held for the account of Mr. Harris
under the TRIP with respect to which Mr. Harris has sole voting power and
dispositive power, subject to the terms of the TRIP; and 10,000 shares of
restricted stock, with respect to which Mr. Harris has sole voting power,
but no dispositive power. The restricted period for 5,000 of such shares of
restricted stock, which were granted in 1993, terminates on February 16,
1996 and the restricted period for the remainder of such shares, which were
granted in 1994, terminates on February 15, 1997.
8
<PAGE>
(6) Includes 20,800 shares Mr. Thomason currently has the right to acquire
pursuant to stock options and 1,722 shares held for the account of Mr.
Thomason under the TRIP, with respect to which Mr. Thomason has sole voting
power and dispositive power, subject to the terms of the TRIP.
(7) Includes 22,871 shares Mr. Wackenhuth currently has the right to acquire
pursuant to stock options; 5,720 shares held for the account of Mr.
Wackenhuth under the TRIP with respect to which Mr. Wackenhuth has sole
voting power and dispositive power, subject to the terms of the TRIP; and
200 shares held jointly by Mr. Wackenhuth and his wife with respect to
which they share voting and dispositive power.
(8) Includes 148,367 shares subject to currently exercisable stock options;
19,329 shares held for the account of such persons under the TRIP; and
20,000 shares of restricted stock.
EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee. The Board designates the members and the Chairman of
the committee. At the present time, the Compensation Committee is comprised of
directors who are not employees of the Company. The Compensation Committee
establishes the general compensation policies of the Company, establishes the
compensation plans and specific compensation levels for executive officers and
administers the Company's Executive Incentive Compensation Program, 1991 Long-
Term Performance Plan and the Long-Term Executive Incentive Compensation Plan
and awards stock-based compensation to executive officers and employees of the
Company.
The following is a report submitted by members of the Compensation Committee
addressing the Company's compensation policy as it related to the executive
officers for fiscal 1993. The report and the information herein under
"Executive Compensation--Performance Graph" shall not be deemed to be
"soliciting material" or to be "filed" with the SEC or subject to the SEC's
proxy rules, except for the required disclosure herein, or to the liabilities
established under Section 18 of the Securities Exchange Act of 1934 (the
"Exchange Act") and such information shall not be deemed to be incorporated by
reference into any filing made by the Company under the Securities Act of 1933
or the Exchange Act.
REPORT OF THE COMPENSATION COMMITTEE
To the Stockholders of Eljer Industries, Inc.:
As members of the Compensation Committee of the Board of Directors (the
"Committee") it is our responsibility to review and set compensation levels of
the executive officers of the Company, evaluate the performance of management
and consider management succession and related matters. All decisions of the
Committee are reviewed by the full Board.
The Committee retains the services of Hewitt Associates L.L.C., a
compensation and benefits consulting firm ("Hewitt Associates"), to provide
information to the Committee to assist it in connection with the performance of
its duties. Hewitt Associates provides advice to the Committee with respect to
the compensation of executive officers of the Company. The Committee takes into
account the performance of
9
<PAGE>
the Company and how compensation paid by the Company compares to compensation
paid by a comparator group of companies. Members of the Committee also review
various compensation surveys provided during the year by Hewitt Associates.
Competitors chosen for comparison purposes in the compensation area generally
are not the same companies which comprise the peer group index in the
performance graph included in this Proxy Statement. The Committee believes that
the Company's most direct competitors for executive talent are not necessarily
those companies that would be included in the peer group established for
comparing stockholder returns.
In establishing executive compensation, the Committee neither bases its
decisions entirely on quantitative relative weights of various factors, nor
does it follow a mathematical formula. Rather, the Committee exercises
discretion and makes judgments after considering all factors that are deemed
relevant, including the achievement of certain objective targets set by the
Committee relating to the Company's financial performance.
Executive compensation policies are designed to use executive pay as
incentive to promote the Company's overall business strategies, values and
management initiatives. The policies are intended to (i) attract and retain
those kinds of executives who are considered essential to the long-term success
of the Company through the salaried administration program; (ii) support a
performance-based environment that rewards achievement of established Company
goals and corporate performance through the payment of cash awards annually;
and (iii) reward executives for long-term strategic management and the
enhancement of stockholder value through stock-based and long-term incentive
awards. In addition, the Committee has attempted to preserve the deductibility
to the Company of compensation paid to executive officers, but has not yet
adopted a formal policy in response to recent changes in federal tax laws
regarding the deductibility of compensation.
For 1993, as in years past, the Company's executive compensation program
consisted of three elements: base salary, annual incentive bonus and stock-
based, long-term incentive compensation. In its compensation decisions with
respect to 1993, the Committee took particular note of the management skills,
abilities and dedication needed in order for the Company to continue to make
progress in resolving financial, legal and operating difficulties facing the
Company. The Committee attempts to structure executive compensation packages so
that the compensation paid to the Company's executive officers, both
individually and collectively, will rank in the median range of the
compensation reported by the comparator companies.
BASE SALARIES
In establishing the base salaries for executive officers, the Committee
considers the individual executive's level of responsibility. That
responsibility is compared to compensation surveys provided in large part by
Hewitt Associates. In 1993, these surveys included a report of 110 middle
market manufacturing and service companies, and the market data of general
industry companies of similar size. Salaries for the executives are reviewed by
the Committee on an annual basis and may be increased at that time on the basis
of the individual performance, and changes in pay levels at the comparator
companies and in industry in general. The Committee feels that a larger portion
of executive compensation opportunity should consist of performance-based
incentives. Consequently, the Company's salaries continue to rank in the low to
mid-point range of base salaries reported by comparator companies for the year
1993.
10
<PAGE>
Effective February 16, 1993, the salary of Scott G. Arbuckle, the Company's
chief executive officer ("CEO"), was raised from $325,000 to $350,000--an
increase of approximately 7 1/2%. In fixing the CEO's salary, the Committee
took into account the Company's continued financial and operational progress
and determined that a merit base salary increase was in order. The Committee
based the amount of the increase partly on industry averages for pay increases
for chief executive officers, which indicated a median percentage pay increase
of 4 1/2% to 5 1/2% per annum.
ANNUAL INCENTIVES
Bonuses awarded under the Executive Incentive Compensation Program consist of
a discretionary portion and a non-discretionary portion that is based on the
achievement of objectives established each year by the Committee with respect
to net income per share and return on assets. In February 1993, the Committee
established 1993 performance goals for the Company's executive officers. The
Committee determined that one-third of each officer's bonus would be based on
whether a net income per share target was met, one-third on whether a return on
assets target was met and one-third would be discretionary with consideration
given to the achievement of certain individual performance objectives
established for each officer.
In December 1993 and in February 1994, the Committee met, reviewed the
continued improved operating performance of the Company in fiscal 1993 and
determined that the earnings per share and return on assets targets established
by the Committee under the bonus program had been met or exceeded. The
Committee also reviewed the CEO's and the other executive officers' success in
meeting individual performance objectives. Based on its evaluation of all
factors, the Committee concluded that the CEO and other executive officers
achieved improvements in long-term financial performance and continued to
posture the Company for stability and future growth, and awarded commensurate
bonuses. The bonus payments exceeded target levels because the operating
performance of the Company exceeded target performance levels. The Committee
believes that the bonuses paid to the CEO and other executives for services in
1993, as a percentage of base salary, are in keeping with the improvements made
to operations.
LONG-TERM INCENTIVES
Stock-based awards under the Long-Term Executive Incentive Compensation Plan
strengthen the ability of the Company to attract, motivate and retain capable
executives and more closely align the interests of management with those of
stockholders. Long-term awards granted in 1993 under this plan consisted of
non-qualified stock options and restricted stock. Unlike cash, the value of
stock options, and to a lesser extent restricted stock, will not be immediately
realized by the executive. Stock options are granted with exercise prices equal
to the prevailing market value of the underlying stock on the date of grant,
and will only have value if the Company's stock price increases, resulting in a
commensurate benefit for the Company's stockholders. Generally, options vest in
equal amounts over four years and executives must be employed by the Company or
an affiliate at the time of vesting in order to exercise the options.
Restricted Stock is subject to a restricted period during which the stock will
be forfeited if the executive's employment is terminated and during which the
stock cannot be transferred. The restricted period is generally three years.
Restricted stock awards are made to enhance the retention of key executives.
11
<PAGE>
The Committee considers the grant of stock-based compensation to executive
officers and key managers on an annual basis. The amount of stock-based
compensation awarded is generally based upon the position held by an executive
and his expected contribution to the Company's future growth and profitability.
In granting stock-based compensation, the Committee considers awards reflected
in compensation surveys and attempts to base awards at the mid-level indicated
by the practices among the comparator companies. The Committee did not reprice
any options in 1993, and has not considered it necessary to establish target
stock ownership levels for its executive officers.
In accordance with the foregoing guidelines, the CEO was granted options to
purchase 50,000 shares of Common Stock in 1993. The Committee believes that top
executives are best motivated by the opportunity for equity ownership and that
fact, coupled with practices at the comparator companies, suggested 50,000
shares as an appropriate size of the option grant to the CEO.
No awards previously granted under the Company's 1991 Long-Term Performance
Plan were earned during the three-year performance period ended March 31, 1993
because performance targets were not achieved. In 1993, the Committee
established new long-term incentive awards under the Company's 1991 Long-Term
Performance Plan for the performance period ending December 31, 1995, and
established the cumulative earnings per share targets relating to those awards.
SUMMARY
The Committee believes that executive compensation levels during fiscal 1993
adequately reflect the Company's compensation goals and policies.
Compensation Committee
Jerre L. Stead, Chairman
Frank J. Morgan
John H. Deininger
C. A. Rundell, Jr.
Walter C. Minnick
Paul E. Price
12
<PAGE>
COMPENSATION SUMMARY
The following table sets forth certain summary information concerning the
compensation awarded to, earned by, or paid to the CEO and the other four most
highly compensated executive officers of the Company whose combined salary and
bonus for 1993 exceeded $100,000 (collectively, the "named executive
officers") for the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- ------------------- -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER RESTRICTED
NAME AND ANNUAL STOCK ALL OTHER
PRINCIPAL COMPEN- AWARD OPTIONS/ LTIP COMPEN-
POSITION YEAR SALARY BONUS(2) SATION(3) (#)(4) SARS (#) PAYOUTS SATION(5)
- - --------- ---- -------- -------- --------- ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Scott G. Arbuckle, 1993 $350,000 $250,000 $41,970 -- 50,000 $-- $392,216(6)
President and CEO 1992 325,000 130,000 12,056 -- 35,000 -- 442,745(6)
1991 300,000 75,000 11,957 -- 17,000 -- 7,051
James F. Thomason, 1993 $179,000 $107,400 $15,149 -- 8,000 $-- $ 7,512
V.P. Manufacturing 1992 170,000 71,400 11,843 -- 9,000 -- 5,426
1991 157,875 31,575 41,455 -- 10,000 -- 3,611
James A. Harris, 1993 $125,300 $ 75,180 $13,359 5,000 8,000 $-- $ 5,049
V.P. Sales/Marketing 1992 118,200 43,000 12,447 -- 8,500 -- 3,998
1991 100,544 15,082 11,843 -- 7,000 -- 3,352
Edward W. Fordyce, Jr., 1993 $131,460 $ 65,730 $12,500 -- 8,000 $-- $ 329
V.P. General Counsel(1) 1992 75,175 30,070 7,380 -- -- -- --
1991 -- -- -- -- -- -- --
Charles R. Wackenhuth, 1993 $119,650 $ 62,220 $13,273 -- 8,000 $-- $ 4,998
V.P. Human Resources 1992 113,950 46,947 13,026 -- 8,500 -- 3,902
1991 107,500 16,125 11,690 -- 7,000 -- 3,585
</TABLE>
- - --------
(1) Mr. Fordyce became an employee of the Company in May 1992.
(2) Annual bonus amounts are earned and accrued during the fiscal years
indicated and paid in the following year.
(3) Amounts consist of automobile lease payments made by the Company and also
include tax planning services for the executives. In addition, the Company
reimbursed Mr. Thomason $29,861 for moving expenses in 1991.
(4) As of January 2, 1994, the only shares of restricted stock outstanding
that were granted to the named executive officers were the 5,000 shares
granted to James A. Harris in 1993. The aggregate value of these shares of
restricted stock based on the closing sales price of the Company's Common
Stock on the date of grant ($8.9375 per share) was approximately
$48,687.50. The restricted period with respect to such shares will
terminate on February 16, 1996. During the period Mr. Harris holds the
restricted stock, he is entitled to receive dividends thereon at the same
time and rate as holders of Common Stock.
(5) Except as noted in footnote 6 below, these amounts represent matching
contributions by the Company to the TRIP and the Supplemental Plan (see
"Defined Benefit Plans" below) on behalf of the named individuals.
(6) With respect to Mr. Arbuckle, these amounts include lump sum retirement
payments of $377,816 in 1993 and $430,574 in 1992 earned pursuant to
pension benefits accrued under the Eljer Supplemental Benefit Plan. The
payments reflect benefits as of December 31, 1991 and December 31, 1993,
respectively, accrued over 28 and 30 years of service, respectively, a
significant amount of which was earned prior to his becoming President and
Chief Executive Officer of the Company.
13
<PAGE>
OPTION/SAR GRANTS
The following table sets forth certain information with respect to options to
purchase Common Stock granted during the year ended January 2, 1994 to each of
the named executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
- - ------------------------------------------------------------------ -----------------
(A) (B) (C) (D) (E) (F) (G)
% OF TOTAL
OPTIONS/ OPTIONS/
SARS SARS
GRANTED GRANTED TO EXERCISE
(NUMBER OF EMPLOYEES PRICE
SHARES) IN FISCAL PER EXPIRATION
NAME (2) YEAR SHARE DATE 5%(3) 10%(4)
- - ---- ---------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Scott G. Arbuckle, CEO.. 50,000 47.2% $8.94 2/16/03 $281,150 $712,500
James F. Thomason....... 8,000 7.5% $8.94 2/16/03 $ 44,984 $114,000
James A. Harris......... 8,000 7.5% $8.94 2/16/03 $ 44,984 $114,000
Edward W. Fordyce, Jr... 8,000 7.5% $8.94 2/16/03 $ 44,984 $114,000
Charles R. Wackenhuth... 8,000 7.5% $8.94 2/16/03 $ 44,984 $114,000
</TABLE>
- - --------
(1) The values shown are based on the indicated assumed annual rates of
appreciation compounded annually. Actual gains realized, if any, on stock
option exercises and Common Stock holdings are dependent on the future
performance of the Common Stock and overall stock market conditions. There
can be no assurance that the values shown in this table will be achieved.
(2) Options granted in 1993 were without SARs.
(3)Represents an assumed market price per share of Common Stock of $14.563.
(4) Represents an assumed market price per share of Common Stock of $23.19.
14
<PAGE>
OPTION/SAR EXERCISES
The following table sets forth certain information with respect to the
exercise of options to purchase Common Stock and SARs during the year ended
January 2, 1994, and the unexercised options held and the value thereof at
that date, by each of the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 1993
AND 1/2/94 OPTION/SAR VALUES
<TABLE>
<CAPTION>
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS AT 01/2/94 IN-THE-MONEY OPTIONS/
ON EXERCISE (SHARES) SARS AT 01/2/94
(NUMBER OF VALUE ------------------------- -------------------------
NAME SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Scott G. Arbuckle....... -0- -0- 71,796 59,250 -0- -0-
Jamees F. Thomason...... -0- -0- 19,100 14,700 -0- -0-
James A. Harris......... -0- -0- 18,100 12,000 -0- -0-
Edward W. Fordyce, Jr... -0- -0- 2,000 6,000 -0- -0-
Charles R. Wackenhuth... -0- -0- 22,871 12,000 -0- -0-
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS
No awards previously granted under the Company's 1991 Long-Term Performance
Plan were earned during the three-year performance period ended March 31, 1993
because performance targets were not achieved. No other long-term incentive
awards were paid during 1993.
15
<PAGE>
DEFINED BENEFIT PLANS
The following table illustrates the amount of annual pension benefits on a
straight-life annuity basis for eligible employees retiring at age 65 in the
specified remuneration and years-of-service classifications under the
Retirement Plan, the Excess Plan and Supplemental Plan discussed below. Offsets
for Social Security payments and other offsets provided for in the plans are
reflected in this table.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
--------------------------------------------
REMUNERATION 15 20 25 30 35
- - ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 155,000.......................... $ 30,980 $ 41,306 $ 51,633 $ 61,960 $ 72,286
200,000.......................... 42,230 56,306 70,383 84,460 98,536
300,000.......................... 64,730 86,306 107,883 129,460 151,036
400,000.......................... 87,230 116,306 145,383 174,460 203,536
500,000.......................... 109,730 146,306 182,883 219,460 256,036
750,000.......................... 165,980 221,306 276,633 331,960 387,286
1,500,000......................... 334,730 446,306 557,883 669,460 781,036
</TABLE>
The Retirement Plan for Salaried Employees of Eljer Manufacturing, Inc. (the
"Retirement Plan") is a noncontributory, defined benefit plan for certain of
its salaried employees. The amount of a participant's pension benefits depends
primarily on years of employment, age at retirement and average annual
compensation (salary plus bonus, whether paid in cash or stock) for the five
successive highest-paid employment years out of the employee's last 10 years of
employment. Participants become fully vested in their accrued pension benefits
after five years of service.
The Company maintains two non-qualified, unfunded benefit plans (the "Excess
Plan" and the "Supplemental Plan") pursuant to which benefits of certain
participants under the Retirement Plan and the Eljer Manufacturing Tax
Reduction Investment Plan ("TRIP") are supplemented to account for limitations
imposed on benefits under these plans by the Internal Revenue Code of 1986, as
amended (the "Code"). Benefits under the Excess Plan are determined by
reference to an employee's benefits under the Retirement Plan and benefits
under the Supplemental Plan are determined by reference to an employee's
benefits under the Retirement Plan and TRIP calculated in each case without
regard to the contribution and benefit limitations contained in the Code.
Generally, benefits under the Excess Plan and the Retirement Plan related
portion of the Supplemental Plan are payable at the time and in the form
benefits are payable to an employee under the Retirement Plan and benefits
under the TRIP related portion of the Supplemental Plan are payable in a single
sum payment following an employee's termination of employment with the Company
or its participating subsidiaries, death or disability. The Board has
authorized the Eljer Pension Committee to administer the Excess Plan and the
Retirement Plan portion of the Supplemental Plan and the Eljer TRIP
Administrative and Investment Committee to administer the TRIP related portion
of the Supplemental Plan; provided that the Board determines in each case the
methods by which benefits are accumulated and distributed (such as the timing
and form of benefit payments) under the Excess Plan and the Supplemental Plan.
16
<PAGE>
For purposes of determining the benefits under the Retirement Plan, the
Excess Plan and the Supplemental Plan for the named executive officers,
credited years of service and the amount of covered compensation (salary plus
bonuses paid in cash or stock) for 1993 are as follows: Mr Arbuckle, 30 years
and $480,000; Mr. Thomason, three years and $250,400; Mr. Harris, seven years
and $168,300; Mr. Fordyce, one year and $136,530; and Mr. Wackenhuth, 21 years
and $166,597. In calculating credited years of service, years of service with
Household International, Inc. prior to the spin-off of the Company have been
taken into account.
EXECUTIVE COMPENSATION (INCLUDING TERMINATION OF EMPLOYMENT) AGREEMENTS
Mr. Arbuckle entered into an agreement with the Company in 1991 that provides
for certain continued compensation in the event of (i) termination of Mr.
Arbuckle's employment by the Company prior to age 65 for any reason other than
willful and deliberate misconduct or disability for a specified period that
prevents him from reasonably performing his duties or (ii) resignation of
employment prior to age 65 by reason of reassignment to a lesser rank or
status, reduction of salary benefits or target bonus or reassignment to a
geographic area more than 50 miles from his residence as of the date the
agreement was executed.
In the event Mr. Arbuckle's employment is terminated or he resigns for any
such reason described above, he will be entitled for 18 months thereafter to
(i) continued salary, (ii) continued targeted bonuses (prorated for such 18-
month period) and (iii) continuation of pension accrual, savings plan
contributions, deferred compensation (if any) and medical and life insurance
benefits or, in each case under (iii), the economic equivalent thereof. Benefit
plan accruals under (iii) that would be payable on a deferred basis were he to
continue in employment, may be deferred or payable in an actuarially equivalent
lump sum at the end of the 18-month period.
Messrs. Harris and Wackenhuth each entered into an agreement with the Company
in 1991, and Mr. Fordyce entered into an agreement with the Company in 1992,
identical to Mr. Arbuckle's agreement, with certain exceptions. First, the
continuation of compensation provisions will apply if the officer's employment
is terminated or he resigns (for the same reasons set forth in Mr. Arbuckle's
agreement) prior to the termination of the agreement (rather than at any time
prior to age 65). Second, the period of continued compensation will be 12
months (rather than 18 months). The agreements with Messrs. Harris and
Wackenhuth were originally scheduled to terminate on May 1, 1994, and the
agreement with Mr. Fordyce was scheduled to terminate on April 30, 1994. The
term of each of the agreements is, however, renewed automatically for
successive one-year periods unless the Company notifies the officer at least 90
days prior to the scheduled termination date of the agreement (as originally
fixed or as extended) of the Company's election not to extend the agreement
beyond such date. The term of each of the agreements has been extended for at
least an additional one-year period.
Mr. Thomason also entered an agreement with the Company in 1991 with terms
that are substantially the same as those contained in the agreements with
Messrs. Harris, Wackenhuth and Fordyce. However, in the event of a qualifying
employment termination, Mr. Thomason will receive the greater of the following
amounts: (i) his benefits under a 1990 employment agreement (which essentially
requires continuation of compensation and benefits until the May 30, 1995
termination date of that agreement); or (ii) his benefits
17
<PAGE>
under the 1991 agreement (which requires continuation of compensation and
benefits for 12 months following employment termination). Mr. Thomason's 1991
agreement was scheduled to terminate on May 1, 1994, but has been extended for
at least an additional one-year period.
The Company's obligations under the employment agreements with Messrs.
Arbuckle, Fordyce, Harris, Thomason and Wackenhuth and two other officers of
the Company are partially secured by a cash-collateralized letter of credit in
the amount of $3,000,000.
Carl Mudd served as Vice President--Finance, Chief Financial Officer and
Secretary of the Company until his resignation on September 24, 1992. Under the
terms of a severance agreement with Eljer Manufacturing, Inc., Mr. Mudd
received severance benefits until September 30, 1993. The aggregate cash
compensation received by Mr. Mudd during fiscal 1993 was $236,000.
CHANGE-IN-CONTROL AGREEMENTS
The Company has entered into agreements with Messrs. Fordyce, Harris,
Thomason and Wackenhuth and two other officers of the Company, providing
severance benefits in the event their employment is terminated within two years
following a change-in-control of the Company.
Under these agreements, a change-in-control is defined as the occurrence of
any one of the following: (i) the acquisition by a person or entity of shares
of stock of the Company representing 25 percent or more of the combined voting
power of the stock of the Company; (ii) a change in the majority of the Board
of Directors; or (iii) stockholder approval of a liquidation of the Company, a
sale or disposition of all or substantially all of the Company's assets or a
merger, consolidation or reorganization of the Company.
If the employment of an officer who is a party to a change-in-control
agreement is terminated by the Company other than for "cause" within two years
following a change-in-control, or if such an officer voluntarily terminates his
or her employment within such time period for "good reason", then the officer
will be entitled to the following severance benefits: (i) two times the
officer's highest annual base salary while employed by the Company; (ii) two
times the greater of (a) the officer's average annual bonus over the preceding
three years or (b) the officer's target bonus for the year in which the change-
in-control occurs; (iii) the officer's unpaid base salary and accrued vacation
pay through the date of employment termination; and (iv) two years of continued
coverage under welfare benefit plans, pension plans and profit sharing plans
(however, in the event an officer receives substantially similar benefits from
a subsequent employer, the coverage under the officer's change-in-control
agreement will be discontinued).
Mr. Arbuckle also has entered into a change-in-control agreement with terms
similar to those summarized above. However, in addition to the methods of
termination entitling officers to payment under the agreements described above,
Mr. Arbuckle's severance benefits also will be payable upon any voluntary
termination of his employment within the two-year period following a change-in-
control. Mr. Arbuckle's severance benefits will consist of the following: (i)
three times his highest annual base salary while employed by the Company; (ii)
three times the greater of (a) his average annual bonus over the preceding
three years or (b) his target bonus for the year in which the change-in-control
occurs; (iii) his unpaid base salary and accrued vacation pay through the date
of employment termination; and (iv) three years of continued coverage under
18
<PAGE>
welfare benefit plans, pension plans, and profit sharing plans (however, in the
event Mr. Arbuckle receives substantially similar benefits from a subsequent
employer, the continued coverage under his change-in-control agreement will be
discontinued).
Upon a change in control of the Company, all outstanding awards granted under
the Company's Long-Term Executive Incentive Compensation Plan and 1991 Long-
Term Performance Plan shall become fully vested, exercisable and/or payable.
REPRICING OF OPTIONS
In 1993, the Company did not adjust or amend the exercise price of stock
options or SARs previously granted to any of the named executive officers.
19
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return for
the Common Stock, the New York Stock Exchange Market Index and a Competitor
Group Index for the years indicated as prescribed by SEC rules.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1) AMONG ELJER INDUSTRIES,
INC., NYSE MARKET INDEX AND COMPETITOR GROUP INDEX(2)
<TABLE>
<CAPTION>
4/3/89 1989 1990 1991 1992 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Company............................... 100 85.43 32.21 29.39 40.69 29.95
NYSE Market........................... 100 119.44 113.90 146.88 156.05 177.38
Competitor Group...................... 100 95.13 63.93 90.02 121.00 151.51
</TABLE>
- - --------
(1) Total return assuming reinvestment of dividends. Assumes $100 invested on
April 3, 1989, the date on which the Company's Common Stock became publicly
traded, in the Common Stock, the NYSE Market Index and a Company
constructed competitor group index.
(2) The Company constructed competitor group consists of the following
companies: Hughes Supply, Inc., Manville Corporation, Masco Corporation,
Morgan Products Ltd., Noland Company, Nortek, Inc., Owens-Corning Fiberglas
Corporation, Ply Gem Industries, Inc. and Waxman Industries, Inc. Total
return calculations were weighted according to the respective company's
market capitalization.
20
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires directors and officers of the
Company and persons who own more than 10 percent of the Common Stock to file
with the SEC initial reports of ownership and reports of changes in ownership
of the Common Stock. Directors, officers and more than 10 percent stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the year ended January 2, 1994, all Section 16(a)
filing requirements applicable to its directors, officers and more than 10
percent beneficial owners were complied with, except a Form 3 due in connection
with the election of Walter C. Minnick to the Board of Directors in April 1993
was filed late in May 1993.
NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS AND
STOCKHOLDER NOMINATIONS OF DIRECTORS
The Company's By-laws establish an advance notice procedure with regard to
the nomination, other than by or at the direction of the Board of Directors of
the Company, of candidates for election as directors and with regard to certain
matters to be brought before an annual meeting of stockholders of the Company.
The By-laws provide that only persons who are nominated by or at the
direction of the Board of Directors or by a stockholder who has given timely
written notice to the Secretary of the Company prior to the meeting at which
directors are to be elected will be eligible for election as directors of the
Company. The By-laws provide further that at an annual meeting, and subject to
any other applicable requirements, only such business may be conducted as has
been brought before the meeting by or at the direction of the Board of
Directors or by a stockholder who has given timely prior written notice to the
Secretary of the Company of such stockholder's intention to bring such business
before the meeting. To be timely, any notice regarding director nominations or
other items of business to be considered at the meeting must be received by the
Company not less than 30 days prior to the meeting (or if fewer than 40 days'
notice or prior public disclosure of the meeting date is given or made to
stockholders, not later than the tenth day following the day on which such
notice was mailed or such public disclosure was made).
Notice to the Company from a stockholder who proposes to nominate a person at
an annual meeting for election as a director must contain certain information
about that person, including age, business and residence addresses, principal
occupation, the class and number of shares of Company stock beneficially owned
and such other information as would be required to be included in a proxy
statement soliciting proxies for the election of the proposed nominee.
Furthermore, certain information must be provided about the stockholder making
the nomination. The Company may require any person nominated by the Board of
Directors to furnish the information that would be required to be set forth in
a stockholder's notice of nomination with respect to such nominee.
Under the By-laws, notice relating to the conduct of business other than the
nomination of directors at an annual meeting must contain certain information
about such business and about the stockholder who
21
<PAGE>
proposes to bring the business before the meeting, including a brief
description of the business the stockholder proposes to bring before the
meeting, the reasons for conducting such business at the meeting, the class and
number of shares of Company stock beneficially owned by such stockholder and
any material interest of such stockholder in the business so proposed.
If the Chairman of the Board of Directors or other officer presiding at a
meeting of stockholders of the Company determines that a person was not
nominated in accordance with the By-laws, such person will not be eligible for
election as a director, or if the Chairman or other presiding officer
determines that the business was not properly brought before such meeting in
accordance with the By-laws, such business will not be conducted at meeting.
Nothing in the By-laws will preclude discussion by any stockholder of any
nomination or business properly made or brought before the annual meeting in
accordance with the above-mentioned procedures.
RATIFICATION OF THE APPOINTMENT OF AUDITORS
Based upon the recommendation of the Audit Committee, the Company's Board of
Directors has voted to appoint, subject to ratification by the Company's
stockholders, Arthur Andersen & Co. as the firm of independent certified public
accountants to audit the financial statements of the Company and its
subsidiaries for 1994. Although it is not required to do so, the Board is
submitting the selection of auditors for ratification in order to obtain
stockholders' approval of this appointment. The affirmative vote of the holders
of at least a majority of the outstanding shares of Common Stock present in
person or by proxy at the meeting and entitled to vote is required to ratify
the selection of auditors. If the selection is not ratified, the Board of
Directors will reconsider the appointment. A representative of Arthur Andersen
& Co. will be present at the annual meeting with the opportunity to make a
statement to stockholders if he or she so desires and to respond to appropriate
questions from stockholders.
OTHER BUSINESS
The management of the Company knows of no business other than that stated in
this Proxy Statement which will be presented for action at the 1994 Annual
Meeting. If however, other business should properly come before the meeting,
the persons designated in the enclosed proxy will vote or refrain from voting
in respect thereof in accordance with their best judgment.
THE COMPANY WILL PROVIDE WITHOUT COST TO ANY OF ITS STOCKHOLDERS A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR ITS MOST RECENT FISCAL YEAR WHICH
THE COMPANY IS REQUIRED TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.
WRITTEN REQUESTS FOR THE REPORT SHOULD BE DIRECTED TO ELJER INDUSTRIES, INC.,
17120 DALLAS PARKWAY, DALLAS, TEXAS 75248, ATTENTION: EDWARD W. FORDYCE, JR.,
VICE PRESIDENT--GENERAL COUNSEL AND SECRETARY.
22
<PAGE>
1995 ANNUAL MEETING OF STOCKHOLDERS
Proposals from stockholders to be presented at the 1995 Annual Meeting of
Stockholders of the Company must be received by the Company on or before
January 6, 1995 in order to be eligible for inclusion in the Company's proxy
statement and form of proxy for that meeting.
ELJER INDUSTRIES, INC.
Scott G. Arbuckle
President and
Chief Executive
Officer
Dallas, Texas
May 6, 1994
23
<PAGE>
[ELGER INDUSTRIES LOGO]
NOTICE OF 1994 ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
<PAGE>
APPENDIX
pursuant to Reg. 232-304
Regulation S-T
Graphic and Image Material
The proxy statement related to the Annual Meeting of Shareholders of Eljer
Industries to be held on June 21, 1994 includes the following graphic and image
material:
1. A map depicting routes to and location of the Shareholders Meeting will
be placed on the inside front cover of the Notice to Shareholders.
2. The performance graph to be shown on page 20 of the proxy statement.
<PAGE>
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
P R O X Y
LOGO
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
17120 DALLAS
PARKWAY,
DALLAS,
TEXAS 75248
The undersigned hereby appoints Frank J. Morgan, Scott G. Arbuckle, and John
H. Deininger, and each or any of them, as Proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of Eljer Industries, Inc. held of record
by the undersigned on April 29, 1994, at the Annual Meeting of Stockholders to
be held on June 21, 1994, or any postponement or adjournment thereof.
PLEASE MARK, SIGN,
DATE, AND RETURN THIS
PROXY CARD PROMPTLY
USING THE ENCLOSED
ENVELOPE.
<PAGE>
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. LOGO
1. ELECTION OF DIRECTOR--
C.A. Rundell, Jr.
FOR
WITHHOLD
LOGO
2. RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN & CO. as the independent
auditors of the Company for the fiscal year ending January 1, 1995.
FOR
AGAINST
ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
LOGO
This proxy will be voted as you direct above. In the absence of such direction,
it will be voted FOR the Nominee listed above and FOR ratification of the ap-
pointment of Arthur Andersen & Co.
Dated: _________________________________________________________, 1994
________________________________________________________________________________
________________________________________________________________________________
Please sign above exactly as your name appears on this card. Joint owners
should each sign personally. Corporation proxies should be signed by an
authorized officer. Executors, administrators, trustees, etc., should so
indicate when signing.
