<PAGE> 1
SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
ENCORE WIRE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
ENCORE WIRE CORPORATION
1410 MILLWOOD ROAD
MCKINNEY, TEXAS 75069
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 5, 1998
NOTICE is hereby given that the annual meeting of stockholders of
Encore Wire Corporation (the "Company") will be held on Tuesday, May 5, 1998,
at 8:30 a.m., local time, at the Company's offices, 1410 Millwood Rd.,
McKinney, Texas, for the following purposes:
(1) To elect a Board of Directors for the ensuing year;
(2) To ratify the appointment of Ernst & Young LLP as
auditors to audit the financial statements of the Company for the
fiscal year ending December 31, 1998; and
(3) To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 10,
1998, are entitled to notice of and to vote at the meeting or any adjournment
thereof.
A record of the Company's activities and consolidated financial
statements for the year ended December 31, 1997, are contained in the enclosed
1997 Annual Report.
Dated: March 30, 1998.
By Order of the Board of Directors
SCOTT D. WEAVER
Secretary
--------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING
ENVELOPE. IF YOU DO ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON. THE PROMPT RETURN OF PROXIES WILL INSURE A QUORUM AND SAVE
THE COMPANY THE EXPENSE OF FURTHER SOLICITATION.
<PAGE> 3
ENCORE WIRE CORPORATION
1410 MILLWOOD ROAD
MCKINNEY, TEXAS 75069
PROXY STATEMENT
For Annual Meeting of Stockholders
To be Held on May 5, 1998
GENERAL
The accompanying proxy is solicited by the Board of Directors of
Encore Wire Corporation (the "Company") for use at the annual meeting of
stockholders of the Company to be held at the time and place and for the
purposes set forth in the foregoing notice. The approximate date on which this
proxy statement and the accompanying proxy are first being sent to stockholders
is March 30, 1998.
The cost of soliciting proxies will be borne by the Company. The
Company has retained Corporate Investor Communications, Inc., a proxy
solicitation firm located in Carlstadt, New Jersey, to solicit proxies from
brokers, banks, nominees, institutional holders and individual holders for use
at the meeting at a fee not to exceed $1,500 plus certain expenses. In
addition, the Company may use certain of its officers and employees (who will
receive no special compensation therefor) to solicit proxies in person or by
telephone, facsimile, telegraph or similar means.
PROXIES
Shares represented by a proxy in the accompanying form, duly signed,
dated and returned to the Company and not revoked, will be voted at the meeting
in accordance with the directions given. If no direction is given, such shares
will be voted for the election of the nominees for directors named in the
accompanying form of proxy and for the other proposal set forth in the notice.
Any stockholder returning a proxy may revoke it at any time before it has been
exercised by giving written notice of such revocation to the Secretary of the
Company, by filing with the Company a proxy bearing a subsequent date or by
voting in person at the meeting.
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
to the best of their abilities. The inspectors will ascertain the number of
shares outstanding and the voting power of each of such shares, 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 each nominee for director and (ii) the number of
votes cast for, against or withheld, as well as the number of abstentions and
broker non-votes, as to the approval of the appointment of auditors. Under
Delaware law and the Company's Certificate of Incorporation and Bylaws,
abstentions and broker non-votes will have no effect on the voting on the
election of directors, 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 to approve the appointment of auditors will effectively count as a
vote against such proposal. A broker non-vote or other limited proxy as to the
proposal to approve auditors will be counted towards a meeting quorum, but can
not be voted on such proposal and therefore will not be considered a part of
the voting power with respect to that proposal. This has the effect of
reducing the number of shares required to be voted in favor of the proposal in
order to approve it.
VOTING SECURITIES
The only voting security of the Company outstanding is its Common
Stock, par value $.01 per share. Only the holders of record of Common Stock at
the close of business on March 10, 1998, the record date for the meeting,
<PAGE> 4
are entitled to notice of and to vote at the meeting. On the record date,
there were 10,808,385 shares of Common Stock outstanding and entitled to be
voted at the meeting. A majority of such shares, present in person or by
proxy, is necessary to constitute a quorum. Each share of Common Stock is
entitled to one vote. Unless otherwise indicated, all share and per share date
in this Proxy Statement have been adjusted to give effect to a three for two
stock split of the Common Stock on August 19, 1997.
ELECTION OF DIRECTORS
The business and affairs of the Company are managed by the Board of
Directors, which exercises all corporate powers of the Company and establishes
broad corporate policies. The Bylaws of the Company provide for nine
directors. At the meeting eight directors will be elected with one vacancy on
the Board to remain after the meeting. The vacancy was created when A. A.
Gingell, who was elected to the Board in May 1993, died in October 1997. The
Board has not selected a nominee to replace Mr. Gingell but will consider
qualified candidates for later appointment to the Board. No stockholder
approval or ratification is required for the Board to fill such vacancy.
Directors are elected by plurality vote, and cumulative voting is not
permitted. All duly submitted and unrevoked proxies will be voted for the
nominees for director selected by the Board of Directors, except where
authorization so to vote is withheld. If any nominee should become unavailable
for election for any presently unforeseen reason, the persons designated as
proxies will have full discretion to vote for another person designated by the
Board. Proxies cannot be voted for a greater number of persons than the number
of nominees for the office of director named herein. Directors are elected to
serve until the next annual meeting of stockholders and until their successors
have been elected and qualified.
The nominees of the Board for directors of the Company are named
below. Each of the nominees has consented to serve as a director if elected.
The table below sets forth certain information with respect to the nominees.
All the nominees are presently directors of the Company and, except John H.
Wilson, have served continuously as directors since the date of their first
election to the Board. Mr. Wilson served as a director from April 1989 until
May 1993 and was re-elected to the Board in May 1994.
VINCENT A. REGO, age 74, Mr. Rego has been Chairman of the Board of
director since April 1989. Directors of the Company since April 1989.
In October 1996, he assumed the duties of
President and Chief Executive Officer. Mr.
Rego served as President, Chief Executive
Officer and Chairman of the Board of Directors
of Capital Wire and Cable Corporation, a
manufacturer of electrical wire and cable
products, from 1978 until the company was sold
to The Penn Central Corporation in 1988.
Prior thereto, Mr. Rego was associated with
predecessors of Capital Wire in various
executive capacities.
DONALD M. SPURGIN, age 60, Mr. Spurgin has been a director of the Company
director since April 1989 since April 1989 and served as President and
Chief Executive Officer from April 1989 to
October 1996, and as Secretary of the Company
from April 1989 to April 1992. In October 1996,
Mr. Spurgin resigned for health reasons as
President and Chief Executive Officer and was
elected Vice Chairman of the Board of
Directors. From 1979 to 1988, Mr. Spurgin was
Executive Vice President, Chief Operating
Officer and a director of Capital Wire and
Cable Corporation. Prior thereto, Mr. Spurgin
was associated with predecessors of Capital
Wire in various executive capacities.
DONALD E. COURTNEY, age 67, Since 1994, Mr. Courtney has served as
director since April 1989 President and Chairman of the Board of Directors
of Investech, Ltd., which is a private
importing firm. Mr. Courtney served as
President and Chairman of the Board of
2
<PAGE> 5
Directors of S.O.I. Industries, Inc. from 1982
until 1994. During that period, he was also
Chairman of the Board of Directors of two
subsidiaries of S.O.I. Industries, Inc.,
Magnatech Corporation, which is engaged in
videotape duplication, and Tempo Lighting,
Inc., which manufactures residential lighting.
Mr. Courtney retired and resigned from these
positions in June 1994. Mr. Courtney was
re-elected to the Board of Directors of Tempo
Lighting and is also a director of F.O.M.
Corporation, a manufacturer of floor cleaning
equipment.
DANIEL L. JONES, age 34, Mr. Jones was Vice President -- Sales and
director since May 1994 Marketing of Encore from May 1992 to May 1997,
and has served as Executive Vice President
since May 1997. In October 1997, Mr. Jones
was also named Chief Operating Officer. From
1988 until joining the Company in 1989, he was
employed as a sales representative by Lone
Star Transportation Inc., a freight brokerage
firm. From 1985 to 1988, while pursuing his
education, Mr. Jones attended college while
working on a part time basis for Capital Wire
and Cable Corporation.
JOHN P. PRINGLE, age 68, Mr. Pringle has been President of Tekserco
director since August 1990 Inc., which owns and operates pay telephones,
since 1990. Prior thereto, Mr. Pringle was
employed in various capacities by Capital Wire
and Cable Corporation, most recently as Vice
President -- Engineering.
WILLIAM R. THOMAS, age 67, Mr. Thomas has been President Board since 1982
director since April 1989 of Capital Southwest Corporation, a publicly
owned venture capital investment firm. Prior
thereto, Mr. Thomas was associated with Capital
Southwest Corporation in various executive
capacities. Mr. Thomas was a director of
Capital Wire and Cable Corporation in 1987 and
1988. Mr. Thomas is also a director of Alamo
Group, Inc., which provides heavy-duty mowing
equipment for agricultural, commercial and
governmental users, and Palm Harbor Homes,
Inc., a manufactured housing company.
JOHN H. WILSON, age 55, Mr. Wilson has been President of Whitehall
since 1980 and Chairman of the Corporation since May 1, 1995 and President of
until May 1993 and since U.S. Equity Corporation, a venture capital
May 1994 firm, since 1983. Mr. Wilson, who was a
director of Capital Wire and Cable Corporation
from 1985 to 1988, is also a director of Capital
Southwest Corporation, Whitehall Corporation,
which modifies and rebuilds commercial and
military aircraft and designs and manufactures
marine sensor systems, Norwood Promotional
Products, Inc., which manufactures and
supplies custom imprinted promotional materials,
and Palm Harbor Homes, Inc., a manufactured
housing company.
JOSEPH M. BRITO, age 75, Mr. Brito has been president of C. Brito
director since October 1997. Construction Company, a utility contracting
firm, and of Brito Enterprises, Inc. for more
than ten years. Mr. Brito is also a general
partner of Metacom Realty, a real estate
development company, and an officer of 1776
Liquors, Ltd. of Bristol, a liquor retailer.
Mr. Brito also has served on the regional
advisory board of Fleet National Bank, as
regional vice president of the National Utility
Contractors Association and Administrative
Vice President of the Rhode Island Contractors
Association.
There is no family relationship between any of the nominees or between
any of the nominees and any executive officer of the Company, except that
Daniel L. Jones, a nominee for director, Executive Vice President and Chief
Operating Officer of the Company, is the son-in-law of Mr. Spurgin, Vice
Chairman of the Board of Directors of the Company. For information regarding
certain business relationships between certain of the nominees and the Company,
see "Certain Transactions." Mr. Thomas and Mr. Wilson were originally elected
to the Board of Directors
3
<PAGE> 6
of the Company pursuant to the terms of a Purchase Agreement dated April 25,
1989 between the Company, Capital Southwest Venture Corporation and certain
other persons. Certain provisions of that agreement, including the provisions
pursuant to which Messrs. Thomas and Wilson were elected to the Board, were
terminated in connection with the initial public offering of the Company's
Common Stock in 1992.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
BOARD MEETINGS AND COMMITTEES
As permitted by the bylaws of the Company, the Board has designated
from its members a compensation committee and an audit committee. The Company
does not have a standing nominating committee of the Board or any other
committee that performs a similar function. During 1997, the Board of
Directors held four meetings. All directors attended at least 75% of such
meetings held during the period in which such director served. The current
committees of the Board, the composition and functions thereof and the number
of meetings held in 1997 is set forth below.
Compensation Committee. In 1997, the members of the
compensation committee were Donald E. Courtney, William R. Thomas and
John H. Wilson. The committee met two times during 1997. The role of
the compensation committee is to review the performance of officers,
including those officers who are also members of the Board, and to set
their compensation. The committee also supervises and administers the
Company's Employee Stock Option Plan and all other compensation and
benefit policies, practices and plans of the Company.
Audit Committee. In 1997, the members of the audit committee
were Donald E. Courtney, William R. Thomas and John H. Wilson.
During 1997, the audit committee met one time. The role of the
committee is to review with the Company's auditors the scope of the
audit procedures to be applied in the conduct of the annual audit as
well as the results of the annual audit.
4
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 10, 1998 the beneficial
ownership of Common Stock of the Company (the only equity securities of the
Company presently outstanding) by (i) each director and nominee for director of
the Company, (ii) each person who was known to the Company to be the beneficial
owner of more than five percent of the outstanding shares of Common Stock and
(iii) all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED (1)
------------------------------------
NUMBER PERCENT OF
NAME OF SHARES CLASS
- ---- --------------- ---------------
<S> <C> <C>
Directors and Nominees for Director
Donald E. Courtney . . . . . . . . . . . . . . . . . . . . . . 49,537 .5%
Daniel L. Jones . . . . . . . . . . . . . . . . . . . . . . . . 53,336 (2) .5%
John P. Pringle . . . . . . . . . . . . . . . . . . . . . . . . 42,375 (3) .4%
Vincent A. Rego . . . . . . . . . . . . . . . . . . . . . . . . 908,821 (4) 8.4%
Donald M. Spurgin . . . . . . . . . . . . . . . . . . . . . . . 466,095 (5) 4.3%
Joseph M. Brito . . . . . . . . . . . . . . . . . . . . . . . . 16,700 (6) .2%
William R. Thomas . . . . . . . . . . . . . . . . . . . . . . . -- (7) --
John H. Wilson . . . . . . . . . . . . . . . . . . . . . . . . -- (7) --
All directors and executive
officers as a group (10 persons) . . . . . . . . . . . . . . 3,349,613 (8) 31.0%
Beneficial Owners of 5% or More (excluding persons
named above)
Capital Southwest Corporation . . . . . . . . . . . . . . . . 1,683,000 (9) 15.6%
Nicholas-Applegate Capital Management . . . . . . . . . . . . . 699,190 (10) 6.5%
</TABLE>
- ------------------
(1) Except as otherwise indicated, each stockholder named in the table has
sole voting and investment power with respect to all shares indicated as
being beneficially owned by such stockholder.
(2) Includes 41,700 shares of Common Stock subject to stock options that are
exercisable within 60 days, 4,500 shares of Common Stock owned by Mr.
Jones' spouse and 150 shares owned for the benefit of Mr. Jones' minor
son. Mr. Jones disclaims beneficial ownership of the shares owned by
his spouse.
(3) Includes 32,375 shares of Common Stock subject to stock options that are
immediately exercisable.
(4) Includes 150,000 shares of Common Stock subject to stock options that are
immediately exercisable and 75,000 shares of Common Stock owned by Mr.
Rego's spouse.
(5) Includes 150,000 shares of Common Stock subject to stock options that are
immediately exercisable and 8,220 shares of Common Stock owned by Mr.
Spurgin's spouse. Mr. Spurgin disclaims beneficial ownership of the
shares owned by his spouse.
(6) Includes 5,000 shares held by the Brito Family Limited Partnership.
(7) William R. Thomas and John H. Wilson, directors of the Company, are both
directors of, and Mr. Thomas is President and Chairman of the Board of,
Capital Southwest Corporation. As indicated in the table, Capital
Southwest Corporation is a principal stockholder of the Company. Mr.
Thomas and Mr. Wilson may be deemed to share voting and investment power
with respect to the 1,683,000 shares of Common Stock beneficially owned by
Capital Southwest Corporation. Mr. Thomas and Mr. Wilson each disclaim
beneficial ownership of such shares.
(8) Includes an aggregate of 441,650 shares of Common Stock that directors
and executive officers have the right to acquire within 60 days pursuant
to the exercise of stock options and 1,683,000 shares beneficially owned
by Capital Southwest Corporation.
5
<PAGE> 8
(9) Includes 1,233,000 shares held by Capital Southwest Venture Corporation,
a wholly-owned subsidiary of Capital Southwest Corporation, as to
which Mr. Thomas and Mr. Wilson may be deemed to share voting and
investment power as directors and, in the case of Mr. Thomas, as an
officer, of Capital Southwest Corporation.
(10) Beneficial ownership of such shares was reported in a Schedule 13G dated
February 3, 1998 filed with the SEC by Nicholas-Applegate Capital
Management ("Nicholas-Applegate") with respect to its beneficial
ownership of Common Stock. In its Schedule 13G, Nicholas-Applegate
reports that it beneficially owns all of the shares with sole dispositive
power, but has sole voting power with respect to 540,300 of the shares.
The respective addresses of the holders of five percent or more of the
Common Stock of the Company are as follows: Capital Southwest Corporation,
12900 Preston Road, Dallas, Texas 75230; Nicholas-Applegate Capital Management,
600 West Broadway, 29th Floor, San Diego, CA 92101; Vincent A. Rego, 1410
Millwood Road, McKinney, Texas 75069; and Donald M. Spurgin, 1410 Millwood
Road, McKinney, Texas 75069.
EXECUTIVE COMPENSATION
The Compensation Committee Report appearing below and the information
presented herein under the caption "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 of 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
Exchange Act or under the Securities Act of 1933.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
To the Stockholders of
Encore Wire Corporation:
The Compensation Committee of the Board of Directors (the "Committee")
administers the compensation program for executive officers and other
management level employees of the Company and makes all related decisions. The
Committee also administers the Company's Employee Stock Option Plan and makes
all decisions regarding the granting of stock options to employees of the
Company under such plan.
The goals of the Company's compensation program are to attract, retain
and motivate competent executive officers who have the experience and ability
to contribute materially to the long-term success of the Company. The
individual judgments made by the Committee are subjective and are based largely
on the Committee's perception of each executive's contribution to both past
performance and the long-term growth potential of the Company. The principal
elements of compensation for executive officers are base salary, discretionary
bonus payments and stock options.
Base salaries for 1998 were reviewed by the Committee in December 1997
for each of the executive officers on an individual basis, taking into
consideration contributions to the Company's performance, length of tenure with
the Company, compensation levels of comparable positions and internal equities
among positions. Among other things, the Committee considered each officer's
contribution to the success of the Company's business and to its foundation for
future earnings growth, as well as such officer's role in achieving a higher
level of customer satisfaction, increased market penetration and the efficient
utilization of assets and employees in his area of responsibility.
In addition to base salaries, discretionary cash bonuses may be paid to
certain executive officers. In determining whether to grant bonuses and the
amount of any such grants, the Committee considers both individual performance
and the Company's overall performance, with particular emphasis on each
executive's specific contributions to the Company's ability to achieve its
long-term objectives. In 1997, the Committee approved cash bonuses to certain
executive officers and key managers, including bonuses of $500,000 to Vincent
A. Rego, $100,000 to Daniel L. Jones, $80,000 to David K. Smith and $80,000 to
Scott D. Weaver.
6
<PAGE> 9
The 1998 compensation levels of Vincent A. Rego, Daniel L. Jones, David
K. Smith and Scott D. Weaver were determined subjectively by the Committee
based on their responsibilities and the factors described in the preceding two
paragraphs.
From time to time, the Committee has granted stock options under the
Company's Employee Stock Option Plan (the "Plan") to executive officers and key
employees to align their long-term interests with those of the stockholders.
The Plan, which was adopted in 1990, initially reserved 561,000 shares of
Common Stock for issuance pursuant to non-qualified and/or incentive stock
options granted under the Plan. In February 1994, the Plan was amended to
increase the number of shares issuable under the Plan to a total 1,011,000
shares. In January 1997, the Plan was amended to increase the number of shares
issuable under the Plan to a total of 1,161,000 shares. Stock options are
granted at exercise prices not less than the fair market value on the date of
the grant and thus will have no value unless the value of the Company's Common
Stock appreciates. The Committee believes that stock options provided a
significant incentive for the option holders to enhance the value of the
Company's Common Stock by continually improving the Company's performance. In
1997 the Committee granted options covering 119,000 shares, including 12,000
shares to Daniel L. Jones, 4,500 shares to David K. Smith and 16,500 shares to
Scott D. Weaver. During the three years ended December 31, 1997, options to
purchase 214,550 shares were granted and options to purchase 90,955 shares were
available under the Plan for grant at December 31, 1997.
COMPENSATION COMMITTEE
William R. Thomas, Chairman
Donald E. Courtney
John H. Wilson
9
<PAGE> 10
SUMMARY COMPENSATION
The following table sets forth summary information regarding the
compensation awarded to, earned by or paid to the Company's Chief Executive
Officer and the four other highest paid executive officers in 1997 for the
years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------------------------------------
OTHER
ANNUAL
COMPENSATION (1) SECURITIES UNDERLYING
NAME AND ---------------- OPTIONS/
PRINCIPAL POSITION YEAR SALARY BONUS (1) SARS(#)
------------------ ---- ------ ----- --- -------
<S> <C> <C> <C> <C> <C>
Vincent A. Rego 1997 $250,000 $500,000 $14,310
Chairman, President 1996 150,000 250,000 16,556
and Chief Executive 1995 150,000 -- 16,829
Officer
Daniel L. Jones 1997 $99,000 $100,000 $18,711 12,000
Executive Vice 1996 91,750 60,000 17,344
President and Chief 1995 85,000 -- 14,262
Operating Officer
David K. Smith 1997 $99,000 $80,000 $ 1,522 4,500
Vice President - 1996 99,667 60,000 1,432
Operations 1995 85,000 -- 1,418
Scott D. Weaver 1997 $99,000 $80,000 $ 5,392 16,500
Vice President - 1996 94,061 60,000 4,254
Finance, 1995 85,000 -- 3,106
Treasurer and Secretary
Donald M. Spurgin 1997 $ 99,000 -- $ 4,612
Vice Chairman 1996 139,555 -- 15,503
1995 150,000 -- 17,640
</TABLE>
- --------------
(1) Includes (a) average monthly lease payments by the Company of $700 in
1995, $640 in 1996 and $820 in 1997 for automobiles used by Mr. Rego,
$680 in 1995, $730 in 1996 and $730 in 1997 for automobiles used by Mr.
Jones, and $700 in 1995, $655 in 1996 and $137 in 1997 for automobiles
used by Mr. Spurgin and (b) Company contributions to defined contribution
plans of $3,416 on behalf of each of Mr. Rego and Mr. Spurgin, $1,275 on
behalf of Mr. Jones and $1,688 on behalf of Mr. Weaver in 1995, $4,535
for Mr. Rego, $2,793 for Mr. Jones, $2,822 for Mr. Weaver and $4,217 for
Mr. Spurgin in 1996 and $3,912 for Mr. Jones, $3,870 for Mr. Weaver and
$2,970 for Mr. Spurgin in 1997.
DEFINED BENEFIT PLANS AND OTHER ARRANGEMENTS
The Company has no defined benefit plans and has not entered into any
agreements or arrangements with respect to any of its executive officers, other
than Mr. Spurgin's employment agreement as discussed below.
10
<PAGE> 11
OPTION GRANTS
The following table sets forth summary information with respect to
options to purchase Common Stock granted during the year ended December 31,
1997 to each of the named executive officers.
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
- ---------------------------------------------------------------------------------------------------------------
Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term (1)
- ---------------------------------------------------------------------------------- --------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) (2) Year ($/Sh) Date 5% ($)(3) 10% ($)(4)
- --------------- ------------ ------------ -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Vincent A. Rego -- -- -- -- -- --
Daniel L. Jones 12,000 10.1% $12.50 1/31/07 $ 94,320 $239,040
David K. Smith 4,500 3.8% $12.50 1/31/07 $ 35,370 $ 89,640
Scott D. Weaver 16,500 13.9% $12.50 1/31/07 $ 129,690 $328,680
Donald M. Spurgin -- -- -- -- -- --
</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) Shares become eligible for purchase at a rate of 20% per year starting on
the first anniversary of the grant.
(3) Represents an assumed market price per share of Common Stock of $20.36.
(4) Represents an assumed market price per share of Common Stock of $32.42.
11
<PAGE> 12
The following table summarizes the number and value of options exercised
during 1997, as well as the number and value of unexercised options, as of
December 31, 1997, held by each of the named officers.
AGGREGATED OPTION EXERCISES IN 1997 AND DECEMBER 31, 1997 OPTION VALUE
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($) (1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
------------------ ----------------- ------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Vincent A. Rego -- -- 150,000 shares/ $3,375,000/
0 shares 0
Daniel L. Jones 0 0 36,975 shares/ $1,075,770/
16,650 shares 326,913
David K. Smith 0 0 34,350 shares/ $995,016/
9,150 shares 186,288
Scott D. Weaver 24,000 714,920 8,100 shares/ $177,525/
27,900 shares 587,685
Donald M. Spurgin -- -- 150,000 shares/ $3,375,000/
0 shares 0
</TABLE>
(1) The high sales price per share on December 31, 1997 was $31 1/4 as
reported by the NASDAQ National Market System.
COMPENSATION OF DIRECTORS
Directors do not receive fees for attending meetings of the Board of
Directors. The Company does, however, reimburse directors for reasonable
travel, lodging and related expenses incurred in attending Board and committee
meetings.
EMPLOYMENT AGREEMENT
The Company employs Donald M. Spurgin under an Employment Agreement
(the "Employment Agreement") as an Executive of the Company for the period
October 1, 1996 through September 6, 2002. The agreement provides for an
annual salary of $99,000 per year, which the Board of Directors may increase
from time to time. Under the Employment Agreement, Mr. Spurgin is entitled to
such bonuses or other discretionary compensation payments as the President may
award him from time to time, and is also entitled to participate in any
employee benefit plans, programs and arrangements provided by the Company from
time to time to its employees.
12
<PAGE> 13
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder
return, which assumes reinvestment of dividends, of a $100 investment in the
Company's Common Stock, the New Peer Group1, the Old Peer Group2 and CRSP Total
Return Index for The Nasdaq Stock Market (U.S. companies).
The Company believes that the New Peer Group more accurately reflects
the Company's peers in the building wire and cable industry and provides a
better basis for comparison than the Old Peer Group. Although the companies
included in the New Peer Group were selected because of similar industry
characteristics, they are not entirely representative of the Company's
business. Performance data for the Old Peer Group has been provided for
comparative purposes but is not expected to be included in subsequent years'
proxy statements.
COMPARISON OF QUARTERLY CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, PEER GROUPS AND CRSP TOTAL RETURN INDEX
FOR THE NASDAQ STOCK MARKET (U.S.)
[GRAPH]
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/30/95 12/29/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Company 100 109.8 170.7 95.1 168.3 449.1
CRSP Total Return Index for 100 114.8 112.2 158.7 195.2 239.5
NASDAQ Stock Market
New Peer Group(1) 100 125.4 161.4 230.4 305.3 406.4
Old Peer Group(2) 100 126.1 82.3 110.8 130.3 181.8
</TABLE>
- --------------
(1) Consists of the following companies, with each company being added to the
index on its first date of public trading, as indicated: AFC Cable Systems
Inc. (12/16/93), Cable Design Technologies Corporation (11/24/93), General
Cable Corporation (5/16/97), Belden Inc. (9/30/93), Essex International
Inc. (4/18/97) and Superior Telecom Inc (10/11/96).
(2) Consists of the following companies: Bird Corporation, Elcor Corporation,
Justin Industries, Masco Industries, Inc., Morgan Products, Ltd., Republic
Gypsum Company and TJ International Inc.
13
<PAGE> 14
AUDITORS
Based on the recommendation of the Audit Committee of the Board of
Directors of the Company, Ernst & Young LLP, which has served as the Company's
independent public accountants since the Company's inception, has been
appointed by the Board of Directors to audit the financial statements of the
Company for the year ending December 31, 1998, subject to the ratification of
such appointment by the stockholders of the Company. Although it is not
required to do so, the Board of Directors is submitting the selection of
auditors for ratification in order to obtain the stockholders' approval of this
appointment. If the selection is not ratified, the Board of Directors will
reconsider the appointment. Representatives of Ernst & Young LLP are expected
to be present at the meeting to respond to appropriate questions from the
stockholders and will be given the opportunity to make a statement should they
desire to do so.
STOCKHOLDER PROPOSALS AND OTHER MATTERS
It is contemplated that the 1999 Annual Meeting of Stockholders of the
Company will take place during the first week of May 1999. Stockholder
proposals for inclusion in the Company's proxy materials for the 1999 Annual
Meeting of Stockholders must be received by the Company at its offices in
McKinney, Texas, addressed to the Secretary of the Company, not less than 120
days in advance of the date (month and day only) this Proxy Statement is first
distributed to stockholders; provided, that if the 1999 Annual Meeting of
Stockholders is changed by more than 30 days from the presently contemplated
date, proposals must be so received a reasonable time in advance of the
meeting.
The Board of Directors does not intend to present any other matters at the
meeting and knows of no other matters that will be presented; however, if any
other matter properly comes before the meeting, the persons named in the
enclosed proxy intend to vote thereon according to their best judgment.
CERTAIN TRANSACTIONS
Since its inception the Company has used Manufacturer's Transportation,
Inc., a Plano, Texas based common carrier, to deliver materials to the Company
and to deliver the Company's products to manufacturers' representatives'
warehouses and customers. Manufacturer's Transportation, Inc. was wholly owned
by the adult children of Donald M. Spurgin (one of whom is the spouse of Daniel
L. Jones, a nominee for director and the Company's Executive Vice President and
Chief Operating Officer) until October 1997, when Manufacturer's
Transportation, Inc. was sold to a non-affiliated party. During the fiscal
year ended December 31, 1997, the Company paid Manufacturer's Transportation,
Inc. approximately $1.7 million for these services on the basis of rates the
Company believes compare favorably with rates charged by other common carriers.
The rates charged by Manufacturer's Transportation, Inc. are filed with the
Interstate Commerce Commission.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 December 31, 1997, all of its
directors, officers and more than 10 percent beneficial owners complied with
all applicable Section 16(a) filing requirements.
14
<PAGE> 15
ANNUAL REPORT
The Company has provided without charge to each person whose proxy is
solicited hereby a copy of the 1997 Annual Report of the Company, which
includes the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (including the consolidated financial statements) filed with
the SEC. Additional copies of the Annual Report may be obtained without charge
upon written request to the Company, Encore Wire Corporation, 1410 Millwood
Road, McKinney, Texas, 75069, Attention: Corporate Secretary.
By Order of the Board of Directors
Scott D. Weaver,
Vice President -
Finance, Treasurer and Secretary
15
<PAGE> 16
PROXY
ENCORE WIRE CORPORATION ANNUAL MEETING Continued from other side
MAY 5, 1998
The undersigned hereby appoints VINCENT A. REGO and DANIEL L. JONES, and
each of them, as the undersigned's attorneys and proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote, as
directed below, all the shares of common stock of ENCORE WIRE CORPORATION (the
"Company") held of record by the undersigned on March 10, 1998, at the annual
meeting of stockholders to be held on May 5, 1998 or any adjournment thereof.
Please mark boxes [ ] in blue or black ink.
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed below
(except as marked tot he contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees
listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME BELOW.)
Joseph M. Brito Daniel L. Jones Vincent A. Rego William R. Thomas
Donald E. Courtney John P. Pringle Donald M. Spurgin John H. Wilson
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The above-named attorney and proxy (or his substitute) is authorized to
vote in his discretion upon such other business as may properly come
before the meeting or any adjournment thereof.
THIS PROXY SOLICITED BY THE BOARD OF DIRECTORS
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
<PAGE> 17
ENCORE WIRE CORPORATION ANNUAL MEETING
MAY 5, 1998
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR management's nominees for election as directors and FOR each of the other
proposals set forth above.
Date: , 1998
------------------------
-------------------------------------
Signature
-------------------------------------
Signature if held jointly
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
