<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ENCORE WIRE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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.:
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4) Date Filed:
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<PAGE> 2
ENCORE WIRE CORPORATION
1410 MILLWOOD ROAD
MCKINNEY, TEXAS 75069
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 1999
NOTICE is hereby given that the annual meeting of stockholders of
Encore Wire Corporation (the "Company") will be held on May 4, 1999, at 9:00
a.m., local time, at the Company's offices, 1411-A 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, 1999; 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, 1999,
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, 1998, are contained in the enclosed
1998 Annual Report.
Dated: March 26, 1999.
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 4, 1999
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 29, 1999.
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 in favor of 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, 1999, the record date for the meeting, are
entitled to notice of and to vote at the meeting. On the record date, there were
15,628,222 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,
<PAGE> 4
all share and per share data in this Proxy Statement have been adjusted to give
effect to a three for two stock split of the Common Stock on August 18, 1997,
and to a three for two stock split of the Common Stock on June 15, 1998.
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, seven directors will be elected with two vacancies on the Board
to remain after the meeting. Donald M. Spurgin, who has been a director since
1989, will not stand for re-election. The Board has not selected a nominee to
replace Mr. Spurgin but will consider qualified candidates for later appointment
to the Board. No stockholder approval or ratification is required for the Board
to fill either of the two vacancies.
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 for 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 75, Mr. Rego has been Chairman of the Board
director since 1989. of Directors of the Company since 1989.
In October 1996, he assumed the duties
of President and Chief Executive
Officer. Mr. Rego served as President
until May 1998 when Daniel L. Jones was
elected President of the Company. 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 E. COURTNEY, age 68, Since 1994, Mr. Courtney has served as
director since 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 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 35, Mr. Jones was Vice President -- Sales
director since May 1994 and 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, and, in May
1998, he was named President. 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
2
<PAGE> 5
attended college while working on a part
time basis for Capital Wire and Cable
Corporation.
JOHN P. PRINGLE, age 69, Mr. Pringle has been President of
director since 1990 Tekserco 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 70, Mr. Thomas has been President since 1980
director since 1989 and Chairman of the Board since 1982 of
Capital Southwest Corporation, a
publicly owned venture capital
investment firm. 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 mowing equipment for
agricultural, commercial and
governmental users, Palm Harbor Homes,
Inc., a manufactured housing company,
and Mail-Well, Inc, which is engaged in
printing and stationary manufacturing.
JOHN H. WILSON, age 56, Mr. Wilson has been President of U.S.
director from 1989 Equity Corporation, a venture capital
until May 1993 and since firm, since 1983 and served as President
May 1994 of Whitehall Corporation from May 1995
to July 1998. Mr. Wilson, who was a
director of Capital Wire and Cable
Corporation from 1985 to 1988, is also a
director of Capital Southwest
Corporation, 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 76, 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. Mr. Thomas and Mr.
Wilson were originally elected to the Board of Directors 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 1998, the Board of Directors
held three meetings. All directors attended 100% 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 1998
are set forth below.
Compensation Committee. In 1998, the members of the
compensation committee were Donald E. Courtney, William R. Thomas and
John H. Wilson. The committee met three times during 1998. 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
3
<PAGE> 6
Company's Employee Stock Option Plan and all other compensation and
benefit policies, practices and plans of the Company.
Audit Committee. In 1998, the members of the audit committee
were Donald E. Courtney, William R. Thomas and John H. Wilson. During
1998, 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 10, 1999, 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> <C>
Directors and Nominees for Director
Donald E. Courtney................................................. 124,305 .8%
Daniel L. Jones.................................................... 98,720 (2) .6%
John P. Pringle.................................................... 73,863 .5%
Vincent A. Rego.................................................... 1,463,232 (3) 9.2%
Donald M. Spurgin.................................................. 701,012 (4) 4.4%
Joseph M. Brito.................................................... 25,050 (5) .2%
William R. Thomas.................................................. -- (6) --
John H. Wilson..................................................... -- (6) --
All directors and executive
officers as a group (10 persons)................................. 5,392,334 (7) 33.2%
Beneficial Owners of 5% or More (excluding persons
named above)
Capital Southwest Corporation ..................................... 2,724,500 (8) 17.4%
Brookside Capital Partners Fund, L.P. ............................. 1,380,250 (9) 8.8%
</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 69,638 shares of Common Stock subject to stock options that are
exercisable within 60 days, 6,750 shares of Common Stock owned by Mr.
Jones' spouse and 225 shares owned for the benefit of Mr. Jones' minor
son. Mr. Jones disclaims beneficial ownership of the shares owned by his
spouse.
(3) Includes 225,000 shares of Common Stock subject to stock options that are
immediately exercisable and 1,236,985 shares of Common Stock held by
Dorvin Partners, L.P., a family limited partnership. Darvin Partners
consists of a trust as its general partner and eight separate family
trusts for the benefit of Mr. Rego's two sons as its limited partners.
Mr. Rego serves as trustee for the general partner trust and is a
co-trustee of four of the limited partnership trusts. Mr. Rego has sole
power to vote or to direct the vote and the sole power to dispose of or
to direct the disposition of all 1,236,985 shares of common stock held by
Dorvin Partners.
(4) Includes 225,000 shares of Common Stock subject to stock options that are
immediately exercisable and 87,330 shares of Common Stock owned by Mr.
Spurgin's spouse. Mr. Spurgin disclaims beneficial ownership of the
shares owned by his spouse.
(5) Includes 7,500 shares held by the Brito Family Limited Partnership.
4
<PAGE> 7
(6) 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 2,724,500 shares of Common Stock beneficially owned
by Capital Southwest Corporation. Mr. Thomas and Mr. Wilson each disclaim
beneficial ownership of such shares.
(7) Includes an aggregate of 613,239 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 2,724,500 shares beneficially owned
by Capital Southwest Corporation.
(8) Includes 1,849,500 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.
(9) Beneficial ownership of such shares was reported in a Schedule 13G dated
December 24, 1998 filed with the SEC by Brookside Capital Partners Fund,
L.P. ("Brookside Capital") with respect to its beneficial ownership of
Common Stock. In its Schedule 13G, Brookside Capital reports that it
beneficially owns all of the shares with sole voting and dispositive
power.
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; Brookside Capital Partners Fund, L.P., Two
Copley Place, Boston, Massachusetts 02116; and Vincent A. Rego, 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 1999 were reviewed by the Committee in December 1998
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 progress of the Company's business and to its
5
<PAGE> 8
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 1998, the Committee approved cash bonuses to certain
executive officers and key managers, including bonuses of $350,000 to Vincent A.
Rego and $75,000 to Daniel L. Jones, which reflected reductions of 30% and 25%,
respectively, from their 1997 bonuses.
The 1999 compensation levels of Vincent A. Rego, Daniel L. Jones and
other management level employees 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 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 841,500 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 1,516,500 shares. In January 1997, the
plan was amended to increase the number of shares issuable under the plan to a
total of 1,741,500 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 provide a significant incentive for the option
holders to enhance the value of the Company's Common Stock by continually
improving the Company's performance. The Committee did not grant any options in
1998 to executive officers. However, the committee granted options to purchase
109,100 shares in 1998 to other employees. During the three years ended December
31, 1998, options to purchase 430,925 shares were granted and options to
purchase 41,381 shares were available under the plan for grant at December 31,
1998.
COMPENSATION COMMITTEE
William R. Thomas, Chairman
Donald E. Courtney
John H. Wilson
6
<PAGE> 9
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 1998 for the years
indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------------------------------
OTHER SECURITIES UNDERLYING
NAME AND ANNUAL OPTIONS/
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION SARS(#)
------------------ ---- ------ ----- ------------ ---------------------
<S> <C> <C> <C> <C> <C>
Vincent A. Rego 1998 $ 250,000 $350,000 $13,057 --
Chairman and Chief 1997 250,000 500,000 14,310 --
Executive Officer 1996 150,000 250,000 16,556 --
Daniel L. Jones 1998 $ 156,250 $ 75,000 $21,116 --
President and Chief 1997 99,000 100,000 18,711 18,000
Operating Officer 1996 91,750 60,000 17,344 --
David K. Smith 1998 $ 105,000 $ 45,000 $ 1,688 --
Vice President - 1997 99,000 80,000 1,522 6,750
Operations 1996 99,667 60,000 1,432 --
Scott D. Weaver 1998 $ 105,000 $ 50,000 $ 6,088 --
Vice President - 1997 99,000 80,000 5,392 24,750
Finance, 1996 94,061 60,000 4,254 --
Treasurer and Secretary
Jon Heiges 1998 $ 115,000 $ 30,000 $19,908 --
National Sales 1997 90,000 60,000 16,591 --
Manager 1996 48,750 24,667 5,362 56,250
</TABLE>
DEFINED BENEFIT PLANS AND OTHER ARRANGEMENTS
The Company has no defined benefit plans and has not entered into any
agreements or arrangements with respect to any of its executive officers, other
than Mr. Spurgin's employment agreement as discussed below.
OPTION GRANTS
No options were granted to any of the named executive officers in 1998.
7
<PAGE> 10
The following table summarizes the number and value of options exercised
during 1998, as well as the number and value of unexercised options, as of
December 31, 1998, held by each of the named officers.
AGGREGATED OPTION EXERCISES IN 1998 AND DECEMBER 31, 1998 OPTION VALUE
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($) (1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ---------------------- ----------------- ------------------- --------------- --------------
<C> <C> <C> <C> <C>
Vincent A. Rego - - 225,000 shares/ $768,750/
0 shares 0
Daniel L. Jones - - 69,638 shares/ $461,311/
10,800 shares 9,936
David K. Smith - - 61,201 shares/ $422,014/
4,050 shares 3,726
Scott D. Weaver 30,150 513,846 9,000 shares/ $ 16,826/
14,850 shares 13,662
Jon Heiges - - 11,250 shares/ $ 57,150/
33,750 shares 171,450
</TABLE>
(1) The high sales price per share on December 31, 1998 was $9 1/4as 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.
In 1998, John P. Pringle rendered consulting services to the Company for which
he received payment of $50,000 made to Tekserco, Inc., a corporation owned
entirely by Mr. Pringle, and Donald E. Courtney rendered consulting services to
the Company for which he received payment of $25,000 made to Tempo Lighting,
Inc., a Company wholly owned by Mr. Courtney.
EMPLOYMENT AGREEMENT
The Company employs Donald M. Spurgin under an Employment Agreement as
an Executive of the Company for the period October 1, 1996 through September 6,
2002. The employment 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.
8
<PAGE> 11
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 Peer Group1 and CRSP Total Return Index for The Nasdaq Stock
Market (U.S. companies).
The Company believes that the Peer Group accurately reflects the
Company's peers in the building wire and cable industry. Although the companies
included in the Peer Group were selected because of similar industry
characteristics, they are not entirely representative of the Company's business.
[COMPARISON OF QUARTERLY CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, PEER GROUP AND CRSP TOTAL RETURN INDEX
FOR THE NASDAQ STOCK MARKET (U.S.) GRAPH]
<TABLE>
<CAPTION>
Symbol CRSP Total Returns Index for: 12/31/93 12/31/94 12/31/95 12/12/96 12/12/97 12/31/98
- ------ ---------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------- * Encore Wire Corporation 100.0 155.6 86.7 153.3 409.2 185.0
- -- - -- [ ] Nasdaq Stock Market (US 100.0 97.8 138.3 170.0 208.3 293.5
Companies)
- - - - - o Self-Determined Peer Group(1) 100.0 128.7 183.6 243.2 322.8 308.1
</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).
9
<PAGE> 12
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, 1999, 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 2000 Annual Meeting of Stockholders of the
Company will take place during the first week of May 2000. Stockholder proposals
for inclusion in the Company's proxy materials for the 2000 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 2000 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.
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, 1998, all of its
directors, officers and more than 10 percent beneficial owners complied with all
applicable Section 16(a) filing requirements.
10
<PAGE> 13
ANNUAL REPORT
The Company has provided without charge to each person whose proxy is
solicited hereby a copy of the 1998 Annual Report of the Company, which includes
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (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
11
<PAGE> 14
PROXY
ENCORE WIRE CORPORATION
ANNUAL MEETING
MAY 4, 1999
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, 1999, at the annual
meeting of stockholders to be held on May 4, 1999 or any adjournment thereof.
PLEASE MARK BOXES [ ] IN BLUE OR BLACK INK.
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
[ ] FOR all nominees listed below (except as [ ] WITHHOLD AUTHORITY to vote for all nominees
marked to the contrary below) listed below
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME BELOW.
<TABLE>
<S> <C> <C> <C>
Joseph M. Brito Daniel L. Jones Vincent A. Rego John H. Wilson
Donald E. Courtney John P. Pringle William R. Thomas
</TABLE>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT AUDITORS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999:
[ ] 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
(over)
(Continued from other side)
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.
DATED: , 1999
---------------------
-----------------------------------
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.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
