<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
THERMADYNE HOLDINGS 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)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
THERMADYNE HOLDINGS CORPORATION
101 SOUTH HANLEY ROAD
ST. LOUIS, MISSOURI 63105
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 1997
---------------------
Notice is hereby given that the Annual Meeting of Shareholders of
Thermadyne Holdings Corporation, a Delaware corporation (the "Company"), will be
held on Thursday, April 24, 1997, at 10:00 a.m., local time, at the Saint Louis
Club, 7701 Forsyth Boulevard, St. Louis, Missouri 63105, for the following
purposes:
1. To elect two Class I directors for terms expiring in 2000;
2. To consider and act upon a proposal to increase the number of shares of
the Company's common stock available and reserved for delivery pursuant
to the Thermadyne Holdings Corporation 1996 Employee Stock Option Plan
from 300,000 to 800,000; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on February 28,
1997, as the record date for determining the shareholders entitled to notice of,
and to vote at, the meeting or any adjournment thereof. A list of such
shareholders will be maintained at the office of the Corporate Secretary of the
Company at 101 South Hanley Road, St. Louis, Missouri 63105, during the ten-day
period prior to the date of the meeting and will be available for inspection by
shareholders, for any purpose germane to the meeting, during ordinary business
hours of the Company.
We hope you will be represented at the meeting by signing, dating and
returning the enclosed proxy card in the accompanying envelope as promptly as
possible, whether or not you expect to be present in person. Your vote is
important and the Board of Directors appreciates the cooperation of shareholders
in directing proxies to vote at the meeting.
By Order of the Board of Directors,
STEPHANIE N. JOSEPHSON
Corporate Secretary
March 20, 1997
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE SIGNED, DATED AND PROMPTLY
RETURNED IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 3
THERMADYNE HOLDINGS CORPORATION
101 SOUTH HANLEY ROAD
ST. LOUIS, MISSOURI 63105
(314) 721-5573
---------------------
PROXY STATEMENT
MARCH 20, 1997
---------------------
GENERAL INFORMATION
This Proxy Statement is being sent by the Board of Directors of Thermadyne
Holdings Corporation (the "Board of Directors"), a Delaware corporation (the
"Company"), to the holders of common stock, par value $.01 per share, of the
Company (the "Common Stock"), in connection with the solicitation of proxies for
use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held at
10:00 a.m., local time, on Thursday, April 24, 1997, at the Saint Louis Club,
7701 Forsyth, St. Louis, Missouri 63105, and at any and all adjournments
thereof.
A proxy delivered pursuant to this solicitation is revocable at the option
of the person giving the same at any time before it is exercised. A proxy may be
revoked, prior to its exercise, by executing and delivering a later dated proxy
card, by delivering written notice of the revocation of the proxy to the
Corporate Secretary of the Company prior to the Annual Meeting, or by attending
and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of
itself, will not constitute a revocation of a proxy. Unless previously revoked,
the shares represented by the enclosed proxy will be voted in accordance with
the shareholder's directions if the proxy is duly executed and returned prior to
the Annual Meeting. If no directions are specified, the shares will be voted FOR
the election of the Class I director nominees recommended by the Board of
Directors, FOR the amendment to the Thermadyne Holdings Corporation 1996
Employee Stock Option Plan (the "Employee Stock Option Plan") increasing the
number of shares of Common Stock available and reserved for delivery thereunder
from 300,000 to 800,000, and in accordance with the discretion of the named
attorneys-in-fact on other matters properly brought before the Annual Meeting.
The expense of preparing, printing and mailing this Proxy Statement and of
soliciting the proxies sought hereby will be borne by the Company. In addition
to the use of the mails, proxies may be solicited in person, or by telephone,
facsimile transmission or otherwise by officers, directors and regular employees
of the Company, none of whom will receive additional compensation for those
services. The total cost of this proxy solicitation, including the costs
represented by salaries and wages of regular employees and officers who may
assist in such solicitation, is expected to be approximately equal to an amount
normally expended by the Company for a solicitation for an election of directors
in the absence of a contest. The Company also will request brokerage firms,
banks, nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares of Common Stock as of the record date and will
provide reimbursement for the cost of forwarding those materials in accordance
with customary practice. Your cooperation in promptly signing, dating and
returning the enclosed proxy card will help to avoid additional expense.
At February 28, 1997, the Company had 11,022,311 shares of Common Stock
issued and outstanding. Each share of Common Stock entitles the holder to one
vote. Only shareholders of record at the close of business on February 28, 1997,
will be entitled to notice of, and to vote at, the Annual Meeting.
This Proxy Statement and the enclosed proxy card are first being mailed to
shareholders of the Company on or about March 20, 1997.
<PAGE> 4
OUTSTANDING VOTING SECURITIES OF THE COMPANY
AND PRINCIPAL HOLDERS THEREOF
DIRECTORS AND OFFICERS
The following table sets forth, as of February 28, 1997, the number of
shares of Common Stock beneficially owned by the directors, director nominees
and the executive officers named in the Summary Compensation Table (see
"Executive and Director Compensation -- Summary Compensation Table"), and the
directors and executive officers of the Company as a group. Other than as set
forth below, no director, director nominee or executive officer of the Company
is the beneficial owner of any shares of Common Stock. The Company believes
that, unless otherwise noted, each person shown in the following table has sole
voting and sole investment power with respect to the shares indicated.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF
COMMON STOCK
-----------------------
NAME OF NUMBER PERCENT OF
BENEFICIAL OWNER OF SHARES CLASS(1)
---------------- --------- ----------
<S> <C> <C>
Randall E. Curran(2).................... 255,999 2.3%
Richard L. Berger(3).................... 11,000 *
Fletcher L. Byrom(4).................... 6,000 *
Henry L. Druker(4)...................... 6,000 *
Talton R. Embry(5)...................... 64,106 *
Charles F. Moran(4)..................... 6,000 *
James H. Tate(6)........................ 60,459 *
Stephanie N. Josephson(7)............... 14,193 *
Thomas C. Drury(8)...................... 12,259 *
Robert D. Maddox(9)..................... 8,968 *
All directors and executive officers as
a group (10 persons)(10).............. 441,984 3.9%
</TABLE>
- ---------------
* Represents less than 1 percent.
(1) Based on 11,022,311 shares of Common Stock outstanding and calculated in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). As of February 28, 1997, 43,163 shares of
such 11,022,311 shares of Common Stock were held by the Company's
disbursing agent pending disbursement pursuant to the terms of the
Company's plan of reorganization.
(2) Includes 244,000 shares of Common Stock issuable to Mr. Curran upon the
exercise of vested stock options or stock options which will vest within 60
days.
(3) Includes 6,000 shares of Common Stock issuable to Mr. Berger upon the
exercise of vested stock options.
(4) Represents shares of Common Stock issuable only upon the exercise of vested
stock options.
(5) Mr. Embry possesses sole voting and investment power with respect to 3,800
shares directly owned and exercises voting and/or investment control with
respect to 2,216 shares owned by his minor children, 600 shares owned by
two trusts for the benefit of family members of which Mr. Embry serves as
trustee, and 850 shares owned by his wife (collectively, the "Relative
Shares"). Mr. Embry, as trustee of four pension trusts for the benefit of
current and former employees (the "Employee Benefit Plans") of Magten Asset
Management Corp. ("Magten"), exercises voting and/or investment power with
respect to 56,640 shares owned by the Employee Benefit Plans (collectively,
the "Magten Shares"). Also, as disclosed below under "-- Principal
Shareholders," Magten and Mr. Embry may be deemed to beneficially own
3,563,573 shares of Common Stock which are owned by investment advisory
clients of Magten (the "Investment Advisory Shares"). Although Mr. Embry
may be deemed to beneficially own the Relative Shares, the Magten Shares
and the Investment Advisory Shares, Mr. Embry disclaims beneficial
ownership of such shares.
(6) Includes 53,500 shares of Common Stock issuable to Mr. Tate upon the
exercise of vested stock options or stock options which will vest within 60
days.
2
<PAGE> 5
(7) Includes 11,000 shares of Common Stock issuable to Ms. Josephson upon the
exercise of vested stock options or stock options which will vest within 60
days.
(8) Includes 11,000 shares of Common Stock issuable to Mr. Drury upon the
exercise of vested stock options or stock options which will vest within 60
days.
(9) Includes 5,000 shares of Common Stock issuable to Mr. Maddox upon the
exercise of vested stock options.
(10) Includes 348,500 shares of Common Stock issuable upon the exercise of
vested stock options or stock options which will vest within 60 days.
PRINCIPAL SHAREHOLDERS
The following table sets forth information about persons who have advised
the Company that they beneficially owned more than 5% of the outstanding shares
of Common Stock as of December 31, 1996, unless otherwise noted below. Except as
otherwise indicated, the Company believes that the persons identified below have
sole voting power and sole investment power with respect to the shares
indicated.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF
COMMON STOCK
-----------------------
NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES CLASS(1)
------------------- --------- ----------
<S> <C> <C>
Magten Asset Management Corp.
35 East 21st Street
New York, NY 10010(2)................. 3,563,573 32.3%
FMR Corp.
82 Devonshire Street
Boston, MA 02109(3)................... 2,439,020 22.1%
General Motors Parties
767 Fifth Avenue
New York, NY 10153(4)................. 1,701,125 15.4%
Dean Witter, Discover & Co.
Two World Trade Center, 72nd Floor
New York, NY 10048(5)................. 1,618,574 14.7%
Whippoorwill Associates, Inc.
11 Martine Avenue
White Plains, NY 10606(6)............. 1,530,918 13.9%
Hughes Master Retirement Trust
P.O. Box 2458
Culver City, CA 90231-2458(7)......... 640,000 5.8%
</TABLE>
- ---------------
(1) Based on 11,022,311 shares of Common Stock outstanding. As of February 28,
1997, 43,163 shares of such 11,022,311 shares of Common Stock were held by
the Company's disbursing agent pending disbursement pursuant to the terms of
the Company's plan of reorganization.
(2) The following information is based on a Schedule 13G, dated July 25, 1996,
as amended on September 25, 1996, filed with the Securities and Exchange
Commission (the "Commission") by Magten, an investment adviser registered
under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"). Magten has sole voting power over none of the shares, shared
voting power over 3,044,573 of the shares, sole investment power over none
of the shares and shared investment power over all of the shares
beneficially owned by it. Magten's investment advisory clients have the
right to receive dividends on the Common Stock beneficially owned by Magten,
and each of two clients, General Motors Employees Domestic Group Pension
Trust and Bankers Trust as Trustee for the Hughes Master Retirement Trust,
has such an interest with respect to more than 5% of the outstanding shares
of Common Stock.
3
<PAGE> 6
(3) The following information is based on a Schedule 13G, dated February 14,
1997, filed with the Commission by FMR Corp., Edward C. Johnson 3d, Abigail
P. Johnson, Fidelity Management & Research Company ("Fidelity"), and
Fidelity Capital & Income Fund. Fidelity, an investment adviser registered
under the Investment Advisers Act, provides investment advisory services to
several registered investment companies and, accordingly, may be deemed to
beneficially own 2,439,020 shares of Common Stock held by those investment
companies (the "Fidelity Funds"). One of these investment companies,
Fidelity Capital & Income Fund, beneficially owns 2,424,935 shares of Common
Stock. Fidelity is a wholly owned subsidiary of FMR Corp. and, therefore,
FMR Corp. may be deemed to be the beneficial owner of the shares
beneficially owned by Fidelity. Edward C. Johnson 3d, Chairman of FMR Corp.,
Abigail P. Johnson and various of their family members and their trusts
control FMR Corp. and, therefore, may be deemed to be the beneficial owners
of the shares shown in the table above. Each of Mr. Johnson, FMR Corp.,
through its control of Fidelity, and the Fidelity Funds has sole power to
dispose of the 2,439,020 shares owned by the Fidelity Funds. Voting power
with respect to such shares resides with the Boards of Trustees of the
various Fidelity Funds. Fidelity votes the shares under written guidelines
established by these Boards.
(4) The following information is based on a Schedule 13G, dated February 9,
1996, filed with the Commission by General Motors Employees Domestic Group
Pension Trust (the "GM Trust") and General Motors Investment Management
Corporation ("GMIMCo" and, together with the GM Trust, the "General Motors
Parties"), and information provided by Magten. The GM Trust is a trust
formed under and for the benefit of certain employee benefit plans ("Plans")
of General Motors Corporation ("GM") and its subsidiaries. GMIMCo is
registered as an investment adviser under the Investment Advisers Act.
GMIMCo's principal business is providing investment advice and investment
management services with respect to the assets of the Plans and of certain
direct and indirect subsidiaries of GM and associated entities. Subject to
certain limitations, GMIMCo has the responsibility to select and terminate
investment managers with respect to the Plans. Two investment managers
acting with respect to the Plans are Magten and Fidelity Management Trust
Company (the "External Managers"). The External Managers have discretionary
authority over the assets of the Plans which they manage including voting
and investment power with respect to the shares of Common Stock included
among such assets. Each of the General Motors Parties has shared power to
vote and shared investment power over 1,701,125 shares of Common Stock.
(5) The following information is based on a Schedule 13G, dated February 13,
1997, filed with the Commission by Dean Witter, Discover & Co., Dean Witter
InterCapital Inc. and Dean Witter Reynolds Inc. Dean Witter InterCapital
Inc. is an investment adviser registered under the Investment Advisers Act.
The shares reflected in the table are managed (with shared voting and
investment power) by Dean Witter InterCapital Inc. and held by various
investment companies for which it provides investment advice.
(6) The following information is based on a Schedule 13G, dated January 31,
1997, filed with the Commission by Whippoorwill Associates, Inc.
("Whippoorwill"). Whippoorwill is an investment adviser registered under the
Investment Advisers Act. Clients of Whippoorwill have the right to receive
or the power to direct the receipt of dividends from, or the proceeds from
the sale of, the shares of Common Stock beneficially owned by Whippoorwill.
Whippoorwill has shared voting power and shared investment power with
respect to all of the shares of Common Stock beneficially owned by it.
(7) The following information has been obtained from Magten, as External Manager
of shares held by the Hughes Master Retirement Trust. Bankers Trust, as
Trustee of the Hughes Master Retirement Trust, has shared power to vote and
shared investment power over 640,000 shares of Common Stock.
4
<PAGE> 7
PROPOSAL FOR THE ELECTION OF DIRECTORS
Action will be taken at the Annual Meeting for the election of two Class I
directors for terms expiring in 2000.
It is intended that the attorneys-in-fact named in the proxy card will vote
FOR the election of the two nominees listed below, unless instructions to the
contrary are given therein. These nominees have indicated that they are able and
willing to serve as directors. However, if some unexpected occurrence should
require the substitution of some other person or persons for either or both of
the nominees, it is intended that the attorneys-in-fact will vote FOR such
substitute nominee(s) as the Board of Directors may designate. All directors
elected at the Annual Meeting will hold office for their respective terms and
until their respective successors are elected and qualified.
The persons named below have been nominated for election as Class I
directors. Each nominee presently serves as a Class I director of the Company.
Also listed below are each of the Class II and Class III directors whose terms
will continue after the Annual Meeting.
CLASS I DIRECTOR NOMINEES -- TERM EXPIRES 2000
FLETCHER L. BYROM, Age 78
Director
Mr. Byrom has been a Director of the Company since February 1994. Since
June 1996, Mr. Byrom has served as President and Chief Executive Officer of
Micasu Corporation. Mr. Byrom previously served as Chairman of the Board
and Chief Executive Officer of Standard Brands Paint Company, a retail
paint and floor covering company, from 1993 to 1995, and Adience, Inc., a
manufacturer of refractory bricks, from 1993 to 1994. From 1982 to 1993,
Mr. Byrom was a consultant to, and a member of the boards of, several
multinational corporations. In 1982, Mr. Byrom retired as Chairman of the
Board and Chief Executive Officer of Koppers Company, Inc., where he had
worked since 1967. Mr. Byrom presently serves on the boards of directors of
PureCycle Corporation and Micasu Corporation.
CHARLES F. MORAN, Age 67
Director
Mr. Moran has been a Director of the Company since February 1994. Mr. Moran
retired as Senior Vice President, Administration of Sears Roebuck and
Company in December 1993, having served in that capacity since August 1989.
From 1954 to 1989, Mr. Moran served in various executive and managerial
positions with Sears Roebuck and Company, including Senior Vice President
and Chief Information Officer from 1988 to 1989, Senior Executive Vice
President and Chief Administrative Officer, Dean Witter Financial Services
from 1986 to 1987, President, Sears World Trade, Inc. from 1984 to 1986,
Vice President, Corporate Planning from 1982 to 1984 and Vice President,
Operating from 1980 to 1982. Mr. Moran presently serves on the boards of
directors of Donnelley Enterprise Solutions, Inc., SPS Transaction
Services, Inc., West Side Affordable Housing, Inc. and Hurley State Bank.
CLASS II DIRECTORS -- TERM EXPIRES 1998
RICHARD L. BERGER, Age 57
Director
Mr. Berger has been a Director of the Company since February 1994. Mr.
Berger is a private investor and consultant, having previously served as
President of Cinetropolis, a division of Iwerks Entertainment, from 1992
until July 1993. From 1985 to 1991, Mr. Berger was with MGM/UA
Communications Co. and served as President of the Film Group from 1989 to
1991 and Executive Vice President of Production from 1985 to 1989. From
1983 to 1985, Mr. Berger was President of Walt Disney Pictures at Walt
Disney Productions. Prior to 1983, Mr. Berger held various executive
positions at CBS, Twentieth Century Fox Television and Twentieth Century
Fox Features. Mr. Berger presently serves on the board of directors of
Calypso Ltd.
5
<PAGE> 8
HENRY L. DRUKER, Age 43
Director
Mr. Druker has been a Director of the Company since February 1994. Mr.
Druker has been a Managing Director of the investment firm of Questor
Management Company since November 1995 and served as the principal
responsible for the New York office of the turnaround and financial
advisory firm Jay Alix & Associates from October 1992 to October 1995. From
1989 to 1992, Mr. Druker was a partner in the New York office of the
Toronto-based merchant bank Gordon Capital. From 1983 to 1989, Mr. Druker
served as an investment banker at L. F. Rothschild and in 1985 he became a
Managing Director and the head of the Leveraged Buyout Group of that firm.
Mr. Druker began his career in 1980 as a corporate finance associate with
Goldman Sachs & Co. in New York.
CLASS III DIRECTORS -- TERM EXPIRES 1999
RANDALL E. CURRAN, Age 42
Chairman of the Board, President
and Chief Executive Officer
Mr. Curran has been a Director of the Company since February 1994 and was
elected Chairman of the Board and Chief Executive Officer in February 1995,
having previously served as President of the Company from August 1994 and
as Executive Vice President and Chief Operating Officer of the Company from
February 1994. He also serves as President of Thermadyne Industries, Inc.,
a position he has held since 1992. From 1986 to 1992, Mr. Curran was Chief
Financial Officer of the Company and/or its predecessors. Prior to 1986,
Mr. Curran held various executive positions with Cooper Industries, Inc.
Mr. Curran presently serves on the board of directors of the Whitfield
School.
TALTON R. EMBRY, Age 50
Director
Mr. Embry has been a Director of the Company since February 1994. Mr. Embry
has served as Managing Director and Chief Investment Officer of Magten
since 1978. From 1968 to 1978, Mr. Embry was a Vice President of Fiduciary
Trust Company of New York. Mr. Embry presently serves on the boards of
directors of Capsure Holdings, Combined Broadcasting, Inc., Varco
International, Inc., Revco Drug Stores, Inc. (of which he is Vice Chairman
of the Board), BDK Holdings, Inc. and Anacomp Inc. On September 9, 1993,
Mr. Embry and Magten, without admitting or denying the allegations in a
complaint by the Commission, consented to the entry of judgments enjoining
them from violating (and, in the case of Mr. Embry, aiding and abetting
violations of) anti-fraud and other provisions of the Exchange Act, the
Investment Advisers Act, and the Investment Company Act. The Commission's
complaint alleged principally that Mr. Embry failed to advise clients of
certain personal trades relevant to clients' holdings, to obtain certain
consents required under applicable law in connection therewith and to
comply with certain reporting requirements. The complaint did not involve
the securities of the Company. As part of the settlement, Mr. Embry made a
$1 million payment for the benefit of certain of Magten's clients.
JAMES H. TATE, Age 49
Director, Senior Vice President and Chief Financial Officer
Mr. Tate has been a Director of the Company since October 1995. He was
elected Senior Vice President and Chief Financial Officer in February 1995,
having previously served as Vice President of the Company and Vice
President and Chief Financial Officer of the Company's subsidiaries since
April 1993. Prior to joining the Company, Mr. Tate was employed by the
accounting firm of Ernst & Young LLP for eighteen years, the last six of
which he was a partner.
6
<PAGE> 9
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors are the Executive, Audit
and Compensation and Organization Committees. Their principal functions and the
names of the directors currently serving as members of those committees are set
forth below.
The Executive Committee assists and advises management of the Company in
conducting the business and affairs of the Company. The Executive Committee may
perform other functions delegated to it by the Board of Directors. The Executive
Committee met one time last year. The current members of the Executive Committee
are Messrs. Moran, Berger, Byrom and Curran (ex-officio).
The Audit Committee has the power and authority to initiate or review the
results of all audits or investigations into the business affairs of the Company
and its subsidiaries, and to conduct pre- and post-audit reviews with the
Company's management, financial employees and independent auditors. The Audit
Committee reviews the Company's quarterly and annual financial statements and
reports. The Audit Committee met three times last year. The current members of
the Audit Committee are Messrs. Berger, Embry and Druker.
Subject to the final decision of the Board of Directors, the Compensation
and Organization Committee reviews the proposed compensation of the Company's
Chief Executive Officer and all other corporate officers and considers
management succession and related matters. In addition, the Compensation and
Organization Committee administers the Company's 1993 Management Option Plan
(the "Management Option Plan"), the Company's Employee Stock Purchase Plan (the
"Stock Purchase Plan"), the Employee Stock Option Plan, the Company's
Non-Employee Directors Stock Option Plan (the "Non-Employee Directors Stock
Option Plan"), and the Company's other incentive compensation plans. The
Compensation and Organization Committee met four times last year. The current
members of the Compensation and Organization Committee are Messrs. Embry, Byrom
and Moran.
During the period from January 1, 1996 until December 31, 1996, the Board
of Directors met nine times. No incumbent member of the Board of Directors
attended fewer than 75% of the total number of meetings held by the Board of
Directors and the committees on which such director served during 1996.
7
<PAGE> 10
EXECUTIVE AND DIRECTOR COMPENSATION
EXECUTIVE COMPENSATION
The discussion that follows has been prepared based on the compensation
paid or awarded and benefits provided with respect to the periods indicated by
the Company and the Company's subsidiaries to executive officers of the Company
and the Company's subsidiaries.
The following table sets forth information in respect of the compensation
of the Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company for services in all capacities to
the Company, its subsidiaries and their predecessors in 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------
AWARDS
------------
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(1)
--------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Randall E. Curran.................... 1996 498,921 385,050 91,000 8,008
Chairman of the Board, 1995 482,919 409,116 65,000 7,728
President and Chief 1994 407,550 305,450 200,000 8,330
Executive Officer(2)
James H. Tate........................ 1996 241,012 169,114 36,000 7,403
Director, Senior Vice 1995 221,454 158,965 20,000 3,991
President and Chief 1994 196,381 139,619 38,500 6,364
Financial Officer(3)
Stephanie N. Josephson............... 1996 129,573 70,208 6,000 6,489
Vice President, General 1995 100,127 44,760 25,000 3,024
Counsel and Corporate 1994 -- -- -- --
Secretary(4)
Thomas C. Drury...................... 1996 107,115 53,708 6,000 5,982
Vice President -- Human 1995 92,557 32,669 25,000 4,160
Resources(5) 1994 80,272 20,135 -- --
Robert D. Maddox..................... 1996 113,658 60,055 6,000 6,272
Vice President and 1995 98,039 36,556 10,000 4,378
Controller(6) 1994 85,483 21,420 -- --
</TABLE>
- ---------------
(1) All other compensation includes group life insurance premiums paid by the
Company and contributions made on behalf of the named executive officers to
the Company's 401(k) retirement and profit sharing plan. The amount of
insurance premiums paid and 401(k) contributions made on behalf of the named
executive officers for 1996 are as follows: Mr. Curran, $2,008 and $6,000,
respectively; Mr. Tate, $1,403 and $6,000, respectively; Ms. Josephson, $411
and $6,078, respectively; Mr. Drury, $391 and $5,591, respectively; and Mr.
Maddox, $255 and $6,017, respectively.
(2) Mr. Curran was elected Chairman of the Board and Chief Executive Officer of
the Company effective as of February 23, 1995, having previously served as
President of the Company from August 1994 and as Executive Vice President
and Chief Operating Officer of the Company from February 1994.
(3) Mr. Tate was elected Senior Vice President and Chief Financial Officer of
the Company effective as of February 23, 1995, having previously served as
Vice President of the Company and as Chief Financial Officer of the
Company's subsidiaries. Mr. Tate was elected as a director of the Company on
October 26, 1995.
8
<PAGE> 11
(4) Ms. Josephson was elected Corporate Counsel and Corporate Secretary of the
Company on March 7, 1995, and was elected Vice President and General Counsel
of the Company on April 26, 1995.
(5) Mr. Drury was elected Vice President -- Human Resources of the Company on
March 7, 1995.
(6) Mr. Maddox was elected Controller of the Company on June 1, 1992, Vice
President and Controller of Thermadyne Industries, Inc. on April 1, 1995,
and Vice President of the Company on April 18, 1996.
The following table sets forth certain information related to stock options
granted to the named executive officers in 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED(#)(1) FISCAL YEAR(%) ($/SH) DATE ($)(2)
---- ------------- -------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Randall E. Curran.............. 75,000 22.3 17.00 02/01/06 607,500
15,000 4.5 21.25 04/18/06 156,300
1,000 0.3 20.875 08/21/06 9,960
James H. Tate.................. 35,000 10.4 17.00 02/01/06 283,500
1,000 0.3 20.875 08/21/06 9,960
Stephanie N. Josephson......... 5,000 1.5 17.00 02/01/06 40,500
1,000 0.3 20.875 08/21/06 9,960
Thomas C. Drury................ 5,000 1.5 17.00 02/01/06 40,500
1,000 0.3 20.875 08/21/06 9,960
Robert D. Maddox............... 5,000 1.5 17.00 02/01/06 40,500
1,000 0.3 20.875 08/21/06 9,960
</TABLE>
- ---------------
(1) The options to purchase Common Stock were granted under the Management
Option Plan or the Employee Stock Option Plan and become exercisable in five
equal annual installments commencing on the first anniversary of the date of
grant. All options become exercisable upon a change of control (as defined).
In addition, such options continue to vest after any termination of
employment for so long as the optionee is entitled to receive severance
benefits under any employment arrangement with the Company. Replacement
options may be granted, in the Compensation Committee's sole discretion, if
a named executive officer exercises such options using previously owned
shares of Common Stock.
(2) The grant date present value of each option grant was determined using a
variation of the Black-Scholes option pricing model. The estimated values
presented for Mr. Curran are based on the following assumptions made as of
the time of grant: an expected dividend yield of 0%; an expected option term
of 6 years; volatility of 0.398, 0.387 and 0.378, respectively (based on
historical stock price observations just prior to each grant); and a
risk-free rate of 5.38%, 6.47% and 6.13%, respectively. The estimated values
presented for all other executive officers are based on the following
assumptions made as of the time of grant: an expected dividend yield of 0%;
an expected option term of 6 years; volatility of 0.398 and 0.378,
respectively (based on historical stock price observations just prior to
each grant); and a risk-free rate of 5.38% and 6.13%, respectively. The
actual value, if any, that an executive officer may realize from the
exercise of the options will be the excess of the fair market value of the
Common Stock on the date of exercise over the exercise price. See "Executive
and Director Compensation -- Fiscal Year-End Option Values."
9
<PAGE> 12
The following table provides information related to the number and value of
options held by the named executive officers at the end of 1996. The last sales
price of Common Stock as reported by The Nasdaq Stock Market on December 30,
1996, the last day of fiscal 1996 on which a trade of Common Stock was reported,
was $28 1/2. No named executive officer exercised any options during 1996.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END AT FISCAL YEAR-END
---------------------------------- ----------------------------------
NAME EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
---- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Randall E. Curran............... 186,333 169,667 3,059,870 2,218,381
James H. Tate................... 29,666 64,834 484,989 806,386
Stephanie N. Josephson.......... 5,000 26,000 76,875 372,625
Thomas C. Drury................. 5,000 26,000 76,875 372,625
Robert D. Maddox................ 2,000 14,000 31,500 191,125
</TABLE>
On November 1, 1996, the Board of Directors granted options to purchase
1,000 shares of Common Stock to each of Messrs. Byrom, Moran, Berger and Druker
pursuant to the Non-Employee Directors Stock Option Plan.
EMPLOYMENT CONTRACTS
Curran and Tate Employment Agreements. On November 1, 1996, Messrs. Curran
and Tate entered into amended and restated employment agreements with the
Company and its subsidiaries. Both employment agreements terminate on November
1, 1999; however, such agreements automatically renew for an additional year on
each November 1 so that a new three-year term begins upon each extension (unless
the agreements are earlier terminated as provided therein). Messrs. Curran and
Tate serve in their current executive capacities with the Company as a
requirement of their respective employment agreements.
Messrs. Curran and Tate are entitled to annual base salaries (subject to
increase at the Board of Directors' discretion) of $513,400 and $260,175,
respectively. In addition, Messrs. Curran and Tate are eligible to participate
in an annual bonus plan providing for an annual bonus opportunity of not less
than 75% and 65%, respectively, of such executive's base salary. Each executive
also is entitled to such benefits as are customarily provided to the executives
of the Company and its subsidiaries. Both executives are required to devote all
their business time and attention to the business of the Company and its
subsidiaries.
Each employment agreement provides that if the executive's employment
ceases as a result of disability or death, he or his estate, heirs or
beneficiaries, as the case may be, will continue to receive the executive's then
current salary for a period of 18 months from the date of his disability or
death. If the executive's employment is terminated by the Company for any reason
other than death, disability or for cause (as defined in the employment
agreement), or if the executive terminates his employment upon the failure of
the Company to comply with the terms of the employment agreement, the executive
will continue to receive his then current salary and any other benefits provided
by the agreement through the later to occur of the termination date of the
agreement or 18 months from the date of termination of the executive's
employment.
Other Employment Related Contracts. In July 1996, the Company entered into
Change of Control Agreements with certain officers of the Company, including the
named executive officers. The new agreements replaced old agreements that
contained substantially similar terms except that the new agreements contain
updated compensation and benefits information with respect to the executives.
The Change of Control Agreements provide for a payment equal to the greater of
(i) two times such executive's then current annual compensation (as defined) or
(ii) 2.99 times the average of such executive's income as reported to the
Internal Revenue Service for the immediately preceding five years and the
immediate vesting of all of the executive's unvested stock options upon the
termination without cause (as defined) or constructive termination without cause
(as defined) of the executive's employment within three years of a change of
control (as
10
<PAGE> 13
defined). The amounts payable under the Change of Control Agreements are in lieu
of any amounts payable under the employment agreements described above.
In August 1996, the Company entered into Employment Retention Agreements
with certain officers and other employees of the Company, including the named
executive officers. These agreements contain restrictive covenants that prohibit
the executive from rendering services or advice to, or being employed by,
certain specified competitors of the Company for a period of two years after the
date of such agreements. As compensation for entering into these agreements and
in accordance with the terms thereof, the Company granted to each of the
executives stock options to acquire 1,000 shares of Common Stock and must pay
them 18 months of severance in the event of their termination by the Company and
its subsidiaries during the two-year term of the agreements for any reason other
than cause (as defined). The Employment Retention Agreements supplement the
Change of Control Agreements between the Company and each of the executives and
the executive employment agreements between the Company and each of Messrs.
Curran and Tate, and the payments required under the Employment Retention
Agreements are in addition to, and not in lieu of, any payments contemplated by
such other agreements.
COMPENSATION OF DIRECTORS
Other than Messrs. Curran and Tate, each director of the Company receives a
$12,000 annual retainer plus a $1,000 fee for each regular meeting of the Board
of Directors attended and a $500 fee for each meeting of a board committee
attended (other than meetings of the Executive Committee, for which members of
the committee other than Mr. Moran, will receive a fee of $750). In addition to
those fees, Mr. Moran, as the Chairman of the Executive Committee, received
aggregate compensation of $60,000 for services he provided during the
twelve-month period ending February 28, 1997. For the period ending February 28,
1998, Mr. Moran is expected to receive aggregated compensation of $60,000 for
services to be provided by him in his capacity as Chairman of the Executive
Committee during such period. Directors also are reimbursed for all reasonable
travel and other expenses of attending meetings of the Board of Directors or
committees of the Board of Directors.
REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
ON EXECUTIVE COMPENSATION
Overview
The Compensation and Organization Committee of the Board of Directors (the
"Compensation Committee") is responsible for reviewing the Company's
compensation arrangements with the Company's senior executive officers. The
Compensation Committee believes that all executive officers of the Company,
including the Chief Executive Officer, should be compensated on a competitive
basis with other manufacturing companies of comparable size in sales and
earnings. Executive compensation consists of base salary, the opportunity for
annual cash bonuses based on the Company's financial performance and on the
individual performance of the executive officers, equity-based compensation in
the form of stock options and the opportunity to participate in a Company-wide
stock purchase program and other customary fringe benefits. The goal of the
Compensation Committee is to establish a total compensation program that
provides base salaries in a competitive range, bonus opportunities that will
reward above-average performance with above-average pay, and equity-based
incentives designed to enhance the profitable growth of the Company and the
value of its Common Stock and align management and shareholder interests.
In April 1996, an outside executive compensation consultant was engaged to
evaluate the Company's compensation programs for the senior executive officers
and the senior operating management of the Company (the "1996 Compensation
Evaluation"). At the direction of the Compensation Committee, the 1996
Compensation Evaluation included a study of the Company's compensation programs
(i.e., the type and mix of compensatory elements such as salary, bonus and
equity-based awards) and the level of compensation paid by the Company compared
to the Company's recent financial performance and the compensation levels and
methods of compensation generally used by manufacturing and durable goods
companies as well as an
11
<PAGE> 14
industry peer group. The 1996 Compensation Evaluation also included an analysis
of long-term incentive plan alternatives for the Compensation Committee to
consider in structuring the Company's executive compensation plan.
Compensation Practices
For 1996, the executive officers of the Company other than Messrs. Curran
and Tate received base salaries in accordance with recommendations of the
Compensation Committee. The employment agreements with Messrs. Curran and Tate
(which agreements were amended and restated in November 1996) established their
1996 base salaries and provided for their participation in an annual bonus plan.
In April 1996, the Compensation Committee approved increases in the base
salaries payable to certain executive officers, including an increase of $30,000
for Mr. Tate. These increases were approved as a result of the Compensation
Committee's review of the 1996 Compensation Evaluation and reflected the
Compensation Committee's desire to maintain a competitive salary structure for
the Company's executive officers compared to salaries paid to similarly situated
executive officers of the Company's industry peers. The Compensation Committee
did not increase Mr. Curran's base salary for 1996. However, in 1996 it did
grant Mr. Curran an additional stock option to purchase 15,000 shares of Common
Stock. The Compensation Committee approved the special stock option grant in
recognition of Mr. Curran's performance as Chief Executive Officer of the
Company. In determining the amount of the stock option grant, the Compensation
Committee took into consideration the 1996 Compensation Evaluation which
indicated that Mr. Curran's total beneficial ownership of capital stock of the
Company plus potential ownership from options then held by Mr. Curran was below
the peer group median for chief executive officers.
For 1996, the Company continued its previously established management bonus
plans: the Executive Incentive Plan (the "Incentive Plan") and the President's
Award Plan (the "President's Award Plan"). The Incentive Plan provides bonus
opportunities based on the Company's actual performance in consolidated EBITDA
(earnings before interest, taxes, depreciation and amortization) and cash flow
from operations compared to planned goals. Participants are eligible to receive
a bonus, expressed as a percentage of base salary, with the amount of the bonus
opportunity varying with the relative responsibilities of the participants.
Under the Incentive Plan, if the established goals are met, the participant is
entitled to receive 70% of the bonus opportunity, with the remaining 30%
available to be granted at the Chief Executive Officer's discretion. For fiscal
1996, the Company achieved its planned financial goals. Based on that
performance, Mr. Curran recommended, and the Compensation Committee approved,
the award to substantially all the plan participants of the maximum bonuses for
which they were eligible under the Incentive Plan.
Under the President's Award Plan, if the Company, as a whole, meets its
goals under the Incentive Plan, participants are eligible to earn additional
bonuses of up to 50% of the participant's maximum potential award under the
Incentive Plan based on the EBITDA and operating cash flow performance of the
particular operating unit to which the participant is assigned. The amount of
the available bonus under the President's Award Plan is based on a sliding scale
that takes into account the operating group's performance above the established
Incentive Plan financial goals for such operating group; accordingly, bonuses
under the President's Award Plan will be awarded only if the performance of an
employee's operating group exceeds the financial goals established for such
operating group under the Incentive Plan. The President's Award Plan is intended
to provide a direct link between incentive compensation and those elements of
the Company's financial performance over which a participant has significant
control. For 1996, no bonuses were paid under the President's Award Plan.
The Company provides long-term compensation to its executive officers
solely through the grant of stock options under the Management Option Plan and
the Employee Stock Option Plan. During 1996, the Compensation Committee awarded
options to acquire an aggregate of 145,000 shares of Common Stock to its
executive officers (including the named executive officers) pursuant to the
Management Option Plan and the Employee Stock Option Plan. In determining the
size of each stock option grant, the Compensation Committee took into account
the number of shares held by such executive, the 1996 Compensation Evaluation
which provided a comparison of such grants made by other comparable companies to
their executive officers, and, with respect to options for all executive
officers other than the Chief Executive Officer,
12
<PAGE> 15
recommendations by Mr. Curran. Specifically, in establishing the total amount of
Mr. Curran's option grants during 1996, the Compensation Committee took into
consideration Mr. Curran's performance as Chief Executive Officer, the
availability of options under the Management Option Plan and the Employee Stock
Option Plan, and the 1996 Compensation Evaluation which indicated that Mr.
Curran's total beneficial ownership of capital stock of the Company plus
potential ownership from options then held by Mr. Curran was below the peer
group median for chief executive officers.
In February 1997, the Company amended the Employee Stock Option Plan to
expressly provide for the grant of replacement options, in the Compensation
Committee's sole discretion, if an option holder exercises an option using
previously owned shares of Common Stock. A replacement option, if granted, is
subject to specific terms and conditions set forth in the Employee Stock Option
Plan. For example, the number of shares underlying a replacement option cannot
exceed the number of previously owned shares of Common Stock used to exercise
the original option. In addition, the replacement option must have an exercise
price equal to the fair market value of the Common Stock on the date of exercise
and cannot have an option term longer than the remaining option term of the
original option. The purpose of this amendment is to maintain equity-ownership
level as for certain executives who otherwise would decrease their holdings in
the Common Stock through such method of exercise. In exercising its discretion,
the Compensation Committee has amended several outstanding stock option grants
under the Management Option Plan and the Employee Stock Option Plan, including
all outstanding grants held by the named executive officers, to provide for the
grant of replacement options if the option holder exercises such option using
previously owned shares of Common Stock.
The Stock Purchase Plan, adopted in 1994, is intended to encourage the
Company's executive officers and all other employees to increase their personal
investments in the Common Stock, which is consistent with the Compensation
Committee's goal of aligning management and shareholder interests. During 1996,
the Compensation Committee changed the year end for the Stock Purchase Plan to
December 31 and extended the term of the Stock Purchase Plan through December
31, 1997.
During 1996, the Compensation Committee approved the Company's entering
into Change of Control Agreements with certain officers of the Company,
including the named executive officers. The new agreements replaced old
agreements that contained substantially similar terms except that the new
agreements contain updated compensation and benefits information with respect to
the executives. The Change of Control Agreements are intended to provide to each
executive a payment equal to the greater of (i) two times such executive's then
current annual compensation (as defined) or (ii) 2.99 times the average of such
executive's income as reported to the Internal Revenue Service for the
immediately preceding five years and the immediate vesting of all of the
executive's unvested stock options upon the termination without cause (as
defined) or constructive termination without cause (as defined) of the
executive's employment within three years of a change of control (as defined).
Tax Considerations
In formulating its compensation policies, the Compensation Committee
considers the relevant provisions, including Section 162(m), of the Internal
Revenue Code of 1986, as amended (the "Code"), that limit the deductibility of
certain executive compensation and the consequences to the Company if the
compensation paid to the Company's executive officers is not deductible.
TALTON R. EMBRY
CHARLES F. MORAN
FLETCHER L. BYROM
13
<PAGE> 16
CORPORATE PERFORMANCE
The following graph shows a comparison of cumulative total returns for the
Company, the Nasdaq Stock Market Index and the Standard & Poor's Midcap 400
Manufacturing (Specialized Industries) Index (the "S&P Midcap 400 Mfg Index")
for the period from May 13, 1994 to December 31, 1996. The comparison assumes
$100 was invested on May 13, 1994 in the Common Stock, the Nasdaq Stock Market
Index, and the S&P Midcap 400 Mfg Index, and assumes compounded daily returns
with reinvestment of dividends.
COMPARISON OF TOTAL CUMULATIVE RETURN AMONG THERMADYNE
HOLDINGS CORPORATION, THE NASDAQ STOCK MARKET INDEX (U.S. COMPANIES),
AND THE S&P MIDCAP 400 MFG INDEX
<TABLE>
<CAPTION>
THERMADYNE
MEASUREMENT PERIOD NASDAQ STOCK S&P MIDCAP 400 HOLDINGS
(FISCAL YEAR COVERED) MARKET INDEX MFG INDEX CORPORATION
<S> <C> <C> <C>
5/13/94 100.00 100.00 100.00
12/30/94 105.77 111.24 91.67
12/29/95 149.59 135.05 142.16
12/31/96 183.99 171.00 223.53
</TABLE>
The Company has been informed by Standard & Poor's that the S&P Midcap 400
Mfg Index has been reconstituted as of July 1996. Consequently, certain
historical information presented above for such index differs from the
information for the same period appearing in the Company's 1996 Notice of Annual
Meeting of Shareholders. The stock price performance depicted in the above graph
is not necessarily indicative of future price performance.
14
<PAGE> 17
PROPOSAL TO AMEND
THE THERMADYNE HOLDINGS CORPORATION
EMPLOYEE STOCK OPTION PLAN
BACKGROUND AND PURPOSE
At its meeting on October 26, 1995, the Board of Directors of the Company
adopted the Employee Stock Option Plan and directed that the Employee Stock
Option Plan be submitted to the shareholders for their approval. The Employee
Stock Option Plan was subsequently approved at the Company's 1996 Annual Meeting
of Shareholders. The Employee Stock Option Plan is intended to provide a means
by which employees can acquire or increase equity ownership in the Company,
thereby strengthening their commitment to the success of the Company and
stimulating their efforts on behalf of the Company. The Employee Stock Option
Plan is intended also to encourage shareholder perspectives through employee
stock ownership and to assist the Company in attracting new employees and
retaining existing employees. Generally, all full-time employees (including any
officer) of the Company and its subsidiaries are eligible to receive awards
under the Employee Stock Option Plan.
AMENDMENT TO INCREASE THE NUMBER OF ELIGIBLE SHARES
The Employee Stock Option Plan provides for the granting of stock options,
including incentive stock options, pursuant to award agreements to purchase
shares of Common Stock. The Compensation Committee may in its discretion grant
awards under the Employee Stock Option Plan to any full-time employee (including
any officer) of the Company or any subsidiary thereof. Subject to adjustment for
certain changes in the capital structure of the Company, the aggregate number of
shares of Common Stock currently reserved for issuance pursuant to the Employee
Stock Option Plan is 300,000. The Board of Directors has approved an amendment
to the Employee Stock Option Plan, subject to the approval of the shareholders
of the Company, whereby the number of shares of Common Stock available and
reserved for issuance pursuant thereto would be increased to 800,000 in the
aggregate (the "Plan Amendment"). As of December 31, 1996, options to purchase
203,000 shares of Common Stock had been awarded pursuant to the Employee Stock
Option Plan. On February 5, 1997, the Compensation Committee granted options
(the "February 1997 Grants") to purchase an additional 137,200 shares of Common
Stock to executive officers and other employees of the Company pursuant to the
Employee Stock Option Plan. The options granted to Messrs. Curran and Tate as
part of the February 1997 Grants were granted subject to the approval by the
shareholders of the Company of the Plan Amendment.
The following table provides additional information related to certain of
the February 1997 Grants which were granted subject to shareholder approval of
the Plan Amendment. If the Plan Amendment is approved by the shareholders of the
Company, the executive officers of the Company will be eligible to receive
additional option grants in the future under the Employee Stock Option Plan,
subject to certain restrictions set forth in the Employee Stock Option Plan.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF UNITS(1)
----------------- ------------------
<S> <C>
Randall E. Curran........................................... 30,600
James H. Tate............................................... 27,000
</TABLE>
- ---------------
(1) All such options were granted at fair market value on the date of grant.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
AMENDMENT TO THE THERMADYNE HOLDINGS CORPORATION EMPLOYEE STOCK
OPTION PLAN.
15
<PAGE> 18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Common Stock, to
file with the Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than 10% beneficial owners are
required by the Commission to furnish the Company with copies of all Section
16(a) reports they file. To the Company's knowledge, based solely on a review of
the copies of such reports furnished to the Company, all Section 16(a) filing
requirements applicable to its officers and directors were complied with for the
year ended December 31, 1996. No shareholder holding more than 10% of the Common
Stock filed a Form 5 for 1996.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if any other matters are properly brought before the
Annual Meeting, it is the intention of the attorneys-in-fact named in the
accompanying proxy to vote in accordance with their judgment on such matters.
VOTING REQUIREMENTS
With regard to the Proposal for the Election of Directors, votes may be
cast for or votes may be withheld from each nominee. Directors will be elected
by plurality vote. Therefore, votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may not be specified with
respect to the election of directors and, under Delaware law, broker non-votes
(as explained below) will have no effect on the outcome of the election of
directors. In general, a broker who holds securities in street name has limited
authority to vote on matters submitted at a shareholders meeting in the absence
of specific instructions from the beneficial owner. In the absence of
instructions from the beneficial owner or authorization from the National
Association of Securities Dealers, Inc. (the "NASD") to vote on specific matters
without the necessity of obtaining instructions from the beneficial owner, a
broker will specify a "non-vote" on particular matters. For purposes of Delaware
law, a broker non-vote is counted as present for quorum purposes, but is
generally excluded entirely from determining whether a particular matter has
been approved. Typically, however, brokers are permitted by the NASD to vote for
the election of directors without instructions from the beneficial owner.
With regard to the Proposal to Amend the Employee Stock Option Plan, votes
may be cast for or against the proposed amendment, or shareholders may abstain
from voting on such matter. Approval of the proposed amendment requires the
affirmative vote of at least a majority of the shares of Common Stock present or
represented by proxy at the meeting and entitled to vote. Therefore, abstentions
will have the effect of votes against the approval of the proposed amendment
and, under Delaware law, broker non-votes will have no effect on the outcome.
If no directions are specified in any duly signed and dated proxy card
received by the Company, the shares represented by that proxy card will be
counted as present for quorum purposes and will be voted by the
attorneys-in-fact named in the proxy FOR the election of the director nominees
recommended by the Board of Directors, FOR the approval of the amendment to the
Employee Stock Option Plan, and in accordance with the discretion of the named
attorneys-in-fact on other matters properly brought before the Annual Meeting.
16
<PAGE> 19
SHAREHOLDER NOMINATION OF DIRECTOR CANDIDATES
The Bylaws of the Company provide that any shareholder of record who is
entitled to vote for the election of directors at a meeting called for that
purpose may nominate persons for election to the Board of Directors subject to
the following notice requirements.
As described more fully in the Company's Bylaws, a shareholder desiring to
nominate a person for election to the Board of Directors must send a written
notice to the Secretary of the Company setting forth (i) as to each person who
the shareholder proposes to nominate, all information required to be disclosed
in solicitations of proxies for election of directors, or as otherwise required,
in each case pursuant to Regulation 14A under the Exchange Act (including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected) and (ii) as to the shareholder giving the
notice (A) the name and address of such shareholder as it appears on the
Company's books and (B) the class and number of shares of the Company that are
owned of record by such shareholder.
Pursuant to the Company's Bylaws, to be timely, notice of persons to be
nominated by a shareholder as a director at an annual meeting of shareholders
must be received at the principal executive offices of the Company not less than
75 days before the first anniversary of the preceding year's annual meeting. The
obligation of shareholders to comply with the foregoing Bylaw provision is in
addition to the requirements of the proxy rules if the shareholder intends to
solicit proxies in favor of the election of its nominee(s).
INDEPENDENT AUDITORS
Ernst & Young LLP served as the Company's independent auditors for the
fiscal year ended December 31, 1996, and it is expected they will be reappointed
by the Board of Directors to serve in that capacity again for the fiscal year
ending December 31, 1997. No member of Ernst & Young LLP or any of its
associates has any financial interest in the Company or its affiliates. It is
anticipated that a representative of Ernst & Young LLP will be available at the
Annual Meeting to respond to appropriate questions and will be given an
opportunity to make a statement on behalf of Ernst & Young LLP, if desired.
SHAREHOLDER PROPOSALS
Shareholder proposals to be included in the Proxy Statement relating to the
1998 Annual Meeting of Shareholders of the Company must be received by no later
than February 8, 1998 at the Company's principal executive offices, 101 South
Hanley Road, Suite 300, St. Louis, Missouri 63105, Attention: Corporate
Secretary. Shareholders of the Company who intend to nominate candidates for
election as a director or to bring business before the meeting must also comply
with the applicable procedures set forth in the Company's Bylaws. The Company
will furnish copies of such Bylaw provisions upon written request to the
Corporate Secretary of the Company at the aforementioned address.
AVAILABILITY OF FORM 10-K
The Company will provide to any shareholder, without charge, upon written
request of such shareholder, a copy of the Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, as filed with the Commission. Such requests
should be addressed to the Company's principal executive offices, 101 South
Hanley Road, Suite 300, St. Louis, Missouri, 63105, Attention: Investor
Relations.
The foregoing Notice and Proxy Statement are sent by order of the Board of
Directors.
STEPHANIE N. JOSEPHSON
Corporate Secretary
March 20, 1997
17
<PAGE> 20
DETACH HERE
P
R
O
X
Y
THERMADYNE HOLDINGS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THERMADYNE HOLDINGS CORPORATION
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 24, 1997
The undersigned, having received the notice and accompanying Proxy
Statement for said meeting, hereby appoints Randall E. Curran, James H. Tate or
Stephanie N. Josephson, and each of them, with full power of substitution, as
the undersigned's proxy and attorney-in-fact to vote at the Annual Meeting of
Shareholders of Thermadyne Holdings Corporation (the "Company") to be held on
April 24, 1997 (the "Annual Meeting"), or at any adjournment thereof, all
shares of voting stock of the Company which the undersigned may be entitled to
vote. The above proxies are hereby instructed to vote as shown on the reverse
of this card and in their discretion upon such other business as may properly
come before the Annual Meeting or at any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE DIRECTOR
NOMINEES AND FOR THE PROPOSAL TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S
COMMON STOCK AVAILABLE AND RESERVED FOR DELIVERY PURSUANT TO THE COMPANY'S
1996 EMPLOYEE STOCK OPTION PLAN FROM 300,000 TO 800,000. THIS PROXY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFIC DIRECTIONS ARE GIVEN, ALL THE VOTES
ATTRIBUTABLE TO YOUR VOTING SHARES WILL BE VOTED FOR THE DIRECTOR NOMINEES AND
FOR THE PROPOSAL TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK
AVAILABLE AND RESERVED FOR DELIVERY PURSUANT TO THE COMPANY'S 1996 EMPLOYEE
STOCK OPTION PLAN FROM 300,000 TO 800,000.
CONTINUED AND TO BE COMPLETED, SIGNED AND DATED ON THE REVERSE SIDE.
<PAGE> 21
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. ELECTION OF DIRECTORS
FLETCHER L. BYROM
CHARLES F. MORAN
FOR BOTH NOMINEES [ ] WITHHOLD AUTHORITY [ ]
(EXCEPT AS INDICATED FOR BOTH NOMINEES
IN SPACE BELOW)
----------------------------------------------------------------------
(To withhold authority to vote for any individual nominee,
print the nominee's name above.)
2. PROPOSAL TO INCREASE THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK
AVAILABLE AND RESERVED FOR DELIVERY PURSUANT TO THE COMPANY'S 1996
EMPLOYEE STOCK OPTION PLAN FROM 300,000 TO 800,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE WITH RESPECT TO
ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR
AT ANY ADJOURNMENT THEREOF.
MARK HERE [ ] MARK HERE [ ]
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE
EVEN IF YOU PLAN TO ATTEND THE MEETING.
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
Signature: Date:
--------------------------------------------- -------------
Signature: Date:
--------------------------------------------- -------------
