<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Global Industrial Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Global Industrial Technologies, Inc.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(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:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF GLOBAL Global Industrial Technologies
INDUSTRIAL TECHNOLOGIES Shareholders, Customers, Employees
APPEARS HERE]
NOTICE OF 1998
ANNUAL MEETING
of SHAREHOLDERS
PROXY STATEMENT &
FORM 10-K
for Year Ended October 31, 1997
2121 San Jacinto Street, Suite 2500 Dallas, Texas 75201
<PAGE>
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
2121 SAN JACINTO STREET, SUITE 2500
DALLAS, TEXAS 75201
----------------
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
AND
FORM 10-K FOR YEAR ENDED OCTOBER 31, 1997
TABLE OF CONTENTS
<TABLE>
<S> <C>
Notice of Annual Meeting of Shareholders.................................. 1
Proxy Statement
Outstanding Shares and Voting Rights.................................... 2
Election of Directors................................................... 2
Additional Information Relating to the Board of Directors............... 3
Security Ownership of Certain Beneficial Owners and Management.......... 5
Report of Executive Compensation Committee.............................. 6
Executive Compensation and Other Information............................ 9
Performance Graph....................................................... 12
Approval of Amended and Restated Stock Option Plan for Non-Employee
Directors.............................................................. 13
Approval of Amendments to 1992 Stock Compensation Plan.................. 15
Other Matters........................................................... 17
Information on Independent Accountants.................................. 17
Section 16(a) Beneficial Ownership Reporting Compliance................. 17
Expense of Solicitation................................................. 17
Shareholder Proposals for 1999 Annual Meeting........................... 18
Annual Report........................................................... 18
Financial Statements.................................................... 18
Exhibit A--Stock Option Plan for Non-Employee Directors................... 19
Exhibit B--Amendment to 1992 Stock Compensation Plan...................... 24
ANNUAL REPORT ON FORM 10-K
Cover Page.............................................................. 1
Documents Incorporated by Reference..................................... 1
Business................................................................ 2
Legal Proceedings....................................................... 6
Submission of Matters to a Vote of Security Holders..................... 7
Market for Common Equity and Related Matters............................ 8
Selected Financial Data................................................. 8
Management's Discussion and Analysis.................................... 9
Accountants............................................................. 14
Directors and Executive Officers........................................ 16
Certain Relationships................................................... 17
Exhibits................................................................ 17
Signatures.............................................................. 18
Report of Management.................................................... F-3
Report of Independent Accountants....................................... F-4
Consolidated Statements of Earnings..................................... F-5
Consolidated Balance Sheets............................................. F-6
Consolidated Statements of Cash Flows................................... F-8
Consolidated Statements of Shareholders' Equity......................... F-9
Notes to Consolidated Financial Statements.............................. F-10
Principal Offices of the Company and its Major Operating Subsidiaries... R-1
Investor Information.................................................... R-2
</TABLE>
<PAGE>
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
2121 SAN JACINTO, SUITE 2500
DALLAS, TEXAS 75201
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 18, 1998
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Global Industrial Technologies, Inc.,
a Delaware corporation, will be held at the Horchow Auditorium, Dallas Museum
of Art, 1717 North Harwood, Dallas, Texas, on Wednesday, March 18, 1998, at
10:00 a.m., for the following purposes:
1. To elect two Class III Directors to serve for three-year terms or until
their successors are elected and qualified;
2. To approve the amended and restated Stock Option Plan for Non-Employee
Directors;
3. To approve certain amendments to the Company's 1992 Stock Compensation
Plan; and
4. To transact such other business as may properly come before the meeting
or any postponement or adjournment thereof.
Only shareholders of record at the close of business at January 26, 1998,
are entitled to notice of and to vote at the meeting or any postponement or
adjournment thereof.
We hope you will be represented at the meeting. Please sign and return 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. The
Board of Directors of the Company appreciates the cooperation of shareholders
in directing proxies to vote at the meeting.
By Order of the Board of Directors
/s/ Graham L. Adelman
Graham L. Adelman
Senior Vice President, General
Counsel and Secretary
Dallas, Texas
February 3, 1998
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THIS MEETING, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY AT YOUR EARLIEST
CONVENIENCE. A REPLY ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED IN THE
UNITED STATES, IS PROVIDED FOR THIS PURPOSE. YOUR IMMEDIATE ATTENTION IS
REQUESTED IN ORDER TO SAVE YOUR COMPANY ADDITIONAL SOLICITATION EXPENSE.
<PAGE>
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
2121 SAN JACINTO, SUITE 2500
DALLAS, TEXAS 75201
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 18, 1998
The enclosed proxy is solicited on behalf of the Board of Directors of
Global Industrial Technologies, Inc. (the "Company" or "Global") for use at
the Annual Meeting of Shareholders to be held Wednesday, March 18, 1998, at
10:00 a.m., at the Horchow Auditorium, Dallas Museum of Art, 1717 North
Harwood, Dallas, Texas, and at any and all postponements and adjournments of
the meeting. The approximate date this Proxy Statement and the enclosed form
of proxy are first being sent to shareholders is February 3, 1998.
OUTSTANDING SHARES AND VOTING RIGHTS
The close of business January 26, 1998, is the record date for the
determination of shareholders entitled to notice of and to vote at the
meeting. On that date, the Company had outstanding and entitled to vote at the
meeting 21,950,493 shares of Common Stock. Each share entitles the holder to
one vote.
If properly executed and received in time for voting, and not revoked, the
enclosed proxy will be voted as indicated in accordance with the instructions
thereon. If no directions to the contrary are indicated, the persons named in
the enclosed proxy will vote all shares in favor of the proposals specified in
the attached notice.
Sending a signed proxy will not affect the shareholder's right to attend the
Annual Meeting and vote in person since the proxy is revocable. A proxy may be
revoked by the grant of a later proxy. The presence at the meeting of a
shareholder who has given a proxy does not revoke the proxy unless the
shareholder votes the shares subject to the proxy by written ballot at the
meeting or files written notice of revocation with the secretary of the
meeting prior to the proxy being voted.
The enclosed proxy confers discretionary authority to vote upon such other
matters and business as may come before the Annual Meeting or any adjournments
thereof. In connection with such matters, the persons named in the enclosed
form of proxy will vote in accordance with their best judgment.
1. ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides that there
shall be three classes of Directors of as nearly equal size as possible, each
class being elected for a three-year term and only one class being elected
each year. The Board of Directors has nominated David H. Blake and Richard W.
Vieser for election to the Board of Directors for three year terms expiring at
the Annual Meeting of Shareholders in 2001 or until their successors are
elected and qualified. Messrs. Blake and Vieser are incumbents whose current
terms commenced upon their election by the shareholders of the Company on
March 16, 1995. Unless otherwise instructed, it is intended that the shares
represented by the enclosed proxy will be voted for the election of the two
nominees.
The Board of Directors has no reason to believe that any nominee will be
unable to serve if elected. In the event that any nominee shall become
unavailable for election, it is intended that such shares will be voted for
the election of a substitute nominee selected by the persons named in the
enclosed proxy unless the Board should determine to reduce the number of
Directors pursuant to the Restated Certificate of Incorporation of the
Company.
Subject to a quorum, the affirmative vote of a plurality of the shares
present in person or represented by proxy at the meeting and entitled to vote
is required for the election of Directors. Votes will be tabulated by an
2
<PAGE>
inspector of election appointed by the Company's Board of Directors.
Abstentions and broker non-votes have no effect on determinations of plurality
except to the extent that they affect the total votes received by any
particular candidate.
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE DURING PAST 5 YEARS ELECTED
NAME (AGE) AND OTHER INFORMATION DIRECTOR
---------- --------------------------------------- ----------
<C> <S> <C>
NOMINEES TO SERVE FOR A THREE YEAR TERM EXPIRING 2001
David H. Blake (57)........ Dean, Graduate School of Management, 1992
University of California, Irvine,
since 1997; Dean, Edwin L. Cox School
of Business, Southern Methodist
University, from January 1990 to
December 1996; Dean and Professor,
Graduate School of Management,
Rutgers--The State University of New
Jersey, January 1983 to December
1989. Director, Procom Technology
Inc.
Richard W. Vieser (70)..... Chairman of the Board, President and 1992
Chief Executive Officer, FL
Industries, Inc., electrical
equipment and high efficiency
industrial and commercial heating and
cooling equipment, June 1985 until
retirement November 1989; Chairman of
the Board, President and Chief
Executive Officer, Lear Siegler,
Inc., March 1987 until retirement
November 1989; Chairman and Chief
Executive Officer, FL Aerospace
Corp., September 1986 until
retirement November 1989. Director,
Ceridian Corporation (formerly
Control Data Corporation), Dresser
Industries, Inc., Sybron Corporation,
Varian Associates, Inc and Berg
Electronics.
CONTINUING DIRECTOR--TERM EXPIRING 1999
Samuel B. Casey, Jr. (70).. Chairman of the Board, Dixon 1992
Ticonderoga Company, manufacturer and
marketer of writing products, October
1985 until retirement February 1989.
Director, Dresser Industries, Inc.
and Dixon Ticonderoga Company.
CONTINUING DIRECTORS--TERM EXPIRING 2000
Rawles Fulgham (70)........ Senior Advisor, Merrill Lynch & Co. 1992
Inc., financial services, Dallas,
Texas, since September 1989; Advisor
to certain Committees of the Board of
Directors of Dorchester Hugoton
Limited since August 1995; Executive
Director, Merrill Lynch Private
Capital, Inc., private financings,
from August 1982 to September 1989.
Director, BancTec, Inc., NCH
Corporation, and Dresser Industries,
Inc.
J. L. Jackson (65)......... Chairman of the Company since January 1992
1, 1994; Chief Executive Officer of
the Company since October 1993;
President and Chief Operating Officer
since February 1997; President from
July 1994 to December 1995; Vice
Chairman of the Company from October
1993 to December 1993; for more than
five years, business consultant to
the petroleum industry; President and
Chief Operating Officer, Diamond
Shamrock Corporation, 1983-1986.
</TABLE>
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
The Board of Directors has standing Audit and Finance, Executive
Compensation and Executive Committees and a Committee on Directors. During
fiscal 1997, there were ten meetings of the Board of
3
<PAGE>
Directors, two of which were attended by telephone. Attendance at meetings of
the Board and its Committees was 100% in 1997, and each member of the Board of
Directors attended 75% or more of the aggregate number of the meetings of the
Board and of any Committee of which he is a member.
The Audit and Finance Committee consists of Messrs. Casey (Chairman), Blake,
Fulgham and Vieser. The functions of the Committee, which held two meetings
during fiscal 1997, are to recommend to the Board of Directors independent
accountants, whose duty it is to audit the books and accounts of the Company
and its subsidiaries for the fiscal year for which they are appointed, and to
review the scope and results of the annual audit activities of the independent
accountants and the Company's internal auditors.
The Executive Compensation Committee is composed of Messrs. Vieser
(Chairman), Blake, Casey and Fulgham. The Committee, which held four meetings
during fiscal 1997, reviews the performance of the Chief Executive Officer,
reviews and recommends to the Board salaries of officers, reviews the
performance of key employees of the Company and administers the Company's
executive compensation plans.
The Executive Committee, consisting of Messrs. Jackson (Chairman), Fulgham,
and Vieser, exercises all powers, except to the extent limited by law, of the
Board of Directors during the intervals between meetings of the Board of
Directors. There were no Executive Committee meetings held during fiscal 1997.
The Committee on Directors develops and recommends to the Board of Directors
criteria for the selection of candidates for Director and considers and
recommends to the Board nominees for election as Directors. The Committee,
which held one meeting during fiscal 1997, also considers Director nominees
recommended by shareholders. Any such recommendation, together with the
nominee's qualifications and consent to be considered as a nominee, should be
sent to the Secretary of the Company. The Committee also advises the Board
concerning the qualifications of candidates for the positions of Chairman of
the Board and Chief Executive Officer. The Committee is composed of Messrs.
Fulgham (Chairman), Blake, Casey and Vieser.
A Director who is an employee of the Company receives no fees or
remuneration for services as a member of the Board of Directors or any
Committee of the Board. During fiscal 1997, each Director of the Company who
was not an employee received an annual retainer of $20,000 for Board
membership, $2,500 for each Committee membership, $1,000 for service as
Chairman of a Committee, and $1,000 for each day on which one or more meetings
of the Board of Directors or any Committee thereof was attended. A fee of $350
was paid for Board or Committee meetings attended by telephone. In addition,
each non-employee Director may be paid a fee of $1,000 for each day on which
he is engaged in Company business, other than attendance at meetings of the
Board of Directors or any Committee thereof, at the request of the Chairman of
the Board.
Under the Global Industrial Technologies, Inc. 1993 Directors Stock
Incentive/Retirement Plan, each non-employee Director was granted, at the
adoption of the plan, a non-qualified option to purchase 8,000 shares of
Common Stock at the fair market value of the Common Stock on the day of grant.
On April 1, 1994, and 1996, each non-employee Director was granted an
additional non-qualified option to purchase 4,000 shares of Common Stock at
the fair market value of the Common Stock on the day of grant. The Company,
subject to shareholder approval, has amended and restated the 1993 Directors
Stock Incentive/Retirement Plan on February 19, 1997, and on that date granted
each non-employee Director a non-qualified option to purchase 5,000 shares of
Common Stock at $17.87 per share, its then fair market value. Pursuant to the
amended and restated Plan, once each calendar year each non-employee Director
will be granted a non-qualified option to purchase 5,000 shares at a price
equal to the fair market value of the shares on the day of grant. Options
granted under this Plan become exercisable six months after the date of grant
and expire in ten years or, if earlier, five years following the death,
disability and/or approved retirement of a Director to whom granted. (See "2.
Approval of Amended and Restated Stock Option Plan for Non-Employee
Directors").
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of January 15, 1998, certain information
regarding those persons believed by the Company to have been the owners on
such date of more than 5% of the Common Stock then outstanding.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES OF PERCENT
BENEFICIAL OWNER COMMON STOCK OWNED OF CLASS
------------------- ------------------- --------
<S> <C> <C>
Prudential Insurance Company of America............ 2,491,600(1) 11.27%
19 Prudential Plaza
Newark, New Jersey 07102
Pioneering Management Corporation.................. 1,987,900(2) 9.01%
60 State Street
Boston, Massachusetts 02109
Neuberger & Berman................................. 1,279,720(3) 5.79%
605 Third Avenue
New York, New York 10158
</TABLE>
- --------
(1) Based upon a Form 13F filed with the Securities and Exchange Commission on
or about September 30, 1997.
(2) Based upon an amendment dated January 5, 1998 to a Schedule 13G filed with
the Securities and Exchange Commission.
(3) Based upon a Form 13F filed with the Securities and Exchange Commission on
or about September 30, 1997.
The following table states the number of shares of Common Stock of the
Company owned by each current Director and nominee and by all Directors and
officers as a group as of December 31, 1997. No Director or officer
beneficially owned more than 1% of the Common Stock outstanding on such date.
The number of shares beneficially owned by all Directors and officers as a
group represented 2.8% of the Common Stock that would then have been
outstanding if all options exercisable by such persons before March 1, 1998
had been exercised. Except as otherwise indicated, each individual named has
sole investment and voting power with respect to the securities shown.
<TABLE>
<CAPTION>
NAMES SHARES OWNED(1) STOCK UNITS(2)
- ----- --------------- --------------
<S> <C> <C>
J. L. Jackson.................................. 249,742 58,963
Richard W. Vieser.............................. 51,633 0
Rawles Fulgham................................. 22,000 0
David H. Blake................................. 17,000 0
Samuel B. Casey, Jr............................ 16,699 0
Juan M. Bravo.................................. 43,732 8,569
Graham L. Adelman.............................. 51,778 9,433
Thomas R. Hurst................................ 59,329 20,613
Gary G. Garrison............................... 61,315 8,053
George W. Pasley............................... 20,500 1,863
All Directors, nominees and officers as a group
(12 persons).................................. 614,296 108,032
</TABLE>
- --------
(1) Includes the following shares subject to options and related restricted
incentive stock awards granted to persons included in the table under
various incentive compensation plans of the Company which are exercisable
on or within sixty days after January 1, 1998; 239,550 shares for Mr.
Jackson; 39,000 shares for Mr. Bravo; 22,900 shares for Mr. Adelman;
59,100 shares for Mr. Hurst; 58,100 shares for Mr. Garrison; 20,500 shares
for Mr. Pasley; 16,000 shares for each of Messrs. Blake, Casey, Fulgham
and Vieser; and 522,050 shares for all Directors and officers as a group.
Such shares are considered to be beneficially owned under the rules of the
Securities and Exchange Commission and are considered to be outstanding
for the purpose of calculating percentage ownership.
(footnotes continue on next page)
5
<PAGE>
(2) Stock Units represent shares of Common Stock which may be distributable
after termination of employment to persons included in the table who have
deferred payment of annual incentive compensation pursuant to the
Company's Deferred Compensation Plan. Stock Units represent an additional
exposure of such persons to changes in the value of Common Stock which is
not reflected in the column "Shares Owned." See "Report of Executive
Compensation Committee--Policies Applicable to All Executive Officers--
Stock Ownership Requirements."
The Board of Directors adopted a Stock Ownership Requirements Policy in
January 1994 (see "Report of Executive Compensation Committee"). At December
31, 1997, the total Shares Owned and Stock Units of the 12 persons included in
the Directors and officers group was 722,328 or approximately 180% of the
401,010 Shares Owned and Stock Units of the 14 persons who were in the
Director and officer group on December 31, 1993.
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
GENERAL
The Executive Compensation Committee is responsible for all components of
the compensation program for executive management of the Company, including
the named executive officers. The Committee is comprised solely of outside
directors and administers and reviews Global's executive compensation plans
and arrangements.
The purpose of the Global executive compensation program is to enable the
Company to recruit, motivate, reward and retain the caliber of executive
talent necessary to provide shareholders and employees a long-term growth
opportunity. The competitiveness of the compensation program is reviewed by
the Executive Compensation Committee using external sources of market
information and analysis provided by outside compensation consultants. Changes
to the programs are made from time to time by the Board of Directors in order
to maintain competitive compensation levels and to better link the interests
of management and the shareholders.
The Committee considers an officer's total compensation package whenever a
change is made to any individual component. Base salary levels affect an
officer's target award under an annual incentive plan and the number of shares
for which stock options are granted under the long-term incentive plan of the
Company.
POLICIES APPLICABLE TO ALL EXECUTIVE OFFICERS
STOCK OWNERSHIP REQUIREMENTS
As a means to develop significant officer and management ownership in the
Company, the Board of Directors approved the Company's Stock Ownership
Requirements Policy in January 1994. This policy establishes stock ownership
and retention levels for officers and other managers which are stated as
multiples of their base salaries. The Stock Ownership Requirements Policy also
provides that at least 50% of any annual incentive payment to which an officer
is entitled must be either invested in Common Stock or credited in the form of
Stock Units under the Company's Deferred Compensation Plan until such time as
the officer's ownership requirements are satisfied. In addition, at least 25%
of any shares acquired by an officer upon exercise of stock options must be
retained until such requirements have been met. After having attained the
required ownership, an officer must continue to meet the requirement until
retirement or termination.
The required ownership level for the Chairman and Chief Executive Officer is
3.5 times annual base salary. Accordingly, Mr. Jackson is required to acquire
and retain, until retirement or termination, ownership of Common Stock or
Stock Units with a market value equivalent to $1,925,000. Because the price of
the Common Stock was higher on December 31, 1996 than December 31, 1997, his
ownership in relation to this requirement declined during calendar 1997 from
80% to 61%. Other executive officers have ownership levels ranging from 1.5 to
2.5 times their annual base salaries, or $2,257,000 in aggregate. As of
December 31, 1997, 66% of this requirement had been met, in aggregate, by
executive officers other than Mr. Jackson.
6
<PAGE>
BASE SALARY AND ANNUAL BONUS
Each of the Company's executive officers receives a base salary and has an
opportunity to earn an annual incentive payment. Under the Company's Incentive
Compensation Plan for Officers and Headquarters Staff ("Headquarters Plan"),
payments, if any, to participants are based upon attainment during the fiscal
year of Company financial performance objectives and individual performance
objectives. Under the Division Executive Incentive Plan ("Division Plan"),
payments to officers who are also Division Presidents are determined based
primarily upon financial performance objectives for the Company's major
business units.
It has been the policy of the Committee to establish a base salary range for
each executive officer position and a midpoint for the range which would place
the base salary of that position in approximately the 50th percentile of
market salary. In considering base salary changes, the Committee reviews the
performance of each named officer, the recent financial performance of the
Company, and the position of the officer's current salary in the established
range. None of the named officers received a salary adjustment during fiscal
1997 other than one to whom additional responsibilities were assigned. While
the Company participates in several compensation surveys, the primary survey
used to determine the salary range and midpoint for executive officers is
prepared by a major consulting firm with data from 300 U.S. manufacturing
corporations, including approximately half of the Fortune 500. Survey data is
reviewed both on a consolidated industry basis, as well as more specific
industry groupings of multiple industry companies and metalworking fabricating
companies. The Committee also determines annually a target incentive
opportunity for each executive officer which would place that officer at about
the 50th percentile of market annual incentive compensation determined by
reference to these surveys.
The Headquarters Plan and Division Plan enable the Committee to provide
incentives for participants to contribute each year to growth in Company
earnings and to accomplishment of other financial and nonfinancial goals.
Pursuant to Board authorization, funds available for distribution for 1997
under the Headquarters Plan could equal up to 4% of the Company's net after
tax profit, adjusted for unusual items. Financial performance objectives for
1997 under the Headquarters Plan related to return upon shareholders' equity
for the fiscal year. For 1997, funds equal to 6% of net after tax profits,
adjusted for unusual items, were authorized for payments under the Division
Plan. Business unit financial performance objectives for 1997 were based upon
proposals submitted to the Committee by the Chief Executive Officer, which, in
turn, reflected the annual operating plans prepared for the business units.
Performance objectives may be adjusted by the Committee to reflect
unanticipated, significant changes in the Company's businesses during a plan
year.
In addition to 8 executive officers, 74 other employees participated in the
annual incentive Plans during 1997. The amount earned by each participant was
related to the extent to which the financial and nonfinancial criteria
established by the Committee were achieved. For 1997, the minimum financial
objectives for the Headquarters Plan were not achieved and no incentive
payments were made for this portion of the officer incentives. Individual
objective incentive payments for the executive officers in the Headquarters
Plan resulted in payments aggregating less than 7% of the total targeted
incentive opportunity for 1997. Under the Division Plans, payments ranged from
21% to 120% of the targeted individual incentive opportunities.
At least 50% of any payments to which officers are entitled under the
Headquarters or Division Plans must be invested in Company Stock or Stock
Units until such time as their ownership requirements are met. Such ownership
levels must be maintained until retirement or termination.
STOCK OPTION PROGRAM
Executive officers are eligible to receive stock option grants under the
Company's 1992 Stock Compensation Plan ("Stock Plan") which is intended to
encourage them to take actions which will result in realization by
shareholders of an attractive return on their Common Stock investment. The
Committee believes that stock option grants, in combination with the Company's
Stock Ownership Requirements Policy, are an effective means of aligning
executive compensation with shareholder interests. Although, the Committee
generally grants options to executive officers for a number of shares which is
above the average level of other
7
<PAGE>
companies of similar size because of Global's stock ownership requirements,
reduced grants may be made for good reason as determined in the discretion of
the Committee.
The Committee granted executive officers options during 1997 under the Stock
Plan to purchase, in aggregate, 74,000 shares of Common Stock, 66,000 of which
were made at $20.00 per share, which was approximately $2.20 above the fair
market value of the Common Stock on the date of grant. An additional option
grant of 8,000 shares was granted to one officer upon hire at the fair market
value of the Common Stock on the date of hire. The options are fully
exercisable six months after the grant date and expire ten years after the
date of grant. Although reduced by the Committee, the number of shares for
which options were granted to each executive officer was related to the
officer's position, base salary, and individual performance. The number of
shares subject to outstanding options previously granted to a Stock Plan
participant are not taken into consideration.
CHIEF EXECUTIVE OFFICER COMPENSATION
No incentive payments were made to Mr. Jackson for fiscal 1997 and, as noted
above, the base salaries of Mr. Jackson and the other named executive
officers, other than one to whom additional responsibilities were assigned,
were not changed during the year.
Mr. Jackson was granted a stock option for 25,000 shares in August 1997 at
an exercise price approximately $2.20 over the trading price of the Common
Stock on the date of grant. Consistent with options granted to other employees
at such time, the number of shares for which Mr. Jackson's option was granted
was substantially reduced by the Committee.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code generally limits the corporate
tax deduction for compensation paid during a year to a public company's chief
executive officer and its four other most highly compensated executed officers
to $1 million, unless specified conditions are met. Certain performance-based
compensation is not subject to the deduction limitation. Although the Company
did not have nondeductible compensation expense during 1997 and is not
expected to have such in 1998, the 1992 Stock Compensation Plan, as amended,
would limit the number of shares for which options may be granted in any
consecutive three-year period to a participant in order to maximize the amount
of compensation expense that may be deductible to the Company under Section
162(m).
Members of the Executive Compensation
Committee:
R. W. Vieser, Chairman
David H. Blake
Samuel B. Casey, Jr.
Rawles Fulgham
The foregoing Report on Executive Officer Compensation shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There were no committee interlocks.
8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table reflects the cash and non-cash compensation paid or
accrued for the Chief Executive Officer and named executive officers of the
Company for fiscal 1997.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ---------------------
OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION(1) YEAR ($) ($) ($)(2) # ($)(3)
------------------ ---- -------- -------- ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
J. L. Jackson........... 1997 $550,000 $ 0 $ 0 25,000 $ 1,917
Chairman and Chief 1996 $541,672 $350,000 $ 56,349 34,250 $20,967
Executive Officer, 1995 $491,667 $500,000 $112,300 72,800 $36,900
President and Chief
Operating Officer
Juan M. Bravo........... 1997 $240,000 $ 30,500 $ 10,880(4) 10,000 $ 2,520
Vice President-- 1996 $229,000 $160,000 $ 53,023(4) 24,000 $10,380
Subsidiary
President 1995 $204,000 $ 68,000 $ 8,209 5,000 $ 2,301
Graham L. Adelman....... 1997 $216,667 $ 20,000 $ 6,665 9,400 $ 3,625
Senior Vice President, 1996 $200,000 $ 82,400 $ 29,333 13,500 $ 5,603
General Counsel & 1995 $ 53,846 $ 30,000 $ 10,659 26,800 $ 1,980
Secretary
Thomas R. Hurst......... 1997 $187,000 $135,000 $ 27,003 6,400 $ 1,830
Vice President-- 1996 $185,833 $125,000 $ 27,322 11,500 $ 8,805
Subsidiary President 1995 $177,600 $116,000 $ 42,144 15,200 $11,118
Gary G. Garrison........ 1997 $170,000 $ 0 $ 0 5,800 $ 2,170
Vice President-- 1996 $167,667 $ 67,500 $ 12,228 12,500 $ 5,191
Finance, Chief 1995 $153,333 $ 93,600 $ 16,908 10,000 $ 4,614
Financial Officer and
Treasurer
George W. Pasley........ 1997 $160,000 $ 15,000 $ 5,002 5,500 $ 0
Vice President-- 1996 $ 26,667 $ 10,500 $ 3,729 15,000 $ 693
Communications 1995 $ 0 $ 0 $ 0 0 $ 0
</TABLE>
- --------
(1) Mr. Jackson was elected President and Chief Operating Officer in February
1997. Mr. Bravo was hired in October 1994 as President of Refractarios
Mexicanos, S.A. de C.V. and in March 1996 was elected a Vice President of
the Company. Mr. Adelman became an employee and officer of the Company in
July 1995. Mr. Pasley became an employee and officer of the Company in
September 1996.
(2) Represents a discount on Stock Units deemed purchased with incentive
compensation deferred under the Company's Deferred Compensation Plan. The
Deferred Compensation Plan provides that Stock Units, which have an
individual value equivalent to a share of Common Stock, may be deemed
purchased with deferred incentive plan payouts for 75% of the average
closing price of Common Stock over a specified period of time prior to an
annual purchase date. Stock Units are not distributable until retirement
or termination. Distributions must be made in shares of Common Stock. This
column does not include the value of perquisites and other personal
benefits because the aggregate value of such compensation did not exceed
the lesser of $50,000 or 10% of the total amount of annual salary and
bonus.
(3) Represents Company contributions under its Deferred Savings Plan to match
contributions made by these officers in 1997. Prior to 1997, this column
also included a pension benefit on amounts deferred under the Deferred
Compensation Plan. The Deferred Compensation Plan was amended in 1997 to
eliminate pension benefit credits.
(4) Includes payments made as a result of Mr. Bravo's relocation from Mexico.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes options granted during fiscal 1997 to the
executive officers named in the Summary Compensation Table, and the potential
value of the shares subject to such options upon their expiration in August
2007.
<TABLE>
<CAPTION>
POTENTIAL
NUMBER OF % OF TOTAL REALIZABLE VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE OR APPRECIATION FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(1) FISCAL YEAR ($/SHARE)(2) DATE 5% 10%
---- ---------- ------------ ------------ ---------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. L. Jackson........... 25,000 13.8% $20.00 8-12-2007 $ 226,642 $ 657,056
Juan M. Bravo........... 10,000 5.5% $20.00 8-12-2007 $ 90,657 $ 262,822
Graham L. Adelman....... 9,400 5.2% $20.00 8-12-2007 $ 85,217 $ 247,053
Thomas R. Hurst......... 6,400 3.5% $20.00 8-12-2007 $ 58,020 $ 168,206
Gary G. Garrison........ 5,800 3.2% $20.00 8-12-2007 $ 52,581 $ 152,437
George W. Pasley........ 5,500 3.0% $20.00 8-12-2007 $ 49,861 $ 144,552
All Shareholders(3)..... 21,913,207 $ 233,417,350 $ 591,525,393
</TABLE>
- --------
(1) Options granted on August 13, 1997, and exercisable in full on February
13, 1998.
(2) The exercise price was approximately $2.20 higher than the fair market
value on the date of grant. The Potential Realizable Value is based on the
Assumed Annual Rates of Stock Price Appreciation being applied to the
above market exercise price.
(3) The Potential Realizable Value for All Shareholders represents the
aggregate value at the end of 10 years of all Common Stock outstanding on
December 31, 1997, which then had a value of $16.9375, assuming the same
rates of appreciation used to calculate the Potential Realizable Value of
shares subject to the stock options summarized in the table. Such
information is shown for comparison purposes only and does not represent
an estimate or prediction of future Company stock price.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUE TABLE
The following table summarizes the value at October 31, 1997, of all shares
subject to options granted to the named executive officers of the Company to
the extent not then exercised, and information concerning option exercises, if
any, during fiscal 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED ON VALUE ------------------------------ -------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
---- ----------- -------- ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. L. Jackson........... 0 $ 0 214,550 25,000 $592,625 $ 0
Juan M. Bravo........... 0 $ 0 29,000 10,000 $ 6,250 $ 0
Graham L. Adelman....... 0 $ 0 13,500 9,400 $ 0 $ 0
Thomas R. Hurst......... 0 $ 0 52,700 6,400 $171,937 $ 0
Gary G. Garrison........ 0 $ 0 52,300 5,800 $217,538 $ 0
George W. Pasley........ 0 $ 0 15,000 5,500 $ 0 $ 0
</TABLE>
- --------
(1) The fiscal year end value of the Common Stock was $17.06 per share.
10
<PAGE>
RETIREMENT PLANS
The estimated total annual retirement benefits payable at age 65 under
pension plans in which Messrs. Jackson, Bravo, Adelman, Hurst, Garrison and
Pasley participate are set forth below. Messrs. Hurst and Garrison would
receive amounts slightly higher than those shown in the pension plan table set
forth below due to Messrs. Hurst's and Garrison's participation in a prior
benefit plan which allows for the inflation proofing of such benefit. The
retirement benefits of Mr. Jackson, who became an employee of the Company in
1993, Mr. Bravo, who became an employee in 1994, Mr. Adelman, who became an
employee in 1995, and Mr. Pasley who became an employee in 1996, will not
become vested until they complete 5 years of vesting service. The chart
illustrates benefits accrued to October 31, 1997.
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
ANNUAL ------------------------------------------------------------------------
COMPENSATION 5 15 25 35
$ $ $ $ $
------------ ------ ------- ------- -------
<S> <C> <C> <C> <C>
200,000 14,897 44,692 74,487 104,282
400,000 30,897 92,692 154,487 216,282
600,000 46,897 140,692 234,487 328,282
800,000 62,897 188,692 314,457 440,282
1,000,000 78,897 236,692 394,487 552,282
1,200,000 94,897 284,692 474,487 664,282
</TABLE>
Less than 10% of the amounts shown in the "Salary" and "Bonus" columns of
the Summary Compensation Table for each of the named individuals is excluded
in determining benefits. Years of credited service for the individuals named
in the Summary Compensation Table are as follows: Mr. Jackson 4 years, Mr.
Bravo 1.83 years, Mr. Adelman 2.25 years, Mr. Hurst 34.75 years, Mr. Garrison
32.83 years, and Mr. Pasley 1.17.
Benefits are computed as straight-life annuity amounts that may be paid in
various forms. Amounts shown in the pension plan table reflect a deduction for
estimated Social Security benefits and are not subject to further deduction
for Social Security or other offset amounts.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Pursuant to the Company's 1992 Stock Compensation Plan, in the event of an
impending merger, reorganization, or liquidation of the Company, or sale of
substantially all of its business or property, the Board may, at its
discretion and without shareholder approval, declare some or all outstanding
options to be immediately exercisable in full (except for required abatements
in the case of combinations of options) without regard to prescribed vesting
periods.
Pursuant to the 1992 Stock Compensation Plan, in the event of a change in
control of the Company without approval of a majority of the members of the
Board of Directors in office immediately prior to the event, all restrictions
on outstanding shares of restricted stock, if any, immediately lapse if
related option shares have not been disposed of prior to such change in
control. At October 31, 1997, 1276 shares of restricted stock were
outstanding. Restricted stock awards have not been made since December 1993.
In January 1997, the Company entered into an arrangement with Mr. Hurst,
Vice President of the Company and President of INTOOL, Incorporated, a wholly-
owned subsidiary of the Company, regarding the severance compensation he would
receive if the shares or substantially all of the assets of INTOOL,
Incorporated are sold prior to November 1, 1998 and his employment by Global
is terminated. In such event, Mr. Hurst would receive installment payments
equal to two times his 1997 base salary and bonus, less compensation he might
receive from an acquiring entity.
11
<PAGE>
PERFORMANCE GRAPH
The cumulative total return on an investment in Global's Common Stock for
the five-year period ending October 31, 1997 was 224%.
The graph set forth below compares the cumulative total returns for Global's
Common Stock, the Standard & Poor's Small Cap 600 Index, and a Peer Group
comprised of A.P. Green Industries, Inc., Minerals Technologies Inc.,
Ingersoll-Rand Company, Cooper Industries, Inc., Harnischfeger Industries,
Inc., and Oglebay Norton Company for the period October 31, 1992 through
October 31, 1997. The Company divested its surface mining equipment operations
in August 1997, and does not consider Harnischfeger Industries, Inc. an
appropriate peer group member for subsequent periods.
The graph assumes an investment on October 31, 1992 of $100 in each of the
Company's Common Stock, the stocks comprising the Standard & Poor's Small Cap
600 Index, and the common stocks of the Peer Group companies, assuming that
any paid dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GLOBAL INDUSTRIAL TECHNOLOGIES, INC.,
THE S & P SMALLCAP 600 INDEX AND A PEER GROUP
[LINE GRAPH APPEARS HERE]
* $100 INVESTED ON 10/31/92 IN STOCK OR INDEX-- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING OCTOBER 31.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
-----------------------------------
10/92 10/93 10/94 10/95 10/96 10/97
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
GLOBAL INDUSTRIAL TECHNOLOGIES, INC........ 100 166 164 225 244 224
S&P SMALLCAP 600........................... 100 134 129 156 188 249
PEER GROUP................................. 100 122 107 109 131 170
</TABLE>
The Stock Price Performance Graph above shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates such information by reference, and shall not otherwise be deemed
filed under such Acts.
12
<PAGE>
2. APPROVAL OF AMENDED AND RESTATED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
The Board of Directors adopted the Company's 1993 Directors Stock
Incentive/Retirement Plan, on December 15, 1993. The purpose of the plan is to
align the financial interests of the shareholders of the Company and its
independent Directors. Directors who exercise options granted under the Plan
must retain 50% of the shares so acquired for 10 years or, if earlier, six
months after the Directors service on the Board ends.
On February 19, 1997, subject to approval by the shareholders, the plan was
amended and restated to provide for the limited transferability of options
granted thereunder and to increase the number of shares subject to the plan by
180,000. At the same time, the plan was renamed the Stock Option Plan for Non-
Employee Directors (the "Directors Stock Plan" or "Plan").
The following is a summary of the principal provisions of the amended and
restated Plan, a copy of which is attached to this proxy statement as Exhibit
A. This summary is qualified in its entirety by reference to the complete text
of the amended and restated Directors Stock Plan.
ADMINISTRATION AND ELIGIBILITY
The Board of Directors or a committee of the Board to which such
responsibility has been delegated administers the Directors Stock Plan. The
Board of Directors is authorized to interpret the Plan and make all
determinations necessary for its administration. Its determinations are final
and binding on all parties.
PLAN PARTICIPANTS; PRIOR GRANTS; AVAILABLE SHARES
The only persons who may participate in the Plan are Directors of the
Company who are not also its employees. At the time it was adopted, 120,000
shares of Common Stock were available for issuance under the Directors Stock
Plan. Of that number, options for 64,000 shares, having a weighted average
exercise price of $16.83 per share and a current market value of approximately
$134,000, have been granted and remain outstanding. Subject to shareholder
approval, the number of shares available for issuance was increased in
February 1997 by 180,000. If the amended and restated Plan is approved at the
1998 Annual Meeting of Shareholders, options for up to 236,000 shares may be
granted under its terms from February 1997 until expiration of the Plan in
2002. Shares issued upon exercise of an option may be either authorized and
unissued shares or treasury shares. In the event an option expires or is
canceled, the remaining shares are forfeited and become available for new
option grants under the Directors Stock Plan.
TERMS OF AWARDS
Subject to shareholder approval of the amended and restated Plan, (i) each
non-employee Director of the Company was granted an option in February 1997 to
purchase 5,000 shares of Common Stock at a price of $17.875 per share, the
fair market value of the Common Stock on that date, (ii) any person who
becomes a non-employee Director of the Company will automatically be granted
an option to purchase 5,000 shares on the date service on the Board begins,
and (iii) once each calendar year, beginning in 1998, each non-employee
Director, who has been such for at least six months, may be granted an
additional option to purchase 5,000 shares. All options granted under the Plan
must have an exercise price equal to not less than 100% of the fair market
value of the Common Stock on the day of grant. The time at which the right to
exercise an option becomes vested, in full or in installments, is determined
by the Board in its discretion at the time of grant.
Under the Plan as amended, an option granted to a non-employee Director may
be exercised until the earlier of (i) ten years after the date of grant, or
(ii) five years after the Director's service on the Board ends, other than for
cause. Options may be exercised by payment in full of the exercise price by
check or by delivery to the Company of shares of Common Stock (not acquired
through prior option exercises) having a value equal to the aggregate exercise
price.
13
<PAGE>
ADJUSTMENTS
The number of shares subject to the Plan and to outstanding options granted
under the Plan will be adjusted in the event of stock splits, stock dividends,
spin-offs, exchanges or other capital changes for which holders of Common
Stock are not required to deliver consideration (other than their shares) as
though such shares were issued and outstanding on the date of any such change.
The aggregate purchase price upon the future exercise of options so adjusted
shall be the same as if the option had continued to be for the shares for
which it originally had been granted. The issuance by the Company of shares
for consideration shall not result in such adjustments. In the event of a
merger, the Board may elect to terminate options outstanding under the Plan
and pay optionees an amount equal to the excess of the fair market value of
the shares subject to the option on the day preceding the merger over the per
share exercise price of the option.
TRANSFERABILITY
If the Plan as amended and restated is approved by the shareholders, options
granted thereunder may be transferred by the Directors if, and only to the
extent, such is expressly permitted by the agreements with the Company that
evidence their options. The options granted in February 1997 are governed by
agreements which provide that the rights of optionees thereunder may be
transferred, subject to the obligations of the optionees under the Plan, to
(i) members of their immediate family (spouse, children, grandchildren or
parents), (ii) trusts of which the only beneficiaries are immediate family
members, and (iii) partnerships of which the only partners are immediate
family members.
AMENDMENT AND TERMINATION
The Directors Stock Plan may be amended by the Board from time to time and
will remain in effect until April 1, 2002, unless sooner terminated by the
Board of Directors.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The grant of a stock option under the Directors Stock Plan will create no
income tax consequences to the optionee or the Company. A Director who is
granted a stock option would generally recognize ordinary income at the time
of exercise in an amount equal to the excess of the fair market value of the
Common Stock at such time over the exercise price. The Company will be
entitled to a deduction in the same amount and at the same time as ordinary
income is recognized by a Director as a result of an exercise. A subsequent
disposition of the securities so acquired will give rise to capital gain or
loss to the extent the amount realized from the sale differs from the tax
basis in the securities sold, i.e., their fair market value on the date of
exercise. The length of time that the securities are held after the date of
exercise controls whether this capital gain or loss will be characterized as
long-term or short-term for federal income tax purposes.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voted at the Annual Meeting with respect to the
Directors Stock Plan is required to approve the Plan. Any shares not voted at
the Annual Meeting with respect to the Directors Stock Plan (whether as a
result of broker non-votes or otherwise, except abstentions) will have no
effect upon the result of the vote. Shares of Common Stock as to which holders
abstain from voting will be treated as votes against the Directors Stock Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE DIRECTORS STOCK PLAN.
SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING BY EXECUTED BUT
UNMARKED PROXIES WILL BE VOTED "FOR" THE DIRECTORS STOCK PLAN.
14
<PAGE>
3. APPROVAL OF AMENDMENTS TO 1992 STOCK COMPENSATION PLAN
The 1992 Stock Compensation Plan (the "1992 Plan") was adopted on July 31,
1992 by the sole shareholder of the Company's predecessor prior to public
distribution of the Common Stock. The Board of Directors is recommending that
the shareholders approve amendments to the 1992 Plan at the 1998 Annual
Meeting which would (i) increase the total number of shares of Common Stock
for which options may be granted by 800,000 and (ii) provide that no employee
may receive grants under the 1992 Plan with respect to more than 750,000
shares over any consecutive three-year period.
The primary features of the 1992 Plan are summarized below. The full text of
the amendment for which shareholder approval is required is set forth as
Exhibit B to this Proxy Statement. This summary is qualified in its entirety
by reference to the complete text of the 1992 Plan.
ADMINISTRATION
The 1992 Plan is administered by the Board of Directors or a committee of
the Board (the "Committee"), no member of which is eligible to participate in
the 1992 Plan. The Board or such Committee is authorized to interpret the
provisions of the 1992 Plan and make all rules relating to its operation.
PLAN PARTICIPANTS; PRIOR GRANTS; AVAILABLE SHARES
Officers and key employees of the Company and its present and future
subsidiaries shall be eligible to participate in the 1992 Plan subject to
approval of the Committee. Awards may be granted in the form of Nonqualified
Options, Phantom Options, Restricted Stock, Performance Units and Incentive
Stock Options (all as defined in the 1992 Plan). Shares issued under the 1992
Stock Plan may be either authorized but unissued shares or issued shares
acquired by the Company. Eight executive officers and seventy-eight other key
employees were granted options under the 1992 Plan in 1997. The 1992 Plan
permits the grant of options through July 30, 2002.
At October 31, 1997, options had been granted under the 1992 Plan for
2,075,397 shares of Common Stock of which 543,518 shares had been purchased
pursuant to option exercises, 1,425,489 shares remained subject to options,
and 106,390 shares had been forfeited. Of the 2.7 million shares available
under the 1992 Plan when it was adopted, 730,993 shares are currently
available for stock option grants. On January 19, 1997, the Board of Directors
amended the 1992 Plan, subject to shareholder approval, to increase by 800,000
the number of shares of Common Stock for which options may be granted. None of
those shares may be made the subject of Restricted Stock or other types of
awards. If this amendment is approved by the shareholders, a total of
1,530,993 shares will be available for issuance pursuant to the exercise of
options which may be granted under the 1992 Plan. In addition, if the
shareholders approve this amendment, no individual employee may receive grants
under the 1992 Plan of Nonqualified Options, Phantom Options, Restricted Stock
or Incentive Stock Options, or any combination thereof, for more than 750,000
shares over any consecutive three-year period.
TERM OF OPTIONS
At the time of grant, the Committee determines the duration of the option,
which may not exceed ten years.
OPTION PRICE
The 1992 Plan provides that the price at which options may be granted cannot
be less than 100% of the fair market value of the Common Stock on the date of
grant. Fair market value is the average of the reported highest and lowest
prices per share of the Common Stock as reported on the New York Stock
Exchange on the grant date. Payment by an employee upon exercise of an option
may be made in cash or Common Stock having a fair market value equal to the
exercise price. The Company may not reprice options granted under the 1992
Plan without shareholder approval.
15
<PAGE>
VESTING
The 1992 Plan provides that (i) no option may be exercised prior to the
lapse of at least a six month period from the date of grant, and (ii) all
unexercised options granted to an employee are cancelled upon the employee's
termination for any reason other than death, disability or approved
retirement. The 1992 Plan permits the Board of Directors to accelerate the
vesting of options under certain circumstances and also provides that the
right to exercise a vested Option expires on the earlier of ten years from the
date on which such Option is granted or five years after retirement, whichever
is earlier.
TRANSFERABILITY
Options granted under the 1992 Plan may be transferred by an employee if,
and only to the extent, such is expressly permitted by the agreement with the
Company that evidences the options. Such agreements currently provide that the
rights of optionees may be transferred, subject to continuation of the
obligations of the optionees, under the 1992 Plan to (i) members of their
immediate family (spouse, children, grandchildren or parents), (ii) trusts of
which the only beneficiaries are immediate family members, and (iii)
partnerships of which the only partners are immediate family members.
ADJUSTMENTS
The number of shares subject to the 1992 Plan and to outstanding awards
granted under the 1992 Plan will be adjusted in the event of stock splits,
stock dividends, spin-offs, exchanges or other capital changes for which
holders of Common Stock are not required to provide consideration (other than
their shares) as though such shares were issued and outstanding on the date of
any such change. The aggregate purchase price of shares subject to options
which have been so adjusted shall be the same as if the option had continued
to be for the shares for which it originally had been granted. Issuance by the
Company of shares for consideration shall not result in such adjustments.
CERTAIN FEDERAL TAX CONSEQUENCES
The following statements are based on current interpretations of existing
federal income tax law. The law is technical and complex and the statements
represent only a general summary of some of the applicable provisions.
While there are no federal income tax consequences to either the employee or
the Company on the grant of an option, the employee will have taxable ordinary
income on the exercise of a non-qualified option equal to the excess of the
fair market value of the shares on the exercise date over the option price.
The Company is entitled to a corresponding deduction.
If the shareholders approve the amendments to the 1992 Plan, the Company
believes that it will be entitled to a deduction for all compensation
attributable to an employee's exercise of non-qualified options and rights.
Under Section 162(m) of the Internal Revenue Code, a limitation was placed on
tax deductions of any publicly-held company for individual compensation paid
to certain key executives exceeding $1,000,000 in any taxable year, unless
such compensation is performance-based. Subject to shareholder approval, the
1992 Plan has been amended to meet the performance-based compensation
exception to the limitation on deductions. The 1992 Plan meets the first
requirement of this exception because options are awarded and priced at not
less than the fair market value of the Common Stock on the date of grant. In
addition, the administration of the 1992 Plan by the Executive Compensation
Committee satisfies a second requirement for exemption from the $1,000,000
cap. As the 1992 Plan has already been approved by the shareholders of the
Company, this third requirement has been met. If the 1992 Plan amendment is
approved at the 1998 Annual Meeting, the last requirement for exemption from
the cap, that there be a limitation upon the number of shares that may be
granted to any single employee, will be satisfied.
AMENDMENTS
The Board of Directors is authorized to amend the 1992 Plan at any time.
However, shareholders must approve amendments which (i) increase the total
number of shares which may be issued under the 1992 Plan
16
<PAGE>
(other than due to an adjustment as described above), (ii) change the class of
employees eligible to receive options, (iii) change the provisions regarding
option price, or (iv) lengthen option periods or the time in which options may
be granted under the 1992 Plan. A copy of the 1992 Plan is on file with the
Securities and Exchange Commission.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voted at the Annual Meeting with respect to the 1992
Plan is required to approve the amendments to the 1992 Plan. Any shares not
voted at the Annual Meeting with respect to the 1992 Plan (whether as a result
of broker non-votes or otherwise, except abstentions) will have no effect upon
the result of the vote. Shares of Common Stock as to which holders abstain
from voting will be treated as votes against the amendments to the 1992 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENTS TO THE 1992
PLAN. SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING BY EXECUTED BUT
UNMARKED PROXIES WILL BE VOTED "FOR" THE AMENDMENTS TO THE 1992 PLAN.
OTHER MATTERS
The Board of Directors is not aware of any other matter to be presented for
action at the meeting. However, if any other matter is properly presented, the
persons named in the enclosed form of proxy will vote upon it in accordance
with their judgment.
INFORMATION ON INDEPENDENT ACCOUNTANTS
The Board of Directors has designated the firm of Price Waterhouse LLP as
independent accountants of the Company for the 1998 fiscal year. No member of
Price Waterhouse LLP or any of its associates has any financial interest in
the Company or its affiliates. A representative of Price Waterhouse LLP will
be present at the Annual Meeting to answer appropriate questions from the
shareholders and will be afforded an opportunity to make any statement on
behalf of Price Waterhouse LLP that he or she may desire.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who beneficially own more
than 10% of a registered class of the Company's equity securities, to file
reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission (the "SEC"). Officers, directors and
greater than 10% beneficial owners also are required by rules promulgated by
the SEC to furnish the Company with copies of all Section 16(a) forms they
file. Based solely upon a review of the copies of such forms furnished to the
Company, the Company believes that all filing requirements under Section 16(a)
applicable to its officers, directors and greater than 10% beneficial owners
were complied with during fiscal 1997, except that in January 1998 Messrs.
Jackson, Garrison, Pasley, Adelman, Hurst, Bravo and Stott reported their
ownership of stock units acquired in January 1997 as a result of their
elections to defer incentive compensation which would otherwise have been paid
in December 1996.
EXPENSE OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition,
the Company will reimburse brokers or other persons holding stock in their
names or in the names of their nominees for charges and expenses in forwarding
proxies and proxy material to beneficial owners. Solicitations may further be
made by officers and regular employees of the Company, without additional
compensation, by use of the mails, telephone, telegraph or by personal calls.
The Company has retained Morrow & Company Inc., New York, New York, to assist
in the solicitation at a cost of $10,000, plus reasonable out-of-pocket
expenses.
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SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
In order for a shareholder proposal to be included in the proxy and proxy
statement of the Company relating to a meeting of shareholders, a shareholder
proponent must comply with the requirements of Rule 14A-8 under the Securities
Exchange Act of 1934. A proposal intended to be presented by a shareholder at
the 1999 Annual Meeting must be received by the Secretary of the Company at
its principal executive offices not later than September 30, 1998. If not
received by such date, pursuant to the rules and regulations promulgated under
the Securities Exchange Act of 1934 a shareholder proposal shall not be
considered for inclusion in the Company's proxy statement and form of proxy
relating to the Annual Meeting of Shareholders to be held March 17, 1999.
The Restated Certificate of Incorporation of the Company sets forth the
procedure to be followed by a shareholder who wishes to bring certain business
before an annual meeting. Generally, only a shareholder of record entitled to
vote at the meeting may make a proposal and must do so by means of a written
notice setting forth, as to each matter proposed, a brief description of the
business desired to be brought before the meeting and the reasons therefor.
The notice must be directed to the Secretary of the Company and delivered to
its principal executives offices not less than 50 days prior to the meeting;
provided that in the event that less than 50 days notice is given to the
shareholder by the Company of the annual meeting, such notice by the
shareholder must be received not later than the close of business on the 10th
day following the day on which such notice of the date of the annual meeting
was mailed by the Company. Any material interest such shareholder has in any
such matter, as well as the shareholder's name and address as they appear in
the Company's books and the class and number of shares of capital stock of the
Company owned by the shareholder beneficially and of record, is also required
to be stated. The Chairman of the Annual Meeting shall determine whether,
based upon the facts presented, any business is properly brought before the
meeting.
ANNUAL REPORT
A summary annual report of the Company for the fiscal year ended October 31,
1997, has been mailed to shareholders.
FINANCIAL STATEMENTS
Consolidated financial statements of the Company and its subsidiaries are
contained in the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1997, which is being delivered with this Notice and Proxy
Statement.
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EXHIBIT A
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED ON FEBRUARY 19, 1997)
1. Purpose. The purposes of the Global Industrial Technologies, Inc. Stock
Option Plan for Non-Employee Directors are to attract and retain individuals
who are not employees of the Company as members of the Board of Directors, by
encouraging them to acquire a proprietary interest in the Company, and to
provide them with an ownership interest in the Company which is parallel to
that of the stockholders of the Company.
2. Definitions. The following terms shall have the respective meanings
assigned to them as used herein:
(a) "Board of Directors" shall mean the Board of Directors of the
Company, as constituted at any time.
(b) "Company" means Global Industrial Technologies, Inc., a Delaware
corporation.
(c) "Fair Market Value" on a specified date shall mean the the average of
the reported highest and lowest prices for a Share on the stock exchange,
if any, on which such Shares are primarily traded, but if no Shares were
traded on such date, then on the last previous date on which a Share was so
traded, or, if such Shares are not traded on a stock exchange, the average
of the bid and asked closing prices at which one Share is traded on the
over-the-counter market, as reported on the National Association of
Securities Dealers Automated Quotation System, or, if none of the above is
applicable, the value of a Share as established by the Board of Directors
for such date using any reasonable method of valuation.
(d) "Non-Employee Director" shall mean a member of the Board of Directors
who (i) is not a current officer or employee of the Company or its
subsidiaries, (ii) does not receive compensation, either directly or
indirectly, from the Company or its subsidiaries, for services rendered as
a consultant or in any capacity other than as a Director, (iii) does not
possess a material interest in any transaction for which disclosure would
be required pursuant to (S)229.404(a) of Regulation S-K, and (iv) is not
engaged in a business relationship for which disclosure would be required
pursuant to (S)229.404(b) of Regulation S-K.
(e) "Option" shall mean an option granted under the Plan.
(f) "Participant" shall mean a Non-Employee Director who has been granted
an Option.
(g) "Plan" shall mean the Global Industrial Technologies, Inc. Stock
Option Plan for Non-Employee Directors.
(h) "Share" shall mean a share of the common stock of the Company, par
value $0.25 (the "Common Stock").
(i) "Transferee" shall have the meaning set forth in Section 9.
3. Plan Administration.
3.1. Authority. The Plan shall be administered by the Board of Directors
(unless the Board of Directors appoints a committee thereof to administer the
Plan, in which case the Plan may be administered by such committee and
references herein to the "Board of Directors" shall be deemed to mean such
committee unless the context otherwise requires) which shall have full power
and authority to interpret the Plan, to establish, amend and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company and to
make all other determinations necessary or advisable for the administration of
the Plan.
3.2. Decisions are Final and Conclusive. The determination of the Board of
Directors (or the applicable committee thereof) as to any question arising
under the Plan, including questions of construction and
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interpretation, shall be final, binding and conclusive upon all persons,
including the Company, its stockholders and persons having any interest in the
Options. No Director shall be liable for any action or determination made in
good faith with respect to the Plan or any options granted hereunder.
4. Eligibility. All Non-Employee Directors are eligible for the grant of
Options.
5. Shares Subject to the Plan.
5.1. Number. The aggregate number of Shares that may be subject to Options
granted under this Plan shall not exceed 300,000, which may be either treasury
Shares or authorized but unissued Shares. If an Option expires or terminates
without being exercised in full, any Shares remaining under such Option shall
again be available for issuance under the Plan. The maximum number of shares
which may be subject to Options shall be adjusted to the extent necessary to
accommodate the adjustments provided for in Section 5.2.
5.2. Adjustment in Capitalization. If there shall be declared and paid a
stock or property dividend or any other distribution by way of dividend, stock
split (including a reverse stock split), or spin-off with respect to the
Shares, or if the Common Stock of the Company shall be converted, exchanged,
reclassified or recapitalized, or if the Shares shall be in any way
substituted for in a merger in which the entity surviving such merger or its
parent is a public company, then to the extent that an Option has not been
exercised the holder thereof shall be entitled upon the future exercise of the
Option to such number and kind of securities or cash or other property,
subject to the terms of the Option, to which the holder would have been
entitled had he or she actually owned the Shares subject to the unexercised
portion of the Option at the time of the occurrence of such dividend, stock
split, spin-off, conversion, exchange, reclassification, recapitalization or
substitution, and the aggregate purchase price upon the future exercise of the
Option shall be the same as if the Shares originally subject to the Option
were being purchased or used to determine the amount of the payment to which
the holder is entitled thereunder. Any fractional shares or securities payable
upon the exercise of the Option as a result of an adjustment pursuant to this
Section 5.2 shall be payable in cash, based upon the fair market value of such
shares or securities at the time of exercise.
5.3 Alternative to Adjustment. The Board of Directors, in its discretion,
may determine that, upon the occurrence of a transaction described in the
preceding section, each Option outstanding hereunder shall terminate within a
specified number of days after notice to the holder, and such holder shall
receive, with respect to each Share subject to such Option, an amount equal to
the excess of the fair market value of such shares immediately prior to the
occurrence of such transaction over the exercise price of such Option. Such
amount shall be payable in cash, in one or more of the kinds of property
payable in such transaction, or in a combination thereof, as the Board of
Directors in its discretion shall determine. The provisions contained in the
immediately preceding sentence shall be inapplicable if the implementation of
such provisions would be deemed a violation of the Securities Exchange Act of
1934, as amended, provided, that in such case the Company nevertheless shall
be entitled to cause such Option to terminate.
5.4 No Adjustment. Except as otherwise expressly provided herein, the
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or
not for fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of Shares subject to Options
theretofore granted or the purchase price per share thereunder.
6. Terms and Conditions of Options.
6.1. Grant of Options. Each Non-Employee Director on February 19, 1997, the
effective date of this amendment and restatement, is granted as of such date
an Option to purchase 5,000 Shares. Each person who becomes a Non-Employee
Director after the effective date of the Plan shall automatically be granted
an Option to purchase 5,000 Shares as of the date such person becomes a Non-
Employee Director. Once each calendar
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year, for years commencing after December 31, 1997, the Board of Directors may
grant to each person who is then a Non-Employee Director an Option to purchase
5,000 Shares, provided that an Option shall not be granted on such date to a
person who became a Non-Employee Director within six months prior thereto. It
is intended, but not required, that this annual grant date shall coincide with
the date during a calendar year that Options are simultaneously granted to
each of the Chief Executive Officer and not less than three other executive
officers of the Company.
6.2. Exercise Price. The exercise price per Share of the Shares to be
purchased pursuant to each Option shall be not less than 100% of the Fair
Market Value of a Share on the day on which the Option is granted.
6.3. Vesting. All Options granted under the Plan shall be fully vested and
exercisable six months and one day after the date of grant.
6.4. Option Agreement. Each Option granted under the Plan shall be evidenced
by a written agreement setting forth the terms under which the Option is
granted.
6.5. Term of Options. All rights to exercise a vested Option shall expire on
the earlier of ten years from the day on which such Option is granted or five
years after the death, disability or termination of the membership of a Non-
Employee Director on the Board of Directors, other than under the
circumstances described in Section 6.7. An Option which is not vested on the
date a Participant's membership on the Board of Directors terminates due to
disability or death or for any other reason shall automatically be canceled
upon the occurrence of such event, unless the Board of Directors determines to
the contrary. In the event of death, the legal representative of a Participant
or Transferee shall have the ability to exercise any vested Options within the
time periods set forth above.
6.6. Retention Requirement. As a condition to the exercise of an Option,
each Participant and Transferee shall agree not to dispose of more than 50% of
any Shares so acquired until the earlier of (A) 10 years from the date of such
exercise or (B) six months after the Participant's membership on the Board of
Directors terminates.
6.7 Cancellation. If a Non-Employee Director is removed or the service of a
Non-Employee Director is terminated as a result of fraud, intentional
misrepresentation, embezzlement, misappropriation of funds or conversion of
assets or opportunities of the Company or any affiliate thereof, any
outstanding Option granted to such Non-Employee Director, whether or not then
vested, shall, to the extent not theretofore exercised, terminate and become
null and void.
6.8 Compliance with Securities Laws. It is a condition to the exercise of
any option that either (i) a Registration Statement under the Securities Act
of 1933, as amended, or any succeeding act (collectively, the "Securities
Act"), with respect to its underlying shares shall be effective and current at
the time of exercise of the option or (ii) in the opinion of counsel to the
Company, there shall be an exemption from registration under the Securities
Act for the issuance of Shares upon such exercise. Nothing herein shall be
construed as requiring the Company to register shares subject to the Plan for
issuance or for resale. In connection with fulfilling the condition set forth
in clause (ii), the Company may require a Participant or Transferee, as a
condition to the exercise of an option, to execute and deliver to the Company
representations and warranties, in form and substance satisfactory to counsel
to the Company, that (A) the Shares to be issued upon the exercise to the
option are being acquired by the Participant or Transferee for his or her own
account, for investment only and not with a view to the resale or distribution
thereof, all within the meaning of the Securities Act, and (B) any subsequent
resale or distribution of Shares by such Non-Employee Director or Transferee
will be made only pursuant to (x) a Registration Statement under the
Securities Act which is effective and current with respect to the Shares being
sold at the time or (y) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the
Participant or Transferee shall, prior to any offer or sale or distribution of
such Shares, provide the Company with a favorable written opinion of counsel,
in form and substance satisfactory to counsel to the Company, as to the
applicability of such exemption to the proposed sale or distribution. The
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Company may endorse such legend or legends upon the certificates for shares,
and may issue instructions to its transfer agent in respect of such shares, as
it determines, in its discretion, to be necessary or appropriate to prevent a
violation of, or to perfect an exemption from, the registration requirements
of the Securities Act.
6.9 Other Conditions. The Company may also require, as a further condition
to the exercise of an Option, in whole or in part, that the Shares underlying
such Option be specifically listed on the securities exchanges on which the
Shares are traded and be registered or qualified under any applicable state
securities laws, and that the consent or approval of any governmental
regulatory body which the Company deems necessary or desirable as a condition
to the exercise of such option or the issue of shares thereunder shall have
been effected or obtained (i) free of any conditions requiring the Company to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction wherein it has not already done so and (ii) free
of any other conditions not customarily imposed by a securities exchange, law
or governmental regulatory body in connection with such listing,
qualifications, consent or approval.
7. Exercise of Options.
7.1. Written Notice. A Non-Employee Director or Transferee who wishes to
exercise an Option, or a portion of an Option, shall give written notice
thereof to any person who has been designated by the Company for the purpose
of receiving the same. The date the Company receives such notice shall be
considered as the date such Option was exercised as to the Shares specified in
such notice.
7.2. Payment. A Non-Employee Director or Transferee who exercises an Option
shall pay to the Company at the date of exercise and prior to the delivery of
the Shares for which the Option is being exercised the aggregate exercise
price of all Shares pursuant to such exercise of the Option. Payment shall be
made by check payable to the order of the Company or Shares duly endorsed over
to the Company (which Shares shall be valued at their Fair Market Value as of
the date preceding the day of such exercise) or any combination of such
methods of payment, which together amount to the full exercise price of the
Shares purchased pursuant to the exercise of the Option; provided, however,
that a holder may not so use any Shares he has acquired pursuant to the
exercise of an Option. Upon the issuance of Shares as a result of the exercise
of an Option, the Participant or Transferee shall pay the Company the amount,
if any, which the Company determines is necessary to satisfy its obligation to
withhold federal, state and local income taxes and other amounts incurred by
reason of the grant or exercise of the Option.
7.3. No Privileges of Stockholder. A Participant or Transferee shall not
have any of the rights or privileges of a stockholder of the Company with
respect to the Shares subject to an Option unless and until such Shares have
been issued and have been duly registered in such person's name.
8. Duration. This Plan shall remain in effect until April 1, 2002, unless
sooner terminated by the Board of Directors. Options theretofore granted may
extend beyond that date in accordance with the provisions of the Plan and such
Options.
9. Transferability of Options. An Option shall only be transferable (i) if
the agreement between the Company and a Non-Employee Director evidencing an
Option so provides, in which event such Option shall only be transferable in
accordance with, and subject to the terms and conditions set forth in, such
agreement, and (ii) by will or, if the Non-Employee Director dies intestate,
by the governing laws of descent and distribution (or, if applicable, pursuant
to a qualified domestic relations order as defined by the Internal Revenue
Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or regulations promulgated thereunder).
Except to such extent, Options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process. Wherever used in this Plan, the term "Transferee" shall mean a person
to whom an Option has been transferred in accordance with this provision.
10. Amendment. The Board of Directors may amend the Plan from time to time.
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11. Compliance with Laws and Regulations. This Plan, the grant and exercise
of Options hereunder and the obligation of the Company to sell and deliver
Shares pursuant to such Options shall be subject to all applicable laws, rules
and regulations, and to any required approvals by any governmental agencies.
12. Governing Law. The Plan and any agreements hereunder shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
without reference to principles of conflict of laws.
13. Effective Date. The Plan is effective as of February 19, 1997, subject
to the approval of the stockholders of the Company.
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EXHIBIT B
AMENDMENT TO 1992 STOCK COMPENSATION PLAN
The second paragraph of the Section titled "Name and General Purpose of
Plan" is hereby amended by restatement to read as follows:
"Effective January 19, 1998, the total number of shares of Common Stock
of the Company reserved and available for issuance under the Plan shall be
increased by 800,000 to 3,500,000 (subject to appropriate adjustment for
any change in the stock due to merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend in excess of
2% or other change in corporation structure). The additional 800,000 shares
are only available for stock option grants under Part A of the Plan. The
maximum number of shares of common stock of the Company with respect to
which a Plan award may be granted to any individual may not exceed 750,000
in any consecutive three-year period. In addition, no more than 750,000 of
such shares are to be issued as Restricted Stock. Such shares may consist
of previously issued shares acquired by the Company, authorized but
unissued shares, or any combination thereof, as determined by the Board of
Directors of the Company."
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GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
J.L. JACKSON and GRAHAM L. ADELMAN, or any of them, with power of
substitution to each, are hereby authorized to represent the undersigned at the
Annual Meeting of Shareholders of GLOBAL INDUSTRIAL TECHNOLOGIES, INC., to be
held at the Horchow Auditorium, Dallas Museum of Art, 1717 North Harwood,
Dallas, Texas, on March 18, 1998 at 10:00 a.m., and to vote the number of shares
which the undersigned would be entitled to vote if personally present on all
matters properly coming before the meeting or any adjournment or postponement
thereof.
WHERE A VOTE IS NOT SPECIFIED, THE PROXIES WILL VOTE THE SHARES
REPRESENTED BY THIS PROXY FOR THE ELECTION OF THE PERSONS NOMINATED TO SERVE AS
DIRECTORS, FOR PROPOSALS 2 AND 3 SET FORTH ON THE REVERSE SIDE, AND IN THEIR
DISCRETION ON ANY OTHER MATTERS PROPERLY COMING BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ELECTION OF" THE PERSONS
NOMINATED TO SERVE AS DIRECTORS AND FOR PROPOSALS 2 AND 3.
(Continued and to be dated and signed on the reverse side).
GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
P.O. BOX 11149
NEW YORK, N.Y. 10203-0149
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW:
1. Election of two Class III FOR all nominees
Directors named below [X]
WITHHOLD AUTHORITY to vote *EXCEPTIONS [X]
for all nominees listed below. [X]
Nominees: David H. Blake and Richard W. Vieser
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDE BELOW.)
*Exceptions ___________________________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
2. Amendment and restatement of the Company's Stock Option Plan for Non-Employee
Directors.
FOR [X] AGAINST [X] ABSTAIN [X]
3. Amendment of the Company's 1992 Stock Compensation Plan.
FOR [X] AGAINST [X] ABSTAIN [X]
Change of Address or Comments Mark Here [X]
The signature on this Proxy should correspond exactly with stockholder's name
as printed to the left. In the case of joint tenancies, co-executors, or
co-trustees, both should sign. Persons signing as Attorney, Executor,
Administrator, Trustee or Guardian should give their full title.
Dated:___________________________________, 1998
_______________________________________________
Signature
_______________________________________________
Signature
VOTE MUST BE INDICATED [X] IN BLACK OR BLUE INK.
(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE.)
