<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
AZTEC MANUFACTURING CO.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
AZTEC MANUFACTURING CO.
400 NORTH TARRANT . P.O. BOX 668
CROWLEY, TEXAS 76036
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Aztec Manufacturing Co.:
The Annual Meeting of the Shareholders of AZTEC MANUFACTURING CO. (the
"Company") will be held at the Petroleum Club in the Derrick I Room on the 39th
floor of the Continental Plaza, 777 Main Street, Fort Worth, Texas, on the 14th
day of July, 1998, at 10:00 a.m. for the purpose of considering and acting upon
the following matters:
1. ELECTION OF DIRECTORS. To elect three directors for a term of three years.
2. RATIFICATION OF APPOINTMENT OF AUDITORS. Ratification of the appointment
of Ernst & Young LLP as auditors for the Company for its fiscal year
ending February 28, 1999.
3. APPROVAL OF THE 1998 INCENTIVE STOCK OPTION PLAN. To approve the 1998
Incentive Stock Option Plan.
4. APPROVAL OF THE 1998 NONSTATUTORY STOCK OPTION PLAN. To approve the 1998
Nonstatutory Stock Option Plan.
5. APPROVAL OF THE 1997 NONSTATUTORY STOCK OPTION GRANTS. To approve the 1997
Nonstatutory Stock Option Grants.
6. OTHER BUSINESS. To transact such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
Information regarding the matters to be acted upon at the meeting is contained
in the Proxy Statement attached to this Notice. As of the date of this Notice,
management does not know of any other business to be presented at the meeting.
Only shareholders of record at the close of business on the 25th day of May
1998, will be entitled to notice of or to vote at the meeting or any adjournment
or adjournments thereof. A copy of the Annual Report to Shareholders for the
fiscal year ended February 28, 1998, is enclosed herewith.
WE HOPE YOU WILL BE ABLE TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
PLAN TO ATTEND, PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
BY ORDER OF THE BOARD OF DIRECTORS
Sam Rosen, Secretary
Crowley, Texas
June 1, 1998
<PAGE>
AZTEC MANUFACTURING CO.
P. O. BOX 668
CROWLEY, TEXAS 76036
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 14, 1998
This Proxy Statement is furnished in connection with the solicitation of proxies
by the board of directors of Aztec Manufacturing Co. (the "Company") for use at
the regular Annual Meeting of the Shareholders of the Company to be held at the
Petroleum Club in the Derrick I Room on the 39th floor of the Continental Plaza,
777 Main Street, Fort Worth, Texas, on the 14th day of July, 1998, at 10:00
a.m., and at any adjournment or adjournments thereof. This Proxy Statement and
the accompanying proxy are being mailed on or about June 1, 1998, to the
Shareholders of the Company.
GENERAL INFORMATION
- -------------------
At the close of business on the 25th day of May, 1998, the record date for
determination of shareholders entitled to notice of and to vote at the meeting,
there were outstanding 5,927,413 shares of Common Stock, $1.00 par value, of the
Company (the "Common Stock"). The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum at the meeting. All shares represented at the meeting in
person or by proxy shall be counted in determining the presence of a quorum.
Each holder of shares of Common Stock will be entitled to one vote, in person or
by proxy, for each share of Common Stock of the Company owned of record at the
close of business on May 25, 1998. Cumulative voting for directors is not
permitted. Directors are elected by plurality vote and, therefore, the three
nominees receiving the highest number of affirmative votes shall be elected as
directors provided a quorum is present. Abstentions and broker non-votes will
not be considered part of the voting power present with respect to any matter on
which such shares so acted which has the effect of reducing the number of shares
voting affirmatively that is required to approve a matter requiring a majority
vote. Therefore, assuming a quorum is present, if more shares vote "for"
approval of the appointment of the independent auditors than vote "against,"
this matter will pass. All shares of Common Stock represented by a valid proxy
will be voted. A proxy may be revoked at any time before it is voted by filing
with the Secretary of the Company a written revocation thereof or a duly
executed proxy bearing a later date.
The cost of preparing, assembling and mailing the Notice of Annual Meeting of
Shareholders, the Proxy Statement and the accompanying proxy will be borne by
the Company. In addition to solicitation of proxies by mail, certain officers
and employees of the Company, without additional compensation for such services,
may solicit proxies by telephone, fax or personal contact. The Company will
also supply brokerage firms and other custodians, nominees, and fiduciaries with
such number of proxy materials as they may require for mailing to beneficial
owners and will reimburse them for their reasonable expenses in connection
therewith.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
- ----------------------------------------------
Meetings of the Board of Directors are held regularly each month, including a
meeting following the conclusion of the Annual Meeting of Shareholders. During
the fiscal year ended February 28, 1998, there were twelve (12) regular meetings
and one (1) special meeting of the Board of Directors. For the fiscal year
ended February 28, 1998, each non-employee director was paid a monthly retainer
of $900 and a fee of $400 for each meeting of the Board of Directors attended.
Mr. Martin, as an employee director, was paid a monthly retainer of $500 and a
fee of $200 for each meeting of the Board of Directors attended. Each committee
member was paid a fee of $400 for each meeting of a committee attended.
Each of the current directors of the Company attended more than 75 percent of
the aggregate of (i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by all committees of the board on which
he served, held during the fiscal year ended February 28, 1998, other than Mr.
Schumacher who due to a temporary illness attended 57 percent of all such
meetings.
The Company has an Audit Committee. The functions of the Audit Committee are to
(i) meet with the independent auditors to review the audit and its results, as
well as to review internal controls of the Company and (ii) make recommendations
to the Board of Directors as to the engagement or discharge of independent
auditors. The members of
-1-
<PAGE>
the Audit Committee are Robert H. Johnson, Chairman, W. C. Walker and R. J.
Schumacher. During the fiscal year ended February 28, 1998, that committee held
one (1) meeting. The Company has a Compensation Committee. The functions of the
Compensation Committee are to (i) make recommendations to the Board of Directors
of remuneration arrangements for directors and senior management and (ii)
administer the Company's incentive stock option plans, which includes selecting
the executives and other key personnel of the Company eligible to participate
thereunder. The members of the Compensation Committee are Martin C. Bowen and
Dr. H. Kirk Downey. During the fiscal year ended February 28, 1998, that
committee held two (2) meetings. The Company has a Nonstatutory Stock Option
Committee which administers the Company's nonstatutory stock option plans. The
members of this committee are L. C. Martin and Dana L. Perry. During the fiscal
year ended February 28, 1998, that committee held two (2) meetings. The Company
does not have a nominating committee.
SECURITY OWNERSHIP OF PRINCIPAL BENEFICIAL OWNERS
- -------------------------------------------------
To the best knowledge of the Company, the only beneficial owners of over 5
percent of the outstanding shares of Common Stock of the Company as of May 4,
1998 were as follows:
<TABLE>
<CAPTION>
TITLE OF CLASS NAME & ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
-------------- ---------------------------------- ---------------- ----------------
<S> <C> <C> <C>
Common Stock FMR Corp. 560,500 (1) 9.5%
$1.00 par value 82 Devonshire Street
Boston, MA 02109
</TABLE>
(1) Based on a Schedule 13G furnished by Fidelity Management & Research Company
("Fidelity"), a wholly-owned subsidiary of FMR Corp. and an investment
adviser, Fidelity is deemed to have beneficial ownership of 560,500 shares
of Aztec Manufacturing Co. Common Stock as a result of acting as investment
adviser to several investment companies. The ownership of one investment
company, Fidelity Low-Priced Stock Fund, amounted to 560,500 shares of the
Common Stock outstanding. Fidelity Low-Priced Stock Fund has its principal
business office at 82 Devonshire Street, Boston, Massachusetts, 02109.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
- --------------------------------------
The Bylaws of the Company provide for nine directors and classify the Board of
Directors into three classes, each class consisting of three directors, the
members of which serve for three years. Of the directors listed under
"DIRECTORS OF THE COMPANY," the terms of office of L. C. Martin, R.J.
Schumacher, and Dr. H. Kirk Downey expire at the 1998 Annual Meeting of
Shareholders. The Board of Directors nominated and recommends the reelection of
Messrs. L. C. Martin, R.J. Schumacher, and Dr. H. Kirk Downey for a three-year
term expiring at the 2001 Annual Meeting of Shareholders.
Mr. John G. Richards retired as a director of the Company on Nov. 13, 1997. Mr.
Richards is now an advisory director of the Company. As an advisory director,
Mr. Richards does not have voting authority. The Bylaws of the Company provide
that any vacancy in the Board is to be filled by the remaining directors with
the newly elected director serving the unexpired term of his predecessor. Mr.
Richards term would have expired in 1999. The Board of Directors of the Company
elected at its Nov. 13, 1997, meeting Mr. Kevern R. Joyce to fill the unexpired
term of Mr. Richards.
All of the nominees are now directors of the Company. All of the nominees have
consented to serve if elected. If for any unforeseen reason a nominee would be
unable to serve if elected, the persons named in the accompanying proxy may
exercise their discretion to vote for a substitute nominee selected by the Board
of Directors. However, the Board of Directors has no reason to anticipate that
any of the nominees will not be able to serve, if elected.
The Board of Directors recommends that Shareholders vote "FOR" the election of
the nominees for directors.
PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------
Subject to ratification by the Shareholders, the Board of Directors has selected
the firm of Ernst & Young LLP to audit the financial statements of the Company
for the fiscal year ending February 28, 1999. This firm of certified public
accountants or its predecessor has acted as independent auditors for the Company
and its subsidiaries since 1976.
-2-
<PAGE>
Representatives of Ernst & Young LLP will be present at the 1998 Annual Meeting
of Shareholders and will be available to respond to appropriate questions.
The Board of Directors recommends that Shareholders vote "FOR" the approval of
the appointment of Ernst & Young LLP.
DIRECTORS OF THE COMPANY
- ------------------------
The following table sets forth certain information as to the number of shares of
Common Stock of the Company beneficially owned as of May 4, 1998, by (i) each
current director and (ii) all of the current executive officers and directors of
the Company as a group. Except as otherwise indicated, each of the persons
named below has sole voting and investment power with respect to the shares of
Common Stock beneficially owned by that person.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION FOR PAST COMMON STOCK OF THE % OF
FIVE YEARS; POSITIONS AND DIRECTOR COMPANY BENEFICIALLY CLASS
DIRECTORS AGE OFFICES WITH THE COMPANY SINCE OTHER DIRECTORSHIPS OWNED AT MAY 4, 1998 (1)
- --------- --- --------------------------------- ----- ------------------- -------------------- -----
<S> <C> <C> <C> <C> <C> <C>
L.C. Martin (2) 72 Chairman of the Board, President 1958 None. 188,765 (4) 3.2%
and Chief Executive Officer of the
Company
Martin C. Bowen (14) 54 Vice President & CFO of Fine Line 1993 Kevco, Inc. (3) 3,400 (6) *
Inc.
Kevern R. Joyce (15) 51 President, CEO and Chairman of TNP 1997 TNP Enterprises, Inc. -0- (7) *
Enterprises, Inc. (1994-Present) (3)
Senior Vice President and CEO of
Tuscon Electric Power Co.
(19921994)
Sam Rosen (8) 62 Partner in the law firm of 1996 Gainsco, Inc. (3) 8,445 (9) *
Shannon, Gracey, Ratliff & Miller,
L.L.P. , Secretary of the Company
Robert H. Johnson (5) 73 Financial Consultant; Certified 1965 None. 3,100 *
Public Accountant
Dana L. Perry (2) 49 Vice President of Finance; Chief 1992 None. 100,200 (10) 1.7%
Financial Officer of the Company;
and Assistant Secretary of the
Company
R.J. Schumacher (5) 69 CEO and Chairman of Pride Refining, 1986 None. 17,885 (11) *
Inc. (1989-1994); President and CEO
of Texland Petroleum, Inc.
(1973-Present)
W.C. Walker (5) 74 Management Consultant (1989-Present) 1986 None. 29,241 (12) *
Dr. H. Kirk Downey (14) 55 Dean of the M.J. Neeley School of 1992 Harris Methodist Health -0- *
Business and a Professor of Plan
Management at Texas Christian LKCM Fund
University
All Current Directors and Executive Officers as a Group (11 Persons) 371,318 (13) 6.2%
</TABLE>
*Less than one percent (1%)
-3-
<PAGE>
(1) The percentage is calculated for each individual by using as the
denominator the total shares of Common Stock outstanding at the close of
business on May 4, 1998 (5,923,828 shares), plus the shares of Common Stock
such individual has the right to acquire within sixty (60) days of May 4,
1998, pursuant to the exercise of stock options granted by the Company.
(2) Member of the Nonstatutory Stock Option Committee.
(3) A publicly owned corporation.
(4) Includes 35,273 shares of Common Stock which Mr. Martin has the right to
acquire within 60 days of May 4, 1998, pursuant to the exercise of stock
options granted under the 1986 and 1991 Incentive Stock Option Plans of the
Company.
(5) Member of the Audit Committee.
(6) Includes 3,400 shares of Common Stock which Mr. Bowen has the right to
acquire within 60 days of May 4, 1998, pursuant to the exercise of stock
options granted under the 1991 Nonstatutory Stock Option Plan of the
Company.
(7) Includes -0- shares Mr. Joyce has the right to acquire within sixty (60)
days of May 4, 1998, pursuant to the exercise of stock options granted
under the 1991 Nonstatutory Stock Option Plan.
(8) Mr. Rosen is a Partner in the law firm of Shannon, Gracey, Ratliff &
Miller, L.L.P., which has been general counsel to the Company since 1968.
The Company proposes to retain said law firm as its general counsel during
the current fiscal year.
(9) Includes 4,200 shares Mr. Rosen has the right to acquire within sixty (60)
days of May 4, 1998, pursuant to the exercise of stock options granted 1991
Nonstatutory Stock Option Plan.
(10) Includes 12,427 shares of Common Stock which Mr. Perry has the right to
acquire within 60 days of May 4, 1998, pursuant to the exercise of stock
options granted under the 1986 and 1991 Incentive Stock Option Plans.
(11) Includes 16,012 shares Mr. Schumacher has the right to acquire within sixty
(60) days of May 4, 1998, pursuant to the exercise of stock options granted
under the 1988 and 1991 Nonstatutory Stock Option Plans.
(12) Includes 21,524 shares Mr. Walker has the right to acquire within sixty
(60) days of May 4, 1998, pursuant to the exercise of stock options granted
under the 1988 and 1991 Nonstatutory Stock Option Plans. All 7,717 shares
of Common Stock currently owned are held jointly by Mr. Walker and his
wife.
(13) The percentage is calculated by using total shares of Common Stock
outstanding at the close of business on May 4, 1998 (5,923,828) plus 53,835
shares of Common Stock that executive officers of the Company have the
right to acquire within 60 days of May 4, 1998, pursuant to the exercise of
stock options granted under the 1986 and 1991 Incentive Stock Option Plans
of the Company plus 45,136 shares of Common Stock that directors have the
right to acquire within sixty (60) days of May 4, 1998, pursuant to the
exercise of stock options granted under the 1988 and 1991 Nonstatutory
Stock Option Plans.
(14) Member of Compensation Committee.
(15) Mr. Joyce was elected to the Board of Directors on November 13, 1997, to
replace Mr. John G. Richards who retired from the board on November 13,
1997.
No family relationship exists between any director or executive officer of the
Company and any other director or executive officer of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934. Section
16(a) of the Securities Exchange Act of 1934 requires executive officers,
directors and persons who beneficially own more than ten percent of the
Company's stock to file initial reports of ownership and reports of changes of
ownership with the Securities and Exchange Commission. Copies of such reports
are required to be furnished to the Company.
Based solely on a review of such forms furnished to the Company and certain
written representations from the executive officers and directors, the Company
believes that all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than 10% beneficial owners were complied with on
a timely basis, except that Mr. Martin Bowen, Director reported a sale of Aztec
stock on Form 5 instead of on a current report on Form 4.
-4-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
- ----------------------------------------
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION. Through fiscal
periods ended February 28, 1998, compensation for the chief executive officer
and senior executives has been approved by the full Board of Directors upon the
recommendations of the Compensation Committee. This Committee is composed of
two outside directors, none of whom perform any services to or receive any fees
from the Company in any capacity other than as director.
It has been the philosophy and the practice of the Committee to relate executive
compensation to the profitability of the Company. The compensation program
provides for market-driven salary ranges based on job responsibilities and
influences on Company performance with a balanced incentive compensation element
based on profit performance of the Company. This is accomplished through a two-
tiered structure of measuring the compensation rewards as follows:
1. Base Salary - The Committee reviews and approves salaries for the chief
executive cfficer and the other executive officers on an annual basis.
Recommended base salaries are reviewed and set based on information derived
from comparative group reviews and national surveys of compensation data,
as well as evaluations of the individual executives' positions and expected
future performance and contribution. In making salary decisions, the
Committee exercises its discretion and judgment with no specific formula
being applied to determine salary levels.
2. Bonus - The purpose of the bonus program is to promote the Company's goal
of increasing shareholder value through sustainable internal growth, high
operating efficiencies, strategic acquisitions, and attracting highly
motivated, results-oriented executive officers. A portion of executive
compensation was calculated using a formula reflecting growth in pretax
income of the Company in the case of the chief executive officer and
certain executive officers or a particular segment of the Company in the
case of an executive officer who is responsible for such segment. Mr.
Martin's and Mr. Perry's bonus base is fixed at 2.5% and 1% of the yearly
pretax profits of the Company, respectively. Mr. Wright's and Mr. Skowron's
bonus base is fixed at 1.25% of the yearly pretax profits of the
Galvanizing Segment and Electrical Segment, respectively. The maximum and
minimum bonus is set at 150% and 50% of the bonus base, respectively. When
the Company or a segment exceeds prior year performance, the executives are
rewarded through increased bonuses up to a maximum of 150% of his bonus
base. Conversely, if the Company or segment falls short of the prior year's
performance, the executive officers receive a reduced bonus. If the current
years performance falls below 50% of the prior year, the executive officers
receive no bonus.
Additionally, the executive officers participate, along with other employees, in
the Company Profit Sharing Plan, the annual contributions to which are
dramatically affected by profitability of the Company, and the Company Stock
Option Plans.
Section 162(m) of the Internal Revenue Code of 1986, as amended, which was
enacted in 1993, imposes a $1 million limit on the amount of compensation that
will be deductible by the Company with respect to the chief executive officer
and the four other most highly compensated executive officers. Performance
based compensation that meets certain requirements will not be subject to the
deduction limit. The Committee has reviewed the impact of Section 162(m) on the
Company and believes it is unlikely that the compensation paid to any executive
officer during the fiscal year ending February 28, 1999, will exceed the limit.
The Committee will continue to monitor the impact of the Section 162(m) limit
and to assess alternatives for avoiding any loss of tax deductions in future
years.
The role of the Compensation Committee also includes a full review of the
compensation package of the five highest paid executive officers, whether or not
their salary and bonuses exceed $100,000. This review is then presented and
recommended to the full board of nine directors, seven of whom are independent
directors.
MEMBERS OF THE COMPENSATION COMMITTEE
Martin C. Bowen
Dr. H. Kirk Downey
-5-
<PAGE>
SUMMARY COMPENSATION TABLE. The following information summarizes annual and
long-term compensation for services in all capacities to the Company for the
fiscal years ended February 28, 1998, February 28, 1997, and February 29, 1996,
of the chief executive officer and the other most highly compensated executive
officers of the Company whose total annual salary and bonus exceeds $100,000
(the "Named Executives").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
==========================
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUTS
| | |
OTHER ANNUAL | RESTRICTED | LONG-TERM | ALL OTHER
NAME AND YEAR COMPENSATION | STOCK AWARD(S) OPTIONS/ | INCENTIVE | COMPENSATION
PRINCIPAL POSITION ENDING SALARY ($) BONUS($) ($) | ($) SARS (#) | PAYOUTS ($) | ($)
- ------------------ ------ ---------- -------- ------------- | -------------- --------- | ----------- | ------------
<S> <C> <C> <C> <C> | <C> <C> | <C> | <C>
L.C. Martin, Chairman, 1998 250,000 317,468 0 | 0 16,299 | 0 | 25,494 (2)
President, and Chief 1997 250,000 214,919 0 | 0 0 | 0 | 23,060 (3)
Executive Officer 1996 250,000 106,443 0 | 0 0 | 0 | 17,937 (4)
| | |
D.L. Perry, Vice 1998 75,000 126,987 0 | 0 5,840 | 0 | 16,894 (5)
President of Finance, 1997 75,000 85,968 0 | 0 0 | 0 | 12,979 (5)
Chief Financial Officer, 1996 75,000 36,543 0 | 0 0 | 0 | 6,007 (5)
and Assistant Secretary | | |
| | |
F. L. Wright, Jr. 1998 85,200 78,818 0 | 0 5,685 | 0 | 16,894 (6)
Senior Vice President 1997 77,550 84,522 0 | 0 0 | 0 | 14,460 (6)
Galvanizing Segment 1996 75,000 65,053 0 | 0 0 | 0 | 8,301 (6)
| | |
R.T. Skowron, Vice 1998 82,000 56,594 0 | 0 0 | 0 | 0
President Electrical 1997 0 0 0 | 0 0 | 0 | 0
Products Segment (1) 1996 0 0 0 | 0 0 | 0 | 0
</TABLE>
(1) Mr. Skowron joined the Company on May 1, 1997.
(2) The amount of $25,494 includes 1998 Director Fees of $8,600 and 1998
contribution made to Mr. Martin's account in Aztec's Profit Sharing Plan of
$16,894.
(3) The amount of $23,060 includes 1997 Director fees of $8,600 and 1997
contribution made to Mr. Martin's account in Aztec's Profit Sharing Plan of
$14,460.
(4) The amount of $17,937 includes 1996 Director Fees of $8,600 and 1996
contribution made to Mr. Martin's account in Aztec's Profit Sharing Plan of
$9,337.
(5) This amount represents the contribution made to Mr. Perry's account in
Aztec's Profit Sharing Plan.
(6) This amount represents the contribution made to Mr. Wright's account in
Aztec's Profit Sharing Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR. The following table sets forth the
number of shares of Common Stock subject to options with respect to Common Stock
granted to the Company's Chief Executive Officer and the Named Executives during
the fiscal year ending February 28, 1998. The Company has no SARs.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
=====================================
% OF TOTAL POTENTIAL REALIZED VALUE AT
NUMBER OF OPTIONS/ EXERCISE OR ASSUMED ANNUAL RATES OF RATES OF STOCK
OPTIONS/ SARS GRANTED BASE PRICE PRICE APPRECIATION FOR OPTION
SARS GRANTED TO EMPLOYEES ($ PER SHARE) EXPIRATION TERM ($)
NAME (a) IN FISCAL YEAR (b) DATE 5% (c) 10% (c)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
L.C. Martin 16,299 7% 11.125 5/20/02 50,120 110,752
D.L. Perry 5,840 2% 11.125 5/20/02 17,958 39,683
F.L. Wright 5,685 2% 11.125 5/20/02 17,481 38,629
</TABLE>
(a) Options granted are immediately exercisable and are for a term of 5 years,
subject to earlier termination related to termination of employment.
(b) The option above was granted at market value at date of grant.
(c) These columns reflect the potential realizable value of each grant assuming
the market value of the Company's stock appreciates at 5 percent and 10
percent, compounded annually, from the date of grant over the term of the
option. There is no assurance that the actual stock price appreciation over
the 5 year option term will be at the assumed 5 percent or 10 percent
levels or at any other level. Unless the market price of the stock does in
fact
-6-
<PAGE>
appreciate over the option term, no value will be realized from the option
grants. These calculations are based on requirements promulgated by the
Securities Exchange Commission and do not reflect the Company's estimate of
future price growth.
OPTIONS EXERCISED AND YEAR END VALUE TABLE. The following table sets forth
certain information regarding the options exercised and the year end value of
options held by the Named Executives during the fiscal year ending February 28,
1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
=================================
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES ACQUIRED OPTIONS AT FY-END (#) MONEY OPTIONS AT FY-END ($)
NAME ON EXERCISE (#) VALUE REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
-------- --------------- ------------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
L. C. Martin 0 0 35,723 -0- 228,137 -0-
D. L. Perry 0 0 12,427 -0- 78,225 -0-
F. L. Wright, Jr. 5,987 99,160 5,685 -0- 15,633 -0-
R. T. Skowron 0 0 -0- -0- -0- -0-
</TABLE>
CHANGE IN CONTROL AGREEMENT. The Company has entered into a change in control
agreement with Mr. L. C. Martin, the president and chief executive officer of
the Company. The change in control agreement provides for the payment of
certain benefits upon the occurrence of a change in control of the Company. A
"change in control of the Company" includes the acquisition by any person of 50
percent or more of the shares of Common Stock, a merger or consolidation of the
Company in which the Company does not survive as an independent public company,
a sale of all or substantially all of the assets of the Company, or a
liquidation or dissolution of the Company.
Under the change in control agreement, if Mr. Martin remains in the employ of
the Company for a period of at least three months immediately following the date
of occurrence of a change in control of the Company, he will be entitled to
receive a lump sum payment from the Company within five days after the
expiration of the three-month period, regardless of whether he continues in the
employ of the Company after the expiration of the three-month period (the
"Change in Control Payment"). The change in control agreement provides for the
payment of the Change in Control Payment of $750,000 in the event of any change
in control of the Company, whether or not such change in control is approved by
the Board of Directors and/or Shareholders of the Company. Additionally, if
during the three-month period Mr. Martin is terminated as a result of death or
total disability or for any other reason whatsoever by the Company, he will be
entitled to receive, in addition to the Change in Control Payment provided
above, his full base salary through the date of termination of his employment,
plus any other amounts to which he would be entitled under any compensation plan
of the Company. However, if the employment of Mr. Martin during the three-
month period is terminated by him for any reason other than as a result of his
death or total disability or voluntary termination for good reason as defined in
the agreement, he would be entitled to his full base salary through the date of
termination of his employment, plus any other amounts to which he would be
entitled under any compensation plan of the Company, but would not be entitled
to the Change in Control Payment provided above.
BUY-SELL AND TERMINATION AGREEMENT. During fiscal 1994 the Company entered into
a "Buy-Sell and Termination Agreement" (the "Agreement") with Mr. L. C. Martin,
the president and chief executive officer of the Company. The Agreement
provides that the proceeds from a $1 million dollar life insurance policy on Mr.
Martin be used to acquire (from the executive's wife or estate) the number of
shares of Company Common Stock which could be purchased in the event the
executive dies while employed by the Company. The purchase price per share is
to be the market value of the stock on the day before the date of death. Upon
termination (other than for "just cause") of employment from the Company prior
to death, the Company will convey all rights in the insurance policy to the
executive, including cash surrender value. The Company recorded a deferred
liability and corresponding charge to expense in the amount of $246,000 during
fiscal 1994. The deferred compensation amount is equivalent to the cash
surrender value of the insurance policy and amounted to $276,730 at February 28,
1998.
Under the "Buy-Sell and Termination Agreement", the Company agrees to maintain a
whole life insurance policy in the face amount of $1 million on the life of Mr.
Martin previously acquired by the Company (the "Policy"). The Company shall be
the owner and direct beneficiary of the Policy and shall be solely responsible
for the payment of any and all premiums required to be paid to keep the Policy
in effect. Within 180 days of the death of Mr. Martin, if Mr. Martin was at
-7-
<PAGE>
the time of his death employed by the Company, Mrs. Martin or the estate, heirs,
legal representatives, successors or beneficiaries of Mr. Martin shall tender to
the Company for sale, transfer or conveyance to the Company a number of shares
equal in value to the proceeds received by the Company from the Policy. Upon the
tender of the shares of the Company, the Company shall purchase the shares with
the proceeds received by the Company under the policy. For purposes of this
Agreement, the value of the shares to be sold, assigned and conveyed to the
Company as provided for herein shall be determined based on the closing price
per share of the Common Stock of the Company as traded on the New York Stock
Exchange on the day before the date of death of Mr. Martin. Upon the termination
of employment of Mr. Martin from the Company for any reason other than "Just
Causes", the Company hereby agrees to assign and convey all rights and title of
the Company in the Policy, including any cash surrender value in the Policy, to
Mr. Martin. No shares shall be transferred to the Company in consideration of
the assignment and conveyance of the Policy to Mr. Martin. For purposes of this
Agreement, "Just Cause" shall mean Mr. Martin willfully and intentionally fails
to substantially perform his duties as an officer of the Company, or Mr. Martin
has committed an illegal act (other than minor traffic violations or similar
acts) in connection with his employment that could reasonably be expected to
materially adversely affect the Company. If Mr. Martin is terminated for "Just
Cause," the Company shall be under no obligation to assign and convey the Policy
to Mr. Martin.
STOCK PRICE PERFORMANCE GRAPH. The following graph illustrates the five-year
cumulative total returns on investments in Aztec Manufacturing Co., the CRSP
Index for NYSE Stock Market (U.S. Companies) and the CRSP Index for NYSE Stocks
(SIC 5000-5099 US Companies). Aztec is listed on the New York Stock Exchange
and is engaged in multiple industries. The shareholder return shown below is
not necessarily indicative of future performance. Total return, as shown,
assumes $100 invested on February 28, 1993, in shares of Aztec Manufacturing Co.
and each index, all with cash dividends reinvested. The calculations exclude
trading commissions and taxes.
FIVE YEAR-CUMULATIVE TOTAL RETURN
VALUE OF $100 INVESTED ON FEBRUARY 28, 1993
For Fiscal Year Ended on the Last Day of February
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
2/93 2/94 2/95 2/96 2/97 2/98
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Aztec Manufacturing Co. 100.0 233.8 156.4 173.4 346.9 520.0
CRSP Index for NYSE Stock Market (US Companies) 100.0 108.7 115.0 153.2 188.7 252.4
CRSP Index for NYSE Stocks (SIC 5000-5099 US Companies) 100.0 125.4 119.4 138.7 156.2 204.1
Wholesale trade - durable goods
</TABLE>
-8-
<PAGE>
PROPOSAL NO. 3: 1998 INCENTIVE STOCK OPTION PLAN
- ------------------------------------------------
On April 21, 1998, the board of directors of the Company adopted, subject to the
approval of the shareholders of the Company, the 1998 Incentive Stock Option
Plan of Aztec Manufacturing Co. (the "1998 ISO Plan"). Options granted under
the 1998 ISO Plan are intended to qualify as "incentive stock options" under
Section 422 of the Internal Revenue Code of 1986, as amended, (the "Code").
A summary of the material provisions of the 1998 ISO Plan is set out below. The
following summary is qualified in its entirety by reference to the full text of
the 1998 ISO Plan, a copy of which is attached as Exhibit A to this Proxy
Statement.
The purpose of the 1998 ISO Plan is to attract capable employees and provide an
incentive for employees to remain in the employ of the Company and its
subsidiaries. All executives and other key personnel of the Company who are
active full time salaried employees of the Company and its subsidiaries are
eligible to participate in the 1998 ISO Plan. Members of the board of directors
who are not employed by the Company or its subsidiaries on a full time basis are
not eligible to participate in the 1998 ISO Plan. Approximately 150 persons
will be eligible to participate in the 1998 ISO Plan.
The 1998 ISO Plan is administered by the Compensation Committee, a committee
composed of at least two (2) non-employee directors of the board of directors of
the Company (the "Committee"). The Committee has discretion to select the
eligible employees to whom options shall be granted under the 1998 ISO Plan and
to determine the number of shares of Common Stock subject to options granted
under the 1998 ISO plan, as well as the term during which such options may be
exercised and the manner of exercise thereof.
Subject to provisions for proportionate adjustment occasioned by changes in the
Company's capital structure, a total of 750,000 shares of Common Stock of the
Company has been set aside under the 1998 ISO Plan for use upon exercise of
options granted thereunder. As of the date hereof, no options to purchase
Common Stock have been granted by the Committee under the 1998 ISO Plan. All
options under the 1998 ISO Plan must be granted on or before ten years from the
effective date of the 1998 ISO Plan. The 1998 ISO Plan will be effective upon
shareholder approval.
No options may be exercised under the 1998 ISO Plan without compliance with
applicable securities laws. It is contemplated by management of the Company
that the options and the shares of Common Stock called for by options granted
under the 1998 ISO Plan will be registered by the Company under the federal
securities laws during the latter half of 1998.
The maximum term of an option that may be granted under the 1998 ISO Plan is ten
(10) years, except that with respect to participants, if any, under the 1998 ISO
Plan who own more than ten percent (10%) of the Common Stock of the Company on
the date the option is granted, the maximum term is five (5) years.
The price at which shares of Common Stock of the Company may be purchased
pursuant to the exercise of options granted under the 1998 ISO Plan shall not be
less than one hundred percent (100%) of the fair market value of the shares of
Common Stock underlying the options on the date such options are granted. With
respect to participants, if any, under the 1998 ISO Plan who own more than ten
percent (10%) of the shares of Common Stock of the Company on the date the
option is granted, the price at which shares of Common Stock of the Company may
be purchased pursuant to the exercise of options granted under the 1998 ISO Plan
shall not be less that one hundred ten percent (110%) of the fair market value
of the shares of Common Stock underlying the options on the date such options
are granted.
The aggregate fair market value (determined at the time of grant) of shares of
Common Stock underlying incentive stock options exercisable for the first time
by an employee during any calendar year cannot exceed $100,000.
Options granted under the 1998 ISO Plan are subject to earlier termination upon
the death, disability, retirement or termination of employment of the
participant. Options granted under the 1998 ISO Plan are exercisable over such
period of time as may be determined by the Committee. Such options are not
transferable, except by will or by the laws of descent and distribution and may
only be exercised for a period of one year following the date of death or
disability, to the extent the options were exercisable at the date of death or
disability, as the case may be. A participant must remain an employee of the
Company as a condition to his right to exercise options granted under the 1998
ISO Plan. However, upon a participant's termination of employment for any
reason, other than gross or willful misconduct or death or disability, such
participant has a right to exercise an option granted to such participant under
the 1998 ISO Plan during the three month period immediately following the date
of termination of employment.
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<PAGE>
The following is a summary of the principal U.S. federal income tax consequences
under current federal income tax laws relating to awards under to the 1998 ISO
Plan. This summary is not intended to be exhaustive and, among other things,
does not describe state, local or foreign tax consequences. Participants are
urged to consult their own tax advisors as to the precise tax consequences of
participation in such plan. Under applicable provisions of the Code as now in
effect: (a) an "incentive stock option" results in no taxable income to
participant or deduction to the Company at the time it is granted; (b) upon
exercise of the option, no taxable income results to the participant from the
receipt of the shares of Common Stock thereby acquired and no deduction is
allowed to the Company; the exercise of an incentive stock option will result in
an adjustment in determining a participant's alternative minimum tax; (c) if,
after exercise of such an option, the participant does not dispose of the shares
of Common Stock thereby acquired within two (2) years of the date of grant of
the option or within one (1) year of the date of exercise of the option, he will
be entitled to treat any gain realized upon disposition of the shares of Common
Stock as long-term capital gain in the year of sale; and (d) if so held by the
participant, as described in clause (c) above, the Company will not be entitled
to any deduction on account of the grant or exercise of the option. However, if
the participant disposes of the shares of Common Stock within two (2) years of
the date of grant of the option or within one (1) year of the date of exercise
of the option, he will be required to treat any gain realized upon disposition
of the shares of Common Stock as ordinary income in the year of sale equal to
the difference between the option price and the fair market value of the stock
on the date of exercise. The balance of the participant's gain on the
disposition of the shares will be treated as a long-term capital gain, provided
the holding period applicable to long-term capital assets is satisfied. The
Company will be entitled to a deduction to the extent the participant recognizes
ordinary income.
The affirmative vote of the holders of a majority of the total number of shares
represented and voting at the Shareholder's Meeting, assuming a quorum is
present, is required to approve the adoption of the 1998 Incentive Stock Option
Plan of the Company.
The Board of Directors recommends that Shareholders vote "FOR" the approval of
the 1998 Incentive Stock Option Plan of the Company.
PROPOSAL NO. 4: 1998 NONSTATUTORY STOCK OPTION PLAN
- ----------------------------------------------------
On April 21, 1998, the Board of Directors unanimously adopted, subject to
approval by Shareholders, the 1998 Nonstatutory Stock Option Plan of Aztec
Manufacturing Co. (the "1998 NSO Plan").
A summary of the material provisions of the 1998 NSO Plan is set out below. The
following summary is qualified in its entirety by reference to the full text of
the 1998 NSO Plan, a copy of which is attached as Exhibit B to this Proxy
Statement.
The purpose of the 1998 NSO Plan is to encourage stock ownership by executive
officers and non-employee directors of the Company, to provide an incentive for
executive officers and non-employee directors to expand and improve the profits
and prosperity of the Company, and to assist the Company in attracting and
retaining executive officers and non-employee directors through the grant of
options to purchase shares of the Company's Common Stock. Only executive
officers and non-employee directors of the Company are eligible to participate
in the 1998 NSO Plan.
The executive officers of the Company at present are: L.C. Martin, Dana L.
Perry, F.L. Wright, Jr., Richard Skowron and Sam Rosen. The outside, non-
employee directors at the present are: Robert H. Johnson, R. J. Schumacher, W.C.
Walker, H. Kirk Downey, Kevern Joyce, and Martin C. Bowen.
The 1998 NSO Plan is administered by the Compensation Committee ("Committee"), a
committee composed of at least two (2) non-employee directors of the board of
directors of the Company.
Subject to provisions for proportionate adjustment occasioned by changes in the
Company's capital structure, a total of 250,000 shares of Common Stock of the
Company has been set aside under the 1998 NSO Plan for use upon exercise of
options granted thereunder. No options to purchase Common Stock have been
granted under the 1998 NSO Plan.
The purchase price for the stock under each option is one-hundred (100%) of the
fair market value of the Common Stock evidenced by the price at which the Common
Stock closed on the date the option is granted, but in no event less than the
par value of the Common Stock. The 1998 NSO Plan terminates ten years after its
effective date and no options can be granted under it after that date. The 1998
NSO Plan will be effective upon Shareholder approval and no options can be
granted under it prior to that approval.
-10-
<PAGE>
The following is a summary of the principal U.S. federal income tax consequences
under current federal income tax laws relating to awards under the 1998 NSO
Plan. This summary is not intended to be exhaustive and, among other things,
does not describe state, local or foreign tax consequences. Participants are
urged to consult their own tax advisors as to the precise tax consequences of
participation in such plan. The granting of options will have no immediate tax
consequences on the Company or the recipient of the options, since the options
are being granted to purchase the stock at the fair market value of the stock on
the date of the grant, and since the options have no readily ascertainable fair
market value. Upon exercise of the options, the optionee will realize and
recognize income on the excess of the fair market value of the stock on the date
of exercise over the exercise price. The excess will be taxed at rates
applicable to ordinary income. The Company will realize a deduction on the date
of exercise in an amount equal to the optionee's gain.
The gain, if any, received upon a subsequent disposition of the Common Stock
will constitute short-term or long-term gain to the optionee, depending on the
optionee's holding period. In addition, the Taxpayer Relief Act of 1997 (the
"Act") made significant changes to the taxation of long-term capital gains. In
general, the Act reduces the maximum rate of tax on the individual's net capital
gain (i.e., the excess of the net long-term capital gain for the taxable year
over the net short-term capital loss for the year) from 28% to 20%. The rate is
reduced to 10% for net capital gains that would otherwise be taxed at 15% rate.
These rates apply for both the regular tax and the minimum tax.
For taxable years beginning after December 31, 2000, the maximum capital gains
rates for assets which are held more than five years are 8% and 18% (rather than
10% and 20%). The 18% rate only applies to assets with holding periods that
begin after December 31, 2000. Finally, the Act provides that the lower capital
gains rate does not apply to the sales or exchange of assets held for 18 months
or less if the sales or exchange is after July 28, 1997. The 28% maximum rate
will continue to apply to the sales or exchange of capital assets held more than
one year but not more than 18 months. However, the 20% maximum rate applies to
otherwise qualifying sales or exchanges occurring after May 6, 1997, and before
July 29, 1997, if the assets were held for more than one year.
The Federal income tax consequences described in this section are based on laws
and regulations in effect on April 21, 1998, and there are no assurances that
the laws and regulations will not change in the future and affect the tax
consequences of the matters discussed in this section.
No options may be exercised under the 1998 NSO Plan without compliance with
applicable securities laws. It is contemplated by management of the Company
that the options and the shares of Common Stock called for by options granted
under the 1998 NSO Plan will be registered by the Company under the federal
securities laws during the remainder of calendar year 1998.
Options granted under the 1998 NSO Plan are nontransferable except by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code, and may be exercised during the lifetime
of the participant only by that participant or his legally authorized
representative, provided, however, the Committee, in its discretion, may allow
for transferability of such options by the participant to "Immediate Family
Members" as that term is defined under the 1998 NSO Plan.
The 1998 NSO Plan would be effective only upon shareholder approval at the 1998
Annual Meeting of Shareholders. The affirmative vote of the holders of a
majority of the total number of shares represented and voting at the
Shareholder's Meeting, assuming a quorum is present, is required in order for
the plan to become effective.
The Board of Directors recommends that Shareholders vote "FOR" ratification of
the 1998 Nonstatutory Stock Option Plan of the Company.
PROPOSAL NO. 5: RATIFICATION OF 1997 NONSTATUTORY STOCK OPTION GRANTS TO THE
- -----------------------------------------------------------------------------
COMPANY'S NON-EMPLOYEE DIRECTORS
- --------------------------------
The Board of Directors of the Company on an individual basis in May 1997 granted
options to purchase 10,000 shares of the Company's Common Stock to each of the
seven (7) non-employee directors (the "1997 Individual NSO Grants").
A summary of the material provisions relating to the 1997 Individual NSO Grants
is set out below. The following summary is qualified in its entirety by
reference to the full text of the Company's Non-Qualified Stock Option Agreement
(the "Agreement") with each of the seven (7) non-employee directors, a copy of
which is attached as Exhibit C to this Proxy Statement.
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<PAGE>
The purpose of the 1997 Individual NSO Grants is to encourage stock ownership by
non-employee directors of the Company, to provide an incentive for non-employee
directors to expand and improve the profits and prosperity of the Company, and
to assist the Company in retaining non-employee directors.
The non-employee directors of the Company receiving the 1997 Individual NSO
Grants were: Martin C. Bowen, Dr. H. Kirk Downey, Robert H. Johnson, John G.
Richards, Sam Rosen, R.J. Schumacher and W.C Walker.
Each non-employee director (the "Optionee") was granted nonqualified stock
options to purchase 10,000 shares of the Company's common shares at a purchase
price of $11.125 per share. The options cannot be exercised until (i) the
passage of six months from the date of the grant, and (ii) the listing of the
underlying shares on the New York Stock Exchange. Options to purchase 2,000
shares of the Company's Common Stock become exercisable on the day following
each annual shareholders' meeting, provided the Optionee is a non-employee
director on such date. Unless terminated earlier pursuant to the terms of the
Agreement, the options remain exercisable for a period of ten (10) years from
the date of the grant.
Since the 1997 Individual NSO Grants are of nonstatutory stock options, the U.S.
federal income tax consequences under current federal income tax law to such
grants is the same as federal income tax consequences relating to options
granted under the 1998 Nonstatutory Stock Option Plan. Reference is made to
information set forth under the heading Proposal No. 4: 1998 Nonstatutory
Stock Option Plan for a description of such federal income tax consequences.
No options may be exercised under the 1997 Individual NSO Grants without
compliance with applicable securities laws. It is contemplated by management of
the Company that the options and the shares of the Company's Common Stock
underlying the options granted under the 1997 Individual NSO Grants will be
registered by the Company under the federal securities laws during the remainder
of calendar year 1998.
Options granted under the 1997 Individual NSO Grants may only by transferred
during the Optionee's lifetime (i) pursuant to a qualified domestic relations
order as defined in the Internal Revenue Code of 1986, as amended, or (ii) to an
"immediate family member" of the optionee.
The affirmative vote of the holders of a majority of the total number of shares
represented and voting at the Shareholders' Meeting, assuming a quorum is
present, is required for ratification of the 1997 Individual NSO Grants.
The Board of Directors recommends that Shareholders vote "FOR" ratification of
the 1997 Individual Nonstatutory Stock Option Grants to the Company's non-
employee directors.
ACTION TO BE TAKEN UNDER THE PROXY
- ----------------------------------
Unless otherwise specified in the accompanying proxy, the proxy holders will
vote the shares presented thereby "FOR" the election of L.C. Martin, R.J.
Schumacher, and Dr. H. Kirk Downey as directors for a three year term expiring
at the 2001 Annual Meeting of Shareholders, "FOR" the ratification of the
appointment of Ernst & Young LLP as the independent auditors of the Company for
its fiscal year ending February 28, 1999, "FOR" the approval of the 1998
Incentive Stock Option Plan, "FOR" the approval of the 1998 Nonstatutory Stock
Option Plan, and "FOR" the approval of the 1997 Nonstatutory Stock Option
Grants.
The accompanying proxy will also be voted in connection with the transaction of
such other business as may properly come before the meeting or any adjournment
or adjournments thereof. Management knows of no other matters, other than as
set forth above, to be considered at the meeting. If, however, any other
matters properly come before the meeting, or any adjournment or adjournments
thereof, the persons named in the accompanying proxy will vote such proxy in
accordance with their best judgment on any such matter.
SHAREHOLDER PROPOSALS
- ---------------------
Shareholder proposals for inclusion in the Proxy Statement for the 1999 Annual
Meeting of Shareholders must be received at the executive office of the Company
on or before January 31, 1999.
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<PAGE>
ANNUAL REPORTS
- --------------
The Company's 1998 Annual Report to Shareholders, covering the fiscal year ended
February 28, 1998, including audited financial statements, is enclosed with this
Proxy Statement. Neither the Annual Report nor the financial statements are
incorporated into this Proxy Statement or are deemed to be a part of the
material for the solicitation of proxies.
A COPY OF THE COMPANY'S 1998 ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, MAY BE OBTAINED WITHOUT CHARGE (EXCEPT FOR EXHIBITS TO SUCH
ANNUAL REPORT WHICH WILL BE FURNISHED UPON PAYMENT OF THE COMPANY'S REASONABLE
EXPENSE IN FURNISHING SUCH EXHIBITS) BY ANY SHAREHOLDER WHOSE PROXY IS SOLICITED
UPON WRITTEN REQUEST TO: AZTEC MANUFACTURING CO., 400 NORTH TARRANT STREET,
CROWLEY, TEXAS 76036, ATTENTION: DANA PERRY.
BY ORDER OF THE BOARD OF DIRECTORS
Sam Rosen, Secretary
Crowley, Texas
June 1, 1998
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<PAGE>
EXHIBIT "A"
AZTEC MANUFACTURING CO.
1998 INCENTIVE STOCK OPTION PLAN
-14-
<PAGE>
1998 INCENTIVE STOCK OPTION PLAN OF
AZTEC MANUFACTURING CO.
The 1998 Incentive Stock Option Plan (the "Plan") of Aztec Manufacturing
Co. (the "Company") is intended to advance the best interests of the Company by
providing all full-time salaried employees of the Company, and of any
subsidiary of the Company, with additional incentive by increasing their
proprietary interest in the success of the Company, thereby encouraging them to
remain in the employ of the Company. Options granted pursuant to this Plan are
intended to be "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
ARTICLE I
Committee
Section 1.1. ADMINSTRATION. The Plan shall be administered by the
Compensation Committee of the Company (the "Committee"). The Committee shall
consist of at least two (2) Non-Employee Directors of the Company.
Section 1.2 POWERS. (a) Subject to the provisions of the Plan, the
Committee shall have plenary authority to determine, in its discretion, the
employees of the Company to whom Options (as hereinafter defined) shall be
granted, the number of shares to be covered by each of the Options, and the time
or times at which and the terms (not inconsistent with this Plan) under which
Options shall be granted, become exercisable and expire. The Committee shall
also have the authority to interpret the Plan and to prescribe, amend or rescind
rules and regulations relating to it.
(b) The Committee shall hold meetings at such times and places as it
may determine. Acts approved at a meeting by a majority of the members of the
Committee or acts approved in writing by the unanimous consent of the members of
the Committee shall be the valid acts of the Committee.
(c) No member of the Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any Options
granted under it. No member of the Committee shall be liable for any act or
omission of any other member of the Committee or for any act or omission on his
own part, including, but not limited to, the exercise of any power and
discretion given to him under the Plan, except those resulting from his own
gross negligence or willful misconduct.
(d) In addition to such other rights of indemnification as he may
have as a member of the Board of Directors or the Committee, and with respect to
administration of the Plan and the granting of Options under it, each member of
the Committee shall be entitled without further act on his part to indemnity
from the Company for all expenses (including the amount of any judgments and the
amount of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Company itself) reasonably incurred
by him in connection with or arising out of any action, suit or proceeding with
respect to the administration of the Plan or the granting of Options under it in
which he may be involved by reason of his being or having been a member of the
Committee, whether or not he continues to be a member of the Committee at the
time of the incurring of such expenses; provided, however, that such indemnity
shall not include any expenses incurred by a member of the Committee (i) in
respect to matters as to which he shall be finally adjudged in such action, suit
or proceeding to have been guilty of gross negligence or willful misconduct in
the performance of his duties as a member of the Committee; or (ii) in respect
of any matter in which any settlement is effected for an amount in excess of the
amount approved by the Company on the advice of its legal counsel; and provided
further that no right of indemnification under the provisions set forth herein
shall be available to or accessible by any such member of the Committee unless
within five (5) days after institution of any such action, suit or proceeding he
shall have offered the Company in writing the opportunity to handle and defend
such action, suit or proceeding at its own expense. The foregoing right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each such member of the Committee and shall be in addition to
all other rights to which such member of the Committee would be entitled as a
matter of law, contract or otherwise.
-15-
<PAGE>
ARTICLE II
Participants
Section 2.1. ELIGIBILITY. The persons who shall be eligible to receive
Options shall be all full-time salaried employees of the Company. For the
purposes of this Plan, the term "Employee(s)" shall mean employee(s) of the
Company, or any of its subsidiaries or affiliates, that adopt the Plan and shall
not include members of the Board who are not employed by the Company. The
Committee shall select the eligible individuals to whom Options shall be granted
("Participants"), and shall determine the number of Options to be granted. In
making this determination, the Committee shall weigh the positions and
responsibilities of the individuals being considered, the nature of their
services, their present and potential contributions to the success of the
Company and such other factors as the Committee shall deem relevant to
accomplish the purposes of the Plan.
Section 2.2. NUMBER OF OPTIONS. An eligible employee may be a Participant
under more than one Option Agreement. As used herein, the term "Option" shall
mean the option to purchase one share of Common Stock (as hereinafter defined)
in accordance with the Plan. The term "Option Agreement" shall mean the
agreement under which Options are granted.
Section 2.3. NO RIGHTS AS SHAREHOLDER. No Participant shall have any
rights as a shareholder with respect to shares covered by Options granted to him
pursuant to the Plan (including the right to vote the shares or to receive any
dividends declared thereon) until the date of issuance of a stock certificate
for such shares, notwithstanding the exercise of the Options covering such
shares.
Section 2.4. ELIGIBILITY FOR OTHER PLANS. Participation in the Plan shall
not affect eligibility for any profit-sharing, bonus, insurance, pension, stock
option, or other compensation plan which the Company currently has in effect or
may at any time in the future adopt for employees.
Section 2.5. EMPLOYMENT OBLIGATION. The granting of an Option shall not
impose any obligation upon the Company to employ or continue to employ any
Participant, and the right of the Company to terminate the employment of any
Participant shall not be diminished or affected by reason of the fact that
Options have been granted to him.
Section 2.6. CONTINUOUS EMPLOYMENT. An Option granted under this Plan
will terminate in accordance with Section 4.8 below upon the termination of
employment of a Participant. However, the requisite employment relationship
with respect to Options granted hereunder will be treated as continuing intact
while the Participant (with the prior approval of the Committee) is on military
leave, sick leave, or other bona fide leave of absence (such as temporary
employment by the Government) if the period of such leave does not exceed ninety
(90) days, or, if longer, so long as the Participant's right to reemployment is
guaranteed by statute or by contract.
Section 2.7. SHAREHOLDER APPROVAL. No Option may be exercised under the
Plan until the Plan has been approved by the affirmative vote of a majority of
the total number of shares represented and entitled to vote thereon at a meeting
of the shareholders, assuming a quorum is present. Such approval must be
obtained from the shareholders of the Company within twelve (12) months from the
prior approval, if any, of the Plan by the Board of Directors.
Section 2.8. NO OBLIGATION TO EXERCISE OPTION. The granting of an Option
under the Plan shall not impose any obligation upon the Participant to exercise
the Option. A Participant may, at any time, elect in writing to abandon Options
granted under the Plan.
ARTICLE III
SHARES SUBJECT TO OPTIONS
Section 3.1. SHARES AVAILABLE. The shares of stock subject to Options
shall be the Company's One Dollar ($1.00) par value common stock (the "Common
Stock"). The aggregate number of shares of Common Stock for which Options may
be granted under the Plan shall not exceed 750,000 shares of Common Stock. Such
shares may be treasury or authorized but unissued shares of Common Stock of the
Company.
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Section 3.2. ALLOTMENT OF OPTIONS FOR THE PURCHASE OF SHARES. (a) Subject
to the allotment requirements of Section 3.2(b), the Committee shall determine
the number of Options for the purchase of shares of Common Stock to be granted
from time to time to any employee eligible to become a Participant.
(b) The aggregate fair market value (determined at the time the
Option is granted) of shares of Common Stock underlying Options exercisable by a
Participant under the Plan for the first time during any calendar year under the
Plan (or any other incentive stock option plan of the Company or a parent or
subsidiary corporation of the Company, as those terms are defined in Section
424(e) and (f), respectively, of the Code) shall not exceed $100,000.
Section 3.3. SHARES FROM UNEXERCISED OPTIONS. In the event that any
outstanding Options under the Plan for any reason expire or are terminated, the
shares of Common Stock allocable to the unexercised Options may again be
subjected to other Option Agreements under the Plan.
ARTICLE IV
TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be evidenced by Option
Agreements in such form as the Committee shall, from time to time, recommend,
which (although they need not be identical in form) shall be subject to the
following terms and conditions:
Section 4.1. OPTION PRICE. The price at which shares of Common Stock may
be purchased pursuant to Options granted under the Plan (the "Option Price")
shall be no less than one hundred percent (100%) of the fair market value of the
shares of Common Stock on the date the Option is granted.
Section 4.2. TIME OF GRANTING OPTIONS. Neither anything contained in the
Plan or in any resolution adopted or to be adopted by the Board of Directors of
the Company or the shareholders of the Company nor any action taken by the
Committee shall constitute the granting of Options. The granting of Options
shall take place only when the written Option Agreement has been duly executed
by or on behalf of the Company and the Participant to whom such Options shall be
granted. Notwithstanding anything herein to the contrary, no Options shall be
granted under the Plan more than ten years after the effective date of the Plan.
Section 4.3 DURATION OF OPTIONS. No Options shall be exercisable after
the expiration of ten (10) years from the date such Options are granted and the
Committee in its discretion, subject to the provisions of Section 4.4 with
regard to holders of 10% or more of the Common Stock, may provide that Options
shall be exercisable during such ten (10) year period or any lesser period of
time.
Section 4.4. TEN PERCENT (10%) SHAREHOLDERS. Anything herein to the
contrary notwithstanding, Options granted by the Committee to any eligible
employee who at the time of the grant of the Options owns, directly or
indirectly, more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company, or of any parent or subsidiary corporation
of the Company, shall be exercisable at an Option Price which is at least one
hundred ten percent (110%) of the fair market value of the shares of Common
Stock determined at the time such Options are granted and such Options shall not
be exercisable after the expiration of five (5) years from the date they are
granted. The attribution rules of Section 424(d) of the Code shall apply in the
determination of indirect ownership of stock of the Company, and of any parent
or subsidiary corporation of the Company.
Section 4.5. AMOUNT EXERCISABLE. Options may be exercised in blocks of no
less than one hundred (100) at any one time, unless the number exercised is the
total number exercisable by a Participant in which case all, but not less than
all, Options may be exercised.
Section 4.6. METHOD OF EXERCISE. (a) No Option shall be deemed to have
been exercised prior to the receipt by the Company of written notice of such
exercise and of payment in full of the Option Price for the shares to be
purchased. Each such notice shall specify the number of shares to be purchased
and shall (unless the shares are covered by a then current registration
statement under the Securities Act of 1933 (the "Act")), contain the
Participant's acknowledgment in form and substance satisfactory to the Company
that (i) such shares are being purchased for investment and not for distribution
or resale (other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (ii) the Participant
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has been advised and understands (A) the shares have not been registered under
the Act and are "restricted securities" within the meaning of Rule 144 under the
Act and are subject to restrictions on transfer, and (B) the Company is under no
obligation to register the shares under the Act or to take any action which
would make available to the Participant any exemption from such registration,
and (iii) such shares may not be transferred without compliance with all
applicable federal and state securities laws. Notwithstanding the above, should
the Company be advised by counsel that issuance of shares should be delayed
pending (i) registration under federal or state securities laws, or (ii) the
receipt or an opinion that an appropriate exemption therefrom is available, the
Company may defer issuance of shares underlying any Options granted hereunder
until either such event has occurred. No Participant who is subject to Section
16 of the Securities Exchange Act of 1934 may sell an Option or any share
acquired by exercise of an Option for at least six (6) months after the date the
Option was granted. No Participant shall have any rights as a shareholder with
respect to shares underlying Options until the date of issuance of a stock
certificate for such shares.
(b) A Participant shall pay for shares acquired upon the exercise of
Options (i) in cash, (ii) by check payable to the order of the Company, or (iii)
by a combination of the foregoing. Alternatively, payment may be made all or in
part in shares of the Common Stock held by the Participant for more than one
year. If payment is made in whole or in part in shares of the Common Stock,
then the Participant shall deliver to the Company certificates registered in the
name of such Participant representing shares of Common Stock legally and
beneficially owned by such Participant, free of all liens, claims and
encumbrances of every kind, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by such certificates.
(c) The certificate or certificates for shares of Common Stock as to
which Options are exercised shall be registered in the name of the person or
persons exercising the Options. In the event the Options shall be exercised
pursuant to Section 4.8(b) by any person or persons other than the Participant,
the notice shall be accompanied by appropriate proof of the right of such person
or persons to exercise the Options.
(d) The Company shall deliver to the Participant the certificate or
certificates for the number of shares of Common Stock with respect to which the
Options have been exercised to the address which shall be specified in the
notice of exercise required by Section 4.6(a), and delivery shall be deemed
effected for all purposes when the Company or its transfer agent shall have
deposited such certificate or certificates in the United States mail addressed
to the Participant at such address.
Section 4.7. NON-TRANSFERABILITY OF OPTIONS. Options shall not be
transferable by the Participant other than by will or under the laws of dscent
and distribution and shall be exercisable, during his lifetime, only by him.
Section 4.8. SEVERANCE OF EMPLOYMENT. (a) Except as otherwise provided in
Section 4.8(b), in the event of the termination of employment of the Participant
by the Company for any reason whatsoever other than the gross and willful
misconduct of the Participant or death or disability, whether by his own
volition or otherwise, any Options granted to the Participant under the Plan
shall terminate on the earlier of the date of their expiration or the day which
is three (3) months after the date of termination of employment of the
Participant. After the date of termination of employment of the Participant,
but prior to the date of termination of such Options, as provided in the
immediately preceding sentence, the Participant shall have the right to exercise
the Options which were exercisable on the date of the termination of the
Participant's employment with the Company. In the event of termination of
Participant's employment with the Company because of gross and willful
misconduct, including but not limited to wrongful appropriation of funds of the
Company or the commission of a felony, Options granted to Participant, to the
extent not previously exercised, shall terminate.
(b) In the event of the death or total disability of the Participant
while in the employ of the Company, any Options granted to a Participant under
the Plan shall terminate on the earlier of (i) the date of their expiration or
(ii) in the event of the death of the Participant, the day which is twelve (12)
months after the date of death of the Participant or in the event of the total
disability of the Participant, the day which is twelve (12) months after the
date of termination of employment of the Participant, as the case may be. After
the date of death or total disability of the Participant, as the case may be,
but prior to the date of termination of Options provided in the immediately
preceding sentence, the Participant's executors, administrators or any person or
persons to whom the Options may be transferred by will or by the laws of descent
and distribution (in the event of the Participant's death) or the Participant
(in the event of the Participant's total disability) shall have the right at any
time during the period of time specified in this Section 4.8(b) to exercise the
Options, in whole or in part regardless of whether or not such Options were
exercisable on the date of death or total disability. For purposes of this
Section 4.8(b), the term "total disability" shall mean the inability of the
Participant to return to the handling of substantially all of his duties as a
full-time salaried
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employee of the Company within ninety (90) days after injury or illness. The
Committee shall determine whether or not a Participant is totally diabled and
such determination by the Committee shall be binding on the Participant.
Section 4.9. REQUIREMENTS OF REGULATORY AGENCIES. The Company shall not
be required to sell or issue any shares of Common Stock under any Options if the
issuance of such shares of Common Stock shall constitute a violation by the
Participant or the Company of any provisions of any law or regulation of any
governmental authority.
ARTICLE V
MODIFICATION
Section 5.1. AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors
of the Company may modify, revise or terminate the Plan at any time and from
time to time; provided, however, that without the further approval of the
shareholders of the Company, the Board of Directors may not (i) materially
increase the benefits accruing to Participants under the Plan; (ii) materially
increase the number of securities which may be issued under the Plan; (iii)
materially modify the requirements as to eligibility for participation in the
Plan; or (iv) change any provisions of the Plan which would affect the income
tax status of the Options granted hereunder. No modification of this Plan
shall, without the consent of the Participant, alter or impair any rights or
obligations of such Participant under any Options theretofore granted under the
Plan except for such modifications as, in the opinion of counsel for the
Company, may be necessary or appropriate from time to time to enable the Options
granted pursuant to the Plan to comply with the requirements of any governmental
or regulatory agency.
Section 5.2. ADJUSTMENTS. Adjustments shall be made to the number of
Options and the per share exercise price therefor as provided in this section:
(a) In the event that the outstanding shares of Stock of the Company
are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation, by reason of a recapitalization, reclassification, stock
split-up, combination of shares, dividend or other distribution payable in
capital stock, appropriate adjustment shall be made by the Committee in the
number and kind of shares for the purchase of which Options may be granted under
the Plan. In addition, the Committee shall make appropriate adjustment in the
number and kind of shares as to which outstanding Options, or portions thereof
then unexercised, shall be exercisable, to the end that the proportionate
interest of the holder of the Option shall, to the extent practicable, be
maintained as before the occurrence of such event. Such adjustment in
outstanding Options shall be made without change in the total price applicable
to the unexercised Options but with a corresponding adjustment in the Option
Price per share.
(b) In the event of the dissolution of the Company, any Options
granted and outstanding under the Plan shall terminate as of the effective date
of dissolution.
(c) In the event of a Reorganization (as hereinafter defined) in
which the Company is not the surviving or acquiring company, or in which the
Company is or becomes a wholly-owned subsidiary of another company after the
effective date of the Reorganization, then
(1) If there is no plan or agreement respecting the
Reorganization ("Reorganization Agreement") or if the Reorganization
Agreement does not specifically provide for the change, conversion or
exchange of the shares under outstanding and unexercised Options for
securities of another corporation, any such Options shall be deemed
exercisable for stock of the surviving corporation or parent corporation of
which the Company becomes a subsidiary at a rate of exchange to be
determined by the Committee, but in no event shall the fair market value of
the stock substituted by the Common Stock of the Company at any time of the
Reorganization be less than the fair market value of the Common Stock of
the Company at the time of the Reorganization; or
(2) If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change, conversion
or exchange of the shares under outstanding and unexercised Options for
securities of another corporation, then the Committee shall adjust the
shares under such outstanding and unexercised Options (and shall adjust the
shares remaining under the Plan which are then available to be optioned
under the Plan, if the Reorganization Agreement makes specific provision
therefor) in
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a manner not inconsistent with the provisions of the Reorganization
Agreement for the adjustment, change, conversion or exchange of such stock
and such Options.
(d) The term "Reorganization" as used in paragraph (c) of this
Section 5.2 shall mean any statutory merger, statutory consolidation, sale of
all or substantially all of the assets of the Company, or sale, pursuant to an
agreement with the Company, of securities of the Company pursuant to which the
Company is or becomes a subsidiary of another company after the effective date
of the Reorganization.
(e) Adjustments and determinations under this Section 5.2 shall be
made by the Committee, whose decisions as to what adjustments or determinations
shall be made, and the extent thereof, shall be final, binding and conclusive.
No fractional shares of Common Stock shall be issued in connection with the
exercise of any Options and any fractional shares of Common Stock resulting from
the computations pursuant to this Section 5.2 shall be eliminated from the
respective Option.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. WRITTEN AGREEMENT. Options granted hereunder shall be
embodied in a written Incentive Stock Option Agreement, which shall be subject
to the terms and conditions of the Plan and shall be signed by the Participant
and by the President or any Vice President of the Company for and on behalf of
the Company.
Section 6.2. SIX MONTH HOLDING PERIOD. No Option or share of Common Stock
acquired upon the exercise of an Option granted under the Plan to an employee
who is subject to Section 16 of the Securities Exchange Act of 1934 shall be
sold or otherwise disposed of for at least six (6) months from the date the
Option was granted.
Section 6.3. PLAN EXPENSES. The expenses of administering the Plan shall
be borne by the Company.
Section 6.4. WITHHOLDING OF TAXES. Whenever the Company proposes or is
required to issue or transfer Common Stock under the Plan, the Company shall
have the right to (a) require the recipient or transferee to remit to the
Company an amount sufficient to satisfy any federal, state and/or local
withholding tax requirements prior to the delivery or transfer of any
certificate or certificates for such shares, or (b) take whatever action it
deems necessary to protect its interests.
Section 6.5. TERMINOLOGY. The headings in this Plan are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Plan. Wherever required by context, any gender shall
include any other gender, the singular shall include the plural and the plural
shall include the singular.
Section 6.6. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective
and shall be deemed to have been adopted on the date of approval by the
Company's shareholders.
Adopted by the Board of Directors, subject to shareholder approval, on the
21st day of April, 1998.
By:
-----------------------------------
L. C. Martin
Chairman of the Board
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EXHIBIT "B"
AZTEC MANUFACTURING CO.
1998 NONSTATUTORY STOCK OPTION PLAN
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<PAGE>
1998 NONSTATUTORY STOCK OPTION PLAN
OF
AZTEC MANUFACTURING CO.
A. Purpose and Scope.
-----------------
The purposes of this Plan are to encourage stock ownership by executive
officers and outside, nonemployee directors of Aztec Manufacturing Co. (herein
called the "Company"), to provide an incentive for executive officers and
outside, nonemployee directors to expand and improve the profits and prosperity
of the Company, and to assist the Company in attracting and retaining executive
officers and outside, nonemployee directors through the grant of options to
purchase shares of the Company's Common Stock (as hereinafter defined).
B. Definitions.
-----------
Unless otherwise required by the context:
1. "Board" shall mean the Board of Directors of the Company.
2. "Committee" shall mean the Compensation Committee of the Company,
which is appointed by the Board from its members, and which shall be
composed of at least two (2) members of the Board.
3. "Common Stock" shall mean the common stock of the Company, par
value $1.00.
4. "Company" shall mean Aztec Manufacturing Co., a Texas corporation.
5. "Code" shall mean the Internal Revenue Code of 1986, as amended.
6. "Executive Officer" shall be defined as set forth in Rule 3b-7 of
the Securities Exchange Act of 1934 or as otherwise determined by the Board
of the Company.
7. "Immediate Family Members" means children, grandchildren, spouse,
siblings or parents of the Participant, or bona fide trusts, partnerships
or other entities controlled by, and of which the beneficiaries are,
Immediate Family Members of the Participant. Any Option grants that are
transferable are conditioned on the Participant and Immediate Family
Members agreeing to abide by the Company's then current stock option
transfer guidelines.
8. "Option" shall mean a right to purchase one share of Common Stock.
9. "Option Agreement" shall mean the agreement under which Options
are granted.
10. "Option Price" shall mean the purchase price for Common Stock
under an Option, as determined in Section F below.
11. "Participant" shall mean an executive officer or a nonemployee
director of the Company to whom an Option is granted under the Plan.
12 "Plan" shall mean this Aztec Manufacturing Co. 1998 Nonstatutory
Stock Option Plan.
C. Common Stock to be Optioned.
---------------------------
Subject to the provisions of Section I of the Plan, the maximum number of
shares of Common Stock that may be optioned or sold under the Plan is 250,000
shares. Such shares may be treasury or authorized but unissued shares of Common
Stock of the Company.
D. Administration.
--------------
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1. The Plan shall be administered by the Committee. The Committee
shall hold meetings at such times and places as it may determine. Acts
approved at a meeting by a majority of the members of the Committee or acts
approved in writing by the unanimous consent of the members of the
Committee shall be the valid acts of the Committee.
2. The Committee shall from time to time direct the Company to grant
Options pursuant to the terms of the Plan. The Committee shall have
authority to interpret the Plan and any Option Agreement entered into
pursuant to Committee action shall be final, binding and conclusive so long
as the provisions of such Option Agreement are consistent with the terms of
the Plan.
3. No member of the Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Options
granted under it. No member of the Committee shall be liable for any act
or omission of any other member of the Committee or for any act or omission
on his own part, including, but not limited to, the exercise of any power
or discretion given to him under the Plan, except those resulting from his
own gross negligence or willful misconduct.
4. In addition to such other rights of indemnification as he may have
as a member of the Board of Directors or the Committee, and with respect to
administration of the Plan and the granting of Options under it, each
member of the Committee shall be entitled without further act on his part
to indemnity from the Company for all expenses (including the amount of
judgment and the amount of approved settlements made with a view to the
curtailment of costs of litigation, other than amounts paid to the Company
itself) reasonably incurred by him in connection with or arising out of any
action, suit or proceeding with respect to the administration of the Plan
or the granting of Options under it in which he may be involved by reason
of his being or having been a member of the Committee, whether or not he
continues to be such member of the Committee at the time of the incurring
of such expenses; provided, however, that such indemnity shall not include
any expenses incurred by such member of the Committee (i) in respect of
matters as to which he shall be finally adjudged in such action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in
the performance of his duties as a member of the Committee; or (ii) in
respect of any matter in which any settlement is effected for an amount in
excess of the amount approved by the Company on the advice of its legal
counsel; and provided further that no right of indemnification under the
provisions set forth herein shall be available to or accessible by any such
member of the Committee unless within five (5) days after institution of
any action, suit or proceeding asserting a claim for which indemnification
would be available under this paragraph, he shall have offered the Company
in writing the opportunity to handle and defend such action, suit or
proceeding at its own expense. The foregoing right of indemnification
shall inure to the benefit of the heirs, executors or administrators of
each such member of the Committee and shall be in addition to all other
rights to which such member of the Committee would be entitled to as a
matter of law, contract or otherwise.
E. Eligibility.
-----------
This Plan shall be exclusively for the benefit of executive officers and
nonemployee directors of the Company and only such persons shall be eligible to
receive Options under this Plan.
F. Option Price.
------------
The purchase price for Common Stock under each Option shall be one hundred
percent (100%) of the fair market value of the Common Stock at the time the
Option is granted, but in no event less than the par value of the Common Stock.
G. Terms and Conditions of Options.
-------------------------------
Options granted pursuant to the Plan shall be evidenced by written Option
Agreements in such form as the Committee shall from time to time approve, which
Option Agreements shall comply with and be subject to the following terms and
conditions:
1. Grant of Options. Neither anything contained in the Plan nor any
resolution adopted or to be adopted by the Board of Directors of the
Company or the shareholders of the Company nor any action taken by the
Committee shall constitute the granting of Options. The granting of
Options shall take place only when
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the written Option Agreement has been duly executed by or on behalf of the
Company and the Participant to whom such Options shall be granted. The Plan
is subject to the approval of the Company's shareholders and no Options
shall be granted under it until and unless such approval is received.
2. Duration of Options. Subject to the provisions of Section H
below, Options shall become exercisable and shall be exercisable for such
period as is determined by the Committee.
3. Exercise and Payment. No Option shall be deemed to have been
exercised prior to the receipt by the Company of written notice of such
exercise and of payment in full of the Option Price for the Options to be
exercised. Each such notice shall specify the number of Options to be
exercised and shall (unless the shares underlying the Options are covered
by a then current registration statement under the Securities Act of 1933
(the "Act")), contain the Participant's acknowledgment in form and
substance satisfactory to the Company that (i) such shares are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration provisions of the
Act), (ii) the Participant has been advised and understands that (A) the
shares have not been registered under the Act and are "restricted
securities" within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer, and (B) the Company is under no obligation to
register the shares under the Act or to take any action which would make
available to the Participant any exemption from such registration, and
(iii) such shares may not be transferred without compliance with all
applicable federal and state securities laws. Notwithstanding the above,
should the Company be advised by counsel that issuance of shares should be
delayed pending (i) registration under federal or state securities laws, or
(ii) the receipt of an opinion that an appropriate exemption therefrom is
available, the Company may defer issuance of any shares hereunder until
either such event has occurred. No Participant who is subject to Section
16 of the Securities Exchange Act of 1934 may sell an Option or any share
acquired upon the exercise of an Option for at least six (6) months after
the date of grant of the Option. No Participant shall have any rights as a
shareholder with respect to any share acquired upon the exercise of an
Option until the date of issuance of a stock certificate for such shares.
The Option Price shall be paid in full at the time an Option is exercised
under the Plan. Otherwise, an exercise of any Option granted under the
Plan shall be invalid and of no effect. Promptly after the exercise of an
Option and the payment of the full Option Price, the Participant shall be
entitled to the issuance of a stock certificate evidencing his ownership of
such Common Stock.
4. Medium of Payment. A Participant shall pay for shares acquired
upon the exercise of Options (i) in cash, (ii) by check payable to the
order of the Company, or (iii) by a combination of the foregoing.
Alternatively, payment may be made all or in part in shares of the Common
Stock held by the Participant for more than one year. If payment is made
in whole or in part in shares of Common Stock, then the Participant shall
deliver to the Company certificates registered in the name of such
Participant representing shares of Common Stock legally and beneficially
owned by such Participant free of all liens, claims and encumbrances of
every kind, accompanied by stock powers duly endorsed in blank by the
record holder of the shares represented by such certificates.
H. Termination of Options.
----------------------
No Options shall be exercisable after the first to occur of the following:
1. Expiration of the Option term specified in the Option Agreement,
which shall not exceed ten (10) years from the date the Options first
become exercisable;
2. Expiration of three (3) months from the date the Participant's
service as an executive officer or nonemployee director with the Company
terminates for any reason other than the circumstances described in 3, 4 or
5 below;
3. Expiration of one (1) year from the date the Participant's service
as an executive officer or nonemployee director with the Company
terminates by reason of the Participant's disability (within the meaning of
section 22(e)(3) of the Code) or death;
4. Expiration of ten (10) days (which period may be extended on a
case by case basis in the sole discretion of the Committee) from the date
the Participant voluntarily resigns as an executive officer or
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nonemployee director of the Company (not including any termination due to
the death or disability of the Participant); or
5. A finding by the Committee, after full consideration of the facts
presented on behalf of both the Company and the Participant, that a
Participant has been removed as an executive officer or nonemployee
director of the Company for Cause. For purposes of this paragraph "Cause"
shall mean: (A) a pattern of gross negligence or an act of willful
misconduct by Participant in the performance of his duties to the Company
which has a material adverse effect on the Company's reputation, business,
properties or business relationships, or (B) Participant's conviction of a
felony or misdemeanor (other than a traffic violation) or of
misappropriation of funds of the Company, or (C) Participant's
appropriation to himself of a corporate opportunity of the Company which
Participant fails to make available to the Company. In the event of a
finding that participant has been removed for Cause, in addition to
immediate termination of the Option, the Participant shall automatically
forfeit all shares to be acquired upon the exercise of Options for which
the Company has not yet delivered the share certificates upon refund by the
Company of the Option Price.
Notwithstanding the foregoing, any Participant who is elected as a
director or advisory director before or contemporaneously with his
voluntary termination as an employee or director of the Company (regardless
of the position for which the Options were awarded) shall not be deemed to
have a break in service that would trigger the termination provisions of
paragraph 4 of this Section H. In this circumstance, the provisions of
paragraphs 1, 2, 3 and 5 of this Section H remain applicable.
I. Adjustments in Common Stock.
---------------------------
Adjustments shall be made with reference to the number of shares of Common
Stock underlying Options and the per share exercise price therefor as provided
in this section:
1. In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company
or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares, dividend or other
distribution payable in capital stock, appropriate adjustment shall be made
by the Committee in the number and kind of shares for the purchase of which
Options may be granted under the Plan. In addition, the Committee shall
make appropriate adjustment in the number and kind of shares as to which
outstanding Options shall be exercisable, to the end that the proportionate
interest of the holder of the Options shall, to the extent practicable, be
maintained as before the occurrence of such event. Such adjustment in
outstanding Options shall be made without change in the total price
applicable to the unexercised Options but with a corresponding adjustment
in the Option Price per share.
2. In the event of a Reorganization (as hereinafter defined) in which
the Company is not the surviving or acquiring company, or in which the
Company is or becomes a wholly-owned subsidiary of another company after
the effective date of the Reorganization, then
a. If there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does
not specifically provide for the change, conversion or exchange of the
shares under outstanding and unexercised stock options for securities
of another corporation, any such stock options shall be deemed
exercisable for stock of the surviving corporation or parent
corporation of which the Company becomes a subsidiary at a rate of
exchange to be determined by the Committee, but in no event shall the
fair market value of the stock substituted for the stock of the
Company at the time of the Reorganization be less than the fair market
value of the stock of the Company at the time of the Reorganization.
b. If there is a Reorganization Agreement and if the
Reorganization Agreement specifically provides for the change,
conversion or exchange of the shares under outstanding and unexercised
stock options for securities of another corporation, then the
Committee shall adjust the shares under such outstanding and
unexercised stock options (and shall adjust the shares remaining under
the Plan which are then available to be optioned under the Plan, if
the Reorganization Agreement makes specific provision therefor) in a
manner not inconsistent with the provisions of the Reorganization
Agreement for the adjustment, change, conversion or exchange of such
stock and such Options.
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<PAGE>
c. The term "Reorganization" as used in paragraph 2 of this
Section I shall mean any statutory merger, statutory consolidation,
sale of all or substantially all of the assets of the Company, or
sale, pursuant to an agreement with the Company, of securities of the
Company pursuant to which the Company is or becomes a subsidiary of
another company after the effective date of the Reorganization.
d. Adjustments and determinations under this Section I shall be
made by the Committee, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final,
binding and conclusive.
J. Amendment of the Plan.
---------------------
Except as hereinafter limited, the Board of Directors of the Company may
modify, revise or terminate the Plan at any time and from time to time;
provided, however, that without the further approval of the shareholders of the
Company, the Board of Directors may not (i) materially increase the benefits
accruing to Participants under the Plan; (ii) materially increase the number of
securities which may be issued under the Plan; (iii) materially modify the
requirements as to eligibility for participation in the Plan; or (iv) change any
provisions of the Plan which would affect the income tax status of the Options
granted hereunder. No modification of this Plan shall, without the consent of
the Participant, alter or impair any rights or obligations of such Participant
under any Options theretofore granted under the Plan except for such
modifications as, in the opinion of counsel for the Company, may be necessary or
appropriate from time to time to enable the Options granted pursuant to the Plan
to comply with the requirements of any governmental or regulatory agency.
K. Miscellaneous.
-------------
1. No fractional shares shall be issued under this Plan.
2. Options may be exercised only in blocks of 100 unless the number
exercised is the total number exercisable by a Participant in which case
all, but not less than all, exercisable Options may be exercised.
3. The granting of Options shall impose no obligation upon the
Participant to exercise such Options.
4. Options shall not be transferable other than by will or by the
laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code, and may be exercised during the
lifetime of a Participant only by that Participant or by his legally
authorized representative; provided, however, that the Committee, in its
discretion, may allow for transferability of such Options by the
Participant to "Immediate Family Members".
5. The Company, during the term of this Plan, will at all times
reserve and keep available the number of shares of Common Stock sufficient
to satisfy the requirements of this Plan.
L. Effective Date of Plan.
----------------------
The Plan shall be effective upon approval by the shareholders of the
Company at its shareholders meeting to be held on July 14, 1998. If the Plan
is not approved by the shareholders, then the Plan will be of no further force
and effect.
Adopted by the Board of Directors, subject to shareholders approval, on the
21st day of April, 1998.
By:
-------------------------------
L. C. Martin
Chairman of the Board
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<PAGE>
EXHIBIT "C"
AZTEC MANUFACTURING CO.
1997 NONSTATUTORY STOCK OPTION AGREEMENT
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<PAGE>
AZTEC MANUFACTURING CO.
1997 NONSTATUTORY STOCK OPTION AGREEMENT
This agreement granting an option to purchase shares of the One Dollar
($1.00) par value common stock of AZTEC MANUFACTURING CO. (the "Stock") is made
as of May 20, 1997, between AZTEC MANUFACTURING CO. (the "Company") and
________________________ (the "Optionee"), a Director (as hereinafter defined)
of the Company, pursuant resolutions (the "Resolutions"), adopted by the
Directors of the Company on May 20, 1997 (the "Date of Grant").
Now, therefore, in consideration of the Company's desire to further its
interests and Optionee's desire to increase his proprietary interest in the
Company, it is agreed by and between the parties as follows:
1. Grant of Options. Optionee is hereby granted options (the "Option" or
"Options") to purchase Ten Thousand (10,000) shares (the "Option Shares") of
Stock at the purchase price of Eleven and One-eight Dollars ($11.125) per Option
Share (the "Option Price"). Options granted herein to purchase Two Thousand
(2000) shares of Stock shall become exercisable on the day following each annual
shareholders meeting commencing with the Company's 1997 annual shareholders
meeting provided Optionee is a Director of the Company on such date and,
provided further, that no option shall be exercised until (i) the passage of six
months from the Date of Grant, and (ii) the listing of the underlying shares on
the New York Stock Exchange.
2. Period During Which Options Are Exercisable. The Option shall become
exercisable as provided in Paragraph 1. above and, unless terminated earlier as
provided below shall remain exercisable for a period of ten (10) years from the
Date of Grant.
3. Method of Exercise and Payment. Options granted hereby may be exercised and
shall be paid for as provided below:
(a) Method of Exercise. An Option may be exercised to the extent it is
exercisable under Section 1 above by written notice addressed to the Company's
President at the Company's principal executive office specifying the number of
Option Shares to be purchased and, unless the Option Shares are covered by a
then-current registration statement under the Securities Act of 1933 (the
"Act"), containing the Optionee's acknowledgment, in form and substance
satisfactory to the Company, that the Optionee:
(i) is purchasing such Option Shares for investment and not for
distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to the Company, may be made without violating
the registration provisions of the Act);
(ii) has been advised and understands that:
(A) the Option Shares have not been registered under the Act
and are "restricted securities" within the meaning of Rule 144 under the act and
are subject to restrictions on transfer; and
(B) the Company is under no obligation to register the Option
Shares under the Act or to take any action which would make available to the
Optionee any exemption from such registration; and
(iii) has been advised and understands that such Option Shares may
not be transferred without compliance with all applicable federal and state
securities laws.
The notice shall be accompanied by payment of the aggregate price of the Option
Shares being purchased. Such exercise shall be effective upon the actual
receipt by the Company's President of such written notice and payment. Such
notice must be given by Optionee, or his or her guardian or other legal
representative, unless the Option is
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<PAGE>
exercised after Optionee's death, in which case it may be given by Optionee's
executor, administrator or other legal representative.
(b) Medium of Payment. An Optionee shall pay for Option Shares (i) in
cash, (ii) by check payable to the order of the Company, or (iii) by a
combination of the foregoing. Alternatively, payment may be made all or in part
in shares of the Common Stock held by the Optionee for more than one year. If
payment is made in whole or in part in shares of the Common Stock, then the
Optionee shall deliver to the Company certificates registered in the name of
such Optionee representing shares of Common Stock legally and beneficially owned
by such Optionee, free of all liens, claims and encumbrances of every kind,
accompanied by stock powers duly endorsed in blank by the record holder of the
shares represented by such certificates.
4. Termination of the Option. No Options shall be exercisable after the first
to occur of the following:
(i) The expiration of the Option term specified herein;
(ii) The date, if any, set by the Board of Directors of the Company
(the "Board of Directors") to be an accelerated expiration date in the event of
dissolution or liquidation of the Company or consummation of any corporate
combination transaction in which the Company is not the surviving or acquiring
company or in which the Company becomes a wholly-owned subsidiary of another
company, provided an Optionee who holds an Option is given written notice at
least thirty (30) days before the date so fixed;
(iii) Expiration of three (3) months from the date the Optionee's
service as a Director of the Company terminates for any reason other than the
circumstances described by subparagraphs (iv), (v) or (vi) below;
(iv) Expiration of one (1) year from the date the Optionee's service
as Director of the Company terminates by reason of the Optionee's disability
(within the meaning of section 22(e)(3) of the Internal Revenue Code of 1986, as
amended) or death;
(v) Expiration of ten (10) days (which period may be extended on a
case by case basis in the sole discretion of the Board of Directors) from the
date the Optionee voluntarily resigns as a Director of the Company (not
including any termination due to the death or disability of the Optionee); or
(vi) A finding by the Board of Directors (without participation by
the Director in question) after full consideration of the facts presented on
behalf of both the Company and the Optionee, that an Optionee has been removed
as a Director of the Company for Cause. For purposes of this paragraph "Cause"
shall mean: (A) a pattern of gross negligence or an act of willful misconduct by
Optionee in the performance of his duties to the Company which has a material
adverse effect on the Company's reputation, business, properties or business
relationships, or (B) Optionee's conviction of a felony or misdemeanor (other
than a traffic violation) or of misappropriation of funds of the Company, or (C)
Optionee's appropriation to himself of a corporate opportunity of the Company
which Optionee fails to make available to the Company. In the event of a finding
that Optionee has been discharged for Cause, in addition to immediate
termination of the Option, the Optionee shall automatically forfeit all Option
Shares for which the Company has not yet delivered the share certificates upon
refund by the Company of the Option Price.
5. Adjustments in Stock. Adjustments shall be made with reference to the
number of Option Shares and the per share exercise price therefor as provided in
this section:
(a) In the event that the outstanding shares of Stock are hereafter
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of a
recapitalization, reclassification, stock split-up, combination of shares,
dividend or other distribution payable in capital stock, appropriate adjustment
shall be made by the Board of Directors in the number and kind of shares as to
which this Option shall be exercisable, to the end that the proportionate
interest of the holder of this Option shall, to the extent practicable, be
maintained as before the occurrence of such event. Such adjustment in this
Option shall
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<PAGE>
be made without change in the total price applicable to the unexercised Option
but with a corresponding adjustment in the option price per share.
(b) In the event of a Reorganization (as hereinafter defined) in which the
Company is not the surviving or acquiring company, or in which the Company is or
becomes a wholly-owned subsidiary of another company after the effective date of
the Reorganization, then
(i) If there is no plan or agreement respecting the Reorganization
("Reorganization Agreement") or if the Reorganization Agreement does not
specifically provide for the change, conversion or exchange of the shares under
outstanding and unexercised stock options for securities of another corporation,
the unexercised portion of this Option shall be deemed exercisable for stock of
the surviving corporation or parent corporation of which the Company becomes a
subsidiary at a rate of exchange to be determined by the Board of Directors, but
in no event shall the fair market value of the stock substituted for the stock
of the Company at the time of the Reorganization be less than the fair market
value of the stock of the Company at the time of the Reorganization.
(ii) If there is a Reorganization Agreement and if the Reorganization
Agreement specifically provides for the change, conversion or exchange of the
shares under outstanding and unexercised stock options for securities of another
corporation, then the Board of Directors shall adjust the shares under the
unexercised portion of this Option in a manner not inconsistent with the
provisions of the Reorganization Agreement for the adjustment, change,
conversion or exchange of such stock and this Option.
(iii) The term "Reorganization" as used in paragraph (b) of this
Section 5 shall mean any statutory merger, statutory consolidation, sale of all
or substantially all of the assets of the Company, or sale, pursuant to an
agreement with the Company, of securities of the Company pursuant to which the
Company is or becomes a subsidiary of another company after the effective date
of the Reorganization.
(iv) Adjustments and determinations under this Section 5 shall be
made by the Board of Directors, whose decisions as to what adjustments or
determinations shall be made, and the extent thereof, shall be final, binding
and conclusive.
6. Transferability; Rights Prior to Exercise of Option. In the event of
death, this Option may be exercised by Optionee's executor, administrator or
other legal representative. During Optionee's lifetime, this Option may not be
sold, pledged, assigned or transferred in any manner other than (i) pursuant to
a qualified domestic relations order as defined in the Internal Revenue Code of
1986, as amended, or (ii) to an Immediate Family Member of the Optionee. The
term "Immediate Family Member", as used in this Agreement, shall mean the
children, grandchildren, siblings or parents of the Optionee, or bona fide
trusts, partnerships or other entities controlled by, and of which the
beneficiaries are, Immediate Family Members of the Optionee. Any Option grants
that are transferable are further conditioned on the Optionee and the Immediate
Family Members agreeing to abide by the Company's then current stock option
transfer guidelines. No holder of this Option shall have any rights as a
shareholder with respect to the Option Shares until payment of the Option Price
and delivery to Optionee or a permitted transferee of the certificates for such
shares as herein provided.
7. Definition of the Term "Director". The term "Director" as used in this
Agreement shall mean a non-employee member of the Board of Directors. A former
member of the Board of Directors who is named an advisory or emeritus member of
the Board of Directors shall be deemed to retain his status as a Director for
purposes of this Agreement so long as he continues to serve in the capacity of
an Advisory or Emeritus Director. The word "Director" shall have the meaning
set forth in this definition regardless of whether or not the first letter of
the word is capitalized.
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<PAGE>
8. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, other legal representative, successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
AZTEC MANUFACTURING CO.
By:
------------------------------------
L. C. Martin
OPTIONEE:
---------------------------------------
---------------------------------------
Printed Name
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<PAGE>
1998 ANNUAL MEETING OF SHAREHOLDERS
10:00 a.m., July 14, 1998
Petroleum Club
Derrick I Room
39th Floor of the Continental Plaza
777 Main Street
Fort Worth, Texas
<PAGE>
AZTEC MANUFACTURING CO.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
[ ]
For Withheld For All
1. Election of Directors - All All Except
Nominees: L.C. Martin, R.J. Schumacher, H.K. Downey 0 0 0
--------------------------------------------
(Except nominee(s) written above.) For Against Abstain
2. Ratification of the appointment of the Auditors 0 0 0
3. Approval of 1998 Incentive Stock Option Plan. For Against Abstain
0 0 0
4. Approval of 1998 Nonstatutory Stock Option Plan. For Against Abstain
0 0 0
5. Approval of 1997 Nonstatutory Stock Option Grants. For Against Abstain
0 0 0
The undersigned acknowledges receipt of the Notice of
Annual Meeting of Shareholders and of the Proxy Statement.
Dated: , 1998
---------------------------------------------
Signature(s)
---------------------------------------------
----------------------------------------------------------
Please sign exactly as your name appears. Joint owners
should each sign personally. When applicable, indicate
your official position of representation capacity.
<PAGE>
PROXY CARD PROXY CARD
AZTEC MANUFACTURING CO.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 14, 1998
The undersigned, having received the notice and accompanying Proxy Statement
and revoking all prior proxies, hereby appoints L.C. MARTIN, SAM ROSEN and
D.L. PERRY and each of them with power of substitution in each, proxies to
vote at the annual meeting to be held on July 14, 1998 at 10:00 a.m. in Fort
Worth, Texas, or at any adjournment thereof, all shares of Aztec Manufacturing
Co. which the undersigned may be entitled to vote. Said proxies are authorized
to vote as directed on the reverse side of this card. If no direction is made,
this Proxy will be voted FOR the election of Directors and FOR proposals 2, 3,
4 and 5.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2, 3, 4 AND 5.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE
SIDE AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
