HOLOPHANE CORP, DEF 14A, 1998-03-23

HOLOPHANE CORP
DEF 14A, 1998-03-23
ELECTRIC LIGHTING & WIRING EQUIPMENT

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<PAGE>
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant / /
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / 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

HOLOPHANE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/ / No fee required

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction applies:

------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

------------------------------------------------------------------------
(5) Total fee paid:

------------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

------------------------------------------------------------------------
(3) Filing Party:

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(4) Date Filed:

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<PAGE>
HOLOPHANE CORPORATION
250 EAST BROAD STREET, SUITE 1400
COLUMBUS, OHIO 43215

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 30, 1998

Notice is hereby given that the 1998 Annual Meeting of Stockholders of
Holophane Corporation will be held at the Concourse Hotel, 4300 International
Gateway, Columbus, Ohio, on Thursday, April 30, 1998, at 11:00 a.m., for the
following purposes:

1. to elect two directors, each for a term to expire at the 2001 Annual
Meeting of Stockholders;

2. to consider and vote upon a proposal to approve the Holophane
Corporation Employee Stock Option Plan;

3. to consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche LLP as the Company's independent accountants for the 1998
fiscal year; and

4. to act upon such other matters as may properly come before the
meeting or any postponements or adjournments thereof.

The Board of Directors has fixed the close of business on March 10, 1998
as the record date for the determination of the stockholders entitled to
notice of and to vote at the meeting and at any adjournment or postponement
thereof.

You are cordially invited to attend the Annual Meeting. Whether or not
you plan to attend the Annual Meeting, you may ensure your representation by
completing, signing, dating and promptly returning the enclosed proxy card.
A return envelope, which requires no postage if mailed in the United States,
has been provided for your use. If you attend the Annual Meeting and inform
the Secretary of the Company in writing that you wish to vote your shares in
person, your proxy will not be used.

If your shares are held of record by a broker, bank or other nominee and
you wish to attend the meeting, you must obtain a letter from the broker,
bank or other nominee confirming your beneficial ownership of the shares and
bring it to the meeting. In order to vote your shares at the meeting, you
must obtain from the record holder a proxy issued in your name.

Regardless of how many shares you own, your vote is very important.
Please SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TODAY.

By order of the Board of Directors,

/s/ Bruce A. Philp

Bruce A. Philp
SECRETARY

Columbus, Ohio
March 25, 1998

<PAGE>

HOLOPHANE CORPORATION
250 EAST BROAD STREET, SUITE 1400
COLUMBUS, OHIO 43215

------------------

PROXY STATEMENT

------------------

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors and management of Holophane Corporation, a Delaware
corporation (the "Company"), of proxies for use at the 1998 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the
Concourse Hotel, 4300 International Gateway, Columbus, Ohio, on Thursday,
April 30, 1998, at 11:00 a.m., and at any and all postponements or
adjournments thereof, for the purposes set forth in the accompanying Notice
of Meeting.

This Proxy Statement, Notice of Meeting and accompanying proxy card are
first being mailed to stockholders on or about March 25, 1998.

The principal executive offices of the Company are located at 250 East
Broad Street, Suite 1400, Columbus, Ohio 43215.

GENERAL

Only stockholders of record at the close of business on March 10, 1998
are entitled to notice of and to vote the shares of common stock, par value
$.01 per share, of the Company (the "Common Stock") held by them on that date
at the Annual Meeting or any postponements or adjournments thereof.

If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote for the slate of
nominees proposed by the Board of Directors; for approval of the Holophane
Corporation Employee Stock Option Plan; ratification of the appointment of
Deloitte & Touche LLP as the Company's independent accountants for the fiscal
year ending December 31, 1998 and as recommended by the Board of Directors
with regard to all other matters or, if no such recommendation is given, in
their own discretion. Abstentions, broker non-votes or, in the case of the
proposal to elect the slate of nominees proposed by the Board of Directors
only, instructions on the accompanying proxy card to withhold authority to
vote for the nominated director will result in a proposal's receiving fewer
votes. Under the Delaware General Corporation Law and the Company's Second
Amended and Restated Certificate of Incorporation (the "Charter"), (i) a
plurality of the votes of the outstanding shares of Common Stock entitled to
vote and present, in person or by properly executed proxy, will be required
to elect a nominated director and (ii) the affirmative vote of the holders of
at least a majority of the outstanding shares of Common Stock entitled to
vote and present, in person or by properly executed proxy, will be required
to approve the Holophane Corporation Employee Stock Option Plan and ratify
the appointment of Deloitte & Touche LLP as the Company's independent
accountants for the fiscal year ending December 31, 1998. Each stockholder
may revoke a previously granted proxy at any time before it is exercised by
filing with the Secretary of the Company a revoking instrument or a duly
executed proxy bearing a later date. The powers of the proxy holders will be
suspended if the person executing the proxy attends the Annual Meeting in
person and so requests in writing. Attendance at the Annual Meeting will
not, in itself, constitute revocation of a previously granted proxy.

<PAGE>

The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of Common Stock outstanding on March 10,
1998 will constitute a quorum. Each outstanding share entitles its holder to
cast one vote on each matter to be voted upon at the Annual Meeting. As of
March 10, 1998, the record date for the 1998 Annual Meeting, 10,990,200
shares of Common Stock were outstanding and entitled to vote. Stockholders
will not be entitled to appraisal rights in connection with any of the
matters to be voted on at the Annual Meeting.

<PAGE>

STOCK OWNERSHIP

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of March 10, 1998, by
each of the Company's directors and nominees, each of the Company's named
executive officers, all directors and officers as a group and each person who
is known by the Company to beneficially own five percent or more of any class
of the Company's voting securities.

SHARES BENEFICIALLY OWNED
-------------------------
DIRECTORS, NOMINEES AND NUMBER EXERCISABLE
OTHER NAMED EXECUTIVE OFFICERS (A) OF SHARES OPTIONS TOTAL PERCENT
- ---------------------------------- --------- ------- ----- -------
<S> <C> <C> <C> <C>

John R. DallePezze (b) 334,679 275,375 610,054 5.4%
William R. Michaels 70,818 10,000 80,818 *
Robert L. Purdum 4,000 22,000 26,000 *
Anthony P. Scotto 48,533 10,000 58,533 *
Tadd C. Seitz 8,000 22,000 30,000 *
Jeffrey M. Wilkins 2,000 10,000 12,000 *
John W. Harvey 58,509 73,750 132,259 1.2
S. Lee Keller (b) 133,999 65,750 199,749 1.8
Bruce A. Philp (b) 169,415 63,750 233,165 2.1
William T. Weisert (b) 31,945 49,713 81,658 *
All directors and executive
officers as a group (12 persons) 880,303 621,151 1,501,454 12.9

OTHER 5% STOCKHOLDERS
- ---------------------
The Capital Group Companies, Inc. (c)
333 South Hope Street
Los Angeles, CA 90071 724,000 6.6

First Pacific Advisors, Inc. (d)
11400 West Olympic Boulevard
Los Angeles, CA 90064 793,600 7.2

T. Rowe Price Associates, Inc. (e)
100 East Pratt Street
Baltimore, MD 21202 1,334,900 12.1

- ------------------------
* Less than 1%.

</TABLE>

<PAGE>

(a) The business address of each of the directors, nominees and named executive
officers is: c/o Holophane Corporation, 250 East Broad Street, Suite
1400, Columbus, Ohio 43215.

(b) Also includes shares of Common Stock held by the respective spouses of
executive officers of the Company and by their children that reside with
them.

(c) Information is based on the Amendment No. 1 to Schedule 13G dated February
10, 1998, which reflects the beneficial ownership of and sole dispositive
power over 724,000 shares of Common Stock by Capital Guardian Trust Company
("Capital Trust"), a California corporation and a wholly-owned subsidiary
of The Capital Group Companies, Inc. ("Capital Group"), a Delaware
corporation. Capital Trust has sole voting power over 602,400 shares.

(d) Information is based on the Amendment No. 1 to Schedule 13G dated February
9, 1998, which reflects the aggregate beneficial ownership of and shared
dispositive power over 793,600 shares of Common Stock by First Pacific
Advisors, Inc. ("First Pacific"), a Massachusetts corporation. First
Pacific has shared voting power over 189,000 shares and sole voting power
over no shares.

(e) Information is based on the Amendment No. 2 to Schedule 13G dated February
12, 1998, filed jointly by T. Rowe Price Associates, Inc. ("Price
Associates"), an investment advisor registered under the Investment
Advisors Act of 1940, and T. Rowe Price Small Cap Value Fund, Inc. ("Value
Fund"), a Maryland corporation, which reflects the beneficial ownership of
and sole dispositive power over 1,334,900 shares of Common Stock by Price
Associates. Price Associates has sole voting power over 118,900 shares.
Value Fund has sole voting power over 813,000 shares and sole dispositive
power over no shares.

ITEM 1 - ELECTION OF DIRECTORS

The Board of Directors of the Company is divided into three classes with
regular three year staggered terms. The term of office of directors in Class
II expires at the Annual Meeting. The Board of Directors proposes that the
nominees described below be elected to Class II for a new term to expire at
the 2001 Annual Meeting of Stockholders and until their successors are duly
elected and qualified. The Board of Directors has no reason to believe that
any of the nominees will not serve if elected, but if any of them should
become unavailable to serve as a director, and if the Board designates a
substitute nominee, the persons named as proxies will vote for the substitute
nominee designated by the Board.

NOMINEES STANDING FOR ELECTION TO THE BOARD OF DIRECTORS

CLASS II - TERM TO EXPIRE AT THE 2001 ANNUAL MEETING

Directors will be elected by a plurality of the votes entitled to vote
and present, in person or by properly executed proxy. The accompanying proxy
will be voted for the election of the Board's nominees unless contrary
instructions are given. If elected, all nominees are expected to serve until
the 2001 Annual Meeting or until their successors are duly elected and
qualified. If the Board's nominee is unable to serve, the persons named as
proxies intend to vote, unless the number of nominees is reduced by the Board
of Directors, for such other person as the Board of Directors may designate.

<PAGE>

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF ITS NOMINEES FOR DIRECTORS, WHICH IS DESIGNATED AS PROPOSAL NO. 1
ON THE ENCLOSED PROXY CARD.

JOHN R. DALLEPEZZE, CHAIRMAN DIRECTOR SINCE 1989

Mr. DallePezze, 54, has been a Director, President and Chief Executive
Officer of the Company since he joined the Company in October 1989 and
Chairman of the Board since February 1992. Prior to joining the Company, Mr.
DallePezze served from 1983 to 1989 as President of the McCullough Division
of N.L. Industries Inc. and Western Atlas International Inc. Prior to 1983,
Mr. DallePezze served as General Manager of the Lighting Products Division of
Corning Inc. Mr. DallePezze serves as a director of Belden, Inc., a wire and
cable manufacturer.

ANTHONY P. SCOTTO DIRECTOR SINCE 1991

Mr. Scotto, 51, is a Managing Director of Oak Hill Partners, Inc., the
investment advisor and management company for Acadia Partners, L.P. and
Keystone, Inc. Mr. Scotto serves as a director of Ivex Packaging Corporation
and Specialty Foods Corporation. Mr. Scotto is a member of the Compensation
Committee.

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE

CLASS I - TERM TO EXPIRE AT THE 2000 ANNUAL MEETING

WILLIAM R. MICHAELS DIRECTOR SINCE 1989

Mr. Michaels, 63, was the Chairman of the Board of the Company from June
1989 through February 1992. From September 1988 to June 1997, Mr. Michaels
was Chairman of the Board, President and Chief Executive Officer and since
June 1997 Chairman of the Board of Pinnacle Automation, Inc., a manufacturer
of specialized material handling systems. Mr. Michaels is a member of the
Audit Committee.

ROBERT L. PURDUM DIRECTOR SINCE 1994

Mr. Purdum, 62, retired as Chairman of Armco Inc., a major steel
manufacturer, in 1994. Mr. Purdum joined Armco in 1962 following service in
the U.S. Navy. He was elected President of Armco in 1986 and served as Chief
Executive Officer from November 1990 to December 1993. Mr. Purdum is a
director of Berlitz International, Inc., a language services firm, and
Chairman of Bucyrus International, a mining equipment manufacturer. Mr.
Purdum is also a partner in American Industrial Partners and is on the Board
of Trustees of GMI Engineering & Management Institute. Mr. Purdum is
Chairman of the Audit Committee.

<PAGE>

CLASS III - TERM TO EXPIRE AT THE 1999 ANNUAL MEETING

JEFFREY M. WILKINS DIRECTOR SINCE 1996

Mr. Wilkins, 53, has been Chairman and Chief Executive Officer of
Metatec Corporation, an information services company, since August 1989. Mr.
Wilkins founded and served as Chief Executive Officer of CompuServe from its
beginning in 1969 until mid-1985. Mr. Wilkins serves as a director of
Checkfree Corporation. Mr. Wilkins is a member of the Compensation Committee.

TADD C. SEITZ DIRECTOR SINCE 1993

Mr. Seitz, 56, is the retired Chairman and Chief Executive Officer of
The Scotts Company, a manufacturer of lawn and garden care products. Mr.
Seitz serves on several private company boards. Mr. Seitz is Chairman of the
Compensation Committee.

DIRECTORS' REMUNERATION; ATTENDANCE

Directors of the Company who are not employees receive an annual
retainer fee of $25,000. Employees who serve as directors receive no
additional remuneration. All directors are reimbursed for out-of-pocket
expenses. Non-employee directors receive no fringe benefits other than
elective deferral of directors' fees through the Supplemental Executive
Retirement Plan.

All independent directors will receive an annual grant of options to
purchase 4,000 shares of Common Stock pursuant to the Company's 1993 and 1996
Incentive Stock Plan.

The Company's Charter and Bylaws provide for the elimination of
liability of directors and the indemnification of directors and officers to
the fullest extent permitted by Delaware law.

The Board of Directors met four times during 1997. All of the
directors attended 100% of the total number of meetings of the Board and of
the committees on which they served during 1997.

COMMITTEES OF THE BOARD

The Board has standing Compensation and Audit Committees.

COMPENSATION COMMITTEE. The Compensation Committee met three times
during 1997. The purpose of the Compensation Committee of the Board of
Directors (the "Committee") is to establish and administer executive
compensation policies which are aligned with the Company's business
objectives. A detailed report follows.

AUDIT COMMITTEE. The Audit Committee met three times during 1997. Its
functions are to recommend the appointment of independent accountants; review
the arrangements for and scope of the audit by independent accountants;
review the independence of the independent accountants; consider the adequacy
of the system of internal accounting controls and review any proposed
corrective actions; review and monitor the Company's policies regarding
business ethics and conflicts of interests; discuss with management and the
independent accountants the Company's draft annual financial statements and
key accounting and/or reporting matters; and other related functions.

<PAGE>

EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

The following tables set forth information concerning total compensation
earned or paid to the Chief Executive Officer and the four most highly
compensated executive officers of the Company who served in such capacities
on December 31, 1997 (the "named executive officers") for services rendered
to the Company.

SUMMARY COMPENSATION TABLE

The following table discloses compensation paid or to be paid to the
named executive officers for each of the last three fiscal years.

ANNUAL LONG-TERM
COMPENSATION(a) COMPENSATION
----------------------------- -----------------------------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(b) BONUS(c) OPTIONS/SARS PAYOUTS(c) COMPENSATION(d)
- --------------------------- ---- --------- -------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John R. DallePezze 1997 $346,192 $193,868 62,500 $203,767 $49,573
Chairman, President & 1996 305,597 122,575 55,000 203,767 44,233
Chief Executive Officer 1995 291,096 248,600 81,000 461,596 70,087

John W. Harvey 1997 $167,173 $78,700 14,000 $72,775 $21,270
Vice President, 1996 152,800 49,100 13,000 72,775 19,224
Manufacturing 1995 145,550 89,500 21,000 164,392 27,958

S. Lee Keller 1997 $171,404 $68,600 14,000 $72,775 $20,957
Vice President, 1996 152,800 41,800 13,000 72,775 18,713
Sales 1995 145,550 98,500 21,000 176,018 29,402

Bruce A. Philp 1997 $167,173 $79,400 14,000 $72,775 $21,203
Vice President, Finance, 1996 152,800 46,500 13,000 72,775 19,042
Chief Financial Officer 1995 145,550 93,500 21,000 172,789 28,826

William T. Weisert 1997 $145,519 $48,300 11,000 $57,933 $16,244
Vice President, 1996 135,190 28,600 8,800 57,933 15,518
Research & Development 1995 128,740 64,000 12,750 130,609 22,631

</TABLE>

- -------------------
(a) Other Annual Compensation, which consists solely of perquisites or other
personal benefits, was less than the lesser of $50,000 or 10% of such named
executive officer's annual salary and bonus for such year.
(b) 1997 salary includes 27 pays versus the normal 26 due to timing of the
Company's bi-weekly payroll practice.
(c) Amounts include deferred portions under the Company's Supplemental
Executive Retirement Plan.
(d) All Other Compensation for the 1997 fiscal year reflects amounts
contributed by the Company to Messrs. DallePezze, Harvey, Keller, Philp
and Weisert of $11,167 each under the Company's Thrift Plan and $38,406,
$10,103, $9,790, $10,036 and $5,077, respectively, as supplemental
retirement benefits under the Company's Supplemental Executive Retirement
Plan.

7
<PAGE>

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The following table provides information on option grants in fiscal 1997
to the named executive officers.

POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (b)
------------------------------------------------------------- ------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE (c) DATE 5% 10%
---- ----------- ----------- ----------- ------------- ------------ ------------
($/SHARE)
<S> <C> <C> <C> <C> <C> <C>
John R. DallePezze..... 62,500(a) 26.7 $20.75 Feb. 19, 2007 $815,598 $2,066,885
John W. Harvey......... 14,000(a) 6.0 $20.75 Feb. 19, 2007 $182,694 $462,982
S. Lee Keller.......... 14,000(a) 6.0 $20.75 Feb. 19, 2007 $182,694 $462,982
Bruce A. Philp......... 14,000(a) 6.0 $20.75 Feb. 19, 2007 $182,694 $462,982
William T. Weisert..... 11,000(a) 4.7 $20.75 Feb. 19, 2007 $143,545 $363,772
All Optionees.......... 234,100 100.0 $20.75 Feb. 19, 2007 $3,054,903 $7,741,724

</TABLE>
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(a) Twenty-five percent of such options vest on February 19, 1998, with the
remaining 75% vesting 25% per year until fully vested on February 19, 2001.
Such options have stock-for-stock exercise and tax withholding features,
which allow the holders, in lieu of paying cash for the exercise price and
any tax withholding, to have the Company commensurately reduce the number
of shares of Common Stock to which they would otherwise be entitled upon
exercise of such options.

(b) The dollar amounts under these columns are the result of calculations at
the 5% and 10% annualized rates of stock price appreciation set by the
Securities and Exchange Commission and therefore are not intended to
forecast future appreciation, if any, of the Company's stock price.

(c) The exercise price of the options is the per share fair market value of the
underlying Common Stock on the date of the grant.

<PAGE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE

The following table provides information on option exercises in fiscal
1997 by the named executive officers and values of such officers' unexercised
options at December 31, 1997.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE END EXERCISABLE/ FISCAL YEAR-END
NAME ON EXERCISE REALIZED UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------------- ------------ ------------------------ ---------------------------
<S> <C> <C> <C> <C>

John R. DallePezze......... 8,000 $103,750 213,875/161,125 $2,826,409/$1,193,234
John W. Harvey............. 0 $0 57,250/38,750 $761,729/$297,136
S. Lee Keller.............. 8,000 $94,000 49,250/38,750 $643,729/$297,136
Bruce A. Philp............. 10,000 $100,000 47,250/38,750 $614,229/$297,136
William T. Weisert......... 0 $0 38,575/26,975 $514,540/$197,645

</TABLE>

EMPLOYMENT AGREEMENT

On August 30, 1993, the Company entered into an amended employment
agreement (the "Employment Agreement") with Mr. DallePezze which sets forth
the terms and conditions of Mr. DallePezze's employment as President,
Chairman and Chief Executive Officer. Mr. DallePezze's current compensation
includes a base salary of $355,000 and a targeted bonus of 70% of the base
salary.

If Mr. DallePezze's employment is terminated by the Company without
Cause or if he resigns for Good Reason, other than within two years following
a Change of Control (in each case, as defined in the Employment Agreement),
Mr. DallePezze would be entitled to receive severance payments and other
benefits. These payments and benefits would include (a) a single lump sum
payment of any accrued base salary, benefits and bonus under the Bonus Plan;
(b) continuation of base salary, bonus payments and fringe benefits generally
for a period of 36 months following termination of employment, provided that
such amounts shall be reduced if Mr. DallePezze accepts third-party
employment; and (c) full vesting of all outstanding stock options.

Within two years following a Change of Control, if Mr. DallePezze's
employment is terminated by the Company without Cause or if he resigns for
Good Reason, he would be entitled to receive certain lump sum payments and
other benefits, including (a) a single lump sum payment of any accrued base
salary, benefits and bonus under the Bonus Plan; (b) a single lump sum
payment equal to the sum of (i) two times Mr. DallePezze's applicable base
salary and targeted Annual Bonus and (ii) the maximum Long-Term bonus payment
possible under the Bonus Plan; and (c) reimbursement of any excise tax
incurred under Section 4999 of the Internal Revenue Code of 1986 (the "Code")
plus any resulting income taxes as a result of such reimbursement. In
addition, upon the occurrence of a Change in Control, Mr. DallePezze will
become fully vested in all employee benefit plans in which he is a
participant, including all stock options granted to him.

If Mr. DallePezze's employment is terminated by the Company for Cause or
if he resigns without Good Reason, he would not be entitled to any severance
pay or any other additional compensation.

<PAGE>

TERMINATION BENEFITS AGREEMENTS

In September and October 1993, the Company entered into certain
Termination Benefits Agreements (the "Termination Agreements") with each of
the Company's executive officers other than Mr. DallePezze. Under the terms
of the Termination Agreements, the executive officers are entitled to receive
certain benefits upon the termination of their employment within two years
following a Change in Control if termination is without Cause or for Good
Reason (all terms as defined in the Termination Agreements). Benefits
payable upon termination would include (a) a single lump sum payment of any
accrued base salary, benefits and bonus under the Bonus Plan; (b)
continuation of fringe benefits for a period of 18 months following
termination of employment; (c) a single lump sum payment equal to the sum of
(i) 1 1/2 times the executive's applicable base salary and targeted Annual
bonus and (ii) the maximum Long-Term bonus payment possible under the Bonus
Plan; and (d) reimbursement of any excise tax incurred under Section 4999 of
the Code, plus any resulting income taxes. In addition, upon the occurrence
of a Change in Control, the executive will become fully vested in all
employee benefit plans in which he is a participant, including all stock
options granted to him.

COMPENSATION COMMITTEE REPORT ON COMPENSATION OF

EXECUTIVE OFFICERS OF THE COMPANY

The purpose of the Compensation Committee of the Board of Directors is
to establish and administer executive compensation policies which are aligned
with the Company's business objectives. The Committee recommends
compensation actions for all corporate officers to the Board of Directors for
approval. All Committee members are non-employee directors.

COMPENSATION PHILOSOPHY

There are certain guiding principles utilized by the Committee in structuring
the compensation packages of key executives. They are:

Pay for Performance - To align the executives' interest with the interests
of stockholders, a high percentage of executives' total compensation is
composed of leveraged short-term and long-term incentives directly linked
to the performance of the Company.

Competitiveness - Executives are provided with an opportunity to earn total
compensation at a level above the median for comparable companies when
Company performance exceeds industry norms and that of its competitors.
This opportunity enables the Company to significantly challenge its
management team.

Executive Ownership - A major component of total compensation is equity
based. This links management's interests with stockholders' interests and
provides rewards for long-term results.

Management Development - Total compensation programs are designed to
attract and retain individuals with the leadership and technical skills
required to ensure the Company's future. The Committee believes that the
Company's human resources can provide a competitive advantage.

<PAGE>

COMPONENTS OF EXECUTIVE COMPENSATION

The components of total compensation for all executives are base salary, a
bonus plan, fringe benefits and stock options. The Committee annually
reviews total compensation for the Company's executives as well as each
component of compensation. Compensation consultants are utilized by the
Committee to assist in structuring the compensation program and to supply
appropriate competitive compensation information. The Committee has utilized
data from a group of publicly held companies in similar lines of business as
the Company as well as data for general industrial companies of similar size
as the Company. For stock performance comparisons, the Company utilizes the
Dow Jones Industrial Index for the Electrical Components and Equipment Group
which includes companies engaged in similar lines of business as the Company.
While some of these companies were also used for competitive compensation
information, those with substantially larger market capitalization were
excluded.

BASE SALARY - Base salary for all executive officers is targeted to be
in the second quartile (below the median but above the 25th percentile) of
comparable companies. Salaries are reviewed annually and may be adjusted
based subjectively on individual and corporate performance, as measured by
sales, EBITDA and net income, as well as industry comparisons. No specific
weight was assigned to these factors in determining 1997 base salaries for
the executive officers.

BONUS PLAN - The Company's management employees, including the executive
officers, participate in the Holophane Bonus Plan, consisting of both an
Annual and Long-Term Bonus. The Plan is targeted to provide total cash
compensation (salary plus bonuses) in the third quartile of comparable
companies if Company performance objectives are met. Depending on actual
performance, total cash compensation may range from the lowest to the highest
quartile of comparable companies.

Each Bonus Plan participant has a target bonus ranging from 10% to 70%
of base salary. Annual Bonuses, ranging from 0% to 150% of target, are paid
based upon performance against Company financial objectives, including goals
for increases in sales and EBITDA. The Chief Executive Officer's Annual
Bonus is based solely upon performance versus these objectives. The Annual
Bonus for other Plan participants, including the executive officers, is based
on performance versus both (in order of importance) Company objectives and
individual objectives. While sales and net income improved in 1997, overall
Company performance fell short of the Company's financial objectives
resulting in bonuses which were lower than target.

The Long-Term Bonus is paid if certain long-term goals are met. The
Long-Term Bonus Plan is a rolling three year plan (except for the two year
transition period ending in 1996). Awards are based solely on achievement of
earnings per share objectives. The maximum Long-Term Bonus award for each
participant equals the target bonus in the first year of each plan period.
The 1997 Long-Term Bonus Plan was paid at maximum levels due to the 50%
earnings per share improvement over the previous three year period. During
this time frame, the market price of Holophane stock increased 98%.

FRINGE BENEFITS - The executive officers participate in the same fringe
benefit plans offered to all salaried employees, including the 5% defined
contribution Thrift Plan. Additionally, they participate in the Supplemental
Executive Retirement Plan, a non-qualified plan intended to "restore"
retirement benefits which would have accrued under the Thrift Plan were it
not for various limitations under the Code. In addition, participants may be
entitled to defer a portion of their bonuses.

STOCK OPTIONS - The Company's Incentive Stock Plans foster executive
stock ownership and align the executives' interests with stockholders'
interests. Grants are targeted to be at the 75th percentile of grants for
similarly

<PAGE>

compensated executives at comparable companies. Consistent with the intent
of the Incentive Stock Plans, the Compensation Committee has established
stock ownership expectations for all participants.

The maximum number of shares of Common Stock with respect to which
awards may be granted under the 1993 Incentive Stock Plan is 1,182,000. Last
year, 234,100 stock options were granted to directors and key employees,
including the named executives as set forth in the Summary Compensation
Table. Under the 1996 Incentive Stock Plan, 800,000 additional shares were
authorized for use after 1996, however, none of these were used in 1997.

SECTION 162(m) COMPLIANCE

Section 162(m) of the Internal Revenue Code of 1986 (the "Code") places
certain restrictions on the amount of compensation in excess of $1,000,000
which may be deducted for each executive. The Company intends to satisfy the
requirements of Section 162(m) should the need arise.

CHIEF EXECUTIVE OFFICER COMPENSATION

Mr. DallePezze is compensated pursuant to the terms of his Employment
Agreement. Based on competitive data from the Company's compensation
consultant, the Committee believes that, relative to CEO compensation in
comparable companies, Mr. DallePezze's base salary for 1997 was in the second
quartile, his annual cash compensation was in the second quartile and his
total cash compensation was in the third quartile. Mr. DallePezze was
granted 62,500 stock options pursuant to the 1993 Incentive Stock Plan
described above under STOCK OPTIONS. This grant was established at the 75th
percentile of grants for similarly compensated executives at comparable
companies. The grant also reflects Mr. DallePezze's leadership in achieving
the Company's past performance as well as expectations for his future
contribution.

Members of the Compensation Committee

ANTHONY P. SCOTTO
TADD C. SEITZ, CHAIRMAN
JEFFREY M. WILKINS

<PAGE>

STOCK PRICE PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return on
the Common Stock of Holophane since becoming a public company on October 28,
1993 with the cumulative total return of (i) the Standard & Poor's 500
Composite Stock Price Index and (ii) the Dow Jones Industrial Index for the
Electrical Components and Equipment Group. The graph assumes the investment
of $100 in Holophane Common Stock, the Standard & Poor's 500 Index and the
Dow Jones Industrial Index for the Electrical Components and Equipment Group.
The initial public offering price of the Company's Common Stock was $10 per
share, adjusted for the 3:2 stock split on December 15, 1995.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ELECTRICAL COMPONENTS STANDARD & POOR'S
HOLOPHANE CORPORATION & EQUIPMENT INDEX 500 INDEX
--------------------- --------------------- -----------------
<S> <C> <C> <C>
10/28/93 100.00 100.00 100.00
12/31/93 113.33 102.97 100.24
12/31/94 125.00 107.22 100.24
12/31/95 217.50 140.20 139.73
12/31/98 190.00 170.75 171.81
12/31/97 247.50 209.62 229.11

</TABLE>

ITEM 2 - APPROVAL OF THE HOLOPHANE CORPORATION EMPLOYEE STOCK OPTION PLAN

On November 18, 1997 the Board of Directors adopted the Holophane
Corporation Employee Stock Option Plan (the "Plan"), subject to the approval
of the Plan by the stockholders of the Company at the 1998 annual meeting of
stockholders.

The purpose of the Employee Stock Option Plan is to promote employee
ownership of the Company by providing eligible employees with an opportunity
to purchase shares of Common Stock at a fixed price through regular payroll
deductions over a period of two years. The Plan is entirely voluntary, and
the Company has made no recommendations to employees whether they should or
should not participate. The following summary is qualified in its entirety by
reference to the Plan, which is attached hereto as Appendix I.

<PAGE>

The Plan provides for the granting of options to eligible employees from
time to time on such dates, not later than November 18, 2007, as the Board of
Directors may from time to time determine (each such date being referred to
as an "Offering Date") to be exercised on such dates, in each case not later
than 27 months after the related Offering Date (the "Exercise Date"). Under
the Plan, all persons who on an Offering Date are employees of the Company's
U.S. or Canadian subsidiaries are eligible to participate except for (i)
directors of the Company or a participating subsidiary who are not employees;
(ii) employees whose customary employment is less than 20 hours per week or
for not more than 5 months in any calendar year; or (iii) any employee who,
if granted an option under the Plan, would immediately after the option is
granted own Stock equal to five percent or more of the total combined voting
power or value of all classes of stock of the Company and its parent and
subsidiary corporations.

As of each Offering Date, each eligible employee shall be granted an
option to purchase a maximum number of shares of Common Stock, which number
of shares, when multiplied by the option price, as described below, will most
closely approximate a percentage fixed by the Board of the employee's total
compensation for the period beginning the first day of the year following
the Offering Date and ending on the last day of the second year following the
Offering Date (the "Payroll Deduction Period"). Not more than 45 days (or
such longer or shorter periods established by the Board) after the Offering
Date, an employee shall elect to purchase all, part or none of the shares of
Common Stock that he is entitled to purchase with respect to that Offering
Date. Such election to participate in the current offering shall be made by
employees by authorizing uniform payroll deductions equal to 1%, 2%, 3%, 4%
or 5% of the employee's total compensation (or a portion of such total
compensation as determined by the Board). The Company will establish a stock
purchase account for employees who elect to purchase shares of Common Stock
with respect to an Offering Date, to which all payroll deductions of those
employees will be credited. Employees will earn interest on the money
contributed to the Plan. Interest earnings may not be used to purchase
shares of Common Stock under the Plan. Interest earnings will be paid to
employees after the Exercise Date or when an employee's participation in the
Plan is terminated.

Once an election is made, employees are not permitted to increase
payroll deductions, nor are they permitted to enter or reenter the Plan after
the deadline for enrolling in the Plan. Employees may at any time on or
before the Exercise Date, (i) reduce the amount of payroll deductions, but in
no event may deductions be less than 1%, (ii) terminate all future payroll
deductions, but continue their election to purchase shares of Common Stock
with the money that has been contributed to date; or (iii) withdraw all of
their contributions and accrued interest and terminate their participation in
the current offering.

The option price for all shares of Common Stock for which options are
granted on an Offering Date will be the lesser of 85% of the average of the
high and low selling price of Common Stock on the Offering Date or 100% of
the average of the high and low selling price of Common Stock on the Exercise
Date.

The aggregate number of shares which may be issued under the Plan is
300,000 shares of Common Stock which shares may be authorized but unissued
shares or treasury shares, or both. The aggregate number of shares that may
be issued under this Plan may be modified to reflect a change in
capitalization of the Company, such as a stock dividend or stock split.

If an employee leaves the employment of the Company prior to the
Exercise Date for any reason other than death or retirement, any election to
purchase shares of Common Stock made by the employee with respect to that
Offering Date shall terminate and any amount then credited to the employee's
account, together with interest to the date of termination, shall be paid in
cash to the employee. In the event an employee leaves the employment of the
Company in connection with the sale of a subsidiary, division or line of
business, the Company may terminate the election of such employee to purchase
shares of Common Stock (refunding any amount credited to the employee's
account, together with accrued interest) or continue said election on any
basis deemed appropriate by the Company.

<PAGE>

Employees who leave the employment of the Company because of retirement
after the Offering Date, may continue their election to purchase shares of
Common Stock with money contributed to date or may withdraw their entire
account balance with interest and terminate participation in the current
offering. Retiring employees must notify the Company of their decision within
30 days following their retirement. If notice is not received by the Company
within 30 days, all of the contributions and accrued interest will be
refunded to the retiring employee.

In the event of the death of a participating employee, the legal
representative of the employee may, within 90 days following the employee's
death, but not later than the Exercise Date, by written notice elect to
either: (i) make no additional payments, but continue the employee's election
to purchase shares of Common Stock with the money that has been contributed
to date; or (ii) withdraw all contributions, together with accrued interest,
and terminate participation in the Plan. If written notice is not received
by the Company within 90 days of the death of the employee, participation
will continue until the Exercise Date at which time options to purchase the
number of shares for which the employee has paid will be exercised.

The Plan provides that payroll deductions will be suspended during any
period of layoff, strike or authorized leave of absence without pay of an
employee and, in such case, the employee may elect to (i) continue the
election to purchase shares of Common Stock based on the amount paid into the
account prior to the leave; or (ii) withdraw all contributions including
interest and terminate participation in the Plan.

Stock certificates will be issued to employees as soon as possible after
the Exercise Date. During the Payroll Deduction Period, participants are not
considered stockholders by virtue of the Plan. Stock certificates for the
shares purchased will be issued in the name of the participating employee
only. All rights as stockholders will begin after the Common Stock
certificates are issued.

The Plan is administered by the Compensation Committee of the Board of
Directors of the Company. The Committee has been designated by the Board of
Directors as being responsible for the administration and interpretation of
its provisions.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

The Plan is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Code. The Plan is not subject to any provisions of
the Employee Retirement Income Security Act ("ERISA") of 1974. The Plan is
not qualified under Section 401(a) of the Code.

Generally, participants will recognize taxable income under the Code
only on disposition of Common Stock purchased under the Plan or on the death
of a participant who has purchased Common Stock under the Plan (however, any
interest on a participant's accumulated payroll deductions returned to him in
cash will be taxed as ordinary income). The precise federal income tax
treatment applicable on disposition of Common Stock purchased under the Plan
is determined by the length of time such shares of Common Stock are held.
This treatment is discussed further below.

Any participant in the Plan who disposes of Common Stock purchased under
the Plan after two years from the date of the option to purchase Common Stock
was granted to him and after one year from the date such Common Stock were
actually transferred to him pursuant to his exercise of the option, or any
participant who dies while holding Common Stock transferred to him pursuant
to his exercise of the option to purchase Common Stock, will recognize
ordinary income in the year of such disposition or death in an amount equal
to the LESSER of: (1) the excess of the fair market value of the Common Stock
at disposition or death over the amount actually paid for the Common Stock;
or (2) the excess of the fair market value of the Common Stock at the time
the option was granted over the option price

<PAGE>

determined as if exercise had occurred on the date that the option was
granted. Any remaining gain will be taxed as a capital gain in the year of
disposition. Such capital gain will be long-term capital gain if the Common
Stock was held by the participant for at least eighteen (18) months following
the date on which such shares were actually transferred to the participant.
If, however, the sales prices is less than the option price, the participant
will recognize a long-term capital loss.

Any participant in the Plan who disposes of Common Stock purchased under
the Plan either within two years after the option to purchase Common Stock
was granted or within one year after the Common Stock were acquired may
recognize both ordinary income and capital gain or loss. The excess of the
fair market value of the Common Stock at the date the option to purchase
Common Stock is exercised over the option price will be taxed as ordinary
income in the year of disposition even if the Common Stock is sold at a loss.
The difference, if any, between the fair market value of the Common Stock as
of the date the option was exercised and the price received on disposition of
the Common Stock will be taxed as a capital gain or loss in the year of
disposition. If the participant has held the Common Stock acquired upon
exercise of his option less than one year, the capital gain or loss will be
short-term; if the participant has held the Common Stock for more than one
year, but less than eighteen (18) months, the capital gain or loss will be
mid-term; and if said participant has held such Common Stock for eighteen
(18) months or more, the capital gain or loss will be long-term.

Approval of the Holophane Corporation Employee Stock Option Plan
requires the affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy and entitled to vote at the annual meeting.
If the stockholders fail to approve the Plan, all employee payroll deposits
and interest earned on the funds will be refunded to employees.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE HOLOPHANE CORPORATION EMPLOYEE STOCK OPTION PLAN WHICH IS
DESIGNATED AS PROPOSAL NO. 2 ON THE ENCLOSED PROXY CARD.

ITEM 3-RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

The Company has appointed Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 31, 1998.
Deloitte & Touche LLP has served as the Company's independent accountants
since 1989. Services provided to the Company and its subsidiaries by Deloitte
& Touche LLP with respect to 1997 included the examination of the Company's
consolidated financial statements, limited reviews of quarterly reports,
services related to filings with the Securities and Exchange Commission and
consultations on various tax and information services matters.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting to respond to appropriate questions and to make such statements as
they may desire.

Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent accountants for 1998 will require the affirmative vote
of a majority of the shares of Common Stock represented in person or by proxy
and entitled to vote at the Annual Meeting. In the event stockholders do not
ratify the appointment of Deloitte & Touche LLP as the Company's independent
accountants for the forthcoming fiscal year, such appointment will be
reconsidered by the Audit Review Committee and the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR 1998, WHICH IS DESIGNATED AS PROPOSAL NO. 3 ON
THE ENCLOSED PROXY CARD.

<PAGE>

OTHER MATTERS

Under the securities laws of the United States, the Company is required
to report in this proxy statement any known failures by officers, directors
or 10% stockholders to file on a timely basis a Form 3, Form 4 or Form 5,
relating to beneficial ownership of the Company's equity securities, during
the last fiscal year. To the best of the Company's knowledge, all required
filings have been made on a timely basis.

As of the date of this proxy statement, the Company knows of no other
business that will be presented for consideration at the Annual Meeting other
than the items referred to above. Proxies in the enclosed form will be voted
in respect of any other business that is properly brought before the Annual
Meeting in accordance with the judgment of the person or persons voting the
proxies.

STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING

In general, stockholder proposals for the nomination of directors
intended to be presented at an Annual Meeting must be received by the Company
at least 60 and not more than 90 days prior to the Annual Meeting, or by
February 27, 1998, for the 1998 Annual Meeting. The requirements for
submitting such proposals and the required contents thereof are set forth in
the Company's Bylaws.

Any proposal of a stockholder intended to be presented at the Company's
1999 Annual Meeting of Stockholders must be received by the Secretary of the
Company, in order to be considered for inclusion in the Company's proxy
statement relating to the 1999 Annual Meeting, by November 25, 1998.

SOLICITATION OF PROXIES

The cost of soliciting proxies for the 1998 Annual Meeting will be borne
by the Company. The Company has retained Corporate Investor Communications,
Inc. to aid in the solicitation of proxies. For these services, the Company
will pay a fee of approximately $1,000 and reimburse it for certain
out-of-pocket disbursements and expenses. Officers and regular employees of
the Company may, but without compensation other than their regular
compensation, solicit proxies by further mailing or personal conversations,
or by telephone, telex or facsimile. The Company will, upon request,
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of stock.

<PAGE>

APPENDIX I

HOLOPHANE CORPORATION

EMPLOYEE STOCK OPTION PLAN

SECTION 1. PURPOSE

The Holophane Corporation Employee Stock Option Plan (the "Plan") is
designed to provide employees of Holophane Corporation (the "Company") and
its U.S. and Canadian subsidiaries with the opportunity to acquire shares of
common stock of the Company ("Stock"), by granting options to such employees
on such dates not later than November 18, 2007 (each such date is herein
referred to as an "Offering Date") to be exercised on such dates, in each
case not later than 27 months after the related Offering Date (each such date
of exercise is herein referred to as the "Exercise Date") as the Board of
Directors of the Company (the "Board") may determine. The Plan is intended
to constitute an "employee stock purchase plan" within the meaning of Section
423 of the Internal Revenue Code of 1986, as amended (the "Code").

SECTION 2. ELIGIBLE EMPLOYEES

All persons who on an Offering Date are U.S. or Canadian employees of
the Company or of such of its U.S. or Canadian subsidiary corporations
(within the meaning of Section 424(f) of the Code) as may be designated prior
to such Offering Date by the Board ("Participating Subsidiaries") will be
eligible to participate in the Plan except for:

(a) directors of the Company or a Participating Subsidiary that
are not employees;

(b) employees whose customary employment is less than 20 hours
per week or for not more than five months in any calendar year; and

(c) any employee who, if granted an option under the Plan, would
immediately after the option is granted own stock equal to five percent or
more of the total combined voting power or value of all classes of stock of
the Company and of its parent and subsidiary corporations (within the
meaning of Section 423(b)(3) and 424(d) of the Code).

SECTION 3. GRANT OF OPTIONS

3.01. As of each Offering Date, each eligible employee shall be
granted an option to purchase a maximum number of shares of Stock (decreased
by any fractional amount required to make a whole share), which number of
shares, when multiplied by the option price described in Section 3.02, will
most closely approximate a percentage fixed by the Board prior to such
Offering Date, of his total compensation (or a specified portion of such
total compensation) for the period beginning the first day of the year
following the Offering Date and ending on the last day of the second year
following the Offering Date (the "Payroll Deduction Period").

The number of shares so determined is subject to possible adjustment as
provided in Sections 3.03 and 5 below.

<PAGE>

3.02. The option price for all shares for which options are granted
on an Offering Date will be the lesser of:

(a) an amount equal to 85% of the average of the high and low
selling price of Stock on the NASDAQ Stock Exchange on the Offering Date,
or if there is no such sale on the Offering Date, on the then most recent
preceding day on which any such sale occurred; or

(b) an amount equal to 100% of the average of the high and low
selling price of Stock on the NASDAQ Stock Exchange on the Exercise Date,
or if there is no such sale on the Exercise Date, on the most recent
preceding day on which any such sale occurred.

3.03. No employee may be granted an option that permits his rights
to purchase Stock under the Plan and under all other employee stock option
plans of the Company and its parent and subsidiary corporations to exceed the
amount provided by Section 423(b)(8) of the Code from time to time for each
calendar year in which such option is outstanding at anytime. If an employee
would become entitled to purchase a number of shares exceeding such maximum
amount, the number of shares available for purchase by the employee shall be
reduced by such excess.

SECTION 4. ELECTIONS TO PURCHASE SHARES AND PAYROLL DEDUCTIONS

Not later than 45 days (or such longer or shorter period established by
the Company) after the Offering Date, an employee may elect to purchase all,
part or none of the shares that he is entitled to purchase with respect to
that Offering Date. Such election shall be made by the execution by the
employee of an approved form authorizing uniform payroll deductions over the
Payroll Deduction Period, in such amounts as will in the aggregate (exclusive
of interest) equal the total option price described in Section 3.02 of all
shares that he has elected to purchase. An employee may elect payroll
deductions equal to 1%, 2%, 3%, 4% or 5% of the employee's total compensation
(or portion of such total compensation used by the Board under Section 3.01).
The minimum payroll deduction shall be 1%. Any election to purchase may be
reduced or terminated as hereinafter set forth. With respect to shares as to
which no election to purchase is made by the employee on or before the
relevant time period after the Offering Date, the option granted to the
employee on that Offering Date shall expire.

SECTION 5. NUMBER OF SHARES OFFERED

5.01. The aggregate number of shares which may be issued under the
Plan is 300,000 shares of Stock, which shares may be authorized but unissued
shares or treasury shares, or both. Should the total number of shares
specified in all employees' initial elections to purchase as provided in
Section 4 with respect to any Offering Date exceed the aggregate number of
shares for which options are to be granted on that Offering Date, the Company
will, on the Exercise Date, make a pro rata allocation in a uniform manner to
all employees who have remained enrolled in the Plan through the Exercise
Date of the aggregate number of shares for which options were to be granted
on such Offering Date, and the initial election to purchase of each such
employee will be canceled with respect to any shares in excess of the number
of shares allocated to each such employee, written notice will be given to
the employee that his election has become effective for a reduced number of
shares and any excess funds (together with interest) in the employee's
accumulated account will be refunded to him.

5.02. The aggregate number of shares that may be issued under this
Plan may be modified to reflect a change in capitalization of the Company,
such as a stock dividend or stock split.

5.03. If, prior to the expiration of an option theretofore granted,
the Company shall effect a subdivision or consolidation of shares of Stock or
the payment of a stock dividend on Stock without receipt of consideration by
the

<PAGE>

Company, the number of shares of Stock thereafter subject to such option (i)
in the event of an increase in the number of outstanding shares shall be
proportionately increased, and the option price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number
of outstanding shares shall be proportionately reduced, and the option price
per share shall be proportionately increased.

5.04. If (i) the Company is to be merged into or consolidated with
one or more corporations and the Company is not to be the surviving
corporation, (ii) the Company is to be dissolved and liquidated, (iii)
substantially all of the assets and business of the Company are to be sold,
or (iv) there occurs a "change in control of the Company," then the Board
may, in its sole discretion, with respect to any or all options then
outstanding under this Plan (a) at any time on or prior to the effective date
of such merger, consolidation, dissolution and liquidation, or sale, and, at
any time on or after a change in control cause the Exercise Date to be
accelerated to a date fixed by the Board ("Acceleration Date") and permit an
employee (or his legal representative) to make a lump-sum deposit prior to
the Acceleration Date in lieu of the remaining payroll deductions or periodic
payments which otherwise would have been made, and upon such Acceleration
Date, cancel any unexercised options; or (b) at any time during the 20-day
period ending on the effective date of such merger, consolidation, change in
control or, if later, the date the Company has notice thereof, cancel any
option in whole or in part by payment in cash to the employee of an amount
equal to the excess, but only if the amount is positive, of the fair market
value of the Company's Common Stock on the date of said cancellation over the
option price per share times the number of shares covered by the option or
portion thereof so canceled. For purposes hereof, a "change in control of
the Company" shall be deemed to have occurred if (i) any "person," as such
term is used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act
of 1934 (the "Exchange Act") is or becomes the "beneficial owner," as such
term is used in Rule 13d-3 issued under the Exchange Act, of securities of
the Company representing 30% or more of the combined voting power of the
Company's then outstanding securities or (ii) during any period of two
consecutive years, directors of the Company on the date hereof (the "Current
Board"), or such directors who are recommended, endorsed or nominated for
election to the Board by a majority of the Current Board or their successors
so recommended, endorsed or nominated, shall cease to constitute a majority
of the Board.

5.05. Any adjustment provided for in this Section 5 shall be subject
to any required shareholder action. No adjustment shall be made if such
adjustment would result in a modification of an option (within the meaning of
Section 424 of the Code), or cause such option to fail to continue to qualify
as an option under an employee stock purchase plan (within the meaning of
Section 423 of the Code).

SECTION 6. APPLICATION OF FUNDS AND PAYMENT OF INTEREST

6.01. The Company will establish a stock purchase account for
employees who elect to purchase shares with respect to an Offering Date (an
"Account"), to which all payroll deductions or cash payments of that employee
with respect to the Offering Date will be credited. Interest will be
credited on the balance in the Account in accordance with the actual rate of
interest earned by the investment vehicle in which the account is deposited.
Interest credited to the date of termination will be paid to the employee
upon termination, for any reason, of his election to purchase shares with
respect to that Offering Date. Such Account will be kept in a segregated
custodial account which will be protected from the general creditors of the
Company.

6.02. Amounts credited to all Accounts may be maintained or
controlled as a single fund or account. The amount, exclusive of interest,
credited to each Account as of the close of business on the respective
Exercise Date for that Offering Date will be applied by the Company to the
payment for the shares to be purchased by such employee on that Exercise
Date, any amount not used for this purpose, together with interest, shall be
paid in cash to the employee, and the option granted the employee on that
Offering Date shall thereupon terminate.

<PAGE>

6.03. In the event that any law or regulation, in the opinion of
counsel for the company, may prohibit the handling or use of all or any part
of the funds in the manner contemplated by the Plan, the Company may deal
with such funds in any lawful manner it may deem advisable.

SECTION 7. CHANGES IN ELECTION TO PURCHASE

At any time on or before the Exercise Date with respect to an Offering
Date, an employee may give written notice that his payroll deductions with
respect to such Offering Date shall thereafter be reduced or shall terminate
and, as the case may be:

(a) reduce the amount of his subsequent payroll deductions in
which event his election to purchase shall be reduced to the number of
shares that may be purchased, at the option price described in Section,
with the aggregate amount of the payroll deductions theretofore made and to
be made thereafter;

(b) terminate further payroll deductions and continue his
election to purchase with respect to the number of shares that may be
purchased, at the option price described in Section 3.02, with the amount
(exclusive of interest) then credited to his Account; or

Any such reduction, termination or withdrawal shall be irrevocable.

SECTION 8. TERMINATION OF EMPLOYMENT

In the event that on or prior to the Exercise Date with respect to an
Offering Date, the employment of an employee of the Company or of a
Participating Subsidiary is terminated otherwise than by his death or
retirement under a plan of the Company or such Participating Subsidiary, any
election to purchase shares made by him with respect to that Offering Date
shall terminate and any amount then credited to his Account, together with
interest to the date of termination, shall be paid in cash to him. In the
event that on or prior to the Exercise Date, an employee leaves the employ of
the Company in connection with the sale of a subsidiary, division or line of
business of the Company, the Company may terminate the election of such
employee to purchase shares (refunding any amount credited to the employee's
Account, together with accrued interest) or continue said election on any
basis deemed appropriate by the Company, including the making of arrangements
for continued payroll deductions by a successor employer willing to provide
this service.

SECTION 9. RETIREMENT

In the event an employee leaves the employ of the Company or of a
Participating Subsidiary by retirement under a plan of the Company or the
Participating Subsidiary, the retired employee may elect, within thirty (30)
days of his retirement, to either:

(a) at the Exercise Date, purchase the number of shares that may
be purchased, at the option price described in Section 3.02, with the
aggregate amount of the payroll deductions made up to retirement; or

(b) withdraw the entire amount (including interest) in his
Account and terminate his election to purchase shares.

<PAGE>

SECTION 10. LAYOFF, STRIKE OR AUTHORIZED LEAVE OF ABSENCE

Payroll deductions for shares for which an election to purchase with
respect to an Offering Date has been made will be suspended during any period
of layoff, strike, or authorized leave of absence without pay of an employee.
If such an employee returns to active service prior to the last Payroll
Deduction Period preceding the Exercise Date with respect to that Offering
Date, his payroll deductions will be resumed.

An employee on layoff, strike, or authorized leave of absence without
pay as of 15 days preceding such Exercise Date shall give written notice
prior to such Exercise Date specifying his choice of one of the following
options:

(b) withdraw the entire amount (including interest) in his
Account and terminate his election to purchase shares.

SECTION 11. DEATH

In the event of the death of an employee while an election by him to
purchase shares with respect to an Offering Date is in effect, the legal
representative of such employee may, within 90 days after his death but not
later than the Exercise Date with respect to such Offering Date, by written
notice elect to either:

(a) continue the employee's election to purchase with respect to
such number of shares as may be purchased, at the option price described in
Section 3.02, with the amount (exclusive of interest) then credited to the
employee's Account, and make no further payments; or

(b) withdraw the entire amount (including interest) in the
employee's Account and terminate his election to purchase shares.

In the event the legal representative of such an employee shall fail to
give notice within the prescribed period, the employee's legal representative
will be deemed to have elected (a) above.

SECTION 12. NONASSIGNABILITY

No option granted under the Plan shall be transferable by the employee
otherwise than by will or the laws of descent and distribution. Each option
shall be exercisable, during his lifetime, only by the employee to whom
granted. Any purported assignment or transfer, whether voluntary or by
operation of law (other than by will or the laws of descent and distribution)
shall have the effect of terminating such option and the related election to
purchase shares thereunder.

SECTION 13. ADMINISTRATION

13.01. The Plan shall be administered at the Company's principal
office in Columbus, Ohio, by the Compensation Committee of the Board (the
"Committee"). The Committee is authorized to interpret the Plan and from time
to time to adopt such rules and regulations, consistent with the provisions
of the Plan, as may be deemed advisable

<PAGE>

to carry out the Plan. The decision of the Committee shall be final and
binding for all purposes with respect to any question arising under the Plan.

13.02. Uniform policies shall be pursued in the administration of the
Plan, and there shall be no discrimination among employees or groups of
employees. The administration of the Plan shall include the authority, which
shall be exercised without discrimination, to make exceptions (available on a
uniform basis to all employees) to provisions of the Plan in the case of
unusual circumstances where strict adherence to such provisions would work
undue hardship. All eligible employees under the Plan shall have the same
rights and privileges under the Plan with respect to the number of shares for
which options may be granted as provided in Section 3.

13.03. The Board shall have the right to amend, modify or terminate
the Plan at any time without notice; provided, that no amendment,
modification or termination may be made which would impair the rights of the
employee in any option theretofore granted without the consent of such
employee; and provided, further, that the Board may not make any alteration
of amendment to the Plan which would increase the aggregate number of shares
that may be issued under the Plan (other than an increase pursuant to Section
5.02 of the Plan) or change the group from among which Participating
Subsidiaries may be designated.

SECTION 14. TERMINATION OF PLAN

The period for payroll deductions with respect to any Offering Date may
not be extended beyond the Exercise Date for such Offering Date. If no
sooner terminated by the Board, the Plan will terminate following the
delivery to employees, as soon as practicable after the Exercise Date with
respect to the last Offering Date, of stock certificates for all shares
purchased and the repayment to them of all funds, including interest, not
used for the purchase of shares on that Exercise Date.

SECTION 15. HOLIDAYS

In the event any date specified in the Plan falls on other than a
business day of the Company at its principal office in Columbus, Ohio, such
date shall be deemed to refer to the next succeeding business day.

SECTION 16. LIENS NOT AUTHORIZED

There is no provision in the Plan, or in any contract in connection
therewith, whereby any person has or may create a lien on any funds,
securities or other property held under the Plan.

SECTION 17. STOCKHOLDER APPROVAL

In the event this Plan has not been approved by the stockholders of the
Company at the time any option is granted hereunder, said option shall be
subject to and contingent upon stockholder approval. If the stockholders
fail to approve the plan, within twelve (12) months at the Initial Plan
Offering, as defined below, no options granted hereunder will be available
for exercise.

SECTION 18. FIRST OFFERING

Notwithstanding anything contained in the Plan, all persons who are
employees on the date of the initial plan offering of the Company's Stock,
unless excluded by Sections 2(b) and 2(c) of the Plan, will be eligible for
the first Offering ("Initial Plan Offering") under the Plan.

23
<PAGE>
HOLOPHANE CORPORATION
250 EAST BROAD STREET, SUITE 1400
COLUMBUS, OHIO 43215

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 30, 1998

The undersigned hereby appoints JOHN R. DALLEPEZZE and BRUCE A. PHILP,
or either of them, my attorneys and proxies, with full power of substitution,
to vote at the annual meeting of stockholders of said corporation to be held
on April 30, 1998, and at any adjournment thereof, with all of the powers I
would have if personally present, for the following purposes:

1. ELECTION OF CLASS II DIRECTORS.
/ / FOR all nominees listed below (except as marked to the contrary)
/ / WITHHOLD AUTHORITY to vote for all nominees.

(INSTRUCTIONS: Do not check "WITHHOLD AUTHORITY" to vote for
only certain individual nominees. To withhold authority to vote
for any individual nominee, strike a line through the nominee's
name below and check "FOR").

John R. DallePezze Anthony P. Scotto

2. APPROVAL OF THE HOLOPHANE CORPORATION EMPLOYEE STOCK OPTION PLAN.
/ / FOR / / AGAINST / / ABSTAIN

3. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS AUDITORS FOR
THE CURRENT FISCAL YEAR.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON OTHER SIDE)

- -------------------------------------------------------------------------------

4. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
AND ANY ADJOURNMENT THEREOF.

THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4.

The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders dated March 25, 1998, the Proxy Statement furnished
therewith and the Annual Report to Stockholders of the Company for the fiscal
year ended December 31, 1997. Any proxy heretofore given to vote said shares
is hereby revoked.

DATED:________________________________ , 1998

____________________________________________

Signature(s) shall agree with the name(s)
printed on this proxy. If shares are
registered in two names, both stockholders
should sign this proxy.

If signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as such.

PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.