<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
CHICAGO MINIATURE LAMP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CHICAGO MINIATURE LAMP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1998
To the Shareholders of Chicago Miniature Lamp, Inc.:
The Annual Meeting of Shareholders of Chicago Miniature Lamp, Inc. (the
"Company") will be held at the offices of BankBoston, Long Lane Room, 2nd Floor,
100 Federal Street, Boston, Massachusetts on April 27, 1998, at 11:00 a.m. (the
"Meeting") for the following purposes:
1. To elect six directors to hold office until the 1999
Annual Meeting of Shareholders and until their
successors have been elected and qualified;
2. To consider and ratify the adoption by the Board of
Directors of the Special 1997 Stock Option Plan;
3. To consider and act upon a proposal to amend the
Company's 1995 Incentive and Non-Statutory Stock
Option Plan to increase the number of shares issuable
pursuant to the exercise of options granted under
said plan from 1,500,000 to 3,000,000 shares of
Common Stock of the Company;
4. To consider and act upon a proposal for the Company
to amend its Amended and Restated Certificate of
Incorporation in order to change the name of the
Company to "SLI, Inc.";
5. To consider and act upon a proposal to ratify the
appointment of Ernst & Young LLP as independent
accountants of the Company for the fiscal year ending
January 3, 1999; and
6. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
Shareholders of record as of the close of business on March 20, 1998,
will be entitled to vote at the Meeting or any adjournment thereof. Information
relating to the matters to be considered and voted on at the Annual Meeting is
set forth in the proxy statement accompanying this Notice.
By Order of the Board of Directors,
Richard F. Parenti
Secretary
April 1, 1998
THE BOARD OF DIRECTORS IS SOLICITING THE ENCLOSED PROXY. WHETHER OR NOT
YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED FOR THAT
PURPOSE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW THE ENCLOSED PROXY GIVEN BY
YOU AND VOTE YOUR SHARES IN PERSON.
<PAGE> 3
CHICAGO MINIATURE LAMP, INC.
500 CHAPMAN STREET
CANTON, MASSACHUSETTS 02021
------------------------
PROXY STATEMENT
Introduction. This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Chicago Miniature Lamp, Inc. (the
"Company"), of proxies for use at the Annual Meeting of Shareholders to be held
at the offices of BankBoston, Long Lane Room, 2nd Floor, 100 Federal Street,
Boston, Massachusetts, on April 27, 1998, at 11:00 a.m., or any adjournment
thereof. This Proxy Statement and the enclosed Annual Report to Shareholders for
the Company's fiscal year ended November 30, 1997 are being mailed to
shareholders on or about April 2, 1998. The Annual Report does not constitute
any part of this Proxy Statement.
Solicitation. The entire cost of preparing, assembling, and mailing
this proxy material will be borne by the Company. In addition, the Company may
reimburse brokerage firms and other persons representing certain beneficial
owners of shares for their reasonable expenses in sending proxy material to and
obtaining proxies from such beneficial owners.
Revocation. A proxy may be revoked by a shareholder at any time prior
to its use by giving written notice of such revocation to the Secretary of the
Company, by appearing at the Meeting and voting in person, or by returning a
later dated proxy in the form enclosed.
Quorum and Voting. Shareholders of record as of the close of business
on March 20, 1998 will be entitled to vote at the Meeting. As of such record
date, there were issued and outstanding and entitled to vote 29,509,982 shares
of the common stock, $.01 par value per share, of the Company (the "Common
Stock"). Holders of shares of Common Stock are entitled to one vote for each
share owned at the record date on all matters to come before the Meeting and any
adjournments thereof. The presence in person or by proxy of holders of a
majority of the shares of Common Stock entitled to vote at the Meeting
constitutes a quorum for the transaction of business.
Tabulation of Votes. Election of each director nominee will be by
plurality vote. The affirmative vote of holders of a majority of the Company's
outstanding Common Stock will be required for approval of the proposal to change
the name of the Company. The affirmative vote of the holders of a majority of
the votes cast at the Meeting is necessary for the ratification of the Special
1997 Stock Option Plan, the ratification of the amendment of the 1995 Incentive
and Non-Statutory Stock Option Plan and ratification of the selection of
auditors. The Company will appoint an inspector of election to tabulate all
votes and to certify the results of all matters voted upon at the Meeting.
Brokerage firms who hold shares in "street name" for customers have the
authority to vote those shares with respect to the election of directors and the
ratification of the appointment of the Company's auditors if such firms have not
received voting instructions from a beneficial owner. Brokers will not have
authority to vote shares with respect to the proposal to ratify the Special 1997
Stock Option Plan, the ratification of the amendment of the 1995 Incentive and
Non-Statutory Stock Option Plan or the proposal to amend the Company's Amended
and Restated Certificate of Incorporation in order to change the name of the
Company. The failure of a broker to vote shares in the absence of instructions
(a "broker non-vote") will have the effect of a vote against the proposal to
amend the Amended and Restated Certificate of Incorporation; broker non-votes
will have no effect with respect to any other matter considered at the Annual
Meeting.
The Company will (i) count abstentions and broker non-votes for
purposes of determining the presence of a quorum at the Meeting; (ii) treat
abstentions as shares represented at the Meeting and voting against a proposal
and disregard broker non-votes in determining results on proposals requiring a
majority of the votes cast at the Meeting; (iii) treat abstentions and broker
non-votes as shares represented at the Meeting and voting against a proposal in
determining results on proposals requiring an affirmative vote of holders of a
majority of the
<PAGE> 4
Company's outstanding Common Stock; and (iv) consider neither abstentions nor
broker non-votes in determining results of plurality votes. If the enclosed
proxy is properly executed and returned prior to or at the Meeting, and is not
revoked prior to or at the Meeting, all shares represented thereby will be voted
at the Meeting as specified in the proxy by the persons designated therein. If a
signed proxy card is returned and the stockholder has made no specifications
with respect to voting matters, the shares will be voted "FOR" the election of
the nominees as directors, "FOR" the ratification of the adoption of the Special
1997 Stock Option Plan, "FOR" the ratification of the amendment of the 1995
Incentive and Non-Statutory Stock Option Plan, "FOR" the proposal to change the
name of the Company, "FOR" the ratification of the appointment of the
independent accountants of the Company, and in accordance with the judgment of
the person or persons voting such proxies with respect to such other matters, if
any, as may properly come before the Meeting.
The Board of Directors does not know of any matters that will be
brought before the Meeting other than those matters specifically set forth in
the Notice of Annual Meeting of Shareholders. However, if any other matter
properly comes before the Meeting, it is intended that the persons named in the
enclosed form of proxy, or their substitute acting thereunder, will vote on such
matter in accordance with their best judgment.
INFORMATION CONTAINED IN THIS PROXY STATEMENT AS TO THE NUMBER OF SHARES AND
PRICE PER SHARE HAVE BEEN ADJUSTED TO REFLECT THE COMPANY'S 3-FOR-2 STOCK SPLIT
EFFECTED ON MARCH 6, 1998.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board of Directors currently consists of six members. It is
proposed that the shareholders re-elect the present six directors, each of whom
is a nominee: Frank M. Ward, Werner Arnold, Donald S. Dewsnap, Frederick B.
Howard, Richard E. Ingram and Norman Scoular. The term of each director elected
will be until the next Annual Meeting of Shareholders or until his successor is
duly elected and qualified. It is intended that the proxies will be voted for
the nominees listed above and cannot be voted for more than six nominees. Each
nominee is at present available for election, but if any nominee should become
unavailable, the persons voting the accompanying proxy may, at their discretion,
vote for a substitute.
Unless authority is withheld, it is the intention of the persons voting
under the enclosed proxy to vote such proxy in favor of the election of these
six nominees to be directors of the Company until the 1999 Annual Meeting of
Shareholders and until their successors are elected and qualified. The
affirmative vote of a plurality of the shares of Common Stock present or
represented at the Meeting by proxy is required for the election of these
nominees as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE
NOMINEES.
-2-
<PAGE> 5
INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
YEAR FIRST
BECAME POSITIONS AND OFFICES
NAME AGE DIRECTOR WITH THE COMPANY
<S> <C> <C> <C>
Frank M. Ward 53 1992 President, Chief Executive Officer
Director and Chairman of the Board
Werner Arnold 44 1996 Director and President of
Alba Speziallampen Holding GmbH
Donald S. Dewsnap (1) 63 1995 Director
Frederick B. Howard 62 1998 Director
Richard E. Ingram (1) 56 1996 Director
Norman Scoular (2) 45 1997 Director, Chief Operating Officer of the
Company, and President of
Sylvania Lighting International B.V.
</TABLE>
- ------------------
(1) Member of the Compensation Committee, Audit Committee and
Stock Option Committee.
(2) Member of the Special Option Committee.
BACKGROUND OF DIRECTORS
FRANK M. WARD has served as President, Chief Executive Officer and
Director of the Company and Xenell since 1985. Prior to 1985, Mr. Ward was
President of Xenell Marketing Corporation, an organization formed to manage the
product development, marketing and distribution of the products of Xenell. Mr.
Ward received a Bachelor of Science degree in Electrical Engineering from
Northeastern University and has completed post graduate studies in physics and
metallurgy.
WERNER A. ARNOLD is the President of Alba Speziallampen Holding GmbH
("CML-Alba"), a subsidiary of the Company formed in May 1996 to consummate the
acquisition of W. Albrecht GmbH u. Co. KG ("Alba-Germany") and its interest in
certain other affiliated entities (the "Alba Acquisition"). From 1994 to 1996,
Mr. Arnold served as President and Chief Executive Officer of Alba-Germany. From
1985 to 1993, he served as General Manager and Executive Vice President of
Engineering, Sales and Marketing of Alba-Germany. Mr. Arnold also served as an
officer and director of certain affiliates of Alba-Germany. Mr. Arnold has a
Masters in Engineering from Technical University of Munich, Germany. Mr. Arnold
was elected as a Director of the Company in June 1996.
DONALD S. DEWSNAP has been Chairman of Norlico Corp., a supplier of
engineered chemical dispense systems to industrial users, since 1977. Prior
thereto he was involved in industrial research at Arthur D. Little Corp. and
spent fourteen years with GTE Sylvania Lighting Division in various product
marketing, management and sales engineering positions. Mr. Dewsnap was elected a
director of the Company in March 1995. Mr. Dewsnap holds a Bachelor of Arts
degree from Merrimack College.
FREDERICK B. HOWARD had been, until his retirement in June 1997, vice
president and general manager of Electronic Control Systems, a division of Osram
Sylvania Inc., since its formation in June 1996. From 1994 until 1996, he had
been vice president and general manager of Osram Sylvania Glass Technologies.
Other positions held during his 35 year tenure with Sylvania include vice
president of marketing for the Sylvania Lighting Division - U.S., vice president
of Lighting Special Products, vice president, Latin America, for International
Lighting. Mr. Howard holds degrees in economics from Babson College, serves as a
member of the Advisory Board of Directors, Mayer Electric Supply Company, and is
a member of the National Electric Manufacturers Association. Mr. Howard was
elected a director of the Company effective February 8, 1998.
-3-
<PAGE> 6
RICHARD E. INGRAM has been the Chairman of the Board of Builder Marts
of America, Inc., a national distributor of lumber and building materials, since
November 1988, and he was its Chief Executive Officer until November 1993. He
was a founding director of Carolina First Corporation, the holding company for
Carolina First Bank, and Ingram Enterprises, Inc., a real estate development and
investment banking company. He is also a director of Synalloy Corporation,
Columbia Lumber, a retail lumber business, and Tel-Pan Communications, Inc., a
long distance provider in Panama. He has served on the Policy Advisory Board of
the Joint Center for Urban Studies at Harvard University. Mr. Ingram is a
graduate of the American Institute of Banking and the University of North
Carolina Executive Program. Mr. Ingram was elected a director of the Company
effective August 1, 1996.
NORMAN SCOULAR has served as Chief Executive Officer of Sylvania
Lighting International B.V. since January 1993. Prior to 1993, he held senior
positions with several large engineering groups. Mr. Scoular was Managing
Director of FKI's Electrical Products Group from 1987 to 1989 and Chief
Executive of FKI Plc. from 1989 to 1992. Between 1979 and 1987 he was Managing
Director of several large companies within GEC Plc., including its low voltage
control activities in Europe. He commenced his career in industrial engineering
with Philips.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held thirteen meetings during the year ended
November 30, 1997. The current standing committees of the Board of Directors are
the Audit Committee, the Compensation Committee, the Stock Option Committee, and
the Special Option Committee. The Audit Committee met once, the Compensation
Committee met once and the Stock Option Committee met once during the year ended
November 30, 1997. The Special Option Committee was formed on March 4, 1998. All
directors attended at least 75% of the meetings held during the year ended
November 30, 1997 (during the period for which each was a director).
The members of the Audit Committee, Compensation Committee and the
Stock Option Committee are Donald S. Dewsnap and Richard E. Ingram. The Audit
Committee has general responsibility for accounting and audit activities of the
Company and its subsidiaries. The Audit Committee annually reviews the
qualifications of the independent certified public accountants, makes
recommendations to the Board as to their selection, reviews the scope, fees and
results of their audit and approves their non-audit services and related fees.
The Audit Committee meets periodically with management and with the Company's
independent auditors to determine the adequacy of internal controls and other
financial reporting matters. The Compensation Committee reviews general policy
matters relating to compensation and benefits of employees generally and has
responsibility for reviewing and approving compensation and benefits for all
executive officers of the Company. The Stock Option Committee administers the
Company's Incentive and Non-Statutory Stock Option Plan (the "Stock Option
Plan") and recommends grants of the specific options under the Stock Option
Plan. The Special 1997 Stock Option Plan (the "Special Option Plan", and
collectively with the Stock Option Plan, the "Option Plans") is administered by
a separate committee with the right to make grants of options under the Special
Option Plan (the "Special Option Committee"). Currently, the Special Option
Committee consists of Norman Scoular only, with authority from the Board to
grant options only with respect to the employees of Sylvania Lighting
International B.V. and its subsidiaries. See Proposal 2, "Ratification of the
Adoption of the Special 1997 Stock Option Plan", elsewhere in this Proxy
Statement.
COMPENSATION OF DIRECTORS
The Company currently pays its non-employee and non-affiliated
directors an annual fee of $10,000 for attendance at meetings of the Board of
Directors or committees thereof. All directors are reimbursed for their
reasonable expenses in connection with the performance of their duties. Messrs.
Ingram and Dewsnap were each granted options to purchase 15,000 shares at fair
market value at the date of grant. Mr. Howard was granted options to purchase
20,000 shares at fair market value at the date of grant.
-4-
<PAGE> 7
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ronald S. Goldstein, a former member of the Board and a former member
of the Compensation Committee, was also, in the fiscal year ended November 30,
1997, the Chief Financial Officer and Secretary of the Company. Mr. Goldstein is
no longer an executive officer of the Company, nor is he a member of the Board
of Directors. No other person serving on the Compensation Committee at any time
during fiscal 1997 was a present or former officer or employee of the Company or
any of its subsidiaries. During fiscal 1997, no executive officer of the Company
served as a member of the board of directors or compensation committee (or other
board committee performing equivalent functions) of another entity, one of whose
executive officers served on the Company's Board of Directors or Compensation
Committee.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Introduction
Under rules of the Commission, the Company is required to provide
certain information concerning compensation provided to the Company's President
and Chief Executive Officer and the other executive officers of the Company. The
disclosure requirements for the executive officers include the use of tables and
a report of the Committee responsible for compensation decisions for the named
executive officers, explaining the rationale and considerations that led to
those compensation decisions. Therefore, the Compensation Committee of the Board
of Directors (the "Committee") has prepared the following report for inclusion
in this Proxy Statement.
Compensation Committee Role
Since its formation, the Committee has been responsible for making
recommendations to the Board of Directors concerning the salaries of executive
officers. The Committee is also responsible for overseeing other forms of
compensation and benefits to other senior officers. The Committee's
responsibilities include reviewing salaries, benefits and other compensation of
senior officers and making recommendations to the full Board of Directors with
respect to these matters.
Compensation Philosophy
The compensation philosophy for executive officers conforms to the
compensation philosophy of the Company generally for all employees. The
Company's compensation is designed to:
- provide compensation comparable to that offered by companies
with similar businesses, allowing the Company to successfully
attract and retain the employees necessary to its long-term
success;
- provide compensation which relates to performance of the
individual and is based upon individual performance;
- provide incentive compensation that varies directly with both
Company performance and individual contribution to that
performance; and
- provide an appropriate linkage between compensation and the
creation of shareholder value through awards tied to the
Company's performance and through facilitating employee stock
ownership.
Executive Officer Compensation Program
The Company's executive officer compensation program is comprised of
base salary, cash bonuses based upon individual performance and long-term
incentive compensation in the form of stock options under the Stock
-5-
<PAGE> 8
Option Plan, which options are recommended by the Stock Option Committee. In
addition, the Company's executive officers receive various other benefits,
including medical benefits, which are generally available to the employees of
the Company.
Base Salary and Bonus Awards
The Committee reviews the salaries of the executive officers of the
Company annually. The Committee made salary decisions about the executive
officers based upon a variety of considerations in conformance with the
compensation philosophy stated above. First, salaries are competitively set
relative to companies with similar businesses to that of the Company. Second,
the Committee considered the performance of the individual executive officer
with respect to the areas under his or her responsibility, including an
assessment of the value of each to the Company. Third, internal equity among
employees was factored into the decision. Finally, the Committee considered the
Company's financial performance and its ability to absorb any increases in
salaries.
The salary of the Chief Executive Officer, Frank M. Ward, has been
established by the Board of Directors to be $500,000 for the current fiscal
year, with a $500,000 discretionary performance bonus based upon meeting certain
financial targets. The Company anticipates that Mr. Ward will enter into an
employment agreement which will reflect this compensation. This employment
agreement will likely be on terms similar to Mr. Ward's previous employment
agreement, which expired at the end of the 1997 fiscal year, and pursuant to
which he received employee health benefits and automobile and expense
allowances. The Board of Directors has established the salary of Norman Scoular,
the Chief Operating Officer and President of Sylvania Lighting International
B.V., at the same level as that of Mr. Ward, with an equal discretionary
performance bonus, also based upon meeting certain financial targets. The
Company similarly anticipates entering into an employment agreement with Mr.
Scoular. The Committee believes that the aggregate compensation for each of
Messrs. Ward and Scoular is reasonable based upon each of his responsibilities,
the revenue size of the Company, profitability of the Company, growth and other
factors when compared to chief executive officers and chief operating officers
of similar companies.
Other than Messrs. Ward and Scoular, Ronald S. Goldstein, formerly
Chief Financial Officer, and Richard F. Parenti, Vice President, Finance and
Secretary, were the only other executive officers receiving compensation
exceeding $100,000 in the fiscal year ended November 30, 1997. Other than Mr.
Scoular, no cash bonuses were awarded to any executive officer for the 1997
fiscal year, although the Committee will consider such bonuses in the future on
a discretionary basis for extraordinary performance or accomplishments. Based
upon surveys available to it, the Committee believes that the salaries of the
executive officers and senior employees of the Company are reasonable when
compared to individuals with similar responsibilities at comparable companies.
Stock Option Awards
The Company maintains the Stock Option Plan, which is designed to align
executive officers' and shareholders' interests in the enhancement of
shareholder value. Stock options are granted upon the recommendation of the
Stock Option Committee with the approval of the disinterested members of the
Board. Executive officers and others are eligible to receive options under the
Stock Option Plan. The Committee strongly believes that the interests of
shareholders and executives become more closely aligned when such executives are
provided an opportunity to acquire a proprietary interest in the Company through
ownership of the Company's Common Stock. Accordingly, key employees of the
Company, including executive officers, as part of their overall compensation
package, are eligible for participation in the Stock Option Plan, whereby they
are granted options generally exercisable at no less than fair market value on
the date of grant. Because no benefit is generally received unless the Company's
stock price performs favorably, awards under the Stock Option Plan are intended
to provide incentives for executive officers to enhance long-term Company
performance, as reflected in stock price appreciation, thereby increasing
shareholder value.
The stock option grants are principally based on overall consolidated
results of the Company, achievement of Company objectives, individual
performance, including managerial effectiveness, initiative and team work, and
are in such amounts that reflect what the Stock Option Committee believes are
necessary to attract, retain and
-6-
<PAGE> 9
motivate senior management and other key employees. The members of the Stock
Option Committee and the Compensation Committee are the same, and stock option
awards are considered in the package of the key employees. The Committee
believes that stock option awards are rewards for past growth and the incentive
for continued growth.
Compliance with Internal Revenue Code Section 162(m)
The Committee has reviewed the potential consequences for the Company
of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
which imposes a limit on tax deductions for annual compensation in excess of $1
million for certain executives of public companies. The Company believes that
options granted under the Option Plans are exempt from the limitation, and other
compensation expected to be paid during fiscal year 1998 is at or below this
compensation limitation.
COMPENSATION COMMITTEE
Donald S. Dewsnap
Richard Ingram
The report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Act of 1934 (together, the "Acts"), except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPENSATION TABLES
The following tables set forth certain information relating to the
compensation earned by the Chief Executive Officer of the Company and each of
the other most highly compensated executive officers of the Company whose total
cash compensation for the fiscal year indicated exceeded $100,000.
-7-
<PAGE> 10
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
---------------------------------- ------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS
--------------------------- ---- ------ -------- -------
<S> <C> <C> <C> <C>
Frank M. Ward 1997 $250,000 $ -- --
President and 1996 250,000 74,000 --
Chief Executive Officer 1995 360,000 -- --
Norman Scoular (2) 1997 $ 99,054 $ 99,355 375,000(3)
Chief Operating Officer and President,
Sylvania Lighting International B.V
Ronald S. Goldstein (4) 1997 $122,376 $ -- --
Chief Financial Officer 1996 140,769 -- 112,500
Richard F. Parenti 1997 $109,299 $ -- 75,000
Vice President, Finance 1996 100,000 -- --
1995 89,213 -- 45,000
</TABLE>
- -----------------------------
(1) Represents bonus earned during the indicated fiscal year. In some
instances, all or a portion of the bonus was paid during the next
fiscal year.
(2) Mr. Scoular became an executive officer of the Company on September 8,
1997 and the table reflects compensation only for such partial year.
(3) Excludes options granted by Mr. Ward to Mr. Scoular on September 8,
1997 to purchase from Mr. Ward 525,000 shares vesting over five years
at $18.67 per share.
(4) Mr. Goldstein resigned from his positions as a director and an
executive officer of the Company in January 1998.
-8-
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------
Potential Realizable Value at
Number of Percent of Assumed Annual Rates of Stock
Securities Total Options Price Appreciation for
Underlying Granted to Exercise Option Term (2)
Options Employees in Price Expiration -----------------------------
Name Granted(1) Fiscal Year ($/sh) Date 5% 10%
------------ ------------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Frank M. Ward -- -- $ -- -- -- --
President and
Chief Executive Officer
Norman Scoular 375,000(3) 12.15% $ 18.67 9/8/07 $ 4,403,000 $11,158,000
Chief Operating Officer and
President, Sylvania
Lighting International B.V
Ronald S. Goldstein (4) -- -- $ -- -- -- --
Chief Financial Officer
Richard F. Parenti 75,000 2.43% $ 16.00 7/3/07 $ 754,800 $ 1,912,800
Vice President, Finance
</TABLE>
- -----------------------------
(1) All options were granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Options vest
at the rate of 20% per year for each of the first five years after the
date of grant and terminate ten years from the date of grant.
(2) The assumed annual rates of appreciation of 5% and 10% would result in
the price of the Company's stock increasing 62.9% and 159.4%,
respectively.
(3) Excludes options granted by Mr. Ward to Mr. Scoular on September 8,
1997 to purchase from Mr. Ward 525,000 shares vesting over five years
at $18.67 per share.
(4) Mr. Goldstein resigned from his positions as a director and an
executive officer of the Company in January 1998.
-9-
<PAGE> 12
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised In-the-Money
Shares Options at 11/30/97 Options at 11/30/97 (2)
Acquired on Value ----------------------------- ----------------------------
Name Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
---- -------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Frank M. Ward -- $ -- -- -- -- --
President and CEO
Norman Scoular -- $ -- -- 375,000(3) -- $1,468,750
Chief Operating Officer
and President, Sylvania
Lighting International B.V
Ronald S. Goldstein (4) 53,933 $ 393,081 58,568 -- $ 813,144 --
Chief Financial Officer
Richard F. Parenti -- $ -- 16,050 82,500 $ 259,538 $ 621,475
Vice President, Finance
</TABLE>
- -------------------
(1) Value realized is based on the fair market value of the Common Stock as
of the date of exercise, minus the exercise price, multiplied by the
number of shares to which the exercise relates.
(2) Value is based on the closing sale price of the Common Stock as
reported on the Nasdaq National Market as of the last business day
prior to the end of the 1997 fiscal year, $22.583 minus the exercise
price, multiplied by the number of shares to which the exercise
relates.
(3) Excludes options granted by Mr. Ward to Mr. Scoular on September 8,
1997 to purchase from Mr. Ward 525,000 shares vesting over five years
at $18.67 per share.
(4) Mr. Goldstein resigned from his positions as a director and an
executive officer of the Company in January 1998.
EMPLOYMENT AGREEMENTS
The salary of the Chief Executive Officer, Frank M. Ward, has been
established by the Board of Directors to be $500,000 for the current fiscal
year, with a $500,000 discretionary performance bonus based upon meeting certain
financial targets. Mr. Ward's prior three-year employment agreement with the
Company expired at the end of the 1997 fiscal year. The Company anticipates that
Mr. Ward will enter into a new employment agreement which will reflect this
compensation. This employment agreement will likely be on terms similar to Mr.
Ward's previous employment agreement, pursuant to which he received employee
health benefits and automobile and expense allowances. The salary of the Chief
Executive Officer of Sylvania Lighting S.A., Norman Scoular, is pound sterling
175,000 per year with pound sterling 175,000 in discretionary performance bonus
based upon meeting certain financial targets, pursuant to existing employment
agreements. The Company anticipates amending Mr. Scoular's agreements to provide
for compensation at the same level as that of Mr. Ward.
-10-
<PAGE> 13
STOCK PRICE PERFORMANCE GRAPH
The following graph presents a comparison of the cumulative total
shareholder return on the Company's Common Stock with the Standard & Poors 500
Index and a Market Cap-Weighted Comparables Composite Index. This graph assumes
that $100 was invested as of the close of markets on June 16, 1995, the date of
the Company's initial public offering, in the Company's Common Stock and in the
indices, and that all dividends were reinvested. The stock price performance
shown below is not necessarily indicative of future price performance.
Table reflecting plot points of graph
<TABLE>
<CAPTION>
Date CHML S&P 500 Composite Index
---- ---- ------- ---------------
<S> <C> <C> <C>
June 16, 1995 $100.00 $100.00 $100.00
December 3, 1995 136.67 116.14 103.05
December 1, 1996 335.00 142.26 131.34
November 30, 1997 342.50 179.47 156.85
</TABLE>
(1) Market Cap-Weighted Comparables Composite Index includes the stock of nine
companies selected for comparison purposes.
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Acts except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under the Acts.
-11-
<PAGE> 14
RATIFICATION OF THE ADOPTION OF THE SPECIAL 1997 STOCK OPTION PLAN
(PROPOSAL 2)
General
The Board has adopted the Special 1997 Stock Option Plan in the form
attached hereto as Exhibit A, subject to shareholder ratification. The Special
Option Plan is intended to further the growth and development of the Company by
encouraging employees and consultants of the Company and its subsidiaries who
are not also officers or directors to obtain a proprietary interest in the
Company through the grant of options to acquire shares of Common Stock. The
Company believes that the Special Option Plan will aid in attracting and
retaining employees and consultants and in stimulating the efforts of such
individuals for the success of the Company and its subsidiaries. The effective
date of the Special Option Plan is September 8, 1997 (the "Effective Date").
The following summary of the principal features and effects of the
Special Option Plan does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the text of the Special Option Plan
as set forth in the attached Exhibit A.
Types of Awards
The options granted under the Special Option Plan may be either (i)
incentive stock options ("ISOs") intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified
stock options ("NQSOs"), not intended to qualify under Section 422 (NQSOs and
ISOs are referred to collectively as "Options").
Administration
The Special Option Plan will be administered by a committee of the
Board of Directors (the "Special Option Committee"). The Special Option
Committee will have full authority in its sole discretion to (i) determine and
designate the employees and consultants to whom Options will be granted and the
manner in and conditions under which Options are exercisable; (ii) determine
whether an Option will constitute an ISO or a NQSO; and (iii) to interpret the
provisions of, and prescribe, amend and rescind any rules and regulations
relating to, the Special Option Plan.
Eligibility
Pursuant to the Special Option Plan, employees and consultants of the
Company and its subsidiaries who are not also officers or directors of the
Company and its subsidiaries are eligible for consideration for the granting of
Options by the Special Option Committee. As of March 4, 1998, approximately
7,410 employees were eligible to participate in the Special Option Plan.
Shares Available
The Special Option Plan provides that the Special Option Committee may
grant Options with respect to a maximum aggregate of 3,000,000 shares of Common
Stock. Shares underlying any Options granted under the Special Option Plan that
expire or terminate without having been fully exercised or vested may be added
to the Common Stock otherwise available for grants of Options under the Special
Option Plan. As of March 16, 1998, the fair market value of the Common Stock was
$35.00 per share.
Terms of Options
GRANT OF OPTIONS. Options granted under the Special Option Plan
represent rights to purchase shares of Common Stock of the Company within a
fixed period of time and at a specified price per share (the "Option Price").
The Special Option Committee is authorized in its sole discretion to grant to
employees either ISOs or
-12-
<PAGE> 15
NQSOs or both for the purchase of Common Stock. Consultants of the Company and
its subsidiaries who are not otherwise employees of the Company or its
subsidiaries are not eligible to receive grants of ISOs.
OPTION PRICE. The Option Price of each share of Common Stock subject to
an Option shall be set by the Special Option Committee, but the Option Price for
ISOs shall be the fair market value of the Common Stock as of the date of grant
(or 110% of the fair market value of Common Stock as of the date of grant in the
case of ISOs granted to optionees who own more than ten percent of the total
combined voting power of all classes of outstanding stock of the Company or one
of its subsidiaries).
TERM AND EXERCISE OF OPTIONS. Each Option granted under the Special
Option Plan may be exercised on such dates, during such periods, and for such
number of shares as determined by the Special Option Committee. The term of any
Option will be determined by the Special Option Committee, but the term may not
exceed ten years from the date of grant (or five years in the case of ISOs
granted to optionees who own more than ten percent of the total combined voting
power of all classes of outstanding stock of the Company or one of its
subsidiaries). Options are exercisable pursuant to terms established by the
Special Option Committee at the time of grant. Upon the exercise of an Option,
payment must be made in full in cash, in shares of Common Stock already owned by
the optionee (which shares will be valued for such purpose on the basis of their
fair market value on the date of exercise), or in a combination of the above.
Payment must equal the Option Price of the shares subject to the Option being
exercised multiplied by the number of shares being purchased.
TRANSFERS; TERMINATION OF EMPLOYMENT. Options granted under the Special
Option Plan will be transferable to the extent, and only to the extent,
expressly provided by the Special Option Committee at the time of grant. At the
discretion of the Special Option Committee at the time of grant, the Company may
have an option to repurchase all or any number of shares purchased upon exercise
of such Option, and a right of first refusal with respect to the transfer or
proposed transfer of any shares purchased upon exercise of an Option. Upon the
termination of an optionee's employment with the Company (including its
subsidiaries) for any reason other than termination due to Disability (as
defined in the Special Option Plan) or death, any Option or unexercised portion
thereof shall generally not be exercisable after the expiration of the ninety
(90) day period following the termination of employment. Upon the termination of
an optionee's employment with the Company (including its subsidiaries) due to
Disability or death, any Option or unexercised portion thereof shall generally
not be exercisable after 180 days after the termination of employment due to
such Disability or death.
Adjustments
In the event of changes in the number of outstanding shares of Common
Stock by reason of stock dividends, splits or recapitalizations, an appropriate
and equitable adjustment will be made by the Special Option Committee to the
number and kind of shares subject to outstanding Options and to the number and
kind of shares remaining available for issuance pursuant to Options to be
granted under the Special Option Plan.
Termination and Amendment
The Special Option Plan will terminate ten years after the Effective
Date, subject to its earlier termination by the Board at any time. The Board may
amend the Special Option Plan at any time, provided that no amendment would
affect, in any way, the rights of optionees or grantees who have outstanding
options or grants without the consent of such optionees or grantees.
Federal Income Tax Consequences
The following is a brief general description of the consequences under
the Code of the receipt or exercise of Options under the Special Option Plan:
INCENTIVE STOCK OPTIONS. An option holder has no tax consequences upon
issuance or, generally, upon exercise of, an ISO. An option holder will
recognize income when he sells or exchanges the shares acquired upon exercise of
an ISO. This income will be taxed at the applicable capital gains rate if the
sale or exchange occurs
-13-
<PAGE> 16
after the expiration of the requisite holding periods. Generally, the requisite
holding periods expire two years after the date of grant of the ISO and one year
after the date of acquisition of the Common Stock pursuant to the exercise of
the ISO. If an option holder disposes of the Common Stock acquired pursuant to
exercise of an ISO before the expiration of the requisite holding periods, the
option holder will recognize compensation income in an amount equal to the
difference between the option price and the lesser of (i) the fair market value
of the shares on the date of exercise and (ii) the price at which the shares are
sold. This amount will be taxed at ordinary income rates. If the sale price of
the shares is greater than the fair market value on the date of exercise, the
difference will be recognized as gain by the option holder and taxed at the
applicable capital gains rate. If the sale price of the shares is less than the
option price, the option holder will recognize a capital loss equal to the
excess of the option price over the sale price.
For these purposes, the use of shares acquired upon exercise of an ISO
to pay the option price of another option (whether or not it is an ISO) will be
considered a disposition of the shares. If this disposition occurs before the
expiration of the requisite holding periods, the option holder will have the
same tax consequences as are described in the preceding paragraph. If the option
holder transfers any such shares after holding them for the requisite holding
periods or transfers shares acquired pursuant to exercise of a NQSO or on the
open market, he generally will not recognize any income upon the exercise.
Whether or not the transferred shares were acquired pursuant to an ISO and
regardless of how long the option holder has held such shares, the basis of the
new shares received pursuant to the exercise will be computed in two steps. In
the first step, a number of new shares equal to the number of old shares
tendered (in payment of the option's exercise) will be considered exchanged
under Code Paragraph 1036 and the rulings thereunder; these new shares will
receive the same holding period and the same basis as the option holder had in
the old tendered shares, if any, plus the amount included in income from the
deemed sale of the old shares and the amount of cash or other nonstock
consideration paid for the new shares, if any. In the second step, the number of
new shares received by the option holder in excess of the old tendered shares
will receive a basis of zero, and the option holder's holding period with
respect to such shares will commence upon exercise.
An option holder may have tax consequences upon exercise of an ISO if
the aggregate fair market value of shares of the Common Stock subject to ISOs
which first become exercisable by an option holder in any one calendar year
exceeds $100,000. If this occurs, the excess shares will be treated as though
they are subject to a NQSO instead of an ISO. Upon exercise of an option with
respect to these shares, the option holder will have the tax consequences
described below with respect to the exercise of NQSO's.
Finally, except to the extent that an option holder has recognized
income with respect to the exercise of an ISO (as described in the preceding
paragraphs), the amount by which the fair market value of a share of the Common
Stock at the time of exercise of the ISO exceeds the option price will be
included in determining an option holder's alternative minimum taxable income,
and may cause the option holder to incur an alternative minimum tax liability in
the year of exercise. There will be no tax consequences to the Company upon
issuance or, generally, upon exercise of an ISO. However, to the extent that an
option holder recognizes ordinary income upon exercise, as described above, the
Company generally will have a deduction in the same amount.
NONQUALIFIED STOCK OPTIONS. Neither the Company nor the option holder
has income tax consequences from the issuance of NQSO's. Generally, in the tax
year when an option holder exercises NQSO's, the option holder recognizes
ordinary income in the amount by which the fair market value of the shares at
the time of exercise exceeds the option price for such shares. The Company
generally will have a deduction in the same amount as the ordinary income
recognized by the option holder in the Company's tax year in which or with which
the option holder's tax year (of exercise) ends.
If an option holder exercises a NQSO by paying the option price with
previously acquired Common Stock, the option holder will recognize income
(relative to the new shares he is receiving) in two steps. In the first step, a
number of new shares equivalent to the number of old shares tendered (in payment
of the NQSO exercised) is considered to have been exchanged in accordance with
Code Paragraph 1036 and the rulings thereunder, and no gain or loss is
recognized. In the second step, with respect to the number of new shares
acquired in excess of the
-14-
<PAGE> 17
number of old shares tendered, the option holder will recognize income on those
new shares equal to their fair market value less any nonstock consideration
tendered.
The new shares equal to the number of the old shares tendered will
receive the same basis as the option holder had in the old shares and the option
holder's holding period with respect to the tendered old shares will apply to
those new shares. The excess new shares received will have a basis equal to the
amount of income recognized by the option holder by exercise, increased by any
nonstock consideration tendered. Their holding period will commence upon
exercise of the Option.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE ADOPTION OF THE COMPANY'S SPECIAL 1997 STOCK OPTION PLAN.
RATIFICATION OF THE AMENDMENT OF THE
1995 INCENTIVE AND
NON-STATUTORY STOCK OPTION PLAN
(PROPOSAL 3)
The Company maintains a stock option plan, the 1995 Incentive and
Non-Statutory Stock Option Plan (the "1995 Plan"), under which incentive and
non-qualified stock options may be granted to employees, directors and certain
key affiliates. Under the 1995 Plan, incentive stock options may be granted at
not less than the fair market value on the date of grant and non-qualified stock
options may be granted at less than or greater than the fair market value on the
date of grant. Options may be subject to a vesting schedule and expire ten years
after grant.
The Company has in the past utilized and wishes in the future to
utilize the 1995 Plan to attract, maintain and develop management by encouraging
ownership of the Company's Common Stock by key employees, directors and others.
Options under the 1995 Plan are either ISOs or NQSOs.
On July 2, 1997, the Board of Directors approved and recommends to the
shareholders that they approve a proposal to amend the 1995 Plan to increase the
number of shares of Common Stock available for grant under the 1995 Plan from
1,500,000 to 3,000,000, an increase of 1,500,000 shares of Common Stock. The
proposed amendment will cause Section 3.1 of the 1995 Plan to be replaced with
the following revised Section 3.1:
3.1 Shares Subject to Plan. The stock subject to the options granted
under the Plan shall be shares of the Company's authorized buy unissued
common stock, par value $.01 per share ("Common Stock"). The total
number of shares that may be issued pursuant to options granted under
the Plan shall not exceed 3,000,000 shares of Common Stock.
The proposed amendment to the 1995 Plan will be adopted upon receiving
the affirmative vote of holders of a majority of the shares present or
represented by proxy at the Meeting. Proxies will be voted in accordance with
the specifications marked thereon and, if no specification is made, will be
voted "FOR" adoption of the proposed amendment to the 1995 Plan.
Except for such amendment, if approved by holders of a majority of the
shares present in person or represented by proxy at the Meeting, the 1995 Plan
will remain unchanged. The following is a summary of the provisions of the 1995
Plan. This summary is qualified in its entirety by reference to the 1995 Plan, a
copy of which may be obtained from the Company.
-15-
<PAGE> 18
Summary Description Of The 1995 Plan
The 1995 Plan is administered by the Board of Directors of the Company
and the Stock Option Committee (the "Committee") appointed by the Board of
Directors. Upon the recommendation of the Committee, the Board is authorized to
grant incentive stock options to officers and other key executive and management
employees of the Company. The Committee establishes rules and regulations for
the operation of the 1995 Plan, selects persons to receive options, determines
the option price for shares subject to each option, and determine the number of
shares subject to grants.
If there is a stock split, stock dividend, or other relevant change
affecting the Company's shares, appropriate adjustments would be made in the
number of shares that could be issued in the future and in the number of shares
and price under all outstanding grants made before the event. Future options may
also cover such shares as may cease to be under option by reason of total or
partial expiration, termination or voluntary surrender of an option.
The aggregate fair market value (determined at the time an option is
granted) of the Common Stock with respect to which ISOs are exercisable for the
first time by any person during any calendar year under the 1995 Plan shall not
exceed $100,000.
The vesting period for options granted under the 1995 Plan are set
forth in an option agreement entered into with the optionee. ISOs granted to an
optionee terminate 90 days after retirement. In the event of death or
disability, all vested options expire 180 days from the date of death or
termination of employment due to disability.
Unless otherwise provided in any option, each outstanding option shall
become immediately fully exercisable in the event of: (i) a change of control of
the Company, (ii) a merger, consolidation, reorganization or dissolution in
which the Company does not survive, or (iii) the sale, release, exchange or
disposition of substantially all the property and assets of the Company.
Stock Options
The Board of Directors and the Committee may grant options qualifying
as ISOs under the Internal Revenue Code of 1986, as amended, or as NQSOs. The
Committee determines the duration of each option; however, the term of an option
cannot exceed ten (10) years from the date of grant and cannot exceed five (5)
years in the case of a greater than 10% shareholder. The option price for an ISO
is the fair market value of a share of the Company's Common Stock on the date of
the grant, whereas the option price for an NQSO may be more or less than the
fair market value on the date of grant. The grantee can pay the option price in
cash, or if permitted, by delivering to the Company shares of Common Stock owned
by the grantee that have a fair market value equal to the option price. Shares
cannot be issued or transferred upon the exercise of an option until the option
price is paid in full.
Information as to the amount of options received during the last fiscal
year by the executive officers of the Company with an annual compensation grater
than $100,000 is set forth herein under "Options Granted in Last Fiscal Year."
Federal Income Tax Consequences
A discussion of Federal income tax consequences is set forth herein in
Proposal 2 under "Federal Income Tax Consequences."
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<PAGE> 19
CHANGE OF CORPORATE NAME
(PROPOSAL 4)
The Board of Directors has unanimously approved, subject to shareholder
approval, an amendment to Article I of the Company's Amended and Restated
Certificate of Incorporation to change the name of the Company from "Chicago
Miniature Lamp, Inc." to "SLI, Inc." The purpose of the change is to adopt a
name more representative of the Company's identity following the acquisition of
the worldwide (outside of North America) operations of Sylvania Lighting
International B.V., and thereby enhance the Company's identity. Under Oklahoma
law, the affirmative vote of a majority of the outstanding stock is required to
approve this proposed amendment to the Company's Amended and Restated
Certificate of Incorporation. Upon approval by the shareholders, the proposed
amendment to the Amended and Restated Certificate of Incorporation will become
effective upon the filing of a certificate of amendment with the Secretary of
State of the State of Oklahoma, which is expected to occur promptly after the
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE COMPANY'S NAME TO "SLI, INC."
INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 5)
On the recommendation of the Audit Committee, the Certified Public
Accounting firm of Ernst & Young LLP, the Company's independent accountants for
the fiscal year ended November 30, 1997, has been selected as the Company's
independent accountants for the fiscal year ending January 3, 1999. The Company
does not expect that a representative of that accounting firm will be present at
the Meeting.
The selection of independent auditors is not required to be submitted
to a vote of the shareholders. The Board believes, however, it is appropriate as
a matter of policy to request that the shareholders ratify the appointment. If
the shareholders do not ratify the appointment, the Board will reconsider its
selection.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
FOR THE FISCAL YEAR ENDING JANUARY 3, 1999.
-17-
<PAGE> 20
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 16, 1998 for (i)
each person who is known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each of the executive officers of the Company named in the Summary Compensation
Table, and (iv) all of the directors and officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
---------------------------
NAME NUMBER PERCENT
---- ------ -------
<S> <C> <C>
Frank M. Ward (2) .............................. 12,383,355 42.2%
Ward Family Partnership ......................... 2,059,395 7.0%
c/o Veritas Advisors, Inc.
84 State Street
Boston, MA 02109
Werner Arnold (3) .............................. 285,000 *
Donald S. Dewsnap ............................... 20,925 *
Frederick B. Howard ............................. -- *
Richard E. Ingram (4) .......................... 37,950 *
Norman Scoular .................................. -- *
Ronald S. Goldstein (5) ........................ 167,635 *
Richard F. Parenti (6) ......................... 19,050 *
All executive officers and directors
as a group (9 persons) ....................... 12,761,280 43.5%
</TABLE>
- --------------
* Less than 1%.
(1) Includes shares underlying options which are exercisable or exercisable
within sixty (60) days from March 16, 1998. Unless otherwise indicated,
each shareholder has sole voting and investment power with respect to
the shares beneficially owned.
(2) Includes 11,633,355 shares owned by Frank M. Ward and Eileen M. Ward as
joint tenants with right of survivorship, 750,000 shares owned by Frank
M. Ward GRAT Trust, of which Mr. Ward is one of two Trustees.
(3) Includes 255,000 shares owned by Mr. Arnold and 30,000 shares subject
to options exercisable within 60 days of March 16, 1998.
(4) Includes 3,450 shares owned by Mr. Ingram and 34,500 shares owned by
Richard E. Ingram as trustee of the Donna C. Ingram Trust.
-18-
<PAGE> 21
(5) Includes 3,150 shares owned by family members and 58,568 shares subject
to options exercisable within 60 days of March 16, 1998. Mr. Goldstein
resigned from his positions as a director and an executive officer of
the Company in January 1998.
(6) Includes 3,000 shares owned by Mr. Parenti and 16,050 shares subject to
options exercisable within 60 days of March 16, 1998.
CERTAIN TRANSACTIONS
The Company leases on a month-to-month basis approximately 2,200 square
feet of office space in Canton, Massachusetts from Frank M. Ward, the President,
Chief Executive Officer and a director of the Company. Rent expense on this
facility was $60,000 for the fiscal year ended December 3, 1995, $67,000 for the
year ended December 1, 1996, and $60,000 for the fiscal year ended November 30,
1997. Management believes the rent to be comparable to the rent that would be
paid to an unrelated party.
At December 2, 1996, Mr. Ward owed the Company $515,000 for advances
made to him or payments made on his behalf. Such amount was repaid by Mr. Ward
in March 1997.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that certain of the directors
and officers of the Company filed late Forms 3, 4 or 5 during the fiscal year
ended November 30, 1997. Frank Ward filed one late Form 5 relating to two
transactions and four late Forms 4 relating to five transactions. Norman Scoular
filed one late Form 3. Richard Parenti filed one late Form 4 relating to two
transactions and one late Form 5 relating to one transaction. Donald Dewsnap
filed one late Form 5 relating to one transaction. Werner Arnold filed one late
Form 5 relating to one transaction and filed two late Forms 4 relating to three
transactions. Richard Ingram filed three late Forms 4 relating to three
transactions and filed two late Form 5 relating to two transactions. Ronald
Goldstein, a former director and officer, filed one late Form 5 relating to five
transactions.
OTHER MATTERS
The management has no information that any other matters will be
brought before the Meeting. If, however, other matters do come before the
Meeting, it is the intention of the persons named in the Proxy to vote the
shares to which the proxy relates on such matters in accordance with their best
judgment, discretionary authority to do so being included in the Proxy.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
In order to be included in the proxy materials for the 1999 Annual
Meeting of Shareholders of the Company, shareholder proposals must be received
by the Company not later than November 27, 1998.
-19-
<PAGE> 22
GENERAL
THE COMPANY WILL PROVIDE FREE OF CHARGE TO ANY SHAREHOLDER FROM WHOM A
PROXY IS SOLICITED PURSUANT TO THIS PROXY STATEMENT, UPON WRITTEN REQUEST FROM
SUCH SHAREHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE COMPANY'S FISCAL YEAR
ENDED NOVEMBER 30, 1997. REQUESTS FOR SUCH REPORT SHOULD BE DIRECTED TO INVESTOR
RELATIONS AT CHICAGO MINIATURE LAMP, INC., 500 CHAPMAN STREET, CANTON, MA 02021
The Company expects to hold its next shareholder meeting on or about
May 24, 1999 and proxy materials in connection with that meeting are expected to
be mailed approximately 30 days prior to the meeting.
Chicago Miniature Lamp, Inc.
Richard F. Parenti, Secretary
Date: April 1, 1998
-20-
<PAGE> 23
Exhibit A
CHICAGO MINIATURE LAMP, INC.
SPECIAL 1997 STOCK OPTION PLAN
SECTION 1. PURPOSE
This Special 1997 Stock Option Plan (the "Plan") is intended as a
performance incentive for employees of those Subsidiaries (as hereinafter
defined) of CHICAGO MINIATURE LAMP, INC., an Oklahoma corporation (the
"Company") whose principal operations are located outside of the United States
and Canada, and for certain other individuals providing services to the Company
or its Subsidiaries, to enable the persons to whom options are granted hereunder
(an "Optionee" or "Optionees") to acquire or increase a proprietary interest in
the success of the Company and its Subsidiaries. The Company intends that this
purpose will be effected by the granting of stock options ("Options") under the
Plan. As used in the Plan, the term "Subsidiary" shall mean, with respect to the
Company, any corporation or other entity, a majority (by number of votes) of
whose outstanding equity interests of any class or classes are at the time of
determination owned by the Company or by a Subsidiary of the Company, if the
holders of such equity interests (a) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or persons performing similar functions) of the issuer thereof, even though the
right so to vote has been suspended by the happening of any such contingency, or
(b) are at the time entitled, as such holders, to vote for the election of a
majority of the directors (or persons performing similar functions) of the
issuer thereof, whether or not the right so to vote exists by reason of the
happening of a contingency.
SECTION 2. OPTIONS TO BE GRANTED AND ADMINISTRATION
2.1 Administration by the Board. This Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board shall have full and
final authority to operate, manage and administer the Plan on behalf of the
Company. This authority includes, but is not limited to: (i) the power to grant
Options conditionally or unconditionally; (ii) the power to prescribe the form
or forms of the instruments evidencing options granted under this Plan; (iii)
the power to interpret the Plan; (iv) the power to provide regulations for the
operation of the incentive features of the Plan, and otherwise to prescribe
regulations for interpretation, management and administration of the Plan; (v)
the power to delegate responsibility for Plan operation, management and
administration on such terms, consistent with the Plan, as the Board may
establish; (vi) the power to delegate to other persons the responsibility for
performing ministerial acts in furtherance of the Plan's purpose; and (vii) the
power to engage the services of persons or organizations in furtherance of the
Plan's purpose, including, but not limited to, banks, insurance companies,
brokerage firms and consultants.
In addition, as to each Option, the Board shall have full and final
authority in its discretion: (i) to determine the number of shares subject to
each Option; (ii) to determine the time or times at which Options will be
granted; (iii) to determine the time or times when each Option shall become
exercisable and the duration of the exercise period, which shall not exceed the
limitations specified in Section 5.1.1; and (iv) to determine the option price
for the shares subject to each Option, which price shall be subject to the
applicable requirements, if any, of Section 5.1.4 hereof.
2.2 Appointment and Proceedings of Committee. The Board may appoint a
Stock Option Committee (the "Committee") which shall consist of one or three
Members of the Board. The Board may from time to time appoint members of the
Committee in substitution for or in addition to the member or members previously
appointed, and may fill vacancies, however caused, in the Committee. If the
Committee has more than one member, it shall select one of its members as its
chairman. The Committee shall hold its meetings at such times and places as it,
or Chairman, as the case may be, shall deem advisable. If the Committee has more
than one member, a majority of its members shall constitute a quorum, and all
actions of the Committee shall be taken by a majority of its members. Any action
of the Committee may be taken by a written instrument signed by the Committee,
or if the Committee has more than one member, by all of its members, and any
action so taken shall be as fully effective as if it had been taken by a vote of
a majority of the members at a meeting duly called and held.
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2.3 Powers of Committee. Subject to the provisions of this Plan and the
approval of the Board, the Committee shall have the power to make
recommendations to the Board as to whom Options should be granted, the number of
shares to be covered by each Option, the time or times of grant of Option, and
the terms and conditions of each Option. In addition, the Committee shall have
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, and to exercise the administrative and
ministerial powers of the Board with regard to aspects of the Plan, other than
the granting of Options. The interpretation and construction by the Committee of
any provisions of the Plan or of any Option and the exercise of any power
delegated to it hereunder shall be final, unless otherwise determined by the
Board. No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.
SECTION 3. STOCK
3.1 Shares Subject to Plan. The stock subject to the Options shall be
shares of the Company's authorized but unissued common stock, par value $.01 per
share ("Common Stock"). The total number of shares that may be issued pursuant
to Options shall not exceed an aggregate of 2,000,000 shares of Common Stock.
3.2 Lapsed or Unexercised Options. Whenever any outstanding Option
expires, is canceled or is otherwise terminated (other than by exercise), the
shares of Common Stock allocable to the unexercised portion of such Option shall
be restored to the Plan and be available for the grant of other Options.
SECTION 4. ELIGIBILITY
4.1 Eligible Optionees. Options may be granted under the Plan to
employees of the Company or any of its Subsidiaries who are not also officers of
the Company or members of the Board, and to certain other individuals providing
services to the Company or its Subsidiaries. No person who is either an officer
of the Company or a member of the Board is eligible to participate in the Plan.
SECTION 5. TERMS OF THE OPTION GRANTS
5.1 Mandatory Terms. Each grant of an Option under the Plan (an "Option
Grant") shall contain such provisions as the Board or the Committee shall from
time to time deem appropriate, and shall include provisions relating to the
method of exercise, payment of exercise price, adjustments or changes in the
Company's capitalization and the effect of a merger, consolidation, liquidation,
sale or other disposition of or involving the Company. Option Grants need not be
identical, but each Option Grant by appropriate language shall include the
substance of all of the following provisions:
5.1.1 Expiration. Notwithstanding any other provision of the
Plan or of any Option Grant, each Option shall expire on the date specified in
the Option Grant, which date shall not be later than the tenth anniversary of
the date as of which the Option was granted.
5.1.2 Exercise. Each Option shall be deemed exercised when (i)
the Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
shares of Common Stock as to which the Option is exercised has been made, and
(iii) arrangements that are satisfactory to the Board or the Committee in its
sole discretion have been made for the Optionee's payment to the Company of the
amount that is necessary for the Company or Subsidiary employing the Optionee to
withhold in accordance with applicable tax withholding requirements. Unless
further limited by the Board or the Committee in any Option Grant, the option
price of any shares of Common Stock purchased shall be paid in cash, by
certified or official bank check, by money order, with shares of Common Stock or
by a combination of the above; provided further, however, that the Board or the
Committee in its sole discretion may accept a personal check in full or partial
payment of any shares of Common Stock. If the exercise price is paid in whole or
in part with shares, the value of the shares surrendered shall be their fair
market value on the date the Option is exercised as determined in accordance
with Section 5.1.4 hereof. No Optionee shall be deemed to be a holder of any
shares of Common Stock subject to an Option unless and until a stock certificate
or certificates for
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such shares of Common Stock are issued to such person(s) under the terms of the
Plan. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as expressly provided in Section 6 hereof.
5.1.3 Events Causing Immediate Exercise. Unless otherwise
provided in any Option Grant, each outstanding Option shall become immediately
fully exercisable:
5.1.3.1 if there occurs any transaction (which shall
include a series of transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that stockholders of the Company immediately
before such transaction cease to own at least 51 percent of the voting stock of
the Company or of any entity that results from the participation of the Company
in a reorganization, consolidation, merger, liquidation or any other form of
corporate transaction;
5.1.3.2 if the stockholders of the Company shall
approve a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless the approved merger,
consolidation, reorganization, liquidation, or dissolution is subsequently
abandoned); or
5.1.3.3 if the stockholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned).
The Board or the Committee may in its sole discretion accelerate the
date on which any Option may be exercised and may accelerate the vesting of any
shares of Common Stock subject to any Option or previously acquired by the
exercise of any Option.
5.1.4 Purchase Price. The price at which shares may be
purchased under any Option shall be specified by the Board at the time such
Option is granted, and may be less than, equal to or greater than the fair
market value of the shares of Common Stock on the date such Option is granted,
but shall not be less than the par value of shares of Common Stock.
For the purpose of the Plan, the "fair market value" per share of
Common Stock on any date of reference shall be the Closing Price of the Common
Stock of the Company which is referred to in clause (i), (ii) or (iii) below, on
the business day immediately preceding such date, or if not referred to in
clause (i), (ii) or (iii) below, "fair market value" per share of Common Stock
shall be such value as shall be determined by the Board or the Committee, unless
the Board or the Committee in its sole discretion shall determine otherwise in a
fair and uniform manner. For this purpose, the Closing Price of the Common Stock
on any business day shall be (i) if the Common Stock is listed or admitted for
trading on any United States national securities exchange, or if actual
transactions, are otherwise reported on a consolidated transaction reporting
system, the last reported sale price of Common Stock on such exchange or
reporting system, as reported in any newspaper of general circulation, (iii) if
the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the mean between
the closing high bid and low asked quotations for such day of Common Stock on
such system, or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
5.1.5 Transferability of Options. Options shall be
transferable to the extent, and only to the extent, expressly provided in the
Option Grant with respect thereto.
5.1.6 Termination of Employment or Death of Optionee. Except
as may be otherwise expressly provided in the Option Grant with respect thereto,
Options shall terminate on the earlier to occur of.
5.1.6.1 the date of expiration thereof stated in the
Option Grant with respect thereto, or
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5.1.6.2 other than in the case of death of the
Optionee or disability of the Optionee within the meaning of Section 22(e)(3) of
the United States Internal Revenue Code ("disability"), 90 days after
termination of the employment or other relationship between the Company or any
of the Subsidiaries and the Optionee, unless such termination provision is
waived by resolution adopted by the Board within 30 days of the termination of
such relationship.
Except as may otherwise be expressly provided in the applicable Option
Grant, in the event of the death of an Optionee while in an employment or other
relationship with the Company and before the date of expiration of an Option,
such Option shall terminate on the earlier of such date of expiration or 180
days following the date of such death. After the death of the Optionee, his
executors, administrators or any person or persons to whom such Option may be
transferred by will or by laws of descent and distribution, shall have the
right, at any time prior to such time of termination, to exercise such Option to
the extent the Optionee was entitled to exercise such Option immediately prior
to the Optionee's death.
Except as may otherwise be expressly provided in the applicable Option
Grant, if an Optionee's employment or other relationship with the Company
terminates because of a disability, such Optionee's Option shall terminate on
the earlier of the date of expiration thereof or 180 days following the
termination of such relationship; and unless by its terms it sooner terminates
and expires during such 180 day period, the Optionee may exercise that portion
of such Option which is exercisable at the time of termination of such
relationship.
An employment relationship between the Company and the Optionee shall
be deemed to exist during any period during which the Optionee is employed by
the Company or by any Subsidiary. Whether authorized leave of absence or absence
on military or government service shall constitute termination of the employment
relationship between the Company and the Optionee shall be determined by the
Board at the time thereof.
5.1.7 Rights of Optionees. No Optionee shall be deemed for any
purpose to be the owner of any shares of Common Stock subject to any Option
unless and until (i) the Option shall have been exercised pursuant to the terms
thereof, (ii) the Company shall have issued and delivered the shares of the
Optionee, and (iii) the Optionee's name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full
voting, dividend and other ownership rights with respect to such shares of
Common Stock.
5.2. Certain Optional Terms. The Board may in its discretion provide,
upon the grant of any Option hereunder, that the Company shall have an option to
repurchase all or any number of shares purchased upon exercise of such Option.
The repurchase price per share payable by the Company shall be such amount or be
determined by such formula as is fixed by the Board at the time the Option for
the shares subject to repurchase was granted. The Board may also provide that
the Company shall have a right of first refusal with respect to the transfer or
proposed transfer of any shares purchased upon exercise of an Option granted
hereunder. In the event the Board shall grant Options subject to repurchase
rights or rights of first refusal in favor of the Company as described in this
Section 5.2, (a) the Option Grant with respect to such Option shall set forth in
its terms and provisions the terms of such repurchase rights or rights of first
refusal (and if not set forth in such Option Grant, such rights shall not
apply), and (b) the certificate or certificates representing the shares
purchased pursuant to such Option shall carry a legend satisfactory to counsel
for the Company referring to the Company's rights with respect thereto.
SECTION 6. ADJUSTMENT OF SHARES OF COMMON STOCK
6.1 Increase or Decrease of Outstanding Shares. If at any time while
the Plan is in effect or unexercised Options are outstanding, there shall be any
increase or decrease in the number of issued and outstanding shares of Common
Stock through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of
shares of Common Stock, then and in such event (i) appropriate adjustment shall
be made in the maximum number of shares of Common Stock available for grant
under the Plan, so that the same percentage of the Company's issued and
outstanding shares of Common Stock shall continue to be subject to being so
optioned, and (ii) appropriate adjustment shall be made in the number of
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shares and the exercise price per share of Common Stock thereof then subject to
any outstanding Option, so that the percentage of the Company's issued and
outstanding shares of Capital Stock shall remain subject to purchase at the same
aggregate exercise price.
6.2 Discretionary Adjustment. Subject to the specific terms of any
Option Grant, the Board or the Committee may change the terms of Options
outstanding under the Plan, with respect to the option price or the number of
shares of Common Stock subject to the Options, or both, when, in the sole
discretion of the Board or the Committee, such adjustments become appropriate by
reason of a corporate transaction described in Section 5.1.3 hereof.
6.3 Conversion of Shares. Except as otherwise expressly provided
herein, the issuance by the Company of shares of its capital stock of any class,
or securities convertible into shares of capital stock of any class, either in
connection with direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of or
exercise of shares of Common Stock then subject to outstanding Options granted
under the Plan.
6.4 General. Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt securities,
or preferred or preference stock that would rank above the shares subject to
outstanding Options; (iv) the dissolution or liquidation of the Company; (v) any
sale, transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
SECTION 7. AMENDMENT OF THE PLAN
The Board may amend the Plan at any time and from time to time. Rights
and obligations under any Option granted before any amendment of the Plan shall
not be altered or impaired by such amendment, except with the consent of the
Optionee.
SECTION 8. NON-EXCLUSIVITY OF THE PLAN
The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
SECTION 9. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW
The obligation of the Company to sell and deliver shares of Common
Stock with respect to Options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable securities
laws, and the obtaining of all such approvals by government agencies as may be
deemed necessary or appropriate by the Board or the Committee. All shares sold
under the Plan shall bear appropriate legends. The Plan shall be governed by and
construed in accordance with the laws of the State of Oklahoma.
SECTION 10. EFFECTIVE DATE OF THE PLAN
The effective date of the Plan is September 8, 1997, the date as of
which it was approved by the Board. No option may be granted under the Plan
after the tenth anniversary of such effective date.
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APPENDIX
Chicago Miniature Lamp, Inc.
500 Chapman Street
Canton, MA 02021
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Frank M. Ward and Richard F. Parenti
with the power to appoint their substitute, and hereby authorized them to
represent and vote, as designated below, all the shares of common stock of
Chicago Miniature Lamp, Inc. held of record by the undersigned as of March 20,
1998 at the Annual Meeting of Shareholders to be held on April 27, 1998 or any
adjournment thereof.
1. To elect six Directors to hold office until the next Annual Meeting
of Shareholders.
___ FOR all nominees listed below ____ WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed
contrary below) below
Werner Arnold Donald S. Dewsnap Frederick B. Howard
Richard E. Ingram Norman Scoular Frank M. Ward
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided.
_________________________
2. To ratify the adoption of the Special 1997 Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To ratify the amendment of the Company's 1995 Incentive and
Non-Statutory Stock Option Plan to increase the number of shares issuable
thereunder from 1,500,000 to 3,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To amend the Company's Amended and Restated Certificate of
Incorporation in order to change the name of the Company to "SLI, Inc."
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Ratification of the reappointment of Ernst & Young LLP as the
Company's independent accountants for 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. In their discretion, the holders of this Proxy are authorized to
vote upon such other business as may properly come before the Meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted for Proposals 1, 2, 3, 4 and 5.
(Continued, and to be signed on next page)
<PAGE> 29
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator
or trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
_________________________________ Signature
_________________________________ Signature, if held jointly
DATED: , 1998
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
