SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Thomas & Betts Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(2).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 1/:
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was determined.
[ ] 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:
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<PAGE>
["Thomas & Betts" logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1994
To the Shareholders of THOMAS & BETTS CORPORATION:
The Annual Meeting of Shareholders of Thomas & Betts Corporation will be
held at the Somerset Hills Hotel, 200 Liberty Corner Road (three-tenths of a
mile north of Exit 33, I-78), Warren, New Jersey, on May 4, 1994, at 10 a.m. at
which time the following matters will be considered:
1. Election of ten directors;
2. Adoption of the Thomas & Betts Corporation Executive Incentive Plan, a
copy of which is set forth in the accompanying Proxy Statement;
3. Ratification of the appointment of KPMG Peat Marwick as independent
public accountants; and
4. Transaction of such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 7, 1994, will
be entitled to receive notice of, and to vote at, the Annual Meeting of
Shareholders or any adjournment thereof.
Whether or not you expect to attend the meeting in person, YOU ARE URGED TO
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY to Inspectors of Election, First
Chicago Trust Company of New York, P.O. Box 8711, Edison, New Jersey 08818-9180.
Your attention is directed to the Proxy Statement which is printed on the
following pages.
JANICE H. WAY, Corporate Secretary
1555 Lynnfield Road
Memphis, Tennessee 38119
March 21, 1994
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR PROXY PROMPTLY
<PAGE>
THOMAS & BETTS CORPORATION
PROXY STATEMENT
SOLICITATION OF PROXY
THE ENCLOSED PROXY IS BEING MAILED AND SOLICITED THIS 21ST DAY OF MARCH,
1994, BY AND ON BEHALF OF THE BOARD OF DIRECTORS (THE "BOARD") OF THOMAS & BETTS
CORPORATION (THE "CORPORATION") whose principal executive offices are at 1555
Lynnfield Road, Memphis, Tennessee 38119, for use in connection with the Annual
Meeting of Shareholders to be held at 10 a.m. on May 4, 1994, at the Somerset
Hills Hotel, 200 Liberty Corner Road, Warren, New Jersey, and at any adjournment
thereof (the "Annual Meeting"). The matters to be considered and acted upon at
such Annual Meeting are referred to in the preceding Notice and are more fully
discussed below. All shares represented by proxies which are returned properly
signed will be voted as specified on the proxy card. If choices are not
specified on the proxy card, the shares will be voted as recommended by the
Board. The By-laws of the Corporation require that the holders of a majority of
the total number of shares entitled to vote be represented in person or by proxy
in order for the business of the meeting to be transacted.
The cost of soliciting proxies for the Annual Meeting will be borne by the
Corporation. The Corporation has retained Hill and Knowlton, Inc., 420 Lexington
Avenue, New York, N.Y. 10164, to distribute material to beneficial owners whose
shares are held by brokers, banks, or other institutions and to assist in
soliciting proxies for a fee estimated at $5,700 plus expenses. In addition,
directors, officers and other employees may solicit proxies in person and by
mail or telecommunication. The Corporation will also reimburse brokers, banks,
and others who are record holders of the Corporation's shares for reasonable
expenses incurred in obtaining voting instructions from beneficial owners of
such shares.
REVOCATION OF PROXY
A proxy may be revoked by the shareholder by giving written notice of
revocation to the Inspectors of Election, First Chicago Trust Company of New
York, P.O. Box 8711, Edison, New Jersey 08818-9180, or by filing another proxy
with the Inspectors of Election at any time prior to its exercise.
COMMON STOCK OUTSTANDING
At the close of business on March 7, 1994, there were outstanding and
entitled to vote at the Annual Meeting 19,159,249 shares of Common Stock, $.50
par value (the "Common Stock"). There were 32,636 treasury shares which carry no
voting rights. Holders of record of Common Stock at the close of business on
March 7, 1994, will be entitled to one vote for each share held on all matters
properly coming before the Annual Meeting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows persons or groups who are known to the
Corporation to be beneficial owners of more than 5% of the outstanding Common
Stock of the Corporation as of December 31, 1993.
<TABLE> <CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------------------------------------------------ --------------------- -----------
<S> <C> <C>
Delaware Management Company, Inc.............................................. 1,856,680(1) 9.84%
1818 Market Street
Philadelphia, Pennsylvania 19103
Wellington Management Company................................................. 1,136,250(2) 6.02%
75 State Street
Boston, Massachusetts 02109
</TABLE>
- ---------------
(1) Information provided on Schedule 13G by Delaware Management Company, Inc. as
of December 31, 1993, indicates that it has sole investment power as to all
1,856,680 shares, sole voting power as to 1,520,000 shares, and shared
voting power as to 17,700 shares.
(2) Information provided on Schedule 13G by Wellington Management Company as of
December 31, 1993, indicates that it has shared investment power as to all
1,136,250 shares and shared voting power over 97,300 shares; it does not
have sole voting power over any shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides data on Common Stock of the Corporation
beneficially owned as of February 4, 1994, by each director, director nominee,
and each of the executive officers named in the Summary Compensation Table and
by the directors, director nominees, and executive officers as a group, as
reported by each person. Unless otherwise stated, the beneficial owners exercise
sole voting and investment power over their shares.
<TABLE> <CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT
NAME OF BENEFICIAL OWNER OWNERSHIP(1)(2) OF CLASS
- ------------------------------------------------------------------------------ ------------------------ -----------
<S> <C> <C>
Ronald P. Babcock............................................................. 40,542 *
Hobart Betts.................................................................. 150,200(3) *
Raymond B. Carey, Jr.......................................................... 1,200 *
Ernest H. Drew................................................................ 600 *
T. Kevin Dunnigan............................................................. 97,216 *
Jeananne K. Hauswald.......................................................... 167 *
Thomas W. Jones............................................................... 300 *
Robert A. Kenkel.............................................................. -- *
Robert H. McCaffrey........................................................... 1,399 *
Clyde R. Moore................................................................ 22,211 *
Robert H. Paquette............................................................ 17,413(4) *
J. David Parkinson............................................................ 27,758(5) *
Dominic J. Pileggi............................................................ 19,911 *
Ian M. Ross................................................................... 400 *
Jerre L. Stead................................................................ 600 *
William H. Waltrip............................................................ 300 *
Directors, director nominees, and executive officers as a group (17 including
the above).................................................................... 381,592 1.98%
</TABLE>
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(1) Includes shares which may be acquired within 60 days of February 4, 1994,
through the exercise of stock options, as follows: Mr. Babcock, 15,400; Mr.
Dunnigan, 57,711; Mr. Moore, 13,700; Mr. Paquette, 9,700; Mr. Parkinson,
5,100; Mr. Pileggi, 12,225; and all directors and executive officers as a
group (7), 113,836.
(2) Includes shares of restricted stock with respect to which the holders have
sole voting power, but no investment power, during the restricted period, as
follows: Mr. Babcock, 3,572; Mr. Betts, 200; Mr. Carey, 200; Dr. Drew, 200;
Mr. Dunnigan, 12,788; Ms. Hauswald, 42; Mr. Jones, 200; Mr. McCaffrey, 200;
Mr. Moore, 8,511; Mr. Paquette, 2,244; Mr. Parkinson, 200; Mr. Pileggi,
2,431; Dr. Ross, 200; Mr. Stead, 100; Mr. Waltrip, 200; and all directors
and executive officers as a group (16), 32,663.
(3) Does not include 195,500 shares held in trusts with respect to which Mr.
Betts has, with others, a present or contingent interest but no voting or
investment power.
(4) Includes 20 shares with respect to which Mr. Paquette shares voting and
investment power with his wife. Does not include 9,125 shares owned by the
wife of Mr. Paquette with respect to which he disclaims beneficial
ownership.
(5) Includes 968 shares with respect to which Mr. Parkinson shares voting and
investment power with his wife.
* Less than one percent of the Corporation's outstanding Common Stock.
2
<PAGE>
ANNUAL REPORT
The Corporation's Annual Report to Shareholders for the fiscal year ended
January 2, 1994, containing consolidated financial statements reflecting the
financial position of the Corporation as of January 2, 1994 and December 31,
1992 and the results of operations and changes in cash flows for each of the
years in the three-year period ended January 2, 1994, has been mailed with this
proxy material to all shareholders.
1. ELECTION OF DIRECTORS
At the forthcoming Annual Meeting it is intended that 10 directors shall be
elected, each to hold office for the term of one year and until a successor
shall be elected and shall qualify. The nominees identified below will be
proposed by the Board for the 10 directorships. Shares represented by proxies
which are returned properly signed will be voted for the nominees unless the
shareholder indicates on the proxy that authority to vote the shares is withheld
for one or more or for all of the nominees listed. The 10 nominees for election
as directors who receive the greatest number of votes cast shall become
directors at the conclusion of the tabulation of votes. Any shares not voted,
whether by abstention, broker non-vote or otherwise, have no effect on the
election of directors except to the extent the failure to vote for an individual
results in another individual receiving a larger number of votes. Should a
nominee become unable to serve as a director, the proxy will be voted for the
election of a substitute nominee who shall be designated by the Board or, if no
substitute nominee is named, the number of directorships will be reduced
accordingly.
Following is information on the principal occupation of each nominee,
positions and offices with the Corporation, and membership on other boards of
directors.
RAYMOND B. CAREY, JR., 67
A DIRECTOR SINCE 1987
[Photograph] Formerly Chairman of the Board (1973 to 1989), Chief
Executive Officer (1972 to 1988) and President (1971 to 1986)
of ADT Security Systems, Inc. (electronic protection
systems). He is a director of C. R. Bard, Inc. and The Kroger
Company.
ERNEST H. DREW, 56
A DIRECTOR SINCE 1989
[Photograph] President (1987 to present) and Chief Executive Officer
(1988 to present) of Hoechst Celanese Corporation (chemicals,
fibers and film, advanced materials, and pharmaceuticals). He
is a director of Hoechst Celanese Corporation, Manville
Corporation, Messer Griesheim Industries, Inc., Public
Service Enterprise Group Incorporated, and Riverwood
International Corp.
3
<PAGE>
T. KEVIN DUNNIGAN, 56
A DIRECTOR SINCE 1975
[Photograph] Chairman of the Board (1992 to present) and Chief
Executive Officer (1985 to present) of the Corporation. Mr.
Dunnigan was President of the Corporation (1980 to 1994).
JEANANNE K. HAUSWALD, 49
A DIRECTOR SINCE 1993
[Photograph] Vice President and Treasurer (1993 to present) and
formerly Vice President-Human Resources (1990 to 1993) and
Treasurer (1987 to 1990) of The Seagram Company, Ltd.
(distilled spirits, wines, fruit juices and beverages).
THOMAS W. JONES, 44
A DIRECTOR SINCE 1992
[Photograph] President and Chief Operating Officer (1993 to present)
and formerly Executive Vice President and Chief Financial
Officer (1989 to 1993) of Teachers Insurance and Annuity
Association--College Retirement Equities Fund (pension system
for employees of colleges, universities, independent schools,
and related organizations). Mr. Jones was Senior Vice
President and Treasurer of John Hancock Mutual Life Insurance
Company (1982 to 1989). He is a trustee of Eastern
Enterprises.
ROBERT A. KENKEL, 59
NOMINEE
[Photograph] Business consultant (1990 to present). Mr. Kenkel was
Chairman of the Board, Chief Executive Officer and Chief
Operating Officer (1988 to 1990) of The Pullman Co.
(automotive, aerospace and industrial components and
products). He held chief operating officer positions (1985 to
1990) in various other companies within the Forstmann-Little
group (electrical, aerospace, automotive, industrial and
consumer products), including FL Industries, Inc. which was
acquired by the Corporation in 1992.
4
<PAGE>
CLYDE R. MOORE, 40
A DIRECTOR SINCE 1993
[Photograph] President and Chief Operating Officer of the Corporation
(January 1994 to present). Mr. Moore was President-Electrical
Division (1992 to 1994) of the Corporation. He was President
and Chief Operating Officer (1990 to 1992) of FL Industries,
Inc. (electrical components) and President of its American
Electric Division (1985 to 1992) prior to its acquisition by
the Corporation.
J. DAVID PARKINSON, 64
A DIRECTOR SINCE 1968
[Photograph] Formerly Chairman of the Board (1975 to 1992), President
(1974 to 1980), and Chief Executive Officer (1974 to 1985) of
the Corporation.
IAN M. ROSS, 66
A DIRECTOR SINCE 1980
[Photograph] President Emeritus (1991 to present) and President (1979
to 1991) of AT&T Bell Laboratories (research and development
for AT&T). Dr. Ross is a director of The B.F. Goodrich Co.
WILLIAM H. WALTRIP, 56
A DIRECTOR SINCE 1983
[Photograph] Chairman and Chief Executive Officer (1993 to present)
of Technology Solutions Company (services and resources to
design, develop and implement large-scale computer systems).
Mr. Waltrip was Chairman (1992 to 1993), Chief Executive
Officer and President (1991 to 1993) of Biggers Brothers,
Inc. (food service distributors); Vice Chairman (1991 to
1992) of Unifax, Inc., the parent corporation of Biggers
Brothers, Inc.; and a business consultant (1988 to 1991). Mr.
Waltrip is a director of Bausch & Lomb Inc., Recognition
International Inc., Teachers Insurance and Annuity
Association, and Technology Solutions Company.
5
<PAGE>
THE BOARD OF DIRECTORS
The Board establishes broad corporate policy and gives guidance to the
Corporation. There were 8 meetings of the Board and 9 meetings of committees of
the Board in 1993. All directors attended at least 75% of the meetings of the
Board and committees of which they were members. The total combined attendance
at these meetings was 98%.
Nonemployee directors receive a retainer fee of $22,000 per year plus a fee
of $1,500 for each Board meeting attended and $1,000 for each regularly
scheduled committee meeting attended. Committee chairmen receive an additional
retainer fee of $3,500 per year. Employee directors do not receive any fees for
serving as a director of the Corporation or as a member or chairman of any
committee of the Board. Under the Thomas & Betts Corporation Restricted Stock
Plan for Nonemployee Directors, each individual who is elected or who continues
as a director receives each year an award of 100 restricted shares of the
Corporation's Common Stock effective as of the date of the annual meeting of
shareholders. A nonemployee director who is elected to fill a vacancy or a newly
created directorship in the interim between annual meetings receives an award of
a prorated number of restricted shares of Common Stock effective as of the date
of election. Shares awarded to a nonemployee director remain restricted until
such director's termination of service as a director.
Under the Deferred Fee Plan for Nonemployee Directors, each director may
elect to defer all or a portion of compensation for services as a director. Any
amount so deferred is, at the time of election, valued as if invested in a
one-year Certificate of Deposit or the Corporation's Common Stock. A deferred
fee account is payable only in cash and is distributed, in accordance with the
director's election, in a lump sum or in installments, upon termination of
service or on January 15 or July 15 of a year specified by the director.
Under the Thomas & Betts Corporation Retirement Plan for Nonemployee
Directors, directors (excluding those who are current or former employees of the
Corporation) who have served on the Board for at least five years will receive
upon retirement an annual benefit payable over a five-year period equal to 50%
of the amount of the annual retainer fee in effect at retirement. Each
additional year of service up to an aggregate of ten years increases the amount
of the benefit payable by ten percentage points and the payment period by one
year, to a maximum of 100% of the retainer payable for a period of ten years. In
the event of a change of control of the Corporation, each nonemployee director
would be fully vested in the maximum retirement benefit.
COMMITTEES OF THE BOARD OF DIRECTORS
There are four standing committees of the Board: Executive Committee, Audit
Committee, Committee on Directors, and Human Resources Committee. Members of
each committee, who are elected by the full Board, are named below. The
Corporation follows the practice of periodically rotating the chairmanship of
the Audit Committee, Committee on Directors, and Human Resources Committee.
EXECUTIVE AUDIT
--------------------- -------------------
J. David Parkinson* Thomas W. Jones*
Raymond B. Carey, Jr. Robert H. McCaffrey
T. Kevin Dunnigan Jerre L. Stead
William H. Waltrip
COMMITTEE
ON HUMAN
DIRECTORS RESOURCES
---------------------- ---------------
Raymond B. Carey, Jr.* Ernest H. Drew*
T. Kevin Dunnigan Hobart Betts
J. David Parkinson Ian M. Ross
William H. Waltrip
* Chairman
EXECUTIVE COMMITTEE
The Executive Committee's function is to act for the Board, to the extent
permitted by law, in any situation in which Board action is required and it is
not practicable to have a meeting of the Board. There was one meeting of the
Executive Committee in 1993.
6
<PAGE>
AUDIT COMMITTEE
This committee is composed solely of nonemployee directors of the
Corporation. The Audit Committee (1) considers the independent accountants to be
employed and recommends to the Board the firm to be appointed, subject to
ratification by the Corporation's shareholders; (2) consults with the
independent accountants with regard to the plan and scope of the annual audit of
the Corporation's financial statements; (3) reviews, in consultation with the
independent accountants, the Corporation's annual financial statements and
related notes, the results of the audit, and the management letter and response
thereto; (4) reviews, in consultation with the independent accountants and the
internal auditors, the adequacy and scope of the Corporation's internal controls
and procedures; (5) reviews and approves the fees and expenses associated with
audit and non-audit services provided by the independent accountants; (6)
reviews with the internal auditors the internal audit plan and current audit
results; (7) reports the results of its findings and actions to the Board; and
(8) directs and supervises investigations, if necessary, into any matter that it
deems appropriate. There were three meetings of the Audit Committee in 1993.
COMMITTEE ON DIRECTORS
A majority of the members of this committee must be nonemployee directors
of the Corporation. A former employee serving on this committee is considered a
nonemployee director. The Committee on Directors (1) reviews and makes
recommendations to the Board regarding the maintenance of a desirable balance of
skill and expertise among Board members; (2) receives suggestions and makes
recommendations to the Board concerning candidates for the Board and the slate
of director nominees to be submitted at the annual meeting of shareholders; (3)
makes recommendations to the Board concerning the compensation of nonemployee
directors and the retirement policy of the Board; (4) reviews Board procedures
and practices; (5) recommends membership assignments for committees of the
Board; and (6) reviews and takes action on requests for management personnel to
serve on boards of directors of other companies. The Committee on Directors will
consider shareholder suggestions of persons for consideration as candidates for
nomination as members of the Board. Shareholders should submit the name,
biographical data, and qualifications of any such suggested candidate to the
Corporate Secretary. Any such recommendation should be accompanied by the
written consent of such person to be named as a candidate and, if nominated and
elected, to serve as a director. If a shareholder wishes to nominate at the
annual meeting of shareholders a person for election to the Board, the
Corporation's By-laws require that the nomination satisfy certain conditions,
including, generally, that written notice must be delivered to the Corporate
Secretary at the Corporation's principal executive offices not less than 60 nor
more than 90 days prior to the first anniversary of the preceding year's annual
meeting of shareholders. A copy of the applicable By-law is available from the
Corporate Secretary upon the request of any shareholder. There were two meetings
of the Committee on Directors in 1993.
HUMAN RESOURCES COMMITTEE
This committee is composed solely of nonemployee directors of the
Corporation. The Human Resources Committee (1) reviews compensation programs,
employee benefit plans, and personnel policies applicable to officers and other
members of senior management; (2) reviews management development and succession
programs; (3) reviews major organization changes and evaluates their impact on
senior management succession plans and reward systems, and makes recommendations
to the Board where Board action is required; (4) makes recommendations to the
Board on the compensation of the five most highly compensated executive
officers; (5) recommends to the Board the performance criteria to be established
each year for the Officer Profit-Sharing Plan; (6) performs the administrative
functions assigned to the Committee by the provisions of the Officer
Profit-Sharing and the 1993 Management Stock Ownership Plans; and (7) reports
the results of its actions and findings to the Board, and, with respect to the
above, recommends programs and changes considered desirable. There were three
meetings of the Human Resources Committee in 1993.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1991 and
1992 and January 2, 1994, the cash compensation paid by the Corporation and its
subsidiaries, as well as certain other compensation paid for those years to each
of the five most highly compensated executive officers of the Corporation (the
"Named Executives") in all capacities in which they served.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
------------------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
--------------------------------------- RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS ALL OTHER
NAME AND COMPENSATION AWARDS GRANTED COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) ($)(2) (#) ($)(3)
- ----------------------------- --------- ----------- ----------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
T. K. Dunnigan............... 1993 $ 487,300 $ 193,921 $ 98,348 $ 320,153 9,000 $ 4,497
Chairman and Chief Executive 1992 443,000 361,565 78,159 254,495 8,300 4,364
Officer 1991 350,000 112,612 54,197 176,428 8,300 4,238
C. R. Moore.................. 1993 330,000 120,351 34,875 139,500 3,700 12,769
President-Electrical Division 1992 300,000 634,750(4) 26,972 107,888 10,000 22,223
1991 -- -- -- -- -- --
R. P. Babcock................ 1993 227,175 63,283 47,709 77,841 2,700 4,497
Vice President-Finance 1992 206,523 117,991 40,997 66,890 2,700 4,364
1991 171,815 52,683 33,108 54,018 2,500 4,238
R. H. Paquette............... 1993 177,549 74,204 36,619 48,825 1,825 4,497
President-Vitramon 1992 168,109 76,776 22,027 51,396 1,850 4,364
Division 1991 153,150 30,734 17,681 41,256 1,900 4,238
D. J. Pileggi................ 1993 153,092 39,838 23,087 62,357 1,825 5,138
President-Electronics 1992 141,512 50,944 34,524 38,899 1,850 4,364
Division 1991 131,721 24,424 15,958 51,948 1,900 3,916
</TABLE>
- ---------------
(1) Cash payments of federal and state withholding taxes equal to the fair
market value on the date of award of such number of shares of Common Stock
that the recipient of a restricted stock award elected to forgo in favor of
tax payments.
(2) Fair market value of shares awarded on the date of grant in each year.
Dividends are paid to the recipients of restricted stock awards at the same
time and at the same rate as paid to all shareholders. The number and value
of the aggregate restricted stock holdings as of January 2, 1994, based on
the closing market price of the Common Stock on December 31, 1993 of $58.50,
are as follows:
Mr. Dunnigan.................................. 12,278 $ 718,263
Mr. Moore..................................... 3,800 222,300
Mr. Babcock................................... 3,286 192,231
Mr. Paquette.................................. 2,362 138,177
Mr. Pileggi................................... 2,557 149,585
(3) The amounts reported for the Named Executives other than Mr. Moore are
contributions to a 401(k) plan on behalf of each such Named Executive. The
amounts reported for Mr. Moore are comprised of contributions to his
accounts in the 401(k) plan ($4,222 in 1993 and $4,364 in 1992) and a
nonqualified savings plan ($8,547 in 1993 and $17,859 in 1992).
(4) Comprised of profit-sharing earnings of $147,750 under the Management
Incentive Plan, which was paid in accordance with the Corporation's
executive compensation program administered by the Human Resources Committee
of the Board, and the following one-time bonus payments, which were
determined independently of the compensation program administered by the
Committee: a signing bonus of $100,000 in connection with a two-year
employment agreement with the Corporation and compensation of $387,000
pursuant to an agreement between Mr. Moore and American Electric prior to
its acquisition by the Corporation, the payment of which was contingent upon
his active assistance in connection with the sale of that company to the
Corporation and his continued employment for a one-year period after the
acquisition date.
8
<PAGE>
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options under the Corporation's 1990 Stock Option Plan to the Named Executives
as of the end of the last fiscal year.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SECURITIES PERCENT OF STOCK PRICE APPRECIATION
UNDERLYING TOTAL OPTIONS FOR OPTION TERM (3)
OPTIONS GRANTED TO EXERCISE --------------------------
GRANTED EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME (#)(1) FISCAL YEAR ($/SH)(2) DATE ($113.62) ($180.91)
- ------------------------------------------- ----------- --------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. K. Dunnigan............................. 9,000 6.14% $ 69.75 2-3-03 $ 394,789 $ 1,000,472
C. R. Moore................................ 3,700 2.53 69.75 2-3-03 162,302 411,305
R. P. Babcock.............................. 2,700 1.84 69.75 2-3-03 118,437 300,141
R. H. Paquette............................. 1,825 1.25 69.75 2-3-03 80,054 202,873
D. J. Pileggi.............................. 1,825 1.25 69.75 2-3-03 80,054 202,873
</TABLE>
- ---------------
(1) Options are exercisable on February 3, 1994.
(2) Based on the average of the high and low sales prices of the Common Stock
reported on the New York Stock Exchange Composite Tape ("NYSE Tape") on the
date of grant, February 3, 1993. The exercise price may be paid in cash or
by tendering shares of the Corporation's Common Stock valued at the closing
price reported on the NYSE Tape for the day immediately preceding the date
of exercise.
(3) The dollar amounts under these columns are the result of calculations at the
arbitrary rates of 5% and 10% set by the Securities and Exchange Commission
and are not a forecast of the value of the Common Stock.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executives concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
VALUE OPTIONS AT 1-2-94 (#) 1-2-94 ($)(1)
SHARES ACQUIRED REALIZED -------------------------- ----------------------------
NAME ON EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------- --------------- ----------- ----------- ------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
T. K. Dunnigan........................... -- -- 48,711 9,000 $ 334,472 --
C. R. Moore.............................. -- -- 10,000 3,700 -- --
R. P. Babcock............................ -- -- 12,700 2,700 53,869 --
R. H. Paquette........................... -- -- 7,875 1,825 28,978 --
D. J. Pileggi............................ -- -- 10,400 1,825 64,595 --
</TABLE>
- ---------------
(1) Aggregate market value of the shares on January 2, 1994 ($58.50) less the
aggregate price to be paid by the Named Executive.
9
<PAGE>
PENSION PLAN
Based on compensation that is covered under the Executive Retirement Plan
("ERP") and years of service with the Corporation and its subsidiaries, the
following table gives the aggregate annual retirement income covered
participants will receive upon retirement at age 60 or later with the required
minimum of 20 years of credited service or more under the ERP. The ERP is an
unfunded, nonqualified retirement plan for corporate officers that provides
supplemental benefits, including amounts that would otherwise be denied
participants by reason of certain limitations imposed on qualified plan benefits
by the Internal Revenue Code of 1986, as amended. The benefit payable under the
ERP incorporates amounts payable to a participant from (1) a qualified pension
plan; (2) the employer-paid portion of his or her Social Security benefit; and
(3) the employer-paid portion of a participant's 401(k) and nonqualified savings
plan accounts.
PENSION PLAN TABLE
HIGHEST
5-YEAR
AVERAGE YEARS OF SERVICE
COMPENSATION --------------------------------------------------
LEVELS 20 25 30 35 OR MORE
--------------- ----------- ----------- ----------- -----------
$ 150,000 $ 75,000 $ 86,250 $ 97,500 $ 108,750
200,000 100,000 115,000 130,000 145,000
300,000 150,000 172,500 195,000 217,500
400,000 200,000 230,000 260,000 290,000
500,000 250,000 287,500 325,000 362,500
600,000 300,000 345,000 390,000 435,000
700,000 350,000 402,500 455,000 507,500
800,000 400,000 460,000 520,000 580,000
Covered compensation is comprised of annual base salary and incentive
compensation paid under the Officer Profit-Sharing Plan or the Management
Incentive Plan. Benefit amounts shown in the above table assume that payments
are made on a 10-year certain and life annuity.
The Named Executives had the equivalent of the following years of credited
service under the terms of the ERP as of February 4, 1994: Mr. Dunnigan, 32; Mr.
Moore, 8; Mr. Babcock, 20; Mr. Paquette, 25; and Mr. Pileggi, 14.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
The Corporation has an agreement with each of the Named Executives
providing for continuation of employment for a term of three years following any
change of control of the Corporation. Each agreement provides for compensation
to be continued during the three-year term at least at the same level that
existed prior to the time of a change of control provided the person continues
employment, leaves employment for good reason, or is terminated without cause.
Events that constitute leaving employment for good reason are: the assignment of
duties inconsistent with the person's position; the diminution of the person's
position, authority, duties or responsibilities; failure to provide compensation
and/or benefits specified in the agreement; relocation to an office that is 35
miles or more from the location where the person was employed immediately prior
to the change of control; or failure to require any successor to the Corporation
to assume and agree to perform the agreement. A person's employment may be
terminated for cause, which is an act or acts of dishonesty intended to result
in substantial personal enrichment, willful violations of the person's duty to
perform responsibilities under the agreement, or conviction of a felony. Each
agreement also provides for immediate vesting of stock options and restricted
stock awards if the person's employment is terminated following a change of
control. Any amount payable under the agreement will be reduced by the amount of
any compensation earned by the person from other employment during the term of
the agreement.
10
<PAGE>
THE HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
1. Executive Compensation Philosophy
The executive compensation program is designed to align shareholder and
management interests, to balance annual performance targets with actions needed
for the long-term success of the Corporation, and to attract, motivate, and
retain key executives.
(a) Pay Positioning: Thomas & Betts positions total direct
compensation (i.e., base salary, annual incentive, and long-term incentive
gain opportunity) at the median of general industry companies, a high
percentage of which are represented in the S&P 400. This is a much broader
group than the electrical/electronics companies that make up the line-of-
business index shown in the performance graph that follows this report.
Since electrical/electronics compensation levels are generally consistent
with general industry levels (where pay and performance data is more easily
accessible), the Committee believes that general industry companies
represent an acceptable comparative framework. Compensation is sufficiently
variable so that there will be a strong relationship between total return
to shareholder performance and actual total direct compensation levels over
time. In fact, over the past eight years, the CEO's actual total direct
compensation has been well aligned with the Corporation's common stock
performance relative to the S&P 400.
(b) Pay Mix: Like total direct compensation, each component is
positioned at the median of general industry companies.
(i) Base Salary: Base salaries are set by periodic comparison to
external rates of pay for comparable positions within general industry
and are targeted at the 50th percentile for such positions. Individual
salaries are considered for adjustment annually; adjustments are based
upon general movement in salary levels in general industry, individual
performance, and potential and/or changes in duties and
responsibilities. Actual salaries may range from 20% below to 20% above
targeted salary levels. As a group, the average of the named executive
officers' base salaries in 1993 was below the targeted level.
(ii) Annual Incentive: Annual incentives are based upon actual
performance compared to established corporate and divisional performance
goals. Annual incentives range between 20% and 40% of base salary for
median performance and provide a maximum payout of between 60% and 100%
of base salary. Annual bonus opportunities are targeted to be at the
50th percentile for general industry when performance is at the 50th
percentile and at the 75th percentile for general industry when
performance is at that level. For the CEO and other corporate staff
executive officers, the annual incentive for 1993 is based solely on
return on equity (ROE) relative to the S&P 400. ROE attainment was at
the mid-point of the performance range and resulted in a mid-point
payout to these executives. For the three divisional executive officers
named in the Summary Compensation Table, the annual incentive payments
for 1993 are based on corporate ROE (25% weighting) and the performance
of each officer's division on sales (30%), income (30%), and either cash
flow or inventory (15%). As a group, the average of the named executive
officers' incentive payments for fiscal year 1993 was 36% of base
salary.
(iii) Long-Term Incentives: Long-term incentive awards are made in
the form of stock options and restricted stock awards, which are
typically granted annually. Combined stock option and restricted stock
awards are targeted to provide a gain opportunity at the 50th percentile
for general industry, according to a mix predetermined by the Committee.
For executive officers, this gain opportunity ranges from 52% to 124% of
base salary. Individual grants may vary based on the Committee's
assessment of individual performance and potential. As a group, the
average of the named executive
11
<PAGE>
officers' long-term incentive awards in 1993 was 85% of base salary. In
determining stock option and restricted stock awards, the Committee does
not consider the amount of options and restricted stock granted in prior
years. Options are granted at fair market value on the date of grant,
have a term of ten years, and vest after one year for awards under the
1990 Stock Option Plan and over a three-year period at the rate of
one-third per year for awards under the 1993 Management Stock Ownership
Plan. Restricted stock vests at the end of three years.
2. Chief Executive Officer Compensation
The Chief Executive Officer's base salary in 1993, $487,300, was increased
by 10% over the prior year. This placed the CEO's base salary slightly below the
median paid to the CEO's in general industry companies of comparable size. The
Committee based this increase on the recent increase in the size of the
Corporation and the length of time the CEO has been in his position.
The Chief Executive Officer's target annual incentive was 40% of base
salary in 1993, and the maximum incentive was 100% of base salary. The
Corporation's 1993 return on equity was 12%, which was near the mid-point of the
performance range, and resulted in the CEO receiving an annual incentive of
$193,921.
The Chief Executive Officer was granted stock options for 9,000 shares and
a restricted stock award for 6,000 shares. As in previous years, the Committee
targeted the gain opportunity from combined stock option and restricted stock
awards to provide a gain opportunity at the 50th percentile of general industry,
according to a mix predetermined by the Committee.
3. Policy Regarding Executive Compensation Deductibility
As a result of the amendment of the Internal Revenue Code to disallow the
deduction of non-performance based compensation in excess of $1 million paid to
the CEO or to any of the four most highly compensated executive officers, the
Corporation is submitting its annual incentive plan for shareholder approval so
as to qualify payments under the plan as performance-based compensation (see
discussion under the heading Proposal to Adopt the Thomas & Betts Corporation
Executive Incentive Plan).
The Corporation's 1993 Management Stock Ownership Plan was approved by the
shareholders last year and stock options granted under the Plan prior to the
Corporation's 1997 annual shareholders' meeting qualify as performance-based
compensation under the transition rules proposed by the Internal Revenue
Service.
No action is being taken with respect to restricted stock awards granted by
the Committee, which do not qualify as performance-based compensation.
Nevertheless, these awards play an important role in the Corporation's executive
compensation program, and they will be continued. In addition, it is unlikely
that restricted stock and other nonqualified compensation paid to any executive
will exceed the $1 million per year limit imposed by the Code.
Ernest H. Drew, Chairman
Hobart Betts
Ian M. Ross
William H. Waltrip
12
<PAGE>
PERFORMANCE GRAPH
The graph set forth below provides comparisons of the yearly percentage
change in the cumulative total shareholder return on the Corporation's Common
Stock with the cumulative total return of Standard & Poor's 500 Stock Index and
Standard & Poor's Electrical Equipment Index for the five fiscal years ended
January 2, 1994.
FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THOMAS & BETTS, S&P 500 AND
S&P ELECTRICAL EQUIPMENT INDEX
(ASSUMES $100 INVESTED ON DECEMBER 31, 1988
AND REINVESTMENT OF DIVIDENDS)
[Chart]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
THOMAS & BETTS $ 100.00 $ 109.78 $ 108.53 $ 137.44 $ 162.13 $ 150.00
% CHANGE YEAR TO
YEAR 9.8% (1.1)% 26.6% 18.0% (7.5)%
S&P ELECTRICAL
EQUIPMENT INDEX 100.00 140.85 129.52 171.71 188.03 226.86
% CHANGE YEAR TO
YEAR 40.9% (8.1)% 32.6% 9.5% 20.7%
S&P 500 100.00 131.69 127.60 166.47 179.15 197.21
% CHANGE YEAR TO
YEAR 31.7% (3.1)% 30.5% 7.6% 10.1%
</TABLE>
13
<PAGE>
2. PROPOSAL TO ADOPT THE THOMAS & BETTS CORPORATION EXECUTIVE
INCENTIVE PLAN
The Board recommends that shareholders adopt the Thomas & Betts Corporation
Executive Incentive Plan (the "Plan"). The Plan is intended to continue the
Corporation's long-standing policy of providing key employees, who are in a
position to contribute materially to the success of the Corporation and its
subsidiaries, with an annual management incentive bonus based on objective,
pre-established criteria and performance targets as approved by the Human
Resources Committee (the "Committee"). If approved, the Plan would become
effective on May 5, 1994, and would continue until it is terminated by the
Board.
The following is a summary of the material features of the Plan. The
summary is qualified in its entirety by the complete text of the Plan as set
forth in Exhibit A to this Proxy Statement.
The Plan is applicable to corporate officers and such division or
subsidiary officers as may be designated by the Committee and provides for
annual cash awards based on corporate, division and/or subsidiary performance in
the preceding year. Approximately 15 employees are currently eligible to
participate in the Plan. The Committee determines which employees shall
participate in the Plan on an annual basis.
Under the Plan, the cash awards payable to participants with respect to a
given fiscal year will be determined by:
(a) assigning each participant a specified percentage of his or her
base salary for the year,
(b) multiplying that percentage by the participant's salary to
determine his or her target incentive amount, and
(c) multiplying the target incentive amount by adjustment factors
based on corporate, division and/or subsidiary performance, weighted by the
relative importance of each performance goal for the participant as
determined by the Committee.
The award payable to any participant may range from zero to 100% of the
participant's annual base salary, depending upon whether, or the extent to
which, performance targets are achieved. The Plan is not funded.
Performance criteria, and weightings thereof, will be established annually
by the Committee. The performance criteria which may be selected are set forth
in Section 2(k) of the Plan. Generally, for any one participant, there will be
no more than four performance criteria. However, the Committee has the
discretion to establish more than four criteria.
The Committee will establish a performance target for each performance
criterion and will certify as to the performance level achieved before any
payments are made. The Committee may not increase the amount of compensation
that would otherwise be payable upon achievement of performance targets, but it
may reduce a participant's award if it believes such action would be in the best
interest of the Corporation and its shareholders. Awards will be paid in cash as
soon as practicable after the close of the year for which they are made. No
award will be payable to any participant who is not an employee on the last day
of the year, with certain exceptions in the event of death, disability,
retirement, and involuntary termination other than for cause.
It is not possible to determine at this time the bonus amounts that would
be payable under the Plan for 1994 performance. The table below sets forth the
amounts that would have been received by each of the persons and groups named if
the Plan had been in effect for the last fiscal year, based on that year's
performance. The maximum award that can be paid to any individual during a year
is $1 million.
14
<PAGE>
<TABLE>
NEW PLAN BENEFITS
<CAPTION>
THOMAS & BETTS CORPORATION
EXECUTIVE INCENTIVE PLAN
----------------------------
NAME AND POSITION DOLLAR VALUE ($)
- -------------------------------------------------------------------------- ----------------------------
<S> <C>
T. K. Dunnigan............................................................ $ 193,921
Chairman and Chief Executive Officer
C. R. Moore............................................................... 120,351
President-Electrical Division for fiscal year 1993
President and Chief Operating Officer as of January 1, 1994
R. P. Babcock............................................................. 63,283
Vice President-Finance and Treasurer
R. H. Paquette............................................................ 74,204
President-Vitramon Division
D. J. Pileggi............................................................. 39,838
President-Electronics Division for fiscal year 1993
President-Electrical Components Division as of March 2, 1994
All current executive officers as a group................................. 591,005
All current officers who are not executive officers,
as a group................................................................ 179,980
</TABLE>
The Plan and all awards will be administered by the Committee, which shall
consist of not less than three members of the Board of Directors and shall be
constituted so as to enable the Plan to comply with the administration
requirements of Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as
amended (the "Code").
It is the intent of the Corporation that the Plan and awards made under it
satisfy and be interpreted in a manner that, in the case of participants who are
or may be Covered Employees as defined in the Code, satisfies the applicable
requirements for Code Section 162(m) so that the Corporation's tax deduction for
remuneration with respect to the Plan for services performed by such Covered
Employees is not disallowed in whole or in part by the operation of such Code
Section.
The Board may from time to time suspend or discontinue the Plan or revise,
amend or terminate the Plan.
APPROVAL OF THE PLAN
Approval of the Plan will require the affirmative vote of a majority of the
votes cast at the Annual Meeting. Abstentions and broker non-votes will not be
counted as votes cast, either for or against this proposal, in accordance with
the New Jersey Business Corporation Act.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accountants for the Corporation in fiscal year 1993
were KPMG Peat Marwick. The Board, upon the recommendation of the Audit
Committee, has appointed this firm, subject to ratification by the shareholders,
to audit the financial statements of the Corporation for the fiscal year 1994
and until the 1995 Annual Meeting of Shareholders. The firm has audited the
Corporation's financial statements annually since 1969, is considered to be well
qualified, and has no financial interest, direct or indirect, in the Corporation
or any subsidiary of the Corporation. If the shareholders do not ratify this
appointment, the Audit Committee and the Board will consider the appointment of
other independent public accountants.
Representatives of KPMG Peat Marwick will be present at the Annual Meeting
to make a statement, if they desire to do so, and to respond to appropriate
questions.
Ratification of the appointment of KPMG Peat Marwick will require the
affirmative vote of a majority of the votes cast at the Annual Meeting.
Abstentions and broker non-votes will not be counted as votes cast, either for
or against this proposal, in accordance with the New Jersey Business Corporation
Act.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
15
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1995 Annual Meeting
of Shareholders, in addition to meeting certain eligibility requirements
established by the Securities and Exchange Commission, must be in writing and
received by the Corporate Secretary at the Corporation's principal executive
offices by November 21, 1994, to be considered for inclusion in the
Corporation's proxy statement and form of proxy for the 1995 Annual Meeting of
Shareholders.
OTHER BUSINESS
The Annual Meeting is called for the purposes set forth in the Notice. The
Board does not know of any matter for action by shareholders at such meeting
other than the matters described in the Notice. To be properly brought before
the Annual Meeting, the matter must be an appropriate subject for shareholder
consideration, timely notice thereof must be given in writing to the Corporate
Secretary, and other applicable requirements must be met. In general, such
notice is timely if it is delivered to the Corporate Secretary at the principal
executive offices of the Corporation not less than 60 nor more than 90 days
prior to the first anniversary of the preceding year's annual meeting.
Alternative notice deadlines apply if the date of the annual meeting differs by
more than 30 days from the date of the previous year's annual meeting. The
By-laws specify the information to be included in the shareholder's notice. An
interested shareholder can obtain a complete copy of the By-law provisions by
making a written request therefor to the Corporate Secretary. The enclosed proxy
will confer discretionary authority with respect to matters which are not known
at the date of printing hereof but which may properly come before the Annual
Meeting. It is the intention of the persons named in the proxy to vote in
accordance with their best judgment on any such matter.
By Order of the Board of Directors,
JANICE H. WAY, Corporate Secretary
16
<PAGE>
EXHIBIT A
THOMAS & BETTS CORPORATION
EXECUTIVE INCENTIVE PLAN
1. PURPOSE
The purpose of the Thomas & Betts Corporation Executive Incentive Plan (the
"Plan") is to provide an incentive for corporate officers and other key
employees who are in a position to contribute materially to the success of the
Corporation and its subsidiaries.
2. DEFINITIONS
The following terms, as used herein, will have the meaning specified:
(a) "Award" means an incentive payment made pursuant to the Plan.
(b) "Board" means the Board of Directors of the Corporation as it may be
comprised from time to time.
(c) "Cause" means (i) a felony conviction of a Participant; (ii) the
commission by a Participant of an act of fraud or embezzlement against the
Corporation and/or a Subsidiary; (iii) willful misconduct or gross negligence
materially detrimental to the Corporation and/or a Subsidiary; (iv) the
Participant's continued failure to implement reasonable requests or directions
arising from actions of the Board after thirty (30) days' written notice to the
Participant; (v) the Participant's wrongful dissemination or use of confidential
or proprietary information; (vi) the intentional and habitual neglect by the
Participant of his or her duties to the Corporation and/or a Subsidiary; or
(vii) any other reasons consistent with the Corporation's and/or a Subsidiary's
policies and procedures regarding dismissals as they are adopted and implemented
from time to time.
(d) "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute, and the regulations promulgated thereunder.
(e) "Committee" means the Committee appointed to administer the Plan, as
provided in Section 4.
(f) "Corporation" means Thomas & Betts Corporation, or any successor
corporation.
(g) "Covered Employee" means a covered employee within the meaning of Code
Section 162(m)(3).
(h) "Employee" means executives and other key employees of the Corporation
and its Subsidiaries.
(i) "Participant" means an Employee selected from time to time by the
Committee to participate in the Plan.
(j) "Performance Adjustment" means a factor (or factors), as determined by
a schedule established by the Committee, that will, when multiplied by a
Participant's Target Award, determine the amount of a Participant's Award.
(k) "Performance Criterion or Criteria" means the business criteria
selected by the Committee to measure Corporation, division or Subsidiary
performance from one or more of the following:
(i) Corporate, division or Subsidiary sales;
(ii) Corporate, division or Subsidiary return on sales--operating
profit divided by sales;
A-1
<PAGE>
(iii) Cash flow-corporate--the change in the Corporation's net
invested position;
(iv) Cash flow-division or Subsidiary--division or Subsidiary
contribution adjusted for certain changes in balance sheet accounts;
(v) Earnings per share;
(vi) Productivity--standard direct labor hours divided by direct
and indirect labor hours incurred;
(vii) Quality--demerits per thousand pieces audited;
(viii) Division or Subsidiary operating profit or contribution
income;
(ix) Investment turnover--net sales divided by certain assets, e.g.
net receivables and inventory, less certain liabilities, e.g. accounts
payable and accrued liabilities;
(x) Return on equity--net income of the Corporation divided by
average shareholders' equity;
(xi) Net asset investment--certain assets, e.g. accounts receivable
and goodwill, less certain liabilities, e.g. accounts payable and
dividends payable, divided by sales;
(xii) Inventory turns; and
(xiii) Customer service indices, e.g. fill rates, request index,
and performance to promise.
The Committee shall establish the weighting of each Performance Criterion,
for use in determining awards under the Plan, prior to the beginning of the
fiscal year to which the Performance Criterion relates.
(l) "Performance Target" means the level of performance on each Performance
Criterion, as approved by the Committee, that will result in a 100 percent
Performance Adjustment to a Participant's Target Award.
(m) "Subsidiary" means any corporation in which the Corporation, directly
or indirectly, controls 50 percent or more of the total combined voting power of
all classes of such corporation's stock.
(n) "Target Award" means, with respect to a Participant in any year, the
Participant's annual base salary multiplied by the percentage of salary
established by the Committee for that Participant.
3. AWARDS
(a) Target Award. A Target Award will be established by the Committee for
each Participant. A prorated Target Award will be assigned to a Participant with
less than twelve months of service. In the event a Participant's Target Award is
changed during the year, the Participant's higher Target Award will be the basis
for determining the Participant's Award for the year.
(b) Performance Criteria. One or more Performance Criteria will be
established by the Committee for the Corporation and for each division or
Subsidiary each year. The Committee may use the same Performance Criteria each
year or may use different Performance Criteria from year to year.
(c) Performance Target. One or more Performance Targets will be
established by the Committee for each Performance Criterion selected for each
year.
A-2
<PAGE>
(d) Performance Adjustment. The Award payable to any Participant may range
from zero to 100 percent of the Participant's annual base salary, depending upon
whether, or the extent to which, Performance Targets have been achieved. All
such determinations regarding the achievement of any Performance Target will be
made by the Committee in its sole and absolute discretion. The Committee may not
increase the amount of compensation that would otherwise be payable upon
achievement of the Performance Target or Targets, but it may reduce a
Participant's award if it believes such action would be in the best interest of
the Corporation and its shareholders.
(i) Schedules. At the beginning of the year, the Committee will
establish a schedule for each Performance Criterion that correlates the
percentage of Target Award to specified levels of Corporation, division or
Subsidiary performance.
(ii) Award Determination. The Award for a participant for a given year
will be calculated by multiplying the Participant's Target Award by the
Corporation, division or Subsidiary Performance Adjustments, respectively.
(iii) Maximum Award. The maximum award payable to any Participant in
any year is $1 million, anything in this Plan to the contrary
notwithstanding.
(e) Payment of Awards. Awards will be paid in cash after the Committee has
certified the extent to which the Performance Target or Targets have been met
and as soon as practicable after the close of the year for which they are made.
If a Participant is disabled for more than four months of the year, the
Participant may be granted a prorated Award as and to the extent determined by
the Committee. If disability lasts four months or less, there will be no
reduction in the amount of the Award. No Award will be payable to any
Participant who is not an Employee on the last day of the year, except that if,
during the last eight months of the year, the Participant dies, or becomes
disabled, the Participant may be granted a prorated Award as and to the extent
determined by the Committee, and further provided that if the Participant
retires or is involuntarily terminated other than for Cause, the Participant may
be granted a prorated Award as and to the extent determined by the Committee,
provided that Performance Targets have been met.
4. ADMINISTRATION
(a) Committee. The Plan and all Awards will be administered by the Human
Resources Committee of the Board of Directors (the "Committee"), which Committee
shall consist of not less than three members of such Board of Directors, and
shall be constituted so as to enable the Plan to comply with the administration
requirements of Code Section 162(m)(4)(C). The members of the Committee shall be
designated by the Board of Directors. A majority of the members of the Committee
shall constitute a quorum. The vote of a majority of a quorum shall constitute
action by the Committee.
(b) Authority. The Committee will have full and complete authority, in its
sole and absolute discretion, (i) to exercise all of the powers granted to it
under the Plan, (ii) to construe, interpret and implement the Plan and any
related document, (iii) to prescribe, amend and rescind rules relating to the
Plan, (iv) to make all determinations necessary or advisable in administering
the Plan, and (v) to correct any defect, supply any omission and reconcile any
inconsistency in the Plan.
The Committee may delegate to the officers or employees of the Corporation
and/or a Subsidiary the authority to execute and deliver such instruments and
documents, to do all such acts and things, and to take all such other steps
deemed necessary, advisable or convenient for the effective administration of
the Plan in accordance with its terms and purpose, except that the Committee may
not delegate any authority with respect to decisions regarding timing,
eligibility, amount or other material terms of any Awards.
A-3
<PAGE>
(c) Determinations. The actions and determinations of the Committee on all
matters relating to the Plan and any Awards will be final and conclusive.
(d) Liability. No member of the Committee or the Board will be liable for
any action taken or determination made in good faith with respect to the Plan or
any Award thereunder, and the Corporation will defend Committee and Board
members for any actions taken or decisions made in good faith under the Plan.
(e) Participants. The Committee will designate the corporate officers who
shall be Participants in the Plan, and it may designate division or Subsidiary
officers to be Participants.
(f) Awards. Subject to the terms of the Plan, the Committee will have full
and complete authority to determine, among other things, the Employees to whom,
and the time or times at which, Awards will be made and the requisite conditions
thereof.
(g) Code Section 162(m). It is the intent of the Corporation that this
Plan and Awards hereunder satisfy, and be interpreted in a manner that, in the
case of Participants who are or may be Covered Employees, satisfies the
applicable requirements of Code Section 162(m) so that the Corporation's tax
deduction for remuneration in respect of this Plan for services performed by
such Covered Employees is not disallowed in whole or in part by the operation of
such Code Section. If any provision of this Plan or if any Award would otherwise
frustrate or conflict with the intent expressed in this Section 4(g), that
provision shall be interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with such intent, such
provision shall be deemed void as applicable to Covered Employees.
5. MISCELLANEOUS
(a) Nonassignability. No Award will be assignable or transferable
(including pursuant to a pledge or security interest) other than by will or by
the laws of descent and distribution.
(b) Withholding Taxes. Whenever payments under the Plan are to be made,
the Corporation and/or the Subsidiary will withhold therefrom an amount
sufficient to satisfy any applicable governmental withholding tax requirements
related thereto.
(c) Amendment or Termination of the Plan. The Board may from time to time
suspend or discontinue the Plan or revise, amend or terminate the Plan.
(d) Non-Uniform Determinations. The Committee's determinations under the
Plan need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, Awards under the Plan, whether or not such
persons are similarly situated. Without limiting the generality of the
foregoing, the Committee will be entitled, among other things, to make non-
uniform and selective determinations and to establish non-uniform and selective
Target Awards; provided, however, that the Committee may not increase the amount
of compensation that would otherwise be payable upon achievement of the
Performance Target or Targets.
(e) Other Payments or Awards. Nothing contained in the Plan will be deemed
in any way to limit or restrict the Corporation, its Subsidiaries, or the
Committee from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.
(f) Payments to Other Persons. If payments are legally required to be made
to any person other than the person to whom any amount is available under the
Plan, payments will be made to the person to whom the Committee, or its
delegate, believes to be legally entitled to the payment. Any such payment will
be a complete discharge of the liability of the Committee.
A-4
<PAGE>
(g) Unfunded Plan. No provision of the Plan will require the Corporation
or its Subsidiaries, for the purpose of satisfying any obligations under the
Plan, to purchase assets or place any assets in a trust or other entity to which
contributions are made or otherwise to segregate any assets; nor will the
Corporation or its Subsidiaries maintain separate bank accounts, books, records
or other evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Participants will have no rights under the
Plan other than as unsecured general creditors of the Corporation and its
Subsidiaries, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they will have the same
rights as other employees under generally applicable law.
(h) Limits of Liability. Neither the Corporation or its Subsidiaries, nor
any member of the Board, the Committee, or any other person participating in the
interpretation, administration or application of the Plan shall have any
liability to any party for any action taken, or not taken, in good faith under
the Plan.
(i) Rights of Employees. Nothing contained in this Plan will confer upon
any Employee or Participant any right to continue in the employ or other service
of the Corporation or a Subsidiary, or constitute any contract or limit in any
way the right of the Corporation or a Subsidiary to change such person's
compensation or other benefits, or to terminate the employment or other service
of such person with or without Cause.
(j) Section Headings. The section headings contained herein are for
convenience only, and in the event of any conflict, the text of the Plan, rather
than the section headings, will control.
(k) Invalidity. If any term or provision contained herein will to any
extent be invalid or unenforceable, such term or provision will be reformed so
that it is valid, and such invalidity or unenforceability will not affect any
other provision or part hereof.
(l) Applicable Law. The Plan will be governed by the laws of the
jurisdiction in which the Corporation is incorporated as determined without
regard to the conflict of law principles thereof.
(m) Effective Date. The Plan shall be effective as of May 5, 1994.
A-5
<PAGE>
THOMAS & BETTS CORPORATION
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
ANNUAL MEETING OF SHAREHOLDERS--MAY 4, 1994
P
R The undersigned hereby appoints T. KEVIN DUNNIGAN, RONALD P. BABCOCK,
O and JAMES D. HAY as Proxies, each with the power to appoint his
X substitute, and hereby authorizes them to represent and to
Y vote, as designated on the reverse side hereof, all the shares of Common
Stock of Thomas & Betts Corporation held by the undersigned on March 7,
1994, at the Annual Meeting of Shareholders to be held
on May 4, 1994, or any adjournment thereof.
Nominees for election as directors: CHANGE OF ADDRESS ONLY:
R. B. Carey, Jr., E. H. Drew, T. K. Dunnigan, _______________________
J. K. Hauswald, T. W. Jones, R.A. Kenkel, C. R. Moore,
J. D. Parkinson, I. M. Ross, and W. H. Waltrip _______________________
(If you have written in
the above space, please
mark the corresponding
box on the reverse side
of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE>
................................................................................
PLEASE MARK YOUR
[X] VOTES AS IN
THIS EXAMPLE. 0137
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED HEREIN, BUT IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, AND 3.
FOR WITHHELD
1. Election of
Directors [ ] [ ]
(see reverse)
For, except vote withheld from the following nominee(s)_________________________
FOR AGAINST ABSTAIN
2. Adoption of the
Thomas & Betts [ ] [ ] [ ]
Executive
Incentive Plan.
FOR AGAINST ABSTAIN
3. Ratification of appointment of
KPMG Peat Marwick as independent [ ] [ ] [ ]
public accountants.
4. In their discretion, the
Proxies are authorized to
vote upon such other business
as may properly come before
the meeting.
Check this
box to note
change of [ ]
address
NOTE: Please sign exactly as your
name or names appear on this
Proxy. Joint owners should
each sign personally. When
signing as attorney,
executor, administrator,
guardian, custodian, or
corporate official, sign
name and title.
______________________________________________
______________________________________________
SIGNATURE DATE
