<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THOMAS & BETTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/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>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1997
To the Shareholders of THOMAS & BETTS CORPORATION:
The Annual Meeting of Shareholders of Thomas & Betts Corporation (the
"Corporation") will be held at the Winegardner Auditorium, The Dixon Gallery and
Gardens, 4339 Park Avenue, Memphis, Tennessee, on May 7, 1997, at 10:00 a.m. to
take action with respect to:
1. Election of twelve directors;
2. Amendment of the 1993 Management Stock Ownership Plan to establish a
maximum number of shares for which grants may be made to any employee in
any given year, as described in the accompanying Proxy Statement;
3. Ratification of the appointment of KPMG Peat Marwick LLP as independent
public accountants; and
4. 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 10, 1997, 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.
JANICE H. WAY, CORPORATE SECRETARY
1555 Lynnfield Road
Memphis, Tennessee 38119
March 24, 1997
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 BEGINNING THE 24TH DAY OF
MARCH, 1997, 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 10:00 a.m. on May 7, 1997, at the
Winegardner Auditorium, The Dixon Gallery and Gardens, 4339 Park Avenue,
Memphis, Tennessee, 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 that 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 Bylaws 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., 466 Lexington
Avenue, New York, N.Y. 10017, 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 $6,000 plus expenses. In addition,
directors, officers and other employees may solicit proxies in person or 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 10, 1997, there were outstanding and
entitled to vote at the Annual Meeting 53,726,110 shares of the Corporation's
Common Stock, no par value (the "Common Stock"). Holders of record of Common
Stock at the close of business on March 10, 1997, will be entitled to one vote
for each share held on all matters properly coming before the Annual Meeting.
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 as of
December 31, 1996.
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------------------------------------------------------------------------- ---------------------- -----------
<S> <C> <C>
Delaware Management Holdings, Inc............................................... 3,878,440(1) 7.3%
2005 Market Street
Philadelphia, Pennsylvania 19103
FMR Corp........................................................................ 6,398,441(2) 12.0%
82 Devonshire Street
Boston, Massachusetts 02109
Scudder, Stevens & Clark, Inc................................................... 3,123,987(3) 5.9%
2 International Place
Boston, Massachusetts 02110
</TABLE>
- ------------------------
(1) Information provided on Schedule 13G by Delaware Management Holdings, Inc.
as of December 31, 1996, indicates that 3,838,149 shares, or 7.2% of the
outstanding Common Stock, are held by its subsidiary Delaware Management
Company, Inc., an investment adviser, and held in the accounts of
institutional investors, and that of the total number reported above, it has
sole dispositive power as to 3,706,940 shares, shared dispositive power as
to 171,500 shares, sole voting power as to 282,207 shares, and no voting
power as to any other shares.
(2) Information provided on Schedule 13G by FMR Corp. as of December 31, 1996,
indicates that it has sole dispositive power as to all 6,398,441 shares,
sole voting power as to 152,738 shares, and no voting power as to any other
shares.
(3) Information provided on Schedule 13G by Scudder, Stevens & Clark, Inc. as of
December 31, 1996, indicates that the shares are held by it as an investment
adviser and that it has sole dispositive power as to all 3,123,987 shares,
sole voting power as to 841,800 shares, and shared voting power as to
2,006,200 shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides data on Common Stock beneficially owned as of
February 14, 1997, by each director, director nominee, and each of the executive
officers named in the Summary Compensation Table (the "Named Executives") and by
the directors, director nominees, Named Executives, 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 PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2) OF CLASS
- ---------------------------------------------------------------------------- -------------------------- -------------
<S> <C> <C>
T. Roy Burton............................................................... 33,272 *
Raymond B. Carey, Jr........................................................ 7,000 *
Ernest H. Drew.............................................................. 1,800(3) *
T. Kevin Dunnigan........................................................... 333,271 *
Jeananne K. Hauswald........................................................ 934 *
Fred R. Jones............................................................... 14,991 *
Thomas W. Jones............................................................. 1,202(3)(4) *
Robert A. Kenkel............................................................ 1,000 *
John N. Lemasters........................................................... 14,112(3)(5) *
Kenneth R. Masterson........................................................ 450 *
Thomas C. McDermott......................................................... 4,524 *
Clyde R. Moore.............................................................. 185,267 *
J. David Parkinson.......................................................... 25,221(6) *
Jean-Paul Richard........................................................... 200 *
Ian M. Ross................................................................. 1,400(3) *
Gary R. Stevenson........................................................... 51,664 *
William H. Waltrip.......................................................... 1,200 *
Directors, director nominees, Named Executives, and executive officers as a
group (21 including the above)............................................ 755,405 1.4%
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
2
<PAGE>
(FOOTNOTES FOR PRECEDING PAGE)
- --------------------------
* Less than one percent of the outstanding Common Stock.
(1) Includes shares which may be acquired within 60 days of February 14, 1997,
through the exercise of stock options, as follows: Mr. Burton, 21,278; Mr.
Dunnigan, 193,096; Mr. Lemasters, 6,356; Mr. McDermott, 3,178; Mr. Moore,
140,136; Mr. Stevenson, 34,610; and all directors, director nominees, Named
Executives, and executive officers as a group (11), 452,550.
(2) Includes shares of restricted stock with respect to which the holders have
sole voting power but no dispositive power during the restricted period, as
follows: Mr. Burton, 9,826; Mr. Carey, 1,000; Dr. Drew, 1,000; Mr. Dunnigan,
47,124; Ms. Hauswald, 684; Mr. F. R. Jones, 8,721; Mr. T. W. Jones, 1,000;
Mr. Kenkel, 600; Mr. Lemasters, 81; Mr. Masterson, 450; Mr. McDermott, 81;
Mr. Moore, 28,109; Mr. Parkinson, 1,000; Dr. Richard, 200; Dr. Ross, 1,000;
Mr. Stevenson, 11,132; Mr. Waltrip, 1,000; and all directors, director
nominees, Named Executives, and executive officers as a group (21), 141,140.
(3) Amounts do not include phantom stock shares credited to accounts in the
Deferred Fee Plan for Nonemployee Directors of Thomas & Betts Corporation,
described on page 7, as follows: Dr. Drew, 2,451; Mr. Jones, 3,943; Mr.
Lemasters, 44; Dr. Ross, 3,797.
(4) Includes 202 shares with respect to which Mr. Jones shares voting and
investment power with his wife.
(5) Includes 317 shares with respect to which Mr. Lemasters shares voting and
investment power with his wife.
(6) Includes 1,936 shares with respect to which Mr. Parkinson shares voting and
investment power with his wife. Does not include 10,002 shares owned by the
wife of Mr. Parkinson with respect to which he disclaims beneficial
ownership.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
On the basis of reports and representations submitted by the directors and
executive officers of the Corporation, all Forms 3, 4 and 5 showing ownership of
and changes in ownership of Common Stock were timely filed with the Securities
and Exchange Commission as required by Section 16(a) of the Securities Exchange
Act of 1934 except that an amended Form 3 was filed by Mr. McDermott to include
in his ownership of Common Stock shares held in a custody account that were
inadvertently omitted from the total reported on the original filing.
ANNUAL REPORT
The Corporation's Annual Report to Shareholders for the fiscal year ended
December 29, 1996, containing consolidated financial statements reflecting the
financial position of the Corporation as of December 29, 1996, and December 31,
1995, and the results of operations and changes in cash flows for each of the
years in the three-year period ended December 29, 1996, has been mailed with
this proxy material to all shareholders.
1. ELECTION OF DIRECTORS
At the forthcoming Annual Meeting it is intended that 12 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 12 directorships. Shares represented by proxies
that 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. Directors are elected by a
plurality of the votes cast. Any shares not voted, whether by withholding or
broker non-vote, 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.
3
<PAGE>
Following is information on the principal occupation of each director
nominee, positions and offices with the Corporation, and membership on other
boards of directors.
<TABLE>
<CAPTION>
[Photo] ERNEST H. DREW, 59
A DIRECTOR SINCE 1989
<S> <C>
Member of Board of Management (1995 to present) of Hoechst A.G.
(chemicals, pharmaceuticals, fibers and plastics). Dr. Drew was
Chairman (May 1994 to 1995), Chief Executive Officer (1988 to 1995),
and President (1987 to May 1994) of Hoechst Celanese Corporation. He
is a director of Public Service Enterprise Group Incorporated.
[Photo] T. KEVIN DUNNIGAN, 59
A DIRECTOR SINCE 1975
Chairman (1992 to present) and Chief Executive Officer (1985 to
present) of the Corporation. Mr. Dunnigan was President of the
Corporation (1980 to 1994). He is a director of C. R. Bard, Inc.,
Elsag Bailey Process Automation N.V., and Lukens Inc.
[Photo] JEANANNE K. HAUSWALD, 52
A DIRECTOR SINCE 1993
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. (beverages and entertainment/
communications).
[Photo] THOMAS W. JONES, 47
A DIRECTOR SINCE 1992
Vice Chairman (1995 to present), 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 is a director and Deputy Chairman of the
Federal Reserve Bank of New York and a trustee of Eastern Enterprises.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
[Photo] ROBERT A. KENKEL, 62
A DIRECTOR SINCE 1994
Formerly Chairman, Chief Executive Officer and Chief Operating Officer
(1988 to 1990) of The Pullman Co. (automotive, aerospace and
industrial components and products).
[Photo] JOHN N. LEMASTERS, 63
A DIRECTOR SINCE 1996
Formerly Chairman and Chief Executive Officer (July to December 1996)
of Augat Inc. (electronic connectors). Mr. Lemasters was Chairman and
Chief Executive Officer (1988 to 1995) of Computer Products, Inc.
(measurement and control components, board-level computers and power
supplies for electronics markets). He is a director of Dialogic
Corporation.
[Photo] KENNETH R. MASTERSON, 53
A DIRECTOR SINCE 1995
Executive Vice President (1996 to present), General Counsel (1981 to
present) and Secretary (1993 to present) of Federal Express
Corporation (worldwide express delivery services). Mr. Masterson was
Senior Vice President of Federal Express Corporation (1981 to 1996).
[Photo] THOMAS C. MCDERMOTT, 60
A DIRECTOR SINCE 1996
Chairman (1995 to present), Chief Executive Officer and President
(1994 to present) of Goulds Pumps, Incorporated (centrifugal pumps for
industrial, domestic and agricultural markets). Mr. McDermott was
President and Chief Operating Officer (1986 to 1993) of Bausch & Lomb
Incorporated (contact lens, lens-care and eyewear products). He is a
director of A. T. Cross Co.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
[Photo] CLYDE R. MOORE, 43
A DIRECTOR SINCE 1993
President and Chief Operating Officer of the Corporation (1994 to
present). Mr. Moore was President-Electrical Division (1992 to 1994)
of the Corporation; 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. He is a member of the advisory board of American
Manufacturing Corporation.
[Photo] JEAN-PAUL RICHARD, 54
A DIRECTOR SINCE 1996
President and Chief Executive Officer (1996 to present) of AGCO
Corporation (agricultural equipment). Dr. Richard was President and
Chief Executive Officer (1993 to 1996) of Insituform Technologies,
Inc. (trenchless technologies for the rehabilitation and improvement
of sewer, water, gas, and industrial pipes); President (1991 to 1993)
of Massey Ferguson Group Limited (farm equipment and machinery), a
subsidiary of Varity Corporation, and Senior Vice President-Corporate
Development (1991 to 1993) of Varity Corporation (farm equipment and
machinery, brake systems, wheels, and diesel engines). He is a
director of AGCO Corporation.
[Photo] IAN M. ROSS, 69
A DIRECTOR SINCE 1980
President Emeritus (1991 to present) and formerly President (1979 to
1991) of AT&T Bell Laboratories (research and development for AT&T
Corp.; now the Bell Labs unit of Lucent Technologies Inc.). Dr. Ross
is a director of The B.F. Goodrich Co. and NACCO Industries, Inc.
[Photo] WILLIAM H. WALTRIP, 59
A DIRECTOR SINCE 1983
Chairman (1995 to present) of Bausch & Lomb Incorporated (contact
lens, lens-care and eyewear products) and Chairman (1993 to present)
of Technology Solutions Company (services and resources to design,
develop and implement large-scale computer systems). Mr. Waltrip was
Chief Executive Officer of Bausch & Lomb Incorporated (1995 to January
1997); Chief Executive Officer (1993 to 1995) of Technology Solutions
Company; Chairman (1992 to 1993), Chief Executive Officer and
President (1991 to 1993) of Biggers Brothers, Inc. (food service
distributors); and Vice Chairman (1991 to 1992) of Unifax, Inc., the
parent corporation of Biggers Brothers, Inc. He is a director of
Bausch & Lomb Incorporated, Teachers Insurance and Annuity
Association, and Technology Solutions Company.
</TABLE>
6
<PAGE>
THE BOARD OF DIRECTORS
The Board establishes broad corporate policy and gives guidance to the
Corporation. In 1996, there were seven meetings of the Board and actions by
unanimous written consent on three occasions, and 10 meetings of committees of
the Board plus action by unanimous written consent on one occasion. All
directors except Dr. Richard and Mr. Waltrip 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 90.6%.
Nonemployee directors receive a retainer fee of $24,000 per year plus a fee
of $2,000 for each Board meeting and $1,500 for each regularly scheduled
committee meeting attended. No fees are paid for actions taken by unanimous
written consent in lieu of a meeting. Each committee chairman receives 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 person who is elected a director at
the annual meeting of shareholders receives an award of 200 restricted shares of
Common Stock. 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.
The Deferred Fee Plan for Nonemployee Directors of Thomas & Betts
Corporation provides for a director to defer all or a portion of compensation
earned for services as a director. Any amount so deferred is valued, in
accordance with the director's election, as if invested in a one-year
Certificate of Deposit or in a hypothetical investment in 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.
In accordance with 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, Corporate Governance Committee, 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, Corporate Governance Committee, and Human Resources
Committee.
<TABLE>
<CAPTION>
CORPORATE HUMAN
EXECUTIVE AUDIT GOVERNANCE RESOURCES
- ------------------------- --------------------- --------------------------- -------------------------
<S> <C> <C> <C>
J. David Parkinson* Thomas W. Jones* Raymond B. Carey, Jr.* Ernest H. Drew*
Raymond B. Carey, Jr. Robert A. Kenkel T. Kevin Dunnigan Jeananne K. Hauswald
T. Kevin Dunnigan Jean-Paul Richard Kenneth R. Masterson William H. Waltrip
William H. Waltrip Ian M. Ross J. David Parkinson
</TABLE>
* 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. The Executive Committee took
action by written consent in lieu of a meeting of the Committee on one occasion
in 1996.
7
<PAGE>
AUDIT COMMITTEE
This committee is composed solely of nonemployee directors of the
Corporation. The Audit Committee's principal responsibilities are to: (1)
provide an open avenue of communication between and among the independent
accountants, the internal auditors, management and the Board of Directors; (2)
review the engagement of the independent accountants and recommend to the Board
the firm to be appointed each year, subject to ratification by the Corporation's
shareholders; (3) review the plan and scope of the independent accountants'
annual audit of the Corporation's financial statements; (4) review the internal
audit plan, its scope, the factors considered in its development and the audit
results; (5) review the annual financial statements and related notes, the
adequacy of disclosures, the impact of major accounting policy decisions and the
results of the annual financial statement audit; (6) review the adequacy of
reserves, accounting estimates and management's judgments employed in the
preparation of the financial statements; (7) review the adequacy and scope of
the Corporation's internal accounting controls and procedures; (8) review the
fees and expenses for audit and non-audit services provided by the independent
accountants; (9) review the impact of any new accounting or auditing standards
being considered by the accounting profession or the Securities and Exchange
Commission; (10) direct and supervise investigations, if necessary, into any
matter it deems appropriate; and (11) report its findings and actions to the
Board. There were three meetings of the Audit Committee in 1996.
CORPORATE GOVERNANCE COMMITTEE
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 Corporate Governance Committee (1) reviews the
performance, attendance, and maintenance of qualifications of current members of
the Board; (2) receives suggestions and makes recommendations to the Board
concerning candidates for the Board and the slate of director nominees to be
submitted to 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 Corporate Governance Committee 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 Bylaws require that the nomination satisfy certain conditions,
including, generally, that written notice 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 Bylaw is available from the
Corporate Secretary upon the request of any shareholder. There were three
meetings of the Corporate Governance Committee in 1996.
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 when Board action is required; (4) makes recommendations to the
Board on the compensation of the five most highly compensated executive
officers; (5) establishes annually the performance criteria for the Executive
Incentive Plan and certifies at the end of each year the extent to which the
performance targets are met; (6) performs the administrative functions assigned
to the Committee by the provisions of the Executive Incentive and the 1993
Management Stock Ownership Plans; and (7) reports the results of its actions and
8
<PAGE>
findings to the Board, and, with respect to the above, recommends programs and
changes considered desirable. The chairman of this committee is responsible for
chairing the annual review by the nonemployee directors of the performance of
the Chief Executive Officer. There were four meetings of the Human Resources
Committee in 1996.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 29, 1996,
December 31, 1995, and January 1, 1995, the cash compensation paid by the
Corporation and its subsidiaries as well as 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.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
-------------------------
ANNUAL COMPENSATION NUMBER OF
-------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND COMPENSATION AWARDS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) ($)(2) GRANTED (#) ($)(3)
- --------------------------------- --------- ---------- ---------- -------------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
T. Kevin Dunnigan................ 1996 $ 585,000 $ 493,448 $ 244,453 $ 345,337 28,380 $ 54,752
Chairman and Chief Executive 1995 550,000 444,235 175,796 248,316 19,600 58,647
Officer 1994 511,665 260,931 230,445 329,940 93,760 49,575
Clyde R. Moore................... 1996 460,000 388,010 196,597 308,055 24,284 30,511
President and Chief Operating 1995 400,000 323,080 101,658 146,011 11,450 24,687
Officer 1994 342,000 174,408 233,880 339,402 97,010 20,149
T. Roy Burton (4)................ 1996 209,504 109,047 -- 139,478 6,712 11,294
President-Electronics/OEM 1995 197,837 83,317 38,526 55,361 4,350 10,888
Division 1994 159,795 129,885 41,600 53,620 16,140 7,056
Fred R. Jones (5)................ 1996 205,000 121,042 55,092 183,089 8,810 14,095
Vice President-Finance and 1995 83,333 61,116 15,097 -- 10,000 1,870
Treasurer
Gary R. Stevenson................ 1996 217,300 109,976 -- 153,449 7,382 13,729
Vice President-Operations 1995 205,000 99,347 31,533 72,067 4,800 11,614
1994 182,836 55,948 39,288 84,222 20,300 8,516
</TABLE>
- ------------------------
(1) Except for Mr. Jones (see footnote 5), the amounts reported represent 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 December 29, 1996, based on
the closing market price of the Common Stock on December 27, 1996 of $44.375
are as follows:
<TABLE>
<S> <C> <C>
Mr. Dunnigan.................................................................................................. 26,846 $1,191,291
Mr. Moore..................................................................................................... 23,440 1,040,150
Mr. Burton.................................................................................................... 6,994 310,359
Mr. Jones..................................................................................................... 4,744 210,515
Mr. Stevenson................................................................................................. 8,814 391,121
</TABLE>
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
9
<PAGE>
(Footnotes continued from preceding page)
(3) The amounts reported in 1996 for Messrs. Dunnigan, Moore, Burton, Jones and
Stevenson include contributions to a 401(k) plan in the amounts of $6,102,
$6,347, $6,303, $5,155 and $6,462, respectively; contributions to a
nonqualified savings plan in the amounts of $14,560, $17,466, $358, $3,175
and $3,990, respectively; and premiums paid by the Corporation in the
amounts of $34,090, $6,698, $4,633, $5,765 and $3,277, respectively, for
group term life insurance and whole life insurance having an aggregate face
value equal to 1 1/2 times each person's annual base salary and average
bonus ("Life Insurance"). The amounts reported in 1995 for Messrs. Dunnigan,
Moore, Burton, Jones and Stevenson include contributions to a 401(k) plan in
the amounts of $5,936, $5,803, $6,476 $1,328 and $6,575, respectively;
contributions to a nonqualified savings plan in the amounts of $20,245,
$12,505, $0, $542 and $1,920, respectively; and premiums paid by the
Corporation in the amounts of $32,466, $6,379, $4,412, $0 and $3,120,
respectively, for Life Insurance. The amounts reported in 1994 for Messrs.
Dunnigan, Moore, Burton and Stevenson include contributions to a 401(k) plan
in the amounts of $3,288, $3,231, $3,087, and $2,476, respectively;
contributions to a nonqualified savings plan in the amounts of $18,311,
$10,873, $0, and $4,085, respectively; and premiums paid by the Corporation
in the amounts of $27,976, $6,046, $3,969, and $2,955, respectively, for
Life Insurance.
(4) The amounts reported for 1994 are for the period beginning February 25, the
date that Mr. Burton joined the Corporation. The bonus amount for 1994 is
comprised of an annual incentive payment of $69,885 and a signing bonus of
$60,000.
(5) The amounts reported for 1995 are for the period beginning August 1, the
date that Mr. Jones joined the Corporation. The bonus amount for 1995 is
comprised of an annual incentive payment of $47,116 and a signing bonus of
$14,000. Other Annual Compensation reported for 1996 and 1995 consists of
relocation expenses paid to or on behalf of Mr. Jones.
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock
options under the Corporation's 1993 Management Stock Ownership Plan to the
Named Executives as of the end of the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENT OF ANNUAL RATES OF STOCK
UNDERLYING TOTAL OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM(3)
GRANTED EMPLOYEES IN PRICE EXPIRATION ------------------------
NAME (#)(1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
- ------------------------------------- ----------- ----------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
T. Kevin Dunnigan.................... 28,380 7.57% $38.59375 02-07-06 $ 688,822 $ 1,745,611
Clyde R. Moore....................... 24,284 6.47 38.59375 02-07-06 589,407 1,493,672
T. Roy Burton........................ 6,712 1.79 38.59375 02-07-06 162,910 412,845
Fred R. Jones........................ 8,810 2.35 38.59375 02-07-06 213,831 541,890
Gary R. Stevenson.................... 7,382 1.97 38.59375 02-07-06 179,171 454,056
</TABLE>
- ------------------------
(1) Options become exercisable in three equal annual installments beginning
February 7, 1997.
(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. The exercise price may be paid in cash or by tendering shares
of 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.
10
<PAGE>
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 last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE OPTIONS AT 12-29-96 (#) 12-29-96 ($)(2)
ON EXERCISE REALIZED -------------------------- ---------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------- ----------- ---------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
T. Kevin Dunnigan........................ 14,988 $ 256,557 145,848 72,704 $ 1,927,198 $ 682,194
Clyde R. Moore........................... -- -- 95,890 64,254 1,234,263 647,011
T. Roy Burton............................ -- -- 12,211 14,991 142,204 135,988
Fred R. Jones............................ -- -- 3,334 15,476 35,424 121,759
Gary R. Stevenson........................ -- -- 23,784 17,348 282,433 159,329
</TABLE>
- ------------------------
(1) Market value on the date of exercise of shares covered by options exercised,
less option exercise price.
(2) Market value of in-the-money option shares on December 29, 1996 ($44.375),
less option exercise price.
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 designated corporate officers and key
executives 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, and
elective deferrals to a nonqualified savings plan. The benefit payable under the
ERP incorporates amounts payable to a participant from (1) a qualified pension
plan; (2) the employer-paid portion of a participant's Social Security benefit;
and (3) the employer-paid portion of a participant's 401(k) and nonqualified
savings plan accounts.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
HIGHEST
5-YEAR
AVERAGE YEARS OF SERVICE
COMPENSATION -----------------------------------------------
LEVELS 20 25 30 35 OR MORE
- --------------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
$ 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
900,000 450,000 517,500 585,000 652,500
1,000,000 500,000 575,000 650,000 725,000
1,100,000 550,000 632,500 715,000 797,500
</TABLE>
Covered compensation is comprised of annual base salary and incentive
compensation paid under the Thomas & Betts Corporation Executive Incentive Plan.
Benefit amounts shown in the above table assume that payments are made on a
10-year certain and life annuity.
11
<PAGE>
The Named Executives had the following years of credited service under the
terms of the ERP as of February 14, 1997: Mr. Dunnigan, 35; Mr. Moore, 11; Mr.
Burton, 3; Mr. Jones, 2; and Mr. Stevenson, 11.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-OF-CONTROL
ARRANGEMENTS
The Corporation entered into an agreement with T. Kevin Dunnigan effective
February 5, 1997 (the "Agreement") in connection with Mr. Dunnigan's desire to
relinquish the title of Chief Executive Officer and to retire as an employee of
the Corporation as of the organizational meeting of the Board on May 7, 1997. In
recognition of Mr. Dunnigan's long and valued service to the Corporation,
including 12 years as Chief Executive Officer, the Agreement provides for the
grant to Mr. Dunnigan on February 5, 1997 of a stock option for 26,170 shares, a
restricted stock award of 14,091 shares that will vest on February 4, 2000, and
a special stock award of 32,302 shares that will be distributed in three
substantially equal installments on May 7, 1998, May 7, 1999 and May 7, 2000,
respectively, subject to his compliance with covenants as to confidential
information and competitive conduct; an incentive cash bonus in March 1998 under
the Executive Incentive Plan as if he had served as Chief Executive Officer of
the Corporation for the entire fiscal year 1997; and retirement benefits under
the ERP attributable to a retirement age of 60. No other stock grants or awards
or cash bonuses will be made to Mr. Dunnigan during the term of the Agreement.
The Agreement further provides for Mr. Dunnigan's post-retirement service as
Chairman of the Board for a term ending May 6, 2000 at an annual rate of no less
than $500,000 per year and perquisites consisting of membership fees in a golf
club in Memphis, Tennessee, that is used in part for Corporation business, and
an automobile allowance. Mr. Dunnigan has undertaken to devote his knowledge,
skill, attention and energies to the performance of the duties of Chairman of
the Board, to perform projects that are assigned by the Board or requested by
the Chief Executive Officer, and to refrain from engaging in any business,
service or employment without the prior consent of the Board. No other fees,
stock awards, retirement benefits or other compensation shall be paid to Mr.
Dunnigan for serving as a member of the Board or any committee of the Board
during the term of the Agreement. The change-of-control provisions described
below also apply to this Agreement.
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.
Generally, a "change of control" shall be deemed to have occurred if (i) any
person, including a "group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, becomes the beneficial owner of 25% or more of
the outstanding voting securities of the Corporation or (ii) a majority of the
Board shall cease for any reason to be members of the "Incumbent Board." The
Incumbent Board shall mean a director who was a director of the Corporation as
of the date of each employment agreement as well as any person whose election or
nomination after such date was approved by at least 75% of the vote of the then
Incumbent Board.
12
<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 the focus on 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
indexes 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 appropriate comparative framework. The annual and long-term
incentive components of compensation are sufficiently variable so that there
should be a strong relationship between total return to shareholder
performance and actual total direct compensation levels over time. In fact,
the averages of the Chief Executive Officer's actual total direct
compensation for the 12-, 5- and 3-year periods ended 1996 have been closely
aligned with the Corporation's common stock performance relative to the S&P
400 for those time periods.
(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 1996 was slightly 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 for superior performance. 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 Chief
Executive Officer and other corporate staff executive officers, the
annual incentive for 1996 is based 50% on return on equity (ROE) relative
to the S&P 400 and 50% on earnings per share (EPS) growth. ROE attainment
was above mid-point, while EPS was near the maximum of the performance
range, resulting in a combined payout above mid-point to these
executives. For the divisional executive officer named in the Summary
Compensation Table, the annual incentive payment for 1996 was based on
corporate ROE (12 1/2% weighting), EPS (12 1/2%), and the performance of
that officer's division on income (50%) and cash flow (25%). As a group,
the average of the named executive officers' incentive payments for
fiscal year 1996 was 72.9% 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 an expected value at grant date
approximately at the 50th percentile for general industry, according to a
mix predetermined by the Committee.
13
<PAGE>
For executive officers, the expected value of grants ranges from
approximately 52% to 150% 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 officers'
annual long-term incentive awards in 1996 was 123.7% 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 over a three-year period at the rate
of one-third per year. Restricted stock vests at the end of three years.
2. CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Dunnigan's base salary in 1996, $585,000, was increased by 6.4% over the
prior year. This placed his base salary at the median paid to chief executive
officers in general industry companies of comparable size. The Committee based
this increase on the continued good performance of the Corporation,
comparability with other positions within general industry at the 50th
percentile and the length of time that Mr. Dunnigan has served as the Chief
Executive Officer.
Mr. Dunnigan's target annual incentive was 40% of base salary in 1996, and
the maximum incentive was 100% of base salary. Before consolidation with the
financial results of Augat Inc. and before special charges, the Corporation's
1996 return on equity was 15.5%, which was above the mid-point of the
performance range, and earnings per share was near the maximum of the
performance range, which together resulted in Mr. Dunnigan receiving an annual
incentive of $493,448. Mr. Dunnigan was granted a stock option for 28,380 shares
and a restricted stock award for 15,282 shares, of which Mr. Dunnigan elected to
forgo 6,334 shares in favor of cash payments for withholding taxes. As in
previous years, the Committee targeted the expected value of the stock option
and restricted stock awards to Mr. Dunnigan to be at the 50th percentile of
general industry according to a mix predetermined by the Committee.
3. POLICY REGARDING EXECUTIVE COMPENSATION DEDUCTIBILITY
The Corporation's policy is to design and administer compensation plans that
support the achievement of long-term strategic objectives and enhance
shareholder value. Performance-based compensation is a significant part of
executive compensation, and it is the Corporation's policy to take all
reasonable action to maximize the deductibility of such compensation.
The Executive Incentive Plan ("EIP") and the 1993 Management Stock Ownership
Plan ("MSOP") were approved by the shareholders, and incentive payments under
the EIP and stock options granted under the MSOP prior to this year's annual
shareholders' meeting qualify as performance-based compensation that is not
subject to a limit on deductibility. Shareholder approval of an amendment to the
MSOP is being requested so that future stock option grants will continue to
qualify as performance-based compensation. (See proposal on page 17.)
Base salary and the value of restricted stock awards do not qualify as
performance-based compensation under the provisions of Section 162(m) of the
Internal Revenue Code (the "Code"), but it is unlikely in the foreseeable future
that such amounts, as calculated under the Code, that are paid to any executive
other than the Chief Executive Officer will exceed the deductibility limit.
Ernest H. Drew, Chairman
Jeananne K. Hauswald
William H. Waltrip
14
<PAGE>
PERFORMANCE GRAPH
The graph set forth below provides comparisons of the yearly percentage
change in the cumulative total shareholder return on the Common Stock with the
cumulative total return for the five years ended December 31, 1996 of Standard &
Poor's ("S&P") 500 Stock Index, the S&P Electrical Equipment Index and a Thomas
& Betts self-constructed peer group index ("T&B Peer Group Index"), which will
replace the S&P Electrical Equipment Index in the performance graph in future
proxy statements. The shareholder returns in each case have been calculated
using the calendar year rather than the Corporation's fiscal year, which was
changed in 1993 to end on the Sunday closest to December 31.
The S&P Electrical Equipment Index has been used as a comparator since the
performance graph was first presented in 1993. It was originally selected
because it was a published industry index that represented a reasonable peer
group. However, General Electric Co. ("GE"), currently weighted at over 70% of
the total, dominates this index, and most of GE's businesses, which include
financial services, materials, plastics, aircraft engines, major appliances and
TV broadcasting, are significantly different from the Corporation's business
segments.
The T&B Peer Group Index consists of companies whose businesses are more
representative of the Corporation's business segments, and serves as a more
valid basis for comparing total returns to shareholders. The companies in the
T&B Peer Group Index are: AMP Incorporated, Emerson Electric Co., W.W. Grainger,
Inc., and General Signal Corporation, which are in the S&P Electrical Equipment
Index, and Berg Electronics Corp. (effective as of its initial public offering
in March 1996), Cooper Industries, Inc., Hubbell Incorporated--Class B, Molex
Incorporated and Robinson Nugent, Inc.
The T&B Peer Group Index has been weighted in accordance with each company's
market capitalization (closing stock price multiplied by the number of shares
outstanding) as of the beginning of each of the five years covered by the
performance graph. The weighted return for each year was calculated by summing
the products obtained by multiplying (i) the percentage that each company's
market capitalization represents of the total market capitalization for all
companies in the index for each such year by (ii) the total shareholder return
for that company for such year.
15
<PAGE>
FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THOMAS & BETTS CORPORATION, T&B PEER GROUP INDEX,
S&P 500 STOCK INDEX, AND S&P ELECTRICAL EQUIPMENT INDEX
(ASSUMES $100 INVESTED ON DECEMBER 31, 1991
AND REINVESTMENT OF DIVIDENDS)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 S&P 500 ELECTRICAL EQUIPMENT THOMAS & BETTS T&B PEER GROUP
<S> <C> <C> <C> <C>
1991 100.00 100.00 100.00 100.00
1992 107.61 109.49 117.96 99.97
1993 118.39 132.08 109.14 110.32
1994 119.99 133.55 129.64 113.54
1995 164.92 187.38 147.20 137.84
1996 202.69 252.75 182.17 163.79
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas & Betts $ 100.00 $ 117.96 $ 109.14 $ 129.64 $ 147.20 $ 182.17
% change 17.96% -7.48% 18.78% 13.55% 23.76%
year to year
T&B Peer Group 100.00 99.97 110.32 113.54 137.84 163.79
% change -0.03% 10.35% 2.92% 21.40% 18.83%
year to year
S&P 500 100.00 107.61 118.39 119.99 164.92 202.69
% change 7.61% 10.02% 1.35% 37.44% 22.90%
year to year
S&P Electrical 100.00 109.49 132.08 133.55 187.38 252.75
Equipment
% change 9.49% 20.63% 1.11% 40.31% 34.89%
year to year
</TABLE>
16
<PAGE>
2. AMENDMENT OF THE 1993 MANAGEMENT STOCK OWNERSHIP PLAN
The 1993 Management Stock Ownership Plan (the "Plan") was approved by the
shareholders on May 5, 1993. The Plan provides for the grant of stock-based
compensation awards to employees of the Corporation, including any entity that
is directly or indirectly controlled by the Corporation or any entity in which
the Corporation has a significant equity interest, in each calendar year of up
to one and one-quarter percent (1 1/4%) of the outstanding Common Stock as of
the first day of such year plus (i) any shares available for issuance in
previous years but not actually issued, (ii) any shares which have been
exchanged by a participant as full or partial payment to the Corporation in
connection with any award under the Plan, and (iii) any shares subject to any
grant or award that is forfeited or terminated without issuance of the shares or
other consideration. There is a limit of 3,000,000 shares (adjusted for the
two-for-one stock split on April 9, 1996) on the aggregate number of shares that
have been issued or are available for issuance pursuant to the exercise of
Incentive Stock Options granted under the Plan.
The Plan as adopted does not provide a limit on the number of shares for
which grants may be made to any employee in any given year ("Maximum Annual
Grant"). Regulations under Section 162(m) of the Internal Revenue Code (the
"Code"), which became effective after the Plan was approved by the Corporation's
shareholders, require a plan to have a shareholder-approved Maximum Annual Grant
if grants under the Plan are to qualify as performance-based compensation not
subject to the $1 million limit on deductibility of compensation paid to the
Chief Executive Officer (the "CEO") or to any other executive officer whose
compensation is required to be reported in the Corporation's proxy statement
("Executive Officers").
As stated in the Human Resources Committee Report on Executive Compensation,
it is the Corporation's policy to take all reasonable action to maximize the
deductibility of all performance-based compensation. Therefore, the Board
recommends that the shareholders approve an amendment to the Plan to add to
Section 5, "Shares of Common Stock Subject to the Plan," a new paragraph (f) to
read as follows:
"(f) Except for a grant that meets all of the requirements for
performance-based compensation set forth in Internal Revenue Code Section
162(m), paragraph (e), and subject to adjustment as provided in Section 6, no
officer or employee may receive, in any given year, grants of stock options
and/or SARs which, singly or in the aggregate, cover more than 200,000 shares of
the Common Stock."
Approval of the amendment will require that the number of votes cast in
favor of this proposal exceeds the number of votes cast against this proposal.
Abstentions and broker non-votes will not be counted as votes cast and will have
no impact on the vote.
THE BOARD UNANIMOUSLY 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 1996
were KPMG Peat Marwick LLP. 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 1997
and until the 1998 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 LLP will be present at the Annual
Meeting to make a statement if they desire to do so, and to respond to
appropriate questions.
17
<PAGE>
Ratification of the appointment of KPMG Peat Marwick LLP will require that
the number of votes cast in favor of this proposal exceeds the number of votes
cast against this proposal. Abstentions and broker non-votes will not be counted
as votes cast and will have no impact on the vote.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 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 24, 1997, to be considered for inclusion in the
Corporation's proxy statement and form of proxy for the 1998 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. For any matter to be properly
brought before the Annual Meeting, it 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
Bylaws specify the information to be included in the shareholder's notice. An
interested shareholder can obtain a complete copy of the Bylaw 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. The persons named as Proxies on the proxy card are authorized to vote
in accordance with their best judgment on any such matter.
By Order of the Board of Directors,
JANICE H. WAY, CORPORATE SECRETARY
18
<PAGE>
P R O X Y
THOMAS & BETTS CORPORATION
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
ANNUAL MEETING OF SHAREHOLDERS--MAY 7, 1997
The undersigned hereby appoints T. KEVIN DUNNIGAN, FRED R. JONES and CYLDE R.
MOORE as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side
hereof, all the shares of Common Stock of Thomas & Betts Corporation held by
the undersigned on March 10, 1997, at the Annual Meeting of Shareholders to be
held on May 7, 1997, or any adjournment thereof.
Nominees for election as directors:
E.H. Drew, T.K. Dunnigan, J.K. Hauswald, T.W. Jones,
R.A. Kenkel, J.N. Lemasters, K.R. Masterson, T.C. McDermott,
C.R. Moore, J.-P. Richard, I.M. Ross, and W.H. Waltrip.
CHANGE OF ADDRESS ONLY:
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(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>
/x/ Please mark your
votes as in this
example.
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.
1. Election of Directors (see reverse) FOR / / WITHHELD / /
For, except vote withheld from the following nominee(s)
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2. Amendment of the 1993 Management Stock Ownership Plan.
FOR / / AGAINST / / ABSTAIN / /
3. Ratification of appointment of KPMG Peat Marwick LLP as independent public
accountants.
FOR / / AGAINST / / ABSTAIN / /
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 appears
on this Proxy. Joint owners should each sign
personally. When signing as attorney, executor,
administrator, guardian, custodian, or
corporate official, sign name and title.
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SIGNATURE(S) DATE
