<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 Section240.14a-11(c) or
Section240.14a-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>
Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
(901) 252-5000
[LOGO]
March 22, 1999
Dear Shareholder:
I invite you to attend our 1999 Annual Meeting of Shareholders on
Wednesday, May 5, 1999. The meeting will be held at 10:00 a.m. in the
Winegardner Auditorium of The Dixon Gallery and Gardens, 4339 Park Avenue,
Memphis, Tennessee. After the business session, we will discuss the
financial results for 1998 and report on current operations.
On the following pages you will find the Notice of Meeting, which lists
the matters to be conducted at the meeting, and the Proxy Statement. In
addition to the election of eleven directors, you will be asked to approve
the Thomas & Betts Corporation Executive Incentive Plan, as amended, and to
ratify the appointment of the independent public accountants.
YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
YOU CAN VOTE OVER THE INTERNET, BY TELEPHONE OR BY USING A TRADITIONAL PROXY
CARD. Detailed voting instructions appear on the next page.
The Board of Directors recommends that you vote "FOR" proposals 1, 2 and
3.
Sincerely,
[SIG]
Clyde R. Moore
President and Chief Executive Officer
<PAGE>
[LOGO]
Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TIME.............................. 10:00 a.m. on Wednesday, May 5, 1999
PLACE............................. Winegardner Auditorium
The Dixon Gallery and Gardens
4339 Park Avenue
Memphis, Tennessee
ITEMS OF BUSINESS................. (1) Election of 11 directors;
(2) Approval of the Thomas & Betts Corporation Executive
Incentive Plan, as amended;
(3) Ratification of the appointment of KPMG LLP as
independent public accountants for fiscal year 1999;
and
(4) Such other business as may properly come before the
meeting or any adjournment or postponement.
RECORD DATE....................... You are entitled to vote if you were a shareholder of record at
the close of business on March 8, 1999.
ANNUAL REPORT..................... Our 1998 Annual Report to Shareholders for the fiscal year
ended January 3, 1999, which is not a part of the proxy
soliciting material, is enclosed.
PROXY VOTING...................... Shareholders of record can vote by one of the following
methods:
(1) CALL THE TOLL-FREE NUMBER 1-800-652-8683 to vote by
telephone (this call is free in the U.S. and Canada)
anytime up to 12:00 midnight New York time on May 4,
1999; OR
(2) VISIT THE WEB SITE AT HTTP://WWW.VOTE-BY-NET.COM to
vote over the Internet anytime up to 12:00 midnight
New York time on May 4, 1999; OR
(3) MARK, SIGN, DATE AND RETURN the enclosed proxy card
in the envelope provided.
You may revoke your proxy in the manner described in the
accompanying Proxy Statement at any time up to the time your
proxy is voted on the day of the meeting.
</TABLE>
March 22, 1999
YOUR VOTE IS IMPORTANT
PLEASE VOTE YOUR SHARES PROMPTLY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT........................................................... 1
Shareholders Entitled to Vote........................................... 1
Proxies................................................................. 1
Vote by Telephone..................................................... 1
Vote by Internet...................................................... 1
Vote by Mail.......................................................... 2
Vote at the Annual Meeting............................................ 2
List of Shareholders.................................................... 2
Quorum.................................................................. 2
Other Matters Which May Come Before the Meeting and Discretionary
Voting................................................................ 2
Multiple Copies of Annual Report to Shareholders........................ 2
Cost of Proxy Solicitation.............................................. 2
Section 16(a) Beneficial Ownership Reporting Compliance................. 2
SECURITY OWNERSHIP........................................................ 3
BOARD AND COMMITTEE MEMBERSHIP............................................ 4
The Board of Directors.................................................. 4
Committees of the Board of Directors.................................... 4
COMPENSATION.............................................................. 7
Director Compensation................................................... 7
Fees.................................................................. 7
Benefit Plans......................................................... 7
Transactions with Nonemployee Directors................................. 8
Executive Compensation.................................................. 8
Summary of Cash and Certain Other Compensation........................ 8
Stock Option Grants................................................... 9
Stock Option Exercises................................................ 10
Pension Plan.......................................................... 11
Employment Contracts, Termination of Employment and Change-of-Control
Arrangements for Executives.......................................... 12
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION................ 12
Executive Compensation Philosophy....................................... 12
Compensation of the Chief Executive Officer............................. 13
Policy Regarding Executive Compensation Deductibility................... 14
PERFORMANCE GRAPH......................................................... 14
PROPOSAL NO. 1, ELECTION OF DIRECTORS..................................... 16
PROPOSAL NO. 2, APPROVAL OF THE THOMAS & BETTS CORPORATION EXECUTIVE
INCENTIVE PLAN, AS AMENDED.............................................. 19
PROPOSAL NO. 3, RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS............................................................. 20
DEADLINES FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION OF DIRECTORS AND
OTHER BUSINESS.......................................................... 21
Proxy Statement Proposals............................................... 21
Nomination of Directors and Other Business for Presentation at the
Annual Meeting........................................................ 21
THOMAS & BETTS CORPORATION EXECUTIVE INCENTIVE PLAN....................... A-1
</TABLE>
<PAGE>
THOMAS & BETTS CORPORATION
8155 T&B Boulevard
Memphis, Tennessee 38125
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
These proxy materials are furnished in connection with the solicitation by
the Board of Directors of Thomas & Betts Corporation ("Thomas & Betts," the
"Company," "our," "we" or "us"), a Tennessee corporation, of proxies to be voted
at our 1999 Annual Meeting of Shareholders (the "Annual Meeting") or at any
adjournment or postponement.
You are invited to attend our Annual Meeting on May 5, 1999, beginning at
10:00 a.m. in the Winegardner Auditorium of The Dixon Gallery and Gardens, 4339
Park Avenue, Memphis, Tennessee.
This Proxy Statement, form of proxy and voting instructions will be mailed
to our shareholders starting March 22, 1999.
SHAREHOLDERS ENTITLED TO VOTE. Holders of shares of Thomas & Betts Common
Stock (the "Common Stock") at the close of business on March 8, 1999 are
entitled to receive notice and to vote their shares at the Annual Meeting. As of
that date, there were 56,854,414 shares of Common Stock outstanding. Each share
of Common Stock is entitled to one vote on each matter properly brought before
the Annual Meeting.
PROXIES. Your vote is important. Shareholders of record may vote their
proxies by telephone, Internet or mail. A toll-free telephone number and web
site address are included on the proxy card. If you choose to vote by mail, an
envelope addressed to the Inspectors of Election is provided.
You may revoke your proxy and reclaim your right to vote up to and including
the day of the Annual Meeting by (1) giving written notice of revocation to the
Inspectors of Election, First Chicago Trust Company, a division of EquiServe,
P.O. Box 8620, Edison, New Jersey 08818-9127, (2) timely delivery of a valid,
later-dated proxy or (3) voting by ballot at the Annual Meeting.
You can save us the expense of a second mailing by voting promptly. If you
are a shareholder of record, choose ONE of the following voting methods to cast
your vote. If your shares are held by a bank, broker or other holder of record,
check the information provided with your voting instruction form to see which
methods are available to you.
VOTE BY TELEPHONE
You can vote your shares by calling 1-800-652-8683 (at no cost to you in the
U.S. and Canada). Telephone voting is available 24 hours a day. Easy-to-follow
voice prompts allow you to vote your shares and confirm that your instructions
have been properly recorded. The telephone voting procedures are designed to
authenticate shareholders by using individual control numbers. If you vote by
telephone you can also give instructions to discontinue future mailings of
duplicate the Annual Report to Shareholders. If you are located outside the U.S.
and Canada, see your proxy card for additional instructions. IF YOU VOTE BY
TELEPHONE, YOU DO NOT NEED TO RETURN YOUR PROXY CARD.
VOTE BY INTERNET
You can also choose to vote over the Internet. The web site for Internet
voting is http://www.vote-by-net.com. Internet voting is available 24 hours a
day. You will be given the opportunity to confirm that your votes have been
properly recorded, and you can give instructions to discontinue future mailings
of duplicate Annual Reports. IF YOU VOTE OVER THE INTERNET, YOU DO NOT NEED TO
RETURN YOUR PROXY CARD.
<PAGE>
VOTE BY MAIL
If you choose to vote by mail, simply mark your proxy, date and sign it, and
return it to First Chicago Trust Company in the envelope provided. To
discontinue future mailings of duplicate Annual Reports, check the box provided
on the card.
VOTE AT THE ANNUAL MEETING
Your vote by telephone, Internet or mail will not limit your right to vote
at the Annual Meeting if you later decide to attend in person. If your shares
are held in the name of a bank, broker or other holder of record, you must
obtain a proxy, executed in your favor, from the holder of record to be able to
vote at the meeting.
All shares that have been properly voted--whether by telephone, Internet or
mail--and not revoked will be voted at the Annual Meeting in accordance with
your instructions. If you sign and return your proxy card but do not give voting
instructions, the shares represented by that proxy will be voted as recommended
by the Board of Directors.
LIST OF SHAREHOLDERS. A list of shareholders entitled to vote at the Annual
Meeting will be available at the corporate headquarters from March 25, 1999
through May 4, 1999, and at the Annual Meeting.
QUORUM. The presence, in person or by proxy, of the holders of a majority
of the shares of Common Stock entitled to vote at the Annual Meeting is required
to constitute a quorum.
OTHER MATTERS WHICH MAY COME BEFORE THE MEETING AND DISCRETIONARY
VOTING. The Board of Directors does not know of any matter for action by
shareholders at the Annual Meeting other than the matters described in the
Notice. The enclosed proxy will confer discretionary authority with respect to
matters which are not known at the date of printing of this Proxy Statement 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.
MULTIPLE COPIES OF ANNUAL REPORT TO SHAREHOLDERS. If more than one copy of
the 1998 Annual Report (the "Annual Report") is sent to your address, we will
discontinue the mailing of the Annual Report to the account(s) you select if you
mark the designated box on the appropriate proxy card(s) or follow the
instructions provided after you vote by telephone or over the Internet.
At least one account in your name or at the same address as another
shareholder of record must continue to receive the Annual Report. Mailing of
dividends, proxy materials and special notices will not be affected by your
election to discontinue future duplicate mailings of the Annual Report. To
resume the mailing of an Annual Report to an account, write to Thomas & Betts's
Investor Relations Department at 8155 Thomas & Betts Boulevard, Memphis,
Tennessee 38125.
If you own Common Stock through a bank, broker or other nominee and receive
more than one copy of our Annual Report, contact the holder of record to
eliminate duplicate mailings.
COST OF PROXY SOLICITATION. The Company will pay the cost of soliciting
proxies for the Annual Meeting. We have retained Georgeson & Co. Inc. 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 $7,500 plus expenses. In addition, directors, officers and other
employees may solicit proxies in person, by mail or electronic transmission. We
will reimburse brokers, banks and others who are record holders of Common Stock
for reasonable expenses incurred in obtaining voting instructions from
beneficial owners of such shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. On the basis of
reports and representations submitted by the directors and executive officers of
the Company, 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, as amended,
except that Jerry Kronenberg, Vice President-General Counsel and Secretary,
filed one late Form 4 reporting one transaction.
2
<PAGE>
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP
- --------------------------------------------------------------------------------
The following table shows beneficial ownership of Common Stock (1) as of
March 8, 1999, by (a) each director and each director nominee, (b) the Chief
Executive Officer and each of the other four most highly compensated executive
officers (together called the "Named Executive Officers") and (c) all directors
and executive officers as a group; and (2) as of December 31, 1998, by
beneficial owners of more than 5% of the outstanding shares of Common Stock.
Information regarding beneficial owners of more than 5% of the outstanding
shares of Common Stock was copied from the latest Schedule 13G filed by these
beneficial owners with the Securities and Exchange Commission. Except as
otherwise stated, each of the individuals named exercises sole voting and
investment power over his or her shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES
THAT MAY BE
ACQUIRED WITHIN 60
AMOUNT AND DAYS OF MARCH 8,
NATURE OF 1999 THROUGH THE
BENEFICIAL EXERCISE OF STOCK NUMBER OF STOCK PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP OPTIONS CREDITS HELD(1) CLASS(2)
- --------------------------------------------------- ------------ ------------------ --------------- -------------
<S> <C> <C> <C> <C>
DIRECTORS:
Ernest H. Drew..................................... 2,200(3) -- 6,332 *
T. Kevin Dunnigan.................................. 157,076(3) 217,237 -- *
Jeananne K. Hauswald............................... 1,334(3) -- 845 *
Thomas W. Jones.................................... 1,613(3) -- 5,980 *
Ronald B. Kalich Sr................................ 200(3) -- 751 *
Robert A. Kenkel................................... 1,500(3) -- 964 *
Kenneth R. Masterson............................... 1,850(3) -- 700 *
Thomas C. McDermott................................ 1,746(3) 3,178 -- *
Jean-Paul Richard.................................. 2,850(3) -- 358 *
Jerre L. Stead..................................... 2,200(3) -- -- *
William H. Waltrip................................. 1,600(3) -- 2,159 *
NAMED EXECUTIVE OFFICERS:
Clyde R. Moore+.................................... 73,876(3) 191,613 -- *
Gary R. Stevenson.................................. 27,696(3) 47,404 -- *
Fred R. Jones...................................... 17,446(3) 26,329 -- *
T. Roy Burton...................................... 23,795(3) 35,474 -- *
W. Neil Parker..................................... 15,206(3) 30,348 -- *
All directors and executive officers as a group (19
persons)......................................... 332,188 551,583 -- 1.54
BENEFICIAL OWNERS OF MORE THAN 5% OF COMMON STOCK:
Capital Research and Management Company............ 2,970,000(4) -- -- 5.20
Delaware Management Holdings, Inc.................. 3,239,700(5) -- -- 5.91
FMR Corp........................................... 3,209,480(6) -- -- 5.65
Scudder Kemper Investments, Inc.................... 3,941,530(7) -- -- 6.90
Wellington Management Company LLP.................. 4,730,606(8) -- -- 8.33
</TABLE>
- ------------------------
+ also serves as a director
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
3
<PAGE>
(1) Stock credits are hypothetical investments in Common Stock that are recorded
as bookkeeping entries to directors' accounts in the Deferred Fee Plan for
Nonemployee Directors. Stock credits do not have voting rights.
(2) An asterisk indicates the person's total interests are less than 1% of the
outstanding Common Stock.
(3) 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: E.H. Drew, 1,400; T.K. Dunnigan, 49,717; J.K. Hauswald, 1,084; T.W.
Jones, 1,400; R.B. Kalich, 200; R.A. Kenkel, 1,000; K.R. Masterson, 850;
T.C. McDermott, 481; J.-P. Richard, 600; J.L. Stead, 200; W.H. Waltrip,
1,400; C.R. Moore, 42,836; G.R. Stevenson, 13,952; F.R. Jones, 12,702; T.R.
Burton, 14,518; and W.N. Parker, 12,308.
(4) Capital Research and Management Company, 333 South Hope Street, Los Angeles,
California 90071, a registered investment adviser, has sole dispositive
power as to all shares and no voting power as to any of the shares.
(5) Shares are held by Delaware Management Company, Inc., 2005 Market Street,
Philadelphia, Pennsylvania 19103, a registered investment adviser and
subsidiary of Delaware Management Holdings, Inc., for the accounts of
institutional investors. Of the total number reported above, Delaware
Management Holdings Inc. has sole voting and dispositive power as to
3,068,600 shares and shared voting power as to 225,100 shares.
(6) FMR Corp., 82 Devonshire Street, Boston, Massachusetts 02109, a holding
company whose subsidiaries include a registered investment adviser and a
bank, has sole dispositive power as to all shares and sole voting power as
to 66,280 shares.
(7) Scudder Kemper Investments, Inc., 345 Park Avenue, New York, New York 10154,
a registered investment adviser, has sole dispositive power as to 3,899,530
shares, shared dispositive power as to 42,000 shares, sole voting power as
to 981,143 shares and shared voting power as to 2,637,600 shares.
(8) Wellington Management Company, LLP, 75 State Street, Boston, Massachusetts
02109, a registered investment adviser, has shared dispositive power as to
all shares and shared voting power as to 2,131,906 shares.
- --------------------------------------------------------------------------------
BOARD AND COMMITTEE MEMBERSHIP
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS. The Board, which is elected by the shareholders, is
the ultimate decision-making body of the Company, except for those matters
reserved to the shareholders. The Board establishes broad corporate policy and
gives guidance to the Company. It selects the senior management team, which is
charged with the conduct of the Company's business. In 1998, there were eight
meetings of the Board and 13 meetings of committees of the Board plus action by
unanimous written consent on two occasions. All director nominees 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 95.7%.
COMMITTEES OF THE BOARD OF DIRECTORS. The four standing committees of the
Board are: Audit, Corporate Governance, Executive and Human Resources. Members
of each committee, who are elected by the full Board, are named below. The
Company follows the practice of periodically rotating the membership of all
committees and the chairmanship of the Audit, Corporate Governance and Human
Resources Committees.
4
<PAGE>
<TABLE>
<S> <C>
AUDIT COMMITTEE
MEMBERS: Thomas W. Jones, Chairman, Jeananne K. Hauswald, Thomas C.
McDermott, Jean-Paul Richard
1998 MEETINGS: Four
RESPONSIBILITIES: This committee is composed solely of nonemployee directors of the
Company whose principal responsibilities are to:
</TABLE>
- provide an open avenue of communication among the independent public
accountants, the internal auditors, management and the Board;
- review the engagement of the independent public accountants and recommend
to the Board the firm to be appointed each year, subject to ratification
by the Company's shareholders;
- review the plan and scope of the independent public accountants' annual
audit of the Company's financial statements;
- review the internal audit plan, its scope, the factors considered in its
development and the audit results;
- 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;
- review the travel and entertainment expenses of employee directors for
compliance with corporate policy;
- review the adequacy of reserves, accounting estimates and management's
judgments employed in the preparation of the financial statements;
- review the adequacy and scope of the Company's internal accounting
controls and procedures;
- review the fees and expenses for audit and non-audit services provided by
the independent public accountants;
- review the impact of any new accounting or auditing standards being
considered by the accounting profession or the Securities and Exchange
Commission;
- direct and supervise investigations, if necessary, into any matter it
deems appropriate; and
- report its findings and actions to the Board.
<TABLE>
<S> <C>
CORPORATE GOVERNANCE COMMITTEE
MEMBERS: Kenneth R. Masterson, Chairman, Ernest H. Drew, T. Kevin
Dunnigan, Clyde R. Moore
1998 MEETINGS: Four; action by unanimous written consent on one occasion
RESPONSIBILITIES: This committee's principal responsibilities are to:
</TABLE>
- review the performance, attendance and maintenance of qualifications of
current members of the Board;
- receive suggestions and make recommendations to the Board concerning
candidates for the Board and the slate of director nominees to be
submitted to the annual meeting of shareholders;
- make recommendations to the Board concerning the compensation of
nonemployee directors and the retirement policy of the Board;
- review Board procedures and practices;
- recommend membership assignments for committees of the Board;
5
<PAGE>
- review and take action on requests for management personnel to serve on
boards of directors of other companies; and
- consider shareholder suggestions of persons for consideration as
candidates for nomination as members of the Board.
A shareholder should submit the name, biographical data and qualifications
of any suggested director candidate to the Secretary. The recommendation should
be accompanied by the person's written consent 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 Company's Bylaws require that the nomination satisfy certain
conditions, including, generally, that written notice be delivered to the
Secretary at the Company's principal executive offices not less than 120 days
prior to the first anniversary of the preceding year's annual meeting of
shareholders. A copy of the Bylaws is available from the Secretary upon the
request of any shareholder.
<TABLE>
<S> <C>
EXECUTIVE COMMITTEE
MEMBERS: T. Kevin Dunnigan, Chairman, Ernest H. Drew, Robert A. Kenkel,
Clyde R. Moore, William H. Waltrip
1998 MEETINGS: Action by unanimous written consent on one occasion
RESPONSIBILITIES: 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.
HUMAN RESOURCES COMMITTEE
MEMBERS: William H. Waltrip, Chairman, Ronald B. Kalich Sr., Robert A.
Kenkel, Jerre L. Stead
1998 MEETINGS: Five
RESPONSIBILITIES: This committee is composed solely of nonemployee directors of the
Company whose principal responsibilities are to:
</TABLE>
- review compensation programs, employee benefit plans and personnel
policies applicable to officers and other members of senior management;
- review management development and succession programs;
- review major organization changes and evaluate their impact on senior
management succession plans and reward systems, and make recommendations
to the Board when Board action is required;
- make recommendations to the Board on the compensation of the five most
highly compensated executive officers;
- establish annually the performance criteria for the Executive Incentive
Plan and certify at the end of each year the extent to which the
performance targets are met;
- perform the administrative functions assigned to the committee by the
provisions of the Executive Incentive and the 1993 Management Stock
Ownership Plans; and
- report the results of its actions and findings to the Board and recommend
any programs and changes considered desirable.
The chairman of this committee is responsible for chairing the annual review
of the performance of the Chief Executive Officer.
6
<PAGE>
- --------------------------------------------------------------------------------
COMPENSATION
- --------------------------------------------------------------------------------
DIRECTOR COMPENSATION
FEES
Nonemployee directors, except Mr. Dunnigan, whose compensation is covered by
an agreement described on page 8, receive the following fees:
<TABLE>
<S> <C>
ANNUAL RETAINER: $ 26,000
COMMITTEE CHAIR RETAINER: $ 3,500
BOARD MEETING FEE: $ 2,000
COMMITTEE MEETING FEE: $ 1,500
</TABLE>
No fees are paid for actions taken by unanimous written consent in lieu of a
meeting. Employee directors do not receive any fees for serving as a director of
the Company or as a member or chairman of any committee of the Board.
BENEFIT PLANS
THE DEFERRED FEE PLAN FOR NONEMPLOYEE DIRECTORS (the "Deferred Fee Plan")
provides for a nonemployee director to defer all or a portion of compensation
earned for services as a director. Any amount deferred is valued, in accordance
with the director's election, in a hypothetical investment in Common Stock
("Stock Credits") or in one or more of seven mutual funds in the Vanguard Group.
Stock Credits fluctuate in value as the value of the Common Stock fluctuates. In
addition, to more closely align directors' interests with those of the Company's
shareholders, nonemployee directors who are elected after December 3, 1997, and
then-current nonemployee directors, except Mr. Dunnigan, who chose prior to May
6, 1998, to convert the accrued cash value of their benefit under the Thomas &
Betts Retirement Plan for Nonemployee Directors to Stock Credits, receive an
annual grant of Stock Credits having a value of $7,500 as of the last day of the
Board year. Additional Stock Credits are credited as dividend equivalents on the
payment date and at the same value as dividends declared on the Common Stock.
Stock Credits are distributed in shares of Common Stock and mutual fund accounts
are distributed in cash upon a director's termination of service.
THE RETIREMENT PLAN FOR NONEMPLOYEE DIRECTORS was closed to new participants
on December 3, 1997. Directors (excluding those who are current or former
employees of the Company and those who chose to convert their accrued benefit to
the Deferred Fee Plan) 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 Company, each nonemployee director who
is a participant in this plan would be fully vested in the maximum retirement
benefit.
THE RESTRICTED STOCK PLAN FOR NONEMPLOYEE DIRECTORS provides that each
nonemployee director who is elected or re-elected 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 the
director's termination of service as a director. Mr. Dunnigan does not
participate in the plan in accordance with the terms of his agreement with the
Company.
7
<PAGE>
TRANSACTIONS WITH NONEMPLOYEE DIRECTORS
The Company entered into an agreement with Mr. 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
Company. In recognition of Mr. Dunnigan's long and valued service to the
Company, including 12 years as Chief Executive Officer, the Agreement provided
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 to be distributed in three
substantially equal installments on May 7, 1998, May 7, 1999 and May 7, 2000,
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 Company for
the entire fiscal year 1997; and retirement benefits under the Executive
Retirement Plan, described on page 11, attributable to a retirement age of 60.
The Agreement further provides for Mr. Dunnigan's post-retirement service as
Chairman of the Board for a term ending May 3, 2000 at an annual rate of no less
than $500,000 per year and perquisites consisting of membership fees in a golf
club in Memphis, Tennessee, that is used in part for Company business, and an
automobile allowance. Mr. Dunnigan has undertaken to devote his knowledge,
skill, attention and energies to the performance of the duties of Chairman of
the Board, to perform projects that are assigned by the Board or requested by
the Chief Executive Officer, and to refrain from engaging in any business,
service or employment without the prior consent of the Board. No other fees,
stock awards, retirement benefits or other compensation will be paid to Mr.
Dunnigan for serving as a member of the Board or any committee of the Board
during the term of the Agreement. The change-of-control provisions described on
page 12 also apply to this Agreement.
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The following table shows,
for the fiscal years ended January 3, 1999, December 28, 1997 and December 29,
1996, the cash compensation paid by the Company as well as other compensation
paid for those years to the Named Executives Officers in all capacities in which
they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION ----------------------------
--------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND COMPENSATION AWARDS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) ($)(1) GRANTED(#) ($)(2)
- ------------------------ --------- ---------- ---------- --------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Clyde R. Moore.......... 1998 654,000 207,514 -- 670,806 25,088 46,031
President and Chief 1997 600,000 537,000 -- 644,663 126,170 38,330
Executive Officer 1996 460,000 388,010 196,597(3) 308,055 24,284 30,511
Gary R. Stevenson....... 1998 275,000 61,080 -- 229,064 8,567 17,549
President-Operations/ 1997 257,000 161,011 -- 200,110 8,124 15,765
Administration Group 1996 217,300 109,976 -- 153,449 7,382 13,729
Fred R. Jones........... 1998 261,000 57,971 -- 208,258 7,788 20,356
Vice President-Chief 1997 244,000 152,866 -- 181,948 7,385 19,378
Financial Officer 1996 205,000 121,042 55,092(4) 183,089 8,810 14,095
T. Roy Burton........... 1998 273,000 15,015 -- 229,064 8,567 10,953
President-Electronics/ 1997 255,000 151,674 -- 200,110 8,124 10,394
OEM Group 1996 209,504 109,047 -- 139,478 6,712 11,294
W. Neil Parker.......... 1998 250,000 34,275 -- 208,258 7,788 20,420
President-Electrical 1997 220,000 95,524 -- 152,485 6,189 18,374
Components Group 1996 194,558 104,065 -- 100,267 4,826 6,908
</TABLE>
- ------------------------
8
<PAGE>
(1) Fair market value (the average of the high and low stock prices for the day)
of shares awarded on the date of grant. 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 3, 1999, based on the closing market price of the
Common Stock on December 31, 1998 of $43.3125, are as follows:
<TABLE>
<S> <C> <C>
C.R. Moore............................................... 27,600 $1,195,425
G.R. Stevenson........................................... 8,987 389,249
F.R. Jones............................................... 8,171 353,906
T.R. Burton.............................................. 8,987 389,249
W.N. Parker.............................................. 7,527 326,013
</TABLE>
(2) The amounts reported in 1998 for C.R. Moore, G.R. Stevenson, F.R. Jones,
T.R. Burton and W.N. Parker include matching contributions by the Company to
a 401(k) plan in the amounts of $6,810, $5,852, $6,941, $5,845 and $6,642,
respectively; matching contributions by the Company to a nonqualified
savings plan in the amounts of $31,837, $8,084, $7,238, $0 and $5,021,
respectively; and premiums paid by the Company in the amounts of $7,384,
$3,612, $6,177, $5,107 and $8,757, 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 1997 for C.R. Moore, G.R. Stevenson,
F.R. Jones, T.R. Burton and W.N. Parker include matching contributions by
the Company to a 401(k) plan in the amounts of $5,836, $6,325, $6,400,
$5,530 and $6,304, respectively; matching contributions by the Company to a
nonqualified savings plan in the amounts of $25,461, $6,000, $5,904, $0 and
$3,730, respectively; and premiums paid by the Company in the amounts of
$7,033, $3,440, $7,086, $4,864 and $8,340, respectively, for Life Insurance.
The amounts reported in 1996 for C.R. Moore, G.R. Stevenson, F.R. Jones,
T.R. Burton and W.N. Parker include matching contributions by the Company to
a 401(k) plan in the amounts of $6,347, $6,462, $5,155, $6,303 and $6,223,
respectively; matching contributions by the Company to a nonqualified
savings plan in the amounts of $17,466, $3,990, $3,175, $358 and $685,
respectively; and premiums paid by the Company in the amounts of $6,698,
$3,277, $5,765, $4,633 and $0, respectively, for Life Insurance.
(3) Cash payments of federal withholding taxes equal to the fair market value on
the date of award of the number of shares of Common Stock that C.R. Moore
elected to forgo in favor of tax payments.
(4) Relocation expenses paid to or on behalf of F.R. Jones.
STOCK OPTION GRANTS. The following table contains information concerning
the grant of stock options under the Company's 1993 Management Stock Ownership
Plan to the Named Executive Officers during the last fiscal year.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% ($) 10% ($)
- ----------------------------- --------------- ------------------- ------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
C.R. Moore................... 25,088 5.32 49.66 02-04-08 783,462 1,985,446
G.R. Stevenson............... 8,567 1.82 49.66 02-04-08 267,535 677,986
F.R. Jones................... 7,788 1.65 49.66 02-04-08 243,208 616,337
T.R. Burton.................. 8,567 1.82 49.66 02-04-08 267,535 677,986
W.N.Parker................... 7,788 1.65 49.66 02-04-08 243,208 616,337
</TABLE>
- ------------------------
(1) Options become exercisable in three equal annual installments beginning
February 4, 1999.
(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 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 forecasts of the value of the Common Stock.
STOCK OPTION EXERCISES. The following table sets forth information with
respect to the Named Executive Officers 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/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/ SARS AT
SHARES OPTIONS/SARS AT
ACQUIRED ON VALUE FISCAL YEAR END(#) FISCAL YEAR END($)(2)
EXERCISE REALIZED ----------------------------- -----------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------- ------------- --------- ------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
C.R. Moore...................... 33,000 905,251 133,101 117,301 862,157 37,697
G.R. Stevenson.................. -- -- 39,378 16,445 363,587 11,464
F.R. Jones...................... -- -- 18,334 15,649 122,342 13,580
T.R. Burton..................... -- -- 27,672 16,221 237,169 10,421
W.N. Parker..................... -- -- 24,081 13,522 214,265 7,487
</TABLE>
- ------------------------
(1) Fair market value on the date of exercise of shares covered by options
exercised, less exercise price.
(2) Fair market value of in-the-money option shares on December 31, 1998
($43.25), less option exercise price. These values have not been realized
and no assurance can be given that these values will be realized.
10
<PAGE>
- --------------------------------------------------------------------------------
PENSION PLAN TABLE
- --------------------------------------------------------------------------------
The following table shows the estimated annual retirement benefit payable to
the Named Executive Officers under The Thomas & Betts Pension Plan, The Thomas &
Betts Pension Restoration Plan and the Thomas & Betts Corporation Executive
Retirement Plan, prior to offset by the amounts described below, assuming they
retire at age 65 with the indicated levels of remuneration and years of credited
service classifications.
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REMUNERATION($) 5 10 15 20 25 30 35
- ---------------- --------- --------- --------- --------- --------- --------- ---------
200,000 15,000 30,000 45,000 100,000 115,000 130,000 145,000
300,000 22,500 45,000 67,500 150,000 172,500 195,000 217,500
400,000 30,000 60,000 90,000 200,000 230,000 260,000 290,000
500,000 37,500 75,000 112,500 250,000 287,500 325,000 362,500
600,000 45,000 90,000 135,000 300,000 345,000 390,000 435,000
700,000 52,500 105,000 157,500 350,000 402,500 455,000 507,500
800,000 60,000 120,000 180,000 400,000 460,000 520,000 580,000
900,000 67,500 135,000 202,500 450,000 517,500 585,000 652,500
1,000,000 75,000 150,000 225,000 500,000 575,000 650,000 725,000
</TABLE>
An executive is not eligible to receive a benefit under the Executive
Retirement Plan unless he or she has completed at least 20 years of credited
service. Therefore, the benefit under the 5, 10 and 15 years of service columns
represents the aggregate benefit payable under the Pension Plan and the Pension
Restoration Plan. The benefit under the columns for 20 or more years of service
represents the aggregate benefit payable under the Pension Plan, the Pension
Restoration Plan and the Executive Retirement Plan.
The remuneration specified in the 5, 10 and 15 years of service columns of
the Pension Plan Table includes salary as reported in the Summary Compensation
Table and 60% of the bonus reported in Summary Compensation Table. The
remuneration specified in the columns of the Pension Plan Table for 20 or more
years of service includes salary and bonus as reported in the Summary
Compensation Table. Because the remuneration in the Pension Plan Table is the
annualized average during the 60 consecutive month period which produces the
highest average for the participant, the remuneration differs from the amount
reported in the Summary Compensation Table. Each Named Executive Officer's
current covered compensation is stated below together with his years of credited
service.
<TABLE>
<CAPTION>
CURRENT COVERED CURRENT COVERED
COMPENSATION FOR COMPENSATION FOR
PURPOSES OF 5, 10, AND 15 PURPOSES OF 20 AND
YEARS OF SERVICE MORE YEARS OF YEARS OF CREDITED
NAME COLUMNS SERVICE COLUMNS SERVICE
- ------------------------------------- ---------------------------------- ------------------- ---------------------
<S> <C> <C> <C>
C. R. Moore.......................... $ 676,342 $ 799,770 14
G. R. Stevenson...................... 282,649 319,493 13
F. R. Jones.......................... 300,872 343,675 4
T. R. Burton......................... 274,881 307,995 5
W. N. Parker......................... 277,377 314,616 7
</TABLE>
Retirement benefits shown in the Pension Plan Table have been computed on a
10-year certain and life annuity basis and are subject to offset as follows: (1)
benefits under the 5, 10 and 15 years of service columns are offset by 7%, 14%,
and 21%, respectively, of the participant's primary Social Security
11
<PAGE>
benefit; and (2) benefits under the 20 or more years of service columns are
offset by matching contributions made by the Corporation to the participant's
account in the Employees' Investment Plan (as annuitized), 50% of the
participant's primary Social Security benefit and benefits payable under certain
prior employer's retirement programs.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-OF-CONTROL
ARRANGEMENTS FOR EXECUTIVES. The Company has an agreement with each of the
Named Executive Officers providing for continuation of employment for a term of
three years following any change of control of the Company. 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 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 Company 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 lapse of restrictions on restricted stock awards if the
person's employment is terminated following a change of control.
Generally, a "change of control" will 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, as amended, becomes the beneficial owner of 25%
or more of the outstanding voting securities of the Company or (ii) a majority
of the Board ceases for any reason to be members of the "Incumbent Board." The
Incumbent Board means a director who was a director of the Company 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.
- --------------------------------------------------------------------------------
HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
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 Company, and to attract,
motivate, and retain key executives.
(a) PAY POSITIONING: The Company 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 Old and New Thomas &
Betts Peer Group 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.
(b) PAY MIX: Like total direct compensation, each component is
positioned at the median of general industry companies.
12
<PAGE>
(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 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 1998 was below the targeted level.
(ii) ANNUAL INCENTIVE: Annual incentives are based upon actual
performance compared to established corporate and operating group
performance goals. Annual incentives range between 30% and 50% 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 1998 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 below the mid-point of the
performance range, resulting in a combined payout below mid-point to
these executives. For the group executive officers named in the Summary
Compensation Table, the annual incentive payment for 1998 was based on
corporate ROE (12 1/2% weighting), EPS (12 1/2%), and the performance of
that officer's group on income (50%) and cash flow (25%). As a group, the
average of the executive officers' incentive payments for fiscal year
1998 was 22% 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. For executive officers, the expected
value of grants ranges from approximately 52% to 180% 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 1998 was
137% 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.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Moore's 1998 base salary was $654,000, which was 9% over the prior year.
This placed his base salary below the median of salaries paid to chief executive
officers in general industry companies of comparable size. The committee based
this increase on the performance of the Company and comparability with other
positions within general industry at the 50th percentile.
Mr. Moore's target annual incentive was 50% of base salary in 1998, and the
maximum incentive was 100% of base salary. The Company's 1998 return on equity,
before special charges, was 15.5%, which was above the mid-point of the
performance range, and earnings per share was below the mid-point of the
performance range, which together resulted in Mr. Moore receiving an annual
incentive of $207,514. Mr. Moore was granted a stock option for 25,088 shares
and a restricted stock award for 13,509 shares. As in previous years, the
committee targeted the expected value of the stock option and restricted stock
awards to Mr. Moore to be at the 50th percentile of general industry according
to a mix predetermined by the committee.
13
<PAGE>
POLICY REGARDING EXECUTIVE COMPENSATION DEDUCTIBILITY
The Company'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 Company's policy to take all reasonable
action to maximize the deductibility of such compensation. For that reason, the
Executive Incentive Plan, last approved by the shareholders in 1994, is being
submitted to shareholders for re-approval this year so that payments under the
plan will continue to qualify as performance-based compensation that is not
subject to a limit on deductibility. (See discussion under the heading PROPOSAL
NO. 2, APPROVAL OF THE THOMAS & BETTS CORPORATION EXECUTIVE INCENTIVE PLAN, AS
AMENDED.)
The 1993 Management Stock Ownership Plan ("MSOP") was approved by the
shareholders, and stock options granted under the MSOP qualify as
performance-based compensation that is not subject to a limit on deductibility.
Base salary and the value of restricted stock awards do not qualify as
performance-based compensation under 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.
<TABLE>
<S> <C> <C>
William H. Waltrip, Chairman Robert A. Kenkel
Ronald B. Kalich Sr. Jerre L. Stead
February 3, 1999
</TABLE>
- --------------------------------------------------------------------------------
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, 1998 of Standard &
Poor's ("S&P") 500 Stock Index, and a Thomas & Betts self-constructed peer group
index ("Old Thomas & Betts Peer Group Index") and a new Thomas & Betts'
self-constructed peer group index ("New Thomas & Betts Peer Group Index").
Thomas & Betts chose to replace the Old Thomas & Betts Peer Group Index with the
New Thomas & Betts Peer Group Index due to the completed or pending acquisitions
of three of the nine companies constituting the old Thomas & Betts Peer Group
Index.
The shareholder returns in each case have been calculated using the calendar
year rather than the Company's fiscal year.
The Old Thomas & Betts Peer Group Index and the New Thomas & Betts Peer
Group Index consist of companies whose businesses are representative of the
Company's business segments. The companies in the Old Thomas & Betts Peer Group
Index are: AMP Incorporated (pending acquisition by Tyco International Ltd.),
Berg Electronics Corp. (until the time it was acquired by Framatome Connectors
International), Cooper Industries, Inc., Emerson Electric Co., W.W. Grainger,
Inc., General Signal Corporation (until the time it was acquired by SPX
Corporation), Hubbell Incorporated--Class B, Molex Incorporated and Robinson
Nugent, Inc. The companies in the New Thomas & Betts Peer Group Index are:
Cooper Industries, Inc., Emerson Electric Co., W.W. Grainger, Inc., Hubbell
Incorporated--Class B, Molex Incorporated, Robinson Nugent, Inc., Avnet Inc.,
Benchmark Electronics Inc., Commonscope Inc. (effective as of its public
offering in the fourth quarter of 1997), Kent Electronics Corp., Magnetek Inc.,
Methode Electronics (Class A), Oak Industries Inc. and Raychem Corp.
14
<PAGE>
Both the Old Thomas & Betts Peer Group Index and the New Thomas & Betts Peer
Group Index have 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 quarter of each of the five years
covered by the performance graph. The weighted return for each quarter was
calculated by summing the products obtained by multiplying (i) the percentage
that each company's market capitalization represents the total market
capitalization for all companies in each index for each such quarter by (ii) the
total shareholder return for that company for each such quarter.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
<S> <C> <C>
BASED UPON AN INITIAL INVESTMENT OF $100 ON DECEMBER 31, 1993
WITH DIVIDENDS REINVESTED
Thomas & Betts Corporation S&P 500(R)
Dec-93 $100 $100
Dec-94 $119 $101
Dec-95 $135 $139
Dec-96 $167 $171
Dec-97 $182 $229
Dec-98 $171 $294
<CAPTION>
CUMULATIVE TOTAL RETURN
<S> <C>
BASED UPON AN INITIAL INVESTMENT OF $100 ON DECEMBER 31, 1993
WITH DIVIDENDS REINVESTED
Old T&B Peer Group Index (9 Company)
Dec-93 $100
Dec-94 $103
Dec-95 $125
Dec-96 $148
Dec-97 $176
Dec-98 $192
<CAPTION>
CUMULATIVE TOTAL RETURN
BASED UPON AN INITIAL INVESTMENT OF $100 ON DECEMBER 31, 1993
WITH DIVIDENDS REINVESTED
New T&B Peer Group Index (14 Company)
Dec-93 $100
Dec-94 $100
Dec-95 $127
Dec-96 $158
Dec-97 $187
Dec-98 $190
</TABLE>
The 9-Company Old T&B Peer Group Index consists of AMP Incorporated, Berg
Electronics Corp. (second quarter of 1996 through third quarter of 1998), Cooper
Industries, Inc., Emerson Electric Corp., W.W. Grainger, Inc., General Signal
Corp. (through the third quarter of 1998), Hubbell Inc. (Class B), Molex Inc.
and Robinson Nugent Inc.
The 14-Company New T&B Peer Group Index consists of Avnet Inc., Benchmark
Electronics Inc., Commscope Inc. (beginning with the fourth quarter of 1997),
Cooper Industries Inc., Emerson Electric Co., W.W. Grainger Inc., Hubbell Inc.
(B Shares), Kent Electronics Corp., Magnetek Inc., Methode Electronics (Class
A), Molex Inc., Oak Industries Inc., Raychem Corp. and Robinson Nugent Inc.
15
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL NO. 1
ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
The Board of Directors currently consists of 12 members. Eleven are
independent directors and one is a member of management. At the Annual Meeting
11 directors are to be elected, each to hold office for the term of one year and
until a successor is elected and qualified. The 11 nominees identified below
were recommended by the Corporate Governance Committee and are all currently
Board members. 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. A proxy cannot be voted for a greater number of persons than
the 11 nominees named below. Directors are elected by a plurality of the votes
cast. 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 will 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 and employment during
the past five years of each director nominee, positions and offices with the
Company, and membership on other boards of directors.
<TABLE>
<S> <C>
ERNEST H. DREW, 61
[PHOTO1] DIRECTOR SINCE 1989
Private investor (1998 to present). Chief Executive Officer (July to
December 1997) of Industries and Technology Group (power generation,
commercial nuclear power, governmental and environmental services,
transport temperature control and process control systems),
Westinghouse Electric Corporation. Member of the Board of Management
(1995 to 1997) of Hoechst A.G. (chemicals, pharmaceuticals, fibers and
plastics). Chairman (1994 to 1995), Chief Executive Officer (1988 to
1995) of Hoechst Celanese Corporation. Director of Ashland, Inc.,
Johns-Manville Corporation and Public Service Enterprise Group
Incorporated.
T. KEVIN DUNNIGAN, 61
[PHOTO2] DIRECTOR SINCE 1975
Chairman of the Board (1992 to present), Chief Executive Officer (1985
to 1997), President (1980 to 1994), Chief Operating Officer (1980 to
1985), Executive Vice President-Electrical (1978 to 1980), Vice
President-T&B/ Thomas & Betts (1976 to 1978), President of The Thomas
& Betts Co. Division (1974 to 1976) of the Company. Director of C. R.
Bard, Inc.
</TABLE>
16
<PAGE>
<TABLE>
<S> <C>
JEANANNE K. HAUSWALD, 54
[PHOTO3] DIRECTOR SINCE 1993
Managing Director (September 1998 to present) of Solo Management
Group, LLC (corporate financial and investment management
consultants). Vice President and Treasurer (1993 to 1998) and Vice
President-Human Resources (1989 to 1993) of The Seagram Company Ltd.
(beverages and entertainment/communications). Member of the Advisory
Board of DSFX International L.L.C.
RONALD B. KALICH SR., 51
[PHOTO4] DIRECTOR SINCE 1998
Group President (1993 to present) in The Marmon Group, Inc. (a
worldwide affiliation of independent manufacturing and service
companies) and President and Chief Executive Officer (1994 to present)
of Getz Bros. & Co., Inc. (marketing and distribution of medical
devices, pharmaceuticals, industrial equipment, specialty chemicals
and consumer goods). Director of The Carbide/Graphite Group, Inc. and
National-Standard Company.
ROBERT A. KENKEL, 64
[PHOTO5] DIRECTOR SINCE 1994
Private investor (1996 to present). Business consultant (1990 to
1996). Chairman, Chief Executive Officer and Chief Operating Officer
(1988 to 1990) of The Pullman Co. (automotive, aerospace and
industrial components and products).
KENNETH R. MASTERSON, 55
[PHOTO6] DIRECTOR SINCE 1995
Executive Vice President, General Counsel and Secretary (January 1998
to present) of FDX Corporation (transportation services). Executive
Vice President, General Counsel and Secretary (1996 to 1998), Senior
Vice President, General Counsel and Secretary (1993 to 1996) of
Federal Express Corporation (worldwide express delivery services).
Director of Accredo Health, Incorporated and Nova Holdings, Inc.
THOMAS C. MCDERMOTT, 62
[PHOTO7] DIRECTOR SINCE 1996
Chairman and Manager (August 1998 to present) of Forbes Products,
L.L.C. (custom vinyl business products). Chairman (1995 to 1997),
Chief Executive Officer and President (1994 to 1997) of Goulds Pumps,
Incorporated (centrifugal pumps for industrial, domestic and
agricultural markets). Director of Canandaigua Brands, Inc.
</TABLE>
17
<PAGE>
<TABLE>
<S> <C>
CLYDE R. MOORE, 45
[PHOTO8] DIRECTOR SINCE 1993
Chief Executive Officer (1997 to present), President (1994 to
present), Chief Operating Officer (1994 to 1997), and
President-Electrical Division (1992 to 1994) of the Company. President
and Chief Operating Officer (1990 to 1992) of FL Industries, Inc.
(electrical components) and President (1985 to 1992) of its American
Electric Division prior to its acquisition by the Company. Director of
The Kroger Company.
JEAN-PAUL RICHARD, 56
[PHOTO9] DIRECTOR SINCE 1996
Chairman and Chief Executive Officer (March 1998 to present) of PRO
MACH, Inc. (industrial food processing and packaging equipment).
Private investor (September 1997 to March 1998). President and Chief
Executive Officer (1996 to September 1997) of AGCO Corporation
(agricultural equipment). 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).
JERRE L. STEAD, 56
[PHOTO10] DIRECTOR SINCE 1998
Chairman and Chief Executive Officer (1996 to present) of Ingram Micro
Inc. (distributor of technology products and services). Chairman and
Chief Executive Officer (January to September 1995) of Legent
Corporation (software products and related services). Executive Vice
President (1993 to 1995) of AT&T Corporation (communication services).
Chairman and Chief Executive Officer (1993 to 1995) of AT&T Global
Information Solutions (formerly NCR) (computing and communications).
Director of Armstrong World Industries, Inc. and Conexant Systems,
Inc.
WILLIAM H. WALTRIP, 61
[PHOTO11] DIRECTOR SINCE 1983
Chairman (1993 to present) and Chief Executive Officer (1993 to 1995)
of Technology Solutions Company (services and resources to design,
develop and implement large-scale computer systems). Chairman (1996 to
1998) and Chief Executive Officer (January to December 1996) of Bausch
& Lomb Incorporated (contact lens, lens-care and eyewear products).
Director of Bausch & Lomb Incorporated, Teachers Insurance and Annuity
Association, and Technology Solutions Company.
</TABLE>
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
18
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL NO. 2
APPROVAL OF THE THOMAS & BETTS CORPORATION
EXECUTIVE INCENTIVE PLAN, AS AMENDED
- --------------------------------------------------------------------------------
The Board recommends that shareholders approve the Thomas & Betts
Corporation Executive Incentive Plan, as amended (the "Plan"), so that awards
under the Plan will continue to qualify as performance-based compensation not
subject to a limit on deductibility. The Plan was last approved by the
shareholders on May 5, 1994. Certain amendments to the Plan were adopted by the
Board on February 3, 1999 to add new performance criteria, increase the maximum
award payable to any participant under the Plan, provide for payment of awards
in stock or a combination of cash and stock, and to make wording changes to
reflect the Company's current organizational structure.
The Plan is intended to continue the Company's long-standing policy of
providing key employees, who are in a position to contribute materially to the
success of the Company and its subsidiaries, with an opportunity to receive an
annual incentive bonus based on the achievement of objective, pre-established
criteria and performance targets as approved by the Human Resources Committee
(the "Committee"). If approved, the Plan, as amended, would become effective on
May 5, 1999, and continue until terminated by the Board.
The following summary of the Plan 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 group, division or
subsidiary officers as may be designated by the Committee. It provides for
annual cash awards based on the extent to which corporate, group, division and
subsidiary performance targets are achieved in the preceding year. Nine
employees are currently eligible to participate in the Plan. The Committee
determines which employees may participate in the Plan on an annual basis.
The cash incentive bonus payable to participants under the Plan 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 the participant's salary by the specified percentage to
determine his or her target incentive amount ("Target Award");
(c) determining the extent of achievement of the pre-established performance
goals, expressed as a percentage of the range for each criterion,
weighted by the relative importance of each performance goal for the
participant as determined by the Committee; and
(d) multiplying the Target Award by the weighted average percentage
representing the extent to which the performance criteria were achieved.
The award payable to any participant will vary from the Target Award,
depending upon whether, or the extent to which, performance targets were
achieved. The Plan is not funded.
Performance criteria and their weightings are 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 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 Company and its shareholders. Awards will be paid in cash as soon as
practicable after the close of the
19
<PAGE>
year for which they are earned. No award will be payable to any participant who
is not an employee at the time incentives are paid, 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 1999 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 any
year is $2 million.
NEW PLAN BENEFITS
EXECUTIVE INCENTIVE PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE
NAME AND POSITION ($)
- ----------------------------------------------------------------------------- ---------------
<S> <C>
C.R. Moore .................................................................. 207,514
President and Chief Executive Officer
G.R. Stevenson .............................................................. 61,080
President-Operations/Administration Group
F.R. Jones .................................................................. 57,971
Vice President--Chief Financial Officer
T.R. Burton ................................................................. 15,015
President-Electronics/OEM Group
W.N. Parker ................................................................. 34,275
President-Electrical Components Group
All current executive officers as a group.................................... 469,184
All employees, including current officers who are not executive officers, as
a group.................................................................... 137,168
</TABLE>
The Board may from time to time suspend or discontinue the Plan or revise,
amend or terminate the Plan. As stated in the Human Resources Committee Report
on Executive Compensation, it is the Company's policy to take all reasonable
action to maximize the deductibility of all performance-based compensation.
Therefore, the Board recommends that the Plan, as amended, be approved by the
shareholders.
Approval of the Plan 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.
- --------------------------------------------------------------------------------
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
The independent public accounting firm for the Company in fiscal year 1998
was KPMG LLP ("KPMG"). 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 Company for the fiscal year 1999 and
until the 2000 annual meeting of shareholders. KPMG has audited the Company's
financial statements annually since 1969, is considered to be well qualified,
and has no financial interest,
20
<PAGE>
direct or indirect, in the Company or any subsidiary of the Company. If the
shareholders do not ratify this appointment, the Audit Committee and the Board
will consider the appointment of another independent public accounting firm.
Representatives of KPMG 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 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.
- --------------------------------------------------------------------------------
DEADLINES FOR SUBMISSION OF
PROXY PROPOSALS, NOMINATION OF DIRECTORS AND OTHER BUSINESS.
- --------------------------------------------------------------------------------
PROXY STATEMENT PROPOSALS. Shareholder proposals intended to be included in
the Proxy Statement and form of proxy for the Annual Meeting of Shareholders to
be held in 2000, in addition to meeting certain eligibility requirements
established by the Securities and Exchange Commission, must be in writing and
received by the Secretary at the Company's principal executive offices on or
prior to November 23, 1999. 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.
NOMINATION OF DIRECTORS AND OTHER BUSINESS FOR PRESENTATION AT THE ANNUAL
MEETING. Shareholders who wish to present director nominations or other
business at the annual meeting of shareholders to be held in 2000 must give
notice to the Secretary at the Company's principal executive offices on or prior
to January 6, 2000. The Company's Bylaws specify the information to be included
in this shareholder's notice. A shareholder may obtain a copy of the Bylaws by
making a written request to the Secretary.
By Order of the Board of Directors,
[SIG]
JERRY KRONENBERG, SECRETARY
Memphis, Tennessee
March 22, 1999
21
<PAGE>
EXHIBIT A
THOMAS & BETTS CORPORATION
EXECUTIVE INCENTIVE PLAN
(AMENDED AND RESTATED EFFECTIVE MAY 5, 1999)
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, group, division or
Subsidiary performance from one or more of the following:
(i) Corporate, group, division or Subsidiary sales;
A-1
<PAGE>
(ii) Corporate, group, division or Subsidiary return on
sales--operating profit divided by sales;
(iii) Corporate, group, division or Subsidiary economic value added,
net operating profit after taxes, return on net assets or return on
capital;
(iv) Cash flow-corporate--the change in the Corporation's net
invested position;
(v) Cash flow group, division or Subsidiary--group, division or
Subsidiary contribution adjusted for certain changes in balance sheet
accounts;
(vi) Earnings per share;
(vii) Productivity--standard direct labor hours divided by direct and
indirect labor hours incurred;
(viii) Quality--demerits per thousand pieces audited;
(ix) Group, division or Subsidiary operating profit or contribution
income;
(x) Investment turnover--net sales divided by certain assets, e.g.
net receivables and inventory, less certain liabilities, e.g. accounts
payable and accrued liabilities;
(xi) Return on equity--net income of the Corporation divided by
average shareholders' equity;
(xii) Net asset investment--certain assets, e.g. accounts receivable
and goodwill, less certain liabilities, e.g. accounts payable and
dividends payable, divided by sales;
(xiii) Inventory turns; and
(ix) 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, within 90 days of
the beginning of the fiscal year to which the Performance Criterion relates.
(l) "Maximum Award" 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 group, 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.
A-2
<PAGE>
(c) PERFORMANCE TARGET. One or more Performance Targets will be
established by the Committee for each Performance Criterion selected for each
year.
(d) PERFORMANCE ADJUSTMENT. The Award payable to any Participant will vary
from the Target Award 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 range for each Performance Criterion that correlates the
percentage of Target Award to specified levels of Corporation, group,
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, group, division or Subsidiary Performance Adjustments,
respectively.
(iii) Maximum Award. The maximum award payable to any Participant in
any year is $2.0 million, anything in this Plan to the contrary
notwithstanding.
(e) PAYMENT OF AWARDS. Awards will be paid in cash, stock, or a
combination of cash and stock 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 group, 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.
(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
A-4
<PAGE>
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 a Subsidiary, 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 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. Effective as of May 5, 1994, the Board approved and
adopted the Plan. The Plan, as amended and restated, shall be effective as of
May 5, 1999 and, as further amended, from time to time thereafter.
A-5
<PAGE>
/X/ Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3.
FOR WITHHELD
1. Election of / / / / Nominees: 01 E.H. Drew, 02 T.K. Dunnigan,
Directors. 03 J.K. Hauswald, 04 R.B. Kalich Sr.,
05 R.A. Kenkel, 06 K.R. Masterson, 07 T.C.
McDermott, 08 C.R. Moore, 09 J.P. Richard,
10 J.L. Stead, 11 W.H. Waltrip
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve the Thomas & Betts Corporation
Executive Incentive Plan, as amended. / / / / / /
3. Ratification of Appointment of Independent
Public Accountants. / / / / / /
Discontinue future mailing of duplicate Annual Reports. / /
Check box for change of address. / /
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- ----------------------------------------------------
- ----------------------------------------------------
SIGNATURE(S) DATE
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
Thomas & Betts Corporation encourages you to take advantage of two new
cost-effective and convenient ways to vote your shares.
You may now vote your proxy 24 hours a day, 7 days a week, using either a
touch-tone telephone or over the Internet. Your telephone or Internet vote
must be received by 12:00 midnight New York time on May 4, 1999. Your
telephone or Internet vote authorizes the Proxies named on the above proxy
card to vote your shares in the same manner as if you marked, signed and
returned your proxy card.
VOTE BY PHONE: ON A TOUCH-TONE TELEPHONE, DIAL 1-800-652-8683 FROM
THE U.S. AND CANADA OR DIAL 001-1-201-324-0377 FROM
OTHER COUNTRIES. You will be asked to enter the Voter
Control Number located in the box just below the
perforation on the proxy card. Then follow the
instructions.
OR
VOTE BY INTERNET: POINT YOUR BROWSER TO THE WEB ADDRESS:
http://www.vote-by-net.com
Click on the "PROXY VOTING" icon. You will be asked
to enter the Voter Control Number located in the box
just below the perforation on the proxy card. Then
follow the instructions.
OR
VOTE BY MAIL: Mark, sign and date your proxy card and return it in
the envelope provided. If you are voting by telephone
or the Internet, please do not mail your proxy card.
<PAGE>
THOMAS & BETTS CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS--MAY 5, 1999--10:00 A.M.
WINEGARDNER AUDITORIUM, DIXON GALLERY AND GARDENS
4339 PARK AVENUE, MEMPHIS, TENNESSEE
YOUR SHARES WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS UNLESS YOU
INDICATE OTHERWISE IN WHICH CASE THEY WILL BE VOTED AS MARKED. THE
UNDERSIGNED HEREBY APPOINTS CLYDE R. MOORE, FRED R. JONES AND JERRY
KRONENBERG 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 8, 1999, AT THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 5, 1999, OR ANY ADJOURNMENT OR POSTPONEMENT.
CHANGE OF ADDRESS:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
THOMAS & BETTS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1999 AT 10:00 A.M.
WINEGARDNER AUDITORIUM
DIXON GALLERY AND GARDENS
4339 PARK AVENUE
MEMPHIS, TENNESSEE
[MAP]
