<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
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
(901) 252-5000
[LOGO]
March 29, 2000
Dear Shareholder:
I invite you to attend our 2000 Annual Meeting of Shareholders on
Wednesday, May 3, 2000. 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 1999 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 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 and 2.
Sincerely,
[SIG]
Clyde R. Moore
President and Chief Executive Officer
<PAGE>
[LOGO]
Thomas & Betts Corporation
8155 T&B Boulevard
Memphis, Tennessee 38125
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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<TABLE>
<S> <C> <C>
TIME.............................. 10:00 a.m. on Wednesday, May 3, 2000
PLACE............................. Winegardner Auditorium
The Dixon Gallery and Gardens
4339 Park Avenue
Memphis, Tennessee
ITEMS OF BUSINESS................. (1) Election of 11 directors;
(2) Ratification of the appointment of KPMG LLP as
independent public accountants for fiscal year
2000; and
(3) 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 6, 2000.
ANNUAL REPORT..................... Our 1999 Annual Report to Shareholders for the fiscal year
ended January 2, 2000, 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 1-877-779-8683 from the U.S. and Canada
(this call is free) or 001-1-201-536-8073 from all
other countries to vote by telephone anytime up to
12:00 midnight New York time on May 2, 2000; OR
(2) VISIT THE WEB SITE AT HTTP://WWW.EPROXYVOTE.COM/TNB
to vote over the Internet anytime up to 12:00
midnight New York time on May 2, 2000; 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.
March 29, 2000
</TABLE>
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PLEASE VOTE YOUR SHARES PROMPTLY.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY STATEMENT........................................................... 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
SECURITY OWNERSHIP........................................................ 3
Section 16(a) Beneficial Ownership Reporting Compliance................. 4
BOARD AND COMMITTEE MEMBERSHIP............................................ 5
Board of Directors...................................................... 5
Committees of the Board of Directors.................................... 5
COMPENSATION.............................................................. 8
Director Compensation................................................... 8
Fees.................................................................. 8
Benefit Plans......................................................... 8
Transactions with Nonemployee Directors................................. 9
Legal Proceedings....................................................... 9
Executive Compensation.................................................. 10
Summary of Cash and Certain Other Compensation........................ 10
Stock Option Grants................................................... 11
Stock Option Exercises................................................ 12
Pension Plan Table.................................................... 12
Employment Contracts, Termination of Employment and Change-of-Control
Arrangements for Executives.......................................... 13
Transactions with Management............................................ 13
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION................ 14
Executive Compensation Philosophy....................................... 14
Compensation of the Chief Executive Officer............................. 15
Policy Regarding Executive Compensation Deductibility................... 15
PERFORMANCE GRAPH......................................................... 16
PROPOSAL NO. 1, ELECTION OF DIRECTORS..................................... 17
PROPOSAL NO. 2, RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS............................................................. 20
DEADLINES FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION OF DIRECTORS AND
OTHER BUSINESS.......................................................... 20
Proxy Statement Proposals............................................... 20
Nomination of Directors and Other Business for Presentation at the
Annual Meeting........................................................ 20
Appendix A................................................................ A-1
</TABLE>
<PAGE>
THOMAS & BETTS CORPORATION
8155 T&B Boulevard
Memphis, Tennessee 38125
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PROXY STATEMENT
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These proxy materials are furnished in connection with the solicitation by
the Board of Directors of Thomas & Betts Corporation ("Thomas & Betts," the
"Corporation," "our," "we" or "us"), a Tennessee corporation, of proxies to be
voted at our 2000 Annual Meeting of Shareholders (the "Annual Meeting") or at
any adjournment or postponement.
You are invited to attend our Annual Meeting on May 3, 2000, 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 30, 2000.
Holders of shares of Thomas & Betts Common Stock (the "Common Stock") at the
close of business on March 6, 2000 are entitled to receive notice and to vote
their shares at the Annual Meeting. As of that date, there were 57,934,265
shares of Common Stock outstanding. Each share of Common Stock is entitled to
one vote on each matter properly brought before the Annual Meeting.
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 in person 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 1-877-779-8683 from the U.S. and Canada
(at no cost to you) or 001-1-201-536-8073 from all other countries. 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 annual reports. 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 choose to vote over the Internet. The web site for Internet voting
is http://www.eproxyvote.com/TNB. 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 April 3, 2000, through May 2, 2000,
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 1999 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
Corporation, Investor Relations Department, 8155 T&B Boulevard, Memphis,
Tennessee 38125.
If you own Common Stock through a bank, broker or other nominee and receive
more than one copy of our 1999 Annual Report, contact the holder of record to
eliminate duplicate mailings.
COST OF PROXY SOLICITATION
The Corporation will pay the cost of soliciting proxies for the Annual
Meeting. We have retained Georgeson Shareholder Communications, 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 or by mail, telephone, fax or e-mail. 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.
2
<PAGE>
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SECURITY OWNERSHIP
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The following table shows beneficial ownership of Common Stock (1) as of
March 6, 2000, 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, 1999, 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 6,
NATURE OF 2000 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..................................... 2,400(3) 800 8,242 *
T. Kevin Dunnigan.................................. 157,027(3) 234,686 -- *
Jeananne K. Hauswald............................... 1,534(3) 800 1,047 *
Dean Jernigan...................................... 83(3) 334 -- *
Ronald B. Kalich Sr................................ 400(3) 800 2,651 *
Robert A. Kenkel................................... 2,600(3)(4) 800 1,170 *
Kenneth R. Masterson............................... 1,050(3) 800 897 *
Thomas C. McDermott................................ 1,946(3) 800 -- *
Jean-Paul Richard.................................. 3,050(3) 800 543 *
Jerre L. Stead..................................... 2,400(3) 800 173 *
William H. Waltrip................................. 1,800(3) 800 2,406 *
NAMED EXECUTIVE OFFICERS:
Clyde R. Moore(+).................................. 95,620(3) 253,890 -- *
Gregory M. Langston................................ 21,949(3) 21,292 -- *
Gary R. Stevenson.................................. 34,183(3) 56,487 -- *
Fred R. Jones...................................... 23,219(3) 34,586 -- *
T. Roy Burton...................................... 30,208(3) 44,557 -- *
All directors and executive officers as a group (20
persons)......................................... 453,198 806,731 -- 2.14
BENEFICIAL OWNERS OF MORE THAN 5% OF COMMON STOCK:
Capital Research and Management Company............ 4,770,000(5) -- -- 8.30
Delaware Management Holdings, Inc.................. 4,025,734(6) -- -- 6.96
Merrill Lynch & Co., Inc........................... 4,504,667(7) -- -- 7.79
Sanford C. Bernstein & Co., Inc.................... 2,987,688(8) -- -- 5.20
Wellington Management Company, LLP................. 3,277,972(9) -- -- 5.67
</TABLE>
- ------------------------
+ also serves as a director
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
3
<PAGE>
(1) Stock credits and dividend equivalents 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, 1,600; T.K. Dunnigan, 10,768; J.K. Hauswald, 1,284; D.
Jernigan, 83; R.B. Kalich, 400; R.A. Kenkel, 1,200; K.R. Masterson, 1,050;
T.C. McDermott, 681; J.-P. Richard, 800; J.L. Stead, 400; W.H. Waltrip,
1,600; C.R. Moore, 50,489; G.M. Langston, 15,002: G.R. Stevenson, 15,929;
F.R. Jones, 14,498; and T.R. Burton, 16,495.
(4) Includes 1,000 shares held in a family trust of which Mr. Kenkel and his
wife are co-trustees and with respect to which Mr. Kenkel shares voting and
dispositive power with his wife.
(5) 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.
(6) 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 power as to 3,793,539 shares, sole
dispositive power as to 3,758,234 shares, shared dispositive power as to
267,500 shares and shared voting power as to 194,458 shares.
(7) Merrill Lynch & Co., Inc. (on behalf of Merrill Lynch Asset Management
Group), World Financial Center, North Tower, 250 Vesey Street, New York, New
York 10381, a registered investment advisor, has shared dispositive power
and shared voting power as to all shares.
(8) Sanford C. Bernstein & Co., Inc, 767 Fifth Avenue, New York, New York 10153,
a registered investment advisor and broker dealer, has sole dispositive
power as to all shares, sole voting power as to 1,407,576 shares and shared
voting power as to 196,273 shares.
(9) 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 940,472 shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
On the basis of reports and representations submitted by the directors and
executive officers of the Corporation, all Forms 3, 4 and 5 showing ownership of
and changes in ownership of Common Stock were timely filed with the Securities
and Exchange Commission as required by Section 16(a) of the Securities Exchange
Act of 1934, as amended, except that Gary R. Stevenson, President-Operations/
Administration Group, filed one late Form 5 reporting one transaction.
4
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BOARD AND COMMITTEE MEMBERSHIP
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BOARD OF DIRECTORS
The Board, which is elected by the shareholders, is the ultimate
decision-making body of the Corporation, except for those matters reserved to
the shareholders. The Board establishes broad corporate policy and gives
guidance to the Corporation. It selects the senior management team, which is
charged with the conduct of the Corporation's business. In 1999, there were nine
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 100%
of the meetings of the Board and committees of which they were members.
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 Corporation follows the practice of
periodically rotating the membership of all committees and the chairmanship of
the Audit, Corporate Governance and Human Resources Committees.
<TABLE>
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AUDIT COMMITTEE
MEMBERS: Jeananne K. Hauswald, Chairman, Ronald B. Kalich Sr., Thomas C.
McDermott, Jean-Paul Richard
1999 MEETINGS: Five
</TABLE>
The primary function of the Audit Committee is to protect the interests of
the Corporation's shareholders by assisting senior management and the Board of
Directors in fulfilling its oversight responsibilities related to the
Corporation's corporate accounting and financial reporting practices and the
quality and integrity of the Corporation's financial reports. The Audit
Committee is comprised of independent directors as defined in the rules of the
New York Stock Exchange. All members of the Audit Committee have a working
familiarity with basic finance and accounting practices and are able to read and
understand fundamental financial statements, and at least one member has
accounting or related financial management expertise. Below is a summary of the
Audit Committee duties and responsibilities:
GENERAL
- Review annually its written charter and publish the charter at least every
three years in the Corporation's proxy statement.
- Report its actions and recommendations to the Board.
- Meet in separate executive sessions, without members of management
present, with the independent auditors and with the internal auditors to
discuss matters that it believes should be discussed privately.
- Conduct or authorize investigations into any matters within its scope of
responsibilities.
- Review any new or proposed accounting or auditing standards from the
accounting profession or the Securities and Exchange Commission which are
relevant to the Corporation's accounting and internal controls.
INDEPENDENT AUDITORS
- Recommend the selection of the independent auditors, after duly
considering their independence and effectiveness, and review the fees to
be paid to the independent auditors.
5
<PAGE>
- Instruct the independent auditors that they are accountable to the Board
of Directors and the Audit Committee.
- Consult with the independent auditors about internal controls and the
fullness and accuracy of the financial statements.
- Meet with the independent auditors and financial management of the
Corporation to review the scope of the annual external audit.
- Review the coordination of internal and external audit procedures.
INTERNAL AUDIT
- Review and approve the annual internal audit plan.
- Review the adequacy of internal audit staff in terms of their number and
their qualifications.
- Review a summary of the findings of completed internal audits and a
progress report on executing the approved internal audit plan.
- Inquire of the internal auditors regarding any difficulties encountered in
the course of their audits, including any restrictions on the scope of
their work or access to required information or to the appropriate level
of management authority.
- Review the appointment, performance, independence and, if appropriate, the
replacement of the internal auditors.
FINANCIAL STATEMENTS/INTERNAL CONTROLS
- Inquire regarding the adequacy, scope and effectiveness of accounting and
financial controls and, as warranted, request recommendations for
improvements.
- Review annual financial statements and related notes with management and
the independent auditors and discuss the auditors' judgment about the
quality, not just the acceptability, of the Corporation's accounting
principles as applied to its financial reporting.
- Each year, after review and discussion of the audited financial statements
with management and the independent auditors, recommend to the Board of
Directors whether the financial statements should be included in the
Corporation's Annual Report on Form 10-K.
- Each year, beginning with fiscal year 2000, prepare a report to
shareholders as required by the Securities and Exchange Commission to be
included in the Corporation's annual proxy statement.
- Review the travel and entertainment expenses of all inside directors for
compliance with corporate policy.
A copy of the Audit Committee Charter is attached as Appendix A to this
Proxy Statement.
<TABLE>
<S> <C>
CORPORATE GOVERNANCE COMMITTEE
MEMBERS: Kenneth R. Masterson, Chairman, Ernest H. Drew, T. Kevin
Dunnigan, Clyde R. Moore
1999 MEETINGS: Three
</TABLE>
This committee's principal responsibilities are to:
- review the performance, attendance and maintenance of qualifications of
current members of the Board;
6
<PAGE>
- 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;
- 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 of the Corporation. 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 Corporation's Bylaws require that the nomination
satisfy certain conditions, including, generally, that written notice be
delivered to the Secretary at the Corporation'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
1999 MEETINGS: One; action by unanimous written consent on two occasions
</TABLE>
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.
<TABLE>
<S> <C>
HUMAN RESOURCES COMMITTEE
MEMBERS: William H. Waltrip, Chairman, Robert A. Kenkel, Jerre L. Stead
1999 MEETINGS: Four
</TABLE>
This committee is composed solely of nonemployee directors of the
Corporation whose principal responsibilities are to:
- 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.
7
<PAGE>
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COMPENSATION
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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 Corporation 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
Corporation's shareholders, nonemployee directors who are first elected after
December 3, 1997, and then-current nonemployee directors (except Mr. Dunnigan
who does not currently participate in the Deferred Fee Plan in accordance with
the terms of his agreement with the Corporation) who chose 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. No current directors are eligible to receive a benefit
under this plan.
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 currently
participate in the plan but will become a participant upon his re-election as a
director at the Annual Meeting.
THE NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN provides that each nonemployee
director who is elected or re-elected at the annual meeting of shareholders
receives a nonqualified stock option grant for 800 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 option grant of
a prorated number of shares of Common Stock effective as of the date of
election. The option exercise price is the fair market value (average of the
high and low sales prices of Common Stock as reported on the
8
<PAGE>
New York Stock Exchange Composite Tape) of a share of Common Stock on the date
the option is granted. Each option grant is fully vested and exercisable on the
date it is granted and has a term of ten years, subject to earlier expiration in
the event the director's membership on the Board terminates due to retirement,
disability, death, or for any other reason. Mr. Dunnigan does not currently
participate in this plan but will become a participant upon his re-election as a
director at the Annual Meeting.
TRANSACTIONS WITH NONEMPLOYEE DIRECTORS
The Corporation 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 Corporation. In recognition of Mr. Dunnigan's long and valued service to the
Corporation, 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 vested 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 Corporation for the entire fiscal year 1997; and retirement benefits under
the Executive Retirement Plan, described on page 12, 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 Corporation business, and
an automobile allowance. Mr. Dunnigan has undertaken to devote his knowledge,
skill, attention and energies to the performance of the duties of Chairman of
the Board, to perform projects that are assigned by the Board or requested by
the Chief Executive Officer, and to refrain from engaging in any business,
service or employment without the prior consent of the Board. No other fees,
stock awards, retirement benefits or other compensation 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.
LEGAL PROCEEDINGS
On February 16, 2000, certain shareholders of the Corporation filed a
purported class-action suit in the United States District Court for the Western
District of Tennessee against the Corporation, Clyde R. Moore and Fred R. Jones.
The complaint alleges fraud and violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder. The
plaintiffs allege that purchasers of the Common Stock between April 28, 1999 and
December 14, 1999 were damaged when the market value of the stock dropped by
nearly 29% on December 15, 1999. The plaintiffs allege generally that the
defendants artificially inflated the market value of the Common Stock by a
series of misleading statements or by failing to disclose certain adverse
information. An unspecified amount of damages is sought. At this time, the
Corporation is investigating the allegations, and is unable to predict the
outcome of this litigation and its ultimate effect, if any, on the financial
condition of the Corporation. However, the Corporation believes that there are
meritorious defenses to the claims and intends to vigorously defend against the
allegations. Mr. Moore and Mr. Jones may be entitled to indemnification from the
Corporation.
9
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The following table shows,
for the fiscal years ended January 2, 2000, January 3, 1999 and December 28,
1997, the cash compensation paid by the Corporation as well as other
compensation paid for those years to the Named Executive Officers in all
capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------- ----------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY COMPENSATION AWARDS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) BONUS ($) ($) ($)(1) GRANTED(#) ($)(2)
- -------------------------- --------- --------- --------- --------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Clyde R. Moore............ 1999 685,000 194,006 -- 647,530 35,550 29,412
President and 1998 654,000 207,514 -- 670,806 25,088 46,031
Chief Executive Officer 1997 600,000 537,000 -- 644,663 126,170 38,330
Gregory M. Langston....... 1999 275,000 154,116 -- 213,988 9,596 11,374
Group President- 1998 250,000 13,750 -- 208,258 7,788 10,575
International 1997 220,000 29,542 -- 152,485 6,189 9,616
Gary R. Stevenson......... 1999 300,000 42,483 -- 211,013 10,556 16,440
President-Operations/ 1998 275,000 61,080 -- 229,064 8,567 17,549
Administration Group 1997 257,000 161,011 -- 200,110 8,124 15,765
Fred R. Jones............. 1999 275,000 38,943 -- 192,568 9,596 15,228
Vice President- 1998 261,000 57,971 -- 208,258 7,788 20,356
Chief Financial Officer 1997 244,000 152,866 -- 181,948 7,385 19,378
T. Roy Burton............. 1999 300,000 10,626 -- 235,068 10,556 12,259
President-Electronics/ 1998 273,000 15,015 -- 229,064 8,567 10,953
OEM Group 1997 255,000 151,674 -- 200,110 8,124 10,394
</TABLE>
- ------------------------
(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 2, 2000, based on the closing market price of the
Common Stock on December 31, 1999 of $31.875, are as follows:
<TABLE>
<S> <C> <C>
C.R. Moore............................................... 42,836 $1,365,398
G.M. Langston............................................ 12,562 400,414
G.R. Stevenson........................................... 13,952 444,720
F.R. Jones............................................... 12,702 404,876
T.R. Burton.............................................. 14,518 462,761
</TABLE>
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
10
<PAGE>
(2) The amounts reported in 1999 for C.R. Moore, G.M. Langston, G.R. Stevenson,
F.R. Jones and T.R. Burton include matching contributions by the Corporation
to a 401(k) plan in the amounts of $5,624, $7,243, $8,199, $7,786 and
$6,896, respectively; matching contributions by the Corporation to a
nonqualified savings plan in the amounts of $16,004, zero, $4,447, $956 and
zero, respectively; and premiums paid by the Corporation in the amounts of
$7,753, $4,130, $3,793, $6,485 and $5,362, 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 1998 for C.R. Moore, G.M. Langston, G.R. Stevenson,
F.R. Jones and T.R. Burton include matching contributions by the Corporation
to a 401(k) plan in the amounts of $6,810, $6,642, $5,852, $6,941 and
$5,845, respectively; matching contributions by the Corporation to a
nonqualified savings plan in the amounts of $31,837, zero, $8,084, $7,238
and zero, respectively; and premiums paid by the Corporation in the amounts
of $7,384, $3,933, $3,612, $6,177 and $5,107, respectively, for Life
Insurance.
The amounts reported in 1997 for C.R. Moore, G.M. Langston, G.R. Stevenson,
F.R. Jones and T.R. Burton include matching contributions by the Corporation
to a 401(k) plan in the amounts of $5,836, $5,510, $6,325, $6,400 and
$5,530, respectively; matching contributions by the Corporation to a
nonqualified savings plan in the amounts of $25,461, zero, $6,000, $5,904
and zero, respectively; and premiums paid by the Corporation in the amounts
of $7,033, $4,106, $3,440, $7,086 and $4,864, respectively, for Life
Insurance.
STOCK OPTION GRANTS. The following table contains information concerning
the grant of stock options under the Corporation's 1993 Management Stock
Ownership Plan to the Named Executive Officers during the last fiscal year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% ($) 10% ($)
- ----------------------------- --------------- ------------------- ------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
C.R. Moore................... 35,550 4.52 42.50 02-03-09 950,181 2,407,946
G.M. Langston................ 9,596 1.22 42.50 02-03-09 256,482 649,976
G.R. Stevenson............... 10,556 1.34 42.50 02-03-09 282,141 715,001
F.R. Jones................... 9,596 1.22 42.50 02-03-09 256,482 649,976
T.R. Burton.................. 10,556 1.34 42.50 02-03-09 282,141 715,001
</TABLE>
- ------------------------
(1) Options become exercisable in three equal annual installments beginning
February 3, 2000.
(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.
11
<PAGE>
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
SHARES OPTIONS/SARS AT 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...................... -- -- 191,613 94,339 6,047 0
G.M. Langston................... -- -- 13,434 16,851 0 0
G.R. Stevenson.................. -- -- 47,404 18,975 9,063 0
F.R. Jones...................... -- -- 26,329 17,250 0 0
T.R. Burton..................... -- -- 35,474 18,975 0 0
</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, 1999
($31.78125), less option exercise price. These values have not been realized
and no assurance can be given that these values will be realized.
PENSION PLAN TABLE. The following table shows the estimated annual
retirement benefits payable to the Named Executive Officers under the Thomas &
Betts Pension Plan, the Thomas & Betts Pension Restoration Plan and the
Thomas & Betts Corporation Executive Retirement Plan, prior to offset as
described below, assuming they retire at age 55 (age 50 if employment commenced
prior to December 1, 1997) with the indicated levels of remuneration and years
of credited service classifications.
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REMUNERATION($) 5 10 15 20 25 30 35
-------------- --------- --------- --------- --------- --------- --------- ---------
200,000 25,000 50,000 75,000 100,000 115,000 130,000 145,000
300,000 37,500 75,000 112,500 150,000 172,500 195,000 217,500
400,000 50,000 100,000 150,000 200,000 230,000 260,000 290,000
500,000 62,500 125,000 187,500 250,000 287,500 325,000 362,500
600,000 75,000 150,000 225,000 300,000 345,000 390,000 435,000
700,000 87,500 175,000 262,500 350,000 402,500 455,000 507,500
800,000 100,000 200,000 300,000 400,000 460,000 520,000 580,000
900,000 112,500 225,000 337,500 450,000 517,500 585,000 652,500
1,000,000 125,000 250,000 375,000 500,000 575,000 650,000 725,000
</TABLE>
12
<PAGE>
The remuneration specified in the Pension Plan Table includes salary and
bonus as reported in the Summary Compensation Table. The annual retirement
benefits are based on the annualized average during the 60 consecutive month
period which provides the highest average for the participant. The Named
Executive Officers have the number of years of credited service listed below.
<TABLE>
<CAPTION>
YEARS OF
NAME CREDITED SERVICE
- ---------------------------------------------------------------------------- ---------------------
<S> <C>
C. R. Moore................................................................. 15
G.M. Langston............................................................... 5
G. R. Stevenson............................................................. 14
F. R. Jones................................................................. 5
T. R. Burton................................................................ 6
</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 for benefits
payable under certain prior employer's retirement programs.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-OF-CONTROL
ARRANGEMENTS FOR EXECUTIVES. The Corporation 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 Corporation. Each agreement
provides for compensation to be continued during the three-year term at least at
the same level that existed prior to the time of a change of control, provided
the person continues employment, leaves employment for good reason, or is
terminated without cause. Events that constitute leaving employment for good
reason are: the assignment of duties inconsistent with the person's position;
the diminution of the person's position, authority, duties or responsibilities;
failure to provide compensation or benefits specified in the agreement;
relocation to an office that is 35 miles or more from the location where the
person was employed immediately prior to the change of control; or failure to
require any successor to the Corporation to assume and agree to perform the
agreement.
A person's employment may be terminated for cause, which is an act or acts
of dishonesty intended to result in substantial personal enrichment, willful
violations of the person's duty to perform responsibilities under the agreement,
or conviction of a felony. Each agreement also provides for immediate vesting of
stock options and 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 Corporation 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
Corporation as of the date of each employment agreement as well as any person
whose election or nomination after such date was approved by at least 75% of the
vote of the then Incumbent Board.
TRANSACTIONS WITH MANAGEMENT
The Corporation has made a loan to Mr. Roy Burton,
President--Electronics/OEM Group, to assist him in the purchase of a residence
in the Memphis area. The loan is for a period ending June 30, 2000 at an
interest rate of 6.5%. The highest balance of such loan outstanding during the
period January 4, 1999 through March 29, 2000 was $110,000 and the balance of
such loan outstanding at March 29, 2000 is $110,000.
13
<PAGE>
- --------------------------------------------------------------------------------
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 Corporation, and to attract,
motivate, and retain key executives.
(a) PAY POSITIONING: The Corporation 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 Thomas &
Betts Peer Group Index shown in the performance graph that follows this
report. Since electrical/electronics compensation levels are generally
consistent with general industry levels (where pay and performance data is
more easily accessible), the committee believes that general industry
companies represent an 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.
(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 1999 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 70% of base
salary for median performance and provide a maximum payout of between 60%
and 140% 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 1999 is based 50% on return on equity (ROE)
relative to the S&P 400 and 50% on earnings per share (EPS) growth. ROE
and EPS attainment 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 1999 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 1999 was 20% 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 119% to 177% of base salary. Individual
grants may vary based on the committee's assessment of individual
14
<PAGE>
performance and potential. As a group, the average of the Named Executive
Officers' annual long-term incentive awards in 1999 was 131% 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 1999 base salary was $685,000, which was 4.75% 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 Corporation in 1998 and
comparability with other positions within general industry at the 50th
percentile.
Mr. Moore's target annual incentive was 70% of base salary in 1999, and the
maximum incentive was 140% of base salary. The Corporation's 1999 return on
equity, before special charges, was 14.06%, which was below the mid-point of the
performance range, and earnings per share was $2.56, which was also below the
mid-point of the performance range. Together these resulted in Mr. Moore
receiving an annual incentive of $194,006. Mr. Moore was granted a stock option
for 35,550 shares and a restricted stock award for 15,326 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.
POLICY REGARDING EXECUTIVE COMPENSATION DEDUCTIBILITY
The Corporation's policy is to design and administer compensation plans that
support the achievement of long-term strategic objectives and enhance
shareholder value. Performance-based compensation is a significant part of
executive compensation, and it is the Corporation's policy to take all
reasonable action to maximize the deductibility of such compensation.
The Executive Incentive Plan ("EIP") and the 1993 Management Stock Ownership
Plan ("MSOP") were approved by the shareholders, and incentive payments under
the EIP and stock options granted under the MSOP 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.
William H. Waltrip, Chairman
Robert A. Kenkel
Jerre L. Stead
March 3, 2000
15
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The graph set forth below provides comparisons of the yearly percentage
change in the cumulative total shareholder return on the Common Stock with the
cumulative total return for the five years ended December 31, 1999 of the
Standard & Poor's ("S&P") 500 Stock Index and a Thomas & Betts self-constructed
peer group index.
The Thomas & Betts Peer Group Index consists of 14 companies whose
businesses are representative of the Corporation's business segments. The
companies in the index are: Avnet, Inc., Benchmark Electronics, Inc., CommScope,
Inc. (effective as of its public offering in the fourth quarter of 1997), Cooper
Industries, Inc., Emerson Electric Co., W.W. Grainger, Inc., Hubbell
Incorporated (Class B shares), Kent Electronics Corporation, MagneTek, Inc.,
Methode Electronics, Inc. (Class A shares), Molex Incorporated, Oak Industries
Inc. (merged into Corning Incorporated on January 28, 2000), Raychem Corporation
(until August 1999 when it was acquired by Tyco International Ltd.) and Robinson
Nugent, Inc.
The Peer Group Index has been weighted in accordance with each company's
market capitalization (closing stock price multiplied by the number of shares
outstanding) as of the beginning of each 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 of the total market
capitalization for all companies in the 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>
DEC-94 DEC-95 DEC-96 DEC-97 DEC-98 DEC-99
<S> <C> <C> <C> <C> <C> <C>
THOMAS & BETTS CORPORATION $100 $114 $141 $153 $144 $109
S&P 500-REGISTERED TRADEMARK- $100 $138 $169 $226 $290 $351
T&B PEER GROUP INDEX $100 $128 $158 $188 $191 $210
(14 COMPANIES)
</TABLE>
16
<PAGE>
The Performance Graph presented above should not be deemed to be soliciting
material or to be incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent the Corporation specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
- --------------------------------------------------------------------------------
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
Corporation, and membership on other boards of directors.
<TABLE>
<S> <C>
ERNEST H. DREW, 62
[PHOTO1] DIRECTOR SINCE 1989
Private investor (1998 to present). Chief Executive Officer (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, Public Service Enterprise Group
Incorporated and Unique Mobility Inc.
T. KEVIN DUNNIGAN, 62
[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) and President (1974 to
1976) of The Thomas & Betts Co. Division of the Corporation. Director
of C. R. Bard, Inc. and PRO MACH, Inc.
</TABLE>
17
<PAGE>
<TABLE>
<S> <C>
JEANANNE K. HAUSWALD, 55
[PHOTO3] DIRECTOR SINCE 1993
Managing Director (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.
DEAN JERNIGAN, 54
[PHOTO4] DIRECTOR SINCE 1999
Chairman, Chief Executive Officer and President (1984 to present) of
Storage USA, Inc. (a self storage real estate investment trust).
RONALD B. KALICH SR., 52
[PHOTO5] DIRECTOR SINCE 1998
President and Chief Executive Officer (November 1999 to present) of
National-Standard Company (a manufacturer and distributor of a wide
range of wire and wire-related products and fabricated filters and
inflator housing for the automotive air bag industry). President and
Chief Executive Officer (1994 to November 1999) of Getz Bros. &
Co., Inc. (international marketer and distributor of a wide variety of
medical, industrial and consumer goods). Director of The
Carbide/Graphite Group, Inc. and National-Standard Company.
ROBERT A. KENKEL, 65
[PHOTO6] 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, 56
[PHOTO7] DIRECTOR SINCE 1995
Executive Vice President, General Counsel and Secretary (1998 to
present) of FedEx Corporation (formerly 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 (express
delivery services). Director of Accredo Health, Incorporated, Federal
Express Corporation and RPS, Inc.
</TABLE>
18
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<TABLE>
<S> <C>
CLYDE R. MOORE, 46
[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 Corporation.
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
Corporation. Director of The Kroger Company.
JEAN-PAUL RICHARD, 57
[PHOTO9] DIRECTOR SINCE 1996
Chairman and Chief Executive Officer (1998 to present) of PRO
MACH, Inc. (industrial food processing and packaging equipment).
Private investor (1997 to 1998). President and Chief Executive Officer
(1996 to 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, 57
[PHOTO10] DIRECTOR SINCE 1998
Chairman (1996 to present) and Chief Executive Officer (1996 to March
2000) of Ingram Micro Inc. (distributor of technology products and
services). Chairman and Chief Executive Officer (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 American Precision Industries Inc., Armstrong World
Industries, Inc. and Conexant Systems, Inc.
WILLIAM H. WALTRIP, 62
[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 (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.
19
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PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
The independent public accounting firm for the Corporation in fiscal year
1999 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 Corporation for the fiscal year 2000
and until the 2001 annual meeting of shareholders. KPMG has audited the
Corporation's financial statements annually since 1969, is considered to be well
qualified, and has no financial interest, direct or indirect, in the Corporation
or any subsidiary of the Corporation. If the shareholders do not ratify this
appointment, the Audit Committee and the Board will consider the appointment of
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 2001, 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 Corporation's principal executive offices on or prior to
November 28, 2000. 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 2001 must give notice to the
Secretary at the Corporation's principal executive offices on or prior to
January 3, 2001. The Corporation'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 29, 2000
20
<PAGE>
APPENDIX A
THOMAS & BETTS COPORATION
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
(as of March 3, 2000)
I. FUNCTION
The primary function of the Audit Committee is to protect the interests of
the Corporation's shareholders by assisting senior management and the Board of
Directors in fulfilling its oversight responsibilities related to the
Corporation's corporate accounting and financial reporting practices and the
quality and integrity of the Corporation's financial reports. Key components of
this responsibility include:
- Facilitating and maintaining an open avenue of communication among the
Board of Directors, the Audit Committee, management, the independent
auditors and the internal audit staff or internal audit service provider.
- Serving as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
- Reviewing and appraising the efforts of the independent auditors.
- Providing direction to and oversight of the internal audit function.
II. ORGANIZATION/COMPOSITION
The Audit Committee will be comprised of three or more directors as
determined by the Board, each of whom shall be an independent director as
defined in the rules, as amended from time to time, of the New York Stock
Exchange. The members will be free from any financial, family or other material
personal relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independence from management and the Corporation. All
members of the Audit Committee will have a working familiarity with basic
finance and accounting practices and be able to read and understand fundamental
financial statements, and at least one member shall have accounting or related
financial management expertise.
III. MEETINGS
The Audit Committee will meet at least three times annually and, unless
otherwise directed by the Committee Chairperson, such meetings will be held in
February, June and December. Additional meetings may be scheduled as
circumstances dictate and may be conducted in person or by electronic means. The
Chief Financial Officer should confer with the Committee Chairperson prior to
scheduled committee meetings to finalize the meeting agenda. The Audit Committee
members will have sole discretion in determining the meeting attendees and
agenda.
IV. RESPONSIBILITIES AND DUTIES
The Audit Committee believes its policies and procedures should remain
flexible in order to best respond to changing conditions and to provide
reasonable assurance to the Board that the accounting and reporting practices of
the Corporation are in accordance with requirements.
The Audit Committee will fulfill its duties and responsibilities as follows:
A. GENERAL
- Recommend that the full Board adopt a formal written charter and that
it be reviewed annually by the Audit Committee. This charter shall be
disclosed publicly at least every three
A-1
<PAGE>
years by being published in the Corporation's proxy statement or as
otherwise required by law.
- Maintain minutes or other records of meetings and activities.
- Report committee actions to the Board with such recommendations as the
Audit Committee may deem appropriate.
- As part of executing its responsibility to foster open communication,
the Audit Committee will meet in separate executive sessions, without
members of management present, with the independent auditors and with
the internal auditors to discuss matters that the Audit Committee or
either of these groups believes should be discussed privately.
- Conduct or authorize investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel, accountants or others to
assist it in the conduct of any investigation and will report its
findings to the Board.
- Review any new accounting or auditing standards adopted by the
accounting profession or the Securities and Exchange Commission and any
proposed new accounting standards publicly released for comment which
are relevant to the Corporation's accounting and internal controls.
B. INDEPENDENT AUDITORS
- Recommend to the Board the selection of the independent auditors, after
duly considering their independence and effectiveness, and review the
fees to be paid to the independent auditors. Annually, the Audit
Committee will ensure that a formal statement is received from the
independent auditor delineating all relationships between the auditor
and the Corporation or any other relationships which may adversely
affect the independence of the auditor. The Audit Committee will
evaluate and discuss with the independent auditors all such information
in order to determine the auditor's independence and objectivity.
- Instruct the independent auditors that they are accountable to the
Board of Directors and the Audit Committee.
- Exercise responsibility, on behalf of the Board, for the selection,
evaluation and, where warranted, the replacement of the independent
auditors.
- Consult with the independent auditors out of management's presence
about internal controls and the fullness and accuracy of the financial
statements.
- Meet with the independent auditors and financial management of the
Corporation to review the scope of the proposed external audit for the
current year. The external audit engagement terms shall include a
requirement that the independent auditors inform the Audit Committee of
any significant changes in the independent auditors' original audit
plan and that the independent auditors conduct a SAS 71 Interim
Financial Review prior to the Corporation's filing of each quarterly
report on Form 10-Q and notify the Audit Committee of any issue
requiring its attention.
- Review the coordination of internal and external audit procedures to
promote both an effective use of resources and a complete but
nonredundant audit.
C. INTERNAL AUDIT
- Review and approve the annual internal audit plan and any significant
changes to it.
- Review the adequacy of internal audit staff in terms of their number
and their qualifications.
A-2
<PAGE>
- Review a summary of the findings of completed internal audits and a
progress report on executing the approved internal audit plan.
- Inquire of the internal auditors regarding any difficulties encountered
in the course of their audits, including any restrictions on the scope
of their work or access to required information or to the appropriate
level of management authority.
- Review the appointment, performance, independence and, if appropriate,
the replacement of the internal auditors.
D. FINANCIAL STATEMENTS/INTERNAL CONTROLS
- Inquire of the Corporate Controller regarding the adequacy, scope and
effectiveness of accounting and financial controls and, as warranted,
request recommendations for improvements.
- Review annual financial statements and related notes with management
and the independent auditors to determine that each is satisfied with
the disclosure and content of the financial statements, including the
nature, quality and extent of any significant changes in accounting
principles.
- In consultation with management, the independent auditors and the
internal auditors, consider the integrity of the Corporation's
financial reporting processes and system of internal controls. Discuss
significant financial risk exposures and the steps management has taken
to monitor, control, and report such exposures. Review significant
findings prepared by the independent auditors and the internal auditing
department together with management's responses.
- Discuss with the independent auditors the auditors' judgment about the
quality, not just the acceptability, of the Corporation's accounting
principles as applied to its financial reporting.
- Each year, after review and discussion of the audited financial
statements with management and the independent auditors, recommend to
the Board of Directors whether the financial statements should be
included in the Corporation's Annual Report on Form 10-K.
- Each year prepare a report to shareholders as required by the
Securities and Exchange Commission to be included in the Corporation's
annual proxy statement.
- Review the travel and entertainment expenses of all inside Board
members for compliance with corporate policy.
E. LEGAL
Review with the General Counsel any legal matters that may have a
significant impact on the Corporation's financial statements.
A-3
<PAGE>
/X/ Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
FOR WITHHELD
1. Election of / / / / Nominees: 01 E.H. Drew, 02 T.K. Dunnigan,
Directors. 03 J.K. Hauswald, 04 D. Jernigan,
05 R.B. Kalich Sr., 06 R.A. Kenkel,
07 K.R. Masterson, 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. 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 2, 2000. 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 1-877-779-8683 FROM
THE U.S. AND CANADA OR DIAL 001-1-201-536-8073 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.eproxyvote.com/TNB
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 3, 2000--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 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 6, 2000, AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 3,
2000, OR ANY ADJOURNMENT OR POSTPONEMENT.
CHANGE OF ADDRESS:
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- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
THOMAS & BETTS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MAY 3, 2000 AT 10:00 A.M.
WINEGARDNER AUDITORIUM
DIXON GALLERY AND GARDENS
4339 PARK AVENUE
MEMPHIS, TENNESSEE
[MAP]
