<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THOMAS INDUSTRIES INC.
(Name of Registrant as Specified In Its Charter)
BRYAN CAVE
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
PROXY RULES
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:*
______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________
* Set forth the amount on which the filing fee is calculated and state
<PAGE> 2
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
______________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________
3) Filing Party:
______________________________________________________________
4) Date Filed:
______________________________________________________________
Notes:
D.
4. Electronic filings. If any of the information required by Items 13
or 14 of this Schedule is incorporated by reference from an annual or quarterly
report to security holders, such report, or any portion thereof incorporated by
reference shall be filed in electronic format with the proxy statement.
Item 14. Mergers, consolidations, acquisitions and similar
matters.
(b)
(2)
(i)
(A) If the registrant elects to furnish information pursuant
to this paragraph (b)(2)(i)(A) and delivers the proxy statement together with a
copy of either its latest Form 10-K or Form 10-KSB filed pursuant to Section
13(a) or 15(d) of the Exchange Act or its latest annual report to security
holders which, at the time of original preparation met the requirements of
either Rule 14a-3 (Section 240.14a-3 of this chapter) or 14c-3 (Section
240.14c-3 of this chapter):
(1) Indicate that the proxy statement is accompanied by either
a copy of the registrant's latest Form 10-K or Form 10-KSB or a copy of its
latest annual report to security holders.
(B) If the registrant does not elect to furnish information
and deliver its latest Form 10-K or Form 10-KSB or a copy of its latest annual
report to security holders pursuant to paragraph (b)(2)(i)(A):
<PAGE> 3
THOMAS INDUSTRIES INC.
4360 BROWNSBORO ROAD
SUITE 300
LOUISVILLE, KENTUCKY 40207
(502) 893-4600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1994
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Thomas Industries Inc., a
Delaware corporation, will be held at the Hyatt Regency Hotel, 320 West
Jefferson, Louisville, Kentucky on Thursday, April 21, 1994 at 10:00
A.M. Eastern Daylight Time for the following purposes:
1. To elect four directors.
2. To consider and vote upon a proposal to approve the Thomas
Industries Inc. Nonemployee Director Stock Option Plan.
3. To consider and transact such other business as may properly
come before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 4,
1994 as the record date for determining the shareholders entitled to
notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
PHILLIP J. STUECKER
Vice President of Finance,
Chief Financial Officer and Secretary
March 10, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND
MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHICH REQUIRES NO
POSTAGE FOR MAILING IN THE UNITED STATES. A PROMPT RESPONSE IS HELPFUL,
AND YOUR COOPERATION WILL BE APPRECIATED.
<PAGE> 4
THOMAS INDUSTRIES INC.
4360 BROWNSBORO ROAD
SUITE 300
LOUISVILLE, KENTUCKY 40207
----------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 21, 1994
----------
To the Shareholders of
THOMAS INDUSTRIES INC.:
This Proxy Statement is being mailed to shareholders on or about
March 16, 1994 and is furnished in connection with the solicitation by
the Board of Directors of Thomas Industries Inc., a Delaware
corporation (the "Corporation"), of proxies for the Annual Meeting of
Shareholders to be held on April 21, 1994 for the purpose of
considering and acting upon the matters specified in the Notice of
Annual Meeting of Shareholders accompanying this Proxy Statement. If
the form of Proxy which accompanies this Proxy Statement is executed
and returned, it will be voted. A Proxy may be revoked at any time
prior to the voting thereof by written notice to the Secretary of the
Corporation.
A majority of the outstanding shares entitled to vote at this meeting
and represented in person or by proxy will constitute a quorum. With
regard to the election of directors, the approval of the Thomas
Industries Inc. Nonemployee Director Stock Option Plan and any other
proposal submitted to a vote, approval requires the affirmative vote of
a majority of the shares entitled to vote and represented in person or
by proxy at this meeting. Shares represented by proxies which are
marked "abstain" or to deny discretionary authority on any matter will
be treated as shares present and entitled to vote, which will have the
same effect as a vote against any such matter. Broker "non-votes" will
be treated as not represented at the meeting as to matter for which
non-vote is indicated on the broker's proxy. A broker "non-vote" occurs
when a nominee holding shares for a beneficial owner does not vote a
particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received
instructions from the beneficial owner. Broker "non-votes" and the
shares as to which shareholders abstain are included for purposes of
determining whether a quorum of shares is present at a meeting.
Expenses incurred in the solicitation of proxies will be borne by the
Corporation. Officers of the Corporation may make additional
solicitations in person or by telephone. In addition, the Corporation
has retained McCormick & Pryor Ltd. to assist in the solicitation of
proxies for a fee of $3,750, plus reimbursement of reasonable out-of-
pocket expenses incurred in connection with the solicitation.
<PAGE> 5
The Annual Report to Shareholders for fiscal year 1993 accompanies
this Proxy Statement. If you did not receive a copy of the report, you
may obtain one by writing to the Secretary of the Corporation.
As of March 4, 1994, the Corporation had outstanding 10,050,595
shares of Common Stock and such shares are the only shares entitled to
vote at the Annual Meeting. Each share is entitled to one vote on each
matter to be voted upon at the Annual Meeting.
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
Set forth in the following table are the beneficial holdings (and the
percentages of outstanding shares represented by such beneficial
holdings) as of March 4, 1994, except as otherwise noted, of (i) each
person (including any "group" as used in Section 13(d)(3) of the
Securities Exchange Act of 1934) known by the Corporation to own
beneficially more than 5% of its outstanding Common Stock, (ii)
directors and nominees, (iii) the four most highly compensated
executive officers who are not directors; and (iv) all executive
officers, directors and nominees as a group.
Under Rule 13d-3 of the Securities and Exchange Commission, persons
who have power to vote or dispose of Common Stock of the Corporation,
either alone or jointly with others, are deemed to be beneficial owners
of such Common Stock. Because the voting or dispositive power of
certain stock listed in the following table is shared, the same
securities in such cases are listed opposite more than one name in the
table. The total number of shares of Common Stock of the Corporation
listed in the table, after elimination of such duplication, is
2,559,645 (25.5% of the outstanding Common Stock).
NUMBER OF SHARES
AND NATURE OF
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS
---- ---------------- --------
(i) Gabelli Group............................... 1,640,912(2) 16.33%
One Corporate Center
Rye, NY 10580
(ii) Walter S. Davis............................. 12,218 *
Timothy C. Brown............................ 58,150(3) *
Peter P. Donis.............................. 3,102 *
Wallace H. Dunbar........................... 149,287(4) 1.5%
Roger P. Eklund............................. 172,625(5) 1.7%
H. Joseph Ferguson.......................... 358,559(6)(7) 3.6%
Gene P. Gardner............................. 15,624 *
Lawrence E. Gloyd........................... 1,990 *
Ralph D. Ketchum............................ 1,200 *
Franklin J. Lunding, Jr. ................... 349,820(6) 3.5%
Bernard W. Rogers........................... 347,564(6) 3.5%
(iii) Clifford C. Moulton......................... 7,000(3) *
C. Barr Schuler............................. 67,175(3) *
<PAGE> 6
Gerald E. Seebeck........................... 10,333(3) *
Phillip J. Stuecker......................... 33,847(3) *
(iv) All Executive Officers, Directors and
Nominees as a Group......................... 918,733(8) 9.1%
- - - - - - - ----------
* Less than 1.0%
(1) Excludes shares owned separately by spouses or children in the
households of the following: Mr. Davis-4,120 shares; Mr. W. H.
Dunbar-37,399 shares; and all executive officers and directors as a
group-41,519 shares. Each such person disclaims that he is the
beneficial owner of any shares of which except for Rule 13d-3 he
would not be deemed the beneficial owner.
(2) Based upon an amendment to Schedule 13D filed by certain reporting
persons (the "Gabelli Group") with the Securities and Exchange
Commission on February 25, 1994. One of the members of the group,
GAMCO Investors, Inc., beneficially owns 1,342,462 shares, which
shares represent 13.4% of the outstanding Common Stock. The other
reporting persons included in this group are Gabelli Associates
Limited, Gabelli Funds, Inc., Gabelli Securities, Inc., Gabelli &
Company, Inc., Gabelli Performance Partnership, Gabelli
International Limited and Mario J. Gabelli.
(3) Includes stock options exercisable within sixty days as follows:
Mr. Brown-51,692 shares; Mr. Moulton-2,000 shares; Mr. Schuler-
51,589 shares; Mr. Seebeck-10,333 shares; Mr. Stuecker-31,613
shares; and all executive officers and directors as a group-165,905
shares.
(4) Includes 2,032 shares owned by the Dunbar Foundation, for which Mr.
Dunbar serves as President. Mr. Dunbar disclaims that he is the
beneficial owner of such shares.
(5) Includes 46,116 shares held in three trusts of which Mr. Eklund is
a co-trustee, 41,390 shares held by two charitable foundations of
which Mr. Eklund is a director and officer, and 5,628 shares held
by a pension trust over which Mr. Eklund shares voting control.
(6) Includes 346,964 shares held by the Thomas Industries Master Trust,
as amended, of which Mr. Ferguson, Mr. Lunding and Mr. Rogers
comprise the Investment Committee. The Investment Committee has the
power to vote and direct disposition of such shares, except for
certain restrictions placed upon the Investment Committee by the
Trustee in the event of a tender offer for the shares of the
Corporation.
(7) Includes 8,095 shares owned by a trust of which Mr. Ferguson is a
trustee.
(8) The total number of shares of Common Stock of the Corporation
reported for executive officers and directors as a group is shown
after eliminating duplication within the table.
<PAGE> 7
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation of the Corporation provides
that the Board of Directors of the Corporation shall be divided into
three classes, as nearly equal in number as possible, with one class
being elected each year for a three-year term. At the Annual Meeting of
Shareholders, four directors are to be elected to serve until 1997 and
seven directors will continue to serve in accordance with their prior
election or appointment.
It is intended that the proxies (except proxies marked to the
contrary) will be voted for the nominees listed below, all of whom are
members of the present Board of Directors. It is expected that the
nominees will serve, but if any nominee declines or is unable to serve
for any unforeseen cause, the proxies will be voted to fill any vacancy
so arising in accordance with the discretionary authority of the
persons named in the proxies.
NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to
the nominees and the continuing directors:
NAME, AGE AND YEAR PRINCIPAL OCCUPATION
FIRST ELECTED DIRECTOR AND OTHER INFORMATION
- - - - - - - --------------------------------------- -------------------------------------
NOMINEES FOR ELECTION TO TERMS EXPIRING IN 1997
Timothy C. Brown....................... President and Chief Executive Officer
Age 43 1989 of the Corporation since February
1992. Prior to February 1992, held
various positions with the
Corporation including Executive Vice
President, Chief Operating Officer
(February 1991 to February 1992),
Executive Vice President, Operations
(1990 to February 1991), Executive
Vice President (1989 to 1990), and
Vice President, Manager Specialty
Products Group (1987 to 1989).
Director of National City Bank,
Kentucky.
Wallace H. Dunbar...................... Chairman of the Board of Americo
Age 62 1991 Group (vinyl and fabric lamination)
for more than five years. Director of
Liberty National Bancorp, Inc. Mr.
Dunbar previously served as a
director of Thomas Industries Inc.
from 1968 to 1979.
<PAGE> 8
Ralph D. Ketchum....................... President of RDK Capital, Inc., the
Age 67 1989 general partner of RDK Capital
Limited Partnership (investments) for
more than five years. Also serves as
Chief Executive Officer and Chairman
of the Board of Heintz Corporation, a
majority owned subsidiary of RDK
Capital Limited Partnership. Heintz
Corporation commenced a voluntary
case under Chapter 11 of the federal
Bankruptcy Code in August 1993.
Formerly, Senior Vice President and
Group Executive of the Lighting
Group, General Electric Company (1980
to 1987). Director of Metropolitan
Savings Bank and Olgebay-Norton
Corporation.
Franklin J. Lunding, Jr................ Attorney in private practice for more
Age 55 1972 than five years. Chairman of the
Board, President, Chief Executive
Officer and a director of BioCatalyst
Resources, Inc. (publisher of
Advances in Nutrition(TM), and other
nutrition related publications for
veterinarians and organizer of
seminars covering nutritional
subjects), and its wholly-owned
subsidiary, The Prozyme Co., Inc.
(manufacturer and distributor of
enzyme-based food supplements) since
June 1988.
DIRECTORS WITH TERMS EXPIRING IN 1995
Walter S. Davis(1)..................... Chairman of the Board since 1987.
Age 69 1974 Member of the firm of Davis &
Kuelthau, S.C. (attorneys) for more
than five years.
H. Joseph Ferguson..................... Director and founder of Ferguson,
Age 60 1989 Wellman, Rudd, Purdy & Van Winkle
Inc. (investments) for more than five
years. President of such entity until
1993.
Bernard W. Rogers...................... Senior Consultant to the Coca-Cola
Age 72 1989 Company (soft drink manufacturing and
sales) for more than five years. NATO
Supreme Allied Commander of Europe
(1979 to 1987). Director of General
Dynamics and Kemper National
Insurance Companies.
<PAGE> 9
DIRECTORS WITH TERMS EXPIRING IN 1996
Peter P. Donis......................... Retired President and Chief Operating
Age 69 1987 Officer of Caterpillar Inc.
(equipment manufacturer) (1985 to
1989). Director of Giddings and
Lewis, Inc.
Roger P. Eklund(1)..................... Partner of Eklund and Eklund
Age 62 1974 (attorneys) for more than five years.
Chairman of the Board and a director
of Upbancorp, Inc. (bank holding
company) since 1983.
Gene P. Gardner........................ Chairman of the Board and a director
Age 64 1986 of Beaver Dam Coal Company (coal
properties) since 1983. Director of
LG & E Energy Corp., Louisville Gas &
Electric Company, Commonwealth
Financial Corporation and
Commonwealth Bank and Trust Company.
Lawrence E. Gloyd...................... Chairman of the Board, President and
Age 61 1987 Chief Executive Officer of CLARCOR
Inc. (manufacturer of filtration and
packaging products) since 1990.
President and Chief Executive Officer
of CLARCOR Inc. (March 1988 to 1990).
Director of AMCORE Financial, Inc.
- - - - - - - ----------
(1) The Corporation retained the law firms of Eklund and Eklund and
Davis & Kuelthau, S.C. for certain services in 1993.
<PAGE> 10
EXECUTIVE COMPENSATION
The following table presents summary information concerning
compensation awarded or paid to, or earned by, the Chief Executive
Officer and each of the other four most highly compensated executive
officers at December 31, 1993 during each of the last three fiscal
years for services rendered to the Corporation and its subsidiaries.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------------- ---------------------------
OTHER ANNUAL RESTRICTED ALL OTHER
NAME AND COMPENSATION STOCK AWARDS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) ($)(3) (#)(4) ($)(5)
- - - - - - - --------------------------- ---- --------- ------------ ------------- --------------- ------------ ------------
<C> <C> <C> <C> <C> <C> <C> <C>
Timothy C. Brown(6) 1993 $250,000 - $ 1,481 - 15,000 $ 7,611
President and Chief 1992 214,022 - - - 10,000 717
Executive Officer 1991 175,000 - - - 8,000 18,297
Clifford C. Moulton(7) 1993 $137,500 $88,000 $58,941 - 12,000 -
Group Vice President, 1992 - - - - - -
Compressors and Vacuum 1991 - - - - - -
Pumps
C. Barr Schuler 1993 $149,000 - $ 8,959 - 1,500 $ 5,724
Vice President 1992 145,000 $28,363 1,839 - 1,500 558
Corporate Development and 1991 145,000 21,657 - - 6,000 15,259
Acquisitions
Gerald E. Seebeck(8) 1993 $150,000 - - - 4,500 $ 4,841
Group Vice President, 1992 130,000 - - - 3,000 3,170
Lighting 1991 - - - - - -
Phillip J. Stuecker 1993 $150,000 - - - 6,000 $ 4,841
Vice President of Finance, 1992 130,000 - - - 3,750 452
Chief Financial Officer, 1991 113,334 $ 5,000 - - 6,000 11,729
and Secretary
- - - - - - - ----------
<FN>
(1) Represents bonuses paid under the executive compensation plan
described in the Compensation Committee Report on Executive
Compensation.
<PAGE> 11
(2) The named executive officers received certain perquisites in 1991,
1992 and 1993, the amount of which did not exceed the lesser of
$50,000 or 10% of any such officer's salary and bonus, except with
respect to Mr. Moulton whose "Other Annual Compensation" included
an allowance and expense reimbursement related to moving of
$52,441. Mr. Schuler received tax-offset bonuses upon exercise of
stock options in 1992 and 1993 and Mr. Brown received a tax-offset
bonus upon exercise of stock options in 1993.
(3) No restricted stock was granted to any of the named executive
officers in 1991, 1992 or 1993 and no shares of restricted stock
were held by any of the named executive officers as of the end of
1993.
(4) Represents stock options awarded under the Corporation's 1987
Incentive Stock Plan.
(5) All Other Compensation represents amounts contributed or accrued
for the named individuals under the Corporation's Profit Sharing
Plan and, for Mr. Seebeck, also includes contributions made by the
Corporation to the Corporation's 401(k) Plan prior to Mr. Seebeck's
becoming an executive officer.
(6) Mr. Brown was elected President and Chief Executive Officer
effective February 6, 1992. Amounts shown for Mr. Brown for 1992
represent his compensation for the entire year, including the
portion of the year during which he did not serve in such
positions. Amounts shown for 1991 represent Mr. Brown's
compensation as Executive Vice President and Chief Operating
Officer of the Corporation (February 1991 to February 1992) and
Executive Vice President, Operations (January and February 1991).
(7) Clifford C. Moulton was elected Group Vice President, Compressors
and Vacuum Pumps effective March 1, 1993. Prior to that time, Mr.
Moulton was not an officer or employee of the Corporation. In
connection with recruiting Mr. Moulton, the Corporation agreed to
calculate Mr. Moulton's bonus payment on the basis he was a full-
time employee of the Corporation as of January 1, 1993.
(8) Gerald E. Seebeck was elected Group Vice President, Lighting
effective December 10, 1992. Prior to this time, Mr. Seebeck was
not an executive officer of the Corporation. Amounts shown for Mr.
Seebeck for 1992 thus include compensation received by him prior to
becoming an executive officer.
</TABLE>
<PAGE> 12
The following tables present certain additional information
concerning stock options granted to and exercised by the named
executive officers during 1993:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
- - - - - - - -----------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
OPTIONS OF STOCK PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED(#)(1) FISCAL YEAR (PER SHARE)(2) DATE 5% 10%
---- ------------- ------------ -------------- ---------- ----------- -----------
<C> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 15,000 14.3% $12.625 12/16/03 $119,306 $301,106
Clifford C. Moulton..... 6,000 5.7% 10.00 03/01/03 37,800 95,400
6,000 5.7% 12.625 12/16/03 47,722 120,442
C. Barr Schuler......... 1,500 1.4% 12.625 12/16/03 11,931 30,111
Gerald E. Seebeck....... 4,500 4.3% 12.625 12/16/03 35,792 90,332
Phillip J. Stuecker..... 6,000 5.7% 12.625 12/16/03 47,722 120,442
- - - - - - - -----
<FN>
(1) Except as noted below, all options were granted in December 1993
and one third of each option becomes exercisable each year
beginning December 16, 1994. Options for 6,000 shares were granted
to Mr. Moulton in March 1993 and one third of such options become
exercisable each year beginning March 1, 1994. Each year the Board
of Directors determines whether tax-offset bonuses will be
available to holders of non-qualified stock options upon exercise.
The Board has determined that tax-offset bonuses will be available
during 1994, provided that such determination is subject to change
at any time during the year.
(2) The exercise price for all options granted is equal to the market
price of the Corporation's Common Stock on December 16, 1993,
except for the options granted to Mr. Moulton in March 1993, for
which the exercise price is equal to the market price of the
Corporation's Common Stock on March 1, 1993.
<PAGE> 13
(3) The amounts shown under these columns are the result of
calculations at 5% and 10% rates over the ten year term of the
options as required by the Securities and Exchange Commission and
are not intended to forecast future appreciation of the stock price
of the Corporation's Common Stock. The actual value, if any, an
executive officer may realize will depend on the excess of the
stock price over the exercise price on the date the option is
exercised.
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FY-END(#) AT FY-END($)(1)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- ---------------- ----------- ------------- --------------
<C> <C> <C> <C> <C>
Timothy C. Brown................. 11/19/93 $ 2,733(2) 51,692/24,334 $49,082/34,668
1,400 Shares
Clifford C. Moulton............... - - 0/12,000 0/21,750
C. Barr Schuler................... 7/27/93 16,537(3) 51,589/4,500 30,562/8,625
5,602 Shares
Gerald E. Seebeck................. - - 10,333/8,167 30,541/12,459
Phillip J. Stuecker............... - - 31,613/10,500 32,906/15,562
- - - - - - - ----------
<FN>
(1) Based on the market value of the Corporation's Common Stock on
December 31, 1993.
(2) Represents the difference between the closing price of the
Corporation's Common Stock on November 19, 1993 and the exercise
price of the option. Does not include a tax-offset bonus of $1,481
paid by the Corporation upon exercise of the option.
(3) Represents the difference between the closing price of the
Corporation's Common Stock on July 27, 1993 and the exercise price
of the option. Does not include a tax-offset bonus of $8,959 paid
by the Corporation upon exercise of the option.
</TABLE>
<PAGE> 14
OTHER BENEFIT PLANS
The Corporation maintains a Pension Floor Plan (the "Floor Plan")
covering substantially all U.S. salaried employees. Terms of the Floor
Plan, which is funded by the Corporation, include among others,
provisions for a normal, optional early or deferred retirement date,
disability, retirement, and survivor benefits. Under the Floor Plan, an
employee who retires at normal retirement age will receive a monthly
pension equal to 1.1 percent of his Average Monthly Earnings (defined
as the average of the highest monthly compensation earned during the
consecutive five-year period preceding the retirement date) for each
year of service plus 0.56 percent of his Average Monthly Earnings in
excess of Covered Compensation (defined as one-twelfth of the average
of the Social Security taxable wage base in effect during the 35-year
period preceding the retirement date) for each year of service minus
the employee's monthly benefit resulting from the employee's vested
account balance under the Corporation's defined contribution, tax-
qualified Profit Sharing Plan. As a result of the fluctuation of
investment results of the Profit Sharing Plan and the undetermined
amount of future contributions by the Corporation to the Profit Sharing
Plan, the Corporation is unable to determine whether there are any
benefits accruing with respect to any current employee under the Floor
Plan until the individual retires.
OTHER COMPENSATION ARRANGEMENTS
The Corporation entered into agreements ("Employment Agreements")
with Messrs. T. C. Brown, C. B. Schuler and P. J. Stuecker effective
October 1, 1988, with G. E. Seebeck effective December 10, 1992 and C.
C. Moulton effective March 1, 1993. The Employment Agreements provide
for continued employment of the respective officer by the Corporation
for a period of two years following a "change of control" (as defined)
on an equivalent basis to employment immediately before the change of
control. If the employee is terminated other than for "cause" (as
defined) or if the employee terminates his employment for "good reason"
(as defined) after a change of control of the Corporation, each
agreement provides for (a) payment of the employee's "highest base
salary" (as defined) and prorated annual bonus through the date of
termination, (b) payment of the present value of the employee's highest
base salary (plus an annual bonus) for a period of three years, (c)
payment of any compensation previously deferred, (d) payment of the
present value of three annual payments, each equal to the average
annual contribution by the Corporation for the benefit of the employee
to all the Corporation's retirement plans, and (e) the continuation of
benefits to the employee and/or the employee's family provided in
connection with the Corporation's medical and life insurance policies
for a period of three years. If it is determined that any payment made
pursuant to these agreements would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), the respective employee would be entitled to receive
additional payments so that the employee would be in the same after-tax
position as if no excise tax were imposed. The Employment Agreements
also provide that an employee will be reimbursed for any legal expenses
incurred in litigating his rights under the agreement. Subject to
earlier termination as a result of death, disability, retirement, or
termination of employment (unrelated to a change of control), these
agreements have three-year terms, automatically extending for
<PAGE> 15
additional three-year terms from October 1 of each year unless the
Corporation terminates the extension upon sixty days' prior notice. In
January 1993, the Corporation notified Mr. Schuler that his Employment
Agreement would terminate on October 1, 1995.
In conjunction with the Employment Agreements, the Corporation
entered into an agreement with National City Trust Company establishing
a trust to provide in whole, or in part, for the payment of the
benefits payable under the Employment Agreements. The Corporation, at
the direction of the Board of Directors, may contribute to the trust
such sums of money or other property as it from time to time deems
appropriate to meet its obligations under the Employment Agreements.
In addition, options for a total of 68,667 shares of Common Stock
granted under the Corporation's incentive stock plans and presently
outstanding (but not currently exercisable) will become immediately
exercisable in the event of a change of control of the Corporation.
Options for an additional 99,000 shares of Common Stock granted on
December 16, 1993 (but not currently exercisable) also will become
immediately exercisable in the event of a change of control of the
Corporation at any time after May 16, 1994.
The Board of Directors adopted a Severance Pay Policy, effective
October 1, 1988, for all full-time officers of the Corporation. If an
officer is involuntarily terminated by the Corporation (other than for
misconduct), upon the execution by such officer of a waiver and release
of all claims against the Corporation, he or she will receive severance
pay equal to two weeks' compensation (at the pay rate in effect at the
date of the termination) for each year of continuous full-time
employment with the Corporation. Severance pay under the Policy is
subject to a minimum payment equal to four weeks' compensation and a
maximum payment equal to fifty-two weeks' compensation and will be
payable in installments. Any installments outstanding at the time the
subject individual begins new employment or self-employment will be
waived automatically under the terms of the Policy. In addition, an
officer shall be entitled to a "non-compete lump sum" equal to the
severance pay described above if the terminated officer executes a one-
year Non-Compete Agreement. This non-compete lump sum is payable one
year after the date of involuntary termination provided the terminated
officer remains in compliance with the Non-Compete Agreement. An
officer who, within the scope of this Severance Pay Policy, voluntarily
terminates employment with the Corporation shall be entitled to a
maximum of one month's severance pay. If the Corporation, a division or
subsidiary of the Corporation is sold by the Corporation, no officer
shall be deemed terminated because of such sale, and there shall be no
entitlement to severance pay pursuant to this Severance Policy.
In connection with the recruitment of Mr. Moulton as Group Vice
President, Compressors and Vacuum Pumps, the Corporation and Mr.
Moulton entered into a two year employment arrangement in March 1993.
Pursuant to this arrangement, Mr. Moulton's base salary was established
at $165,000 with a bonus potential of up to 80% of base pay pursuant to
the Corporation's Key Employee Bonus Plan described below in
"Compensation Committee Report on Executive Compensation." In addition,
Mr. Moulton was granted a stock option for 6,000 shares of Common Stock
with an exercise price of $10 per share, and is entitled to
participate, subject to certain vesting requirements, in certain
<PAGE> 16
standard executive programs such as the Corporation's Profit Sharing
and Pension Floor Plan, life and health insurance plans, and leased
automobile program. In connection with Mr. Moulton's relocation to
Louisville, Kentucky, the Corporation also agreed to certain allowances
which are set forth in Summary Compensation Table under "Other Annual
Compensation."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished
the following report on executive compensation for 1993:
EXECUTIVE OFFICER COMPENSATION POLICIES AND 1993 RESULTS
Subject to Board of Director approval, the Compensation Committee of
the Board of Directors administers the Corporation's executive officer
compensation program, consisting of base salary, annual bonus
opportunities and stock option grants. Base salary levels reflect
individual officer responsibilities and performance over time;
adjustments to base salary reflect both individual performance and the
Compensation Committee's judgment of Corporation and business unit
financial performance. The Corporation's Key Employee Bonus Plan
directly links potential annual incentive payments to the
accomplishment of predetermined financial and functional goals. A
portion of each executive officer's potential bonus is tied to the
Corporation's overall financial performance. Awards under the
Corporation's Incentive Stock Option Plans directly link potential
participant rewards to increases in shareholder value. As a result of
the Corporation's practice in implementing these plans, more than 36%
of senior executive officers' potential compensation is directly
related to financial performance and increases in shareholder value.
With respect to 1993, the Committee reviewed executive officer
salaries and recommended to the Board that adjustments be made, based
on individual performance and the results of an executive compensation
survey conducted on behalf of the Corporation by an independent
executive compensation consulting firm (the "Survey"). Based upon the
Corporation's Survey, the Committee believes executive officer base
salaries approved by the Board for 1993 are at or below median
competitive base salary levels of manufacturing companies of comparable
capitalization.
For the 1993 Key Employee Bonus Plan, the Committee approved goals
based on corporate pre-tax earnings, business unit operating income and
individual participant performance. Recognizing the need to improve the
operating performance of the Lighting Group segment and with the
understanding that during 1993 the Lighting Group would continue to
undergo restructuring initiated in 1992, the Committee revised the
bonus plan for the named executive officers other than Clifford
Moulton. Under this revised plan, (i) bonus potential for 1993 was
reduced, (ii) two year targets were established at levels higher than
the Corporation's internal projections and (iii) second year potential
bonus payments were increased to correspond to the challenging two year
targets. With respect to the Compressor & Vacuum Pump Group and other
divisions, new 1993 targets were established but the plan structure
remained unchanged from 1992.
<PAGE> 17
As a result of 1993 performance, no bonuses were awarded to executive
officers, with the exception of Mr. Moulton who received his award
based on the performance of the Compressor and Vacuum Pump Group, for
which he had responsibility. See the Summary Compensation Table above.
Such award represented approximately 18% of the total awards that could
have been earned by the executive officers named in the Summary
Compensation Table if all goals had been met.
To provide a direct incentive to improve the value of the Corporation
to shareholders, stock option grants were made to Mr. Moulton in March
1993 in connection with his recruitment by the Corporation and to all
the named executive officers in December 1993. The exercise price of
the option grants was 100% of fair market value on the date of grant.
CHIEF EXECUTIVE OFFICER COMPENSATION
At the December 1992 Compensation Committee meeting, Mr. Brown's base
salary was reviewed and the Committee recommended a base salary
adjustment to the Board of Directors. Based on his performance as Chief
Executive Officer since February 1992 and upon the Survey the Committee
recommended for approval by the Board of Directors an annualized base
salary of $250,000.
For 1993, Mr. Brown's potential bonus award was based on the
Corporation's meeting certain financial objectives, including targets
related to company-wide earnings per share and return on assets as well
as operating results of the Lighting Group. Since such goals were not
achieved, no bonus award was paid for 1993 performance under the bonus
program established by the Committee in December 1992.
The Committee also believes that Mr. Brown's stock option grant helps
to align his compensation directly with shareholder value. The
potential value of this grant is based solely on increases in the fair
market value of the Corporation's stock during the term of the option.
-------------
The Board approved the recommendations made by the Compensation
Committee with respect to each element of Mr. Brown's compensation, as
well as the compensation of the other executive officers.
COMPENSATION COMMITTEE
Peter P. Donis
Wallace H. Dunbar
Lawrence E. Gloyd
Ralph D. Ketchum
<PAGE> 18
PERFORMANCE GRAPH
The following graph sets forth a comparison of the Corporation's
cumulative total shareholder return, assuming reinvestment of
dividends, for the last five years with the cumulative total return for
the same period measured by the S&P 500 Index and, as a peer group, the
Value Line Building Materials Index.
1988 1989 1990 1991 1992 1993
------ ------ ------ ------ ------ ------
Thomas Industries 100 114 59 76 60 89
Standard & Poor's 500 100 131 127 166 179 197
Value Line Bldg/Mat 100 107 94 115 151 191
BOARD OF DIRECTORS
The Board of Directors held six meetings during 1993. All directors
attended at least 75 percent of such meetings and of meetings of Board
committees on which they served in 1993.
The Board of Directors has an Audit Committee which met four times
during 1993. The Audit Committee is composed of Peter P. Donis, Gene P.
Gardner and Bernard W. Rogers. The functions of the Audit Committee
consist of reviewing with the independent accountants the plan and
results of the auditing engagement, reviewing the scope and results of
the Corporation's procedures for internal auditing, reviewing the
professional services provided by the independent accountants and the
fees charged therefor, selecting the Corporation's independent
accountants for each year and reviewing the adequacy of the
Corporation's system of internal accounting controls.
The Board of Directors has a Compensation Committee which met three
times during 1993. The Compensation Committee is composed of Peter P.
Donis, Wallace H. Dunbar, Lawrence E. Gloyd and Ralph D. Ketchum. The
functions of the Compensation Committee consist of reviewing and
recommending to the Board changes in salaries of officers and general
managers, bonus and stock plans, and employee benefit plans, and the
review of the competitiveness of the Corporation's compensation plans.
The Nominating and Search Committee met twice during 1993. The
Nominating and Search Committee is composed of Timothy C. Brown, Peter
P. Donis, Roger P. Eklund and Ralph D. Ketchum. The functions of the
Nominating and Search Committee consist of reviewing the recruitment of
senior management, monitoring senior management and director succession
plans and reviewing new director nominees.
The Chairman of the Board receives a fee of $17,600 per quarter,
other directors who are committee chairmen (except for directors who
are employees of the Corporation) receive a fee of $4,400 per quarter,
and all other directors (except for directors who are employees of the
Corporation) receive a fee of $3,850 per quarter. During 1994, all
directors (except for directors who are employees of the Corporation
and the Chairman of the Board) will receive $800 for each Board of
Directors' meeting and each committee meeting attended, plus expenses
for attendance, and special management meetings attended, if any. The
<PAGE> 19
Corporation's policy that directors who are employees of the
Corporation not receive any fees for serving on the Board of Directors,
serving as a committee chairman or attending director meetings became
effective in April 1993. If approved by the shareholders of the
Corporation, nonemployee directors may also receive certain non-
qualified stock options. See "Approval of Nonemployee Director Stock
Option Plan."
Any director terminating his membership on the Board of Directors
after one year of service thereon is eligible to receive an annual
retainer fee, plus such benefits as are available to active directors,
for three years following termination of Board membership. This fee is
equal to the fee such director received as an active member of the
Board prior to termination.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1993 are listed
above under "Board of Directors." During 1993, no executive officer of
the Corporation served on the board of directors or compensation
committee of any other corporation, with respect to which any member of
the Compensation Committee was engaged as an executive officer. No
member of the Compensation Committee was an officer or employee of the
Corporation during 1993 and no member of the Compensation Committee was
formerly an officer of the Corporation other than Mr. Dunbar who served
as an officer of the Corporation prior to 1980.
APPROVAL OF NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
The Board of Directors approved the Thomas Industries Inc.
Nonemployee Director Stock Option Plan (the "Plan") on February 10,
1994, subject to approval by the shareholders of the Corporation. The
purpose of the Plan is to increase the stock ownership of nonemployee
directors and to foster and promote the long-term financial success of
the Corporation by attracting and retaining outstanding nonemployee
directors by enabling them to participate in the Corporation's growth
through automatic, nondiscretionary grants of options to purchase
shares of the Corporation's Common Stock in the amounts and subject to
the conditions set forth in the Plan. The Plan is set out in full as
Exhibit A to this Proxy Statement. The following summary of the terms
of the Plan is derived from Exhibit A and is qualified by reference to
the specific terms of the Plan. An aggregate of 250,000 shares of
Common Stock are to be reserved for issuance pursuant to the exercise
of options granted under the Plan.
The Plan provides for the grant of non-qualified stock options to
directors of the Corporation who are not, and have not been for at
least one year, employees or officers of the Corporation or any
subsidiary of the Corporation (a "Nonemployee Director"). The Board of
Directors is responsible for the Plan's implementation but may not
exercise any discretion concerning its administration. Subject to
approval of the Plan by the shareholders of the Corporation, each
Nonemployee Director in office on the date of the Annual Meeting, that
is, April 21, 1994, will receive a stock option under the Plan to
purchase 2,000 shares of Common Stock. Thereafter, each Nonemployee
Director in office on the date of each subsequent Annual Meeting of
<PAGE> 20
Shareholders will receive a stock option to purchase 2,000 shares of
Common Stock as of the date of such subsequent annual meeting. There
are ten Nonemployee Directors currently eligible to receive stock
options under the Plan. Accordingly, if the Plan receives shareholder
approval, the Nonemployee Directors as a group will receive stock
options to purchase 20,000 shares of Common Stock on April 21, 1994.
The purchase price for each share of Common Stock covered by an
option ("Option Price") will equal the closing price per share of the
Common Stock on the date of the Annual Meeting of Shareholders on which
the option is granted. Each option is granted for a term of ten years
and is exercisable at any time after the date it is granted, except
that, to the extent required to comply with Rule 16b-3 under the
Securities Exchange Act of 1934 ("Rule 16b-3"), no option shall be
exercisable within the first six months of its grant. The Option Price
may be paid in cash or by delivery of Common Stock already owned by the
Nonemployee Director valued at fair market value on the date of
exercise. In the event of a stock dividend or stock split, or
combination or other change in the number of issued shares of Common
Stock, a merger, consolidation, reorganization, recapitalization, sale
or exchange or substantially all of the Corporation's assets or
dissolution of the Corporation, appropriate adjustments are to be made
in the price, number and types of shares subject to options in order to
prevent the dilution or enlargement of rights under options granted
under the Plan.
No option granted under the Plan shall be transferable by a
Nonemployee Director, otherwise than by will or, if the Nonemployee
Director dies intestate, by the laws of descent and distribution. All
grants shall be exercisable during the Nonemployee Director's lifetime
only by the Nonemployee Director or his legal representative. In the
event of a Nonemployee Director's death prior to the exercise of any
options which were then exercisable, such options may be exercised
within one year after the Nonemployee Director's death (regardless of
the expiration date that would otherwise apply) by the beneficiary
designated by the Nonemployee Director as specified in the Plan or, in
the absence of such designation, by the Nonemployee Director's estate.
The Board of Directors of the Corporation may suspend or terminate
the Plan or any portion thereof at any time. The Board of Directors may
also amend the Plan from time to time in such respects as the Board of
Directors may deem advisable in order that any grants thereunder shall
conform to or reflect changes in the law or regulations applicable to
the Plan, or to permit the Corporation or the Nonemployee Directors to
enjoy the benefits of any such changes in law or regulations, or in any
other respect that the Board of Directors may deem to be in the best
interests of the Corporation. No such amendment shall be made, however,
without shareholder approval to the extent required by law, agreement
or the rules of any exchange upon which the Common Stock is listed, if
such amendment would: (a) materially increase the number of shares of
Common Stock which may be issued under the Plan (other than due to a
stock dividend, stock split, etc. as described above), (b) materially
modify the eligibility requirements for participation in the Plan, (c)
materially increase the benefits accruing to Nonemployee Directors
under the Plan, or (d) extend the termination date of the Plan. In any
event, no suspension, termination, or amendment of the Plan shall
impair the rights of Nonemployee Directors under any outstanding
<PAGE> 21
options without the consent of the Nonemployee Directors affected
thereby or shall make any change that would disqualify the Plan, or any
other plan of the Corporation intended to be so qualified, from the
exemption provided by Rule 16b-3. The Plan will terminate and no
additional options will be granted under the Plan after April 21, 2004.
As of March 4, 1994, the closing price of the Corporation's Common
Stock was $15.50.
TAX CONSEQUENCES
The options granted under the Plan will not qualify for the special
tax treatment accorded to "incentive stock options" under Section 422
of the Internal Revenue Code. Although a Nonemployee Director will not
recognize income at the time of the grant of the option, he will
recognize ordinary income upon the exercise of an option in an amount
equal to the excess of the fair market value of the stock on the date
of exercise of the option over the amount of cash paid for the stock.
As a result of the optionee's exercise of an option, the Corporation
will be entitled to deduct as compensation an amount equal to the
amount included in the optionee's gross income. The Corporation's
deduction will be taken in the Corporation's taxable year in which the
option is exercised.
If a Nonemployee Director exercises an option and surrenders Common
Stock already owned by such director ("Old Shares"), the Nonemployee
Director will recognize ordinary income in an amount equal to the fair
market value of the number of shares acquired ("New Shares") in excess
of the number of Old Shares exchanged, less any cash paid for them and
the Company will be entitled to a deduction in an amount equal to such
income. No gain or loss will be recognized with respect to the number
of New Shares acquired that are equal to the number of Old Shares
exchanged.
The foregoing description is only a summary of the federal income tax
consequences of the Plan and is based on the Corporation's
understanding of present federal tax laws and regulations.
VOTE REQUIRED
Adoption of the Plan requires the affirmative vote of the holders of
a majority of the shares of Common Stock entitled to be voted at the
1994 Annual Meeting of Shareholders. The Board of Directors of the
Corporation recommends a vote FOR such approval of the Plan.
COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires that
the Corporation's officers and directors, and persons who own more than
ten percent of the Corporation's outstanding stock, file reports of
ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. During 1993, to the
knowledge of the Corporation, all Section 16(a) filing requirements
applicable to its officers, directors, and greater than ten percent
beneficial owners were complied with.
<PAGE> 22
ACCOUNTANTS
The firm of KMPG Peat Marwick has been selected as independent
accountants to audit the books, records and accounts of the corporation
and its subsidiaries for 1994.
Representatives of KMPG Peat Marwick will be present at the Annual
Meeting with the opportunity to respond to appropriate questions and to
make a statement if they desire to do so.
PROPOSALS OF SECURITY HOLDERS
A shareholder proposal to be presented at the 1995 Annual Meeting
must be received at the Corporation's executive offices, 4360
Brownsboro Road, Suite 300, Louisville, Kentucky 40207 by no later than
November 18, 1994 for evaluation as to inclusion in the Proxy Statement
in connection with such Meeting.
In order for a shareholder to nominate a candidate for director,
under the Corporation's Bylaws timely notice of the nomination must be
given in writing to the Secretary of the Corporation. To be timely,
such notice must be received at the principal executive offices of the
Corporation not less than sixty days prior to the meeting of
shareholders. Such notice must describe various matters regarding the
nominee and the shareholder giving the notice, including such
information as name, address, occupation and shares held.
In order for a shareholder to bring other business before a
shareholders meeting, timely notice must be given to the Secretary of
the Corporation within the time limits described above. Such notice
must include various matters regarding the shareholder giving the
notice and a description of the proposed business. These requirements
are separate from and in addition to the requirements a shareholder
must meet to have a proposal included in the Corporation's proxy
statement. Any shareholder desiring a copy of the Corporation's Bylaws
will be furnished one upon written request to the Secretary upon
receipt of $5.00 per copy requested.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors of the Corporation knows of no other business
which may come before the Annual Meeting. However, if any other matters
are properly presented to the Meeting, the persons named in the proxies
will vote upon them in accordance with their best judgment.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE
PROXY AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
PHILLIP J. STUECKER
Vice President of Finance,
Chief Financial Officer and Secretary
Date: March 10, 1994
<PAGE> 1
EXHIBIT A
THOMAS INDUSTRIES INC.
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
ARTICLE I
GENERAL
1.1 PURPOSE.
Thomas Industries Inc., a Delaware corporation (the "Company"),
hereby adopts this Thomas Industries Inc. Nonemployee Director Stock
Option Plan (the "Plan"). The purpose of the Plan is to increase the
stock ownership of nonemployee directors and to foster and promote the
long-term financial success of the Company by attracting and retaining
outstanding nonemployee directors by enabling them to participate in
the Company's growth through automatic, nondiscretionary grants of
Options (as defined in Article II).
1.2 PARTICIPATION.
Only directors of the Company who at the time a grant is made meet
the following criteria ("Directors") shall receive grants under the
Plan: (a) the director is not, and has not been for at least one year,
an employee or officer of the Company or any subsidiary of the Company
and (b) the director is a "disinterested person" as such term is
defined in Rule 16b-3 promulgated under the Securities Exchange Act of
1934 (the "Exchange Act") or any similar rule which may subsequently be
in effect ("Rule 16b-3").
1.3 SHARES SUBJECT TO THE PLAN.
Shares of stock covered by grants under the Plan may be in whole or
in part authorized and unissued or treasury shares of the Company's
common stock or such other shares as may be substituted pursuant to
Section 3.2 ("Common Stock"). The maximum number of shares of Common
Stock which may be issued for all purposes under the Plan shall be
250,000 (subject to adjustment pursuant to Section 3.2). Any shares of
Common Stock subject to an Option which for any reason is cancelled or
terminated without having been exercised, shall again be available for
grants under the Plan. No fractional shares shall be issued.
1.4 GENDER AND NUMBER.
Except when otherwise indicated by the context, words in the
masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall
include the singular.
ARTICLE II
STOCK OPTIONS
2.1 GRANT OF STOCK OPTIONS.
Effective on the date of each annual meeting of the shareholders of
the Company at which Directors are elected ("Annual Meeting")
<PAGE> 2
commencing with the Annual Meeting in 1994, each Director then in
office will automatically be awarded a stock option (an "Option") under
the Plan to purchase 2000 (subject to adjustment pursuant to Section
3.2) shares of Common Stock. The Options are not intended to qualify as
"incentive stock options" under Section 422 of the Internal Revenue
Code of 1986, as amended.
2.2 STOCK OPTION CERTIFICATES.
The grant of an Option shall be evidenced by a certificate executed
by an officer of the Company.
2.3 OPTION PRICE.
The purchase price of Common Stock under each Option (the "Option
Price") granted as of the Annual Meeting shall be the Fair Market Value
of the Common Stock as of the date of the Annual Meeting.
2.4 EXERCISE AND TERM OF OPTIONS.
(a) Options may be exercised by the delivery of written notice of
exercise and the Option Price for the shares to be purchased to the
Corporate Secretary of the Company. The Option Price shall be paid in
cash (including check, bank draft or money order) or, unless in the
opinion of counsel to the Company to do so may result in a possible
violation of law, by delivery of Common Stock already owned by the
Director valued at Fair Market Value on the date of exercise. As soon
as practicable after receipt of each notice and full payment, the
Company shall deliver to the Director a certificate or certificates
representing the acquired shares of Common Stock.
(b) Each Option may be exercised at any time after the date it is
granted until (subject to Section 3.1) the first to occur of the tenth
anniversary of the date such Option was granted or the second
anniversary of the date the Director ceases to be a Director (whether
by death, disability, retirement or resignation). In the event of the
death of a former Director prior to the exercise of any Options which
were then exercisable, such Options may be exercised as provided in
Section 3.1 until the second anniversary of the date the former
Director ceased to be a Director. Provided however that, no Option
shall be exercisable within the first six months of its term.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1 NON TRANSFERABILITY; BENEFICIARIES.
No Option granted under the Plan shall be transferable by the
Director otherwise than by will or, if the Director dies intestate, by
the laws of descent and distribution. All grants shall be exercisable
during the Director's lifetime only by the Director or his personal
representative. Any transfer contrary to this Section 3.1 will nullify
the Option. In the event of a Director's death prior to the exercise of
any Options which were then exercisable, such Options may be exercised
by the Director's beneficiary, designated as provided below, or, in the
absence of any such designation, his estate. Each Director may name,
from time to time, any beneficiary or beneficiaries (who may be named
<PAGE> 3
contingently or successively) who may exercise such Options and receive
such certificates. Each designation will revoke all prior designations
by such Director, will be in writing and will be effective only when
filed with the Corporate Secretary of the Company during his lifetime.
3.2 ADJUSTMENTS UPON CERTAIN CHANGES.
In the event of a stock dividend or stock split, or combination or
other change in the number of issued shares of Common Stock, a merger,
consolidation, reorganization, recapitalization, sale or exchange of
substantially all assets or dissolution of the Company, the Board of
Directors of the Company ("Board of Directors") shall, in order to
prevent the dilution or enlargement of rights under Options make such
adjustments in the number and type of shares authorized by the Plan,
the number and type of shares covered by outstanding Options and the
Option Prices specified therein as may be required to prevent such
dilution or enlargement. In the event fractional shares would otherwise
result from any such adjustment, the number of shares so authorized and
covered and the prices thereof shall be further adjusted so as to
eliminate such fractions.
3.3 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN.
(a) The Board of Directors may suspend or terminate the Plan or any
portion thereof at any time and may amend it from time to time in such
respects as the Board of Directors may deem advisable in order that any
grants thereunder shall conform to or otherwise reflect any change in
applicable laws or regulations, or to permit the Company or the
Directors to enjoy the benefits of any change in applicable laws or
regulations, or in any other respect the Board of Directors may deem to
be in the best interests of the Company; provided, however, that no
such amendment shall, without stockholder approval to the extent
required by law, agreement or the rules of any exchange upon which the
Common Stock is listed (a) except as provided in Section 3.2,
materially increase the number of shares of Common Stock which may be
issued under the Plan, (b) materially modify the requirements as to
eligibility for participation in the Plan, (c) materially increase the
benefits accruing to Directors under the Plan or (d) extend the
termination date of the Plan. No such amendment, suspension, or
termination shall (x) impair the rights of Directors under any
outstanding Options without the consent of the Directors affected
thereby or (y) make any change that would disqualify the Plan, or any
other plan of the Company intended to be so qualified, from the
exemption provided by Rule 16b-3.
(b) The provisions of Sections 2.1 and 2.3 may not be amended more
than once every six months other than to comply with changes in the
Internal Revenue Code of 1986, the Employee Retirement Income Security
Act of 1974, and the rules thereunder.
3.4 DEFINITION OF FAIR MARKET VALUE.
The term "Fair Market Value" as it relates to Common Stock on any
given date means (a) the closing sales prices of the Company's Common
Stock as reported by the Composite Tape of the New York Stock Exchange
(or, if not so reported, on any domestic stock exchanges on which the
Common Stock is then listed); or (b) if the Common Stock is not listed
<PAGE> 4
on any domestic stock exchange, the closing sales price of the
Company's Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System (or, if not so reported,
by the system then regarded as the most reliable source of such
quotations) or, if there are no reported sales on such date, the mean
of the closing bid and asked prices are so reported; or (c) if the
Common Stock is listed on a domestic exchange or quoted in the domestic
over-the-counter market, but there are no reported sales or quotations,
as the case may be, on the given date, the value determined pursuant to
(a) or (b) above using the reported sale prices or quotations on the
last previous date on which so reported; or (d) if none of the
foregoing clauses apply, the fair value as determined in good faith by
the Board of Directors.
3.5 PLAN NOT EXCLUSIVE.
The adoption of the Plan shall not preclude the adoption by
appropriate means of any other stock option or other incentive plan for
Directors.
3.6 LISTING, REGISTRATION AND LEGAL COMPLIANCE.
Each Option shall be subject to the requirement that if at any time
counsel to the Company shall determine that the listing, registration
or qualification thereof or of any shares of Common Stock or other
property subject thereto upon any securities exchange or under any
foreign, federal or state securities or other law or regulation, or the
consent or approval of any governmental body or the taking of any other
action to comply with or otherwise with respect to any such law or
regulation, is necessary or desirable as a condition to or in
connection with the grant of such Option or the issue, delivery or
purchase of shares of Common Stock or other property thereunder, no
such Option may be exercised unless such listing, registration,
qualification, consent, approval or other action shall have been
effected or obtained free of any conditions not acceptable to the
Company and the holder of the Option will supply the Company with such
certificates, representations and information as the Company shall
request and shall otherwise cooperate with the Company in effecting or
obtaining such listing, registration, qualification, consent, approval
or other action. The Company may at any time impose any limitations
upon the exercise, of any Option which, in the opinion of the Board of
Directors, are necessary or desirable in order to cause the Plan or any
other plan of the Company to comply with Rule 16b-3. If the Company, as
part of an offering of securities or otherwise, finds it desirable
because of foreign, federal or state legal or regulatory requirements
to reduce the period during which Options may be exercised, the Board
of Directors may, without the holders' consent, so reduce such period
on not less than 15 days' written notice to the holders thereof.
3.7 RIGHTS OF DIRECTORS.
Nothing in the Plan shall confer upon any Director any right to serve
as a Director for a period of time or to continue his present or any
other rate of compensation.
<PAGE> 5
3.8 REQUIREMENTS OF LAW; GOVERNING LAW.
The granting of Options and the issuance of shares of Common Stock
shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities
exchanges as may be required. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the
State of Delaware.
3.9 EFFECTIVE DATE.
The Plan shall, subject to the approval of the holders of a majority
of the shares of Common Stock present, or represented, and entitled to
be voted at the 1994 Annual Meeting, be deemed effective as of such
Annual Meeting. No grants shall be made hereunder after April 21, 2004.
