<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Thomas Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
THOMAS INDUSTRIES INC.
4360 BROWNSBORO ROAD
SUITE 300
LOUISVILLE, KENTUCKY 40207
(502) 893-4600
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 1997
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Thomas Industries Inc., a Delaware
corporation, will be held at the Seelbach Hotel, 500 Fourth Street,
Louisville, Kentucky on Thursday, April 17, 1997 at 10:00 A.M. Eastern
Daylight Time for the following purposes:
1. To elect three Class II directors.
2. To consider and approve the business criteria and material terms
relating to performance share awards to be granted under the Corporation's
1995 Incentive Stock 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 7, 1997 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 14, 1997
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>
THOMAS INDUSTRIES INC.
4360 BROWNSBORO ROAD
SUITE 300
LOUISVILLE, KENTUCKY 40207
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 17, 1997
----------------
To the Shareholders of
THOMAS INDUSTRIES INC.:
This Proxy Statement is being mailed to shareholders on or about March 14,
1997 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 17, 1997 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 business criteria and material terms
related to performance share awards to be granted under the Corporation's 1995
Incentive Stock 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 matters. Broker "non-votes" will be
treated as not represented at the meeting as to matters for which a non-vote
is indicated on the broker's proxy. 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. 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" will not affect the determination of the outcome of
the vote on any proposal to be decided at the 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 $4,000, plus
reimbursement of reasonable out-of-pocket expenses incurred in connection with
the solicitation.
The Annual Report to Shareholders for fiscal year 1996 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 7, 1997, the Corporation had outstanding 10,555,782 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.
<PAGE>
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 7, 1997, except as otherwise noted, of (i) each person (including any
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934
(the "Exchange Act")) known by the Corporation to own beneficially more than
5% of its outstanding Common Stock, (ii) directors and nominees, (iii) the
executive officers named in the Summary Compensation Table who are not
directors, and (iv) all executive officers, directors and nominees as a group.
Under Rule 13d-3 of the Exchange Act, persons who have the 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
3,204,061 (30.4%) of the outstanding Common Stock).
<TABLE>
<CAPTION>
NUMBER OF SHARES AND
NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP OF CLASS
---- -------------------- --------
<C> <S> <C> <C>
(i) Gabelli Group..................... 1,801,012(1) 17.06%
One Corporate Center
Rye, NY 10580
Neuberger & Berman................ 532,350(2) 5.04
(ii) Timothy C. Brown.................. 78,819(3)(6) *
Wallace H. Dunbar................. 454,222(4)(7)(9) 4.30
Roger P. Eklund................... 166,380(4)(8) 1.58
H. Joseph Ferguson................ 308,435(4)(9) 2.92
Gene P. Gardner................... 21,624(4) *
Lawrence E. Gloyd................. 8,140(4) *
William M. Jordan................. 301,935(5)(9) 2.86
Ralph D. Ketchum.................. 10,400(4) *
Franklin J. Lunding, Jr........... 307,791(4)(9) 2.93
(iii) Richard J. Crossland.............. 9,385(6) *
Phillip J. Stuecker............... 49,362(6) *
Clifford C. Moulton............... 21,723(6) *
Ronald D. Schneider............... 13,675(6) *
(iv) All Executive Officers, Directors
and
Nominees as a Group (14 persons). 870,699(6)(10) 8.25
</TABLE>
- --------
*Less than 1.0%
(1) Based upon an amendment to Schedule 13D filed by certain reporting persons
(the "Gabelli Group") with the Securities and Exchange Commission. One of
the members of the Gabelli Group, GAMCO Investors, Inc., beneficially owns
1,550,012 shares, representing 14.68% of the outstanding Common Stock.
GAMCO Investors, Inc. has sole voting power with respect to 1,335,512 of
such shares. The other reporting persons included in this group are
Gabelli Funds, Inc., Gabelli International Limited and Mario J. Gabelli.
2
<PAGE>
(2) Based on Schedule 13G filed by Neuberger & Berman, LLC ("Neuberger &
Berman") with the Securities and Exchange Commission on February 10, 1997.
Neuberger & Berman beneficially owns 532,350 shares, representing 5.04% of
the outstanding Common Stock of which Neuberger & Berman has sole voting
power with respect to 22,700 of such shares. Does not include an aggregate
of 170,200 shares of which 13,800 are owned by principals of Neuberger &
Berman and 156,400 shares are owned by the Neuberger & Berman Profit
Sharing Retirement Plan. Neuberger & Berman disclaims beneficial ownership
of the 170,200 shares.
(3) Excludes shares owned separately by spouses or children in the households
of the following: Mr. Brown--221 shares; and all executive officers and
directors as a group--221 shares. Mr. Brown 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.
(4) Includes 6,000 shares which may be acquired pursuant to options
exercisable within sixty days under the Thomas Industries Inc. Nonemployee
Director Stock Option Plan.
(5) Includes 2,000 shares which may be acquired pursuant to options
exercisable within sixty days under the Thomas Industries Inc. Nonemployee
Director Stock Option Plan.
(6) Includes shares which may be acquired pursuant to stock options
exercisable within sixty days as follows: Mr. Brown--58,500 shares; Mr.
Crossland--9,166 shares; Mr. Stuecker--39,762 shares; Mr. Moulton--14,500
shares; Mr. Schneider--11,250 shares; and all executive officers as a
group--143,190 shares.
(7) Includes 2,032 shares owned by the Dunbar Foundation, for which Mr. Dunbar
serves as President. Mr. Dunbar disclaims beneficial ownership of such
shares.
(8) Includes 37,753 shares held in two 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 2,500 shares held by a pension trust
over which Mr. Eklund shares voting control. Mr. Eklund disclaims
beneficial ownership of such shares.
(9) Includes 298,935 shares held by the Thomas Industries Master Trust, as
amended, of which Messrs. Ferguson, Jordan, Lunding and Dunbar 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. Messrs. Ferguson, Jordan,
Lunding and Dunbar disclaim beneficial ownership of such shares.
(10) The total number of shares of Common Stock of the Corporation reported
for executive officers, directors and nominees as a group is shown after
eliminating duplication within the table.
PROPOSAL NO. 1 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, three Class II
directors are to be elected to serve until 2000 and six 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.
The Board of Directors recommends a vote FOR each of the Class II nominees.
3
<PAGE>
NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to the
nominees and the continuing directors:
<TABLE>
<CAPTION>
NAME, AGE AND YEAR PRINCIPAL OCCUPATION AND OTHER
FIRST ELECTED DIRECTOR INFORMATION
---------------------- ------------------------------
CLASS II NOMINEES FOR ELECTION WITH TERMS EXPIRING IN 2000
<C> <S>
Timothy C. Brown......................
Age 461989 President and Chief Executive Officer
of the Corporation since February
1992, and Chairman of the Board since
April 1995. 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). Director of
National City Bank, Kentucky.
Wallace H. Dunbar.....................
Age 651991 Chairman of the Board of Americo Group
(vinyl and fabric lamination) for more
than five years. Director of Banc One
Kentucky Corporation. Mr. Dunbar
previously served as a director of the
Corporation from 1968 to 1979.
Franklin J. Lunding, Jr...............
Age 581972 Attorney in private practice for more
than five years. Chairman of the
Board, President and Chief Executive
Officer of BioCatalyst Resources, Inc.
and its wholly owned subsidiary, The
Prozyme Co., Inc. (manufacturer and
distributor of enzyme-based food
supplements) since June 1988.
CLASS III DIRECTORS WITH TERMS EXPIRING IN 1998
Roger P. Eklund.......................
Age 651974 Partner of Eklund and Eklund
(attorneys) for more than five years.
Chairman of the Board of Upbancorp,
Inc. (bank holding company) since
1983.
H. Joseph Ferguson ...................
Age 631989 Director and founder of Ferguson,
Wellman, Rudd, Purdy & Van Winkle Inc.
(investments) for more than five
years. President of such entity until
1993.
Ralph D. Ketchum .....................
Age 701989 President of RDK Capital, Inc., the
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, Olgebay-Norton
Corporation, Pacific Scientific
Corporation and Lithium Technology
Corporation.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND YEAR PRINCIPAL OCCUPATION AND OTHER
FIRST ELECTED DIRECTOR INFORMATION
---------------------- ------------------------------
CLASS I DIRECTORS WITH TERMS EXPIRING IN 1999
<C> <S>
Gene P. Gardner ......................
Age 671986 Chairman of the Board 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 ....................
Age 641987 Chairman of the Board and 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 1995).
Director of AMCORE Financial, Inc.,
G.U.D. Holdings Ltd. and Woodward
Governor Co.
William M. Jordan ....................
Age 531995 Chairman, President and Chief
Executive Officer of The Duriron
Company, Inc. (manufacturer of pumps
and related products) since 1993.
Prior to 1993, held various positions
with The Duriron Company including
Executive Vice President and Chief
Operating Officer (1990-1991),
President and Chief Operating Officer
(1991-1993), and has been a director
since 1991. Director of NIBCO.
</TABLE>
5
<PAGE>
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, 1996
during each of the last three fiscal years for services rendered to the
Corporation and its subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION(3)
---------------------------------- ---------------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) (#)(4) ($)(5)
------------------ ---- --------- ----------- ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 1996 $340,000 $139,221 -- 35,000 $70,717
President, Chief 1995 325,000 193,252 -- 30,000 53,274
Executive Officer 1994 275,000 69,809 -- 30,000 31,660
and Chairman of the
Board
Richard J. Crossland(6). 1996 $219,000 $104,171 -- 9,000 $38,695
Vice President, 1995 208,333 159,826 -- 10,000 26,259
Lighting Group Manager 1994 68,974 30,000 $39,734 20,000 --
Phillip J. Stuecker..... 1996 $183,000 $ 74,934 -- 9,000 $30,717
Vice President of 1995 174,000 103,464 -- 10,000 24,636
Finance, 1994 162,000 47,255 -- 10,000 16,763
Chief Financial Officer
and Secretary
Clifford C. Moulton(7).. 1996 $196,000 $ 56,232 -- 9,000 $26,856
Vice President, 1995 190,000 66,206 -- 10,000 30,295
Business Development 1994 180,000 86,426 $56,659 10,000 24,870
Ronald D. Schneider..... 1996 $140,000 $ 54,680 -- 4,500 $22,947
Vice President, General 1995 130,000 86,572 -- 5,000 15,794
Manager, C&I 1994 111,000 25,535 -- 5,000 10,346
Business Unit
</TABLE>
- --------
(1) Represents bonuses paid under the Key Employee Bonus Plan described in the
Compensation Committee Report on Executive Compensation.
(2) The named executive officers received certain perquisites in 1994, 1995
and 1996, 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.
Crossland whose "Other Annual Compensation" included an allowance and
expense reimbursement related to moving of $38,814 in 1994 and Mr. Moulton
whose "Other Annual Compensation" included an allowance and expense
reimbursement related to moving of $51,784 in 1994.
(3) No restricted stock was granted to any of the named executive officers in
1994, 1995 or 1996 and no shares of restricted stock were held by any of
the named executive officers as of the end of 1996.
(4) Represents stock options awarded under the Corporation's incentive stock
plans.
6
<PAGE>
(5) All Other Compensation represents amounts contributed or accrued for
Messrs. Brown, Crossland, Stuecker, Moulton and Schneider under the
Corporation's Profit Sharing Plan and Supplemental Profit Sharing Plan of
$50,877, $34,195, $24,761, $22,356 and $18,447, respectively, a 401(k)
matching contribution of $4,500 for each of them, and for Messrs. Brown
and Stuecker under the Corporation's Supplemental Executive Retirement
Plan contributions of $15,340 and $1,456, respectively.
(6) Richard J. Crossland was elected Vice President, Lighting Group Manager
effective August 18, 1994. Prior to that time, Mr. Crossland was not an
officer or employee of the Corporation. Mr. Crossland's base salary and
bonus potential were established pursuant to an employment agreement
entered into in August 1994 between the Corporation and Mr. Crossland. The
employment agreement expired August 29, 1996.
(7) Pursuant to a Pension Floor Plan under which no additional benefits will
accrue subsequent to June 1995, Mr. Moulton will be entitled to receive a
straight life annuity in the amount of $103 per month commencing at age 65
and upon retirement.
The following tables present certain additional information concerning stock
options granted to the named executive officers during 1996 and the value of
options held by such officers at fiscal year-end.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES
OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(3)
- ------------------------------------------------------------------------ -------------------
NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS OR
UNDERLYING GRANTED TO BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
- ---- ------------- ------------ --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 35,000 21.5% $21.00/sh 12/11/06 $463,050 $1,168,650
Richard J. Crossland.... 9,000 5.5 21.00/sh 12/11/06 119,070 300,510
Phillip J. Stuecker..... 9,000 5.5 21.00/sh 12/11/06 119,070 300,510
Clifford C. Moulton..... 9,000 5.5 21.00/sh 12/11/06 119,070 300,510
Ronald D. Schneider..... 4,500 2.8 21.00/sh 12/11/06 59,535 150,255
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
- --------
(1) All options were granted December 11, 1996, one-fourth of each option
becoming exercisable each year beginning December 11, 1998. All options
permit the optionee to pay for exercise with Common Stock owned for at
least six months. Each year the Compensation Committee determines whether
tax-offset bonuses will be available to holders of non-qualified stock
options upon exercise and whether the holders will be able to pay
withholding tax with shares acquired on exercise. The Compensation
Committee has determined that tax-offset bonuses will be available and
that withholding tax may be paid with shares acquired on exercise, during
1997, provided that such determination is subject to change at any time
during the year.
(2) The exercise price for all options granted is equal to the closing market
price of the Corporation's Common Stock on December 11, 1996.
(3) The amounts shown under these columns are the result of calculations at 5%
and 10% annual rates over the ten-year term of the options as required by
the Securities and Exchange Commission and are not intended to forecast
future appreciation of the stock price of the Corporation's Common Stock.
The actual value, if any, an executive officer may realize will depend on
the excess of the stock price over the exercise price on the date the
option is exercised.
7
<PAGE>
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN-THE-
NUMBER OF SECURITIES UNDERLYING MONEY OPTIONS AT
UNEXERCISED OPTIONS AT FY-END FY-END ($)(1)
----------------------------------- --------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C>
Timothy C. Brown........ 75,037 87,500 $ 574,186 $ 168,750
Richard J. Crossland.... 9,166 10,834 58,746 76,254
Phillip J. Stuecker..... 39,762 26,500 288,758 56,250
Clifford C. Moulton..... 14,500 26,500 133,500 56,250
Ronald D. Schneider..... 13,250 13,250 130,125 28,125
</TABLE>
- --------
(1) Based on the market value of the Corporation's Common Stock on December
31, 1996.
The following table presents information concerning performance share awards
granted to the named executive officers during 1996 under the Corporation's
1995 Incentive Stock Plan.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS
PERFORMANCE UNDER NON-STOCK
NUMBER OF PERIOD PRICE-BASED PLANS
PERFORMANCE UNTIL ----------------------
NAME SHARES (#) MATURATION TARGET (#) MAXIMUM (#)
- ---- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Timothy C. Brown................. 3,810 12/31/99 3,810 5,715
Richard J. Crossland............. 1,000 12/31/99 1,000 1,500
Phillip J. Stuecker.............. 1,000 12/31/99 1,000 1,500
Clifford C. Moulton.............. 1,000 12/31/99 1,000 1,500
Ronald D. Schneider.............. 500 12/31/99 500 750
</TABLE>
Up to 150% of the target shares may be earned, depending on the total
shareholder return of the Corporation during the three-year period commencing
January 1, 1997 and ending December 31, 1999, as compared with the total
shareholder return for the Standard & Poor's Small Cap 600 Index. During the
performance period, dividend equivalents will be credited based on actual
shares earned. The performance share awards provide for pro rata vesting in
the event of death, disability or retirement, and adjust for stock dividends
or splits. In the event of a change in control the performance goals
established thereunder shall be deemed satisfied and 100% of the target shares
will be delivered. In the event of a merger, consolidation or combination of
the Corporation with or into another corporation, the target shares shall be
converted into the acquisition consideration. Recipients of the performance
share awards may elect to defer receipt of any shares earned during the
performance period in accordance with the terms of the performance share
awards. For more information see Proposal No. 2.
OTHER COMPENSATION ARRANGEMENTS
The Corporation entered into agreements ("Change of Control Agreements")
with Messrs. Brown and Stuecker effective October 1, 1988, with Mr. Moulton
effective March 1, 1993 and with Mr. Crossland effective August 29, 1994. The
Change of Control 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
8
<PAGE>
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 Change of
Control 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 an additional one-year term
from October 1 of each year unless the Corporation terminates the extension
upon sixty days' prior notice.
In conjunction with the Change of Control 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 Change of Control 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 Change of Control Agreements.
In addition, options for a total of 443,984 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.
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 one-half
months' 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 one month's compensation and a maximum payment equal to one year's
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 Pay
Policy.
Effective in 1997, the Corporation entered into an employment agreement with
Mr. Brown by which he will be employed as President and Chief Executive
Officer of the Corporation for a continuing three-year period which requires
three year's notice of termination. This agreement provides for a base salary
of $360,000 in 1997, $375,000 in 1998 and $390,000 in 1999. It also makes Mr.
Brown eligible for (i) annual target bonuses on not less than sixty percent
(60%) of his salary and (ii) participation in the Company's 1995 Incentive
Stock Plan and
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awards of stock options and performance shares as determined from time to time
by the Compensation Committee. The agreement may be terminated by the
Corporation at any time for cause as defined in the Change of Control
Agreements referred to above. If Mr. Brown's employment is terminated by the
Corporation without cause, the Corporation will be obligated to (i) pay Mr.
Brown his base salary for a 36-month period from the date of termination (ii)
provide Mr. Brown with health and life insurance coverage to which he would
otherwise have been entitled and (iii) pay Mr. Brown a lump sum distribution
equal to the present value of three annual contributions to the Company's
retirement plan. In the event of a change of control, the provisions of the
Change of Control Agreements referred to above shall supersede the provisions
of the employment agreement.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for 1996:
EXECUTIVE OFFICER COMPENSATION POLICIES AND 1996 RESULTS
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 1995 Incentive Stock Plan directly link
potential participant rewards to increases in shareholder value. As a result
of the Corporation's practice in implementing these plans, more than 40% of
senior executive officers' potential compensation is directly related to
financial performance and increases in shareholder value.
With respect to 1996, the Committee approved executive officer salaries,
based on individual performance and the results of an executive compensation
survey conducted on behalf of the Committee by an independent executive
compensation consulting firm (the "Survey"). Based upon the Survey, the
Committee believes executive officer base salaries for 1996 are at or below
median competitive base salary levels of manufacturing companies with
comparable revenues.
For the 1996 Key Employee Bonus Plan, the Committee approved goals based on
corporate pre-tax earnings, business unit operating income, return on assets
and individual participant performance. As a result of the achievement of such
goals in 1996, bonuses were awarded to executive officers. See the Summary
Compensation Table on page 6.
Federal tax law establishes certain requirements in order for compensation
exceeding $1 million earned by certain executives to be deductible. Because
the total compensation for executive officers is significantly below the $1
million threshold, the Compensation Committee has not had to address the
issues relative thereto.
Effective in 1997, the Company adopted the performance share award program
to provide incentives and a more competitive compensation package for its
executive officers. The performance share awards are based on the achievement
of certain long-term performance goals of the Company related to total
shareholder return. For 1997, the Compensation Committee established targets
and goals based on total shareholder return as compared to the Standard &
Poor's Small Cap 600 Index and granted performance share awards to the named
executive
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officers based on these goals. For more information on this subject see "Long-
Term Incentive Plan--Awards in Last Fiscal Year" and Proposal No. 2.
CHIEF EXECUTIVE OFFICER COMPENSATION
For 1996, Mr. Brown's potential bonus award was based on the Corporation
meeting certain financial objectives, including targets related to company-
wide earnings and return on assets as well as operating income and return on
assets of the Lighting Group and Compressor & Vacuum Pump Group and certain
functional objectives, including the further consolidation of functions in the
Lighting Group. Since such goals were achieved, a bonus was paid for 1996
performance under the bonus program established in February 1996 by the
Committee. See the Summary Compensation Table on page 6.
In 1996, the Committee granted Mr. Brown stock options as part of his
overall compensation. The Committee 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 Compensation Committee granted Mr. Brown a performance share award based
on total shareholder return as indicated above for the reasons indicated
above. The combination of stock options and performance share awards granted
to Mr. Brown are intended to bring his overall compensation within a
competitive range for chief executive officers of companies comparable to the
Corporation. For more information concerning the performance share awards see
"Long-Term Incentive Plan--Awards in Last Fiscal Year" and Proposal No. 2.
In addition, the Compensation Committee recommended to the full Board of
Directors that the Corporation enter into an employment agreement with Mr.
Brown effective in 1997. This agreement was entered into by the Corporation to
assure it of Mr. Brown's services for the next three years and to provide a
framework for Mr. Brown's compensation during the next three years. For
further information on the employment agreement, see the last paragraph under
the caption "Other Compensation Arrangements."
----------------
COMPENSATION COMMITTEE
Gene P. Gardner
Lawrence E. Gloyd
William M. Jordan
Ralph D. Ketchum
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1996, 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 1996 and no member of the Compensation Committee was
formerly an officer of the Corporation.
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PERFORMANCE GRAPH
The Board of Directors has determined that the Standard and Poor's Small Cap
600 Index more fairly reflects the performance of the Corporation and is the
index in which the Corporation is included. Accordingly, the Standard and
Poor's 500 Index will be eliminated from future proxy statements. 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
Standard & Poor's 500 Index, Standard & Poor's Small Cap 600 Index and the
Value Line Building Materials Index.
LOGO
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Thomas Industries Inc............. $100 $ 79.06 $117.56 $132.27 $221.21 $200.39
Standard & Poor's 500 Index....... 100 107.79 118.66 120.56 165.78 204.32
Standard & Poor's Small Cap 600
Index............................ 100 121.04 143.78 136.92 177.94 213.91
Value Line Building Materials
Index............................ 100 104.99 135.71 101.86 140.47 156.54
</TABLE>
Based on $100 invested on December 31, 1991 in the Corporation's Common
Stock, the Standard & Poor's 500 Index, Standard & Poor's Small Cap 600 Index
and the Value Line Building Materials Index.
PROPOSAL NO. 2 APPROVAL OF BUSINESS CRITERIA AND MATERIAL TERMS RELATING TO
PERFORMANCE SHARE AWARDS.
The Corporation's 1995 Incentive Stock Plan, as amended (the "Plan"),
permits the grant of performance share awards. The Compensation Committee has
determined that the use of performance share awards will further motivate
participants and link their compensation to the shareholders because the
performance share awards are payable in Common Stock of the Corporation. Under
Section 162(m) of the Internal Revenue Code of 1986 and related regulations,
performance share awards paid to the named executive officers will be exempt
from the deduction limitation imposed under Section 162(m) if they qualify as
"performance-based." The
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purpose of this Proposal is to obtain shareholder approval of the business
criteria and material terms of the performance share awards so that they will
qualify as performance-based. The Plan was originally approved by the
shareholders in 1995. The material terms, as described below, consist of the
following: (i) the individuals eligible to receive performance share awards
under the Plan, (ii) the business criteria on which the performance share
awards are payable under the Plan, and (iii) the maximum number of performance
share awards payable under the Plan to a participant.
Under the Plan, executive officers and other senior management of the
Corporation and its subsidiaries are eligible to receive performance share
awards. Performance share awards under the Plan will be paid one hundred
percent (100%) in the Common Stock of the Corporation. Generally, a
participant must be employed by the Corporation or a subsidiary as of the last
day of the performance cycle. If employment is terminated prior to the last
day of the performance cycle due to the participant's death, disability or
qualified retirement, a prorated portion of the performance shares will be
paid to the participant or the participant's designated beneficiary. The
performance share awards also contain provisions with respect to stock
dividends or splits, change in control and the effect of mergers and
consolidations.
The Board may amend, suspend or modify the Plan at any time, except as
limited by the terms of the Plan and the specific performance share awards.
The Compensation Committee administers the Plan and will approve the
participants and the objective performance goals in writing before the
beginning of each performance cycle. A performance cycle under the Plan is a
period of three consecutive fiscal years of the Corporation. All shares paid
pursuant to the performance share awards must be payable as the result of the
achievement of objectively measured performance targets based on quantifiable,
measurable business criteria. The performance goals will be based on total
shareholder return as compared with the Standard & Poor's Small Cap 600 Index
over a three fiscal year period. The specific targets relating to performance
goals constitute confidential business information and are not disclosed.
The Compensation Committee must certify, in writing, that the goals have
been met before any payments to participants will be made. The Compensation
Committee will have no discretion to increase the shares payable to any
participant or to otherwise alter the performance goals after the beginning of
a performance cycle.
For information concerning the performance share awards made in December of
1996 see "Long-Term Incentive Plan--Awards in Last Fiscal Year." In addition
to the named executive officers, three other persons received a total of 1,500
target performance share awards with a maximum of 2,250. The maximum number of
shares of Common Stock applicable to a performance share award to any
participant during any performance cycle is 20,000.
At the end of the three-year performance cycle, if the performance goals are
achieved and so determined by the Compensation Committee, a participant will
receive shares of the Common Stock of the Corporation which will be taxable as
ordinary income based on the fair market value on the date of the Compensation
Committee's determination, and the Corporation will receive a corresponding
tax deduction.
As of March 7, 1997, the closing price of the Corporation's Common Stock was
$24 7/8.
The Board of Directors recommends that the shareholders approve the business
criteria and material terms of the performance share awards to be granted
under the Corporation's 1995 Incentive Stock Plan.
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<PAGE>
BOARD OF DIRECTORS
The Board of Directors held 5 meetings during 1996. All directors attended
at least 75 percent of the aggregate number of such meetings and of meetings
of Board committees on which they served in 1996.
The Board of Directors has an Audit Committee which met 3 times during 1996.
The Audit Committee is composed of Wallace H. Dunbar, Gene P. Gardner,
Franklin J. Lunding, Jr. and Ralph D. Ketchum. The functions of the Audit
Committee consist of reviewing with the independent auditors 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 auditors and the fees charged therefor,
selecting the Corporation's independent auditors 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 3 times during
1996. The Compensation Committee is composed of Gene P. Gardner, Lawrence E.
Gloyd, William M. Jordan and Ralph D. Ketchum. The functions of the
Compensation Committee consist of establishing the remuneration for the Chief
Executive Officer, consulting with the Chief Executive Officer with respect to
the compensation of other executives of the Corporation, and administering and
determining awards under the Corporation's stock incentive plans and certain
other employee benefit plans.
The Nominating and Search Committee met 1 time during 1996. The Nominating
and Search Committee is composed of Timothy C. Brown, Roger P. Eklund, H.
Joseph Ferguson, Gene P. Gardner and Lawrence E. Gloyd. The functions of the
Nominating and Search Committee consist of reviewing the recruitment of senior
management, monitoring senior management, director succession plans and
reviewing new director nominees. The Nominating and Search Committee will
consider director nominees recommended by shareholders, if such
recommendations are submitted in writing to the Committee.
Directors who are committee chairmen (except for directors who are employees
of the Corporation) receive a fee of $18,500 per year, and all other directors
(except for directors who are employees of the Corporation) receive a fee of
$16,200 per year. In addition, all directors (except for directors who are
employees of the Corporation and the Chairman of the Board) receive $850 for
attendance at each Board of Directors meeting, committee meeting, special
management meeting, if any, and annual meeting of shareholders, plus expenses
for attendance. In addition, pursuant to the Corporation's Nonemployee
Director Stock Option Plan each nonemployee director receives on the date of
each annual meeting a non-qualified stock option to purchase 2,000 shares of
Common Stock. Effective in 1997, the Nonemployee Director Stock Option Plan
has been amended to permit directors who are not employees of the Corporation
to elect to receive their annual retainer and meeting fees in shares of Common
Stock.
Mr. Eklund is a partner in the law firm of Eklund and Eklund which provided
certain legal services to the Corporation in 1996.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that certain of 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
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<PAGE>
1996, 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.
AUDITORS
Ernst & Young LLP ("Ernst & Young") has been selected as the Corporation's
independent auditors for the 1997 fiscal year. Representatives of Ernst &
Young 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.
On February 7, 1996, on the recommendation of the Audit Committee, the Board
of Directors appointed Ernst & Young as the Corporation's independent auditors
for the 1996 fiscal year, replacing KPMG Peat Marwick LLP ("KPMG") which was
dismissed from that role.
KPMG's reports on the financial statements for the two fiscal years
preceding dismissal contained no adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles. During the two fiscal years and interim period preceding the
dismissal, there were no disagreements with KPMG on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure.
PROPOSALS OF SECURITY HOLDERS
A shareholder proposal to be presented at the 1998 Annual Meeting must be
received at the Corporation's executive offices, 4360 Brownsboro Road, Suite
300, Louisville, Kentucky 40207 by no later than November 14, 1997 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 the requirements a
shareholder must meet to have a proposal included in the Corporation's proxy
statement.
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.
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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 14, 1997
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<PAGE>
PROXY
THOMAS INDUSTRIES INC.
4360 BROWNSBORO ROAD, SUITE 300, LOUISVILLE, KENTUCKY 40207
Solicited on behalf of the Board of Directors
Annual Meeting of Shareholders
April 17, 1997
The undersigned hereby appoints Timothy C. Brown and Phillip J. Stuecker,
or either of them, with full power of substitution, to represent and to vote the
stock of the undersigned at the Annual Meeting of Shareholders of Thomas
Industries Inc., to be held at the Seelbach Hotel, 500 Fourth Street,
Louisville, Kentucky, on Thursday, April 17, 1997 at 10 A.M., Eastern Daylight
Time, or at any adjournment thereof as follows:
1. Election of Directors
[_] FOR all the nominees listed below [_] WITHHOLD AUTHORITY to
(except as marked to the contrary below). vote for all the nominees
listed below
Timothy C. Brown Wallace H. Dunbar Franklin J. Lunding, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name below.
- --------------------------------------------------------------------------------
2. Proposal to approve the business criteria and material terms relating to
performance share awards to be granted under the Corporation's 1995 Incentive
Stock Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion on any other matter that may properly come before the
meeting or any adjournment thereof.
Please mark, sign on the reverse side, date and return in the enclosed envelope.
(Continued and to be signed on reverse side)
<PAGE>
This proxy when properly executed will be voted in the manner directed by
the undersigned shareholder(s). If no direction is made, the proxy will be
voted FOR proposals 1 and 2.
Date_______________________, 1997
_________________________________________
Signature(s)
_________________________________________
Signature(s)
When signing as attorney, administrator,
personal representative, executor,
custodian, trustee, guardian or corporate
official, please give your full title as
such. When stock is held in the name of
more than one person, each such person
should sign the proxy.
