<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:
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(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 16, 1998
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 16, 1998 at 10:00 A.M. Eastern
Daylight Time for the following purposes:
1. To elect three Class III directors.
2. 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 6, 1998 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 18, 1998
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 16, 1998
----------------
To the Shareholders of
THOMAS INDUSTRIES INC.:
This Proxy Statement is being mailed to shareholders on or about March 18,
1998 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 16, 1998 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 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
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 Corporate
Investor Communications, Inc. 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 1997 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 6, 1998, the Corporation had outstanding 15,862,422 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 6, 1998, 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
4,615,303 (29.1% 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.................. 2,453,268(1) 15.47%
One Corporate Center
Rye, NY 10580
Neuberger & Berman, LLC........ 1,038,225(2) 6.55
(ii) Timothy C. Brown............... 141,612(3)(6) *
Wallace H. Dunbar.............. 625,345(4)(7)(8) 3.94
H. Joseph Ferguson............. 406,665(4)(8) 2.56
Gene P. Gardner................ 35,436(4) *
Lawrence E. Gloyd.............. 16,189(4) *
William M. Jordan.............. 398,326(5)(8) 2.51
Ralph D. Ketchum............... 21,100(4) *
Franklin J. Lunding, Jr........ 405,699(4)(8) 2.56
Anthony A. Massaro............. -- --
(iii) Richard J. Crossland........... 26,913(6) *
Clifford C. Moulton............ 40,393(6) *
Phillip J. Stuecker............ 79,064(6) *
Ronald D. Schneider............ 24,565(6) *
(iv) All Executive Officers,
Directors and
Nominees as a Group (16
persons)...................... 1,123,810(4)(5)(6)(9) 7.08
</TABLE>
- --------
*Less than 1.0%
(1) Based on an amendment to Schedule 13D filed by certain reporting persons
(the "Gabelli Group") with the Securities and Exchange Commission in July
1997. One of the members of the Gabelli Group, GAMCO Investors, Inc.,
beneficially owns 2,031,768 shares, representing 12.81% of the outstanding
Common Stock. GAMCO Investors, Inc. has sole voting power with respect to
1,968,768 of such shares. The other reporting persons included in this
group are Gabelli Funds, Inc., Gabelli International Limited and Mario J.
Gabelli.
(2) Based on an amended Schedule 13G filed by Neuberger & Berman, LLC
("Neuberger & Berman") with the Securities and Exchange Commission in
February 1998. Neuberger & Berman beneficially owns
2
<PAGE>
1,038,225 shares, representing 6.55% of the outstanding Common Stock of
which Neuberger & Berman has sole voting power with respect to 658,575 of
such shares. Does not include an aggregate of 23,700 shares which are owned
by principals of Neuberger & Berman. Neuberger & Berman disclaims
beneficial ownership of the 23,700 shares.
(3) Excludes shares owned separately by spouses or children in the households
of the following: Mr. Brown 337 shares; and all executive officers and
directors as a group--337 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 12,000 shares which may be acquired pursuant to options
exercisable within sixty days under the Thomas Industries Inc. Nonemployee
Director Stock Option Plan.
(5) Includes 6,000 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--110,250 shares; Mr.
Crossland--26,250 shares; Mr. Moulton--29,250 shares; Mr. Stuecker--58,875
shares; Mr. Schneider--20,625 shares; and all executive officers as a
group--293,625 shares.
(7) Includes 3,048 shares owned by the Dunbar Foundation, for which Mr. Dunbar
serves as President. Mr. Dunbar disclaims beneficial ownership of such
shares.
(8) Includes 389,415 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.
(9) 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.
3
<PAGE>
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. On December 10, 1997, the Board of Directors amended
the Corporation's Bylaws to increase the number of directors from nine to ten
and to increase the number of members of Class III from three to four. Anthony
A. Massaro was elected by the Board of Directors as a Class III director to
fill the newly created vacancy. Roger P. Eklund, a member of the Board of
Directors for 24 years, died in January 1998. The Board of Directors will miss
the friendship, counsel and valuable insight that Mr. Eklund has given to the
Corporation over his many years of service. As a result of Mr. Eklund's death,
the Board of Directors amended the Corporation's Bylaws, effective as of
February 11, 1998, to reduce the number of directors to nine and to reduce the
number of members of Class III to three. At the Annual Meeting of
Shareholders, three Class III directors are to be elected to serve until 2001
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 III nominees.
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
FIRST ELECTED DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---------------------- ------------------------------------------
CLASS III NOMINEES FOR ELECTION WITH TERMS EXPIRING IN 2001
<S> <C>
H. Joseph Ferguson........... Founded Ferguson, Wellman, Rudd, Purdy & Van
Age 641989 Winkle Inc. ("FWRPV") in 1975 (registered
investment advisers). Retired as a director of
FWRPV on December 31, 1997 and was President of
FWRPV until 1993.
Ralph D. Ketchum............. President of RDK Capital, Inc., the general
Age 711989 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
FIRST ELECTED DIRECTOR PRINCIPAL OCCUPATION AND OTHER INFORMATION
- ---------------------- ------------------------------------------
<S> <C>
Anthony A. Massaro........... President and Chief Executive Officer of The
Age 531997 Lincoln Electric Company (manufacturer of arc
welding products and electric motors) ("Lincoln")
since 1996 and Chairman of the Board since 1997.
Chief Operating Officer of Lincoln during 1996.
President of Lincoln (International) from 1995 to
1996 and President of Lincoln (Europe) from 1993
to 1995. Prior to joining Lincoln, Mr. Massaro
served as Group Vice President of Westinghouse
Electric Corporation.
CLASS I DIRECTORS WITH TERMS EXPIRING IN 1999
Gene P. Gardner.............. Chairman of the Board of Beaver Dam Coal Company
Age 681986 (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 and Chief Executive Officer
Age 651987 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............ President and Chief Operating Officer of Flowserve
Age 541995 Corp. (manufacturer of pumps and related products)
since May 1997 and prior thereto Chairman,
President and Chief Executive Officer of The
Duriron Company, Inc. Prior to 1993, held various
positions with The Duriron Company including
President and Chief Operating Officer (1991-1993),
and has been a director since 1991. Director of
NIBCO.
CLASS II DIRECTORS WITH TERMS EXPIRING IN 2000
Timothy C. Brown............. President and Chief Executive Officer of the
Age 471989 Corporation since February 1992, and Chairman of
the Board since April 1995. Director of National
City Bank, Kentucky.
Wallace H. Dunbar............ Chairman of the Board of Americo Group (vinyl and
Age 661991 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...... Attorney in private practice for more than five
Age 591972 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.
</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, 1997
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........ 1997 $360,000 $374,869 -- 52,500 $76,666
President, Chief 1996 340,000 139,221 -- 52,500 70,717
Executive Officer and 1995 325,000 193,252 -- 45,000 53,274
Chairman of the Board
Richard J. Crossland.... 1997 $225,000 $185,446 -- 13,500 $42,232
Vice President, 1996 219,000 104,171 -- 13,500 38,695
Lighting Group Manager 1995 208,333 159,826 -- 15,000 26,259
Clifford C. Moulton (6). 1997 $198,000 $144,325 -- 10,000 $34,324
Vice President, 1996 196,000 56,232 -- 13,500 26,856
Business Development 1995 190,000 66,206 -- 15,000 30,295
Phillip J. Stuecker..... 1997 $192,500 $140,316 $ 4,755 13,500 $33,753
Vice President of 1996 183,000 74,934 -- 13,500 30,717
Finance, 1995 174,000 103,464 -- 15,000 24,636
Chief Financial Officer
and Secretary
Ronald D. Schneider..... 1997 $165,000 $113,545 $15,710 7,000 $25,054
Vice President, General 1996 140,000 54,680 -- 6,750 22,947
Manager, C&I 1995 130,000 86,572 -- 7,500 15,794
Business Unit
</TABLE>
- --------
(1) Represents bonuses paid under the Key Employee Bonus Plan described in the
Compensation Committee Report on Executive Compensation.
(2) Messrs. Stuecker and Schneider received tax offset bonuses upon exercise
of stock options in 1997. The named executive officers received certain
perquisites in 1995, 1996 and 1997, the amount of which did not exceed the
lesser of $50,000 or 10% of any such officer's salary and bonus.
(3) No restricted stock was granted to any of the named executive officers in
1995, 1996 or 1997 and no shares of restricted stock were held by any of
the named executive officers as of the end of 1997.
(4) Represents stock options awarded under the Corporation's incentive stock
plans.
(5) All Other Compensation represents amounts contributed or accrued for
Messrs. Brown, Crossland, Moulton, Stuecker and Schneider under the
Corporation's Profit Sharing Plan and Supplemental Profit Sharing Plan
6
<PAGE>
of $69,676, $37,482, $29,574, $29,003 and $20,304, respectively, a 401(k)
matching contribution of $4,750 for each of them, and for Mr. Brown under
the Corporation's Supplemental Executive Retirement Plan a contribution of
$2,240.
(6) 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 $103 per month commencing at age 65
and upon retirement.
The following tables present certain additional information concerning stock
options granted to the named executive officers during 1997 and the value of
options held by such officers at fiscal year-end.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(3)
- ------------------------------------------------------------------------ ---------------------------
NUMBER OF % OF TOTAL EXERCISE
SECURITIES OPTIONS OR
UNDERLYING GRANTED TO BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
- ---- ------------- ------------ --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 52,500 21.4% $21.75/sh 12/9/07 $ 719,381 $ 1,815,581
Richard J. Crossland.... 13,500 5.5 21.75/sh 12/9/07 184,984 466,864
Clifford C. Moulton..... 10,000 4.1 21.75/sh 12/9/07 137,025 345,825
Phillip J. Stuecker..... 13,500 5.5 21.75/sh 12/9/07 184,984 466,864
Ronald D. Schneider..... 7,000 2.9 21.75/sh 12/9/07 95,918 242,078
</TABLE>
- --------
(1) All options were granted December 9, 1997, one-fourth of each option
becoming exercisable each year beginning December 9, 1999. 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
1998, 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 9, 1997.
(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>
The following table sets forth information with respect to the named
executive officers concerning exercise of options during the last fiscal year
and unexercised options held as of the end of this fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END # AT FY-END ($)(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- --------------- ----------- ------------- ----------- ------------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 16,537 $148,923 110,250 161,250 $1,170,875 $720,000
Richard J. Crossland.... -- -- 26,250 45,750 248,125 217,000
Clifford C. Moulton..... -- -- 29,250 42,250 320,375 217,000
Phillip J. Stuecker..... 5,512 89,259 58,875 45,750 616,719 217,000
Ronald D. Schneider..... 2,000 26,750 20,625 23,125 236,562 108,500
</TABLE>
- --------
(1) Represents the difference between the closing price of the Corporation's
Common Stock on the date of exercise and the exercise price of the option.
(2) Based on the market value of the Corporation's Common Stock on December
31, 1997.
The following table presents information concerning performance share awards
granted to the named executive officers during 1997 under the Corporation's
1995 Incentive Stock Plan.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER NON-
PERFORMANCE STOCK
NUMBER OF PERIOD PRICE-BASED PLANS
PERFORMANCE UNTIL ----------------------
NAME SHARES (#) MATURATION TARGET (#) MAXIMUM (#)
- ---- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Timothy C. Brown................. 5,715 12/31/00 5,715 8,572
Richard J. Crossland............. 1,500 12/31/00 1,500 2,250
Clifford C. Moulton.............. 1,167 12/31/00 1,167 1,750
Phillip J. Stuecker.............. 1,500 12/31/00 1,500 2,250
Ronald D. Schneider.............. 833 12/31/00 833 1,249
</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, 1998 and ending December 31, 2000, 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.
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
8
<PAGE>
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 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" (as
defined) 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 786,918 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
9
<PAGE>
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 of not less than
sixty percent (60%) of his salary and (ii) participation in the Corporation's
1995 Incentive Stock Plan and 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
Corporation's retirement plan. In the event of a change of control, the
provisions of the Change of Control Agreements referred to above 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 1997:
EXECUTIVE OFFICER COMPENSATION POLICIES AND 1997 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 Option 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 1997, 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 1997 are at or below
median competitive base salary levels of manufacturing companies with
comparable revenues.
For the 1997 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 1997, 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, but has focused on this issue with respect to the
performance share award program.
Effective in 1997, the Corporation 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
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<PAGE>
the achievement of certain long-term performance goals of the Corporation
related to total shareholder return. For 1997 and 1998, 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 officers based on these goals. For more
information on this subject see "Long-Term Incentive Plan--Awards in Last
Fiscal Year."
CHIEF EXECUTIVE OFFICER COMPENSATION
For 1997, 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. Since such goals were achieved, a bonus was paid for
1997 performance under the bonus program established in February 1997 by the
Committee. See the Summary Compensation Table on page 6.
In 1997, 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 discussed
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."
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
Anthony A. Massaro
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1997, 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 1997 and no member of the Compensation Committee was
formerly an officer of the Corporation.
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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 Standard & Poor's Small Cap 600 Index and the Value Line Building
Materials Index.
LOGO
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Thomas Industries Inc............. $100 $148.70 $167.31 $279.81 $253.47 $364.89
Standard & Poor's Small Cap 600
Index............................ 100 118.78 113.12 147.01 177.60 222.56
Value Line Building Materials
Index............................ 100 128.78 121.43 158.60 184.50 222.58
</TABLE>
Based on $100 invested on December 31, 1992 in the Corporation's Common
Stock, the Standard & Poor's Small Cap 600 Index and the Value Line Building
Materials Index.
12
<PAGE>
BOARD OF DIRECTORS
The Board of Directors held five meetings during 1997. 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 1997.
The Board of Directors has an Audit Committee which met three times during
1997. The Audit Committee is currently composed of Wallace H. Dunbar, Gene P.
Gardner, Ralph D. Ketchum, Franklin J. Lunding, Jr. and Anthony A. Massaro.
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, subject to the approval of the Board of Directors, 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 1997. The Compensation Committee is currently composed of Gene P.
Gardner, Lawrence E. Gloyd, William M. Jordan, Ralph D. Ketchum and Anthony A.
Massaro. 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 three times during 1997. The
Nominating and Search Committee is currently composed of Timothy C. Brown, 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) currently receive a fee of $19,200 per year, and all other
directors (except for directors who are employees of the Corporation) receive
a fee of $16,800 per year. In addition, all directors (except for directors
who are employees of the Corporation and the Chairman of the Board) receive
$900 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 3,000
shares of Common Stock. Effective in 1997, the Nonemployee Director Stock
Option Plan permits directors to elect to receive their annual retainer and
meeting fees in shares of Common Stock.
Any director, elected prior to 1995, terminating his membership on the Board
of Directors after at least one year of service thereon is eligible to receive
an annual retainer fee, plus certain benefits as are available to active
directors, for three years following termination of Board membership. Any new
director elected to the Board after 1994 is entitled to receive a benefit
equal to one years retainer fee for each three years served on the Board of
Directors, up to a maximum of a three-year benefit. This fee is equal to the
fee such director received as an active member of the Board prior to
termination.
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<PAGE>
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 1997, 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
Selection of the independent auditors is made by the Board of Directors upon
consultation with the Audit Committee. The Corporation's independent public
accountants for fiscal year ended December 31, 1997, were Ernst & Young LLP
("Ernst & Young"). The Board of Directors will vote upon selection of the
auditors for the current fiscal year at a future Board of Directors' meeting.
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 1999 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, 1998, 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.
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<PAGE>
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 18, 1998
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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 16, 1998
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 16, 1998 at 10 A.M., Eastern Daylight
Time, or at any adjournment thereof as follows:
1. Election of Directors
<TABLE>
<S> <C>
[_] FOR all the nominees listed below [_] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary below). the nominees listed below
H. Joseph Ferguson Ralph D. Ketchum Anthony A. Massaro
INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name below.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
2. 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 proposal 1.
Date___________________________________, 1998
_____________________________________________
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.
