<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.:
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(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 15, 1999
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Thomas Industries Inc., a Delaware
corporation, will be held at the Hyatt Regency Hotel, 320 West Jefferson
Street, Louisville, Kentucky, on Thursday, April 15, 1999, at 10:00 A.M.
Eastern Daylight Time, for the following purposes:
1. To elect three Class I directors.
2. To consider and vote upon a proposed amendment to the Thomas Industries
Inc. 1995 Incentive Stock Plan, as amended and restated, to increase the
number of shares of Common Stock reserved thereunder by 750,000 shares.
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 5, 1999, 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 12, 1999
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 15, 1999
----------------
To the Shareholders of
THOMAS INDUSTRIES INC.:
This Proxy Statement is being mailed to shareholders on or about March 12,
1999, 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 15, 1999, 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 proposal to increase the number of shares reserved
under the Thomas Industries Inc. 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 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 $5,500, plus reimbursement of reasonable out-of-pocket expenses
incurred in connection with the solicitation.
The Annual Report to Shareholders for fiscal year 1998 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 5, 1999, the Corporation had outstanding 15,758,789 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 5, 1999, 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
percent 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 13(d)(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
4,290,181 (27.2 percent of the outstanding Common Stock).
<TABLE>
<CAPTION>
Number of Shares and
Nature of Percent
Name Beneficial Ownership of Class
---- -------------------- --------
<S> <C> <C>
(i)Gabelli Group.................... 2,294,620(1) 14.56%
One Corporate Center
Rye, NY 10580
Neuberger Berman, LLC............... 1,105,375(2) 7.01
605 Third Avenue
New York, New York 10158
(ii)Timothy C. Brown................ 176,424(3)(5) 1.12
Wallace H. Dunbar................... 351,682(4)(6)(7) 2.23
H. Joseph Ferguson.................. 117,002(4)(7) *
Gene P. Gardner..................... 38,436(4) *
Lawrence E. Gloyd................... 20,104(4) *
William M. Jordan................... 111,088(4)(7) *
Ralph D. Ketchum.................... 25,274(4) *
Franklin J. Lunding, Jr............. 116,036(4)(7) *
Anthony A. Massaro.................. 3,789(4) *
(iii)Clifford C. Moulton............ 51,494(5) *
Phillip J. Stuecker................. 91,500(5) *
Bernard R. Berntson................. 42,474(5) *
Richard J. Crossland................ 17,514(5) *
(iv)All Executive Officers,
Directors, and Nominees as a
Group (14 people).............. 890,186(4)(5)(8) 5.65
</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
November 1998. One of the members of the Gabelli Group, GAMCO Investors,
Inc., beneficially owns 1,842,120 shares, representing 11.69% of the
outstanding Common Stock. GAMCO Investors, Inc. has sole voting power with
respect to 1,795,370 of such shares. The other reporting persons included
in this group are Gabelli Funds, Inc., Gemini Capital Management Limited,
Marc J. Gabelli, and Mario J. Gabelli.
2
<PAGE>
(2) Based on an amended Schedule 13G filed by Neuberger Berman, LLC
("Neuberger Berman"), with the Securities and Exchange Commission in
February 1999. Neuberger Berman beneficially owns 1,105,375 shares,
representing 7.01% of the outstanding Common Stock, of which Neuberger
Berman has sole voting power with respect to 703,175 of such shares. Does
not include an aggregate of 25,050 shares that are owned by principals of
Neuberger Berman. Neuberger Berman disclaims beneficial ownership of the
25,050 shares.
(3) Excludes 341 shares owned separately by Mr. Brown's spouse. 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 shares that may be acquired pursuant to options exercisable
within sixty days under the Thomas Industries Inc. Nonemployee Director
Stock Option Plan as follows: Messrs. Ferguson, Gardner, Gloyd, Ketchum,
and Lunding, 15,000 shares each; Mr. Jordan, 9,000 shares; Mr. Dunbar,
6,000 shares; and Mr. Massaro, 3,000 shares.
(5) Includes shares that may be acquired pursuant to stock options exercisable
within sixty days as follows: Mr. Brown, 139,875 shares; Mr. Moulton,
40,125 shares; Mr. Stuecker, 69,750 shares; Mr. Berntson, 40,125 shares;
Mr. Crossland, 10,876 shares; and all executive officers as a group,
310,876 shares.
(6) Includes 3,048 shares owned by the Dunbar Foundation, for which Mr. Dunbar
serves as President. Mr. Dunbar disclaims beneficial ownership of such
shares.
(7) Includes 96,752 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.
(8) 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. Ralph D. Ketchum, a member of the Audit and
Compensation Committees, has advised the Corporation that he is retiring as a
director effective as of April 15, 1999. The Board of Directors wishes to
thank him for his service to the Corporation over the years. As a result of
his retirement, the Board of Directors has amended the Corporation's Bylaws,
effective as of April 15, 1999, to reduce the number of directors from nine to
eight and reducing the number of members of Class III from three to two. At
the Annual Meeting of Shareholders, three Class I directors are to be elected
to serve until 2002, and five 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 I 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 I Nominees for Election with Terms Expiring in 2002
<S> <C>
Gene P. Gardner.............. Chairman of the Board of Beaver Dam Coal Company
Age 69 1986 (coal properties) since 1983. Director of
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 66 1987 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.,
and Woodward Governor Co.
William M. Jordan............ Retired President and Chief Operating Officer of
Age 55 1995 Flowserve Corp. (manufacturer of pumps and related
products). President and Chief Operating Officer
of Flowserve Corp. from May 1997 to October 1998,
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). Director of NIBCO.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name, Age and Year
First Elected Director Principal Occupation and Other Information
- ---------------------- ------------------------------------------
Class II Directors with Terms Expiring in 2000
<S> <C>
Timothy C. Brown............. President and Chief Executive Officer of the
Age 48 1989 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 67 1991 fabric lamination) for more than five years. 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 60 1972 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 2001
H. Joseph Ferguson........... Founded Ferguson, Wellman, Rudd, Purdy & Van
Age 65 1989 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.
Anthony A. Massaro........... President and Chief Executive Officer of The
Age 54 1997 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.
</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 three most highly compensated executive officers at December 31, 1998,
during each of the last three fiscal years for services rendered to the
Corporation and its subsidiaries. Mr. Crossland resigned as an officer of the
Corporation on August 30, 1998. See Footnote 7.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation(3)
--------------
Annual Compensation Awards
---------------------------------- --------------
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........ 1998 $375,000 $150,022 -- 52,500 $96,634
President, Chief 1997 360,000 374,869 -- 52,500 76,666
Executive
Officer and Chairman of 1996 340,000 139,221 -- 52,500 70,717
the Board
Clifford C. Moulton (6). 1998 $204,900 $ 60,159 -- 7,300 $40,569
Vice President, 1997 198,000 144,325 -- 10,000 34,324
Business
Development 1996 196,000 56,232 -- 13,500 26,856
Phillip J. Stuecker..... 1998 $200,000 $ 63,701 -- 13,500 $39,638
Vice President of 1997 192,500 140,316 $4,755 13,500 33,753
Finance,
Chief Financial 1996 183,000 74,934 -- 13,500 30,717
Officer, and Secretary
Bernard R. Berntson..... 1998 $183,500 $ 24,792 -- 10,100 $27,896
Vice President, General 1997 177,000 57,654 -- 10,000 28,903
Manager, North American 1996 169,000 39,394 -- 7,500 21,707
Compressor & Vacuum
Pump Group
Richard J. Crossland 1998 $156,000 $ 24,334 -- 4,700 $34,170
(7).....................
Vice President, 1997 225,000 185,446 -- 13,500 42,232
Lighting
Group Manager 1996 219,000 104,171 -- 13,500 38,695
</TABLE>
- --------
(1) Represents bonuses paid under the Key Employee Bonus Plan described in the
Compensation Committee Report on Executive Compensation.
(2) Mr. Stuecker received a tax offset bonus upon exercise of stock options in
1997. The named executive officers received certain perquisites in 1996,
1997, and 1998, the amount of which did not exceed the lesser of $50,000,
or 10 percent, of any such officer's salary and bonus.
(3) No restricted stock was granted to any of the named executive officers in
1996, 1997, or 1998; and no shares of restricted stock were held by any of
the named executive officers as of the end of 1998.
(4) Represents stock options awarded under the Corporation's incentive stock
plans.
(5) All Other Compensation represents amounts contributed or accrued for
Messrs. Brown, Moulton, Stuecker, Berntson, and Crossland under the
Corporation's Profit Sharing Plan and Supplemental Profit Sharing Plan of
$89,594, $35,769, $34,838, $23,096, and $29,370, respectively, a 401(k)
matching contribution of $4,800 for each of them, and for Mr. Brown under
the Corporation's Supplemental Executive Retirement Plan a contribution of
$2,240.
6
<PAGE>
(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 $103 per month commencing at age 65
and upon retirement.
(7) In connection with the formation of Genlyte Thomas Group LLC, the joint
venture between the Corporation and The Genlyte Group Incorporated, Mr.
Crossland was named Executive Vice President and Chief Operating Officer
of the Genlyte Thomas Group LLC effective August 30, 1998, and ceased
being an employee of the Corporation on that date. The annual compensation
of Mr. Crossland for 1998 reflected in the above table discloses the
compensation paid and accrued by the Corporation through August 30, 1998.
The following table presents certain additional information concerning
stock options granted to the named executive officers during 1998 and the
value of options held by such officers at fiscal year end.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------
Potential
Realizable Value at
Assumed Annual
Number of % of Total Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise or for Option Term(3)
Options Employees in Base Price Expiration -------------------
Name Granted(#)(1) Fiscal Year ($/Sh)(2) Date 5% 10%
- ---- ------------- ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 52,500 21.9% $18.5625/sh 12/14/08 $613,955 $1,549,505
Clifford C. Moulton..... 7,300 3.0 18.5625/sh 12/14/08 85,369 215,455
Phillip J. Stuecker..... 13,500 5.6 18.5625/sh 12/14/08 157,874 398,444
Bernard R. Berntson..... 10,100 4.2 18.5625/sh 12/14/08 118,113 298,095
Richard J. Crossland.... 4,700 2.0 18.5625/sh 12/14/08 54,964 138,718
</TABLE>
- --------
(1) All options were granted December 14, 1998, one-fourth of each option
becoming exercisable each year beginning December 14, 2000. All options
permit the optionee to pay for exercise with Common Stock owned for at
least six months and to use share withholding to pay taxes.
(2) The exercise price for all options granted is equal to the closing market
price of the Corporation's Common Stock on December 14, 1998.
(3) The amounts shown under these columns are the result of calculations at 5
percent and 10 percent annual rates over the ten-year term of the options
as required by the Securities and Exchange Commission and are not intended
to forecast future appreciation of the stock price of the Corporation's
Common Stock. The actual value, if any, an executive officer may realize
will depend on the excess of the stock price over the exercise price on
the date the option is exercised.
The following table sets forth information with respect to the named
executive officers concerning exercise of options during the last fiscal year
and unexercised options held as of the end of this fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-End # at FY-End ($)(2)
Acquired Value ------------------------- -------------------------
Name on Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 6,000 $42,743 139,875 178,125 $1,365,359 $511,172
Clifford C. Moulton..... -- -- 40,125 38,675 394,766 142,678
Phillip J. Stuecker..... -- -- 69,750 48,375 687,406 149,266
Bernard R. Berntson..... -- -- 40,125 31,725 446,516 85,372
Richard J. Crossland.... 26,249 202,184 10,876 39,575 78,052 139,916
</TABLE>
7
<PAGE>
- --------
(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, 1998.
The following table presents information concerning performance share
awards granted to the named executive officers during 1998 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................. 6,500 12/31/01 6,500 9,750
Clifford C. Moulton.............. 850 12/31/01 850 1,275
Phillip J. Stuecker.............. 1,700 12/31/01 1,700 2,250
Bernard R. Berntson.............. 850 12/31/01 850 1,275
Richard J. Crossland............. -- -- -- --
</TABLE>
Up to 150 percent of the target shares may be earned, depending on the
total shareholder return of the Corporation during the three-year period
commencing January 1, 1999, and ending December 31, 2001, 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 percent 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, and with Mr.
Moulton effective March 1, 1993. 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
8
<PAGE>
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 843,006 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
month's 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 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.
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for 1998:
Executive Officer Compensation Policies and 1998 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
percent of senior executive officers' potential compensation is directly
related to financial performance and increases in shareholder value.
With respect to 1998, 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 1998 are at the median
competitive base salary levels of comparatively sized companies.
For the 1998 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 1998, 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, except for the performance share award program which
has been approved by shareholders.
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 the
achievement of certain long-term performance goals of the Corporation related
to total shareholder return. For 1997, 1998, and 1999, 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."
Stock ownership guidelines for officers will be established by the
Compensation Committee in 1999.
Chief Executive Officer Compensation
For 1998, 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
10
<PAGE>
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 1998 performance under the bonus program established in February 1998
by the Committee. See the Summary Compensation Table on page 6.
In 1998, 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 for the reasons discussed above. The
combination of stock options and performance share awards granted to Mr. Brown
is 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 1998, 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 1998, and no member of the Compensation Committee was
formerly an officer of the Corporation.
11
<PAGE>
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.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Thomas Industries Inc............. $100 $112.52 $188.18 $170.46 $245.39 $247.36
Standard & Poor's Small Cap 600
Index............................ 100 95.23 123.76 149.52 187.49 184.70
Value Line Building Materials
Index............................ 100 94.29 123.15 143.30 172.84 182.14
</TABLE>
Based on $100 invested on December 31, 1993, in the Corporation's Common
Stock, the Standard & Poor's Small Cap 600 Index, and the Value Line Building
Materials Index.
12
<PAGE>
PROPOSAL TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
RESERVED UNDER THE THOMAS INDUSTRIES INC.
1995 INCENTIVE STOCK PLAN
Background
The Board of Directors has amended the 1995 Incentive Stock Plan (the
"Plan"), subject to shareholder approval, to increase the number of shares of
Common Stock reserved under the Plan by 750,000 shares. The purpose of the
Plan is to enable the Corporation to offer officers and other key employees of
the Corporation and its subsidiaries performance-based incentives and other
equity interests in the Corporation, thereby attracting, retaining, and
rewarding such employees and strengthening the mutuality of interests between
such employees and the Corporation's shareholders. The proposed amendment will
permit the Corporation to keep pace with changing developments in management
compensation and make the Corporation competitive with those companies that
offer stock incentives to attract and keep key employees.
Shares Available
The Plan originally reserved 900,000 shares of Common Stock (as adjusted
for the three-for-two stock split last year) for awards under the Plan.
Approximately 40,000 shares are currently available for awards under the Plan.
All of such shares may, but need not, be issued pursuant to the exercise of
incentive stock options. The maximum number of shares that may be awarded to
any participant in any year during the term of the Plan is 75,000 shares. If
there is a lapse, expiration, termination, or cancellation of any option or
right prior to the issuance of shares or the payment of the equivalent
thereunder, or if shares are issued and thereafter are reacquired by the
Corporation pursuant to rights reserved upon issuance thereof, those shares
may again be used for new awards under the Plan.
Administration
The Plan provides for administration by a committee (the "Committee") to be
comprised of either the Compensation Committee of the Board or another
committee designated by the Board. Among the Committee's powers are the
authority to interpret the Plan, establish rules and regulations for its
operation, select officers and other key employees of the Corporation and its
subsidiaries to receive awards, and determine the form, amount, and other
terms and conditions of awards. The Committee also has the power to modify or
waive restrictions on awards, to amend awards, and to grant extensions and
accelerations of awards. The Committee has amended the Plan to prohibit the
repricing of stock options.
Eligibility of Participation
Officers and other key employees of the Corporation or any of its
subsidiaries are eligible to participate in the Plan. The selection of
participants from eligible employees is within the discretion of the
Committee. The estimated number of individuals who are eligible to participate
in the Plan is 200. Since the approval of the Plan, approximately 54 percent
of the options granted have been issued to officers, with the remaining 46
percent being issued to other key employees. Over this period, options for
approximately 255,000 shares have been granted annually, with a five-year
vesting schedule. This includes approximately 60 Corporation officers and
other key employees and 140 key employees from Genlyte Thomas Group LLC
("GTG"), the lighting joint venture formed by the Corporation and The Genlyte
Group Incorporated ("Genlyte") effective August 30, 1998. The Corporation has
a 32 percent interest in GTG and issued 90,000 options to key employees of GTG
this past
13
<PAGE>
December. The issuance of options to GTG key employees was based on the
recommendation of the GTG Management Board to the Compensation Committees of
the Corporation and Genlyte that stock options from both companies be granted
to GTG officers and other key employees as part of their overall compensation
program. Due to the Corporation's substantial investment in the joint venture,
the Corporation believes that the granting of stock options to key employees
of GTG provides incentives to the key employees of GTG and benefits the
shareholders of the Corporation.
Types of Awards
The Plan provides for the grant of any or all of the following types of
awards: (1) stock options, including incentive stock options and non-qualified
stock options; (2) stock appreciation rights; (3) stock awards, including
restricted stock; and (4) performance share awards. Awards may be granted
singly, in combination, or in tandem, as determined by the Committee.
Federal Tax Treatment
Under current law, the following are U.S. federal income tax consequences
generally arising with respect to awards under the Plan.
A participant who is granted an incentive stock option does not recognize
any taxable income at the time of the grant or at the time of exercise.
Similarly, the Corporation is not entitled to any deduction at the time of
grant or at the time of exercise. If the participant makes no disposition of
the shares acquired pursuant to an incentive stock option before the later of
two years from the date of grant and one year from the date of exercise, any
gain or loss realized on a subsequent disposition of the shares will be
treated as a long-term capital gain or loss. Under such circumstances, the
Corporation will not be entitled to any deduction for federal income tax
purposes.
A participant who is granted a non-qualified stock option will not have
taxable income at the time of grant but will have taxable income at the time
of exercise equal to the difference between the exercise price of the shares
and the market value of the shares on the date of exercise. The Corporation is
entitled to a tax deduction for the same amount.
The grant of an SAR will produce no U.S. federal tax consequences for the
participant or the Corporation. The exercise of an SAR results in taxable
income to the participant equal to the difference between the exercise price
of the shares and the market price of the shares on the date of exercise and a
corresponding tax deduction to the Corporation.
A participant who has been granted an award of restricted shares of Common
Stock or performance share awards will generally not realize taxable income at
the time of the grant, and the Corporation will not be entitled to a tax
deduction at the time of the grant. When the restrictions lapse or the
performance goals are met, the participant will recognize taxable income in an
amount equal to the excess of the fair market value of the shares at such time
over the amount, if any, paid for such shares. The Corporation will be
entitled to a corresponding tax deduction.
Other Information
The awards to be granted under the Plan in 1999 are not now determinable.
Stock awards granted under the Plan in 1998 are disclosed under the heading
"Executive Compensation" elsewhere in this Proxy Statement.
14
<PAGE>
As of March 1, 1999, the closing price per share of the Corporation's
Common Stock was $16.94.
The affirmative vote of holders of a majority of the shares represented and
entitled to vote at the meeting is required for approval of the amendment to
the Plan. Abstentions will count as a vote against the proposal, but broker
non-votes will have no effect.
The Board of Directors recommends a vote FOR approval of the Amendment to
the Thomas Industries Inc. 1995 Incentive Stock Plan.
BOARD OF DIRECTORS
The Board of Directors held seven meetings during 1998. 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 1998.
The Board of Directors has an Audit Committee which met three times during
1998. 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 1998. 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 twice during 1998. 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 and 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 non-employee
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
15
<PAGE>
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 year's 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.
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 1998, 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 firm of Ernst & Young LLP
("Ernst & Young") has been selected as independent auditors for the 1999
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.
PROPOSALS OF SECURITY HOLDERS
A shareholder proposal to be presented at the 2000 Annual Meeting must be
received at the Corporation's executive offices, 4360 Brownsboro Road, Suite
300, Louisville, Kentucky 40207, by no later than November 13, 1999, 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
ninety days prior to the meeting of shareholders. Such notice must describe
various matters regarding both 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 proxy will vote upon them
in accordance with their best judgment.
16
<PAGE>
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 12, 1999
17
<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 15, 1999
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 Hyatt Regency Hotel, 320 West Jefferson
Street, Louisville, Kentucky, on Thursday, April 15, 1999 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 vote for
(except as marked to the contrary below) all the nominees listed below
Gene P. Gardner Lawrence E. Gloyd William M. Jordan
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name below,
_______________________________________________________________________________
2. Proposal to amend the Thomas Industries Inc. 1995 Incentive Stock Plan, as
amended and restated, to increase the number of shares of Common Stock
reserved thereunder by 750,000 shares.
[_] 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>
Thomas Industries Inc.
c/o Corporate Trust Services
Mail Drop 10AT66--4129
38 Fountain Square Plaza
Cincinnati, OH 45263
fold and detach here
................................................................................
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: ________________, 1999
----------------------------
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.
