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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Thomas Industries
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
THOMAS INDUSTRIES INC.
4360 Brownsboro Road
Suite 300
Louisville, Kentucky 40207
(502) 893-4600
Notice of Annual Meeting of Shareholders
April 20, 2000
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 20, 2000, at 10:00 A.M.
Eastern Daylight Time, for the following purposes:
1. To elect three Class II 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 3, 2000, as
the record date for determining the shareholders entitled to notice of and to
vote at the Annual Meeting.
By Order of the Board of Directors
Phillip J. Stuecker
Vice President of Finance, Chief
Financial Officer, and Secretary
March 14, 2000
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 20, 2000
----------------
To the Shareholders of
THOMAS INDUSTRIES INC.:
This Proxy Statement is being mailed to shareholders on or about March 14,
2000, 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 20, 2000, 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 $4,500, plus reimbursement of reasonable out-of-pocket expenses
incurred in connection with the solicitation.
The Annual Report to Shareholders for fiscal year 1999 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 3, 2000, the Corporation had outstanding 15,571,913 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 3, 2000, 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
6,298,499, (40.4 percent of the outstanding Common Stock).
<TABLE>
<CAPTION>
Number of Shares and
Nature of Percent
Name Beneficial Ownership of Class
---- -------------------- --------
<C> <S> <C> <C>
(i) Southeastern Asset Management, Inc... 2,250,450(1) 14.45%
6410 Poplar Avenue, Suite 900
Memphis, TN 38119
Gabelli Group........................ 2,120,424(2) 13.62
One Corporate Center
Rye, NY 10580
Neuberger Berman, LLC................ 976,475(3) 6.27
605 Third Avenue
New York, NY 10158
(ii) Timothy C. Brown..................... 226,700(4)(6) 1.46
Wallace H. Dunbar.................... 340,360(5)(7)(8) 2.19
H. Joseph Ferguson................... 105,680(5)(8) *
Gene P. Gardner...................... 41,436(5) *
Lawrence E. Gloyd.................... 24,156(5) *
William M. Jordan.................... 101,189(5)(8) *
Franklin J. Lunding, Jr.............. 104,714(5)(8) *
Anthony A. Massaro................... 7,696(5) *
(iii) Phillip J. Stuecker.................. 99,217(6) *
Bernard R. Berntson.................. 51,872(6) *
Clifford C. Moulton.................. 68,420(6) *
(iv) All Executive Officers, Directors, 951,150(5)(6)(9) 6.11
and Nominees as a Group (12 people).
</TABLE>
- --------
* Less than 1.0%
2
<PAGE>
(1) Based on a Schedule 13G filed by Southeastern Asset Management, Inc., with
the Securities and Exchange Commission in February 2000. Longleaf Partners
Small Cap Fund beneficially owns 1,692,850 shares, representing 10.87% of
the outstanding Common Stock. Southeastern Asset Management, Inc., has
sole voting power with respect to 187,000 shares. O. Mason Hawkins is
included as a reporting person in this group.
(2) Based on an amendment to Schedule 13D filed by certain reporting persons
(the "Gabelli Group") with the Securities and Exchange Commission in July
1999. One of the members of the Gabelli Group, GAMCO Investors, Inc.,
beneficially owns 1,687,424 shares, representing 10.84% of the outstanding
Common Stock. GAMCO Investors, Inc. has sole voting power with respect to
1,659,924 of such shares. The other reporting persons included in this
group are Gabelli Funds, LLC, Gemini Capital Management Limited,
Marc J. Gabelli, and Mario J. Gabelli.
(3) Based on an amended Schedule 13G filed by Neuberger Berman, LLC
("Neuberger Berman"), with the Securities and Exchange Commission in
February 2000. Neuberger Berman beneficially owns 976,475 shares,
representing 6.27% of the outstanding Common Stock, of which Neuberger
Berman has sole voting power with respect to 637,025 of such shares. Does
not include an aggregate of 28,950 shares that are owned by principals of
Neuberger Berman. Neuberger Berman disclaims beneficial ownership of the
28,950 shares.
(4) Excludes 347 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.
(5) 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, and
Lunding, 18,000 shares each; Mr. Jordan, 12,000 shares; Mr. Dunbar, 9,000
shares; and Mr. Massaro, 6,000 shares.
(6) Includes shares that may be acquired pursuant to stock options exercisable
within sixty days as follows: Mr. Brown, 179,625 shares; Mr. Stuecker,
69,000 shares; Mr. Berntson, 48,625 shares; Mr. Moulton, 53,500 shares;
and all executive officers as a group, 367,250 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 82,430 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. At the Annual Meeting of Shareholders, three Class II
directors are to be elected to serve until 2003, 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 II 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 II Nominees for Election with Terms Expiring in 2003
<S> <C>
Timothy C. Brown............. President and Chief Executive Officer of the
Age 49 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 68 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 61 1972 years. Retired 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).
Class III Directors with Terms Expiring in 2001
H. Joseph Ferguson........... Founded Ferguson, Wellman, Rudd, Purdy & Van
Age 66 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 55 1997 Lincoln Electric Company (manufacturer of arc
welding products) ("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.
Director of Commercial Metals, Inc., and Cleveland
Cliffs, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name, Age and Year
First Elected Director Principal Occupation and Other Information
- ---------------------- ------------------------------------------
Class I Directors with Terms Expiring in 2002
<S> <C>
Gene P. Gardner.............. Retired Chairman of the Board and Chief Executive
Age 70 1986 Officer of Beaver Dam Coal Company (coal
properties). Director of Beaver Dam Coal Company
since 1983. Director of Commonwealth Financial
Corporation and Commonwealth Bank and Trust
Company.
Lawrence E. Gloyd............ Chairman of the Board and Chief Executive Officer
Age 67 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 56 1995 Flowserve Corp. (manufacturer of pumps and related
products). President and Chief Operating Officer
of Flowserve Corp. from May 1997 to October 1999,
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.
</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, 1999,
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)
------------------------------ --------------------
Awards Payouts
---------- ---------
Securities Long-Term
Other Annual Underlying Incentive All Other
Name and Salary Bonus Compensation Options Plan Compensation
Principal Position Year ($) ($)(1) ($)(2) (#)(4) ($)(5) ($)(6)
- ------------------ ---- -------- -------- ------------ ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 1999 $390,000 $152,003 -- 46,000 $138,014 $62,938
President, Chief 1998 375,000 150,022 -- 52,500 -- 96,634
Executive Officer and 1997 360,000 374,869 -- 52,500 -- 76,666
Chairman of the Board
Phillip J. Stuecker..... 1999 $200,000 $ 50,026 -- 12,000 $ 36,215 $27,402
Vice President of 1998 200,000 63,701 -- 13,500 -- 39,638
Finance, Chief 1997 192,500 140,316 $4,755 13,500 -- 33,753
Financial Officer, and
Secretary
Bernard R. Berntson..... 1999 $193,500 $ 64,986 -- 12,000 $ 18,108 $22,551
Vice President, 1998 183,500 24,792 -- 10,100 -- 27,896
General Manager, North 1997 177,000 57,654 -- 10,000 -- 28,903
American Compressor &
Vacuum Pump Group
Clifford C. Moulton(7).. 1999 $165,000 $ 38,706 -- 7,000 $ 36,215 $26,134
Vice President, 1998 204,900 60,159 -- 7,300 -- 40,569
Business Development 1997 198,000 144,325 -- 10,000 -- 34,324
</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 1997,
1998, and 1999, 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
1997, 1998, or 1999; and no shares of restricted stock were held by any of
the named executive officers as of the end of 1999.
(4) Represents stock options awarded under the Corporation's incentive stock
plans.
(5) Represents December 31, 1999, market value of shares earned under Long-
Term Incentive Plan awards for the three-year period ended December 31,
1999.
(6) All Other Compensation represents amounts contributed or accrued for
Messrs. Brown, Stuecker, Berntson, and Moulton, under the Corporation's
Profit Sharing Plan and Supplemental Profit Sharing Plan of $58,138,
$22,602, $17,751, and $21,334, respectively, and a 401(k) matching
contribution of $4,800 for each of them.
(7) Pursuant to the termination of the Thomas Industries Pension Floor Plan,
Mr. Moulton received a lump sum distribution in the amount of $5,397 in
1999.
6
<PAGE>
The following tables present certain additional information concerning
stock options granted to the named executive officers during 1999 and the
value of options held by such officers at fiscal year end.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------
Potential
Realizable Value at
Assumed Annual
Number of % of Total Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise or for Option Term(3)
Options Employees in Base Price Expiration -------------------
Name Granted(#)(1) Fiscal Year ($/Sh)(2) Date 5% 10%
- ---- ------------- ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 46,000 24.7% $18.0625/sh 12/12/09 $523,451 $1,321,091
Phillip J. Stuecker..... 12,000 6.4 18.0625/sh 12/12/09 136,553 344,633
Bernard R. Berntson..... 12,000 6.4 18.0625/sh 12/12/09 136,553 344,633
Clifford C. Moulton..... 7,000 3.8 18.0625/sh 12/12/09 79,656 201,036
</TABLE>
- --------
(1) All options were granted on Sunday, December 12, 1999, one-fourth of each
option becoming exercisable each year beginning December 12, 2001. All
options permit the optionee to pay for exercise with Common Stock owned
for at least six months and to use share withholding to pay taxes.
(2) The exercise price for all options granted is equal to the closing market
price of the Corporation's Common Stock on Friday, December 10, 1999.
(3) The amounts shown under these columns are the result of calculations at 5
percent and 10 percent annual rates over the ten-year term of the options
as required by the Securities and Exchange Commission and are not intended
to forecast future appreciation of the stock price of the Corporation's
Common Stock. The actual value, if any, an executive officer may realize
will depend on the excess of the stock price over the exercise price on
the date the option is exercised.
7
<PAGE>
The following table sets forth information with respect to the named
executive officers concerning exercise of options during the last fiscal year
and unexercised options held as of the end of this fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-End# at FY-End($)(2)
Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Timothy C. Brown........ 9,000 $59,037 179,625 175,375 $1,687,531 $442,531
Phillip J. Stuecker..... 15,000 98,433 69,000 46,125 711,898 119,219
Bernard R. Berntson..... -- -- 48,625 35,225 528,086 82,555
Clifford C. Moulton..... -- -- 53,500 32,300 514,250 95,719
</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, 1999.
The following table presents information concerning performance share
awards granted to the named executive officers during 1999 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 Price-Based
Number of Period Plans
Performance until --------------------
Name Shares(#) Maturation Target(#) Maximum(#)
- ---- ----------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Timothy C. Brown................... 6,500 12/31/02 6,500 9,750
Phillip J. Stuecker................ 1,700 12/31/02 1,700 2,550
Bernard R. Berntson................ 850 12/31/02 850 1,275
Clifford C. Moulton................ 850 12/31/02 850 1,275
</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, 2000, and ending December 31, 2002, 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
8
<PAGE>
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 791,738 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.
9
<PAGE>
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 years' notice of termination. This agreement provides for a base salary
of $390,000 in 1999 and a minimum base salary of $390,000 for the years 2000
and thereafter. 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.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation for 1999:
Executive Officer Compensation Policies and 1999 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 45
percent of senior executive officers' potential compensation is directly
related to financial performance and increases in shareholder value.
With respect to 1999, 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"). Using the Survey as a guide, the
Committee believes executive officer base salaries for 1999 are at the median
competitive base salary levels of comparatively sized companies.
For the 1999 Key Employee Bonus Plan, the Committee approved goals based on
corporate pre-tax earnings, business unit operating income, return on net
assets, and individual participant performance. As a result of the achievement
of such goals in 1999, 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 any executive officer is 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, 1999, and 2000, 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."
In 1999, the Compensation Committee approved stock ownership guidelines of
four times base pay for the Chief Executive Officer, two times base pay for
Vice Presidents, and one and one-half times base pay for other officers. The
targeted stock ownership should be achieved within four years. Deferred shares
will be included in the ownership calculation, but outstanding stock options
will not be included.
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Chief Executive Officer Compensation
For 1999, 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 Compressors & Vacuum Pumps business and certain functional
objectives. Since such goals were achieved, a bonus was paid for 1999
performance under the bonus program established in February 1999 by the
Committee. See the Summary Compensation Table on page 6.
In 1999, 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, that extends itself three years automatically each
day until such time as the Board of Directors decides that the contract will
not be extended. 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
Anthony A. Massaro
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During 1999, 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 1999, and no member of the Compensation Committee was
formerly an officer of the Corporation.
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PERFORMANCE GRAPH
As a result of the Lighting Joint Venture formed by the Corporation and The
Genlyte Group Incorporated ("Genlyte"), effective August 30, 1998, Thomas
Industries was transferred by Value Line from the Value Line Building
Materials Group to the Value Line Machinery Group. Due to this change, the
Corporation will use the Value Line Machinery index as the industry group to
which it is compared. Accordingly, the Value Line Building Materials Index
will be eliminated from future Proxy Statements.
The following graph sets forth a comparison of the Corporation's cumulative
total shareholder return, assuming reinvestment of dividends, for the last
five years with the cumulative total return for the same period measured by
the Standard & Poor's Small Cap 600 Index, the Value Line Building Materials
Index, and the Value Line Machinery Index.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Thomas Industries Inc............. $100 $167.24 $151.50 $218.09 $219.84 $232.76
Standard & Poor's Small Cap 600
Index............................ 100 129.96 157.01 196.89 193.96 213.27
Value Line Building Materials
Index............................ 100 130.61 151.98 183.31 193.18 208.21
Value Line Machinery Index........ 100 141.70 180.24 276.01 235.78 321.13
</TABLE>
Based on $100 invested on December 31, 1994, in the Corporation's Common
Stock, the Standard & Poor's Small Cap 600 Index, the Value Line Building
Materials Index, and the Value Line Machinery Index.
BOARD OF DIRECTORS
The Board of Directors held five meetings during 1999. 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 1999.
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<PAGE>
The Board of Directors has an Audit Committee which met three times during
1999. The Audit Committee is currently composed of Wallace H. Dunbar, Gene P.
Gardner, 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 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 1999. The Compensation Committee is currently composed of Gene P.
Gardner, Lawrence E. Gloyd, William M. Jordan, 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 once during 1999. 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 $1,000 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
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.
In 1999, the Compensation Committee approved stock ownership guidelines of
five times the annual retainer for the Thomas Board of Directors. The targeted
stock ownership should be achieved within four years. Deferred shares will be
included in the ownership calculation, but outstanding stock options will not
be included.
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
14
<PAGE>
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. During 1999, 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 2000
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 2001 Annual Meeting must be
received at the Corporation's executive offices, 4360 Brownsboro Road, Suite
300, Louisville, Kentucky 40207, by no later than November 14, 2000, 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.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY AND
RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
Phillip J. Stuecker
Vice President of Finance,
Chief Financial Officer and
Secretary
Date: March 14, 2000
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<PAGE>
DETACH CARD
- --------------------------------------------------------------------------------
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 20, 2000
The undersigned hereby appoints Timothy C. Brown and Phillip J. Stuecker, or
either of them, with full powers 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 20, 2000, at 10:00 a.m.,
Eastern Daylight Time, or at any adjournment thereof as follows:
1. Election of Directors
[_] FOR all the [_] WITHHOLD
nominees listed AUTHORITY to vote
below (except as for all the
marked to the nominees listed
contrary below) below
Timothy C. Brown Wallace H. Dunbar Franklin J. Lunding, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name below.
___________________________________________________________________________
2. 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>
DETACH CARD
- --------------------------------------------------------------------------------
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 _____________________________ , 2000
_________________________________________
Signature(s)
_________________________________________
Signature(s)
When signing as attorney, administrator,
personal representative, executor, cus-
todian, 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.
________________________________________________________________________________
