SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant XX
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement Confidential, for Use of the Com-
mission Only (as permitted by
Rule 141-6(e) (2))
XX Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
______________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
TRION, INC.
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
XX $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(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:
________________________________________________________________________________
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 filing.
(1) Amount previously paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
(3) Filing Party:
________________________________________________________________________________
(4) Date Filed:
________________________________________________________________________________
<PAGE>
Trion, Inc.
TRION,INC.
Notice of Annual Meeting
of Shareholders
and Proxy Statement
Tuesday, April 16, 1996
10:00 A.M. (Local Time)
Dennis A. Wicker Civic Center
1801 Nash Street
Sanford, North Carolina_______________________
Table of Contents Page
Notice of Annual Meeting of Shareholders 2
Proxy Statement 3
Shares Entitled to Vote 3
Election of Directors 4
Security Ownership 7
Executive Compensation 8
Corporate Performance 14
Service Agreement 15
Independent Auditors 15
Shareholder Proposals for 1997 Annual Meeting 15
Other Matters 15
__________________________________________________
<PAGE>
TRION, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 1996
The Annual Meeting of Shareholders of Trion, Inc. will be held at the Dennis
A. Wicker Civic Center, 1801 Nash Street, Sanford, North Carolina, on Tuesday,
April 16, 1996, at 10:00 A.M. (local time), for the following purposes:
(1) To elect two directors to serve for a term of three years.
(2) To transact any and all other business which may properly come before
the meeting or any adjournment or adjournments thereof.
A Proxy Statement containing information for shareholders is annexed hereto
and a copy of the Annual Report of the Company for the fiscal year ended
December 31, 1995 is enclosed herewith.
Shareholders who do not expect to attend the meeting and desire to have
their stock voted at the meeting are requested to sign the enclosed Proxy and
return the same in the enclosed envelope, which requires no postage if mailed
in the United States.
By Order of the Board of Directors,
March 13, 1996 C. J. Monsma
Sanford, North Carolina Secretary
<PAGE>
TRION, INC.
P.O. Box 760
Sanford, North Carolina 27331-0760
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of Trion, Inc. (the "Company"), to be voted at
the Annual Meeting of Shareholders of the Company to be held on Tuesday,
April 16, 1996, beginning at 10:00 A.M. (local time) (the "Annual Meeting"),
at the Dennis A. Wicker Civic Center, 1801 Nash Street, Sanford, North
Carolina, and at any and all adjournments thereof.
The only business which the Company intends to present, or knows that others
will present, at the Annual Meeting is the business specified in the
accompanying Notice of the Annual Meeting. However, if other matters are
properly presented at the Annual Meeting, such matters will be considered and
acted upon and the persons named in the Proxies being solicited will vote such
Proxies in accordance with their best judgment on such matters.
This Proxy Statement and the accompanying Notice and form of Proxy will be
mailed to shareholders on or about March 13, 1996.
SHARES ENTITLED TO VOTE
Shareholders of record at the close of business on March 1, 1996, will be
entitled to vote at the Annual Meeting. As of March 1, 1996 there were
outstanding 6,467,483 shares of the Company's common stock, par value $0.50 per
share (the "Common Stock"). Shareholders are entitled to one vote per share
of Common Stock and, in the election of directors, have cumulative voting
rights; that is, each shareholder (or his proxies) is entitled to as many
votes as his shares represent times the number of directors to be elected and
may cast all such votes for a single nominee or distribute them among the
nominees as he (or his proxies) sees fit. The persons named in the Proxies
will allocate the cumulated votes represented by the Proxies in the manner
they deem proper in their best judgment. A shareholder voting by signing
and returning the Proxy may not specify a manner of allocation on the Proxy,
but must be present at the Annual Meeting and vote by ballot or specify a
manner of allocation in a proxy given to another person in order to have his
votes allocated in a particular manner.
The Company has a confidential voting By-law which provides that, at the
shareholder's election, an individual shareholder's votes on a proxy card
will not be disclosed to the Company other than in specified situations.
The Company's proxy cards will be collected and tabulated by the judge of
election for the Annual Meeting, First Union National Bank. The tabulator will
forward comments written on the proxy cards to the Company for management's
information, but information about individual shareholders' votes who have
checked the box on the proxy card to elect confidential voting will not be
communicated to the Company's management except in specified situations.
In the election of directors, the two candidates who receive the highest
number of votes actually cast will be elected. If your Proxy is specifically
marked as withholding authority to vote for one or more of the director
nominees listed on the Proxy, your shares will not be voted for the election
of the nominee(s) as to whom you have withheld authority to vote, and will be
voted for the election of the other listed nominee, if applicable. Such votes
withheld will not have the effect of a "negative" vote with respect to the
election of directors. Any other proposal coming before the Annual Meeting
generally will be approved and authorized if it receives the affirmative vote
of a majority of the votes actually cast by shareholders entitled to vote on
the proposal. Therefore, abstentions, if any, from voting with respect to any
such matter will not have the effect of a "negative" vote with respect to such
matter. In accordance with Pennsylvania law, votes withheld from director
nominees or abstentions with respect to any other matter will be counted for
purposes of determining whether a quorum exists at the Annual Meeting.
Brokers, banks and other nominee holders of Common Stock will be requested
to obtain voting instructions of beneficial owners of such Common Stock
registered in the nominee holders' names. All shares represented by a duly
completed Proxy submitted by a nominee holder on behalf of beneficial owners
<PAGE>
will be counted for purposes of determining whether a quorum exists at the
Annual Meeting, whether or not such shares are actually voted by the nominee
holder with respect to all matters presented at the Annual Meeting. Such
shares will be voted to the extent instructed by the nominee holder, and if such
nominee holder fails to vote a beneficial owner's shares for a particular
matter, such shares will not have the effect of a "negative" vote with respect
to such matter.
ELECTION OF DIRECTORS
The By-laws of the Company provide that directors are to be elected in three
classes. At the annual meeting in each year, the shareholders elect for a term
of three years a successor or successors to the directors whose term or terms
expire in such year. At the Annual Meeting, the shareholders will elect a class
of two directors for a term expiring in 1999. It is intended that the Proxies
will be voted for the election of the nominees listed below. James E. Heins
and Steven L. Schneider are currently serving as directors in the class to be
elected at the Annual Meeting. Edwin V. Clarke, Jr. is also serving in such
class and will retire from the Board of Directors at the expiration of his
current term. Since the Board of Directors has not identified a successor to
Mr. Clarke, the Board will be reduced from eight to seven members at this time.
If a n ominee is unable to serve for any reason not presently known, a
substitute will be nominated by the Board of Directors and the Proxies will be
voted for such substitute.
The following table lists information concerning the nominees for election
as directors and the continuing directors of the Company, including the number
of shares of Common Stock beneficially owned, directly or indirectly, by each as
of March 1, 1996. Unless otherwise indicated, the holders of all shares
shown in the table have sole voting and investment power with respect to such
shares, and hold less than 1% of the class.
Shares of Common Percent
Name and Director Stock Beneficially of
Principal Age Since Owned (2) Class (2)(3)
Occupation (1)
(a) Nominees for director for terms to expire in 1999:
James E. Heins (***) 65 1981 11,482 --
Independent Consultant-
communications
Pinehurst, NC (4)
Steven L. Schneider (**) 52 1993 77,504(6) 1.16%
President and Chief
Executive Officer,
Trion, Inc.,
Sanford, NC (5)
(b) Continuing directors whose terms expire in 1997:
Grant R. Meyers (*) 53 1976 289,762 4.33%
President, Vidal-Meyrs,
manufacturers' repre-
sentative organization,
Davie, FL (7)
Samuel J. Wornom III 53 1982 82,125(9) 1.23%
(*) (**)
President, Nouveau
Investments, Inc.,
Sanford, NC (8)
<PAGE>
Shares of Common
Name and Director Stock Beneficially Percent of
Principal Age Since Owned (2) Class (2)(3)
Occupation (1)
(c) Continuing directors whose terms expire in 1998:
Hugh E. Carr (*)(**) 63 1968 548,332(11) 8.20%
Former Chairman and
Chief Executive Officer,
Trion, Inc.,
Sanford, NC (10)
Joseph W. Deering (***) 55 1995 1,000 --
President, PMI
Food Equipment Group
(a Division of Premark
International, Inc.),
manufacturer of commercial
food products,
Troy, OH (12)
Seddon Goode, Jr. 64 1979 74,599 1.12%
President, University
Research Park, a 501(c)(6)
corporation - real estate
developers, Charlotte, NC
(*) Member of audit committee
(**) Member of nominating committee
(***) Member of compensation committee
(1) There are no family relationships between any executive officers,
directors or persons nominated to become a director, except that Messrs.
Meyers and Carr are brothers-in-law. Except as otherwise indicated, each
director and nominee has held the principal occupation listed for
five years or more.
(2) These figures include shares owned by the immediate families (i.e., wives,
minor children and relatives sharing the same home) of the respective
persons. Shares of Common Stock also include any shares which each person has
the right to acquire upon exercise of options which are exercisable within
sixty days of March 1, 1996.
(3) With respect to holdings of Common Stock, these percentages assume the
exercise of options exercisable within sixty days of March 1, 1996 owned by
the respective persons, but no other exercise, for each calculation.
(4) Mr. Heins was employed by ALLTEL Corporation, a communications company, from
1986 until his retirement in 1991. His most recent position was Vice
President Government Relations. Mr. Heins is also a director of BB&T Financial
Corporation and Central Carolina Communications, Inc.
(5) Prior to joining the Company in May 1993, Mr. Schneider served as Group
President of Tomkins Industries, Inc., a diversified manufacturing company
and a subsidiary of Tomkins PLC, for more than five years.
<PAGE>
(6) Includes 16,585 shares which Mr. Schneider has the right to acquire within
sixty days of March 1, 1996 upon the exercise of stock options. Also
includes 15,619 shares of Common Stock owned by the Trion Charitable Foundation
with respect to which Mr. Schneider shares the voting and investment power
as one of four co-trustees, but as to which he has no economic interest.
(7) Mr. Meyers is also President of Scuba Marine Products, a manufacturer and
distributor of scuba diving and marine supplies and Vice President of Island
Trader Inc., a retail store in Key Largo, FL.
(8) Mr. Wornom was the President and sole shareholder of First Southern
Financial Corp. ("First Southern"), a factoring business which he purchased
in 1988. Mr. Wornom was not active in the day-to-day operations of First
Southern. In 1991, the Executive Vice President and General Manager of First
Southern pleaded guilty to falsifying reports furnished to a federal bank and
as a result of his activities, First Southern initiated liquidation
proceedings under Chapter 7 of the United States Bankruptcy Code in March 1992.
(9) Includes 35,000 shares which Mr. Wornom has the right to acquire upon the
exercise of stock options.
(10) Mr. Carr is a director of the Sanford branch of Wachovia Bank of North
Carolina. Wachovia is the Company's principal banking affiliation. The
amount of shares of Common Stock beneficially owned by Mr. Carr includes 324,069
shares of Common Stock owned of record and beneficially by his spouse, as to
which she has sole voting and investment power and as to which he disclaims
beneficial ownership.
(11) Includes 35,000 shares which Mr. Carr has the right to acquire within sixty
days of March 1, 1996 upon the exercise of stock options. See "Service
Agreement."
(12) Prior to assuming his current position in June 1992, Mr. Deering was
President of Leucadia Manufacturing, a division of Leucadia National, Inc.,
a diversified insurance, banking and manufacturing company, beginning in 1991.
From 1989 to 1991 he was President and Chief Executive Officer of Tomkins
Industries, Inc., a diversified manufacturing company and a subsidiary of
Tomkins PLC.
The Company has standing audit, compensation and nominating committees.
During 1995 the Board of Directors met five times; the audit committee met
twice; the compensation committee met three times; and the nominating committee
met twice. Each of the directors attended at least 75% of the aggregate
number of meetings of the Board of Directors and of the committees on which he
served. The functions of the audit committee consist primarily of selecting
the Company's independent auditors and reviewing their independence; approving
the scope of annual or special audit activities and reviewing audit results;
monitoring financial reporting and accounting practices; and reviewing the
adequacy of the Company's system of internal accounting controls. The
functions of the compensation committee are to make recommendations to the
Board on all matters of policy and procedures relating to compensation of
executive management; to conduct an annual review of the performance of the
Company's executives and make recommendations to the Board regarding the level
and form of compensation to be awarded each executive, including the granting
of stock options; and to make reports and recommend actions to the Board
concerning compensation plans, including an annual Management Incentive Plan.
The functions of the nominating committee consist of making recommendations
to the Board concerning its size, the composition of its classes and candidates
for election as directors, including consideration of individuals recommended by
shareholders for election as a director. Any such recommendations, together
with the individual's qualifications and consent to be considered as a nominee,
should be sent to the Secretary of the Company for presentation to the
nominating committee.
Under current arrangements, the non-employee directors are paid an annual
retainer of $6,000 which is paid in shares of Common Stock plus a fee of $600
for participation in each meeting of the Board of Directors and each committee
meeting if held at a time and place different than a Board meeting. Each
director has $50,000 in life insurance coverage and $200,000 in travel and
accident coverage through the Company's group plans. Mr. Carr receives
compensation in his capacity as a consultant as described under "Service
Agreement," and does not receive the annual retainer or the meeting fees.
<PAGE>
SECURITY OWNERSHIP
Information concerning beneficial ownership of Common Stock by individual
directors and nominees, including S. L. Schneider, who is also named in the
Summary Compensation Table below, is set forth under "Election of Directors."
The following table sets forth the number of shares of Common Stock
beneficially owned by the other executive officers named in the Summary
Compensation Table and by the directors, nominees and executive officers of
the Company as a group (eleven persons) on March 1, 1996:
Name Shares Beneficially Owned (1) Percent of Class (1)
B. H. Boender 17,659 --
C. J. Monsma 6,757 --
C. A. Haynes 3,189 --
J. G. Waters 23,043 --
Directors and
executive officers 1,135,452 16.97%
as a group
(1) Includes shares which were deemed outstanding because the individuals had
the right to acquire them upon exercise of options which are exercisable
within sixty days of March 1, 1996 as follows: Mr. Boender, 7,659; Mr. Monsma,
5,757; Mr. Haynes, 2,374; Mr. Waters, 17,918; and the group, 120,303.
The only person known to the Company to be the beneficial owner of more than
5% of the Common Stock on March 1, 1996 is Hugh E. Carr, whose address is
318 Court Square, Suite A, Sanford, North Carolina 27330-5658. Information as
to Mr. Carr's beneficial ownership is set forth above under "Election of
Directors."
Section 16 of the Exchange Act requires the Company's directors and
executive officers to file reports with the Securities and Exchange
Commission indicating their holdings of and transactions in the Company's
equity securities and to provide copies of such reports to the Company.
To the Company's knowledge, except for James E. Heins, who inadvertently filed
one Form 4 one day late for one purchase transaction, insiders of the
Company complied with all filing requirements.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
during 1995 of the President and Chief Executive Officer of the Company
and the other executive officers of the Company whose salary and bonus exceeded
$100,000 in 1995:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION> Long Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Other Securities
Annual Restricted Underlying LTIP All Other
Name and Salary Bonus Compensation Stock Awards(s) Options Payouts Compensation
Principal Position Year $ $ $ $ (#) ($) ($)(4)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S. L. Schneider 1995 190,000 45,410 N/A N/A 9,248 N/A 1,879
President and Chief 1994 182,500 48,711 N/A N/A 10,205 N/A 1,190
Executive Officer (1) 1993 109,153 105,121 (2) N/A N/A 175,000 (3) N/A N/A (5)
B. H. Boender 1995 98,800 26,592 N/A N/A 4,925 N/A 1,508
Vice President/Sales 1994 95,944 27,166 N/A N/A 4,028 N/A 647
Marketing (6) 1993 45,282 19,699 N/A N/A 5,000 (7) N/A N/A (5)
C. J. Monsma 1995 99,996 18,946 N/A N/A 2,302 N/A 312
Vice President and 1994 47,756 9,791 N/A N/A 15,000 (9) N/A N/A (10)
Chief Financial
Officer (8)
C. A. Haynes 1995 90,000 17,145 N/A N/A 2,121 N/A 281
Vice President 1994 44,019 9,001 N/A N/A 5,000 (12) N/A N/A (10)
Engineering (11)
J. G. Waters 1995 85,000 15,836 N/A N/A 3,609 N/A 2,385 (13)
Vice President 1994 74,790 12,894 N/A N/A 5,573 N/A 1,661 (13)
Operations 1993 70,768 16,200 N/A N/A 8,000 N/A 2,042 (13)
<FN>
______________
(1) Mr. Schneider joined the Company on May 24, 1993. He is employed pursuant
to a three-year employment agreement described under the caption
"Compensation Agreements."
(2) Mr. Schneider's 1993 bonus included a $55,000 sign-on bonus.
(3) Mr. Schneider was granted nonstatutory stock options to purchase 175,000
shares in connection with his employment. See "Compensation Agreements" for
a description of the terms of such options.
(4) Represents the Company's contribution to the Trion Savings Plus Plan
(401(k)) for the accounts of the named executive officers.
(5) Mr. Schneider and Mr. Boender were not eligible to participate in the Trion
Savings Plus Plan (401(k)) in 1993.
<PAGE>
(6) Mr. Boender joined the Company on July 19, 1993.
(7) Mr. Boender was granted incentive stock options to purchase 5,000 shares of
Common Stock under the Trion, Inc. 1985 Incentive Stock Option Plan (the
"1985 Option Plan") in connection with his employment. The exercise price per
share of such options is $4.50. The options become exercisable ratably over
three years from the first anniversary of the date of grant.
(8) Mr. Monsma joined the Company on July 11, 1994.
(9) Mr. Monsma was granted incentive stock options to purchase 15,000 shares of
Common Stock under the 1985 Option Plan in connection with his employment.
The exercise price per share of such options is $5.375. The options become
exercisable ratably over three years from the first anniversary of the date
of grant.
(10) Mr. Monsma and Mr. Haynes were not eligible to participate in the Trion
Savings Plus Plan (401(k)) in 1994.
(11) Mr. Haynes joined the Company on July 6, 1994.
(12) Mr. Haynes was granted incentive stock options to purchase 5,000 shares of
Common Stock under the 1985 Option Plan in connection with his employment.
The exercise price per share of such options is $5.00. The options become
exercisable ratably over three years from the first anniversary of the date
of grant.
(13) Mr. Waters, as part of an agreement made in 1992 to maintain the previous
level of retirement benefits reduced by federally mandated changes to the
Company's defined benefit pension plan, has been provided with a Company paid
annuity which will cease being funded by the Company in the event of his
termination of employment. The annual premium for this annuity is $1,138 and
is included in the reported amount.
</FN>
</TABLE>
The following table sets forth information concerning stock option grants
during 1995 to the executive officers named in the Summary Compensation Table:
<TABLE>
OPTION GRANTS IN 1995
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants (1) for Option Term
- -------------------------------------------------------------- -----------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
- ---------------- ---------- ----------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
S. L. Schneider 9,248 23.59 4.8125 1/30/00 12,296 27,171
B. H. Boender 4,925 12.56 4.8125 1/30/00 6,548 14,470
C. J. Monsma 2,302 5.87 4.8125 1/30/00 3,061 6,763
C. A. Haynes 2,121 5.41 4.8125 1/30/00 2,820 6,232
J. G. Waters 3,609 9.21 4.8125 1/30/00 4,799 10,604
- ----------------
<FN>
(1) All stock options reflected in the table were granted under the 1985 Option
Plan and are incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986. The options become exercisable ratably over three
years from the first anniversary of the date of grant.
</FN>
</TABLE>
<PAGE>
The following table sets forth information concerning the unexercised
options held at December 31, 1995 by the executive officers named in the Summary
Compensation Table:
<TABLE>
AGGREGATED OPTION EXERCISES IN 1995 AND 1995 YEAR END OPTION VALUE
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Value Options at Fiscal Options at Fiscal Year-
on Realized Year-End (#) End ($)(1)
Name Exercise # $ Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
S. L. Schneider 43,300 120,200 10,101 141,052 18,425 310,296
B. H. Boender - - 4,675 9,278 2,500 3,405
C. J. Monsma - - 5,000 12,302 - 1,007
C. A. Haynes - - 1,667 5,454 417 1,761
J. G. Waters - - 14,857 7,325 24,500 1,579
___________________
<FN>
(1) Represents the difference between the exercise price of the options and the closing sales
price of the Common Stock as reported on the NASDAQ National Market System on December 29, 1995
of $5.25 per share.
</FN>
</TABLE>
Pension Benefits
The Company maintains a noncontributory defined benefit retirement plan (the
"Plan") for all domestic employees of the parent Company, Trion, Inc., who have
completed one year of service with the Company and have reached the age of 21.
The approximate annual retirement benefit at various earnings levels and years
of service classifications are set forth in the table below.
PENSION PLAN TABLE
Earnings credited
for
retirement benefits Years of Service
10 15 20 25 30 35
------- ------- ------- ------- ------- -------
$100,000 $17,932 $26,898 $35,864 $44,830 $53,795 $62,761
$125,000 $22,932 $34,398 $45,864 $57,330 $68,795 $80,261
$150,000 $27,932 $41,898 $55,864 $69,830 $83,795 $97,761
Under the Plan, benefits are calculated for each participant on two separate
bases. With respect to any years of service prior to January 1, 1982, benefits
are based on the participant's average monthly earnings during the period from
January 1, 1977 to December 31, 1981. With respect to years of service
beginning January 1, 1982, benefits for each participant will be determined
annually based on the individual's actual earnings, and the annual amounts as
<PAGE>
calculated will be aggregated. The average of the yearly amounts computed as
set forth above constitute the earnings credited for retirement benefits.
Earnings covered by the Plan include salaries and bonus as referenced in the
Summary Compensation Table. Plan benefits to any individual were limited to
a maximum of $120,000 in 1995. The maximum annual income that can be taken
into account in the calculation of pension benefits is $150,000. This maximum
will be indexed for inflation beginning in 1996. The normal form of benefit
payment as calculated is a straight life annuity; however, joint and survivor
options are available. A participant is not entitled to any pension benefit
under the Plan until five years of credited service has been reached, at
which point a participant becomes fully vested. The named executive officers
have the following credited service under the Plan: Mr. Schneider, two years
and seven months; Mr. Boender, two years and five months; Mr. Monsma, one year
and five months; Mr. Haynes, one year and five months; and Mr. Waters, 17
years.
The Plan benefits are subject to offset by federal social security benefits
so that the level of Plan benefits will vary depending upon the participant's
covered compensation for social security benefit purposes as determined annually
by the Social Security Administration. For purposes of the table, it is assumed
that each participant's earnings are the same for all years of employment and
each participant had ten years of credited service prior to January 1, 1996.
Effective January 1, 1996, the method of calculating the benefits under the
Plan will be changed, but the change is not expected to materially increase the
cost of the Plan to the Company or significantly impact the benefits of
participants.
Compensation Agreements
On March 31, 1993 the Company and Steven L. Schneider entered into an
employment agreement which was subsequently amended and restated on
July 28, 1995 (the "Agreement") providing for his employment as President
and Chief Executive Officer for a three-year term commencing on May 24, 1993
(the "Commencement Date"). After the initial term, the Agreement will be
automatically extended for an additional year on each anniversary date unless
either party gives written notice of termination at least 90 days prior to an
anniversary date. The Agreement provides for a base salary of $190,000 per
year, subject to review and adjustment by the Board of Directors or the
Compensation Committee. The initial Agreement also provided for the grant of
options to purchase an aggregate of 175,000 shares of the Common Stock described
in more detail below. In the event of Mr. Schneider's death, disability or
resignation or discharge by the Company other than a termination without
cause (as described below), the Company will pay him all accrued obligations
including his base salary through the date of termination, the amount of any
accrued bonus and incentive, deferred or other cash compensation, and all
accrued benefits under the Company's retirement, incentive and other benefit
plans. In the event of a termination without cause, he is entitled to
receive the product of two times the highest base salary during the term of
the Agreement; a pro rata incentive bonus equal to the full target award for
the then current fiscal year; all accrued benefits under the Company's
retirement and other benefit plans; and, for a period of two years, the Company
shall arrange to provide insurance coverage generally provided for other
Company executives or until such time as Mr. Schneider is provided with
substantially equivalent benefits by another employer. For this purpose, a
termination without cause includes a discharge by the Company without cause or
a resignation by Mr. Schneider within one year after a substantial reduction of
Mr. Schneider's compensation or duties, the giving of notice by the Company that
it elects not to extend the Agreement or a failure by the Company to cause a
successor to assume the Company's obligations under the Agreement. The
Agreement provides that the Company will indemnify Mr. Schneider to the fullest
extent permitted by law, against claims relating to his service as a director,
officer or employee of the Company of any other enterprise for which he acts in
such capacity, at the Company's request. Mr. Schneider has agreed that while
employed by the Company and for a period of two years following his resignation
or discharge for cause he will not directly or indirectly work for or
participate in the activities of any firm engaged in the manufacture or sale of
products competing with the Company.
On March 31, 1993 the Company and Mr. Schneider entered into a Stock Option
Agreement pursuant to which the Company granted to Mr. Schneider nonstatutory
stock options to purchase an aggregate of 175,000 shares of the Common Stock;
100,000 shares effective as of the Commencement Date at an exercise price of
$2.50 per share (the "1993 Options") and 75,000 shares effective as of
May 24, 1994 at an exercise price of $3.00 per share (the "1994 Options").
The fair market value of the Common Stock at the time of grant of the options
was $3.75 per share. The 1993 Options are exercisable in increments of 25,000
shares on each of the first through the fourth anniversaries of the Commencement
Date. The 1994 Options are exercisable in increments of 25,000 shares on
each of the second through the fourth anniversaries of the Commencement Date.
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors makes recommendations
to the Board of Directors concerning compensation plans for the Company
generally and the specific forms and levels of compensation for executive
officers of the Company. The Compensation Committee, which is comprised of
three members, each of whom is a non-employee director, makes the following
report on executive compensation:
Compensation Philosophy
The executive compensation policies established by the Board of Directors
are intended to provide compensation to the Company's executive officers at
competitive levels in order to attract and retain qualified executive officers,
to reward executive officers based on the Company's annual and long-term
performance, and to thereby enhance shareholder value. The Compensation
Committee views stock-based awards as an important means of linking compensation
to corporate performance and providing executive officers with an added
incentive to enhance shareholder value.
The Company will not be affected for the 1995 tax year by the limitation on
deductibility of executive compensation imposed by Section 162(m) of the
Internal Revenue Code of 1986, and it is not presently anticipated that Section
162(m) will affect the Company's compensation deductions in future years.
The Compensation Committee intends to review this issue periodically.
Elements of Executive Compensation
Compensation of the Company's executive officers currently consists of the
following elements: base salary, cash payments under the Trion, Inc. Management
Incentive Plan as adopted for a particular year (the "Management Incentive
Plan"), and stock option awards, including awards under the 1995 Option Plan.
Base Salary. As to all executive officers other than the Chief Executive
Officer, the Compensation Committee establishes base salaries primarily on the
basis of the Chief Executive Officer's recommendations. The Chief Executive
Officer's approach to determining recommended base salary for a new executive
officer includes consideration of responsibilities of the position, the
candidate's experience, skills and expertise, prior accomplishments, current
compensation, competitive salary data including various national reports and
surveys and cost of living comparisons of new location versus old location.
In order to ensure that a new officer's base salary bears a reasonable
relation to the base salaries paid to others, the compensation levels of
existing executive officers are also considered. The primary factors
influencing the Chief Executive Officer's annual recommended changes in
base salaries for existing executive officers are his personal evaluation
of individual performances for the prior year including attainment of
personal objectives and goals, attainment of Company performance goals, the
Company's salary structure, competitive salary data including various
national reports and surveys and the prior year's national percentage
increase in the cost of living.
Management Incentive Plan. Each year a Management Incentive Plan is
adopted by the Board of Directors to provide executive officers and key
management employees with cash compensation commensurate with the level of
attainment of certain performance goals. Target amounts payable under the
Management Incentive Plan to individual executives are determined at the
discretion of the Board of Directors and amounts earned, if any, are paid
annually early in the succeeding year. Target incentive amounts are earned
if certain pre-established Company and individual performance goals are
achieved. The structure and elements of each year's Management Incentive
Plan historically have been similar from year to year. Company goals under the
Management Incentive Plan for 1995 were comprised of targeted amounts of net
sales (40%) and operating income (60%). Individual performance goals are
established by the executive officer to whom the individual reports, after
consultation with the individual.
The target amounts which may be earned by individual executive officers if
performance goals are achieved are set at a specified percentage of base salary.
The target percentages for 1995 for executive officers other than the Chief
Executive Officer ranged from 35% to 50% of base salary and were set by the
Board of Directors based on the Chief Executive Officer's recommendations.
The target percentage for the Chief Executive Officer was set at 50% for 1995
by the Board of Directors.
<PAGE>
Incentive compensation can be earned at levels below and above the targeted
percentages of base salary, with the minimum and maximum amounts for 1995 being
0% and 150% of each individual's target percentage. Threshold and maximum
Company performance criteria are established in addition to the target
performance criteria, and actual percentages of base salary earned are
determined by proration based on the level of achievement within the range
between the threshold and maximum performance criteria. No payments are
made if the threshold criteria are not met.
Options. The grant of stock options is intended to provide long-term
performance-based compensation to executive officers of the Company.
Options also are intended to provide executive officers with an additional
incentive to increase and promote shareholder value.
For incentive stock option grants in 1995, the Chief Executive Officer
recommended, and the Compensation Committee approved, a determination based
for each individual on the total of his 1994 base salary and incentive
compensation earned under the 1994 Management Incentive Plan. Each
executive officer's grant amount expressed in dollar terms was 20% of his
total earned compensation for 1994, and the number of options granted was
equal to the dollar amount of the grant divided by the price of the Common
Stock on the first trading day of 1994 ($5.00). The exercise price of the
options is equal to the fair market value of the Common Stock on the date
of grant.
The Board of Directors has generally granted incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986, and all options
granted in 1995 were incentive stock options. The Compensation Committee also
from time to time recommends that the Board of Directors award, in its
discretion, non-statutory stock options to executive officers, particularly
where a one-time grant involving a significant number of shares is considered
appropriate in connection with the recruitment of a new executive to the
Company, such as the options granted to the Company's Chief Executive Officer in
1993 as described under the caption "Compensation Agreements."
Compensation of Chief Executive Officer
In light of the Company's 1995 performance, including the consummation
during the year of a strategic acquisition, and Mr. Schneider's key role in
those accomplishments, Mr. Schneider's Employment Agreement was amended and
restated during 1995 to provide for certain obligations on the part of the
Company in the event of his discharge without cause or resignation under
specified circumstances. Mr. Schneider's Employment Agreement as currently
in effect and related Stock Option Agreement are described under the caption
"Compensation Agreements."
As is the case for each of the Company's executive officers, Mr. Schneider's
compensation currently includes three primary components: base salary, cash
payments under the Management Incentive Plan and stock option awards. Mr.
Schneider's base salary was increased effective January 1, 1996, reflecting
the Company's and Mr. Schneider's performances since October 1994. His
target bonus under the 1995 Management Incentive Plan was 50% of base salary, to
be based 100% on Company performance. Targeted Company performance goals
established for 1995 at the end of 1994 were weighted 40% to net sales and
60% to operating income. 87.4% of the Company's weighted performance goals
were achieved, resulting in Mr. Schneider being awarded 23.9% of base salary
as incentive compensation under the 1995 Management Incentive Plan. The grant
to Mr. Schneider in January 1995 of options to purchase 9,248 shares of Common
Stock at an exercise price of $4.8125 per share was determined pursuant to the
formula described above under "Elements of Executive Compensation - Options",
based on his total 1994 earned cash compensation.
Edwin V. Clarke, Jr., Chairman
Joseph W. Deering
James E. Heins
Compensation Committee Interlocks and Insider Participation
The Securities and Exchange Commission's rules require that proxy statements
include certain information about "insider" participation on compensation
committees and about specified kinds of "interlocking" relationships between
the compensation committees of different companies, under the foregoing
caption.
<PAGE>
Edwin V. Clarke, Jr., Chairman of the Board of the Company until April 19,
1994, served as Chairman of the Company's compensation committee during fiscal
1995. Mr. Clarke, who will be retiring as a director of the Company, is not
and has at no time in the past been an employee of the Company.
CORPORATE PERFORMANCE
The following table represents a performance comparison of cumulative total
returns on the Company's Common Stock compared to the NASDAQ Market (U.S.
companies) and to NASDAQ Non-Financial Stocks for the period of five years
ended December 31, 1995.
The Company has chosen the latter index because it cannot reasonably
identify a peer group or specific industry index for comparison purposes.
Most of the Company's competitors are minor components of large enterprises
or are privately held.
" Date " " Company" " Market" " Market" " Peer" "Peer "
" " " Index " " Index " " Count " " Index" "Count"
"12/31/90", 100.000, 100.000, 3970, 100.000, 3198
"01/31/91", 116.667, 111.085, 3937, 112.207, 3175
"02/28/91", 94.444, 121.770, 3923, 122.661, 3164
"03/28/91", 138.889, 129.918, 3910, 131.362, 3147
"04/30/91", 133.333, 130.741, 3872, 130.778, 3111
"05/31/91", 166.667, 136.742, 3871, 137.141, 3123
"06/28/91", 122.222, 128.414, 3894, 127.604, 3143
"07/31/91", 144.444, 136.016, 3892, 135.229, 3141
"08/30/91", 161.111, 142.778, 3906, 141.717, 3154
"09/30/91", 172.222, 143.303, 3910, 143.261, 3162
"10/31/91", 166.667, 148.057, 3922, 148.243, 3172
"11/29/91", 177.778, 143.093, 3934, 142.779, 3183
"12/31/91", 150.000, 160.564, 3942, 160.983, 3195
"01/31/92", 150.000, 169.953, 3953, 170.876, 3210
"02/28/92", 161.111, 173.805, 3957, 173.857, 3213
"03/31/92", 166.667, 165.601, 3969, 163.523, 3235
"04/30/92", 155.556, 158.500, 3968, 153.500, 3240
"05/29/92", 155.556, 160.559, 3956, 154.479, 3226
"06/30/92", 138.889, 154.282, 3934, 146.859, 3205
"07/31/92", 138.889, 159.746, 3898, 151.448, 3172
"08/31/92", 127.778, 154.865, 3880, 146.199, 3160
"09/30/92", 111.111, 160.622, 3878, 151.526, 3165
"10/30/92", 105.556, 166.948, 3890, 157.678, 3184
"11/30/92", 155.555, 180.230, 3906, 170.886, 3203
"12/31/92", 138.889, 186.866, 3930, 176.089, 3232
"01/29/93", 144.444, 192.185, 3918, 180.822, 3224
"02/26/93", 125.000, 185.016, 3949, 171.773, 3256
"03/31/93", 161.111, 190.371, 3973, 176.418, 3289
"04/30/93", 172.222, 182.247, 4007, 169.134, 3316
"05/28/93", 172.222, 193.134, 4035, 182.818, 3340
"06/30/93", 188.889, 194.026, 4072, 183.010, 3371
"07/30/93", 222.222, 194.256, 4104, 181.457, 3401
"08/31/93", 216.667, 204.297, 4139, 192.088, 3439
"09/30/93", 200.000, 210.382, 4175, 197.308, 3475
"10/29/93", 227.778, 215.110, 4223, 203.482, 3507
"11/30/93", 227.778, 208.695, 4306, 197.505, 3583
"12/31/93", 222.222, 214.511, 4378, 203.323, 3649
"01/31/94", 277.778, 221.022, 4402, 210.148, 3667
"02/28/94", 244.444, 218.957, 4441, 207.974, 3711
"03/31/94", 283.333, 205.488, 4493, 193.570, 3762
"04/29/94", 261.111, 202.821, 4522, 189.121, 3784
"05/31/94", 261.111, 203.317, 4561, 187.663, 3819
"06/30/94", 255.555, 195.885, 4574, 178.503, 3833
"07/29/94", 227.778, 199.907, 4592, 183.191, 3848
"08/31/94", 244.444, 212.649, 4609, 195.678, 3860
"09/30/94", 244.444, 212.104, 4611, 196.203, 3863
"10/31/94", 255.556, 216.271, 4634, 201.917, 3876
"11/30/94", 238.889, 209.096, 4650, 195.393, 3897
"12/30/94", 205.556, 209.686, 4655, 194.855, 3906
"01/31/95", 222.222, 210.786, 4644, 194.325, 3910
"02/28/95", 278.744, 221.922, 4647, 204.493, 3917
"03/31/95", 270.382, 228.493, 4642, 210.889, 3919
"04/28/95", 262.019, 235.677, 4653, 217.479, 3924
"05/31/95", 268.505, 241.778, 4650, 222.668, 3930
"06/30/95", 262.911, 261.361, 4667, 242.292, 3953
"07/31/95", 246.130, 280.535, 4686, 260.014, 3966
"08/31/95", 280.588, 286.237, 4709, 263.117, 3979
"09/29/95", 280.588, 292.820, 4705, 270.596, 3978
"10/31/95", 258.141, 290.996, 4741, 267.060, 4010
"11/30/95", 231.026, 297.839, 4773, 271.252, 4039
"12/29/95", 231.026, 296.304, 4812, 267.923, 4089
<PAGE>
SERVICE AGREEMENT
On July 30, 1992, Hugh E. Carr, a director of the Company, resigned his
position as Chairman and Chief Executive Officer of the Company. In an
agreement dated October 30, 1992 between the Company and Mr. Carr, Mr. Carr
agreed to remain available to render consulting services to the Company
through September 30, 1997. It was also agreed that during this period Mr.
Carr would not have any financial interest in or make his services available
to any person or entity engaged in any business activity competing with the
Company. The Company agreed to compensate Mr. Carr in the amount of $12,500
per month and that he will be entitled to participate in all employee benefit
plans in which he previously participated, including the 1985 Option Plan.
The agreement also provided, among other things, for the regrant of a stock
option held by Mr. Carr and scheduled to expire December 10, 1992 covering
30,000 shares of Common Stock, with the exercise price to be set at market
value on the date of regrant ($3.75 per share).
Upon retirement on October 1, 1997, Mr. Carr will be entitled to receive a
monthly pension supplement from the Company until his death sufficient to bring
his gross annual retirement benefits to $81,000. In determining the amount of
the supplement to be paid by the Company there will be deducted the amount of
primary benefit to which Mr. Carr is entitled under the federal social security
laws then in effect and his gross retirement benefit under the Company's
pension plan. It is estimated that the supplement will be approximately $3,000
annually.
INDEPENDENT AUDITORS
The independent auditors selected by the Company for the current fiscal year
and the fiscal year ended December 31, 1995, are Ernst & Young LLP, Raleigh,
North Carolina, representatives of which will be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so.
They will be available to respond to appropriate questions at that time.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any proposal of shareholders intended to be presented for consideration at
the 1997 Annual Meeting must be received no later than November 13, 1996, by
the Secretary of the Company for inclusion in the Company's proxy statement
and form of proxy relating to the 1997 Annual Meeting.
OTHER MATTERS
The solicitation of Proxies is made on behalf of the Board of Directors of
the Company and the cost thereof will be borne by the Company. In addition to
soliciting Proxies by mail, directors, officers and employees of the Company,
without receiving additional compensation therefor, may solicit Proxies by
telephone, telegram, in person or by other means. Arrangements also will be
made with brokerage firms and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of Common Stock
held of record by such persons and the Company will reimburse such brokerage
firms, custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith.
All Proxies received pursuant to this solicitation will be voted as directed
and, if no direction is given, will be voted FOR all nominees named herein.
Such Proxies will be voted in the discretion of the Proxies on any other
matter properly presented at the meeting. Shareholders who execute Proxies
may revoke them by giving notice in writing to the Secretary of the Company
at the principal executive office of the Company, which notice must be received
before the Proxies are voted.
By Order of the Board of Directors,
March 13, 1996 C. J. Monsma
Secretary
<PAGE>
1996 ANNUAL MEETING PROXY CARD
- -------------------------------------------------------------------------------
PROXY
TRION, INC.
P.O. Box 760
Sanford, NC 27331-0760
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Seddon Goode, Jr. and Samuel J. Wornom III,
and each of them, Proxies with power of substitution, and hereby authorizes
each of them to represent and to vote, as designated below, all the shares
of common stock of Trion, Inc. held of record by the undersigned at the close
of business on March 1, 1996, at the Annual Meeting of Shareholders to be
held on April 16, 1996, at 10:00 A.M. (local time) at the Dennis A. Wicker
Civic Center and any adjournments thereof.
1. ELECTION OF DIRECTORS
____ FOR election as Directors of the following nominees identified in
the Proxy Statement: James E. Heins and Steven L. Schneider.
____ WITHHOLD AUTHORITY to vote for all nominees.
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the space
provided: ___________________________________________________________________
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
______________________________________________________________________________
____ The undersigned desires to elect voting confidentiality, to the extent
applicable under the Trion, Inc. By-laws.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEES IDENTIFIED IN PROPOSAL 1.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name be President or other authorized officer. If a
partnership, please sign in partnership name be authorized person.
Dated: ______________________, 1996
___________________________________
Signature
___________________________________
Signature
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
______________________________________________________________________________
