SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ___)
Filed by the Registrant [ X ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TRION, INC.
(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):
[ 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 transactions 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:
TRION, INC.
TRION, INC. Notice of Annual Meeting
of Shareholders
and Proxy Statement
Tuesday, April 20, 1999
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
Section 16(a) Beneficial Ownership Reporting Compliance. . . . .8
Executive Compensation . . . . . . . . . . . . . . . . . . . . .8
Corporate Performance. . . . . . . . . . . . . . . . . . . . . 16
Proposal to Amend the Trion, Inc. 1995 Non-Employee
Director Stock Plan to Increase the Number of Shares
Which May be Issued Thereunder. . . . . . . . . . . . . . . 17
Independent Auditors . . . . . . . . . . . . . . . . . . . . . 18
Shareholder Proposals for 2000 Annual Meeting. . . . . . . . . 18
Other Matters. . . . . . . . . . . . . . . . . . . . . . . . . 18
_____________________________________
<PAGE>
TRION, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1999
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 20, 1999, at 10:00 A.M. (local
time), for the following purposes:
(1) To elect three directors to serve for a term of three
years.
(2) To consider and vote upon a proposal to amend the
Company's 1995 Non-Employee Director Stock Plan to
increase the number of shares which may be issued
thereunder.
(3) 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, 1998 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 26, 1999 C. J. Monsma
Sanford, North Carolina Secretary
<PAGE> 2
TRION, INC.
101 McNeill Road
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 20,
1999, 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 is being mailed to shareholders on or about March 26, 1999.
SHARES ENTITLED TO VOTE
Shareholders of record at the close of business on March 1, 1999,
will be entitled to vote at the Annual Meeting. As of March 1,
1999 there were outstanding 7,149,247 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 if a shareholder checked the box on
the proxy card to elect confidential voting, that individual
shareholder's vote will not be communicated to the Company's
management except in specified situations.
In the election of directors, the three 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
<PAGE> 3
have withheld authority to vote, and will be voted for the election
of the other listed nominee(s), if applicable. Such votes withheld
will not have the effect of a "negative" vote with respect to the
election of directors.
The proposal to approve additional shares available for the 1995
Non-Employee Director Stock Plan (the "Stock Plan") will be
approved if it receives the affirmative vote of a majority of the
shares of Common Stock present in person or by proxy at the
Annual Meeting and entitled to vote on the proposal. 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. If your proxy is specifically marked as
abstaining from voting on the Stock Plan, your shares will be
counted as having voted against such plan. An abstention from
voting as to any other proposal will not be counted as having
been voted for or against that particular proposal. 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 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. The rules applicable to a nominee holder may
preclude it from voting the shares that it holds on certain kinds
of proposals unless it receives voting instructions from the
beneficial owners of the shares. 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 director or directors whose term or terms
expire in such year. At the Annual Meeting, the shareholders
will elect a class of three directors for a term expiring in
2002.
It is intended that the Proxies will be voted for the election of
the nominees listed below. James E. Heins, F. Trent Hill, Jr.,
and Steven L. Schneider are currently serving as directors in the
class to be elected at the Annual Meeting. If a nominee 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, 1999. 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.
<PAGE> 4
Name and Director Shares of Common Stock Percent of
Principal Occupation(1) Age Since Beneficially Owned(2) Class(2)(3)
- ---------------------- --- -------- ---------------------- ----------
(a) Nominees for director for terms to expire in 2002:
James E. Heins (***) 68 1981 15,333 --
Independent consultant-
communications,
Pinehurst, NC (4)
F. Trent Hill, Jr. (*) 46 1996 22,763 --
Chief Financial Officer,
Sonoco Products Company,
manufacturer of packaging
products,
Hartsville, SC (5)
Steven L. Schneider (**) 55 1993 220,415(6) 3.04%
President and Chief
Executive Officer,
Trion, Inc.,
Sanford, NC
(b) Continuing directors whose terms expire in 2000:
Grant R. Meyers (*) 56 1976 242,263 3.39%
Partner, Target Sales
manufacturers' repre-
sentative organization,
Davie, FL (7)
Samuel J. Wornom III(*)(**) 56 1982 109,776(8) 1.53%
President, Nouveau
Properties, Inc.,
Sanford, NC (9)
(c) Continuing directors whose terms expire in 2001:
Hugh E. Carr (*)(**) 66 1968 440,849 6.17%
Former Chairman and
Chief Executive Officer,
Trion, Inc.
Sanford, NC (10)
Joseph W. Deering (***) 58 1995 10,584 --
Chairman, Trion, Inc. and
President, PMI
Food Equipment Group
(a division of Premark
International, Inc.),
manufacturer of commercial
food service products,
Troy, OH
<PAGE> 5
Name and Director Shares of Common Stock Percent of
Principal Occupation(1) Age Since Beneficially Owned(2) Class(2)(3)
- ----------------------- --- -------- ---------------------- -----------
(c) Continuing directors whose terms expire in 2001: (cont.)
Seddon Goode, Jr. (**)(***) 67 1979 84,575 1.18%
President, University
Research Park, a 501(c)(6)
corporation - real estate
developers,
Charlotte, NC (11)
(*) 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, 1999.
(3) With respect to holdings of Common Stock, these percentages
assume the exercise of options exercisable within sixty days of
March 1, 1999 owned by the respective persons, but no other
exercise, for each calculation.
(4) Mr. Heins is a director of BB&T Financial Corporation.
(5) Prior to assuming his current position in 1995, Mr. Hill was
Vice President-Finance in 1994 and Vice President-Industrial
Products Division, N.A. from 1990 through 1994 for Sonoco
Products Company.
(6) Includes 102,546 shares which Mr. Schneider has the right to
acquire within sixty days of March 1, 1999 upon the exercise of
stock options. Also includes 14,869 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 three
co-trustees, but as to which he has no economic interest.
(7) Mr. Meyers is also Vice President of Island Trader Inc., a
retail store in Key Largo, FL.
(8) Includes 35,000 shares which Mr. Wornom has the right to
acquire upon the exercise of stock options.
(9) Mr. Wornom is also a director of Capital Bank and of
Carolina Pottery.
(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 listed
as being beneficially owned by Mr. Carr includes 245,086 shares
of
<PAGE> 6
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) Mr. Goode is a director of Riscorp, Inc.
The Company has standing audit, compensation and nominating
committees. During 1998 the Board of Directors met twenty one
times; the audit committee met twice; the compensation committee
met once; and the nominating committee met once. 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, during 1998, and if proposal two is
approved by the shareholders then also for the 1999 year, the
Chairman of the Board is paid an annual retainer of 3,000 shares
of Common Stock and all other non-employee directors are paid an
annual retainer of 1,500 shares of Common Stock. In addition,
all non-employee directors receive a fee of $600 for
participation in each meeting of the Board of Directors and each
committee meeting. Each director has $50,000 in life insurance
coverage and $200,000 in travel and accident coverage through the
Company's group plans.
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 (fifteen persons) on March 1, 1999:
Name Shares Beneficially Owned (1) Percent of Class (1)
- ---------------------- ----------------------------- -------------------
D. M. Schlegel 28,644 --
B. H. Boender 19,398 --
C. J. Monsma 48,003 --
C. A. Haynes 16,640 --
Directors and executive 1,286,773 17.41%
officers as a group
- -------------------------
<PAGE> 7
(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, 1999
as follows: Mr. Schlegel, 28,644; Mr. Boender, 14,398; Mr.
Monsma, 26,503; Mr. Haynes, 15,825; and the group, 240,190.
The only person known to the Company to be the beneficial owner
of more than 5% of the Common Stock on March 1, 1999 is Hugh E.
Carr, whose address is 1508 Von Cannon Circle, Sanford, North
Carolina 27330. Information as to Mr. Carr's beneficial
ownership is set forth above under "Election of Directors."
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 insiders of
the Company complied with all such filing requirements for 1998.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information
concerning the compensation during 1998 of the President and
Chief Executive Officer of the Company and the other four most
highly paid executive officers of the Company in 1998:
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------------
Other
Name and Annual
Principal Year Salary Bonus Compensation
Position ($) ($) ($)
S. L. Schneider 1998 214,000 14,980 N/A
President and Chief 1997 205,500 119,796 N/A
Executive Officer(2) 1996 197,600 27,960 N/A
D. M. Schlegel 1998 180,000 0 18,146 (3)
Vice President 1997 173,053 90,853 N/A
President-Envirco (4) 1996 166,397 35,051 N/A
B. H. Boender 1998 110,600 17,077 N/A
Vice President/Sales 1997 106,250 60,818 N/A
Marketing 1996 102,360 18,044 N/A
C. J. Monsma 1998 113,400 6,827 N/A
Vice President and 1997 108,576 44,460 N/A
Chief Financial 1996 104,200 13,806 N/A
Officer (6)
C. A. Haynes 1998 105,000 8,134 N/A
Vice President 1997 98,282 34,474 N/A
Engineering 1996 94,050 12,609 N/A
Long Term Compensation
-----------------------------------
Awards Payouts
---------------------- ---------
Restricted Securities
Name and Stock Underlying LTIP
Principal Year Awards(s) Options Payouts
Position ($) (#) ($)
S. L. Schneider 1998 N/A 11,000 N/A
President and Chief 1997 N/A 7,080 N/A
Executive Officer(2) 1996 N/A 9,912 N/A
D. M. Schlegel 1998 N/A 5,500 N/A
Vice President 1997 N/A 3,540 N/A
President-Envirco (4) 1996 20,000 (5) 4,511 N/A
B. H. Boender 1998 N/A 5,500 N/A
Vice President/Sales 1997 N/A 3,540 N/A
Marketing 1996 N/A 5,280 N/A
C. J. Monsma 1998 N/A 5,500 N/A
Vice President and 1997 N/A 3,540 N/A
Chief Financial 1996 N/A 5,008 N/A
Officer (6)
C. A. Haynes 1998 N/A 5,500 N/A
Vice President 1997 N/A 3,540 N/A
Engineering 1996 N/A 4,511 N/A
All
Name and Other
Principal Year Compensation
Position ($)(1)
S. L. Schneider 1998 20,606
President and Chief 1997 18,461
Executive Officer(2) 1996 16,195
D. M. Schlegel 1998 54,319
Vice President 1997 52,163
President-Envirco (4) 1996 52,080
B. H. Boender 1998 12,181
Vice President/Sales 1997 10,121
Marketing 1996 8,896
C. J. Monsma 1998 12,237
Vice President and 1997 10,028
Chief Financial 1996 9,065
Officer (6)
C. A. Haynes 1998 8,755
Vice President 1997 7,691
Engineering 1996 8,186
_____________
(1) Represents the Company's contribution to the applicable
401(k) retirement plans for the accounts of the named executive
officers. For Messieurs Schneider, Boender, Monsma and Haynes
amounts credited under the Non-Qualified Retirement and Savings
Plan, which provides for an annual accrual equal to 7% of an
eligible executives base
<PAGE> 8
salary plus interest thereon, is included. The amounts credited in
1998, 1997 and 1996, respectively, under the Non-Qualified Retirement
and Savings Plan were as follows: Mr. Schneider - $17,877, $16,086
and $14,275; Mr. Boender - $9,840, $8,538 and $7,395; Mr. Monsma - $9,468,
$8,498 and $7,528; and Mr. Haynes - $8,755, $7,690 and $6,796.
In addition, in each of the years 1998, 1997 and 1996 Mr.
Schlegel received a non-compete payment of $50,000 related to an
employment agreement entered into on August 1, 1995 in
conjunction with the Company's acquisition of the Envirco
Corporation.
(2) Mr. Schneider is employed pursuant to an employment
agreement described under the caption "Compensation Agreements."
(3) Represents Company paid fringe benefits and perquisites,
including automobile expenses in the amount of $13,743, provided
to Mr. Schlegel pursuant to an employment agreement described
under the caption "Compensation Agreements."
(4) Mr. Schlegel is employed pursuant to an employment agreement
described under the caption "Compensation Agreements."
(5) Mr. Schlegel was awarded non-qualified options to purchase
the Company's Common Stock pursuant to an employment agreement
described under the caption "Compensation Agreements."
(6) On May 19, 1998, Mr. Monsma entered into an agreement with
the Company which provides compensation in the event of a change
of control in the Company described under the caption
"Compensation Agreements."
The following table sets forth information concerning stock
option grants during 1998 to the executive officers named in the
Summary Compensation Table:
OPTION GRANTS IN 1998
Individual Grants (1)
- -------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year (2) ($/Sh) Date
---- ---------- --------- ------- ----------
S. L. Schneider 11,000 11.40 5.3125 2/11/02
D. M. Schlegel 5,500 5.70 5.3125 2/11/02
B. H. Boender 5,500 5.70 5.3125 2/11/02
C. J. Monsma 5,500 5.70 5.3125 2/11/02
C. A. Haynes 5,500 5.70 5.3125 2/11/02
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Option Term
Name 5% ($) 10% ($)
---- ------ -------
S. L. Schneider 16,145 35,677
D. M. Schlegel 8,073 17,838
B. H. Boender 5,135 11,346
C. J. Monsma 5,135 11,346
C. A. Haynes 5,135 11,346
_____________
(1) All stock options reflected in the table were granted under
the 1995 Option Plan and are incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as
amended. The options become exercisable ratably over three years
from the first anniversary of the date of grant.
(2) Based upon options to purchase 96,500 shares granted during 1998.
<PAGE> 9
The following table sets forth information concerning the options
exercised during 1998 and the unexercised options held at
December 31, 1998 by the executive officers named in the Summary
Compensation Table:
AGGREGATED OPTION EXERCISES IN 1998 AND
1998 YEAR END OPTION VALUES
Number of Securities
Shares Underlying Unexercised
Acquired Value Options at Fiscal
on Realized Year-End (#)
Name Exercise(#) ($) Exercisable Unexercisable
---- ---------- -------- ----------- -------------
S. L. Schneider - - 103,421 19,024
D. M. Schlegel - - 24,147 9,344
B. H. Boender - - 13,653 9,620
C. J. Monsma - - 21,820 9,530
C. A. Haynes - - 11,308 9,364
Value of Unexercised
In-the-Money
Options at Fiscal
Year-End ($)(1)
Name Exercisable Unexercisable
---- ----------- -------------
S. L. Schneider 0 0
D. M. Schlegel 0 0
B. H. Boender 0 0
C. J. Monsma 0 0
C. A. Haynes 0 0
_____________________
(1) The exercise price of all of the options listed above are in
excess of or equal to the closing sales price of the Common Stock
as reported on the NASDAQ National Market System on December 31,
1998 of $3.00 per share.
Pension Benefits
Prior to January 31, 1999, the Company maintained 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.
Historically, benefits under the Plan were calculated for
participants on two separate bases. With respect to any years of
service prior to January 1, 1982, benefits were 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, through December 31, 1995,
benefits for each participant were determined based on the
individual's actual earnings, and the annual amounts as
calculated were aggregated.
Beginning January 1, 1996, the Company amended the Plan to a cash
balance basis. Under the terms of the conversion to a cash
balance pension plan, benefits are based on hypothetical account
balances. The benefit accrued by each participant prior to
January 1, 1996 was converted into an actuarially equivalent cash
balance amount. For 1997 and 1996, each participant accrued an
additional benefit equal to 2.75% of eligible compensation and
interest was credited on their hypothetical account balance at a
rate fixed by the Board of Directors. The rate for both 1997 and
1996 was 6.5%. Eligible compensation for purposes of the Plan
includes salary and bonus, as referenced in the Summary
Compensation Table, subject to maximum annual compensation of
$150,000 which is indexed for inflation. For 1998, the maximum
annual pension payable under the Plan was $130,000.
The normal form of benefit payment was calculated as a straight
life annuity with joint and survivor options available. With the
conversion to a cash balance pension plan, lump sum distributions
were also permitted.
<PAGE> 10
On October 24, 1997, the Board of Directors approved a plan to
freeze the Plan effective December 31, 1997 and terminate the
Plan upon approval from the Internal Revenue Service. Approval
was received on November 16, 1998. Effective January 31, 1999,
the plan was terminated and all participants became fully vested
and were either paid a lump sum distribution, provided an
annuity, or rolled over their accumulated benefit balance. All
Plan assets were distributed to Plan participants. Pursuant to
this distribution the named executive officers received the
following amounts on January 31, 1999: Mr. Schneider - $51,552;
Mr. Boender - $23,377; Mr. Monsma - $13,784; and Mr. Haynes -
$13,290.
Prior to the termination, the estimated annual benefit payable
under the Plan at the normal retirement age of 65 to the named
executive officers was: Mr. Schneider - $8,631; Mr. Boender -
$5,505; Mr. Monsma - $3,595; and Mr. Haynes - $2,995. Mr.
Schlegel was an employee of the Company's subsidiary, Envirco
Corporation which maintained only a defined contribution pension
plan.
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 and again on May 20, 1998, as so
amended and restated (the "Agreement"), providing for his
employment as President and Chief Executive Officer for a five-year term
commencing on May 24, 1993 (the "Commencement Date").
The Agreement will be automatically extended for an additional
year on each anniversary date of the Commencement Date unless
either party gives written notice of termination at least 90 days
prior to an anniversary date. On May 24, 1998, the Agreement was
automatically extended for an additional one year term. The
Agreement provides for a base salary of $214,000 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 or
resignation with good reason (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
or resignation with good reason, he is entitled to receive the
product of three times the highest base salary during the term of
the Agreement plus the full target award fixed for the then-
current fiscal year; a pro rata incentive bonus equal to the full
target award for the then-current fiscal year; an amount equal to
the sum of (A) the maximum contributions that could have been
made by the Company on Mr. Schneider's behalf to all defined
contribution plans of the Company and (B) the present value of
the benefits that Mr. Schneider could have accrued under all
defined benefit plans of the Company, had Mr. Schneider continued
to participate in such plans for a three year period following
termination; 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 or
resignation with good reason 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, a relocation of Mr. Schneider's principal place of
business to a location which is more than 50 miles from its
current location, a substantial change in the duties and
responsibilities of Mr. Schneider's current position, the giving
of
<PAGE> 11
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 or
any other enterprise for which he acts in such capacity at the
Company's request.
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; consisting of 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.
During 1995 and 1997 Mr. Schneider exercised all of the 1993
Options. The 1994 Options expire on the tenth anniversary of the
Commencement Date.
On August 1, 1995 and in conjunction with the Company's
acquisition of the Envirco Corporation, Mr. Schlegel and the
Company and its subsidiary, the Envirco Corporation ("Envirco"),
entered into an employment agreement providing for Mr. Schlegel's
employment as President and Chief Executive of Envirco for a term
continuing until August 1, 2000. The agreement provides for an
annual base salary of $166,397 with increases at the sole
discretion of the Board, based upon his performance and that of
Envirco, participation in the Company's Management Incentive
Plan, participation in the Company's Incentive Stock Option Plan,
and participation in all other fringe benefit plans of Envirco.
In addition, the agreement provided for a Stock Option Award
Agreement by which Mr. Schlegel would be eligible for awards of
options to purchase up to 20,000 shares of Common Stock, at a per
share price fixed at five days prior to the award but in no event
less than $6.00 per share, in each of the five years of the
employment agreement based upon specific performance targets
established for Envirco. Under this Stock Option Award
Agreement, Mr. Schlegel was awarded 20,000 shares at an exercise
price of $6.00 per share for Envirco's performance in 1995 and no
awards were made for 1996, 1997 or 1998. In the event of death
or disability, Mr. Schlegel will be paid all accrued wages,
incentives and benefits to which he is entitled under the
retirement, incentive and other benefit plans. In the event of
Mr. Schlegel's termination without cause after the third
anniversary of the employment agreement, Mr. Schlegel will
continue to be paid his base salary then in effect for a period
of the lesser of (i) twenty four months or (ii) the remaining
employment term and which amount shall be reduced by the gross
earnings he earned during the period such payments are payable.
Additionally, the employment agreement calls for Mr. Schlegel to
be paid five annual payments of $50,000, the first being made on
August 1, 1995 and four subsequent payments to be made on August
1, 1996, 1997, 1998, and 1999, for the covenant not to compete
included in the employment agreement. The covenant includes Mr.
Schlegel's agreement to protect and not disclose confidential
information.
On May 19, 1998 the Company and Calvin J. Monsma entered into a
Change in Control Agreement (the "Control Agreement") providing
for certain severance payments being made to Mr. Monsma in the
event of his termination without cause or resignation with good
reason should there be a change in control of the Company. The
term of the agreement is for three years and, in the event of a
change in control of the Company, for two years from the date of
the change in control. In the event of a termination without
cause or resignation with good reason, he is entitled to receive
the product of two times the sum of the highest base salary
during the term of the agreement plus
<PAGE> 12
the full target award fixed for the then-current year; a pro rata
incentive bonus equal to the full target award for the then-current
fiscal year; an amount equal to the sum of (A) the maximum contribution
that could have been made by the Company on Mr. Monsma's behalf to
all defined contribution plans of the Company and (B) the present value of
the benefits that Mr. Monsma could have accrued under all defined
benefit plans of the Company, had Mr. Monsma continued to
participate in such plans for a three year period following
termination; and, for a period of two years, the Company shall
arrange to provide Mr. Monsma, at the Company's cost, with
insurance coverage providing substantially similar benefits to
those which he was receiving immediately prior to the effective
date until such time as Mr. Monsma is provided with substantially
equivalent benefits by another employer. For this purpose, a
termination without cause or resignation with good reason
includes a discharge by the Company without cause or a
resignation by Mr. Monsma within one year after a substantial
reduction of Mr. Monsma's compensation or duties, a relocation of
Mr. Monsma's principal place of business to a location which is
more than 50 miles from its current location, a substantial
change in the duties and responsibilities of Mr. Monsma's current
position, the giving of notice by the Company that it elects not
to extend the Control Agreement or a failure by the Company to
cause a successor to assume the Company's obligations under the
Control Agreement.
The Company and Charles A. Haynes are negotiating a Change in
Control Agreement providing for the payment of certain severance
benefits to Mr. Haynes in the event of his termination without
cause should there be a change in control as to be defined in the
agreement. The substantive terms of the agreement are expected
to be as follows. In the event of a change in control of the
Company, for one year from the date of the closing of the change
in control, if Mr. Haynes is terminated without cause he would be
entitled to receive an amount equal to the sum of the highest
base salary during the term of the agreement plus the full target
award fixed for the then-current year; a pro rata incentive bonus
equal to the full target award for the then-current fiscal year;
an amount equal to the sum of (A) the maximum contribution that
could have been made by the Company on Mr. Haynes' behalf to all
defined contribution plans of the Company and (B) the present
value of the benefits that Mr. Haynes could have accrued under
all defined benefit plans of the Company, had Mr. Haynes
continued to participate in such plans for a one year period
following termination; and, for a period of one year following
the termination, the Company shall provide Mr. Haynes, at the
Company's cost, insurance coverage providing substantially
similar benefits to those which he was receiving immediately
prior to the effective date until such time as Mr. Haynes is
provided with substantially equivalent benefits by another
employer. For this purpose, a termination without cause includes
a discharge by the Company without cause, a substantial reduction
of Mr. Haynes' compensation, or a relocation of Mr. Haynes'
principal place of business to a location which is more than 50
miles from its current location.
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:
<PAGE> 13
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 1998 tax year by the
limitation on deductibility of executive compensation imposed by
Section 162(m) of the Internal Revenue Code of 1986 as amended
(the "Code"), 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 1998 were comprised of targeted amounts of net
sales and operating income. 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 1998 for
<PAGE> 14
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 1998 by the Board of Directors. Incentive compensation can
be earned at levels below and above the targeted percentages of
base salary, with the minimum and maximum amounts for 1998 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. The Compensation Committee approved incentive stock
option grants in 1998. Grants were based on a pool of shares
determined by the number of participants, with established
minimum and maximum numbers of shares if certain performance
goals were attained. The specific number of shares granted to
individuals was provided in the recommendation. 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 Code, and all options granted in 1998 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
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. His target bonus under
the 1998 Management Incentive Plan was 50% of base salary, to be
based 80% on Company performance and 20% on his individual
performance goals. Targeted Company performance goals
established for 1998 at the end of 1997 were weighted 40% to net
sales and 60% to operating income. The Company did not achieve
the necessary corporate financial performance targets in 1998.
Mr. Schneider achieved 70% of his individual performance goals.
The resulting award to Mr. Schneider was 7.0% of base salary as
incentive compensation under the 1998 Management Incentive Plan.
The grant to Mr. Schneider in February 1998 of options to
purchase 11,000 shares of Common Stock at an exercise price of
$5.3125 per share was determined pursuant to the process
described above under "Elements of Executive Compensation -
Options".
Joseph W. Deering, Chairman
Seddon Goode, Jr.
James E. Heins
<PAGE> 15
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, 1998.
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.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
Performance Graph for
Trion, Inc.
Prepared by the Center for Research in Security Prices
Produced on 01/21/1999 including data to 12/31/1998
Date Company Market Market Peer Peer
Index Index Count Index Count
12/31/1993 100.000 100.000 4376 100.000 3646
01/31/1994 125.000 103.035 4400 103.355 3664
02/28/1994 110.000 102.073 4439 102.286 3708
03/31/1994 127.500 95.797 4491 95.206 3759
04/29/1994 117.500 94.553 4520 93.019 3781
05/31/1994 117.500 94.785 4562 92.302 3819
06/30/1994 115.000 91.318 4576 87.794 3833
07/29/1994 102.500 93.193 4594 90.101 3848
08/31/1994 110.000 99.135 4612 96.245 3860
09/30/1994 110.000 98.881 4615 96.503 3864
10/31/1994 115.000 100.824 4637 99.314 3875
11/30/1994 107.500 97.479 4653 96.067 3896
12/30/1994 92.500 97.752 4658 96.164 3905
01/31/1995 100.000 98.310 4648 95.837 3910
02/28/1995 125.435 103.509 4650 100.776 3916
03/31/1995 121.672 106.578 4644 104.340 3917
04/28/1995 117.909 109.936 4655 108.087 3922
05/31/1995 120.827 112.772 4654 110.564 3929
06/30/1995 118.310 121.911 4671 120.652 3950
07/31/1995 110.758 130.873 4690 129.857 3963
08/31/1995 126.265 133.526 4713 131.561 3976
09/29/1995 126.265 136.596 4709 134.520 3977
10/31/1995 116.163 135.807 4747 133.144 4013
11/30/1995 103.962 138.996 4779 135.644 4043
12/29/1995 103.962 138.256 4819 134.033 4094
01/31/1996 106.497 138.936 4809 134.999 4099
02/29/1996 119.565 144.224 4839 140.986 4135
03/29/1996 137.372 144.699 4878 140.773 4182
04/30/1996 142.460 156.700 4923 154.414 4227
05/31/1996 173.452 163.896 4981 162.164 4277
06/28/1996 130.089 156.508 5034 153.173 4333
07/31/1996 122.437 142.551 5066 137.613 4362
08/30/1996 115.193 150.538 5090 145.320 4389
09/30/1996 115.193 162.052 5096 157.027 4407
10/31/1996 102.394 160.261 5138 154.162 4454
11/29/1996 92.564 170.168 5180 163.441 4499
12/31/1996 84.850 170.015 5176 162.838 4508
01/31/1997 123.419 182.098 5161 175.433 4498
02/28/1997 105.822 172.026 5170 163.112 4515
03/31/1997 105.822 160.793 5168 151.880 4527
04/30/1997 87.754 165.820 5155 156.928 4510
05/30/1997 95.900 184.612 5148 175.918 4510
06/30/1997 95.900 190.266 5132 179.998 4502
07/31/1997 85.532 210.349 5127 199.833 4503
08/29/1997 92.445 210.028 5116 199.545 4510
09/30/1997 105.465 222.440 5106 210.860 4500
10/31/1997 104.163 210.924 5115 198.091 4515
11/28/1997 86.317 211.979 5131 197.771 4536
12/31/1997 102.010 208.580 5082 191.045 4501
01/30/1998 106.588 215.158 5053 199.572 4468
02/27/1998 102.418 235.360 5032 220.040 4455
03/31/1998 126.053 244.052 4994 228.239 4422
04/30/1998 126.053 248.196 4973 232.301 4404
05/29/1998 118.577 234.573 4965 219.213 4395
06/30/1998 115.942 251.119 4943 235.998 4374
07/31/1998 94.862 248.467 4919 233.970 4348
08/31/1998 117.260 199.752 4881 186.809 4315
09/30/1998 102.767 227.341 4820 213.401 4261
10/30/1998 60.606 236.632 4736 222.165 4173
11/30/1998 63.241 259.943 4701 246.414 4135
12/31/1998 63.241 293.209 4651 279.821 4087
LEGEND
CRSP Total Returns
Index for: 12/1993 12/1994 12/1995 12/1996 12/1997 12/1998
_________________ _______ _______ _______ _______ _______ _______
Trion, Inc. 100.0 92.5 104.0 84.9 102.0 63.2
Nasdaq Stock Market
(US Companies) 100.0 97.8 138.3 170.0 208.6 293.2
Nasdaq Non-Financial
Stocks
SIC 0100-3999,
7000-9999 US & Foreign 100.0 96.2 134.0 162.8 191.0 279.8
<PAGE> 16
PROPOSAL TO AMEND THE
TRION, INC. 1995 NON-EMPLOYEE DIRECTOR STOCK PLAN
On December 10, 1998, the Board of Directors adopted, subject to
shareholder approval, an amendment to the Company's 1995 Non-
Employee Director Stock Plan (the "Director Stock Plan") which
would increase the aggregate number of shares of Common Stock
which may be issued thereunder from 30,000 to 45,000 shares of
Common Stock. The primary features of the Director Stock Plan
are summarized below.
The purposes of the Director Stock Plan are to promote the
interests of the Company and its shareholders by attracting,
retaining and providing an incentive to non-employee directors by
giving them an increased proprietary interest in the Company,
thereby more closely aligning their interests with those of the
shareholders.
The Director Stock Plan became effective on April 18, 1995 and
will remain effective until the close of business on April 18,
2000, unless this proposal is not approved by the shareholders or
the Director Stock Plan is terminated earlier by the Board. The
Director Stock Plan provides that each individual elected,
reelected or continuing as a non-employee director as of each
Annual Meeting date shall automatically receive an award (the
"Annual Award") in an amount to be determined by the Board.
Pursuant to that authority, during 1998 the Board fixed the
amount of the annual award to be 3,000 shares of Common Stock to
the Chairman of the Board and 1,500 shares of Common Stock for
the other non-employee directors. The amount of the award will
be unchanged for 1999. In accordance with this arrangement, each
of Messieurs Carr, Goode, Heins, Hill, Meyers and Wornom will
receive 1,500 shares of Common Stock and Mr. Deering will receive
3,000 shares of Common Stock on April 20, 1999 if this proposal
is approved.
As of March 1, 1999, there were no shares of Common Stock
available for future issuance under the Director Stock Plan. If
this proposal is adopted, the number of shares available for
issuance under the Director Stock Plan would increase by 15,000
shares of Common Stock. Such shares may be authorized and
unissued shares, or issued shares which have been reacquired by
the Company and held in treasury.
The Board shall administer the Director Stock Plan and may amend
or terminate it; provided, however, that no amendment may be made
without shareholder approval if such approval is required by Rule
16b-3 under the Exchange Act (unless the Board determines that
such compliance is no longer desired) or under any other
applicable law.
Certain Federal Income Tax Consequences
The following is a brief summary of the principal federal income
tax consequences of awards under the Director Stock Plan based
upon current federal income tax laws. The summary is not
intended to be exhaustive and, among other things, does not
describe state, local or foreign tax consequences.
Except as described below, a non-employee director who receives
an award of shares of Common Stock will recognize ordinary income
in an amount equal to the fair market value of such shares six
months after the award date (assuming that such shares are held
by the non-employee director for at least six months in order to
avoid any short-swing profit liability under Section 16(b) of the
Exchange Act). A non-employee director may elect under Section
83(b) of the Code to recognize ordinary income on the award date
in an amount equal to the fair market value of the Common Stock
on the award date. The Company will be entitled to take a
corresponding tax deduction for the tax year in which the non-
employee director recognizes ordinary income. If such
<PAGE> 17
an election is made, any appreciation in value of the Common Stock
from the award date to the date a non-employee director disposes
of such Common Stock will be taxed as capital gain, short-term or
long term, depending on the length of time the Common Stock was
held.
Board Recommendation
The Board of Directors recommends that the Company's shareholders
vote "FOR" approval of the proposal to amend the Director Stock
Plan.
INDEPENDENT AUDITORS
The independent auditors selected by the Company for the current
fiscal year and the fiscal year ended December 31, 1998, 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 2000 ANNUAL MEETING
The deadline for submission of shareholder proposals pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") for inclusion in the Company's proxy
statement for the 2000 annual meeting of shareholders is November
27, 1999. Additionally, the Company must receive notice of any
shareholder proposal to be submitted at the 2000 annual meeting
of shareholders (but not required to be included in the proxy
statement) by February 10, 2000, or such proposal will be
considered untimely pursuant to Rules 14a-4 and 14a-5(e) under
the Exchange Act and the persons named in the proxies solicited
by the Company may exercise discretionary voting authority with
respect to such proposal.
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 therefore, may solicit Proxies
by telephone, facsimile, 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 and FOR the proposal to amend the 1995 Non-
Employee Director Stock Plan. 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 26, 1999 C. J. Monsma
Secretary
<PAGE> 18
[Proxy Card]
TRION, INC.
Annual Meeting of Shareholders
Dennis A. Wicker Civic Center
1801 Nash Street
Sanford, North Carolina
April 20, 1999
10:00 A.M.
FOLD AND DETACH HERE
- -----------------------------------------------------------------
TRION, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Seddon Goode, Jr., and Calvin J.
Monsma, and each of them, Proxies with the 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, 1999, at the Annual Meeting of Shareholders to be held
on April 20, 1999, at 10:00 A.M. (local time) at the Dennis A.
Wicker Civic Center, 1801 Nash Street, Sanford, North Carolina,
and any adjournments thereof.
The Board of Directors recommends a vote "FOR" all nominees
identified in Proposal 1.
1. ELECTION OF DIRECTORS
[ ] FOR election as [ ] WITHHOLD AUTHORITY
Directors of the to vote for all nominees
following nominees
identified in the
Proxy Statement:
James E. Heins,
F. Trent Hill, Jr., and
Steven L. Schneider
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided:
_________________________________________________________________
The Board of Directors recommends a vote "FOR" Proposal 2.
2. Proposal to amend the Trion, Inc. 1995 Non-Employee Director
Stock Plan to increase the number of shares which may be
issued thereunder.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
(over)
FOLD AND DETACH HERE
- -----------------------------------------------------------------
- -----------------------------------------------------------------
[ ] 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 AND FOR PROPOSAL 2.
Please sign exactly as name appears
to the left. 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 by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
Dated: ______________________, 1999
Signature:_________________________
Signature:_________________________
PLEASE COMPLETE, SIGN, DATE AND
RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE>
The Proposed amendment appears in brackets in Section 1.04.
TRION, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK PLAN
Article I. General
1.01 Purpose. The purposes of the 1995 Non-Employee
Director Stock Plan (hereinafter referred to as the "Plan") are
to promote the interests of the Company and its shareholders by
attracting, retaining and providing an incentive to Non-Employee
Directors by giving them the opportunity to acquire a proprietary
interest in the Company and an increased personal interest in its
continued successful performance and progress.
1.02 Adoption and Term. The Plan has been approved by the
Board effective as of January 16, 1995, but is subject to the
approval of the Company's shareholders at the annual meeting of
shareholders to be held in 1995. The Plan will be approved if at
such meeting a quorum is present and a majority of the votes cast
with respect to the Plan are cast in favor of its approval. The
Plan shall terminate without further action at the close of
business of April 18, 2000.
1.03 Definitions. As used herein the following terms have
the following meanings:
(a) Affiliate means any parent or subsidiary corporation of
the Company within the meaning of Section 424(e) and (f),
respectively, of the Code.
(b) Annual Award means the shares of Common Stock issued
pursuant to the Plan in payment of the Annual retainer.
(c) Annual Meeting Date means, as to any particular year,
the date on which the annual meeting of the Company's
shareholders is held.
(d) Annual Retainer means, as to any particular year, the
dollar amount of the retainer for such year payable to Non-Employee
Directors as determined by the Board, excluding for this
purpose any fees payable for attendance at meetings of the Board
or of a committee of the Board.
(e) Board means the Board of Directors of the Company.
(f) Code means the Internal Revenue Code of 1986, as
amended. References to a section of the Code shall include that
section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.
(g) Common Stock means the $0.50 par value common stock of
the Company.
(h) Company means Trion, Inc., a Pennsylvania corporation,
and any successor thereto.
(i) Director means a member of the Board.
(j) Employee means any employee of the Company or an
Affiliate.
(k) Exchange Act means the Securities Exchange Act of 1934,
as amended.
(l) Fair Market Value means, on any date, the closing sale
price of one share of Common Stock, as reported in the NASDAQ
National Market System or any national securities exchange on
which the Common Stock is then listed, as published in the Wall
Street Journal or another newspaper of general circulation, as of
such date or, if there were no sales reported as of such date, as
of the last date preceding such date as of which a sale was
reported. In the event that the Common Stock is not listed on
the NASDAQ National Market System or a national securities
exchange, Fair Market Value shall be determined in good faith by
the Board in its sole discretion.
(m) Non-Employee Director means a Director who is not an
Employee.
(n) Plan means this Trion, Inc. 1995 Non-Employee Director
Stock Plan, as it may hereafter be amended from time to time.
(o) Subsidiary means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if each of the corporations (other than the last
corporation in the chain) owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of
the other corporations in the chain.
1.04 Number of Shares. Subject to adjustment in accordance
with Section 5.01, up to 30,000 [45,000] shares of Common Stock
in the aggregate shall be available for Annual Awards under the
Plan. Such shares may be authorized and unissued shares or
shares which shall have been issued and subsequently reacquired
by the Company.
Article II. Administration
2.01 The Board. The Plan shall be administered by the
Board. Subject to the provisions of the Plan, the Board shall
interpret the Plan, promulgate, amend and rescind rules and
regulations relating to the Plan and make all other
determinations necessary or advisable for its administration.
Interpretation and construction of any provision of the Plan by
the Board shall be final and conclusive. Notwithstanding the
foregoing, the Board shall have or exercise no discretion with
respect to the selection of persons eligible to receive Annual
Awards hereunder, the determination of the number of Annual
Awards to be granted to any person or any other aspect of Plan
administration with respect to which such discretion is not
permitted in order for grants of Annual Awards to be exempt under
Rule 16b-3 under the Exchange Act.
Article III. Participation
3.01 Participants. Each Non-Employee Director shall
participate in the Plan on the terms and conditions hereinafter
set forth.
Article IV. Grant of Annual Awards
4.01 Grant of Annual Awards. As of each Annual Meeting
Date, each individual elected, reelected or continuing as a Non-Employee
Director shall automatically receive an Annual Award of
shares of Common Stock in an amount determined in accordance with
Section 4.02. Receipt of the Annual Award shall constitute
complete and full satisfaction of any obligation of the Company
to pay the Annual Retainer.
4.02 Number of Shares. The number of shares of Common Stock
covered by an Annual Award shall be equal to 100% of the Annual
Retainer divided by the Fair Market Value of the Common Stock at
the close of business on the eleventh day prior to the Annual
Meeting Date. Any fraction of a share shall be rounded down to
the next whole share so that no fractional shares of Common Stock
are issued.
Article V. Miscellaneous
5.01 Adjustments to Reflect Capital Changes. The number and
kind of shares available for Annual Awards subsequently granted
under the Plan shall be appropriately adjusted to reflect any
stock dividend, stock split, combination or exchange of shares,
recapitalization, merger, consolidation or other change in
capitalization of the Company with a similar substantive effect
upon the Plan or the Annual Awards granted under the Plan.
5.02 Termination and Amendment. The Board shall have the
right and the power to terminate the Plan at any time. The Board
shall have complete power and authority to amend the Plan at any
time; provided, however, that the Board shall not, without the
affirmative approval of the shareholders of the Company, increase
the number of shares of Common Stock available for Annual Awards
hereunder or make any other amendment which requires shareholder
approval under Rule 16b-3 under the Exchange Act, unless the
Board determines that such compliance is no longer desired, or
under any other applicable law; and provided, further, that the
Board shall not amend more than once every six months any
provisions which may not be so amended in order for grants of
Annual Awards to be exempt under Rule 16b-3 under the Exchange
Act, other than amendments to comport with changes in the Code,
the Employee Retirement Income Security Act of 1974, or the rules
thereunder. For purposes of this section, an amendment to the
Plan shall be deemed to have the affirmative approval of the
shareholders of the Company if such amendment shall have been
submitted for a vote by the shareholders at a duly called and
constituted meeting of such shareholders at which a quorum is
present and a majority of the votes cast with respect to such
amendment at such meeting shall have been cast in favor of such
amendment.
5.03 Requirements of Law. The issuance of Common Stock
pursuant to an Annual Award shall be subject to all applicable
laws, rules and regulations and to such approval by governmental
agencies as may be required.
5.04 No Guarantee of Membership. Nothing in the Plan shall
confer upon a Non-Employee Director any right to continue to
serve as a Director.
5.05 Governing Law. The Plan and all determinations made
and actions taken pursuant to the Plan shall be governed by the
laws of the Commonwealth of Pennsylvania, other than the conflict
of laws provision of such laws, and shall be construed in
accordance therewith.
5.06 No Strict Construction. No rule of strict construction
shall be implied against the Company, the Board, or any other
person in the interpretation of any of the terms of the Plan, any
Annual Award granted under the Plan or any rule or procedure
established by the Board.
5.07 Compliance with Rule 16b-3. It is intended that the
Plan be applied and administered in compliance with Rule 16b-3.
If any provision of the Plan would be in violation of Rule 16b-3
if applied as written, such provision shall not have effect as
written and shall be given effect so as to comply with Rule 16b-3, as
determined by the Board. The Board is authorized to amend
the Plan to comply with Rule 16b-3, as it may be amended from
time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments
made to Rule 16b-3.
