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EXHIBIT (c)(12)
EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31,
1994, 1993 and 1992 with respect to the Company's Chief Executive Officer and
each of the other executive officers of the Company during 1994, whose salary
and bonus exceeded $100,000.
ANNUAL COMPENSATION
SHARES
UNDERLYING
NAME AND OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS GRANTED COMPENSATION(1)
----------------------------------------- ---- -------- ------- ---------- ---------------
Frank A. Rosbenberry..................... 1994 $233,200 -- None $16,104
Chief Executive Officer 1993 $220,000 -- 20,000 $15,448
1992 $220,000 -- None $17,182
James M. Harrison........................ 1994 $159,000 $10,000 15,000 $11,715
Executive Vice President, Chief 1993 $150,000 -- 10,000 $11,849
Operating Officer 1992 $150,000 -- 4,000 $12,352
Willard D. Finch, III.................... 1994 $127,200 $10,000 None $ 9,432
Vice President Manufacturing 1993 $120,000 -- 7,500 $ 9,600
1992 $120,000 -- 4,000 $ 9,613
Steven P. Mack........................... 1994 $121,900 -- None $ 9,039
Vice President Product Development 1993 $115,000 -- 7,500 $ 8,625
1992 $115,000 -- 4,000 $ 9,285
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(1) Represents contributions by the Company in respect of the named officer
under the ESOP and the Company's Savings and Investment Plan.
DIRECTOR COMPENSATION
Each director who is not also an employee of the Company receives a fee of
$1,000 per meeting attended of the Board of Directors of the Company and $1,000
per meeting attended of the committees thereof on which he serves other than the
stock option committee. In addition, each director who is not also an employee
of the Company receives, at the end of each year, shares of Common Stock of the
Company having a fair market value as of the end of that year equal to $1,000
times the number of meetings of the Board of Directors, but not the meetings of
the committees thereof, attended during that year. Under certain circumstances
Directors may receive cash in lieu of such shares.
OTHER COMPENSATION MATTERS
The Company has entered into Employment Agreements (as amended) with each
of Messrs. Rosenberry, Harrison, Finch and Mack pursuant to which the Company
will employ them until December 31, 1997, provided, however, that prior to
expiration of such period (i) the Company may terminate such employee's
employment for cause (as defined) or disability and (ii) such employment will
automatically terminate at death. In addition, prior to a change in control or a
potential change in control of the Company (as defined), if any, the Company may
terminate these agreements upon the payment to the employee by the Company of
twelve months' salary. If the Company terminates the employee's employment other
than for death, cause or disability following a change in control or potential
change in control, the employee shall be entitled to a lump-sum severance
payment which shall be equal to 2.99 times the sum of (i) the employee's annual
salary as of the date of termination (as defined) and (ii) the aggregate bonus
received by such employee in respect of the three full years prior to the date
of termination divided by three. As part of the severance payment, such
employee, at his election, shall be entitled to a cash payment in respect of all
or any portion of options for shares of the Company's Common Stock held by such
employee based on the difference between the exercise price and the value of the
stock determined under a formula. The employee shall also be entitled to such
severance payment if, following a change in control, such employee terminates
his
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employment with the Company for good reason (as defined). During the period of
employment and thereafter, each such employee covenants not to divulge or use,
directly or indirectly, any confidential or proprietary information with respect
to the Company; each employee also covenants not to be associated in any manner
with any competitive business within the United States during the term of the
Employment Agreement and for the year following such termination. Under these
Agreements, the current salaries per annum of Messrs. Rosenberry, Harrison,
Finch and Mack are $233,200, $175,000, $135,000, and $135,000, respectively.
The Company has entered into a Supplementary Salary Continuance Agreement
with its Chairman, Mr. Bowman. Payments to Mr. Bowman will terminate on December
31, 2003. The Supplementary Salary Continuance Agreement with Mr. Bowman
provides for annual payments of $52,400. In the case of death prior to December
31, 2003, an amount equal to 50% of the amount payable under the Supplementary
Salary Continuance Agreement will be payable to Mr. Bowman's spouse if then
living.
The Company and Mr. Russell have also entered into an Agreement whereby Mr.
Russell is being paid an annual retirement allowance of $43,348 through January
31, 2008. In the event of Mr. Russell's death during the period in which he is
entitled to receive a retirement allowance, 50% of the retirement allowance will
be paid to his spouse until the earlier of January 31, 2008 or her death.
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PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
shareholder return (Common Stock price appreciation plus dividends, on a
reinvested basis) over the last five fiscal years with the Standard and Poor's
500 Index and a market value peer group.
COMPARATIVE FIVE-YEAR TOTAL RETURNS(1)
THE C.R. GIBSON COMPANY, S&P 500, MARKET VALUE PEER GROUP(2)
(PERFORMANCE RESULTS THROUGH 12/31/94)
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) GIB S&P 500 PEER GROUP
1989 100.00 100.00 100.00
1990 67.19 96.83 85.32
1991 140.06 126.38 107.18
1992 107.46 136.22 110.23
1993 132.44 149.82 118.52
1994 102.53 151.81 113.15
Assumes $100 invested at the close of trading on the last trading day
preceding the first day of the fifth preceding fiscal year in GIB common stock,
S&P 500, and Market Value Peer Group.
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(1) Cumulative total return assumes reinvestment of dividends.
(2) The Company does not believe it can reasonably identify an industry peer
group or a published industry or line of business index which contains
companies in a similar line of business. The market value peer group
presented consists of eighty-one companies, listed on the American Stock
Exchange, with market values similar to the Company (between $50-75
million).
Source: Frank Russell Company
STOCK OPTION PLAN
The Option Plan was approved by stockholders at the 1989 Annual Meeting of
Stockholders. Under the Option Plan options to purchase 575,896 shares have been
granted, by the Stock Option Committee of the Board of Directors, to 28 key
employees of the Company. Under the Option Plan, the option price shall not be
less than 100% of the fair market value of the Company's Common Stock on the
date the option is granted. The term of each option is for such period as the
Stock Option Committee determines, but as to any portion of an option the term
may not be more than five years from the first date of exercisability and the
term of an option may not be more than ten years. Notwithstanding the foregoing,
options outstanding under the Option Plan become immediately exercisable in full
in the event of a change in control (as defined) of the Company. In the event of
termination of employment (other than for cause (as defined)), retirement,
disability or death,
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an option under the Option Plan may be exercised for varying periods of time but
only to the extent exercisable at the date of termination of employment,
retirement, disability or death and in no event after the expiration of the term
of the option.
STOCK OPTIONS TRANSACTIONS DURING LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options under the Option Plan to the four executive officers of the Company as
of the end of the last fiscal year who are named in the Summary Compensation
Table:
STOCK OPTION GRANTS FOR YEAR ENDED DECEMBER 31, 1994
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL
------------------------------------------ RATES OF STOCK
NUMBER OF % OF TOTAL PRICE APPRECIATION
SHARES STOCK OPTIONS EXERCISE FOR STOCK OPTION
UNDERLYING GRANTED TO OR TERM
OPTION EMPLOYEES BASE PRICE(3) EXPIRATION ------------------
NAME (3)(1) IN 1994(2) ($/SH) DATES 5%(4) 10%(4)
------------------------------- ---------- ------------- ------------- ---------- ------- --------
F.A. Rosenberry................ None -- -- -- -- --
J.M. Harrison.................. 15,000 60.0% $7.75 9/99-9/03 $55,504 $132,942
W.D. Finch..................... None -- -- -- -- --
S.P. Mack...................... None -- -- -- -- --
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(1) Stock options are exercisable ratably over five years, expiring five years
after the date first exercisable.
(2) A total of 25,000 stock options were granted under the Option Plan in 1994
to 2 employees of the Company.
(3) The exercise price may be paid in cash, shares of Common Stock valued at the
fair market value on the date of exercise, or pursuant to a cashless
exercise procedure under which the stock option holder provides irrevocable
instructions to a brokerage firm to sell the purchased shares and to remit
to the Company, out of the sales proceeds, an amount equal to the exercise
price plus all applicable withholding taxes.
(4) The dollar amounts under these columns are the result of calculations at the
5% and 10% annual appreciation rates for the term of the options (8 year
average life) as required by the Securities and Exchange Commission, and,
therefore, are not intended to forecast possible future appreciation, if
any, of the stock price of the Company.
During 1994 there were no stock options exercised by the four executive
officers of the Company who are named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN 1994 AND YEAR-END OPTION VALUE TABLE
The following information is furnished for the year ended December 31, 1994
with respect to the Company's Chief Executive Officer and each of the other
executive officers of the Company who are named in the Summary Compensation
Table, with respect to options outstanding at December 31, 1994.
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NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTION AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1994 DECEMBER 31, 1993(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------------------- ----------- -------- ----------- ------------- ----------- -------------
F.A. Rosenberry.................. -- -- 65,014 31,253 -- --
J.M. Harrison.................... -- .-- 11,600 27,400 -- --
W.D. Finch....................... -- -- 8,433 9,734 -- --
S.P. Mack........................ -- -- 15,901 9,734 $14,450 --
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(1) This amount is the aggregate of the number of options multiplied by the
difference between the closing price of the Common Stock on the American
Stock Exchange on December 31, 1994 minus the exercise price for that
option.