Exhibit 99(A)(3)
ANNEX A
BIRD CORPORATION
1077 PLEASANT STREET
NORWOOD, MA 02062
INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about April 12, 1996 as
part of Bird Corporation's (the "Company") Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") to the holders of record at
the close of business on April 9, 1996 of the Shares. Capitalized terms used
and not otherwise defined herein shall have the meaning ascribed to them in
the Schedule 14D-9. You are receiving this Information Statement in connection
with the possible election of persons to be designated by the Purchaser to a
majority of the seats on the Board of Directors of the Company (the "Board").
Pursuant to the Merger Agreement, upon the acquisition by the Purchaser of at
least a majority of the outstanding Common Shares pursuant to the Offer, the
Purchaser shall be entitled to designate such number of directors to be
appointed to the Company's Board (the "Designated Directors") as is required
in order for the Designated Directors to constitute a majority of the Board.
At such time, the Company and the Board are required to take all such action,
including increasing the size of the Board or using their best efforts to
secure the resignations of incumbent directors, as needed to assure that the
Designated Directors constitute a majority of the Board. In addition, in the
event that after the acquisition by the Purchaser of at least a majority of
the outstanding Common Shares pursuant to the Offer and prior to the Effective
Date, the number of members of the Company's Board increases, the Company and
the Board are required at such time to take all such additional action,
including increasing the size of the Board, using their best efforts to secure
the resignation of incumbent directors or appointing additional Designated
Directors, as needed to assure that the Designated Directors shall then
constitute a majority of the Board. The parties to the Merger Agreement have
agreed to use their respective best efforts to ensure that at least three
members of the Board shall, at all times prior to the Effective Date, be
Continuing Directors.
This Information Statement is required by Section 14(f) of the Exchange Act,
and Rule 14f-1 thereunder. You are urged to read this Information Statement
carefully. However, you are not required to take any action.
Pursuant to the Merger Agreement, on April 12, 1996, the Purchaser commenced
the Offer. The Offer is scheduled to expire on May 9, 1996.
The information contained in this Information Statement (including
information listed in Schedule I to the Purchaser's Offer to Purchase and
information incorporated herein by reference) concerning CertainTeed, the
Purchaser and the Designated Directors has been furnished to the Company by
CertainTeed and the Purchaser, and the Company assumes no responsibility for
the accuracy or completeness of such information.
The Common Shares and the Preference Shares are the only classes of
securities of the Company outstanding which are entitled to vote upon adoption
of the Merger Agreement. Each Common Share and Preference Share has one vote
with respect thereto. As of April 8, 1996, there were 4,124,513 Common Shares
and 814,300 Preference Shares outstanding.
A-1
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
The Board currently consists of eight members and there are currently no
vacancies on the Board. The Board is divided into three classes, with each
class to hold office for a term of three years and the term of office of one
class to expire each year.
DESIGNATED DIRECTORS
Pursuant to the Merger Agreement, immediately after the acquisition by the
Purchaser of at least a majority of the outstanding Common Shares pursuant to
the Offer, the Board will consist of seven members, four of whom will be
Designated Directors and three of whom will be Continuing Directors. Upon the
acquisition by the Purchaser of at least a majority of the outstanding Common
Shares pursuant to the Offer, and during the period after such acquisition and
prior to the Effective Date, the Company and the Board are required to take any
and all such action, including increasing the size of the Board, appointing
Designated Directors and using their best efforts to secure the resignations of
incumbent directors, as needed to cause the Designated Directors to constitute
a majority of the Board.
The Purchaser has informed the Company that it currently intends to choose
the following Designated Directors from the directors and executive officers
listed in Schedule I to the Offer to Purchase, a copy of which is being mailed
to the Company's stockholders together with the Schedule 14D-9: Michel L.
Besson, Peter R. Dachowski, Thomas A. Decker and James E. Hilyard. The
Purchaser has informed the Company that each of the Designated Directors has
consented to act as a director. The information on such Schedule I is
incorporated herein by reference. None of the Designated Directors (i) is
currently a director of, or holds any position with, the Company, (ii) has a
familial relationship with any of the directors or executive officers of the
Company or (iii) to the best knowledge of the Purchaser, beneficially owns any
securities (or rights to acquire any securities) of the Company. The Company
has been advised by the Purchaser that, to the best of Purchaser's knowledge,
none of the Designated Directors has been involved in any transaction with the
Company or any of its directors, executive officers or affiliates which are
required to be disclosed pursuant to the rules and regulations of the SEC,
except as may be disclosed herein or in the Schedule 14D-9. The business
address of the Purchaser and CertainTeed is 750 E. Swedesford Road, Valley
Forge, Pennsylvania 19482.
It is expected that the Designated Directors will assume office at any time
following the acquisition by the Purchaser pursuant to the Offer of at least a
majority of the outstanding Common Shares, which acquisition cannot be earlier
than May 9, 1996, and that upon assuming office, the Designated Directors will
thereafter constitute at least a majority of the Board.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The table below sets forth certain information with respect to the current
Board of Directors and executive officers of the Company.
A-2
EXPIRATION
POSITION WITH THE COMPANY; FIRST OF PRESENT
PRINCIPAL OCCUPATION AND ELECTED OR TERM OF
NAME AND AGE OTHER BUSINESS AFFILIATIONS(1) APPOINTED(2) OFFICE
------------ --------------------------------- ------------ ----------
Frank S. Anthony, 49........ Vice President, General Counsel 1984 N/A
and Corporate Secretary of the
Company since May 1984; Attorney;
formerly served in the law
department of Westinghouse
Electric Corporation from 1976 to
1983
Robert P. Bass, Jr., 72(3).. Director; Attorney, Counsel to 1961 1997
Cleveland, Waters and Bass, P.A.,
Concord, NH; Director of Bank of
New Hampsire Corp., Manchester,
NH
Charles S. Bird, III, 71(3). Director; Trustee of family 1962 1998
trusts
Francis J. Dunleavy, 81..... Director; Retired Vice Chairman 1982 1997
of ITT Corporation; formerly
President, Chief Operating
Officer and Member of Executive
Committee of ITT Corporation;
Director of AEL Industries, Inc.,
Crown Cork & Seal Company, Inc.,
Quaker Chemical Corporation,
Scan-Graphics, Inc., and Selas
Corp. of America
John T. Dunlop, 80.......... Director; The Lamont University 1984 1996
Professor, Emeritus of Harvard
University, Cambridge, MA;
Harvard Community Health Plan
Chair; Commission on the Future
of Worker/Manager Relations;
formerly Secretary of the U.S.
Department of Labor
Guy W. Fiske, 70............ Director; Chairman of the Board 1984 1996
of Directors of the Company from
May 1994 to April 1995; Chairman
and President, Fiske Associates,
Inc., Hobe Sound, FL, (private
investment firm); formerly
Executive Vice President and
Director of General Dynamics
Corporation, Undersecretary of
the U.S. Department of Energy,
and Deputy Secretary of the U.S.
Department of Commerce; Director,
Graphic Controls Corporation,
Buffalo, NY; Director, Gunther
International and Vice Chairman
and Director, Educational
Publishing Corporation of Oak
Lawn, IL
A-3
EXPIRATION
POSITION WITH THE COMPANY; FIRST OF PRESENT
PRINCIPAL OCCUPATION AND ELECTED OR TERM OF
NAME AND AGE OTHER BUSINESS AFFILIATIONS(1) APPOINTED(2) OFFICE
------------ --------------------------------- ------------ ----------
Richard C. Maloof, 51....... Director; President and Chief 1995(4) 1998
Operating Officer of the Company
since April 1995; Vice President
and Chief Operating Officer of
the Company from April 1994 to
April 1995; Vice President of the
Company and President, Roofing
and Distribution Groups of the
Company for more than five years
prior thereto
Joseph D. Vecchiolla, 40.... Director; Executive Vice 1993 1997
President--Corporate Finance of
S. N. Phelps & Company and
affiliates since May 1995;
Chairman of the Board of
Directors of the Company since
April 1995; President and Chief
Executive Officer of the Company
from January 1994 to May 1995;
President, Chief Operating
Officer, Chief Financial Officer
and Acting Chief Executive
Officer of the Company from
November 1993 to January 1994;
Vice President and Chief
Financial Officer of the Company
from June 1993 to November 1993;
formerly Vice President and Chief
Financial Officer of Horizon
Cellular Telephone Company,
Malvern, PA and Executive Vice
President and Chief Financial
Officer of Educational Publishing
Corporation of Oak Lawn, IL
Loren R. Watts, 61.......... Director; Retired Managing 1991 1998
Partner, Management Consultant
Services, Coopers & Lybrand
(certified public accountants)
- --------
(1) Includes business experience during past five years.
(2) At the 1990 annual meeting, the stockholders approved a reorganization
pursuant to which the then stockholders of Bird Incorporated became
stockholders of Bird Corporation, a newly organized Massachusetts
corporation, and Bird Incorporated became a wholly owned subsidiary of Bird
Corporation. This column indicates the date as of which a person was first
elected a director or appointed an officer of the Company or of Bird
Incorporated.
(3) Robert P. Bass, Jr. and Charles S. Bird, III are first cousins.
(4) Date first elected director.
A-4
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1995 the Board held seven meetings. Each
of the directors attended more than 75% of the aggregate of Board meetings and
meetings of committees of the Board of which he is a member.
The Audit Committee, which consisted during 1995 of Loren R. Watts
(Chairman), John T. Dunlop and Joseph D. Vecchiolla, meets periodically with
the Company's independent accountants to review the scope of the annual audit,
to discuss the adequacy of internal accounting controls and procedures and to
perform general oversight with respect to the accounting principles applied in
the financial reporting of the Company. The Audit Committee also meets with
the Company's internal auditor and reviews the scope of the internal audit
plan and the results of audits performed thereunder. The Audit Committee held
two meetings during 1995.
The function of the Stock Option, Compensation, and Organizational
Development Committee (the "Compensation Committee") is to administer the
Company's stock option plans, to recommend to the full Board the amount,
character, and method of payment of compensation of all executive officers and
certain other key employees of the Company, and to provide for organizational
development and succession planning. During 1995 the Compensation Committee
consisted of Robert P. Bass, Jr. (Chairman), Charles S. Bird, III, Francis J.
Dunleavy and John T. Dunlop. The Compensation Committee held three meetings in
1995.
The Company also has a Nominating Committee which, during 1995, consisted of
Francis J. Dunleavy (Chairman), Robert P. Bass, Jr. and Joseph D. Vecchiolla.
The Nominating Committee makes recommendations to and otherwise assists the
Board in connection with finding, evaluating, and nominating directors of the
Company. The Nominating Committee held one meeting during 1995.
A-5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists the stockholders known to management to be the
beneficial owners of more than 5% of the outstanding Common Shares as of April
1, 1996 (except as otherwise noted).
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------- -------------- -------
The Entwistle Company .. 546,139 shares(1) 13.2%
Bigelow Street
Hudson, MA 01749
S.M. Lorusso & Sons,
Inc. .................. 332,121 shares(2) 8.1%
Antonio J. Lorusso, Jr.
James B. Lorusso
Samuel A. Lorusso
331 West Street
Walpole, MA 02081
Quest Advisory Corp. ... 329,950 shares(3) 8.0%
Charles M. Royce
1414 Avenue of the
Americas
New York, NY 10019
Mellon Bank Corporation
and its Subsidiaries .. 309,000 shares(4)(5) 7.5%
One Mellon Bank Center
Pittsburgh, PA 15258
Charles S. Bird, III ... 305,458 shares(5) 7.4%
13 Proctor Street
Manchester, MA 01944
FMR Corp. .............. 266,753 shares(6) 6.2%
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109
Dimensional Fund
Advisors Inc. ......... 232,400 shares(7) 5.6%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
R. Keith Long .......... 208,500 shares(8) 5.1%
Financial Institutions
Insurance Group, Ltd.
Joan Greco and John Fyfe
Otter Creek Partners I,
L.P.
400 Royal Palm Way
Suite 400
Palm Beach, Florida
33480
- --------
(1) Based on information contained in an amended Schedule 13D filed with the
SEC on April 1, 1987. The Schedule 13D reports that The Entwistle Company
had sole voting and dispositive power with respect to all shares
beneficially owned, including 8,539 shares it had the right to acquire
upon conversion of Preference Shares.
(2) Based on information contained in a Schedule 13D amended through January
23, 1996 filed with the SEC. The Schedule 13D reports that S.M. Lorusso &
Sons, Inc. ("Lorusso") had sole voting power and dispositive power with
respect to 230,121 shares. Antonio J. Lorusso, Jr., president, director
and a stockholder of Lorusso, had sole voting and dispositive power with
respect to 20,000 shares and had shared
A-6
voting and dispositive power with respect to 79,500 shares and James B.
Lorusso, an officer, director and a stockholder of Lorusso, had sole voting
and dispositive power over 1,000 shares and Samuel A. Lorusso, an officer,
director and stockholder of Lorusso, has shared voting and dispositive power
with respect to 1,500 shares.
(3) Based on information contained in a Schedule 13G amended through February
14, 1996 filed with the SEC. The Schedule 13G reports that Quest Advisory
Corp. ("Quest") had sole voting and dispositive power with respect to
329,950 shares and that Charles M. Royce may be deemed a controlling
person of Quest and as such may be deemed to beneficially own the shares
although he disclaims such beneficial ownership.
(4) Based on information contained in a Schedule 13G amended through January
31, 1996 filed with the SEC. The Schedule 13G reports that Mellon Bank
Corporation had sole voting power with respect to 20,000 shares and sole
dispositive power with respect to 20,000 shares and that Mellon Bank
Corporation together with its subsidiaries, including Boston Safe Deposit
and Trust Company, had shared voting power with respect to 293,629 shares,
and shared dispositive power with respect to 289,000 shares, including
274,929 shares referred to in footnote (5), below.
(5) Includes 274,929 shares held in a trust of which Boston Safe Deposit and
Trust Company and Charles S. Bird, III are co-trustees with shared voting
and dispositive power. See footnote (3) to the table below.
(6) Based on information contained in a Schedule 13G amended through February
14, 1996 filed with the SEC. The Schedule 13G reports as follows: FMR
Corp. and Edward C. Johnson 3d, chairman of FMR Corp. (who, with other
family members including Abigail P. Johnson, forms a controlling group
with respect to FMR Corp.), had sole voting power with respect to 8,900
shares, and FMR Corp., Edward C. Johnson 3d and certain investment
companies (the "Fidelity Funds"), which are subsidiaries of FMR Corp.
(including Fidelity Convertible Securities Fund), each had sole
dispositive power with respect to 257,853 shares. The sole power to vote
the 257,853 shares owned by the Fidelity Funds resides with the Fidelity
Funds' Boards of Trustees. Fidelity Management and Research Company, a
wholly owned subsidiary of FMR Corp., acts as investment advisor to the
Fidelity Funds and carries out the voting of the shares under written
guidelines established by the Fidelity Funds' Boards of Trustees. Of the
266,753 shares reported as beneficially owned by FMR Corp., as of December
31, 1995, 192,853 shares could be acquired upon conversion of Preference
Shares.
(7) Based on information contained in a Schedule 13G amended through February
7, 1996 filed with the SEC. The Schedule 13G reports that Dimensional Fund
Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed
to have beneficial ownership of 232,400 shares of Bird Corporation stock
as of December 31, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc. (the "Fund"), or in series of the DFA
Investment Trust Company, a Delaware business trust (the "Trust"), each an
open-end management investment company registered under the Investment
Company Act of 1940, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional serves as investment manager. The Schedule 13G reports
that Dimensional had sole voting power with respect to 154,900 shares
(persons who are officers of Dimensional also serve as officers of the
Fund and the Trust and in their capacities as officers of the Fund and the
Trust, these persons vote 21,700 additional shares which are owned by the
Fund and 55,800 shares which are owned by the Trust) and sole dispositive
power with respect to 232,400 shares. Dimensional disclaims beneficial
ownership of all such shares.
(8) Based on information contained in a Schedule 13D filed on March 8, 1996
jointly by Otter Creek Partners I, L.P. ("Otter Creek"), and R. Keith Long
on his own behalf and on behalf of Financial Institutions Insurance Group,
Ltd. ("FIIG"), and Joan Greco and John Fyfe, joint tenants with rights of
survivorship ("Fyfe") (together, the "Reporting Persons"). The Schedule
13D reports that Otter Creek Management Inc. ("OCM") is the sole general
partner and investment advisor of Otter Creek. Mr. Long is the sole
executive officer, sole director and sole shareholder of OCM and currently
serves as chairman of the Board of Directors of FIIG. Mr. Long also
manages discretionary stock trading accounts for FIIG and Fyfe.
Additionally, the Schedule 13D reports that each of Otter Creek, Mr. Long,
FIIG and Fyfe had sole voting and sole dispositive power with respect to
92,200, 20,000, 39,000 and 57,300 shares, respectively. The Reporting
Persons indicated in their Schedule 13D that they may, through one or more
designees, seek representation on the Board of Directors of the Company.
A-7
The tables below set forth information provided by the individuals named
therein as to the amount of the Company's Common Shares, Preference Shares and
5% Stock beneficially owned by the directors and executive officers of the
Company, individually, and the directors and executive officers as a group,
all as of April 1, 1996 except as otherwise noted. Unless otherwise indicated
in the footnotes, each of the named persons and members of the group had sole
voting and investment power with respect to the shares shown.
COMMON
COMMON SHARES SHARES
BENEFICIALLY SUBJECT PERCENT
OWNED (EXCLUD- TO STOCK OF
NAME ING STOCK OPTIONS) OPTIONS(1) TOTAL CLASS
---- ------------------ ---------- ------- -------
Robert P. Bass, Jr............... 47,086(2) 17,500 64,586 1.6%
Charles S. Bird, III............. 292,858(3) 15,000 307,858 7.4%
Francis J. Dunleavy.............. 1,000(4) 22,500 23,500 *
John T. Dunlop................... 2,000(5) 20,000 22,000 *
Joseph D. Vecchiolla............. 0 150,000 150,000 3.5%
Guy W. Fiske..................... 6,000 22,500 28,500 *
Loren R. Watts................... 1,000 10,000 11,000 *
Frank S. Anthony................. 31,712(6) 31,000 62,712 1.5%
Joseph M. Grigelevich, Jr........ 6,726(7) 0 6,726 *
William C. Kinsey(8)............. 3,795 0 3,795 *
Richard C. Maloof................ 37,563(9) 77,500 115,063 2.7%
All directors and executive
officers as a group (11
persons)........................ 429,740(10) 366,000 795,740 19.1%
- --------
* Less than 1% of the outstanding Common Shares.
(1) Represents shares which the individual has a right to acquire by exercise
of stock options exercisable on April 1, 1996 or within 60 days thereafter.
(2) Includes 16,000 shares as to which Mr. Bass shares voting and investment
power and 2,696 shares which may be acquired upon conversion of
Preference Shares.
(3) Includes 274,929 shares as to which Mr. Bird shares voting and investment
power (see table on page A-6) and 3,595 shares which may be acquired upon
conversion of Preference Shares. Does not include 100 shares owned by his
wife, as to which he disclaims beneficial ownership.
(4) Does not include ten shares owned by a child of Mr. Dunleavy, as to which
he disclaims beneficial ownership.
(5) Represents shares as to which Mr. Dunlop shares voting and investment
power.
(6) Includes 2,136 shares allocated to Mr. Anthony's account under the
Company's Employees Savings and Profit Sharing Plan (the "Savings Plan")
as of December 31, 1995.
(7) Includes 45 shares which may be acquired upon conversion of Preference
Shares and 6,481 shares allocated to his account under the Savings Plan
as of December 31, 1995. Mr. Grigelevich was an executive officer of the
Company until May 31, 1995, when his employment with the Company
terminated.
(8) Mr. Kinsey was an executive officer of the Company until March 8, 1995,
when his employment with the Company terminated.
(9) Includes 2,551 shares allocated to his account under the Savings Plan as
of December 31, 1995 and 625 shares held jointly with members of his
family.
(10) Includes 293,554 shares as to which persons included in the group have
shared voting and investment power, 6,336 shares which may be acquired
upon conversion of Preference Shares, and 11,168 shares allocated to the
accounts of officers under the Savings Plan as of December 31, 1995.
A-8
PREFERENCE
SHARES PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
---- ------------ -------
Robert P. Bass, Jr................................... 3,000 *
Charles S. Bird, III................................. 4,000 *
All directors and executive officers as a group (2
persons)............................................ 7,000 *
--------
* Less than 1% of the outstanding Preference Stock.
SHARES OF
5% STOCK PERCENT
BENEFICIALLY OF
NAME OWNED CLASS
---- ------------ -------
Charles S. Bird, III................................. 1,815 31%
All directors and executive officers as a group (1
person)............................................. 1,815 31%
COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and persons who hold more than 10% of the Company's Common
Shares to file with the SEC reports of ownership and changes in ownership of
the Company's equity securities. Based on reports received by the Company and
representations of certain reporting persons that no Forms 5 were required,
the Company believes that all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners with respect to fiscal year
1995 were complied with.
A-9
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or accrued for services in all capacities to the Company during each of the
last three fiscal years to each person who served as chief executive officer
during 1995 and to each of the other four most highly compensated executive
officers of the Company who served as such during 1995.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION__
---------------------------
ANNUAL
COMPENSATION OTHER
------------------ ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND COMPEN- STOCK UNDERLYING STOCK LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($) AWARDS OPTIONS/SARS(#) PAYOUTS(1) SATION($)
- ------------------ ---- --------- -------- --------- ---------- ---------------- ---------- ---------
Joseph D. Vecchiolla.... 1995 87,692 227,222 -- -- -- -- 663,781(2)
President and 1994 229,077 240,000 -- -- 50,000 37,449(3)
Chief Executive 1993 91,903 50,000 -- -- 100,000 39,912
Officer(4)
Richard C. Maloof....... 1995 195,962 46,416 -- -- 50,000 81,938 0
Vice President and 1994 180,223 45,450 17,992(5) -- 25,000 7,843(3)
Chief Operating 1993 161,629 11,300 8,873 -- -- 10,784
Officer(6)
William C. Kinsey....... 1995 29,600 36,919 -- -- -- 45,885 411,754(2)
Vice President; 1994 148,000 43,000 10,076(5) -- -- 9,986(3)
President, Bird 1993 138,792 10,000 5,460 -- -- 18,159
Vinyl Products(7)
Frank S. Anthony........ 1995 135,000 27,509 -- -- -- 49,163 150,000(2)
Vice President and 1994 141,750 30,000 10,795(5) -- -- 8,496(3)
General Counsel 1993 128,350 5,000 5,850 -- -- 11,381
Joseph M. Grigelevich,
Jr..................... 1995 46,069 31,476 -- -- -- -- 213,048(2)
Vice President Finance 1994 96,192 36,700 -- -- 20,000 5,943(3)
and Administration(8)
- --------
(1) In 1995 restrictions on all stock held in escrow pursuant to the Company's
Long Term Incentive Plan (the "LTIP") lapsed as a result of the Vinyl Sale
and shares were distributed to each of the persons named in the table except
Mr. Vecchiolla and Mr. Grigelevich.
(2) Represent severance payments received in connection with the "change in
control" which occurred pursuant to the Vinyl Sale. Also includes, in the
case of Mr. Vecchiola, $47,300 representing additional incentive
compensation related to the Vinyl Sale, the amount of which was deducted
from a severance payment which he received as a result of the Vinyl Sale.
(3) Represents contributions by the Company to the Savings Plan or in Mr.
Anthony's case to a separate trust established by the Company with a bank
trustee to which amounts in excess of those permitted to be contributed to
the Savings Plan under limits imposed by the Internal Revenue Code of 1986,
as amended (the "Code") are contributed. Also includes, in the case of Mr.
Vecchiolla, $31,825 representing additional incentive compensation related
to asset sales, the amount of which was deducted from a severance payment
which Mr. Vecchiolla received as a result of the change in control of the
Company which was deemed to have occurred upon consummation of the Vinyl
Sale. See "Employment Contracts and Termination of Employment and Change in
Control Arrangements", below.
(4) Mr. Vecchiolla was hired as Vice President and Chief Financial Officer
effective June 1, 1993 and was elected President and Chief Operating
Officer in November 1993. He served as acting Chief Executive Officer
during November and December 1993 and was elected Chief Executive Officer
on January 25, 1994. He resigned as President on April 1, 1995 and on that
date was elected Chairman of the Board. He resigned his full-time
employment and his office as Chief Executive Officer on May 25, 1995.
(5) Represents reimbursement for withholding taxes arising from the lapse of
restrictions on restricted stock held by each officer in accordance with
provisions of the LTIP. Does not include perquisites and other personal
benefits, the cost of which to the Company was below the disclosure
thresholds established by the SEC.
(6) Mr. Maloof was elected Chief Operating Officer in April 1994 and President
in April, 1995. Prior to that time he served as Vice President and
President of the Company's Roofing and Distribution Groups.
(7) Mr. Kinsey's employment with the Company was terminated on March 8, 1995 as
a result of the Vinyl Sale.
(8) Mr. Grigelevich first became an executive officer of the Company on March
21, 1994. Prior to that time he was treasurer of the Company. Mr.
Grigelevich's employment with the Company was terminated on May 31, 1995.
A-10
The following tables provide information concerning grants during 1995 to,
and exercises of stock options and stock appreciation rights ("SARs") during
1995 by, the executive officers named in the Summary Compensation Table above
and the value of unexercised stock options and SARs held by them at December
31, 1995.
OPTION/SAR GRANTS IN LASTS FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING PERCENT OF TOTAL EXERCISE GRANT DATE
OPTIONS OPTIONS GRANTED PRICE EXPIRATION PRESENT
NAME GRANTED(#) TO ALL EMPLOYEES ($/SHARE) DATE VALUE($)(1)
---- ---------- ---------------- --------- ------------ -----------
Richard C. Maloof....... 50,000(2) 100% 8.125 Apr. 3, 2005 $272,000
- --------
(1) This value was calculated using the Black-Scholes option pricing model and
the following assumptions, which were representative of conditions existing
when the options were granted: stock price volatility of 42.02%; risk free
rate of return of 7.32%; dividend yield of 0%; and time of exercise, ten
years. The actual value, if any, to be realized will depend on the excess of
the market price of the Company's Common Stock over the exercise price on
the date the option is exercised; there is no assurance that the value
realized will be at or near the value estimated by the Black-Scholes model.
(2) These options, which (when granted) were exercisable in five equal annual
installments commencing one year after the date of grant, will become
exercisable in full upon the consummation of the earlier of the Offer or the
Merger. The Company and Mr. Maloof have amended these options so that they
will be canceled upon the Effective Date without payment of any
consideration.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT YEAR- IN-THE-MONEY OPTIONS/SARS
END(#) AT YEAR-END($)
-------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED EXERCISABLE EXERCISABLE
NAME EXERCISE(#) ($)(1) (2) UNEXERCISABLE (2) UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Joseph D. Vechiolla..... 0 0 150,000 0 0 N/A
Richard C. Maloof....... 0 0 67,500 50,000 0 0
William C. Kinsey....... 2,000 6,500 0(3) 0 0 N/A
Frank S. Anthony........ 0 0 31,000 0 0 0
Joseph M. Grigelevich,
Jr. ................... 0 0 0(3) 0 0 N/A
- --------
(1) Based on the difference between the fair market value of the securities
underlying the options at date of exercise and the exercise price of the
options.
(2) Upon consummation of the Vinyl Sale on March 8, 1995, the vesting schedule
of all unvested options as of such date was accelerated and the holders
thereof became entitled to exercise such options in full or, in certain
cases in lieu of such exercise, cash out some or all of such options.
(3) Mr. Kinsey's and Mr. Grigelevich's employment with the Company terminated
as of March 8, 1995 and May 31, 1995, respectively. All options were
forfeited 90 days after termination of employment with the Company.
A-11
STOCK OPTION PLANS
Employee Stock Option Plans. The Company's executive officers currently
participate in the 1992 Option Plan. Prior to the approval of the 1992 Option
Plan by the Company's stockholders on May 27, 1993 the Company's executive
officers participated in the Company's 1982 Option Plan, which was terminated
by the Board on May 27, 1993. To the extent options or stock appreciation
rights granted under the 1982 Option Plan remain outstanding, such options and
stock appreciation rights are governed by the terms of the 1982 Option Plan.
The following is a general description of the 1992 Option Plan and the 1982
Option Plan (together, the "Plans").
The Plans permit the grant of options that qualify as incentive stock
options under Section 422 of the Code, non-qualified stock options and stock
appreciation rights. Options and rights to purchase up to 450,000 Common
Shares, plus any unused Common Shares under the 1982 Option Plan, may be
granted under the 1992 Option Plan. The 1982 Option Plan had permitted the
issuance of 900,000 Common Shares, as adjusted, pursuant to options and rights
granted under such plan. Any Common Shares subject to an option or right
granted under the 1992 Option Plan which expires or is terminated without
being exercised in full may again be subject to an option or right.
The 1992 Option Plan is administered by a committee of non-employee members
of the Board (the "Committee"). Members of the Committee are required to be
"disinterested persons" within the meaning of Rule 16b-3 of the Exchange Act.
Within specified guidelines, the Committee has the authority under the 1992
Option Plan to determine the terms and conditions under which options and
rights may be granted and generally to interpret, construe and implement the
provisions of the 1992 Option Plan.
Options or rights under the 1992 Option Plan may be granted to officers and
other selected key employees of the Company and its subsidiaries and to any
other person who is determined by the Committee to contribute to the success
of the Company or any subsidiary.
The exercise price of any option granted under the Plans may not be less
than the fair market value of the Common Shares subject to the option on the
date the option is granted (or, in the case of an incentive stock option
granted to an employee who owns more than 10% of the outstanding Common
Shares, 110% of such fair market value). The maximum term of an option granted
under the 1992 Option Plan is 15 years, and the maximum term of an option
granted under the 1982 Option Plan is 10 years. Each optionee (except non-
employee director optionees under the 1982 Option Plan) must remain in the
continuous employ of the Company for one year after the date of grant of an
option under the Plans before exercising any part of the option.
The Merger Agreement provides that immediately following the Effective Date,
the 1992 Option Plan will be terminated and that no further rights or options
may be granted under the 1992 Option Plan subsequent to the date of the Merger
Agreement.
Non-Employee Directors Option Plan. The Non-Employee Directors Option Plan
was approved by the Company's stockholders on May 27, 1993. The following is a
general description of the Non-Employee Directors Option Plan.
Options granted under the Non-Employee Directors Option Plan are non-
statutory options not intended to qualify under Section 422 of the Code. An
aggregate of 100,000 Common Shares are available for grants under the Non-
Employee Directors Option Plan. Common Shares subject to options which
terminate unexercised will be available for future option grants.
The Non-Employee Directors Option Plan automatically provides annual grants
of options to each director who is serving on the Board at the time of such
grant and who is not also an employee of the Company or any subsidiary. The
exercise price of options granted under the Non-Employee Directors Option Plan
are equal to the fair market value of Common Shares subject thereto on the
date of grant. Options are exercisable in full one year after the date of
grant.
The Merger Agreement provides that immediately following the Effective Date,
the Non-Employee Directors Option Plan will be terminated and that no further
options may be granted thereunder subsequent to the date of the Merger
Agreement.
A-12
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Employment Contracts
Joseph D. Vecchiolla had been employed by the Company pursuant to a one-year
employment agreement dated December 21, 1993 which automatically renewed for
successive one-year terms as of December 1 each year unless either the Company
or Mr. Vecchiolla gave the other party at least six months' prior notice that
the agreement will not be so extended. Under the agreement, Mr. Vecchiolla was
initially employed to serve as President and Chief Operating Officer of the
Company. Effective January 25, 1994 his duties were expanded to include those
of Chief Executive Officer. His compensation under the agreement included a
base salary of not less than $200,000 per year, plus participation in the
Company's management incentive compensation plan (the "MICP") and other
employee benefit plans and programs generally available to its executive
officers. Mr. Vecchiolla was also granted a stock option under the employment
agreement and was entitled to certain relocation expenses incurred in
connection with his employment by the Company.
On April 4, 1995 Guy W. Fiske resigned as Chairman of the Board, and Mr.
Vecchiolla resigned as President and was elected Chairman of the Board. Mr.
Vecchiolla resigned as Chief Executive Officer and terminated his employment
with the Company in early May 1995, but continues to serve as an outside
director and as Chairman of the Board. Richard C. Maloof was elected President
and Chief Operating Officer of the Company on April 4, 1995. Subsequent to his
resignation as Chief Executive Officer Mr. Vecchiolla entered into a
consulting arrangement with the Company providing for an annual compensation
of $100,000, which included any fees payable to him for serving as a director.
Mr. Vecchiola's compensation was reduced to $60,000 per year on January 1,
1996.
Mr. Anthony entered into a one-year employment contract with the Company,
commencing April 1, 1995, at the same annual rate of compensation ($135,000
plus a bonus of 35% of such amount if MICP targets are obtained) and with the
same fringe benefit package (participation in the Company's Savings Plan and
customary health insurance and life insurance benefits) as he received prior
to the Vinyl Sale. As a result of the "change in control" which was deemed to
have occurred as a result of the Vinyl Sale, Mr. Anthony became entitled to
severance benefits. Pursuant to the terms of his employment contract, Mr.
Anthony received $150,000 as a partial severance payment and agreed to defer
the payment of the balance thereof until the expiration of his employment
contract. Pursuant to the terms of his contract, the balance of Mr. Anthony's
severance payment, approximately $315,000, became payable on March 31, 1996.
As of April 9, 1996, the Company had paid Mr. Anthony $267,000 and expects to
pay the balance of his severance payment by the end of June 1996.
On April 1, 1996 Mr. Anthony's employment contract automatically converted
to an oral employment agreement on the same terms, terminable by either party
upon 60 days notice.
Upon consummation of the Vinyl Sale, William C. Kinsey, a former vice
president of the Company and former president of Bird Vinyl Products, was
terminated by the Company due to a change in control. Mr. Kinsey received a
severance benefit payment of approximately $412,000. Similarly, the employment
of Joseph M. Grigelevich, Jr., a former vice president and treasurer of the
Company, was terminated on May 31, 1995 as a result of such change in control.
Mr. Grigelevich received a severance payment of approximately $213,048.
Termination of Employment and Change in Control Arrangements
The Company's 1982 Option Plan, 1992 Option Plan and Non-Employee Director
Option Plan provide for accelerated benefits, and the Executive Severance
Contract (defined below) provides for severance payments, following the
occurrence of a "change in control" of the Company. For purposes of these
plans and such contract, a "change in control" is deemed to have occurred if,
among other things, any person is or becomes the beneficial owner of
securities of the Company representing 30% or more of the combined voting
power of the securities of the Company then outstanding or in the event of a
merger or consolidation of the Company with
A-13
another corporation resulting in either (i) the shareholders of the Company,
immediately prior to the merger or consolidation, not beneficially owning,
immediately after the merger or consolidation, shares of the surviving entity
representing 50% or more of the combined voting power of the securities of the
surviving entity then outstanding or (ii) the members of the Board,
immediately prior to the merger or consolidation, not constituting,
immediately after the merger or consolidation, a majority of the Board of
Directors of the surviving entity.
Executive Severance Contract. The Company has entered into a severance
agreement with Richard C. Maloof, the Company's President and Chief Operating
Officer, dated as of October 14, 1984, as amended, April 1, 1986, May 24, 1990
and August 21, 1995 (as so amended, the "Executive Severance Contract") the
terms of which provide for severance benefits to be paid to Mr. Maloof in the
event that his employment with the Company is terminated subsequent to a
"change in control" of the Company. Severance benefits are payable if, after a
"change in control," (i) the employment of Mr. Maloof is terminated either by
the Company (other than for "Disability" or "Cause") or by Mr. Maloof for
"Good Reason" (which term includes, but is not limited to a substantial
alteration in the nature of Mr. Maloof's responsibilities from those in effect
immediately prior to a "change in control") or (ii) Mr. Maloof negotiates in
good faith an employment agreement with a person to whom substantially all of
the Company's Common Shares are sold providing for his employment commencing
on the date of sale on such terms and conditions not less generous than those
on which he is then employed by the Company (regardless of whether or not any
such employment agreement is ever executed).
If the Offer and/or the Merger is consummated, and either (i) the employment
of Mr. Maloof is terminated (either by the Company (other than for "Disability
or Cause") or by Mr. Maloof), or (ii) Mr. Maloof honors the obligation of
negotiating in good faith (regardless of whether or not his employment is
actually terminated), Mr. Maloof would be entitled to severance benefits under
the Executive Severance Contract.
If the right to receive severance benefits is triggered under the Executive
Severance Contract, Mr. Maloof will be entitled to receive severance pay in
the amount of two times the sum of (i) Mr. Maloof's current annual base salary
and (ii) the amount of any bonus paid (which for severance purposes, includes
any distributions made under the terms of the LTIP and any discretionary
bonuses awarded to Mr. Maloof by the Compensation Committee of the Board based
solely on Mr. Maloof's performance against management objectives, and the
amount paid to Mr. Maloof pursuant to the MICP) to Mr. Maloof and the amount
paid to Mr. Maloof pursuant to the LTIP in the year preceding termination. In
addition, Mr. Maloof would also receive a lump sum benefit equal to any
incentive compensation or other award allocated, but not paid, to Mr. Maloof
for any prior year and a pro rata portion of all contingent bonus awards to
which Mr. Maloof might be entitled in the year of termination.
The Company estimates that if the right to receive severance benefits under
the Executive Severance Contract is triggered, Mr. Maloof would be entitled to
receive approximately $750,000.
Stock Option Plans and Non-Employee Directors Option Plan. Under the Plans,
the vesting of all options to purchase Common Shares outstanding but not yet
exercisable will be accelerated upon a "change in control." Each optionee will
have, for a period of thirty (30) days after the change in control occurs, the
right (the "Cash-Out Right"), with respect to all or a part of the shares
subject to the options or stock appreciation rights of such person, to receive
an amount in cash in lieu of such optionee's right to exercise all options in
full, equal to the product of (i) the number of shares as to which the
employee exercises the Cash-Out Right and (ii) the amount by which the
purchase price of each such share under the applicable option or stock
appreciation right is exceeded by the greater of (x) the fair market value of
such shares on the date the employee exercises the Cash-Out Right or (y) the
highest purchase price paid or offered per share in any bona fide transaction
related to the "change in control" of the Company at any time during the
preceding 60-day period (as determined by the Compensation Committee of the
Board). In addition, if the employment of any employee terminates after the
expiration of the applicable waiting period for the exercise of an option or
right granted to such employee under the Plans, such employee may for up to
three months after the date of termination (or for up to one year if
A-14
termination is on account of long-term disability), exercise such option or
right. The Plans provide for a similar one-year period to exercise options or
rights subsequent to the death of an employee occurring while in the employ of
the Company or of any subsidiary or within any period after termination of
employment during which such employee has the right to exercise such options
or rights.
The vesting schedules of options held by Mr. Maloof to purchase 50,000
shares of Common Stock in the aggregate would be accelerated if the Offer
and/or the Merger is consummated. Such options have an exercise price of
$8.125 per share.
Under the Non-Employee Directors Option Plan, any non-employee director
whose service on the Board is terminated by reason of disability, death or a
"change in control" will have the right to exercise all outstanding options
during the one-year period following such termination. In the event that
service on the Board is terminated for any reason other than disability, death
or a "change in control," such non-employee director will have the right to
exercise all outstanding options for a period of 90 days from the date of such
termination.
The vesting schedule of options to purchase 2,500 shares of Common Stock,
which were granted on May 25, 1995 to each non-employee director, would be
accelerated for each such non-employee director, if the Offer and/or Merger is
consummated. Such options have an exercise price of $6.625 per share.
The Company and each holder of outstanding options issued under the Plans
and the Non-Employee Directors Option Plan have amended such options so that
(i) unexpired options outstanding on the Effective Date, whether or not
exercisable at the Effective Date, including stock appreciation rights
relating thereto, with an exercise price less than $7.50 will by virtue of the
Merger be converted into the right to receive a cash payment without interest
equal to $7.50 for each Common Share subject thereto, less the per share
exercise price of each such option, and will be canceled upon the Effective
Date, and (ii) options outstanding on the Effective Date with an exercise
price equal to or greater than $7.50 will be canceled upon the Effective Date
without payment of any consideration.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Robert P. Bass, Jr.
(Chairman), Charles S. Bird III, Francis J. Dunleavy and John T. Dunlop. None
of these individuals, other than Mr. Bird, is or was formerly an officer or
employee of the Company, and no "compensation committee interlocks" existed
during 1995. Mr. Bird has not been an officer or employee of the Company since
1966.
DIRECTORS' COMPENSATION
Mr. Fiske received compensation through April 1, 1995 at the rate of
$100,000 per year for serving as Chairman of the Board and of the Executive
Committee. From April 1, 1995 through year-end, Mr. Vecchiolla received
compensation at the rate of $100,000 per year. As stated earlier, his
compensation was reduced to an annual rate of $60,000. During 1995 other non-
employee members of the Board received an annual retainer of $14,000, a fee of
$750 for each Board meeting attended ($375 for a telephonic Board meeting) and
a fee of $750 for each committee meeting attended ($375 for a telephonic
meeting). The chairman of each of the Audit and Compensation Committees
received an annual retainer of $2,000. Expenses incurred in attending meetings
are reimbursed. As of January 1, 1996 the annual retainer for all non-employee
Board members was reduced to $7,000 and the annual retainer for the chairman
of each of the Audit and Compensation Committees was reduced to $1,000.
A-15
Pursuant to the Non-Employee Directors Option Plan non-employee directors
are also entitled to receive each year a non-qualified stock option to acquire
2,500 shares of the Company's Common Stock (provided that the maximum number
of shares subject to options granted to any director may not exceed 30,000
shares). Such options are granted on the date of the annual meeting each year
and become exercisable in full one year later. During 1995 each non-employee
director was granted such an option at an exercise price of $6.625 per share.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for compensation decisions with
respect to senior management of the Company, as well as for organizational
development and succession planning within the Company.
The Compensation Committee's compensation philosophy and policies applicable
to executive officers emphasize pay for performance and increased stockholder
value within a framework of compensation levels comparable to companies of
similar size. Base salary, annual MICP awards, and long-term incentive awards
are structured to provide total compensation levels for executive officers
that are intended to be below competitive compensation amounts when operating
results are at or below acceptable levels and above average levels when
results are outstanding or other targets or personal goals are achieved. The
Compensation Committee has used outside consulting assistance for plan design
and consultant and independent survey data in setting compensation levels and
has relied, in the case of officers other than the Chief Executive Officer, on
recommendations of the Chief Executive Officer which are reviewed and modified
where appropriate by the Committee.
Long-term awards have primarily in recent years taken the form of stock
option grants, which are designed to align the interests of executives with
those of the stockholders and reward executives when shareholder value
increases. Stock options are granted at an exercise price equal to the market
price of the Company's Common Stock on the date of grant. Prior to 1992,
options were usually granted with a ten-year term, exercisable in five equal
annual installments beginning one year after the date of grant. However,
options awarded in 1992 and one option granted in 1993 were granted with a 15-
year term, exercisable prior to the last six months of the term only if the
price of the Company's Common Stock achieved a substantial increase above the
price on the date of grant. In the case of 1992 and 1993 grants, a minimum
price increase in Company Common Stock from $12 per share to $18 per share was
required in order for any part of the option to become exercisable prior to
the last six months of the term of the option. This approach was designed as
an incentive for future performance by the creation of shareholder value over
the long term, since the benefit of the stock options could not be realized
unless and until significant price appreciation in the Company's Common Stock
occurred. Options granted in 1994 were in the form used prior to 1992. All
options outstanding at the time of the Vinyl Sale automatically vested upon
consummation of the sale, which was deemed a "change in control" of the
Company under the terms of the option plans. No stock options were granted in
1995, other than to the non-employee Directors and to Mr. Maloof.
Salaries for the Chief Executive Officer and other executive officers are
based in part upon a range of salaries for each office developed from a survey
of compensation practices at competitive companies. Mr. Vecchiolla served as
Chief Executive Officer from January 25, 1994 until his resignation in early
May of 1995. Mr. Vecchiolla's base salary during 1995 was the same as his 1994
base salary of $240,000 annually. Subsequent to Mr. Vecchiolla's resignation
the position of Chief Executive Officer has remained vacant.
During 1995 merit increases in base salary were made only for Mr. Maloof.
The merit increase in Mr. Maloof's salary, from $185,000 to $200,000 annually,
was based primarily on increased scope of responsibility as a result of Mr.
Maloof's appointment as President.
In 1995 Mr. Maloof was the only executive officer granted stock options. He
received 50,000 stock options on April 4, 1995, which were granted in
connection with his appointment as President.
A-16
One of the principal elements of variable compensation for senior executive
officers is found in the annual MICP awards. In 1994, the possible pay-out for
1995 was set at 60% of base salary in the case of the Chief Executive Officer,
35% of base salary in the case of the Chief Financial Officer, between 20% and
35% of base salary in the case of other members of the Corporate staff, and
45% of base salary in the case of Presidents of operating divisions. In 1994
the MICP targets were modified to promote cash flow as well as profitability
in order to reflect the Company's financial condition and were maintained at
such 1994 levels in 1995. 1995 awards to the Chief Executive Officer and
corporate staff and officers were based upon individual specific objectives,
both financial and non-financial, and satisfactory improvements in cash flow
and profitability through the management of current assets and the disposition
of non-core assets. At the operating level, management incentives were tied to
achievement of goals with respect to increased cash flow and profitability on
an equal 50/50 basis. For corporate personnel, including the Chief Executive
Officer, goals with respect to cash flow and profits were weighted at 40% each
with specific objectives making up the balance of the target.
During 1994 the Committee approved an additional bonus arrangement for Mr.
Vecchiolla to provide him with an incentive to maximize the value of the
Company's Common Stock. This arrangement provided compensation to Mr.
Vecchiolla equal to one-tenth of one percent of the gross sales price realized
on the sale of the Company's assets after the approval of the bonus. However,
in recognition of the fact that the sale of a substantial part of the
Company's assets would be treated as a change in control of the Company which
would trigger certain severance payments to Mr. Vecchiolla, the Committee
provided that this bonus would be considered as an advance against such
severance payments and that the amount of the severance payments otherwise
payable to him would be reduced by the amount of the bonus paid. In 1995 Mr.
Vecchiolla received $47,300 pursuant to this bonus arrangement. This amount
was subsequently deducted from a severance payment received by him in
connection with the Vinyl Sale.
The Committee believes that the combination of salary increases and bonus
rewards was appropriate based upon the substantial progress made by management
in 1995 in turning around the Company's performance, stabilizing its financial
condition, disposing of its non-core assets and managing its contingent
liabilities.
Based on current compensation levels and the present structure of the
Company's executive compensation programs, the Committee believes that the
compensation payable to executives will not be subject to the limitation on
deductibility imposed by the Omnibus Budget Reconciliation Act of 1993. If
such limitation should become applicable in the future, the Committee and the
Company will determine whether any changes in the Company's compensation
programs are advisable.
Stock Option, Compensation, and
Organizational Development
Committee:
Robert P. Bass, Jr., Chairman
Charles S. Bird, III Francis J.
Dunleavy John T. Dunlop
A-17
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common Stock
of the Company for the last five fiscal years with the cumulative total
returns of the Russell 2000 index and the Value Line Building Materials
Industry Index, assuming an investment of $100 in the Company's Common Stock
and each index at the close of trading on December 31, 1990 and the
reinvestment of all dividends. The total shareholder return data for the
Russell 2000 Index and the Value Line Building Materials Index is provided by
Value Line Institutional Services.
BIRD CORPORATION
CUMULATIVE TOTAL SHAREHOLDER RETURN FOR
FIVE-YEAR PERIOD ENDING DECEMBER 31, 1995
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG BIRD CORPORATION, RUSSELL 2000 INDEX AND VL BULIDING MATERIAL INDEX
VL BUILDING
Measurement period BIRD RUSSELL 2000 MATERIAL
(Fiscal year Covered) CORPORATION Index Index
- --------------------- --------- --------- ---------
Measurement PT -
December 31...
1990 $ 100.00 $ 100.00 $ 100.00
FYE 1991 $ 108.36 $ 146.05 $ 131.25
FYE 1992 $ 84.28 $ 172.94 $ 168.41
FYE 1993 $ 62.34 $ 205.64 $ 233.98
FYE 1994 $ 63.74 $ 201.56 $ 178.10
FYE 1995 $ 34.43 $ 258.89 $ 245.71
A-18