SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ X ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Materials Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CompX International Inc.
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(Name of Registrant as Specified in Its Charter)
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[LOGO GOES HERE]
COMPX INTERNATIONAL INC.
THREE LINCOLN CENTRE
5430 LBJ FREEWAY, SUITE 1700
DALLAS, TEXAS 75240-2697
March 31, 2001
To Our Stockholders:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of CompX International Inc., which will be held on Thursday, May
10, 2001, at 10:00 a.m., local time, at CompX's corporate offices at Three
Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas. The matters to be
acted upon at the meeting are described in the attached Notice of Annual Meeting
of Stockholders and Proxy Statement.
Whether or not you plan to attend the meeting, please complete, date,
sign and return the enclosed proxy card or voting instruction form in the
accompanying envelope as promptly as possible to ensure that your shares are
represented and voted in accordance with your wishes.
Sincerely,
Brent A. Hagenbuch
President and Chief Executive Officer
COMPX INTERNATIONAL INC.
THREE LINCOLN CENTRE
5430 LBJ FREEWAY, SUITE 1700
DALLAS, TEXAS 75240-2697
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 10, 2001
To the Stockholders of CompX International Inc.:
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Stockholders
(the "Meeting") of CompX International Inc., a Delaware corporation ("CompX"),
will be held on Thursday, May 10, 2001, at 10:00 a.m., local time, at CompX's
corporate offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas for the following purposes:
(1) To elect six directors to serve until the 2002 Annual Meeting of
Stockholders and until their successors are duly elected and qualified
or their earlier removal, resignation or death; and
(2) To transact such other business as may properly come before the Meeting
or any adjournment or postponement thereof.
The board of directors of CompX set the close of business on March 23,
2001 as the record date (the "Record Date") for the Meeting. Only holders of
CompX's class A common stock, par value $0.01 per share, and class B common
stock, par value $0.01 per share, at the close of business on the Record Date
are entitled to notice of, and to vote at, the Meeting. CompX's stock transfer
books will not be closed following the Record Date. A complete list of
stockholders entitled to vote at the Meeting will be available for examination
during normal business hours by any stockholder of CompX, for purposes related
to the Meeting, for a period of ten days prior to the Meeting at the place where
CompX will hold the Meeting.
You are cordially invited to attend the Meeting. Whether or not you
plan to attend the Meeting in person, please complete, date and sign the
accompanying proxy card or voting instruction form and return it promptly in the
enclosed envelope to ensure that your shares are represented and voted in
accordance with your wishes. You may revoke your proxy by following the
procedures set forth in the accompanying proxy statement. If you choose, you may
still vote in person at the Meeting even though you previously submitted your
proxy.
By Order of the Board of Directors,
A. Andrew R. Louis, Secretary
Dallas, Texas
March 31, 2001
COMPX INTERNATIONAL INC.
THREE LINCOLN CENTRE
5430 LBJ FREEWAY, SUITE 1700
DALLAS, TEXAS 75240-2697
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PROXY STATEMENT
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GENERAL INFORMATION
This proxy statement and the accompanying proxy card or voting
instruction form are being furnished in connection with the solicitation of
proxies by and on behalf of the board of directors (the "Board of Directors") of
CompX International Inc., a Delaware corporation ("CompX"), for use at the 2001
Annual Meeting of Stockholders of CompX to be held on Thursday, May 10, 2001 and
at any adjournment or postponement thereof (the "Meeting"). The accompanying
Notice of Annual Meeting of Stockholders (the "Notice") sets forth the time,
place and purposes of the Meeting. The Notice, this proxy statement, the
accompanying proxy card or voting instruction form and CompX's Annual Report to
Stockholders, which includes CompX's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 (the "Annual Report"), are first being mailed to
the holders of CompX's class A common stock, par value $0.01 per share ("CompX
Class A Common Stock"), and CompX's class B common stock, par value $0.01 per
share (" CompX Class B Common Stock" and collectively with the CompX Class A
Common Stock, the "CompX Common Stock"), on or about April 6, 2001. CompX's
executive offices are located at Three Lincoln Centre, 5430 LBJ Freeway, Suite
1700, Dallas, Texas 75240-2697.
QUORUM, VOTING RIGHTS AND PROXY SOLICITATION
The record date set by the Board of Directors for the determination of
stockholders entitled to notice of and to vote at the Meeting was the close of
business on March 23, 2001 (the "Record Date"). As of the Record Date, there
were 5,117,280 shares of CompX Class A Common Stock and 10,000,000 shares of
CompX Class B Common Stock issued and outstanding. Each share of CompX Class A
Common Stock entitles its holder to one vote on all matters to be acted on at
the Meeting. Each share of CompX Class B Common Stock entitles its holder to ten
votes with respect to the election of directors and one vote on all other
matters to be acted on at the Meeting. The presence, in person or by proxy, of
the holders of a majority of the votes of CompX Common Stock entitled to vote at
the Meeting, counted as a single class, is necessary to constitute a quorum for
the conduct of business at the Meeting. Shares of CompX Common Stock that are
voted to abstain from any business coming before the Meeting and broker/nominee
non-votes will be counted as being in attendance at the Meeting for purposes of
determining whether a quorum is present.
A plurality of the affirmative votes of the CompX Class A and Class B
Common Stock, voting together as a single class, represented and entitled to be
voted at the Meeting, is necessary to elect a director of CompX. The
accompanying proxy card or voting instruction form provides space for a
stockholder to withhold authority to vote for any or all of the nominees of the
Board of Directors. Neither shares as to which the authority to vote on the
election of directors has been withheld nor broker/nominee non-votes will be
counted as affirmative votes to elect director nominees to the Board of
Directors. However, since director nominees need only receive the vote of a
plurality of the votes represented at the Meeting and entitled to vote, a vote
withheld from a particular nominee will not affect the election of such nominee.
Except as applicable laws may otherwise provide, the approval of any
other matter that may properly come before the Meeting will require the
affirmative vote of a majority of the votes represented and entitled to vote at
the Meeting. Shares of CompX Common Stock that are voted to abstain from any
other business coming before the Meeting and broker/nominee non-votes will not
be counted as votes for or against any such other matter.
Unless otherwise specified, the agents designated in the proxy card or
voting instruction form will vote the shares represented by a proxy at the
Meeting "FOR" the election of the nominees for director of the Board of
Directors and, to the extent allowed by the federal securities laws, in the
discretion of the agents on any other matter that may properly come before the
Meeting.
Valcor, Inc. ("Valcor") directly holds 100% of the outstanding shares
of CompX Class B Common Stock as of the Record Date, which represents
approximately 66.1% of the outstanding shares of CompX Class A and B Common
Stock combined. Valcor is a wholly owned subsidiary of Valhi, Inc. ("Valhi") and
both are affiliates of Contran Corporation ("Contran"). Valhi directly holds
approximately 7.3% of the outstanding shares of CompX Class A Common Stock as of
the Record Date (approximately 2.5% of the combined voting power of the CompX
Common Stock). Together Valcor and Valhi hold approximately 68.6% of the
combined voting power of the CompX Common Stock (approximately 95.5% for the
election of directors) as of the Record Date. Both Valhi and Contran are
diversified holding companies that Harold C. Simmons may be deemed to control.
Valcor and Valhi have indicated their intention to have their shares of
CompX Common Stock represented at the Meeting and voted "FOR" the election of
each of the nominees for director of the Board of Directors. If Valcor alone
attends the Meeting in person or by proxy and votes as indicated, the Meeting
will have a quorum present and the stockholders will elect all the nominees for
the Board of Directors.
Computershare Investor Services, L.L.C. or its successor
("Computershare"), the transfer agent and registrar for CompX Class A and Class
B Common Stock as of the Record Date, has been appointed by the Board of
Directors to ascertain the number of shares represented, receive proxies and
ballots, tabulate the vote and serve as inspector of election at the Meeting.
Each holder of record of CompX Common Stock giving the proxy enclosed
with this proxy statement may revoke it at any time prior to the voting of such
stock at the Meeting by delivering to Computershare a written revocation of the
proxy, delivering to Computershare a duly executed proxy bearing a later date or
by voting in person at the Meeting. Attendance by a stockholder at the Meeting
will not in itself constitute the revocation of such stockholder's proxy.
Employees participating in the CompX Contributory Retirement Plan, as
amended (the "CompX 401(k) Plan"), who are beneficial owners of CompX Class A
Common Stock under such plan may use the enclosed voting instruction form to
instruct the plan trustee how to vote the shares held for such employees. The
trustee will, subject to the terms of the plan, vote such shares in accordance
with such instructions.
The Board of Directors is making this proxy solicitation. CompX will
pay all expenses related to the solicitation, including charges for preparing,
printing, assembling and distributing all materials delivered to stockholders.
In addition to solicitation by mail, directors, officers and regular employees
of CompX may solicit proxies by telephone or in person for which such persons
will receive no additional compensation. Upon request, CompX will reimburse
banking institutions, brokerage firms, custodians, trustees, nominees and
fiduciaries for their reasonable out-of-pocket expenses incurred in distributing
proxy materials and voting instructions to the beneficial owners of CompX Class
A Common Stock that such entities hold of record.
ELECTION OF DIRECTORS
The bylaws of CompX provide that the Board of Directors shall consist
of not less than one and not more than fifteen persons, as determined from time
to time by the Board of Directors in its discretion. The Board of Directors has
currently set the number of directors at six. The directors elected at the
Meeting will hold office until the 2002 Annual Meeting of Stockholders and until
their successors are duly elected and qualified or their earlier removal,
resignation or death.
All of the nominees are currently directors of CompX whose terms will
expire at the Meeting. All of the nominees have agreed to serve if elected. If
any nominee is not available for election at the Meeting, a proxy will be voted
"FOR" an alternate nominee to be selected by the Board of Directors, unless the
stockholder executing such proxy withholds authority to vote for such nominee.
The Board of Directors believes that all of its present nominees will be
available for election at the Meeting and will serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
FOLLOWING NOMINEES FOR DIRECTOR.
Nominees for Director. The following information has been provided by
the respective nominees for election as directors of CompX for terms expiring at
the 2002 Annual Meeting of Stockholders.
Paul M. Bass, Jr., age 65, has been a director of CompX since 1997 and
is a member of CompX's audit committee and chairman of CompX's management
development and compensation committee (the "MD&C Committee"). Mr. Bass also
serves as a director of Contran's less-than-majority-owned affiliate, Keystone
Consolidated Industries, Inc. ("Keystone"), a steel fabricated wire products,
industrial wire and carbon steel rod company. From prior to 1996, Mr. Bass has
served as vice chairman of First Southwest Company, a privately owned investment
banking firm. Mr. Bass is also chairman of the board of MorAmerica Private
Equities Company and a director and chairman of the audit committee of
California Federal Bank. Mr. Bass is currently serving as chairman of the board
of Zale Lipshy University Hospital and as chairman of the board of trustees of
the Southwestern Medical Foundation.
David A. Bowers, age 63, has served as CompX's vice chairman of the
board and chief operating officer since December 2000 and as a director of CompX
since 1993. From October 2000 to December 2000, Mr. Bowers served as president
and chief operating officer of CompX. From January 1999 to October 2000 he
served as CompX's vice president and president of CompX Security Products. From
1993 through 1998, Mr. Bowers served as president of CompX and from 1993 to
February 1998 he served as chief executive officer of CompX. Mr. Bowers has been
employed by CompX and its predecessors since 1960 in various sales, marketing
and executive positions, having been named president of CompX's security
products and related businesses in 1979. Mr. Bowers is a trustee and chairman of
the board of Monmouth College, Monmouth, Illinois.
Edward J. Hardin, age 58, has served as a director of CompX since 1997
and is chairman of CompX's audit committee. Mr. Hardin has served as a director
of Valhi since February 2000. Mr. Hardin has been a partner of the law firm of
Rogers & Hardin LLP since its formation in 1976. Mr. Hardin serves as a director
of Westrup, Inc., a manufacturer of seed processing machinery, and as chairman
of the board of the Harvard Center for the Study of World Religions.
Ann Manix, age 48, has served as a director of CompX since June 1998
and is a member of CompX's audit committee and the MD&C Committee. Since prior
to 1996, Ms. Manix has served as a managing partner of Ducker Research
Corporation, a privately held industrial research firm.
Glenn R. Simmons, age 73, has served as chairman of the board of CompX
since October 2000 and director of CompX since 1993. From October 2000 to
December 2000, Mr. Simmons served as chief executive officer of CompX. From 1993
to 1998, Mr. Simmons also served as chairman of the board of CompX. Mr. Simmons
has been vice chairman of the board of Valhi and Contran since prior to 1996.
Mr. Simmons also serves as a director of Valhi's majority owned subsidiary, NL
Industries, Inc. ("NL"), a titanium dioxide pigments company; chairman of the
board of Keystone; a director of Titanium Metals Corporation ("TIMET"), a
company engaged in the titanium metals industry of which Tremont Corporation
("Tremont") owns approximately 39%; and a director of Tremont, Valhi's majority
owned indirect subsidiary that in addition to its holdings in TIMET owns
approximately 20% of NL and interests in land development entities. Mr. Simmons
has been an executive officer or director of various companies related to
Contran since 1969. Mr. Simmons is the brother of Harold C. Simmons. See
footnote (4) to the "Security Ownership--Ownership of CompX" table below for a
description of certain entities that Harold C. Simmons may be deemed to control,
including, Contran, Valhi and CompX.
Steven L. Watson, age 50, has served as a director of CompX since
February 2000. Mr. Watson has been president and a director of Valhi and Contran
since 1998. Mr. Watson also serves as a director of Keystone, NL, Tremont and
TIMET. From prior to 1996 to 1998, Mr. Watson served as vice president and
secretary of Valhi and Contran. Mr. Watson also served as vice president and
secretary of CompX from 1993 to 1998. Mr. Watson has served as an executive
officer and/or director of various companies related to Valhi and Contran since
1980.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held seven meetings and took action by written
consent in lieu of a meeting on four occasions in 2000. Each of the directors
participated in at least 75% of all of the 2000 meetings of the Board of
Directors and its committees on which the director served.
The Board of Directors has established and delegated authority to the
following standing committees.
Audit Committee. The principal responsibilities of the audit committee
are to serve as an independent and objective party to review the corporation's
auditing, accounting and financial reporting processes. The responsibilities of
the audit committee are more specifically set forth in the audit committee
charter attached as Exhibit A to this proxy statement. For further information
on the role of the audit committee, see "Independent Auditor Matters--Audit
Committee Report." The current members of the audit committee are Edward J.
Hardin (chairman), Paul M. Bass, Jr. and Ann Manix. The audit committee held
five meetings in 2000.
Management Development and Compensation Committee. The principal
responsibilities of the MD&C Committee are to review and approve certain matters
involving executive compensation; to take action or to review and approve
certain matters regarding CompX's employee benefit plans or programs; to
administer and grant awards under the CompX International Inc. 1997 Long-Term
Incentive Plan (the "1997 Plan"); to administer and grant certain awards under
the CompX International Inc. Variable Compensation Plan; and to review and
administer such other compensation matters as the Board of Directors may direct
from time to time. For further information on the role of the MD&C Committee,
see "Compensation Committee's Report On Executive Compensation." The current
members of the MD&C Committee are Paul M. Bass, Jr. (chairman) and Ann Manix.
The MD&C Committee held three meetings in 2000 and took action by written
consent in lieu of a meeting on two occasions.
The Board of Directors does not have a nominating committee or any
committee performing a similar function. All matters that would be considered by
such a committee are acted upon by the full Board of Directors. The Board of
Directors will consider recommendations by stockholders of CompX with respect to
the election of directors if such recommendations are submitted in writing to
the secretary of CompX and received not later than December 31 of the year prior
to the next annual meeting of stockholders. Such recommendations should be
accompanied by a full statement of qualifications and confirmation of the
nominee's willingness to serve.
Members of the standing committees will be elected at the annual
meeting of the Board of Directors immediately following the Meeting. The Board
of Directors has previously established, and from time to time may establish,
other committees to assist it in the discharge of its responsibilities.
EXECUTIVE OFFICERS
Set forth below is certain information relating to the current
executive officers of CompX. Each executive officer serves at the pleasure of
the Board of Directors. Biographical information with respect to Glenn R.
Simmons and David A. Bowers is set forth under "Election of Directors--Nominees
for Director."
Name Age Position(s)
------------------------------- -------- ------------------------------------------------------
Glenn R. Simmons............... 73 Chairman of the Board
David A. Bowers................ 63 Vice Chairman of the Board and Chief Operating Officer
Brent A. Hagenbuch............. 41 President and Chief Executive Officer
Stuart M. Bitting.............. 42 Vice President, Chief Financial Officer and Treasurer
Wouter J. Dammers.............. 48 Vice President
Robert L. Janson............... 48 Vice President
Julian M. Steinberg............ 46 Vice President
Todd W. Strange................ 43 Vice President and Controller
Brent A. Hagenbuch has served as president and chief executive officer
of CompX since January 2001. From March 2000 to December 2000, Mr. Hagenbuch
served as chief operating officer or chief financial officer of e-Chemicals, an
electronic commerce service provider in the industrial chemicals industry. From
1998 to March 2000, Mr. Hagenbuch served as corporate vice president at Suiza
Foods Corporation, a manufacturer and distributor of dairy products. From 1996
to 1998, Mr. Hagenbuch served as chief financial officer of a division of Frito
Lay, Inc., a subsidiary of PepsiCo, Inc. that manufactures and distributes snack
foods.
Stuart M. Bitting has served as vice president, treasurer and chief
financial officer since March 2001. From January 2001 to March 2001, Mr. Bitting
served as chief financial officer of MSU Corporation, an internet access device
manufacturer. From July 1999 to December 2000, Mr. Bitting served as chief
financial officer of The LTC Group, a digital pre-media services company. From
May 1997 to July 1999, Mr. Bitting served as vice president of operation finance
of Centex Homes, a home builder. From prior to 1996 to May 1997, Mr. Bitting
held various financial positions with Frito-Lay, Inc., a subsidiary of PepsiCo,
Inc.
Wouter J. Dammers has served as vice president of CompX since May 2000
and managing director of CompX's Dutch subsidiary, Thomas Regout Holding B.V.
("Thomas Regout"), since September 1999. From prior to 1996 to 1999, Mr. Dammers
served as president of BIK Bouwprodukten B.V., a manufacturer of plastic
building products.
Robert L. Janson has served as vice president of CompX since March
2000. From 1997 to March 2000, Mr. Janson served as vice president of
international business development for Accuride International, Inc., a leading
manufacturer of ball bearing drawer slides serving multiple industries. From
prior to 1996 to 1997, Mr. Janson served as senior vice president, global
marketing and product development for the Toro Company, a manufacturer of
irrigation products for commercial, retail and agricultural markets.
Julian M. Steinberg has served as CompX's vice president since July
2000. Prior to July 2000, Mr. Steinberg served for twenty-two years in various
positions with the B.F. Goodrich Company ("BFGoodrich"), a manufacturer and
supplier of a variety of systems and component parts for the aerospace industry.
Mr. Steinberg's last position with BFGoodrich was as vice president of the
specialty plastics unit.
Todd W. Strange has served as vice president and controller of CompX
since December 1998. From 1997 to 1998, Mr. Strange served as chief financial
officer of Draper-Texmaco, Inc., a manufacturer of textile machinery. From prior
to 1996 to 1997, he served as vice president of finance and treasurer of BPM
Technology, Inc., a manufacturer of office machinery that produced three
dimensional models of objects.
SECURITY OWNERSHIP
Ownership of CompX. The following table and footnotes set forth as of
the Record Date the beneficial ownership, as defined by regulations of the
Securities and Exchange Commission (the "SEC"), of CompX Class A and Class B
Common Stock held by each person or group of persons known to CompX to own
beneficially more than 5% of the outstanding shares of CompX Class A or Class B
Common Stock, each director of CompX, each current or former executive officer
of CompX named in the Summary Compensation Table below (a "named executive
officer") and all current directors and executive officers of CompX as a group.
See footnote (4) below for information concerning individuals and entities that
may be deemed to own indirectly and beneficially those shares of CompX Common
Stock that Valcor and Valhi directly hold. All information is taken from or
based upon ownership filings made by such persons with the SEC or upon
information provided by such persons.
CompX Class
A and Class
B Common
CompX Class A Common Stock CompX Class B Common Stock Stock
------------------------------ ------------------------------ Combined
Amount and Nature of Percent Amount and Nature Percent of
Beneficial of Class of Beneficial Percent Class
Beneficial Owner Ownership (1) (1)(2) Ownership (1) of Class (1)(2)
---------------- -------------------- -------- ------------------ --------- ------------
Valcor, Inc................... -0- (3)(4) -0- 10,000,000 (3)(4) 100% 66.1%
Valhi, Inc.................... 374,000 (3)(4) 7.3% -0- (3)(4) -0- 2.5%
------- ---- ---------- --- ----
374,000 (4) 7.3% 10,000,000 (4) 100% 68.6%
T. Rowe Price Associates, Inc. 1,098,200 (5) 21.5% -0- -0- 7.3%
Rutabaga Capital Management... 919,710 (6) 18.0% -0- -0- 6.1%
Wellington Management Company,
LLP........................ 596,300 (7) 11.7% -0- -0- 3.9%
SSB Citi Fund Management LLC..
554,800 (8) 10.8% -0- -0- 3.7%
MassMutual Institutional Funds
MassMutual Small Cap Value
Equity Fund................ 446,300 (9) 8.7% -0- -0- 3.0%
Dalton, Greiner, Hartman, Maher
& Co....................... 373,000 (10) 7.3% -0- -0- 2.5%
Paul M. Bass, Jr.............. 2,800 (4)(11) * -0- -0- *
David A. Bowers............... 47,220 (4)(11) * -0- -0- *
Edward J. Hardin.............. 6,300 (11) * -0- -0- *
Ann Manix..................... 4,700 (11) * -0- -0- *
Glenn R. Simmons.............. 37,200 (4)(11) * -0- -0- *
Steven L. Watson.............. 7,900 (4)(11) * -0- -0- *
Wouter J. Dammers............. -0- -0- -0- -0- -0-
Todd W. Strange............... 8,000 (11) * -0- -0- *
Joseph S. Compofelice......... 111,200 (12) 2.2% -0- -0- *
John A. Miller................ 21,000 (11) * -0- -0- *
All current directors and
executive officers of CompX
as a group (12 persons) ... 118,920 (4)(11) 2.3% -0- -0- *
----------
* Less than 1%.
(1) Except as otherwise noted, the listed entities, individuals and group
have sole investment power and sole voting power as to all shares of
CompX Common Stock set forth opposite their names. The number of shares
and percentage of ownership of CompX Class A Common Stock for each
person or group assumes the exercise by such person or group (exclusive
of others) of stock options that such person or group may exercise
within 60 days subsequent to the Record Date.
(2) The percentages are based on 5,117,280 shares of CompX Class A Common
Stock outstanding as of the Record Date.
(3) The business address of Valcor and Valhi is Three Lincoln Centre, 5430
LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697.
(4) Valhi is the direct holder of 100% of the outstanding common stock of
Valcor. As a result, as of the Record Date, Valhi holds, directly and
indirectly through Valcor, approximately 68.6% of the combined voting
power of the CompX Common Stock (approximately 95.5% for the election
of directors). In certain instances, shares of CompX Class B Common
Stock are automatically convertible into shares of CompX Class A Common
Stock.
Valhi Group, Inc. ("VGI"), National City Lines, Inc. ("National") and
Contran are the direct holders of approximately 81.7%, 9.5% and 1.8%,
respectively, of the outstanding common stock of Valhi. National, NOA,
Inc. ("NOA") and Dixie Holding Company ("Dixie Holding") are the direct
holders of approximately 73.3%, 11.4% and 15.3%, respectively, of the
outstanding common stock of VGI. Contran and NOA are the direct holders
of approximately 85.7% and 14.3%, respectively, of the outstanding
common stock of National. Contran and Southwest Louisiana Land Company,
Inc. ("Southwest") are the direct holders of approximately 49.9% and
50.1%, respectively, of the outstanding common stock of NOA. Dixie Rice
Agricultural Corporation, Inc. ("Dixie Rice") is the direct holder of
100% of the outstanding common stock of Dixie Holding. Contran is the
holder of 100% of the outstanding common stock of Dixie Rice and
approximately 88.9% of the outstanding common stock of Southwest.
Substantially all of Contran's outstanding voting stock is held by
trusts established for the benefit of certain children and
grandchildren of Harold C. Simmons (the "Trusts"), of which Mr. Simmons
is the sole trustee. As sole trustee of the Trusts, Mr. Simmons has the
power to vote and direct the disposition of the shares of Contran stock
held by the Trusts. Mr. Simmons, however, disclaims beneficial
ownership of any Contran shares that the Trusts hold.
Harold C. Simmons is the chairman of the board and chief executive
officer of Valcor, Valhi, VGI, National, NOA, Dixie Holding, Dixie
Rice, Southwest and Contran. By virtue of the holding of the offices,
the stock ownership and his service as trustee, all as described above,
Mr. Simmons may be deemed to control certain of such entities, and Mr.
Simmons and certain of such entities may be deemed to possess indirect
beneficial ownership of the shares of CompX Common Stock directly held
by Valcor or Valhi. Mr. Simmons, however, disclaims beneficial
ownership of the shares of CompX Common Stock beneficially owned,
directly or indirectly, by any of such entities.
Harold C. Simmons' spouse is the direct beneficial owner of 20,000
shares of CompX Class A Common Stock, or approximately 0.4% of the
outstanding CompX Class A Common Stock. Mr. Simmons may be deemed to
share indirect beneficial ownership of such shares. Mr. Simmons
disclaims all such beneficial ownership.
Edward J. Hardin is a director of Valhi and Glenn R. Simmons and Steven
L. Watson are directors of Valhi and Contran. Mr. Hardin disclaims
beneficial ownership of any shares of CompX Common Stock directly or
indirectly held by Valhi or any of its subsidiaries. Messrs. Glenn
Simmons and Watson disclaim beneficial ownership of any shares of CompX
Common Stock directly or indirectly held by Contran, Valhi or any of
their subsidiaries.
The Harold Simmons Foundation, Inc. (the "Foundation") directly holds
approximately 0.5% of the outstanding shares of Valhi common stock. The
Foundation is a tax-exempt foundation organized for charitable
purposes. Harold C. Simmons is the chairman of the board and chief
executive officer of the Foundation and may be deemed to control the
Foundation. Mr. Simmons, however, disclaims beneficial ownership of any
shares of Valhi common stock held by the Foundation.
The Contran Deferred Compensation Trust No. 2 (the "CDCT No. 2")
directly holds approximately 0.4% of the outstanding Valhi common
stock. U.S. Bank National Association serves as trustee of the CDCT No.
2. Contran established the CDCT No. 2 as an irrevocable "rabbi trust"
to assist Contran in meeting certain deferred compensation obligations
that it owes to Harold C. Simmons. If the CDCT No. 2 assets are
insufficient to satisfy such obligations, Contran must satisfy the
balance of such obligations. Pursuant to the terms of the CDCT No. 2,
Contran retains the power to vote the shares held by the CDCT No. 2,
retains dispositive power over such shares and may be deemed the
indirect beneficial owner of such shares. Mr. Simmons, however,
disclaims such beneficial ownership of the shares beneficially owned,
directly or indirectly, by the CDCT No. 2, except to the extent of his
interest as a beneficiary of the CDCT No. 2.
The Combined Master Retirement Trust (the "Master Trust") holds
approximately 0.1% of the outstanding shares of Valhi common stock.
Valhi established the Master Trust to permit the collective investment
by master trusts that maintain the assets of certain employee benefit
plans Valhi and related companies adopt. Harold C. Simmons is the sole
trustee of the Master Trust and a member of the trust investment
committee for the Master Trust. Paul M. Bass, Jr. is also a member of
the trust investment committee for the Master Trust. Valhi's board of
directors select the trustee and members of the trust investment
committee for the Master Trust. Harold C. Simmons, Glenn R. Simmons and
Steven L. Watson are members of Valhi's board of directors and along
with David A. Bowers are participants in one or more of the employee
benefit plans that invest through the Master Trust. Each of such
persons disclaims beneficial ownership of the shares held by the Master
Trust, except to the extent of his individual vested beneficial
interest in the assets held by the Master Trust.
For purposes of calculating the percentage ownership of the outstanding
shares of Valhi common stock as of the Record Date, 1,186,200 shares of
Valhi common stock that a subsidiary of NL, Valhi's majority-owned
titanium dioxide pigments subsidiary, directly holds and 1,000,000
shares of Valhi common stock that Valmont Insurance Company
("Valmont"), a wholly owned subsidiary of Valhi, directly holds are
excluded from the amount of Valhi common stock outstanding. Pursuant to
Delaware corporate law, Valhi treats these excluded shares as treasury
stock for voting purposes.
The business address of VGI, National, NOA, Dixie Holding, the Master
Trust, the Foundation and Contran is Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240-2697. The business address of
Dixie Rice is 600 Pasquiere Street, Gueydan, Louisiana 70542. The
business address of Southwest is 402 Canal Street, Houma, Louisiana
70360.
(5) Based on Amendment No. 3 to Schedule 13G dated February 14, 2001 T.
Rowe Price Associates, Inc. ("T. Rowe Price"), the T. Rowe Price
Small-Cap Stock Fund, Inc. ("T. Rowe Small-Cap Stock Fund") and the T.
Rowe Price Small-Cap Value Fund, Inc. ("T. Rowe Small-Cap Value Fund")
filed with the SEC. These shares are shares that various individuals
and institutional investors own for which T. Rowe Price is an
investment advisor. T. Rowe Price has sole dispositive power over all
of these shares and sole voting power over 124,000 of these shares. T.
Rowe Small-Cap Stock Fund, an investment company sponsored by T. Rowe
Price, has sole voting power over 463,700 of these shares. T. Rowe
Small-Cap Value Fund, an investment company sponsored by T. Rowe Price,
has sole voting power over 415,000 of these shares. T. Rowe Price
expressly disclaims that it is, in fact, the beneficial owner of these
securities. The address of T. Rowe Price, the T. Rowe Small-Cap Stock
Fund and the T. Rowe Small-Cap Value Fund is 100 E. Pratt Street,
Baltimore, Maryland 21202.
(6) Based on Amendment No. 2 to Schedule 13G dated March 9, 2001 Rutabaga
Capital Management ("Rutabaga") filed with the SEC. The address of
Rutabaga is 2 Oliver Street, Second Floor, Boston, Massachusetts 02109.
(7) Based on a Schedule 13G dated January 10, 2001 Wellington Management
Company, LLP ("Wellington") filed with the SEC. Wellington is an
investment advisor and these shares are owned of record by clients of
Wellington. Wellington has shared dispositive power over all of these
shares and shared voting power over 331,300 of these shares. The
address of Wellington is 75 State Street, Boston, Massachusetts 02109.
(8) Based on a Schedule 13G dated February 13, 2001 SSB Citi Fund
Management LLC ("SSB Citi"), Salomon Smith Barney Holdings Inc. ("SSB")
and Citigroup Inc. ("Citigroup") filed with the SEC. Citigroup is the
sole stockholder of SSB and SSB is the sole stockholder of SSB Citi.
Each of SSB Citi, SSB and Citigroup have shared voting and dispositive
power over all of these shares. The address of SSB Citi and SSB is 388
Greenwich Street, New York, New York 10013. The address of Citigroup is
399 Park Avenue, New York, New York 10043.
(9) Based on Amendment No. 1 to Schedule 13G dated February 7, 2000
MassMutual Institutional Funds - MassMutual Small Cap Value Equity Fund
("MassMutual") filed with the SEC. These shares are shares that the
MassMutual Institutional Funds own for which Massachusetts Mutual Life
Insurance Company is an investment advisor. The address of MassMutual
is 1295 State Street, Springfield, Massachusetts 01111.
(10) Based on Amendment No. 1 to Schedule 13G Dalton, Greiner, Hartman,
Maher & Co. ("Dalton Greiner") filed with the SEC. The address of
Dalton Greiner is 565 Fifth Avenue, Suite 2101, New York, New York
10017.
(11) The shares of CompX Class A Common Stock shown as beneficially owned by
such person include the following number of shares such person has the
right to acquire upon the exercise of stock options granted pursuant to
the 1997 Plan that such person may exercise within 60 days subsequent
to the Record Date:
Shares of CompX Class A Common
Stock Issuable Upon the
Exercise of Stock Options
Name of Beneficial Owner On or Before May 22, 2001
----------------------------------------------------- ------------------------------
Paul M. Bass, Jr. 1,800
David A. Bowers............................................... 26,000
Edward J. Hardin.............................................. 1,800
Ann Manix..................................................... 1,200
Glenn R. Simmons.............................................. 31,200
Steven L. Watson.............................................. 6,400
Todd W. Strange............................................... 8,000
John A. Miller................................................ 21,000
All other current executive officers of as a group (4 persons) 4,000
(12) The shares of CompX Class A Common Stock shown as beneficially owned by
Joseph S. Compofelice include 1,000 shares he jointly holds with his
wife.
CompX understands that Contran and related entities may consider
acquiring or disposing of shares of CompX Common Stock through open-market or
privately negotiated transactions, depending upon future developments,
including, but not limited to, the availability and alternative uses of funds,
the performance of CompX Class A Common Stock in the market, an assessment of
the business of and prospects for CompX, financial and stock market conditions
and other factors deemed relevant by such entities. CompX may similarly consider
acquisitions of shares of CompX Class A Common Stock and acquisitions or
dispositions of securities issued by related entities.
In 2000 and 2001, the Board of Directors authorized CompX repurchases
of 1,087,400 shares of CompX Class A Common Stock. CompX does not presently
intend, and understands that Contran does not presently intend, to engage in any
transaction or series of transactions that would result in the CompX Class A
Common Stock becoming eligible for termination of registration under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or ceasing to
be traded on a national securities exchange.
Ownership of Valhi and its Parents. The following table and footnotes
set forth the beneficial ownership, as of the Record Date, of the common stock,
par value $0.01 per share, of Valhi ("Valhi Common Stock") held by each director
of CompX, each named executive officer and all current directors and executive
officers of CompX as a group. Except as set forth below, no securities of
CompX's parent companies are beneficially owned by any director or executive
officer of CompX. All information is taken from or based upon ownership filings
made by such persons with the SEC or upon information provided by such persons.
Valhi Common Stock
-------------------------------------
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership (1) Class (1)(2)
------------------------ ----------------------- ------------
Paul M. Bass, Jr......................................................... -0- (3) -0-
David A. Bowers.......................................................... 5,000 (3) *
Edward J. Hardin......................................................... 3,000 (3)(4) *
Ann Manix................................................................ -0- -0-
Glenn R. Simmons......................................................... 353,183 (3)(4)(5) *
Steven L. Watson......................................................... 318,635 (3)(4) *
Wouter J. Dammers........................................................ -0- -0-
Todd W. Strange.......................................................... -0- -0-
Joseph S. Compofelice.................................................... -0- -0-
John A. Miller........................................................... -0- -0-
All current directors and executive officers of CompX as a group
(12 persons).......................................................... 679,818 (3)(4)(5) *
--------------
* Less than 1%.
(1) Except as otherwise noted, the listed individuals and group have sole
investment power and sole voting power as to all shares of Valhi Common
Stock set forth opposite their names. The number of shares and
percentage of ownership of Valhi Common Stock for each person or group
assumes the exercise by such person or group (exclusive of others) of
stock options that such person or group may exercise within 60 days
subsequent to the Record Date.
(2) The percentages are based on 114,692,317 shares of Valhi Common Stock
outstanding as of the Record Date. For purposes of calculating the
outstanding shares of Valhi Common Stock as of the Record Date,
1,186,200 shares of Valhi Common Stock held by a subsidiary of NL and
1,000,000 shares of Valhi Common Stock held by Valmont are excluded
from the amount of Valhi Common Stock outstanding. Pursuant to Delaware
corporate law, Valhi treats these excluded shares as treasury stock for
voting purposes.
(3) Excludes certain shares that such individual may be deemed to
indirectly and beneficially own as to which such individual disclaims
beneficial ownership. See footnote (4) to the "Ownership of CompX"
table.
(4) The shares of Valhi Common Stock shown as beneficially owned by such
person include the following number of shares such person has the right
to acquire upon the exercise of stock options Valhi granted pursuant to
its stock option plans that such person may exercise within 60 days
subsequent to the Record Date:
Shares of Valhi Common
Stock Issuable Upon the
Exercise of Stock Options
Name of Beneficial Owner On or Before May 22, 2001
----------------------------------------------------------- ---------------------------
Edward J. Hardin.................................................. 2,000
Glenn R. Simmons.................................................. 350,000
Steven L. Watson.................................................. 300,000
(5) The shares of Valhi Common Stock shown as beneficially owned by Glenn
R. Simmons include 800 shares his wife holds in her retirement account,
with respect to which shares he disclaims beneficial ownership.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
AND OTHER INFORMATION
Compensation of Directors. During 2000, directors of CompX who were not
also employees of CompX received an annual retainer of $15,000 paid in quarterly
installments, plus a fee of $1,000 per day for attendance at meetings and as a
daily rate ($125 per hour) for other services rendered on behalf of the Board of
Directors and/or committees thereof. In addition, directors who were members of
the audit committee or MD&C Committee received an annual retainer of $1,000,
paid in quarterly installments, for each committee on which they served. CompX
also reimbursed its nonemployee directors for reasonable expenses incurred in
attending meetings and in the performance of other services rendered on behalf
of the Board of Directors and/or its committees. CompX's current directors who
received director fees during 2000 were Paul M. Bass, Jr., Edward J. Hardin, Ann
Manix, Glenn R. Simmons and Steven L. Watson.
In February 1999, the MD&C Committee, upon the recommendation of the
Board of Directors, approved under the 1997 Plan annual grants to CompX's
nonemployee directors on the day of the annual meeting of stockholders. Each
annual grant consists of a grant at each annual meeting of CompX's stockholders
of 500 shares of CompX Class A Common Stock and stock options exercisable for
2,000 shares of CompX Class A Common Stock, which options will have an exercise
price equal to the closing sales price of CompX Class A Common Stock on the date
of grant, have a term of 10 years and vest 20% over the first five anniversaries
of the date of grant.
CompX and Valhi are parties to an intercorporate services agreement
(the "Valhi ISA") pursuant to which Valhi provided certain services to CompX
during 2000, including services that Steven L. Watson rendered to CompX. See
"Certain Relationships and Transactions--Intercorporate Services Agreements."
Summary of Cash and Certain Other Compensation of Executive Officers.
The Summary Compensation Table set forth below provides information concerning
annual and long-term compensation paid or accrued by CompX and its subsidiaries
for services rendered to CompX and its subsidiaries during 2000, 1999 and 1998
by each person who was the chief executive officer of CompX during 2000 and each
of the four other most highly compensated individuals who were executive
officers of CompX at December 31, 2000.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation (1)
----------------
Awards
Annual Compensation ----------------
-------------------------------------------------- Shares
Name and Other Annual Underlying All Other
Principal Position Year Salary Bonus Compensation (2) Options (#) Compensation
-------------------------- ----- ----------- ------------- ----------------- ----------------- --------------
Glenn R. Simmons (3)...... 2000 $ 41,990 (4) $ -0- $ -0- 2,000 $ -0-
Chairman of the Board and 1999 40,618 (4) -0- -0- 2,000 -0-
Former Chief Executive 1998 12,500 (4) 240,056 (5) -0- 50,000 -0-
Officer
David A. Bowers........... 2000 200,044 60,000 -0- 25,000 22,894 (6)
Vice Chairman of the Board 1999 160,000 120,000 -0- 15,000 22,348 (6)
and Chief Operating 1998 160,000 400,056 (5) -0- 25,000 20,000 (6)
Officer`
Wouter J. Dammers (7)..... 2000 134,454 (7) 34,139 (7) 46,566 (7)(8) -0- 151 (7)(9)
Vice President 1999 43,918 (7) -0- 20,272 (7)(8) 10,000 43 (7)(9)
Todd W. Strange (10)...... 2000 120,016 25,000 -0- 10,000 20,170 (6)
Vice President and 1999 99,840 15,000 -0- 15,000 -0- (6)
Controller 1998 16,640 5,000 -0- -0- -0- (6)
Joseph S. Compofelice (11) 2000 423,077 -0- -0- 50,000 522,894 (6)
Former Chairman of the 1999 500,000 -0- -0- -0- 22,348 (6)
Board, President and 1998 500,000 1,980,000 (5) -0- 100,000 20,000 (6)
Chief Executive Officer
John A. Miller (12)....... 2000 200,044 50,000 -0- 25,000 16,088 (6)
Former Vice President, 1999 200,000 50,000 (12) -0- 40,000 -0-
Treasurer and Chief
Financial Officer
---------------------------
(1) No shares of restricted stock were granted to the named executive
officers nor payouts made to the named executive officers pursuant to
long-term incentive plans during the last three years. Therefore, the
columns for such compensation have been omitted.
(2) An amount for other annual compensation is disclosed only if the amount
for other annual compensation exceeds the level required for reporting
pursuant to SEC rules.
(3) Mr. Simmons served as CompX's chief executive officer from October 20,
2000 to December 6, 2000.
(4) The amounts shown in the table as salary compensation for Mr. Glenn
Simmons represent director fees CompX paid to him as set forth below.
CompX
CompX Cash Director
Named Executive Officer Year Director Fees Stock (a) Total
---------------------------- ---- -------------- --------- --------
Glenn R. Simmons.................. 2000 $ 32,365 (b) $ 9,625 $ 41,990
1999 32,678 (b) 7,940 40,618
1998 12,500 -0- 12,500
------------------------
(a) These shares are valued based on the closing price per share
for CompX Class A Common Stock on the New York Stock Exchange
Composite Tape on the date of grant.
(b) This amount includes $12,678 and $10,365 for 1999 and 2000,
respectively, that are director fees Thomas Regout paid Mr.
Simmons.
(5) Each of these named executive officer's 1998 bonus amount includes
CompX's dollar amount valuation of shares of CompX Class A Common Stock
that CompX awarded each of these named executive officers in February
1998 as a bonus subject to the consummation of CompX's initial public
offering of CompX Class A Common Stock (the "IPO Bonus Share Awards").
Pursuant to the elections of Messrs. Simmons, Bowers and Compofelice
under section 83(b) of the Internal Revenue Code of 1986, as amended
(the "Code"), CompX valued these IPO Bonus Share Awards for purposes of
the compensation table above based on the shares' fair market value at
the time of the award taking into account their illiquidity at the time
of the award. In March 1998, pursuant to the IPO Bonus Share Awards,
CompX issued to Messrs. Simmons, Bowers and Compofelice 16,220, 16,220
and 100,000 shares of CompX Class A Common Stock, respectively.
(6) All other compensation for 2000, 1999, and 1998 for Messrs. Bowers,
Strange, Compofelice and Miller consisted of CompX's matching
contributions to their accounts under the CompX 401(k) Plan, CompX's
contributions to their account under the National Cabinet Lock, Inc.
Capital Accumulation Pension Plan, a defined contribution plan (the
"CAPP Plan"), and a severance payment to Mr. Compofelice, as follows:
Employer's
CompX 401(k) Employer's
Plan Matching CAPP Plan Severance
Named Executive Officer Year Contributions Contributions Payment Total
-------------------------------- ---- ------------- ------------- ----------- -----------
David A. Bowers 2000 $ 7,053 $ 15,841 $ -0- $ 22,894
1999 7,530 14,818 -0- 22,348
1998 6,111 13,889 -0- 20,000
Todd W. Strange 2000 7,811 12,359 -0- 20,170
1999 -0- -0- -0- -0-
1998 -0- -0- -0- -0-
Joseph S. Compofelice 2000 -0- -0- 522,894 (a) 522,894
1999 7,530 14,818 -0- 22,348
1998 6,111 13,889 -0- 20,000
John A. Miller 2000 8,705 (b) 7,383 (b) -0- 16,088 (b)
1999 -0- -0- -0- -0-
------------------
(a) CompX paid $500,000 of this severance payment to Mr.
Compofelice pursuant to a Release Agreement effective as of
November 6, 2000 between CompX and Mr. Compofelice. See
"Certain Relationships and Transactions--Compofelice
Severance" for a description of this agreement and the balance
of the severance payment.
(b) Since Mr. Miller resigned from CompX as of March 2, 2001, he
forfeited these unvested payments.
(7) Mr. Dammers became the managing director of Thomas Regout on September
20, 1999 and executive an officer of CompX on May 11, 2000. Thomas
Regout pays Mr. Dammers his base salary, cash bonus and contributions
to his retirement plan in Dutch guilders. CompX reports these amounts
in the table above in U.S. dollars based on the average exchange rates
for 2000 and 1999 of NLG 2.38 per US$1.00 and NLG 2.07 per US$1.00,
respectively.
(8) Mr. Dammers' other annual compensation includes the following amounts
Thomas Regout pays for the benefit of Mr. Dammers.
Supplemental Supplemental
Sickness and Pension Insurance
Automobile Disability Premium Paid by
Named Executive Officer Year Expenses (a) Insurance Thomas Regout (b) Total
----------------------------------- ---- ------------ ------------ ----------------- ---------
Wouter J. Dammers.................. 2000 $ 15,796 $ 10,224 $ 20,546 $ 46,566
1999 2,068 11,151 7,053 20,272
-------------------
(a) Thomas Regout provides Mr. Dammers with an automobile that he
may use for his private purposes. The amount disclosed is the
total amount Thomas Regout pays for this automobile in the
respective year and includes both business and private use for
the automobile.
(b) Thomas Regout pays two-thirds of the premium of Mr. Dammers'
supplemental pension insurance. Mr. Dammers pays the balance
of the premium. The amount disclosed is the portion of the
premium Thomas Regout paid in the respective year. See
"--Dammers Employment Agreement" for a description of Mr.
Dammers' benefits under this supplemental pension insurance.
(9) These amounts represent Thomas Regout's contribution to the account of
Wouter J. Dammers under its Employees Premium Savings Schedule.
(10) Mr. Strange became an executive officer of CompX as of December 15,
1998.
(11) Mr. Compofelice resigned his positions with CompX as of October 20,
2000.
(12) Mr. Miller became an employee and executive officer of CompX as of
January 1, 1999 and received a $50,000 sign-on bonus. Mr. Miller
resigned his positions with CompX as of March 2, 2001.
Grants of Stock Options. The following table provides information, with
respect to the named executive officers, concerning the grant of stock options
under the 1997 Plan during 2000. CompX has not granted any stock appreciation
rights ("SARs").
OPTION GRANTS IN 2000
Individual Grants
---------------------------------------------------- Potential Realizable Value at
Number of Percent of Assumed Annual Rates of
Shares of Total Options Stock Price Appreciation
Underlying Granted to Exercise or for Option Term (1)
Options Employees Base Price Expiration --------------------------
Name Granted (#) in 2000 Per Share Date 5% 10%
------------------------- ---------- ------------- ----------- ---------- ------------ -------------
Glenn R. Simmons......... 2,000 (2) 0.72% $ 19.25 (2) 05/11/10 $ 24,220 (3) $ 61,360 (3)
David A. Bowers.......... 25,000 (2) 8.96% 18.38 (2) 02/10/10 289,000 (4) 732,250 (4)
Wouter J. Dammers........ 0 0.00% n/a n/a n/a n/a
Todd W. Strange.......... 10,000 (2) 3.58% 18.38 (2) 02/10/10 115,600 (4) 292,900 (4)
Joseph S. Compofelice (5) 50,000 (2) 17.92% 18.38 (2) 02/10/10 578,000 (4) 1,464,500 (4)
John A. Miller (6)....... 25,000 (2) 8.96% 18.38 (2) 02/10/10 289,000 (4) 732,250 (4)
All stockholders' gain (7) n/a n/a n/a n/a 116MM (7) 237MM (7)
--------------------
(1) Pursuant to the rules of the SEC, the amounts under these columns
reflect calculations at assumed 5% and 10% appreciation rates and,
therefore, are not intended to forecast future appreciation, if any, of
CompX Class A Common Stock. The potential realizable value to the
optionees was computed as the difference between the appreciated value,
at the expiration dates of the stock options, of the CompX Class A
Common Stock obtainable upon exercise of such stock options over the
aggregate exercise price of such stock options.
The amount of gain to the optionees is dependent on the amount of
increase in the price of CompX Class A Common Stock, which would
benefit all stockholders proportionately. These potentially realizable
values are based solely on arbitrarily assumed rates of appreciation
required by applicable SEC regulations. Actual gains, if any, on stock
option exercises are dependent on the future performance of CompX Class
A Common Stock, overall market conditions and the timing of the
exercise thereof by each respective optionee. There can be no assurance
that the amounts reflected in the table will be achieved.
(2) This stock option is exercisable for shares of CompX Class A Common
Stock and becomes exercisable at a rate of 20% on each of the first
five anniversary dates of the date of grant. The exercise price for
this stock option can be paid in already owned shares of CompX Class A
Common Stock, provided such tendered shares were held by the optionee
for at least six months.
(3) The appreciated value per share on May 11, 2010, based on the $19.25
per share market value of a share of CompX Class A Common Stock on May
11, 2000, would be $31.36 and $49.93 at the hypothetical 5% and 10%
rates, respectively.
(4) The appreciated value per share on February 10, 2010, based on the
$18.38 per share market value of a share of CompX Class A Common Stock
on February 10, 2000, would be $29.94 and $47.67 at the hypothetical 5%
and 10% rates, respectively.
(5) Since none of the 50,000 shares underlying Mr. Compofelice's stock
option granted in 2000 had vested on his resignation date of October
20, 2000, the entire stock option was canceled as of his resignation
date.
(6) Since only 5,000 of the 25,000 shares underlying Mr. Miller's stock
option granted in 2000 had vested on his resignation date of March 2,
2001, Mr. Miller may only exercise 5,000 of these shares and the
balance of the shares underlying the stock option were canceled as of
his resignation date.
(7) The $116,059,000 and $236,971,000 amounts shown represent the
cumulative increase in value stockholders would receive on all
outstanding shares of CompX Class A Common Stock over a ten-year period
at the hypothetical 5% and 10% appreciation rates, respectively, based
on the $18.38 per share market value of the 6,147,380 shares of CompX
Class A Common Stock outstanding on the close of business on February
10, 2000 and the reinvestment of cash dividends paid at a rate equal to
CompX's current cash dividend payments of $0.125 per share per calendar
quarter.
Stock Option Exercises and Holdings. The following table provides
information, with respect to the named executive officers, concerning the amount
the named executive officer realized in 2000 upon the exercise of stock options
for Valhi Common Stock and the value of unexercised stock options exercisable
for CompX Class A Common Stock or Valhi Common Stock held as of December 31,
2000. Neither CompX nor Valhi has granted any SARs.
AGGREGATE STOCK OPTION EXERCISES IN 2000 AND
DECEMBER 31, 2000 OPTION VALUES
Number of Shares
Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options
Acquired on December 31, 2000 (#) at December 31, 2000 (1)
Exercise Value --------------------------- ---------------------------
Name (#) Realized Exercisable Unexercisable Exercisable Unexercisable
-------------------------- ---------- ------------ ----------- ------------- ----------- -------------
Glenn R. Simmons
CompX Stock Options....... -0- $ -0- 20,400 33,600 $ -0- $ -0-
Valhi Stock Options....... -0- -0- 340,000 10,000 1,984,400 51,200
--------- ------------- ---------- ------------- --------- ----------
-0- -0- 360,400 43,600 1,984,000 51,200
David A. Bowers
CompX Stock Options....... -0- -0- 13,000 52,000 -0- -0-
Wouter J. Dammers
CompX Stock Options....... -0- -0- -0- 10,000 -0- -0-
Todd W. Strange
CompX Stock Options....... -0- -0- 3,000 22,000 -0- -0-
Joseph S. Compofelice
CompX Stock Options....... -0- -0- 40,000 -0- -0- -0-
Valhi Stock Options....... 50,000 210,500 (2) -0- -0- -0- -0-
-------- ------- ------- --------- -------- --------
50,000 210,500 40,000 -0- -0- -0-
John A. Miller
CompX Stock Options....... -0- -0- 8,000 57,000 -0- -0-
--------------------
(1) The aggregate amount is based on the difference between the exercise
price of the individual stock options and, as applicable, the $11.50
per share closing sales price of Valhi Common Stock and the $9.94 per
share closing sales price of the CompX Class A Common Stock as reported
on the New York Stock Exchange Composite Tape on December 31, 2000.
(2) The amount realized is based on the difference between the last
reported sales price per share of Valhi Common Stock as reported on the
New York Stock Exchange Composite Tape on the date of exercise and the
exercise price per share.
Dammers Employment Agreement. Pursuant to an employment agreement dated
August 30, 1999 between CompX and Wouter J. Dammers, Thomas Regout employs Mr.
Dammers as its managing director. The agreement provides Mr. Dammers a gross
annual salary of NLG 320,000, including a holiday allowance, and participation
in the CompX variable compensation plan and the 1997 Plan. Under the agreement,
Thomas Regout provides Mr. Dammers with an automobile with a value of
approximately NLG 100,000 that he may use for his private purposes, supplemental
sickness or disability insurance payments and certain other benefits. Mr.
Dammers must protect CompX's confidential information as provided in the
agreement. Thomas Regout is entitled under the agreement to any patents arising
from inventions that Mr. Dammers may develop while employed with Thomas Regout
and for a period of one year after his termination. The agreement terminates for
reasons other than cause upon three months notice from Mr. Dammers or six months
notice from Thomas Regout. Mr. Dammers' severance pay in the event of
termination of employment for reasons other than cause is 18 months of base pay.
Cause is defined in the agreement as a breach by Mr. Dammers of his fiduciary
responsibility or engaging in an illegal activity that harms Thomas Regout.
Dutch law governs the agreement.
Mr. Dammers' employment agreement also provides for Mr. Dammers and
Thomas Regout to share the expense of private supplemental pension insurance for
his benefit. Mr. Dammers established the private supplemental pension insurance
before he became an employee of Thomas Regout. Pursuant to the agreement, Mr.
Dammers continues to purchase supplemental pension insurance. Under the
insurance, Mr. Dammers' pension benefits after retirement at 65 years of age are
determined annually by taking his annual salary less the maximum salary insured
through the Dutch General Old Age Pensions Act multiplied by his years of
service and 2.0%. The compensation eligible to be utilized for purposes of the
pension benefits while Thomas Regout employs Mr. Dammers includes only the
annual salary that Thomas Regout pays Mr. Dammers. See "--Summary of Cash and
Certain Other Compensation of Executive Officers." The supplemental pension
insurance also provides for payments upon Mr. Dammers' death of a widow's
pension of 70% of Mr. Dammers' retirement pension benefits and an orphan's
pension of 20% of the widow's pension benefits per orphan up to 40%, to be paid
until the orphan reaches the age of 18. Mr. Dammers pays one-third of the
supplemental pension insurance premiums, which amounts are withheld from his
salary. Thomas Regout pays the balance of the supplemental pension insurance
premiums. At December 31, 2000, Mr. Dammers' pension benefits under the
supplemental pension insurance attributable to his 1.25 years of service with
Thomas Regout was $3,361 (NLG 8,000) per annum payable after retirement at age
65.
Mr. Dammers has an additional agreement with CompX that he will be
reimbursed in 2001 for up to NLG 200,000 for his expenses in relocating to
Maastricht, the Netherlands.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires CompX's executive officers,
directors and persons who own more than 10% of a registered class of CompX's
equity securities to file reports of ownership with the SEC, the New York Stock
Exchange, Inc. and CompX. Based solely on the review of the copies of such forms
and representations by certain reporting persons, CompX believes that for 2000
its executive officers, directors and 10% stockholders complied with all
applicable filing requirements under Section 16(a).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2000, the MD&C Committee deliberated on certain CompX executive
officer compensation. The MD&C Committee is currently comprised of Paul M. Bass,
Jr. (chairman) and Ann Manix, both nonemployee directors of CompX.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
The MD&C Committee consists of individuals who are neither officers nor
employees of CompX or its subsidiaries. The MD&C Committee reviews and approves
certain compensation policies and practices related to CompX's executive
officers and other employees, including stock-based compensation. See "Meetings
and Committees of the Board of Directors - Management Development and
Compensation Committee."
CompX's executive compensation system generally consists of three
primary components: salary, annual operating income award compensation and
stock-based compensation, including stock options, restricted stock and/or stock
appreciation rights. Through the use of the foregoing, the MD&C Committee seeks
to achieve a balanced compensation package that will attract and retain high
quality key executives, appropriately reflect each such executive officer's
individual performance, contributions, and general market value, and provide
further incentives to the executive officers to maximize annual operating
performance and long-term stockholder value.
Annual Salaries
Base salaries for executive officers of CompX have been established on
a position-by-position basis. The chief executive officer conducts annual
internal reviews of executive officer salary levels in an attempt to rank salary
and job value to each position. The chief executive officer then makes
recommendations on salaries to the MD&C Committee. The MD&C Committee reviews
the chief executive officer's recommendations regarding changes in salaries for
executive officers. When recommendations regarding changes in salary levels are
made by the chief executive officer, the MD&C Committee may take such actions,
including any modifications to the recommendation, as it deems appropriate. The
determinations of the MD&C Committee may be based primarily on a subjective
evaluation of past and potential future individual performance and contributions
and alternative opportunities that might be available to the executives in
question. The MD&C Committee may also review compensation data from companies
employing executives in positions similar to those whose salaries were being
reviewed as well as market conditions for executives in general with similar
skills, background and performance levels, both inside and outside of CompX's
businesses (such companies may include companies contained in the peer group
index plotted on the Performance Graph following this report), and other
companies with similar financial and business characteristics as CompX, or where
the executive in question has similar responsibilities.
The MD&C Committee based its actions regarding executive officer 2000
salaries primarily upon the chief executive officer's recommendations with
regard to all executive officers and its general business knowledge. In 2000, no
specific survey or study was utilized to make salary determinations. In February
2000, the MD&C Committee approved executive officer salary increases for 2000
for three executive officers, other than the chief executive officer. No action
was taken with respect to the 2000 salaries of any of the other executive
officers of CompX.
For newly hired executive officers in 2000, the chief executive officer
determined, in his best business judgment, their annual base salaries based upon
his general business knowledge.
Annual Variable Compensation
Operating income awards under the variable compensation plan constitute
a significant portion of an executive's potential annual cash compensation
(between 0% and 150% of salary for the chief executive officer and certain
executive officers). Operating income awards are based on CompX and/or business
units of CompX achieving annual predetermined operating income goals. CompX's
management makes recommendations to the Board of Directors regarding the
operating income plan for the year after reviewing market conditions and CompX's
operations, competitive position, marketing opportunities and strategies for
maximizing financial performance. The Board of Directors approves this
recommendation with modifications it deems appropriate. Based on the business
plan for the year, the MD&C Committee sets CompX's and its business units'
operating income goals at three levels that are designed to help focus CompX's
executives on achieving superior annual operating results in light of existing
conditions: a threshold level, which is the minimum operating income level for
any operating income award to be made under the variable compensation plan (the
"Minimum Level"), a target level (the "Target Level") and a maximum level (the
"Maximum Level"). An operating income award, in combination with salary, is
designed to result in executive officers and other eligible participants
receiving annual cash compensation below competitive compensation levels if the
Minimum Level is not achieved.
Pursuant to the variable compensation plan, if operating income is
below the Minimum Level, no operating income award is paid. The MD&C Committee,
however, does have discretion under the variable compensation plan to award
discretionary bonuses to certain executive officers. If the Minimum Level is
met, executive officers are eligible to receive operating income awards that in
2000 ranged between 10% and 50% of salary, depending on the executive. If the
Target Level is reached, the range of operating income awards is higher, and in
2000 ranged between 10% and 100% of salary, depending on the executive. If the
Maximum Level is reached or exceeded, executives are eligible to receive the
highest operating income awards, and in 2000 this range of operating income
awards for which executives were eligible was between 10% and 150% of salary,
depending on the executive.
As a result of CompX achieving 2000 operating income below the Minimum
Level, no executive officer whose award was based entirely on CompX's operating
income received an operating income award for 2000. The 2000 operating income
awards of two of the executive officers, however, were partially based on a
respective business unit of CompX that achieved operating income above one of
the unit's operating income goals. Accordingly, in the first quarter of 2001 the
MD&C Committee awarded an operating income award for 2000 to each such executive
officer based on the achieved operating income goal of the unit to which such
executive officer's operating income award was partially based. CompX's
executive officers who were hired during 2000 were not eligible to receive
operating income awards.
Upon the recommendation of CompX management, the MD&C Committee decided
to award certain of the executive officers and other employees discretionary
bonuses under a discretionary provision of the variable compensation plan. One
executive officer that CompX hired during 2000 who was not eligible for an
operating income award received a discretionary bonus representing 9% of such
officer's annualized base salary. The two executive officers who received
operating income awards for 2000 received additional discretionary bonuses
ranging from 6% to 23% of such officer's base salary. The executive officers who
were eligible but did not receive any operating income award for 2000 received
discretionary bonuses ranging from 21% to 25% of such officer's base salary. The
MD&C Committee decided to award a discretionary bonus based upon the committee's
belief that such bonus was necessary to retain such individual or to reflect
such individual's contributions to CompX in 2000.
One executive officer hired in 2000 received a sign-on bonus that
represented 25% of his base salary, which bonus amount the chief executive
officer determined in his best business judgment based upon his general business
knowledge.
The 2000 operating income awards or discretionary bonuses the named
executive officers received pursuant to the variable compensation plan are in
the bonus column in the Summary Compensation Table set forth above.
Stock-Based Compensation
The 1997 Plan supports the goal of maximizing long-term stockholder
value by providing for stock-based compensation, the value of which is directly
related to increases in stockholder value. Stock option grants, in particular,
are considered a significant element of CompX's total compensation package for
the chief executive officer and the other executive officers of CompX. The MD&C
Committee believes that compensation linked to stock price performance helps
focus the executives' attention on management of CompX from the stockholders'
perspective.
Stock option grants are intended to provide incentives to increase
stockholder value in the future and to reward past performance by the executive.
In 2000, the MD&C Committee reviewed recommendations by the chief executive
officer regarding stock option grants to executive officers. The MD&C Committee
granted stock options to executive officers based on the chief executive
officer's recommendations. The chief executive officer based his recommendations
on a subjective evaluation regarding each executive's performance and
responsibilities. In 2000, the chief executive officer included in his
recommendations regarding the number of options to be granted to each executive
officer the amount and terms of options already held by such officers. Stock
options granted to named executive officers in 2000 are reported in the Option
Grants in 2000 table set forth above.
To help assure a focus on long-term creation of stockholder value, in
2000 the MD&C Committee granted stock options with a term of ten years that vest
20% on each of the first five anniversaries of the stock option's date of grant.
Although permitted under the 1997 Plan, the MD&C Committee in 2000 did not grant
any restricted stock, stock appreciation rights or other equity-based awards to
employees.
Tax Code Limitation on Executive Compensation Deductions
In 1993, Congress amended the Internal Revenue Code to impose a $1.0
million deduction limit on compensation paid to the chief executive officer and
the four other most highly compensated executive officers of public companies,
subject to certain transition rules and exceptions for compensation received
pursuant to non-discretionary performance-based plans approved by such company's
shareholders. It is CompX's general policy to structure the performance-based
portion of the compensation of its executive officers in a manner that permits
CompX to deduct fully such compensation.
The foregoing report is submitted by the following individuals in the
capacities indicated:
Paul M. Bass, Jr. Ann Manix
Chairman of the MD&C Committee Member of the MD&C Committee
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in the
cumulative total stockholder return on CompX Class A Common Stock against the
cumulative total return of the Russell 2000 Stock Index and a self-selected peer
group of companies index for the period commencing March 6, 1998 (the date upon
which CompX first registered with the SEC the CompX Class A Common Stock under
Section 12 of the Exchange Act) and ending December 31, 2000. The self-selected
peer group index is comprised of Bush Industries, Inc., Herman Miller, Inc., HON
Industries Inc., Interface, Inc., Knape & Vogt Manufacturing Company, Leggett &
Platt, Incorporated and Steelcase Inc. The graph shows the value at December 31,
2000 assuming an original investment of $100 and reinvestment of cash dividends
and other distributions to stockholders.
Comparison of Cumulative Return Among CompX International Inc.,
the Russell 2000 Index and a Self-Selected Peer Group Index
[PERFORMANCE GRAPH GOES HERE]
March 6, December 31, December 31, December 31,
1998 1998 1999 2000
--------- ------------ ------------ ------------
CompX International Inc......................... $100 $132 $ 93 $ 46
Russell 2000 Index.............................. 100 92 111 108
Self-Selected Peer Group Index.................. 100 70 63 67
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Relationships with Related Parties. As set forth under the caption
"Security Ownership," Harold C. Simmons, through Contran, may be deemed to
control CompX. CompX and other entities that may be deemed to be controlled by
or affiliated with Mr. Simmons sometimes engage in (a) intercorporate
transactions such as guarantees, management and expense sharing arrangements,
shared fee arrangements, tax sharing agreements, joint ventures, partnerships,
loans, options, advances of funds on open account and sales, leases and
exchanges of assets, including securities issued by both related and unrelated
parties and (b) common investment and acquisition strategies, business
combinations, reorganizations, recapitalizations, securities repurchases and
purchases and sales (and other acquisitions and dispositions) of subsidiaries,
divisions or other business units, which transactions have involved both related
and unrelated parties and have included transactions that resulted in the
acquisition by one related party of a publicly held minority equity interest in
another related party. CompX continuously considers, reviews and evaluates and
understands that Contran and related entities consider, review and evaluate
transactions of the type described above. Depending upon the business, tax and
other objectives then relevant, it is possible that CompX might be a party to
one or more of such transactions in the future. In connection with these
activities CompX may consider issuing additional equity securities or incurring
additional indebtedness. CompX's acquisition activities may in the future
include participation in the acquisition or restructuring activities conducted
by other companies that may be deemed to be controlled by Mr. Simmons. It is the
policy of CompX to engage in transactions with related parties on terms, in the
opinion of CompX, no less favorable to CompX than could be obtained from
unrelated parties.
No specific procedures are in place that govern the treatment of
transactions among CompX and its related entities, although such entities may
implement specific procedures as appropriate for particular transactions. In
addition, under applicable principles of law, in the absence of stockholder
ratification or approval by directors who may be deemed disinterested,
transactions involving contracts among companies under common control must be
fair to all companies involved. Furthermore, directors owe fiduciary duties of
good faith and fair dealing to all stockholders of the companies for which they
serve.
Intercorporate Services Agreements. Under the Valhi ISA, Valhi renders
or provides for certain management, financial and administrative services to
CompX on a fee basis. Such fees are based upon estimates of time devoted to the
affairs of CompX by the individual providers of such services and Valhi's costs
for providing such services. CompX paid Valhi fees of $556,000 for services
rendered under the Valhi ISA in 2000. In addition, Valhi charged CompX for the
out-of-pocket costs incurred in rendering such services. The Valhi ISA
automatically extends on a quarter-to-quarter basis, subject to termination by
either party pursuant to written notice 30 days prior to a quarter-end, and may
be amended by mutual agreement.
Under the ISA between CompX and NL (the "NL ISA"), NL made available to
CompX on a fee basis certain accounting and internal auditing services and
occupancy and related office services for CompX's offices in Houston, Texas.
Such fees were based upon estimates of NL's costs of providing such services to
CompX. For 2000, CompX paid NL fees of approximately $180,000 for such services.
The NL ISA was terminated in the first quarter of 2001.
Insurance Commissions. Tall Pines Insurance Company ("Tall Pines"),
Valmont and EWI RE, Inc. ("EWI") provide for or broker certain of CompX's
insurance policies. Tall Pines is a wholly owned captive insurance company of
Tremont. Valmont is a wholly owned captive insurance company of Valhi. Parties
related to Contran own all of the outstanding common stock of EWI. Through
December 31, 2000, a son-in-law of Harold C. Simmons managed the operations of
EWI. Subsequent to December 31, 2000, such son-in-law provides advisory services
to EWI as requested by EWI. Consistent with insurance industry practices, Tall
Pines, Valmont and EWI receive commissions from the insurance and reinsurance
underwriters for the policies that they provide or broker. During 2000, CompX
and its subsidiaries paid approximately $619,000 for policies provided or
brokered by Tall Pines, Valmont and/or EWI. These amounts principally included
payments for reinsurance and insurance premiums paid to unrelated third parties,
but also included commissions paid to Tall Pines, Valmont and EWI. In CompX's
opinion, the amounts that CompX and its subsidiaries paid for these insurance
policies are reasonable and similar to those they could have obtained through
unrelated insurance companies and/or brokers. CompX expects that these
relationships with Tall Pines, Valmont and EWI will continue in 2001.
Compofelice Severance. Pursuant to a Release Agreement effective
November 6, 2000 between CompX and Joseph S. Compofelice, CompX paid Mr.
Compofelice $500,000 in consideration of a general release from Mr. Compofelice
of CompX and its affiliates. In addition, CompX paid Mr. Compofelice $22,894 as
a severance payment to compensate Mr. Compofelice for his not receiving an
employer match under the CompX 401(k) Plan or the CAPP Plan for 2000. Both
payment amounts are disclosed in Mr. Compofelice's 2000 compensation in the
"Summary Compensation Table" above under the column "All Other Compensation."
Executive Relocation Costs. In connection with Julian M. Steinberg's
employment with CompX and his relocation to Grand Rapids, Michigan, on July 11,
2000, CompX loaned Mr. Steinberg $100,000 at no interest. The loan is a
short-term bridge loan that is due three days after Mr. Steinberg sells his
former residence in Ohio. The loan is non-transferable and conditioned upon Mr.
Steinberg's remaining employed with CompX or its subsidiaries. The use of the
proceeds of the loan was limited to the purchase of a principal residence in the
vicinity of Grand Rapids, Michigan. Mr. Steinberg has not sold his former
residence in Ohio and the entire principal balance of the loan currently remains
unpaid.
In connection with Robert L. Janson's employment with CompX and his
relocation to Houston, Texas from California, CompX paid $133,804 of his
relocation costs, which includes an amount to pay his related income taxes on
CompX's payment of certain of his relocation costs.
INDEPENDENT AUDITOR MATTERS
Independent Auditors. The firm of PricewaterhouseCoopers LLP served as
CompX's independent auditors for the year ended December 31, 2000. CompX's audit
committee has appointed PricewaterhouseCoopers LLP to review CompX's quarterly
unaudited consolidated financial statements to be included in its Quarterly
Reports on Form 10-Q for the first three quarters of 2001. CompX expects
PricewaterhouseCoopers LLP will be considered for appointment to audit CompX's
annual consolidated financial statements for the year ending December 31, 2001.
Representatives of PricewaterhouseCoopers LLP are not expected to attend the
Meeting.
Audit Committee Report. The audit committee of the Board of Directors
is composed of three directors, all of whom are independent within the meaning
of New York Stock Exchange listing standards. The audit committee operates under
a written charter the Board of Directors adopted. A copy of the charter is
attached as Exhibit A to this proxy statement. CompX's management is responsible
for preparing CompX's consolidated financial statements in accordance with
accounting principles generally accepted in the United States. CompX's
independent auditors are responsible for auditing CompX's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States. The audit committee serves as an independent and objective party
to review CompX's auditing, accounting and financial reporting processes.
The audit committee has reviewed and discussed CompX's audited
consolidated financial statements for the year ended December 31, 2000 with
CompX's management and independent auditors. The audit committee discussed with
the independent auditors the matters required by Statement on Auditing Standards
No. 61 (Communication with Audit Committees), received written disclosures from
the independent auditors required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and discussed with the
independent auditors their independence. The audit committee also considered
whether the independent auditors' provision of non-audit services to CompX and
its subsidiaries is compatible with such auditors' independence. Additionally,
the audit committee discussed with CompX's management and the independent
auditors such other matters as the committee deemed appropriate. Based on the
audit committee's review of CompX's audited consolidated financial statements
and the audit committee's discussions with CompX's management and independent
auditors, the audit committee recommended to the Board of Directors that CompX's
audited consolidated financial statements for the year ended December 31, 2000
be included in CompX's Annual Report on Form 10-K for the year ended December
31, 2000, which has been filed with the SEC.
Edward J. Hardin Paul M. Bass, Jr. Ann Manix
Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee
Audit and Other Fees. The following table shows the aggregate fees
PricewaterhouseCoopers LLP has billed or is expected to bill to CompX and its
subsidiaries for services rendered for 2000.
Financial Information
Systems Design and
Audit Fees (1) Implementation Fees All Other Fees
-------------------------------------- ------------------------ ------------------------------
$ 153,000 $ -0- $ 67,654
(1) Includes (a) fees for the audit of CompX's consolidated financials
statements for the year ended December 31, 2000, (b) fees for reviews
of the unaudited quarterly financial statements appearing in CompX's
Forms 10-Q for each of the first three quarters of 2000 and (c) the
estimated out-of-pocket costs PricewaterhouseCoopers LLP incurred in
such audits and reviews. CompX reimburses PricewaterhouseCoopers LLP
for such out-of-pocket costs.
OTHER MATTERS
The Board of Directors knows of no other business that will be
presented for consideration at the Meeting. If any other matters properly come
before the Meeting, the persons designated as agents in the enclosed proxy card
or voting instruction form will vote on such matters in accordance with their
best judgment.
STOCKHOLDER PROPOSALS FOR ANNUAL MEETING IN 2002
Stockholders may submit proposals on matters appropriate for
stockholder action at CompX's annual stockholder meetings, consistent with rules
adopted by the SEC. Such proposals must be received by CompX not later than
December 7, 2001 to be considered for inclusion in the proxy statement and form
of proxy relating to the Annual Meeting of Stockholders in 2002. For proposals
to be brought at the 2002 Annual Meeting of Stockholders but not included in the
proxy statement for such meeting, CompX's bylaws require that the proposal must
be delivered to or mailed and received at the principal executive offices of
CompX no later than ten days following the date on which notice of the date of
the annual meeting was mailed or public disclosure of the date of the meeting
was made. Any such proposals should be addressed to: Corporate Secretary, CompX
International Inc., Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas 75240-2697.
2000 ANNUAL REPORT ON FORM 10-K
A copy of CompX's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, as filed with the SEC, is included as part of the annual
report mailed to CompX's stockholders with this proxy statement. Copies of such
annual report may be obtained without charge by writing: Corporate Secretary,
CompX International Inc., Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700,
Dallas, Texas 75240-2697.
COMPX INTERNATIONAL INC.
Dallas, Texas
March 31, 2001
Exhibit A
COMPX INTERNATIONAL INC.
AUDIT COMMITTEE CHARTER
May 11, 2000
----------------
ARTICLE I.
PURPOSE
The audit committee assists the board of directors in fulfilling its
oversight responsibilities relating to the financial accounting and reporting
practices of the corporation. The audit committee's primary responsibilities are
to serve as an independent and objective party to review the corporation's
auditing, accounting and financial reporting processes. The audit committee will
primarily fulfill these responsibilities by carrying out the activities
enumerated in Article V of this charter.
ARTICLE II.
RELATIONSHIP WITH THE OUTSIDE AUDITORS
The corporation's outside auditors are ultimately responsible to the
board of directors and the audit committee. The board of directors, acting
through the audit committee, has the ultimate authority and responsibility to
select, evaluate and replace the outside auditors.
Management is responsible for preparing the corporation's financial
statements. The corporation's outside auditors are responsible for auditing the
financial statements. The activities of the audit committee are in no way
designed to supersede or alter these traditional responsibilities.
The corporation's outside auditors, management and internal auditors
have more available time and information about the corporation than does the
audit committee. Accordingly, the audit committee's role does not provide any
special assurances with regard to the corporation's financial statements, nor
does it involve a professional evaluation of the quality of the audits performed
by the outside auditors.
ARTICLE III.
COMPOSITION
The audit committee shall be comprised of three or more directors as
determined by the board. The board of directors shall also designate a
chairperson of the audit committee. Each member of the audit committee shall be
independent of management of the corporation and shall have no relationship that
might, in the business judgment of the board of directors, interfere with the
exercise of his or her independent judgment. The members of the audit committee
shall satisfy at all times the requirements for audit committee membership of
any exchange on which the corporation's securities are listed or of any
applicable law. The board of directors shall determine, in its business
judgment, whether the members of the audit committee satisfy all such
requirements.
ARTICLE IV.
MEETINGS
The audit committee shall meet regularly and as circumstances dictate.
Regular meetings of the audit committee may be held without notice at such time
and at such place as shall from time to time be determined by the chairperson of
the audit committee, the president or the secretary of the corporation. Special
meetings of the audit committee may be called by or at the request of any member
of the audit committee, any of the corporation's executive officers, the
secretary, the director of internal auditing or the outside auditors, in each
case on at least twenty-four hours notice to each member.
If the board of directors, management, the director of internal
auditing or the outside auditors desire to discuss matters in private, the audit
committee shall meet in private with such person or group.
A majority of the audit committee members shall constitute a quorum for
the transaction of the audit committee's business. Unless otherwise required by
applicable law, the corporation's charter or bylaws or the board of directors,
the audit committee shall act upon the vote or consent of a majority of its
members at a duly called meeting at which a quorum is present. Any action of the
audit committee may be taken by a written instrument signed by all of the
members of the audit committee. Meetings of the audit committee may be held at
such place or places as the audit committee shall determine or as may be
specified or fixed in the respective notices or waivers of a meetings. Members
of the audit committee may participate in audit committee proceedings by means
of conference telephone or similar communications equipment by means of which
all persons participating in the proceedings can hear each other, and such
participation shall constitute presence in person at such proceedings
ARTICLE V.
SPECIFIC ACTIVITIES
Subject to Article II and without otherwise limiting the audit
committee's authority, the audit committee shall carry out the following
specific activities.
Section 5.1. Review of Documents and Reports
(a) Review and reassess this charter at least annually.
(b) Review the corporation's Annual Reports on Form 10-K,
including the corporation's year end financial statements,
before its release. Consider whether the information contained
in the Annual Reports on Form 10-K is adequate and consistent
with the members' knowledge about the corporation and its
operations. If determined to be appropriate, recommend that
the audited financial statements be included in the Annual
Report on Form 10-K.
(c) Review the internal reports to management prepared by the
internal auditors and management's response.
Section 5.2. Outside Auditors
(a) Select the outside auditors, considering independence and
effectiveness and approve the fees and other compensation to
be paid to the outside auditors.
(b) The audit committee shall receive the written disclosures
required by generally accepted auditing standards. On an
annual basis, the audit committee shall require the outside
auditors to provide the audit committee with a written
statement delineating all relationships between the outside
auditors and the corporation. The audit committee shall
actively engage in a dialogue with the outside auditor with
respect to any disclosed relationships or services that may
impact the objectivity and independence of the outside
auditor. The audit committee shall recommend that the board of
directors take appropriate action in response to the outside
auditors' report to satisfy itself of the outside auditors'
independence.
(c) Prior to the annual audit, review with management and the
outside auditors the scope and approach of the annual audit.
(d) After the annual audit, review with management and the outside
auditors their report on the results of the annual audit.
(e) Ensure that the outside auditors inform the audit committee of
any fraud, illegal acts or deficiencies in internal control of
which they become aware and communicate certain required
matters to the audit committee.
(f) Review with the outside auditors their performance and
recommend to the board of directors any proposed discharge of
the outside auditors when circumstances warrant.
(g) Direct and supervise special audit inquiries by the internal
or outside auditors as the board of directors or the audit
committee may request.
Section 5.3. Financial Reporting Processes
(a) Review significant accounting and reporting issues, including
recent professional and regulatory pronouncements or proposed
pronouncements, and understand their impact on the
corporation's financial statements.
Section 5.4. Process Improvement
(a) Ensure that significant findings and recommendations made by
the internal and outside auditors are received and discussed
on a timely basis with the audit committee and management.
(b) Review any significant disagreement among management and the
internal or outside auditors in connection with the execution
of the annual audit or the preparation of the financial
statements.
Section 5.5. Reporting Responsibilities
(a) Regularly update the board of directors about audit committee
activities and make appropriate recommendations.
ARTICLE VI.
MISCELLANEOUS
The audit committee may perform any other activities consistent with
this charter, the corporation's charter and bylaws and governing law, as the
audit committee or the board deems necessary or appropriate.
ADOPTED BY THE BOARD OF DIRECTORS OF
COMPX INTERNATIONAL, INC. ON MAY 11, 2000
/s/ A. Andrew R. Louis
-----------------------------------------
A. Andrew R. Louis, Secretary
COMPX INTERNATIONAL INC.
THREE LINCOLN CENTRE
5430 LBJ FREEWAY, SUITE 1700
DALLAS, TEXAS 75240-2697
PROXY PROXY
COMPX INTERNATIONAL INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF COMPX INTERNATIONAL INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 10, 2001
The undersigned hereby appoints Brent A. Hagenbuch, Stuart M. Bitting
and A. Andrew R. Louis, and each of them, proxy and attorney-in-fact for the
undersigned, with full power of substitution, to vote on behalf of the
undersigned at the 2001 Annual Meeting of Stockholders (the "Meeting") of CompX
International Inc., a Delaware corporation ("CompX"), to be held at CompX's
corporate offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas on Thursday, May 10, 2001, at 10:00 a.m. (local time), and at any
adjournment or postponement of said Meeting, all of the shares of class A and
class B common stock, par value $0.01 per share, of CompX standing in the name
of the undersigned or that the undersigned may be entitled to vote on the
proposals set forth, and in the manner directed, on this proxy.
THIS PROXY MAY BE REVOKED AS SET FORTH IN THE COMPX PROXY STATEMENT
THAT ACCOMPANIED THIS PROXY.
This proxy, if properly executed, will be voted in the manner directed
on this proxy. If no direction is made, this proxy will be voted "FOR" all
nominees for election as directors named in proposal 1 and, to the extent
allowed by the federal securities laws, in the discretion of the proxies as to
all other matters that may properly come before the Meeting and any adjournment
or postponement thereof.
PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
SEE REVERSE SIDE.
COMPX INTERNATIONAL INC.
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
1. Election of Six Directors
Nominees: 01 Paul M. Bass, Jr., 02 David A. Bowers, 03 Edward J.
Hardin, 04 Ann Manix, 05 Glenn R. Simmons and 06 Steven L.
Watson
[ ] FOR ALL
[ ] WITHHOLD ALL
[ ] FOR ALL EXCEPT*
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*(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided above.)
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting and any adjournment or
postponement thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Address Change [ ]
(Instruction: Please mark in the box and make necessary corrections to the
mailing label.)
SIGNATURE(S) DATE
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SIGNATURE(S) DATE
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NOTE: Please sign exactly as the name that appears on this card. Joint owners
should each sign. When signing other than in an individual capacity,
please fully describe such capacity. Each signatory hereby revokes all
proxies heretofore given to vote at said Meeting and any adjournment or
postponement thereof.