UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by
Registrant: ý
Filed by
a Party other than the
Registrant:
¨
Check the
appropriate box:
¨ Preliminary
Proxy Statement
|
¨
|
Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
|
ý Definitive
Proxy Statement
|
¨
|
Definitive
Additional Materials
|
|
¨
|
Soliciting
Material Pursuant to § 240.14a-12
|
CompX
International Inc.
(Name of
Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
|
ý
|
No
fee required.
|
|
¨
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
|
1)
|
Title
of each class of securities to which transaction
applies:
|
|
|
2)
|
Aggregate
number of securities to which transaction
applies:
|
|
|
3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was
determined):
|
|
|
4)
|
Proposed
maximum aggregate value of
transaction:
|
|
|
5)
|
Total
fee paid:
|
|
¨
|
Fee
paid previously with preliminary
materials.
|
|
¨
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
|
|
|
1)
|
Amount
Previously Paid:
|
|
|
2)
|
Form,
Schedule or Registration Statement
No.:
|
|
|
3)
|
Filing
Party:
|
|
4)
|
Date
Filed:
|
CompX
International Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
April 24,
2009
To our
Stockholders:
You are
cordially invited to attend the 2009 Annual Meeting of Stockholders of CompX
International Inc., which will be held on Wednesday, May 27, 2009, at 10:00
a.m., local time, at our 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 cast your vote as instructed on
the enclosed proxy card or voting instruction form as promptly as possible to
ensure that your shares are represented and voted in accordance with your
wishes. Your vote, whether given by proxy or in person at the
meeting, will be held in confidence by the inspector of election as provided in
our bylaws.
Sincerely,
David A.
Bowers
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 27, 2009
To the
Stockholders of CompX International Inc.:
The 2009
Annual Meeting of Stockholders of CompX International Inc. will be held on
Wednesday, May 27, 2009, at 10:00 a.m., local time, at our corporate
offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas,
for the following purposes:
|
|
(1)
|
to
elect the seven director nominees named in the proxy statement to serve
until the 2010 Annual Meeting of Stockholders;
and
|
|
|
(2)
|
to
transact such other business as may properly come before the meeting or
any adjournment or postponement
thereof.
|
The close
of business on March 31, 2009 has been set as the record date for the
meeting. Only holders of our class A and class B common stock at the
close of business on the record date are entitled to notice of, and to vote at,
the meeting. A complete list of stockholders entitled to vote at the
meeting will be available for examination during normal business hours by any of
our stockholders, for purposes related to the meeting, for a period of ten days
prior to the meeting at our corporate offices.
You are
cordially invited to attend the meeting. Whether or not you plan to
attend the meeting, please cast your vote as instructed on the enclosed proxy
card or voting instruction form as promptly as possible to ensure that your
shares are represented and voted in accordance with your wishes. If
you choose, you may still vote in person at the meeting even though you
previously cast your vote.
By Order
of the Board of Directors,
A. Andrew
R. Louis, Secretary
Dallas,
Texas
April 24,
2009
Important Notice Regarding the
Availability of Proxy Materials for the
Annual
Stockholder Meeting to Be Held on May 27, 2009.
This proxy statement is available at www.compx.com/proxy and the annual report to
stockholders
(including CompX’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2008) is available at www.compx.com/annual.
|
|
Ownership
of CompX
|
|
|
Ownership
of Related Companies
|
|
|
Nominees
for Director
|
|
|
Controlled
Company Status, Director Independence and
Committees
|
|
|
2008
Meetings and Standing Committees
of the Board of Directors
|
|
|
Audit
Committee
|
|
|
Management
Development and Compensation
Committee
|
|
|
Non-Management
and Independent Director Meetings
|
|
|
Stockholder
Proposals and Director Nominations for the 2010 Annual Meeting of
Stockholders
|
|
|
Communications
with Directors
|
|
|
Compensation
Committee Interlocks and Insider
Participation
|
|
|
Code
of Business Conduct and Ethics
|
|
|
Corporate
Governance Guidelines
|
|
|
Availability
of Corporate Governance Documents
|
|
|
Compensation
Discussion and Analysis
|
|
|
Compensation
Committee Report
|
|
|
Summary
of Cash and Certain Other Compensation of Executive
Officers
|
|
|
2008
Grants of Plan-Based Awards
|
|
|
Outstanding
Equity Awards at December 31,
2008
|
|
|
Option
Exercises and Stock Vested
|
|
|
Pension
Benefits
|
|
|
Nonqualified
Deferred Compensation
|
|
|
Director
Compensation
|
|
|
Related
Party Transaction Policy
|
|
|
Relationships
with Related Parties
|
|
|
Intercorporate
Services Agreements
|
|
|
Insurance
Matters
|
|
|
Tax
Matters
|
|
|
Loan
from TFMC
|
|
|
Law
Firm Relationship
|
|
|
Simmons
Family Matters
|
|
|
Independent
Registered Public Accounting Firm
|
|
|
Fees
Paid to PricewaterhouseCoopers LLP
|
|
|
Preapproval
Policies and Procedures
|
GLOSSARY OF TERMS
|
|
“401(k) Plan” means the
CompX Contributory Retirement Plan, a defined contribution
plan.
|
|
|
“CDCT” means the Contran
Amended and Restated Deferred Compensation Trust, an irrevocable “rabbi
trust” established by Contran to assist it in meeting certain deferred
compensation obligations that it owes to Harold C.
Simmons.
|
|
|
“CMRT” means The
Combined Master Retirement Trust, a trust Contran sponsors that permits
the collective investment by master trusts that maintain assets of certain
employee defined benefit plans Contran and related entities
adopt.
|
|
|
“Computershare” means
Computershare Investor Services L.L.C., our stock transfer agent and
registrar.
|
|
|
“CompX,” “us,” “we” or “our” means CompX
International Inc.
|
|
|
“Contran” means Contran
Corporation, the parent corporation of our consolidated tax
group.
|
|
|
“Dixie Rice” means Dixie
Rice Agricultural Corporation, Inc., one of our parent
corporations.
|
“EWI” means EWI RE,
Inc., a reinsurance brokerage and risk management company wholly owned by
NL.
|
|
“FAS 123R” means
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 123 (revised 2004) Share-Based
Payment.
|
|
|
“Foundation” means the
Harold Simmons Foundation, Inc., a tax-exempt foundation organized for
charitable purposes.
|
|
|
“independent directors”
means the following directors: Paul M. Bass, Jr., Norman S.
Edelcup and Ann Manix.
|
|
|
“ISA” means an
intercorporate services agreement between Contran and a related company
pursuant to which employees of Contran provide certain services, including
executive officer services, to such related company on a fixed fee
basis.
|
|
|
“Keystone” means
Keystone Consolidated Industries, Inc., one of our publicly held sister
corporations that manufactures steel fabricated wire products, industrial
wire, billets and wire rod.
|
|
|
“Kronos Worldwide” means
Kronos Worldwide, Inc., one of our publicly held sister corporations that
is an international manufacturer of titanium dioxide
pigments.
|
|
|
“named executive
officer” means any person named in the Summary Compensation table
in this proxy statement.
|
|
|
“NL” means NL
Industries, Inc., one of our publicly held parent corporations that is a
diversified holding company with principal investments in Kronos Worldwide
and us.
|
|
|
“nonemployee directors”
means the following directors: Paul M. Bass, Jr., Norman S.
Edelcup, Edward J. Hardin, Ann Manix, Glenn R. Simmons and Steven L.
Watson.
|
|
|
“non-management
directors” means the following directors who are not one of our
executive officers: Paul M. Bass, Jr., Norman S. Edelcup,
Edward J. Hardin, Ann Manix and Steven L.
Watson.
|
|
|
“NYSE” means the New
York Stock Exchange.
|
|
|
“PwC” means
PricewaterhouseCoopers LLP, our independent registered public accounting
firm.
|
|
|
“record date” means the
close of business on March 31, 2009, the date our board of directors set
for the determination of stockholders entitled to notice of and to vote at
the 2009 annual meeting of our
stockholders.
|
|
|
“SEC” means the U.S.
Securities and Exchange Commission.
|
“Securities Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Tall Pines” means Tall
Pines Insurance Company, an indirect wholly owned captive insurance subsidiary
of Valhi.
|
|
“TFMC” means TIMET
Finance Management Company, a wholly owned subsidiary of
TIMET.
|
|
|
“TIMET” means Titanium
Metals Corporation, one of our publicly held sister corporations that is
an integrated producer of titanium metals
products.
|
|
|
“Valhi” means Valhi,
Inc., one of our publicly held parent corporations that is a diversified
holding company with principal investments in NL and Kronos
Worldwide.
|
|
|
“VHC” means Valhi
Holding Company, one of our parent
corporations.
|
|
|
“Waterloo” means
Waterloo Furniture Components Limited, one of our wholly owned
subsidiaries.
|
CompX
International Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
PROXY
STATEMENT
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 our board of directors for use at our 2009 Annual Meeting of Stockholders to
be held on Wednesday, May 27, 2009 and at any adjournment or postponement
of the meeting. The accompanying notice of annual meeting of
stockholders sets forth the time, place and purposes of the
meeting. The notice, this proxy statement, the accompanying proxy
card or voting instruction form and our 2008 Annual Report to Stockholders,
which includes our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008, are first being mailed on or about April 24, 2009
to the holders of our class A and class B common stock at the close of business
on March 31, 2009. Our principal executive offices are located at
Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas
75240-2697.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Q: What
is the purpose of the annual meeting?
|
A:
|
At
the annual meeting, stockholders will vote on the election of the seven
directors named in this proxy statement and any other matter that may
properly come before the meeting.
|
Q: How
does the board recommend that I vote?
|
A:
|
The
board of directors recommends that you vote FOR each of the nominees for
director named in this proxy
statement.
|
Q: Who
is allowed to vote at the annual meeting?
|
A:
|
The
board of directors has set the close of business on March 31, 2009 as the
record date for the determination of stockholders entitled to notice of
and to vote at the meeting. Only holders of record of our
common stock as of the close of business on the record date are entitled
to vote at the meeting. On the record date,
2,361,307 shares of our class A common stock and 10,000,000 shares of
our class B common stock were issued and outstanding. Each
share of our class A common stock entitles its holder to one vote. Each
share of our class B common stock entitles its holder to ten votes with
respect to the election of directors and one vote on all other
matters.
|
Q: How
do I vote?
|
A:
|
If
your shares are held by a bank, broker or other nominee (i.e., in “street
name”), you must follow the instructions from your nominee on how to vote
your shares.
|
If you
are a stockholder of record, you may:
|
·
|
vote
over the internet at www.investorvote.com/cix;
|
|
·
|
vote
over the telephone by using the voting procedures set forth on the proxy
card;
|
|
·
|
instruct
the agents named on the proxy card how to vote your shares by completing,
signing and mailing the enclosed proxy card in the envelope provided;
or
|
|
·
|
vote
in person at the annual meeting.
|
If
you execute a proxy card but do not indicate how you would like your shares
voted for one or more of the director nominees named in this proxy statement,
the agents will vote FOR the election of each such director nominee and, to the
extent allowed by applicable law, in the discretion of the agents on any other
matter that may properly come before the meeting.
Q: Who
will count the votes?
|
A:
|
The
board of directors has appointed Computershare, our transfer agent and
registrar, to receive proxy instructions and ballots, ascertain the number
of shares represented, tabulate the vote and serve as inspector of
election for the meeting.
|
Q: Is
my vote confidential?
|
A:
|
Yes. All
proxy cards, ballots or voting instructions delivered to Computershare
will be kept confidential in accordance with our
bylaws.
|
Q: May
I change or revoke my proxy or voting instructions?
|
A:
|
If
you are a stockholder of record, you may change or revoke your proxy
instructions in any of the following
ways:
|
|
·
|
delivering
to Computershare a written
revocation;
|
|
·
|
submitting
another proxy card bearing a later
date;
|
|
·
|
changing
your vote on www.investorvote.com/cix;
|
|
·
|
using
the telephone voting procedures set forth on the proxy card;
or
|
|
·
|
voting
in person at the meeting.
|
If your
shares are held by a bank, broker or other nominee, you must follow the
instructions from your nominee on how to change or revoke your voting
instructions.
Q: What
constitutes a quorum?
|
A:
|
A
quorum is the presence, in person or by proxy, of a majority of the votes
from holders of the outstanding shares of our class A and class B common
stock, counted as a single class, entitled to vote at the
meeting. Under the applicable rules of the NYSE and the SEC,
brokers or other nominees holding shares of record on behalf of a client
who is the actual beneficial owner of such shares are authorized to vote
on certain routine matters without receiving instructions from the
beneficial owner of the shares. If such a broker/nominee who is
entitled to vote on a routine matter delivers an executed proxy card and
votes on some matters and not others, a matter not voted on is referred to
in this proxy statement as a “broker/nominee
non-vote.” Abstentions, votes withheld from a director nominee
and broker/nominee non-votes will be counted as being in attendance at the
meeting for purposes of determining whether a quorum is
present.
|
|
Q:
|
Assuming
a quorum is present, what vote is required to elect a director nominee or
approve any other matter?
|
|
A:
|
A
plurality of the affirmative votes of the holders of our outstanding class
A and class B shares of common stock, voting together as a single class,
represented and entitled to be voted at the meeting is necessary to elect
each director nominee. The accompanying proxy card or voting
instruction form provides space for you to withhold authority to vote for
any of such director nominees. The election of directors is a
routine matter on which a broker/nominee has discretionary authority to
vote if such broker/nominee does not receive voting instructions from the
beneficial holder of the shares to be voted. 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. However, since director nominees
need only receive the plurality of the affirmative votes from the holders
represented and entitled to vote at the meeting to be elected, a vote
withheld or a broker/nominee non-vote regarding a particular nominee will
not affect the election of such director
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 votes of the
holders of a majority of the outstanding shares of our class A and class B
common stock, voting together as a single class, represented and entitled to
vote at the meeting. Abstentions and broker/nominee non-votes will
not be counted as votes for or against any such other matter.
Q: Who
will pay for the cost of soliciting the proxies?
|
A:
|
We
will pay all expenses related to the solicitation, including charges for
preparing, printing, assembling and distributing all materials delivered
to stockholders. In addition to the solicitation by mail, our
directors, officers and regular employees may solicit proxies by telephone
or in person for which such persons will receive no additional
compensation. Upon request, we 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 our common stock that such entities hold of
record.
|
CONTROLLING STOCKHOLDER
NL
directly held approximately 87.0% of our combined class A and B common stock as
of the record date. NL has indicated its intention to have its shares
of our common stock represented at the meeting and voted FOR the election of
each of the director nominees named in this proxy statement. If NL
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 to
the board of directors named in this proxy statement.
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 SEC, of
our class A and class B common stock held by each individual, entity or group
known by us to own beneficially more than 5% of the outstanding shares of our
class A or class B common stock, each director, each named executive officer and
all of our directors and executive officers as a group. See footnote
4 below for information concerning the relationships of certain individuals and
entities that may be deemed to own indirectly and beneficially more than 5% of
the outstanding shares of our class A or class B common stock. All
information is taken from or based upon ownership filings made by such
individuals or entities with the SEC or upon information provided by such
individuals or entities.
|
CompX
Class A Common Stock
|
CompX
Class B Common Stock
|
CompX
Class A and Class B Common Stock
Combined
|
|||||
|
Beneficial
Owner
|
Amount
and Nature of Beneficial
Ownership
(1)
|
Percent
of Class
(1)(2)
|
Amount
and Nature of Beneficial
Ownership
(1)
|
Percent
of
Class
|
Percent
of Class
(1)(2)
|
||
|
Harold
C. Simmons (3)
|
311,405
|
(4)
|
13.2%
|
-0-
|
(4)
|
-0-
|
2.5%
|
|
NL
Industries, Inc (3).
|
755,104
|
(4)
|
32.0%
|
10,000,000
|
(4)
|
100%
|
87.0%
|
|
Annette
C. Simmons (3)
|
20,000
|
(4)
|
*
|
-0-
|
(4)
|
-0-
|
*
|
|
1,086,509
|
(4)
|
46.0%
|
10,000,000
|
(4)
|
100%
|
89.7%
|
|
|
Royce
& Associates, LLC
|
292,300
|
(5)
|
12.4%
|
-0-
|
-0-
|
2.4%
|
|
|
Dimensional
Fund Advisors LP.
|
162,372
|
(6)
|
6.9%
|
-0-
|
-0-
|
1.3%
|
|
|
Renaissance
Technologies LLC.
|
146,400
|
(7)
|
6.2%
|
-0-
|
-0-
|
1.2%
|
|
|
Paul
M. Bass, Jr.
|
17,000
|
(4)(8)
|
*
|
-0-
|
-0-
|
*
|
|
|
David
A. Bowers
|
41,400
|
(4)(8)
|
1.7%
|
-0-
|
-0-
|
*
|
|
|
Norman
S. Edelcup
|
5,500
|
(4)
|
*
|
-0-
|
-0-
|
*
|
|
|
Edward
J. Hardin
|
20,500
|
(8)
|
*
|
-0-
|
-0-
|
*
|
|
|
Ann
Manix
|
17,000
|
(8)
|
*
|
-0-
|
-0-
|
*
|
|
|
Glenn
R. Simmons
|
30,000
|
(4)(8)(9)
|
1.3%
|
-0-
|
-0-
|
*
|
|
|
Steven
L. Watson
|
15,500
|
(4)(8)
|
*
|
-0-
|
-0-
|
*
|
|
|
Corey
J. Boland
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
|
Darryl
R. Halbert
|
2,000
|
(4)
|
*
|
-0-
|
-0-
|
*
|
|
|
J.
Mark Hollingsworth
|
-0-
|
(4)
|
-0-
|
-0-
|
-0-
|
-0-
|
|
|
Scott
C. James
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
||
|
All
of our directors and executive officers as a group (12
persons)
|
149,100
|
(4)(8)(9)
|
6.2%
|
-0-
|
-0-
|
1.2%
|
|
——————————
* Less
than 1%.
|
(1)
|
Except
as otherwise noted, the listed entities, individuals or group have sole
investment power and sole voting power as to all shares set forth opposite
their names. The number of shares and percentage of ownership
for each entity, individual or group assumes the exercise by such entity,
individual or group (exclusive of others) of stock options that such
entity, individual or group may exercise within 60 days subsequent to the
record date.
|
|
(2)
|
The
percentages are based on 2,361,307 shares of our class A common stock
outstanding as of the record date. As already discussed, each
share of our class A common stock entitles its holder to one vote and each
share of our class B common stock entitles its holder to ten votes with
respect to the election of directors and one vote on all other
matters. In certain instances, shares of our class B common
stock are automatically convertible into shares of our class A common
stock.
|
|
(3)
|
The
business address of NL and Harold C. and Annette C. Simmons is Three
Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas 75240-2697.
|
|
(4)
|
Valhi
and TFMC are the direct holders of approximately 83.1% and 0.5%,
respectively, of the outstanding shares of NL common
stock. TIMET is the direct holder of 100% of the outstanding
shares of TFMC common stock.
|
VHC,
Annette C. Simmons, the CMRT, Harold C. Simmons, NL, Valhi, the CDCT and the
Foundation are the holders of approximately 26.1%, 12.1%, 8.5%, 4.2%, 0.8%,
0.5%, 0.4% and 0.2%, respectively, of the outstanding shares of common stock of
TIMET. NL’s percentage ownership of TIMET common stock includes 0.3%
directly held by a wholly owned subsidiary of NL.
VHC,
TFMC, the Foundation and the CMRT are the direct holders of approximately 92.6%,
1.1%, 0.9% and 0.1%, respectively, of the outstanding common stock of
Valhi. Dixie Rice is the direct holder of 100% of the outstanding
common stock of VHC. Contran is the beneficial holder of 100% of the
outstanding common stock of Dixie Rice.
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, of which Mr.
Simmons is the sole trustee, or held by Mr. Simmons or persons or other entities
related to Mr. Simmons. As sole trustee of these trusts, Mr. Simmons
has the power to vote and direct the disposition of the shares of Contran stock
held by these trusts. Mr. Simmons, however, disclaims beneficial
ownership of any Contran shares these trusts hold.
The
Foundation directly holds approximately 0.2% of the outstanding shares of TIMET
common stock and 0.9% 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
of the Foundation.
The CDCT
directly holds approximately 0.4% of the outstanding shares of TIMET common
stock. U.S. Bank National Association serves as the trustee of the
CDCT. Contran established the CDCT as an irrevocable “rabbi trust” to
assist Contran in meeting certain deferred compensation obligations that it owes
to Harold C. Simmons. If the CDCT assets are insufficient to satisfy
such obligations, Contran must satisfy the balance of such
obligations. Pursuant to the terms of the CDCT, Contran retains the
power to vote the shares held by the CDCT, retains dispositive power over such
shares and may be deemed the indirect beneficial owner of such
shares.
The CMRT
directly holds approximately 8.5% of the outstanding shares of TIMET common
stock and 0.1% of the outstanding shares of Valhi common
stock. Contran sponsors this trust to permit the collective
investment by master trusts that maintain assets of certain employee defined
benefit plans Contran and related entities adopt. Harold C. Simmons
is the sole trustee of this trust and a member of the investment committee for
this trust. Contran’s board of directors selects the trustee and
members of this trust’s investment committee. Paul M. Bass, Jr. is
also a member of the trust’s investment committee. Glenn R. Simmons
and Steven L. Watson are members of Contran’s board of directors and along with
David A. Bowers, Darryl R. Halbert, J. Mark Hollingsworth and Kelly D. Luttmer
are participants in one or more of the employee defined benefit plans that
invest through this trust. Each of such persons disclaims beneficial
ownership of any of the shares this trust holds, except to the extent of his or
her individual vested beneficial interest, if any, in the plan assets this trust
holds.
Harold C.
Simmons is the chairman of the board and chief executive officer of NL and the
chairman of the board of each of TIMET, Valhi, VHC, Dixie Rice and
Contran.
By virtue
of the holding of the offices, the stock ownership and his services as trustee,
all as described above, (a) Harold C. Simmons may be deemed to control certain
of such entities and (b) Mr. Simmons and certain of such entities may be deemed
to possess indirect beneficial ownership of shares directly held by certain of
such other entities. However, Mr. Simmons disclaims beneficial
ownership of the shares beneficially owned, directly or indirectly, by any of
such entities, except to the extent of his vested beneficial interest, if any,
in shares held by the CDCT or the CMRT. Mr. Simmons disclaims
beneficial ownership of all shares of our common stock beneficially owned,
directly or indirectly, by NL.
All of
our directors or executive officers who are also directors or executive officers
of NL or its parent companies disclaim beneficial ownership of the shares of our
common stock that such companies directly or indirectly hold.
Annette
C. Simmons is the wife of Harold C. Simmons. She is the direct owner
of 20,000 shares of our class A common stock, 269,775 shares of NL common stock,
21,825,875 shares of TIMET common stock and 200,900 shares of Valhi common
stock. Mr. Simmons may be deemed to share indirect beneficial
ownership of such shares. Mr. Simmons disclaims all such beneficial
ownership.
The
Annette Simmons Grandchildren’s Trust, a trust of which Harold C. Simmons and
Annette C. Simmons are co-trustees and the beneficiaries of which are the
grandchildren of Annette C. Simmons, is the direct holder of 17,432 shares of
TIMET common stock and 34,000 shares of Valhi common stock. Mr.
Simmons, as co-trustee of this trust, has the power to vote and direct the
disposition of the shares of Valhi common stock this trust directly
holds. Mr. Simmons disclaims beneficial ownership of any shares that
this trust holds.
Harold C.
Simmons is the direct owner of 311,405 shares of our class A common stock,
880,600 shares of NL common stock, 7,549,737 shares of TIMET common stock and
154,838 shares of Valhi common stock.
NL and
one of its subsidiaries directly hold 3,604,790 and 1,186,200 shares of Valhi
common stock, respectively. Since NL is a majority owned subsidiary
of Valhi, and pursuant to Delaware law, Valhi treats the shares of Valhi common
stock that NL and its subsidiary hold as treasury stock for voting
purposes. For the purposes of calculating the percentage ownership of
the outstanding shares of Valhi common stock as of the record date in this proxy
statement, such shares are not deemed outstanding.
Contran
is the sole owner of Valhi’s 6% series A preferred stock and a trust related to
Harold C. Simmons is the sole owner of VHC’s 2% convertible preferred
stock. Messrs. Harold and Glenn Simmons and Watson each hold of
record one director qualifying share of Dixie Rice.
VHC has
pledged 42,304,992 shares of TIMET common stock as security and 120,000 shares
of Valhi common stock as security. Shares owned directly by Contran
or its related entities or their executive officers or directors may be held in
margin accounts at brokerage firms. Under the terms of the margin account
agreements, stocks and other assets held in these accounts may be pledged to
secure margin obligations under these accounts.
The
business address of Contran, the CMRT, the Foundation, TIMET, Valhi and VHC 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 TFMC is 1007 Orange Street, Suite 1400, Wilmington,
Delaware 19801.
|
(5)
|
Based
on Amendment No. 7 to Schedule 13G executed on January 23, 2009 that Royce
& Associates, LLC filed with the SEC. The address of Royce
& Associates, LLC is 1414 Avenue of the Americas, New York, New
York 10019.
|
|
(6)
|
Based
on a Schedule 13G executed on February 9, 2009 that Dimensional Fund
Advisors LP filed with the SEC. Dimensional is an investment
adviser that furnishes investment advice to four investment companies and
serves as investment manager of certain other commingled group trusts and
separate accounts. Dimensional has sole voting power over
159,372 of these shares and sole dispositive power over all of these
shares. Dimensional disclaims beneficial ownership of all of
these shares. Dimensional’s address is Palisades West, Building
One, 6300 Bee Cave Road, Austin,
Texas 78746.
|
|
(7)
|
Based
on a Schedule 13G executed on February 12, 2009 that Renaissance
Technologies LLC and James H. Simons filed with the SEC. Dr.
Simons is a control person of Renaissance, which is an investment
adviser. Their address is 800 Third Avenue, New York, New
York 10022.
|
|
(8)
|
The
shares of our 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 our stock
option plan that such person may exercise within 60 days subsequent to the
record date:
|
|
Name
of Beneficial Owner
|
Shares
of our Class A Common Stock Issuable Upon the Exercise of Stock
Options
On
or Before May 30, 2009
|
|
Paul M.
Bass, Jr.
|
8,000
|
|
David
A. Bowers
|
25,000
|
|
Edward
J. Hardin
|
8,000
|
|
Ann
Manix
|
8,000
|
|
Glenn
R. Simmons
|
6,000
|
|
Steven
L. Watson
|
6,000
|
|
(9)
|
The
shares of our class A common stock shown as beneficially owned by Glenn R.
Simmons include 500 shares his wife holds, with respect to which he
disclaims beneficial ownership.
|
We
understand that Contran and related entities may consider acquiring or disposing
of shares of our 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 our common
stock in the market, an assessment of our business and prospects, financial and
stock market conditions and other factors deemed relevant by such
entities. We may similarly consider acquisitions of shares of our
common stock and acquisitions or dispositions of securities issued by related
entities.
Ownership of
Related Companies. Some of our directors and executive
officers own equity securities of several companies related to us.
Ownership of NL and Valhi. The
following table and footnotes set forth the beneficial ownership, as of the
record date, of the shares of NL and Valhi common stock held by each of our
directors, each named executive officer and all of our directors and executive
officers as a group. All information is taken from or based upon
ownership filings made by such persons with the SEC or upon information provided
by such persons.
|
NL
Common Stock
|
Valhi
Common Stock
|
||||||
|
Name
of Beneficial Owner
|
Amount
and Nature
of
Beneficial
Ownership
(1)
|
Percent
of
Class
(1)(2)
|
Amount
and Nature
of
Beneficial
Ownership
(1)
|
Percent
of
Class
(1)(3)
|
|||
|
Paul
M. Bass,
Jr.
|
-0-
|
-0-
|
5,000
|
(4)
|
*
|
||
|
David
A.
Bowers
|
-0-
|
-0-
|
-0-
|
(4)
|
-0-
|
||
|
Norman
S.
Edelcup
|
-0-
|
(4)
|
-0-
|
38,000
|
(4)
|
*
|
|
|
Edward
J.
Hardin
|
-0-
|
-0-
|
4,000
|
*
|
|||
|
Ann
Manix
|
2,000
|
*
|
-0-
|
-0-
|
|||
|
Glenn
R.
Simmons
|
2,000
|
(4)
|
*
|
15,652
|
(4)(5)
|
*
|
|
|
Steven
L.
Watson
|
12,000
|
(4)
|
*
|
28,246
|
(4)
|
*
|
|
|
Corey
J.
Boland
|
-0-
|
-0-
|
-0-
|
-0-
|
|||
|
Darryl
R.
Halbert
|
-0-
|
-0-
|
-0-
|
(4)
|
-0-
|
||
|
J.
Mark Hollingsworth
|
500
|
(4)
|
*
|
55,000
|
(4)(6)
|
*
|
|
|
Scott
C.
James
|
-0-
|
-0-
|
-0-
|
-0-
|
|||
|
All
our directors and executive officers as a group (12
persons)
|
16,500
|
(4)
|
*
|
190,898
|
(4)(5)(6)
|
*
|
|
——————————
* Less
than 1%.
|
(1)
|
Except
as otherwise noted, the individuals or group have sole investment power
and sole voting power as to all shares set forth opposite their
names. The number of shares and percentage of ownership for
each individual or group assumes the exercise by such individual or group
(exclusive of others) of stock options that such individual or group may
exercise within 60 days subsequent to the record
date.
|
|
(2)
|
The
percentages are based on 48,602,584 shares of NL common stock
outstanding as of the record date.
|
|
(3)
|
The
percentages are based on 113,599,955 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,
3,604,790 and 1,186,200 shares of Valhi common stock held by NL and a
wholly owned subsidiary of NL, respectively, are treated as treasury stock
for voting purposes and for purposes of this statement are excluded from
the amount of Valhi common stock
outstanding.
|
|
(4)
|
See
footnote 4 to the Ownership of CompX table above for a description of
certain relationships among the individuals or group appearing in this
table. All of our directors or executive officers who are also
directors or executive officers of any of our parent companies disclaim
beneficial ownership of the shares of NL or Valhi common stock that such
companies directly or indirectly
own.
|
|
(5)
|
The
shares of Valhi common stock shown as beneficially owned by Glenn R.
Simmons include 1,500 shares his wife holds and 1,100 shares she holds in
her retirement account, with respect to all of which shares he disclaims
beneficial ownership.
|
|
(6)
|
The
shares of Valhi common stock shown as beneficially owned by such person or
group include the following number of shares such person or group has the
right to acquire upon the exercise of stock options granted pursuant to
Valhi stock option plans that such person or group may exercise within 60
days subsequent to the record date:
|
|
Name
of Beneficial Owner
|
Shares
of Valhi Common Stock Issuable Upon the Exercise of Stock
Options
On
or Before May 30, 2009
|
|
J. Mark
Hollingsworth
|
55,000
|
|
All our
directors and executive officers as a group (12 persons)
|
100,000
|
ELECTION OF DIRECTORS
Our
bylaws provide that the board of directors shall consist of one or more members
as determined by our board of directors or stockholders. The board of
directors has currently set the number of directors at seven and recommends the
seven director nominees named in this proxy statement for election at our 2009
annual stockholder meeting. The directors elected at the meeting will
hold office until our 2010 Annual Meeting of Stockholders and until their
successors are duly elected and qualified or their earlier removal or
resignation.
All of
the nominees are currently members of our board of directors 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,
the agents named on the proxy card will vote FOR an alternate nominee to be
selected by the board of directors, unless the stockholder executing such proxy
card withholds authority to vote for such nominee. The board of
directors believes that all of its 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 respective nominees have provided the following
information.
Paul M. Bass, Jr., age 73, has
served on our board of directors since 1997. Mr. Bass also serves as
a director of Keystone. From prior to 2004, Mr. Bass has served as
vice chairman of First Southwest Company, a privately held investment banking
firm. He also serves as chairman emeritus on the board of trustees of
the Southwestern Medical Foundation, a foundation that supports and promotes The
University of Texas Southwestern Medical Center. Mr. Bass is a member
of Keystone’s audit committee and our audit committee and chairman of our
management development and compensation committee.
David A. Bowers, age 71, has
served as our president and chief executive officer since 2002, our vice
chairman of the board since 2000 and on our board of directors since
1993. Mr. Bowers has been employed by us or our predecessors since
1960 in various sales, marketing and executive positions, having been named our
president of security products and related businesses in 1979. Mr.
Bowers is a trustee and past chairman of the board of Monmouth College,
Monmouth, Illinois.
Norman S. Edelcup, age 73, has
served on our board of directors since 2006. Since prior to 2004, he
has served as mayor of Sunny Isles Beach, Florida. He also serves as
a trustee for the Baron Funds, a mutual fund group. Since 2007, he
has served as a director of Marquis Bank located in North Miami Beach,
Florida. From 2001 to 2004, Mr. Edelcup served as senior vice
president of Florida Savings Bancorp. He served as senior vice
president of Item Processing of America, Inc., a processing service bureau, from
1999 to 2000 and as chairman of the board from 1989 to 1998. Mr.
Edelcup is a certified public accountant and served as senior vice president and
chief financial officer of Avatar Holdings, Inc. (formerly GAC Corporation), a
real estate development firm, from 1976 to 1983; vice chairman of the board,
senior vice president and chief financial officer of Keller Industries, Inc., a
building products manufacturer, from 1968 to 1976; and as a senior accountant
with Arthur Andersen & Co., a public accounting firm, from 1958 to
1962. He is chairman of our audit committee and is also a Valhi
director and chairman of Valhi’s audit committee and management development and
compensation committee.
Edward J. Hardin, age 66, has
served on our board of directors since 1997. Mr. Hardin has been a
partner of the law firm of Rogers & Hardin LLP since its formation in
1976.
Ann Manix, age 56, has served
on our board of directors since 1998. Ms. Manix has been a principal
of Summus, Ltd., a strategic consulting firm, since December
2008. From prior to 2004 until 2006, she served as a managing partner
of Ducker Research Corporation, a privately held industrial research
firm. She is a member of our audit committee and management
development and compensation committee.
Glenn R. Simmons, age 81, has
served as our chairman of the board since 2000 and on our board of directors
since 1993. In 2000, Mr. Simmons served as our chief executive
officer. Mr. Simmons has been vice chairman of the board of Valhi and
Contran since prior to 2004. Mr. Simmons also serves as chairman of
the board of Keystone and as a director of Kronos Worldwide, NL and
TIMET. In 2004, Keystone filed a voluntary petition for
reorganization under federal bankruptcy laws and emerged from the bankruptcy
proceedings in 2005. Mr. Simmons has been an executive officer or
director of various companies related to Contran since 1969. He is a
brother of Harold C. Simmons.
Steven L. Watson, age 58, has
served on our board of directors since 2000. Mr. Watson has been
chief executive officer of Valhi and president and a director of Valhi and
Contran since prior to 2004. He has served as chief executive officer
of Kronos Worldwide since February 2009 and its vice chairman of the board since
2004 and chief executive officer of TIMET since 2006 and its vice chairman of
the board since 2005. Mr. Watson also serves as a director of
Keystone and NL. Mr. Watson has served as an executive officer or
director of various companies related to Valhi and Contran since
1980.
EXECUTIVE OFFICERS
Set forth
below is certain information relating to our executive officers. 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 the Nominees for Director subsection
above.
|
Name
|
Age
|
Position(s)
|
|
Glenn
R.
Simmons
|
81
|
Chairman
of the Board
|
|
David
A.
Bowers
|
71
|
Vice
Chairman of the Board, President and Chief Executive
Officer
|
|
Corey
J.
Boland
|
38
|
Vice
President
|
|
Darryl
R.
Halbert
|
44
|
Vice
President, Chief Financial Officer and Controller
|
|
J.
Mark Hollingsworth
|
57
|
Vice
President and General Counsel
|
|
Scott
C.
James
|
43
|
Vice
President
|
|
Kelly
D.
Luttmer
|
45
|
Vice
President and Tax Director
|
Corey J. Boland has served as
our vice president and president of our CompX Furniture Components division,
CompX Precision Slides Inc. and Waterloo, the later two being wholly owned
subsidiaries of CompX that are a part of the CompX Furniture Components
Division, since May 2008. From 2004 to May 2008, he served as vice
president, engineering of Waterloo. Mr. Boland has served in various
engineering positions with Waterloo since 2002.
Darryl R. Halbert has served
as our chief financial officer, vice president and controller since prior to
2004.
J. Mark Hollingsworth has
served as our vice president since 2007 and our general counsel, acting general
counsel of Keystone and vice president and general counsel of Valhi and Contran
since prior to 2004. Mr. Hollingsworth has served as legal counsel of
various companies related to us and Contran since 1983.
Scott C. James has served as
our vice president since 2002 and president of two or our divisions, CompX
Security Products and CompX Marine, since 2002 and 2005,
respectively. Since 1992, Mr. James has served in various sales,
marketing and executive positions with our security products
operations.
Kelly D. Luttmer has served as
our vice president since 2004 and our tax director since prior to
2004. She also has served as vice president of Contran, Kronos
Worldwide, NL and Valhi since 2004, vice president and tax director of TIMET
since 2006, tax director of Kronos Worldwide and NL and tax director of Contran
and Valhi since prior to 2004. Ms. Luttmer has served in tax
accounting positions with various companies related to us and Contran since
1989.
CORPORATE GOVERNANCE
Controlled
Company Status, Director Independence and Committees. Because
of NL’s ownership of 87.0% of our common stock, we are considered a controlled
company under the listing standards of the NYSE. Pursuant to the
listing standards, a controlled company may choose not to have a majority of
independent directors, independent compensation, nominating or corporate
governance committees or charters for these committees. We have
chosen not to have a majority of independent directors or an independent
nominating or corporate governance committee or charters for these
committees. Our board of directors believes that the full board of
directors best represents the interests of all of our stockholders and that it
is appropriate for all matters that would be considered by a nominating or
corporate governance committee to be considered and acted upon by the full board
of directors. Applying the NYSE director independence standards
without any additional categorical standards, the board of directors has
determined that Paul M. Bass, Jr., Norman S. Edelcup and Ann Manix are
independent and have no material relationship with us other than serving as our
directors. While the members of our management development and
compensation committee currently satisfy the independence requirements of the
NYSE, we have chosen not to satisfy all of the NYSE listing standards for a
compensation committee.
In
determining that Mr. Bass has no material relationship with us other than
serving as our director, the board of directors considered the following
relationships:
|
·
|
Contran’s
employment of his son as a lawyer in its legal
department;
|
|
·
|
In
2005, 2006 and 2007, Annette C. Simmons, the wife of Harold C. Simmons,
contributed shares of TIMET common stock of approximately $1.0 million,
$10.1 million and $11.1 million, respectively, in value to the
Southwestern Medical Foundation for the benefit of The University of Texas
Southwestern Medical School, Parkland Memorial Hospital or Kalispell
Community Regional Medical Center for Breast Cancer, of which Southwestern
Medical Foundation Mr. Bass serves on the board of
trustees;
|
|
·
|
In
2007, the Foundation, of which Harold C. Simmons is the chairman of the
board, contributed shares of TIMET common stock of approximately $1.0
million and $0.8 million in value to the Southwestern Medical
Foundation for the benefit of Zale Lipshy University Hospital and The
University of Texas Southwestern Medical School, respectively, of which
Southwestern Medical Foundation Mr. Bass serves on the board of
trustees;
|
|
·
|
In
2008, VHC, of which Harold C. Simmons is the chairman of the board,
contributed shares of Valhi and TIMET common stock of approximately $7.5
million in aggregate value to the Southwestern Medical Foundation, of
which Mr. Bass serves on the board of trustees;
and
|
|
·
|
First
Southwest Company, of which Mr. Bass is the vice chairman of the board,
served as a market maker for the common stock of Keystone, a subsidiary of
Contran, until December 31, 2008 and Harold C. Simmons, Contran and
its related entities or persons execute trades on a regular basis through
First Southwest Company.
|
The board
determined that Mr. Bass did not have a direct or indirect material interest in
these transactions based on representations from him that:
|
·
|
Mr.
Bass’ son is an adult who does not reside with his father and who will not
perform services for us while employed by
Contran;
|
|
·
|
he
receives no compensation for serving on the board of trustees of
Southwestern Medical Foundation;
|
|
·
|
the
aggregate brokerage commissions paid to First Southwest Company by Mr.
Simmons and Contran related entities or persons over each of the last
three years did not exceed $300,000 and represented less than 0.3% of the
consolidated gross revenues of First Southwest Company for each of those
years; and
|
|
·
|
Keystone
did not compensate First Southwest Company for serving as a market maker
in Keystone common stock and the broker relationship with Harold C.
Simmons, Contran and its related entities or persons and First Southwest
Company is solely a business relationship that does not afford Mr. Bass
any special benefit.
|
2008 Meetings and
Standing Committees of the Board of Directors. The board of
directors held three meetings and took action by written consent on two
occasions in 2008. Each director participated in at least 80% of all
of such meetings and of the 2008 meetings of the committees on which he or she
served at the time. It is expected that each director will attend our
annual meeting of stockholders, which is held immediately before the annual
meeting of the board of directors. All of our directors attended our
2008 annual stockholder meeting.
The board
of directors has established and delegated authority to two standing committees,
which are described below. The board of directors is expected to
elect the members of the standing committees at the board of directors annual
meeting immediately following the annual stockholder meeting. The
board of directors from time to time may establish other committees to assist it
in the discharge of its responsibilities.
Audit
Committee. Our audit committee assists with the board of
directors’ oversight responsibilities relating to our financial accounting and
reporting processes and auditing processes. The purpose, authority,
resources and responsibilities of our audit committee are more specifically set
forth in our audit committee charter. Applying the requirements of
the NYSE listing standards (without additional categorical standards) and SEC
regulations, as applicable, the board of directors has determined
that:
|
·
|
each
member of our audit committee is independent, financially literate and has
no material relationship with us other than serving as our director;
and
|
|
·
|
Mr.
Norman S. Edelcup is an “audit committee financial
expert.”
|
No member
of our audit committee serves on more than three public company audit
committees. For further information on the role of our audit
committee, see the Audit Committee Report in this proxy
statement. The current members of our audit committee are Norman S.
Edelcup (chairman), Paul M. Bass, Jr. and Ann Manix. Our audit
committee held six meetings in 2008.
Management
Development and Compensation Committee. The principal
responsibilities of our management development and compensation committee
are:
|
·
|
to
recommend to the board of directors whether or not to approve any proposed
charge to us or any of our privately held subsidiaries pursuant to an ISA
with a related party;
|
|
·
|
to
review, approve and administer certain matters regarding our employee
benefit plans or programs, including annual incentive compensation
awards;
|
|
·
|
to
review, approve, administer and grant awards under our equity compensation
plan; and
|
|
·
|
to
review and administer such other compensation matters as the board of
directors may direct from time to
time.
|
As
discussed above, the board of directors has determined that each member of our
management development and compensation committee is independent by applying the
NYSE director independence standards (without additional categorical
standards). In certain instances under our 1997 Long-Term Incentive
Plan, a plan allowing for grants of cash or equity performance awards, the
management development and compensation committee may delegate its authority to
administer this plan to certain individuals, which delegation authority the
committee has not utilized. With respect to the role of our executive
officers in determining or recommending the amount or form of executive
compensation, see the Compensation Discussion and Analysis section of this proxy
statement. With respect to director compensation, our executive
officers make recommendations on such compensation directly to our board of
directors for its consideration without involving the management development and
compensation committee. The current members of our management
development and compensation committee are Paul M. Bass, Jr. (chairman) and Ann
Manix. Our management development and compensation committee held one
meeting and took action by written consent on two occasions in
2008.
Non-Management
and Independent Director Meetings. Pursuant to our corporate
governance guidelines, our non-management directors are entitled to meet on a
regular basis throughout the year, and will meet at least once annually, without
management participation. Our independent directors also meet at
least once annually, without management participation. The chairman
of our audit committee presides at all of these meetings. In 2008, we
complied with these requirements.
Stockholder
Proposals and Director Nominations for the 2010 Annual Meeting of
Stockholders. Stockholders may submit proposals on matters
appropriate for stockholder action at our annual stockholder meetings,
consistent with rules adopted by the SEC. We must receive such
proposals not later than December 28, 2009 to be considered for inclusion in the
proxy statement and form of proxy card relating to our annual meeting of
stockholders in 2010. Our bylaws require that the proposal must set
forth a brief description of the proposal, the name and address of the proposing
stockholder as they appear on our books, the number of shares of our common
stock the stockholder holds and any material interest the stockholder has in the
proposal.
The board
of directors will consider the director nominee recommendations of our
stockholders. Our bylaws require that a nomination set forth the name
and address of the nominating stockholder, a representation that the stockholder
will be a stockholder of record entitled to vote at the annual stockholder
meeting and intends to appear in person or by proxy at the meeting to nominate
the nominee, a description of all arrangements or understandings between the
stockholder and the nominee (or other persons pursuant to which the nomination
is to be made), such other information regarding the nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the SEC and the consent of the nominee to serve as a director if
elected.
As stated
in our corporate governance guidelines, our board of directors has no specific
minimum qualifications for director candidates. The board of
directors will consider a potential director nominee’s ability to satisfy the
need, if any, for any required expertise on the board of directors or one of its
committees. Historically, our management has recommended director
nominees to the board of directors. Because under the NYSE listing
standards we may be deemed to be a controlled company, the board of directors
believes that additional policies or procedures with regard to the consideration
of director candidates recommended by its stockholders are not
appropriate.
For
proposals or director nominations to be brought at the 2010 annual meeting of
stockholders but not included in the proxy statement for such meeting, our
bylaws require that the proposal or nomination must be delivered or mailed to
our principal executive offices in most cases no later than March 10,
2010. Proposals and nominations should be addressed to our corporate
secretary at CompX International Inc., Three Lincoln Centre, 5430 LBJ Freeway,
Suite 1700, Dallas, Texas 75240-2697.
Communications
with Directors. Stockholders and other interested parties who
wish to communicate with the board of directors or its non-management directors
may do so through the following procedures. Such communications not
involving complaints or concerns regarding accounting, internal accounting
controls and auditing matters related to us may be sent to the attention of our
corporate secretary at CompX International Inc., Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas,
Texas 75240-2697. Provided that any such
communication relates to our business or affairs and is within the function of
our board of directors or its committees, and does not relate to insignificant
or inappropriate matters, such communications, or summaries of such
communications, will be forwarded to the chairman of our audit committee, who
also serves as the presiding director of our non-management and independent
director meetings.
Complaints
or concerns regarding accounting, internal accounting controls and auditing
matters, which may be made anonymously, should be sent to the attention of our
general counsel with a copy to our chief financial officer at the same address
as our corporate secretary. These complaints or concerns will be
forwarded to the chairman of our audit committee. We will keep these
complaints or concerns confidential and anonymous, to the extent feasible,
subject to applicable law. Information contained in such a complaint
or concern may be summarized, abstracted and aggregated for purposes of analysis
and investigation.
Compensation
Committee Interlocks and Insider Participation. As discussed
above, for 2008 the management development and compensation committee was
composed of Paul M. Bass, Jr. and Ann Manix. No member of the
committee:
|
·
|
was
an officer or employee of ours during 2008 or any prior
year;
|
|
·
|
had
any related party relationships with us that requires disclosure under
applicable SEC rules; or
|
|
·
|
had
any interlock relationships under applicable SEC
rules.
|
For 2008,
no executive officer of ours had any interlock relationships within the scope of
the intent of applicable SEC rules. However, our chairman of the
board is on the board of directors of Contran and Contran employs Steven L.
Watson, who serves as one of our directors.
Code of Business
Conduct and Ethics. We have adopted a code of business conduct
and ethics. The code applies to all of our directors, officers and
employees, including our principal executive officer, principal financial
officer, principal accounting officer and controller. Only the board
of directors may amend the code. Only our audit committee or other
committee of the board of directors with specifically delegated authority may
grant a waiver of this code. We will disclose amendments to or
waivers of the code as required by law and the applicable rules of the
NYSE.
Corporate
Governance Guidelines. We have adopted corporate governance
guidelines to assist the board of directors in exercising its
responsibilities. Among other things, the corporate governance
guidelines provide for director qualifications, for independence standards and
responsibilities, for approval procedures for ISAs and that our audit committee
chairman presides at all meetings of the non-management or independent
directors.
Availability of
Corporate Governance Documents. A copy of each of our audit
committee charter, code of business conduct and ethics and corporate governance
guidelines is available on our website at www.compx.com under the corporate
section. In addition, any person may obtain a copy of these three
documents without charge, by sending a written request to the attention of our
corporate secretary at CompX International Inc., Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240-2697.
COMPENSATION OF EXECUTIVE OFFICERS AND
DIRECTORS
AND
OTHER INFORMATION
Compensation
Discussion and Analysis. This compensation discussion and
analysis describes the key principles and factors underlying our executive
compensation policies for our named executive officers. We employed
three of our named executive officers at December 31, 2008. Our
two other named executive officers at December 31, 2008 were employed and
directly compensated by Contran and provided their services to us in 2008 under
our ISA with Contran.
Compensation of our Named Executive
Officers Employed by Us. In 2008, we employed the following
named executive officers:
|
Name
|
Position(s)
|
|
David
A. Bowers
|
Vice
Chairman of the Board, President and Chief Executive
Officer
|
|
Corey
J. Boland
|
Vice
President
|
|
Scott
C. James
|
Vice
President
|
Overview. Prior
to 2006, we decided to forego long-term compensation (other than defined
contribution plans that are generally available on
a non-discriminatory basis to all employees) and implemented a compensation
program that is primarily cash-based, with minimal perquisites, if
any. Our objectives for the primarily cash-based compensation program
as it relates to our senior officers, including all of our named executive
officers employed by us, are to:
|
·
|
have
a total individual compensation package that is easy to
understand;
|
|
·
|
encourage
them to maximize long-term stockholder value;
and
|
|
·
|
achieve
a balanced compensation package that would attract and retain highly
qualified senior officers and appropriately reflect each such officer’s
individual performance, contributions and general market
value.
|
In
furtherance of our objectives and in an effort to separate annual operating
planning from annual incentive compensation, we implemented discretionary
incentive bonuses for our senior officers. As a result, annual
compensation for our named executive officers employed by us primarily consists
of base salaries and discretionary incentive bonuses.
We do not
base our employed named executive officer compensation on any specific measure
of, or formula based upon, our financial performance, although we do consider
our financial performance as one factor in determining the compensation of our
employed named executive officers. We determine the amount of each
component of such compensation solely on our collective business judgment and
experience, without performing any independent market research. We do
not enter into any written employment agreements with our employed named
executive officers.
Base Salaries. We
have established the annual base salaries for our employed named executive
officers on a position-by-position basis based on responsibility and
experience. We pay this portion of each of our employed named
executive officer’s compensation to provide him with a reliable amount of
compensation for the year, subject to his continued at-will employment and
satisfactory performance for his services at the level of his
responsibilities. Our chief executive officer has the responsibility
to conduct annual internal reviews of our employed named executive officer
salary levels in order to rank salary, individual performance and job value to
each position. He then makes recommendations on salaries, other than
his own, to our chairman of the board and then to our management development and
compensation committee. The chairman of the board makes
recommendations on our chief executive officer’s salary to the
committee. The committee reviews the recommendations regarding
changes in salaries for executive officers and may take such action, including
modifications to the recommendations, as it deems appropriate. The
recommendations of our chief executive officer and our chairman of the board and
the determinations of our management development and compensation committee are
based on our evaluations of the past year annual base-salary amounts with
adjustments made as result of our past and expected future financial
performance, inflation, past and potential future individual performance and
contributions or alternative career opportunities that might be available to our
named executive officers employed by us, without performing any independent
market research. We approved in the fourth quarter of 2005, 2006 and
2007 increases in the base salaries effective January 1 of the following year
for:
|
·
|
Mr.
Bowers of 6.1%, 4.3% and 4.0%, respectively, primarily to
account for inflation and our general financial performance;
and
|
|
·
|
Mr.
James of 9.6%, 7.8% and 4.0%, respectively, primarily to account for
inflation and our general financial performance and with respect to the
salaries for 2006 and 2007, for increased
responsibility.
|
Mr.
Boland received two salary increases for 2008. His first 2008 salary
increase of 7.6% was granted effective in April 2008 while he was vice
president, engineering of Waterloo primarily to recognize additional
responsibility, to account for the financial performance of his operating unit
and for inflation. His second 2008 salary increase of 12.5% was
granted to him in May 2008 as the first of two salary increases recognizing his
promotion to one of our executive officers in May 2008. Mr. Boland
received an additional salary increase of 12.5% in January 2009 as the second of
the two increases recognizing his promotion in May 2008. Other than
Mr. Boland’s January 2009 salary increase, we instituted a salary freeze for
2009 for our named executive officers.
In all
cases, no specific measure of, or formula based upon, our financial performance
was utilized in determining the increase in an executive officer’s base salary
for a year, although we did consider our financial performance as one factor in
determining such increase. There is no specific weighing of factors
in determining such increases. The salaries for our named executive
officers employed by us are disclosed in their salary column in the Summary
Compensation table in this proxy statement for each year of the last three years
in which such officer served as one of our executive officers.
Annual Incentive Bonuses. We pay discretionary
incentive bonuses annually in cash to each of our employed named executive
officers to motivate him to achieve higher levels of performance in attaining
our corporate goals and reward him for such performance. We determine
the amount of any such incentive bonuses we pay our named executive officers
employed by us on a year-end discretionary evaluation of each such officer’s
responsibility, performance, attitude and potential. The amount of
the incentive bonus is also influenced by the amount of the named executive
officer’s base salary and prior year incentive bonus as well as our financial
performance. We based our award of incentive bonuses for each year
primarily upon the chairman of the board’s recommendation regarding the chief
executive officer, the chief executive officer’s recommendations regarding the
other named executive officers employed by us and the determinations of our
management development and compensation committee, which may take such action,
including modifications to the recommendations, as it deems
appropriate. No specific overall performance measures were utilized
and there is no specific measure of, or formula based upon, our financial
performance that was utilized in determining an employed named executive
officer’s bonus, although we did consider our financial performance as one
factor in determining such bonus. Additionally, there is no specific
weighing of factors considered in the determination of incentive bonuses paid to
these executive officers.
We
approved discretionary incentive bonuses for our employed named executive
officers in the last three years as a percentage of the officer’s base salary as
follows.
|
Discretionary
Incentive Bonuses as a Percentage of Base Salary for Years in which the
Recipient was an Executive Officer of CompX
|
|||
|
Named
Executive Officer
|
2008
(1)
|
2007
(2)
|
2006
(2)
|
|
David
A.
Bowers
|
0%
|
100%
|
100%
|
|
Corey
J.
Boland
|
62%
|
(3)
|
(3)
|
|
Scott
C.
James
|
62%
|
100%
|
100%
|
|
(1)
|
These
bonuses were approved by our management development and compensation
committee in the first quarter of 2009 and paid in 2009 for performance in
2008.
|
|
(2)
|
These
bonuses were approved by our management development and compensation
committee in the fourth quarter of the year and paid in that
year.
|
|
(3)
|
Mr.
Boland was not an executive officer of ours in these
years.
|
The
decline in the 2008 discretionary incentive bonuses as a percentage of base
salary reflects our 2008 financial performance. In considering the
amount of the bonuses, management recommended, and our management development
and compensation committee considered, among other things, that we achieved 2008
operating income margins of greater than 10% in our two largest divisions in
difficult economic times. These discretionary incentive bonuses are
disclosed in the bonus column in the Summary Compensation table in this proxy
statement.
Defined Contribution
Plans. We pay discretionary annual contributions to the CompX
Capital Accumulation Pension Plan, a profit sharing defined contribution plan,
and the CompX Contributory Retirement Plan, a 401(k) defined contribution
plan. Participants of these plans are employees of certain of our
domestic operations. In March of each year, upon the recommendation
of our chief executive officer and the approval of our management development
and compensation committee, we contributed for the plan year that ended on
December 31 of the prior year, subject to certain limitations under the
respective plans and the U.S. Internal Revenue Code of 1986:
|
·
|
to
the Capital Accumulation Pension Plan for each of the last three plan
years, 7.25% of that year’s earnings before taxes of our National Lock and
Timberline units for 2007 and 2006 and our CompX security products
division and Livorsi marine components unit for 2008 (with certain
adjustments); and
|
|
·
|
to
our 401(k) plan for each of the last three plan years, a matching
contribution of 5% of the earnings before taxes of the participant’s
business unit up to 100% of the participant’s eligible
earnings.
|
Each of
Messrs. Bowers and James received such contributions, which are disclosed in his
all other compensation column in the Summary Compensation table in this proxy
statement. For each of the 2008, 2007 and 2006 plan years, the
committee approved a total contribution for all of the participants in the
Capital Accumulation Pension Plan and the 401(k) Plan of approximately $1.6
million, $1.9 million and $1.8 million, respectively, subject to certain
limitations of the Internal Revenue Code and the respective plans.
We also
contributed annually to Mr. Boland’s account under the Registered Pension Plan
for Employees of Waterloo Furniture Components Ltd., a defined contribution plan
sponsored by our Canadian subsidiary. The amount of the contribution
is set by Canadian law based on Mr. Boland’s annual cash
compensation. The contributions we made to Mr. Boland under this plan
for the 2008 plan year is included in his all other compensation column in the
Summary Compensation table in this proxy statement.
Equity-Based
Compensation. Prior to 2006, we decided to forego the grant of
any equity compensation to our employees, although we continue to grant annual
awards of stock to our nonemployee directors as a portion of their annual
retainers. We also do not have any security ownership requirements or
guidelines for our management or directors. We do not currently
anticipate any equity-based compensation will be granted in 2009, other than
annual grants of stock to our nonemployee directors. See the Director
Compensation section in this proxy statement for a discussion of these annual
grants. The dollar amount for option awards appearing in the Summary
Compensation table represents the expense or income we recognized for financial
statement reporting purposes in each of the last three years for stock options
to purchase shares of our class A common stock, which stock options were granted
prior to 2006.
Compensation of our Named Executive
Officers Employed by Contran. For each of the last three
years, we paid Contran a fee for services provided pursuant to our ISA with
Contran, which fee was approved by our independent directors after receiving the
recommendation of our management development and compensation
committee. Such services provided under this ISA included the
services of the following executive officers of ours:
|
Name
|
Positions
with CompX
|
|
Glenn
R. Simmons
|
Chairman
of the Board
|
|
Darryl
R. Halbert
|
Vice
President, Chief Financial Officer and Controller
|
|
J.
Mark Hollingsworth
|
Vice
President and General Counsel
|
|
Kelly
D. Luttmer
|
Vice
President and Tax Director
|
The
nature of the duties of each of our named executive officers who are employees
of Contran are consistent with the duties normally associated with the officer
titles and positions such officer holds with us. Other than Mr.
Halbert, each of these persons also serves as an executive officer of
Contran.
The
charge under this ISA reimburses Contran for its cost of employing the personnel
who provide the services by allocating such cost to us based on the estimated
time such personnel were expected to devote to us over the year. The
amount of the fee we paid for each year under this ISA for a person who provided
services to us represents, in management’s view, the reasonable equivalent of
“compensation” for such services. See the Intercorporate Services
Agreements part of the Certain Relationships and Transactions section of this
proxy statement for the aggregate amount we paid to Contran in 2008 under this
ISA. Under the various ISAs among Contran and its subsidiaries, we
share the cost of the employment of Messrs. Glenn Simmons and Hollingsworth and
Ms. Luttmer with Contran and certain of its other publicly held
subsidiaries. Mr. Halbert, however, provides all of his services to
us and no other unconsolidated affiliate of ours. Therefore, the
portion of the charge under this ISA related to his services represents a full
2,080-hour year for his services for each reported year. For Mr.
Glenn Simmons, the portion of the annual charge we paid in 2008 to Contran under
this ISA attributable to his services and the amount we paid for his director
services is set forth in the 2008 Director Compensation table in this proxy
statement. For Mr. Halbert, the portion of the annual charge we paid
in each reported year to Contran under this ISA attributable to his services is
set forth in his salary column in the Summary Compensation table in this proxy
statement. Mr. Hollingsworth became an executive officer of ours in
2007. Accordingly, only the 2007 and 2008 charges to us under this
ISA attributable to his services are set forth in his salary column in the
Summary Compensation table in this proxy statement. For Ms. Luttmer,
the portion of the annual charge we paid for each of the last three years to
Contran under this ISA attributable to her services was less than the SEC
disclosure threshold. The amount charged under the ISA is not
dependent upon our financial performance.
We
believe the cost of the services received under the ISA with Contran, after
considering the quality of the services received, is fair to us and is no less
favorable to us than we could otherwise obtain from an unrelated third party for
comparable services, based solely on our collective business judgment and
experience without performing any independent market research.
In the
last quarter of the prior year and the early part of each current year,
Contran’s senior management, including certain of our named executive officers,
estimated the number of hours (out of a standard 2,080-hour year) that each
Contran employee, including our named executive officers employed by Contran,
was expected to devote in such current year to Contran and its subsidiaries,
including us. Contran’s senior management then allocated Contran’s
cost of employing each of its employees among Contran and its various
subsidiaries based on the ratio of the estimated hours of service devoted to
each company and the total number of standard hours in a year. The
cost of each officer’s services that is allocated for each of the last three
years was the sum of the following:
|
·
|
the
annualized base salary of such officer at the beginning of the
year;
|
|
·
|
the
bonus Contran paid or accrued for such officer (other than bonuses for
specific matters) in the prior year, which served as a reasonable
approximation of the bonus that may be paid or accrued in the current year
for such officer; and
|
|
·
|
Contran’s
portion of the social security and medicare taxes on such base salary and
an estimated overhead factor (17% for 2008 as compared to 19% for 2007 and
21% for 2006) applied to the base salary for the cost of medical and life
insurance benefits, unemployment taxes, disability insurance, defined
benefit and defined contribution plan benefits, professional education and
licensing and costs of providing an office, equipment and supplies related
to the provision of such services.
|
The
overhead factor declined in 2007 as compared to 2006, and further declined in
2008 as compared to 2007, in each case as a result of Contran achieving some
economies of scale and being able to spread the fixed costs included in
determining the overhead factor over a greater number of employees providing
services under various ISAs. Contran’s senior management subsequently
made such adjustments to the details of the proposed ISA charge as they deemed
necessary for accuracy, overall reasonableness and fairness to us.
In the
first quarter of each year, the proposed charge for that year under our ISA with
Contran was presented to our management development and compensation committee
to determine whether the committee would recommend that our board of directors
approve the ISA charge. Among other things during such presentation,
the committee was informed of:
|
·
|
the
quality of the services Contran provides to us, including the quality of
the services certain of our executive officers provide to
us;
|
|
·
|
the
$1.0 million charge to us for the services of Harold C. Simmons for his
consultation and advice to our chief executive officer regarding major
strategic corporate matters;
|
|
·
|
the
comparison of the ISA charge and number of full-time equivalent employees
reflected in the charge by department for the prior year and proposed for
the current year;
|
|
·
|
the
comparison of the prior year and proposed current year charges by
department and in total and such amounts as a percentage of Contran’s
similarly calculated costs for its departments and in total for those
years; and
|
|
·
|
the
comparison of the prior year and proposed current year average hourly
rate.
|
In
determining whether to recommend that the board of directors approve the
proposed ISA fee, the management development and compensation committee
considers the three elements of Contran’s cost of employing the personnel who
provide services to us, including the cost of employing our named executive
officers, in the aggregate and not individually. After such
presentations and following further discussion and review, our management
development and compensation committee recommended that our board of directors
approve the proposed ISA fee after concluding that:
|
·
|
the
cost to employ the additional personnel necessary to provide the quality
of the services provided by Contran would exceed the proposed aggregate
fee to be charged by Contran to us under this ISA;
and
|
|
·
|
the
cost for such services would be no less favorable than could otherwise be
obtained from an unrelated third party for comparable
services.
|
In
reaching its recommendation, our management development and compensation
committee did not review:
|
·
|
any
ISA charge from Contran to any other publicly held parent or sister
company because such charge was separately reviewed by the management
development and compensation committee of the applicable company;
and
|
|
·
|
the
compensation policies of Contran
because:
|
|
o
|
each
of our named executive officers, other than Mr. Halbert, provides services
to many companies related to Contran, including Contran
itself;
|
|
o
|
the
fee we pay to Contran under the ISA each year does not represent all of
Contran’s cost of employing each of such named executive
officers;
|
|
o
|
Contran
and these other companies related to Contran absorb the remaining amount
of Contran’s cost of employing each of such named executive officers;
and
|
|
o
|
the
members of our management development and compensation committee consider
the other factors discussed above in determining whether to recommend that
the proposed ISA fee for each year be approved by the full board of
directors.
|
Based on
the recommendations of our committee, our independent directors approved the
proposed annual ISA charge effective January 1st of each
year, with our other directors abstaining.
For
financial reporting and income tax purposes, the ISA fee is expensed as incurred
on a quarterly basis. Contran has implemented a limit of $1.0 million
on any individual’s charge to a publicly held company in order to enhance the
deductibility by the company of the charge for tax purposes under Section 162(m)
of the Internal Revenue Code of 1986, if such section were somehow to be deemed
applicable. Section 162(m) generally disallows a tax deduction to
publicly held companies for non-performance based compensation over $1.0 million
paid to the company’s chief executive officer and four other most highly
compensated executive officers.
Deductibility of
Compensation. It is our general policy to structure the
performance-based portion of the compensation of our executive officers in a
manner that enhances our ability to deduct fully such compensation under Section
162(m) of the Internal Revenue Code.
Compensation
Committee Report. The management development and compensation
committee has reviewed with management the Compensation Discussion and Analysis
section in this proxy statement. Based on the committee’s review and
a discussion with management, the committee recommended to the board of
directors that our compensation discussion and analysis be included in this
proxy statement.
The
following individuals, in the capacities indicated, hereby submit the foregoing
report.
|
Paul
M. Bass, Jr.
Chairman
of our Management Development and Compensation Committee
|
Ann
Manix
Member
of our Management Development and Compensation
Committee
|
Summary of Cash
and Certain Other Compensation of Executive Officers. The
Summary Compensation table below provides information concerning compensation we
and our subsidiaries paid or accrued for services rendered during the last three
years by our chief executive officer, chief financial officer and each of the
three other most highly compensated individuals with compensation over $100,000
(in certain instances, based on ISA charges to us) who were our executive
officers at December 31, 2008. Messrs. Halbert and Hollingsworth
were employees of Contran for the last three years and provided their services
to us and our subsidiaries pursuant to our ISA with Contran. For a
discussion of this ISA, see the Intercorporate Services Agreements part of the
Certain Relationships and Transactions section of this proxy
statement.
2008 SUMMARY COMPENSATION TABLE
(1)
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Option
Awards (2)
|
All
Other Compensation
|
Total
|
||||
|
David
A.
Bowers
|
2008
|
$379,518
|
$ -0-
|
$ -0-
|
$33,098
|
(3)
|
$412,616
|
|||
|
Vice
Chairman of the Board,
|
2007
|
364,751
|
365,000
|
-0-
|
26,848
|
(3)
|
756,599
|
|||
|
President
and Chief
|
2006
|
349,627
|
350,000
|
29,520
|
32,389
|
(3)
|
761,536
|
|||
|
Executive
Officer
|
||||||||||
|
Darryl
R.
Halbert
|
2008
|
541,600
|
(4)
|
-0-
|
-0-
|
-0-
|
541,600
|
|||
|
Vice
President, Chief Financial
|
2007
|
519,500
|
(4)
|
-0-
|
-0-
|
-0-
|
519,500
|
|||
|
Officer
and Controller
|
2006
|
481,000
|
(4)
|
-0-
|
9,580
|
-0-
|
490,580
|
|||
|
Scott
C.
James
|
2008
|
257,794
|
160,000
|
-0-
|
33,098
|
(3)
|
450,892
|
|||
|
Vice
President
|
2007
|
247,695
|
248,000
|
-0-
|
26,848
|
(3)
|
522,543
|
|||
|
2006
|
229,713
|
230,000
|
19,680
|
32,389
|
(3)
|
511,782
|
||||
|
Corey
J. Boland
(5)
|
2008
|
142,426
|
94,532
|
-0-
|
4,596
|
(6)
|
241,554
|
|||
|
Vice
President
|
||||||||||
|
J.
Mark Hollingsworth (7)
|
2008
|
118,800
|
(4)
|
-0-
|
-0-
|
-0-
|
118,800
|
|||
|
Vice
President and
|
2007
|
85,800
|
(4)
|
-0-
|
-0-
|
-0-
|
85,800
|
|||
|
General
Counsel
|
||||||||||
——————————
|
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
|
(2)
|
Represents
the expense we recognized for financial statement reporting purposes in
2006 for stock options to purchase shares of our class A common stock we
granted to this named executive officer prior to 2003 under our 1997
Long-Term Incentive Plan. This expense was determined by
applying FAS 123R (disregarding any estimate of forfeitures related to
service based vesting conditions) and calculated using the Black-Scholes
stock option valuation model with the following weighted average
assumptions:
|
|
·
|
a
stock price volatility of 37% to
45%;
|
|
·
|
risk-free
rates of return of 5.1% to 6.9%;
|
|
·
|
dividend
yields of nil to 5.0%; and
|
|
·
|
an
expected term of ten years.
|
|
(3)
|
All
other compensation for Messrs. Bowers and James consisted of our matching
contributions to their accounts under our 401(k) Plan and our
contributions to their accounts under the CompX Capital Accumulation
Pension Plan, a defined contribution plan, as
follows:
|
|
Named
Executive Officer
|
Year
|
Employer’s
401(k) Plan Matching
Contributions
|
Employer’s
Capital
Accumulation Pension Plan
Contributions
|
Total
|
|||||||||
|
David
A.
Bowers
|
2008
|
$ | 11,406 | $ | 21,692 | $ | 33,098 | ||||||
|
2007
|
6,092 | 20,756 | 26,848 | ||||||||||
|
2006
|
11,611 | 20,778 | 32,389 | ||||||||||
|
Scott
C.
James
|
2008
|
11,406 | 21,692 | 33,098 | |||||||||
|
2007
|
6,092 | 20,756 | 26,848 | ||||||||||
|
2006
|
11,611 | 20,778 | 32,389 | ||||||||||
See the
discussion of our retirement plan contributions in the Compensation Discussion
and Analysis section of this proxy statement.
|
(4)
|
Messrs.
Halbert and Hollingsworth are employees of Contran and provide their
executive officer services to us pursuant to our ISA with
Contran. The amount shown in the table as salary compensation
for them represents the portion of the fees we paid to Contran pursuant to
the ISA attributable to the services each of them rendered to
us. As further discussed in the Compensation Discussion and
Analysis section of this proxy statement, the ISA charges disclosed for
Contran employees who perform executive officer services to us and our
subsidiaries are based on the estimated hours such individual spends
fulfilling such duties.
|
|
(5)
|
Mr.
Boland was elected one of our executive officers effective May 7,
2008. Waterloo paid Mr. Boland his salary, cash bonus,
contributions to his account under Waterloo’s defined contribution plan
and life insurance premiums in Canadian dollars. We report
these amounts in the table above in U.S. dollars based on an average
exchange rate for 2008 of CN$0.94532 per
US$1.00.
|
|
(6)
|
As
shown below, all other compensation for Mr. Boland consisted of the
following payments:
|
|
·
|
Waterloo’s
contribution to Mr. Boland’s account under the Registered Pension Plan for
Employees of Waterloo Furniture Components Ltd., a defined contribution
plan, for the 2008 plan year; and
|
|
·
|
life
insurance premiums for his benefit.
|
|
Named
Executive Officer
|
Year
|
Waterloo Registered Pension
Plan Contributions
|
Life
Insurance Premiums (a)
|
Total
|
|
Corey
J.
Boland
|
2008
|
$3,854
|
$742
|
$4,596
|
|
(7)
|
Mr.
Hollingsworth was elected one or our executive officers effective May 30,
2007.
|
2008 Grants of
Plan-Based Awards. In 2008, we did not grant any stock, stock
options or other plan-based awards to our named executive officers.
Outstanding
Equity Awards at December 31, 2008. The following table
provides information with respect to the outstanding stock options to purchase
shares of our class A common stock held by our named executive officers as of
December 31, 2008.
OUTSTANDING EQUITY AWARDS AT
DECEMBER 31, 2008 (1)
|
Option
Awards
|
|||||||||||||
|
Name
|
Number
of Shares
Underlying
Unexercised
Options at
December 31,
2008 (#) (2)
|
Option
Exercise Price
|
Option
Expiration Date
|
||||||||||
|
Exercisable
|
Unexercisable
|
||||||||||||
|
David
A.
Bowers
|
15,000 | -0- | $ | 17.94 |
02/17/09
|
||||||||
| 25,000 | -0- | 18.38 |
02/10/10
|
||||||||||
| 40,000 | |||||||||||||
——————————
|
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
|
(2)
|
These
stock options vested at a rate of 20% on each of the first five
anniversary dates of the date of grant of the stock option, which date of
grant was the tenth anniversary prior to the expiration date of the stock
option.
|
Option Exercises
and Stock Vested. During 2008, no named executive officer
exercised any stock options or had any stock awards vest.
Pension
Benefits. We do not have any defined benefit pension plans in
which our named executive officers participate.
Nonqualified
Deferred Compensation. We do not owe any nonqualified deferred
compensation to our named executive officers.
Director
Compensation. Our directors who are not employees of us or our
subsidiaries are entitled to receive compensation for their services as
directors. Directors who received such compensation in 2008 were Paul
M. Bass, Jr., Norman S. Edelcup, Edward J. Hardin, Ann Manix, Glenn R. Simmons
and Steven L. Watson.
Our
nonemployee directors receive an annual retainer of $20,000, paid in quarterly
installments, plus a fee of $1,000 per day for attendance at meetings of the
board of directors or its committees and at a daily rate ($125 per hour) for
other services rendered on behalf of our board of directors or its
committees. In addition to the annual retainers for service on the
board of directors, the chairman of our audit committee and any member of our
audit committee whom the board identified as an “audit committee financial
expert” for purposes of the annual proxy statement receive an annual retainer of
$20,000, paid in quarterly installments (provided that if one person serves in
both capacities only one such retainer is paid), and other members of our audit
committee receive an annual retainer of $10,000, paid in quarterly installments,
for their service on the audit committee. Members of our management
development and compensation committee also receive an annual retainer of
$2,000, paid in quarterly installments, for their service on that
committee. If a nonemployee director dies while serving on our board
of directors, his designated beneficiary or estate will be entitled to receive a
death benefit equal to the annual retainer then in effect. We
reimburse our nonemployee directors for reasonable expenses incurred in
attending meetings and in the performance of other services rendered on behalf
of our board of directors or its committees.
On the
day of each annual stockholder meeting, each of our nonemployee directors
elected on that date receives a grant of shares of our class A common stock as
determined by the following formula based on the closing price of a share of our
class A common stock on the date of such meeting.
|
Range
of Closing Price Per
Share
on the Date of Grant
|
Shares
of Class A Common
Stock
to Be Granted
|
|
Under
$5.00
|
2,000
|
|
$5.00
to $9.99
|
1,500
|
|
$10.00
to $20.00
|
1,000
|
|
Over
$20.00
|
500
|
The
following table provides information with respect to compensation our
nonemployee directors earned or received for their 2008 director services
provided to us.
2008 DIRECTOR COMPENSATION
(1)
|
Name
|
Fees
Earned or Paid in Cash (2)
|
Stock
Awards (3)
|
All
Other Compensation (4)
|
Total
|
||||||||||||
|
Paul
M. Bass, Jr.
(5)
|
$ | 38,000 | $ | 9,060 | $ | -0- | $ | 47,060 | ||||||||
|
Norman
S.
Edelcup
|
46,000 | 9,060 | -0- | 55,060 | ||||||||||||
|
Edward
J. Hardin
(5)
|
24,000 | 9,060 | -0- | 33,060 | ||||||||||||
|
Ann
Manix
(5)
|
39,000 | 9,060 | -0- | 48,060 | ||||||||||||
|
Glenn
R. Simmons
(5)
|
23,000 | 9,060 | 37,000 | 69,060 | ||||||||||||
|
Steven
L. Watson
(5)
|
23,000 | 9,060 | 81,100 | 113,160 | ||||||||||||
——————————
|
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
|
(2)
|
Represents
retainers and meeting fees the director received or earned for director
services he provided to us in 2008.
|
|
(3)
|
Represents
the value of 1,500 shares of our class A common stock we granted to each
of these directors. For the purposes of this table and financial statement
reporting, these stock awards were valued at the closing price per share
of such shares on their date of grant, which closing price and date of
grant were $6.04 and May 28, 2008,
respectively.
|
|
(4)
|
Represents
the portion of the annual charge we paid in 2008 to Contran under our ISA
with Contran attributable to the nondirector services such person provided
to us under the ISA.
|
|
(5)
|
As
of December 31, 2008, the following nonemployee directors held the
following stock options exercisable for shares of our class A common
stock, all of which stock options were granted for director
services:
|
|
Name
|
Aggregate
Number of Shares Underlying Outstanding Stock Options Held by Such
Director at December 31, 2008
|
|
Paul M.
Bass,
Jr.
|
8,000
|
|
Edward
J.
Hardin
|
8,000
|
|
Ann
Manix
|
8,000
|
|
Glenn
R.
Simmons
|
6,000
|
|
Steven
L.
Watson
|
6,000
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section
16(a) of the Securities Exchange Act requires our executive officers, directors
and persons who own more than 10% of a registered class of our equity securities
to file reports of ownership with the SEC, the NYSE and us. Based
solely on the review of the copies of such forms and representations by certain
reporting persons, we believe that for 2008 our executive officers, directors
and 10% stockholders complied with all applicable filing requirements under
section 16(a), other than a Form 4 Harold C. Simmons filed on October 22, 2008
after the required filing date that reported two purchases of shares of our
class A common stock on October 14, 2008.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Related Party
Transaction Policy. As set forth in our code of business
conduct and ethics, from time to time, we engage in transactions with affiliated
companies. In addition, certain of our executive officers and
directors serve as executive officers and directors of affiliated
companies. With respect to transactions between or involving us and
one or more of our affiliates, it is not a violation of the code if the
transaction, in our opinion, is no less favorable to us than could be obtained
from unrelated parties, or the transaction, in the absence of stockholder
ratification or approval by our independent directors, is fair to all companies
involved. Furthermore, the code provides that:
|
·
|
directors
and officers owe a duty to us to advance our legitimate interests when the
opportunity to do so arises; and
|
|
·
|
they
are prohibited from (a) taking for themselves personally opportunities
that properly belong to us or are discovered through the use of our
property, information or position; (b) using corporate property,
information or position for improper personal gain; and (c) competing with
our interests.
|
Our
executive officers are responsible for applying this policy to related
parties. No specific procedures are in place, however, that govern
the treatment of transactions among us and our related entities, although we and
such entities may implement specific procedures as appropriate for particular
transactions. Provided, in our judgment, the standard set forth in
the code of business conduct and ethics is satisfied, we believe, given the
number of companies affiliated with Contran, that related party transactions
with our affiliates, in many instances (such as achieving economies of scale),
are in our best interest. In certain instances, our executive
officers may seek the approval or ratification of such transactions by our
independent directors, but there is no quantified threshold for seeking this
approval.
Relationships
with Related Parties. As set forth
under the Security Ownership section of this proxy statement, Harold C. Simmons,
through Contran, may be deemed to control us. We and other entities
that may be deemed to be controlled by or related to Mr. Simmons sometimes
engage in the following:
|
·
|
intercorporate
transactions, such as guarantees, management, expense and insurance
sharing 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
|
|
·
|
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 an equity interest in another
related party.
|
We
periodically consider, review and evaluate and understand that Contran and
related entities periodically consider, review and evaluate such
transactions. Depending upon the business, tax and other objectives
then relevant and restrictions under indentures and other agreements, it is
possible that we might be a party to one or more of such transactions in the
future. In connection with these activities, we may consider issuing
additional equity securities or incurring additional
indebtedness. Our acquisition activities have in the past and may in
the future include participation in acquisition or restructuring activities
conducted by other companies that may be deemed to be related to Harold C.
Simmons.
Certain
directors or executive officers of Contran, Keystone, Kronos Worldwide, NL,
TIMET or Valhi also serve as our directors or executive
officers. Such relationships may lead to possible conflicts of
interest. These possible conflicts of interest may arise under
circumstances in which such companies may have adverse interests. In
such an event, we implement such procedures as appropriate for the particular
transaction.
Intercorporate
Services Agreements. As
discussed elsewhere in this proxy statement, we and certain related companies
have entered into ISAs. Under the ISAs, employees of one company
provide certain services, including executive officer services, to the other
company on a fixed fee basis. The services rendered under the ISAs
may include executive, management, financial, internal audit, accounting, tax,
legal, insurance, real estate management, environmental management, risk
management, treasury, aviation, human resources, technical, consulting,
administrative, office, occupancy and other services as required from time to
time in the ordinary course of the recipient’s business. The fees
paid pursuant to the ISAs are generally based upon an estimate of the time
devoted by employees of the provider of the services to the business of the
recipient and the employer’s cost related to such employees, which includes the
employees’ cash compensation and an overhead component that takes into account
other employment related costs. Generally, each of the ISAs renews on
a quarterly basis, subject to the termination by either party pursuant to a
written notice delivered 30 days prior to the start of the next
quarter. Because of the number of companies related to Contran and
us, we believe we benefit from cost savings and economies of scale gained by not
having certain management, financial, legal, tax, real estate and administrative
staffs duplicated at each company, thus allowing certain individuals to provide
services to multiple companies. With respect to a publicly held
company that is a party to an ISA, the ISA and the related aggregate annual
charge are approved by the independent directors of the company after receiving
a recommendation from the company’s management development and compensation
committee. See the Compensation of our
Named Executive Officers Employed by Contran part of the Compensation Discussion
and Analysis section in this proxy statement for a more detailed discussion on
the procedures and considerations taken by our independent directors in
approving the aggregate 2008 ISA fee charged by Contran to us.
The
services of Harold C. Simmons provided to us under our ISA with Contran include
consultation and advice to our chief executive officer and our other senior
management concerning major strategic corporate matters. Such matters
may include acquisitions or dispositions of certain assets (including
investments) or operations, strategic business plans, business reorganizations
and restructurings, financing and other capital raising initiatives, legal and
litigation strategies, tax planning strategies and other matters.
In 2008,
we paid Contran fees of $3.1 million for its services under the ISA between
Contran and us, including $1.0 million for the services of Harold C.
Simmons. In 2009, we expect to pay Contran fees of $3.2 million for
its services under this ISA, including $1.0 million for the services of Harold
C. Simmons. We also pay director fees and expenses directly to
Messrs. Glenn Simmons and Watson for their services as our
directors.
Insurance
Matters. We and Contran participate in a combined risk
management program. Pursuant to the program, Contran and certain of
its subsidiaries and related entities, including us and certain of our
subsidiaries and related entities, purchase certain insurance policies as a
group, with the costs of the jointly owned policies being apportioned among the
participating companies. Tall Pines and EWI provide for or broker
these insurance policies. Tall Pines is a captive insurance company
wholly owned by Valhi, and EWI is a reinsurance brokerage and risk management
company wholly owned by NL. Consistent with insurance industry
practices, Tall Pines and EWI receive commissions from insurance and reinsurance
underwriters and/or assess fees for the policies that they provide or
broker.
With
respect to certain of such jointly owned insurance policies, it is possible that
unusually large losses incurred by one or more insureds during a given policy
period could leave the other participating companies without adequate coverage
under that policy for the balance of the policy period. As a result,
Contran and certain of its subsidiaries or related companies, including us, have
entered into a loss sharing agreement under which any uninsured loss is shared
by those companies who have submitted claims under the relevant
policy. We believe the benefits in the form of reduced premiums and
broader coverage associated with the group coverage for such policies justify
the risks associated with the potential for any uninsured loss.
During
2008, we paid premiums of approximately $1.2 million for insurance policies Tall
Pines provided or EWI brokered. This amount principally included
payments for reinsurance and insurance premiums paid to unrelated third parties,
but also included commissions paid to Tall Pines and EWI. Tall Pines
purchases reinsurance for substantially all of the risks it
underwrites. In our opinion, the amounts we paid for these insurance
policies and the allocation among us and our related entities of these insurance
premiums are reasonable and are less than the costs we would incur if such
policies were obtained or brokered through third parties. We expect
that these relationships with Tall Pines and EWI will continue in
2009. Because we believe there is no conflict of interest regarding
our participation in the combined risk management program, our audit committee
received a report regarding this program but our independent directors were not
asked to approve it.
Tax
Matters. We and our qualifying subsidiaries are members of the
consolidated U.S. federal tax return of which Contran is the parent company,
which we refer to as the “Contran Tax Group.” As a member of the
Contran Tax Group and pursuant to certain tax sharing agreements or policies,
each of the members and its qualifying subsidiaries compute provisions for U.S.
income taxes on a separate company basis using tax elections made by
Contran. Pursuant to the tax sharing agreements or policies and using
tax elections made by Contran, each of the parties makes payments or receives
payments in amounts it would have paid to or received from the U.S. Internal
Revenue Service had it not been a member of the Contran Tax Group but instead
had been a separate taxpayer. Refunds are generally limited to
amounts previously paid under the respective tax sharing agreement or
policy. We and our qualifying subsidiaries are also a part of
consolidated tax returns filed by Contran in certain U.S. state
jurisdictions. The terms of the applicable tax sharing agreements or
policies also apply to state payments to these jurisdictions.
Under
applicable law, we, as well as every other member of the Contran Tax Group, are
each jointly and severally liable for the aggregate federal income tax liability
of Contran and the other companies included in the group for all periods in
which we are included in the group. Contran’s policy, however, is to
indemnify us for any liability for income taxes of the Contran Tax Group in
excess of our tax liability previously computed and paid by us in accordance
with the tax allocation policy.
Under
certain circumstances, tax regulations could require Contran to treat items
differently than we would have treated them on a stand alone
basis. In such instances, accounting principles generally accepted in
the United States of America require us to conform to Contran’s tax
elections. In 2008, pursuant to our tax sharing agreement and
policies with NL, we made net cash payments to NL of approximately $5.2
million. Because the calculation of our tax payments or refunds is
determined pursuant to applicable tax law, our independent directors were not
asked to approve our tax agreement or policies or such payments or
refunds.
Loan from
TFMC. In October 2007, we on a net basis purchased and/or
cancelled approximately 2.7 million shares of our class A common stock formerly
held directly or indirectly by TFMC for $19.50 per share paid in the form of a
consolidated promissory note pursuant to a stock purchase agreement between us
and TFMC and a merger agreement among CompX Group, Inc., our former parent in
which NL and TFMC were the sole stockholders, and CompX KDL LLC, our former
wholly owned subsidiary. The price per share was determined based on
our open market purchases of our class A common stock around the time of the
approval of these transactions. The stock purchase agreement and the
merger agreement were approved by the independent directors of us and
TIMET.
Pursuant
to such transactions, among other things, we issued a consolidated unsecured
term loan promissory note to TFMC in the original principal amount of
$52,580,190 that:
|
·
|
matures
on September 30, 2014;
|
|
·
|
bears
interest at an annual rate of LIBOR plus
1.00%;
|
|
·
|
requires
quarterly principal payments of $250,000 beginning on September 30,
2008;
|
|
·
|
does
not have prepayment penalties; and
|
|
·
|
is
subordinated to the our credit agreement with Wachovia Bank, National
Association and certain other
banks.
|
During
2008, the largest amount of principal that we owed to TFMC was $50.0
million. At March 25, 2009, we owed TFMC under this note $43.0
million of outstanding principal. In 2008, we paid TFMC approximately
$7.0 million of principal and $2.2 million of interest on the consolidated
promissory note.
Law Firm
Relationship. Contran and its related entities, including us,
engaged and paid in 2008 to Rogers & Hardin LLP, a law firm of which our
director Edward J. Hardin is a partner, in the aggregate approximately $43,100
in fees and expenses for legal services Rogers & Hardin LLP rendered to such
entities. We presently expect, and understand that Contran and its
other affiliates presently expect, to continue their relationship with Rogers
& Hardin LLP in 2009.
Simmons Family
Matters. In addition to the services he provides under our ISA
with Contran as discussed under the Intercorporate Services Agreements section
above, certain family members of Harold C. Simmons also provide services to us
pursuant to this ISA. In 2008, L. Andrew Fleck (a step-son of Harold
C. Simmons) provided certain real property management services to us pursuant to
this ISA. The portion of the fees we paid to Contran in 2008 pursuant
to this ISA attributable to the services of Mr. Fleck was not enough to require
quantification under SEC rules. See the Intercorporate Services
Agreements section above for a more detailed discussion on the procedures and
considerations taken by our independent directors in approving the aggregate
2008 ISA fee Contran charged us. As disclosed in the Director
Compensation table in this proxy statement, Mr. Glenn Simmons (a brother of
Harold Simmons) also provided us nondirector services under our ISA with Contran
and received compensation in cash and stock from us for his services as a
director for 2008. We expect similar compensation expenses and ISA
charges regarding Messrs. Glenn Simmons and Fleck for 2009.
AUDIT COMMITTEE REPORT
Our audit
committee of the board of directors is comprised of three directors and operates
under a written charter adopted by the board of directors. All
members of our audit committee meet the independence standards established by
the board of directors and the NYSE and promulgated by the SEC under the
Sarbanes-Oxley Act of 2002. The audit committee charter is available
on our website at www.compx.com under the
corporate section.
Our
management is responsible for, among other things, preparing our consolidated
financial statements in accordance with accounting principles generally accepted
in the United States of America, or “GAAP,” establishing and maintaining
internal control over financial reporting (as defined in Securities Exchange Act
Rule 13a-15(f)). Our independent registered public accounting firm is
responsible for auditing our consolidated financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States) and for expressing an opinion on the conformity of the financial
statements with GAAP. Our audit committee assists the board of
directors in fulfilling its responsibility to oversee management’s
implementation of our financial reporting process. In its oversight
role, our audit committee reviewed and discussed the audited financial
statements with management and with PwC, our independent registered public
accounting firm for 2008. Our audit committee also reviewed and
discussed our internal control over financial reporting with management and with
PwC.
Our audit
committee met with PwC and discussed any issues deemed significant by our
independent registered public accounting firm, including the matters required to
be discussed by the Statement on Auditing Standards No. 61, Communication with Audit Committee,
as amended, as adopted by the Public Company Accounting Oversight
Board. PwC has provided to our audit committee written disclosures
and the letter required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant’s communications
with the audit committee concerning independence, and our audit committee
discussed with PwC that firm’s independence. Our audit committee also
concluded that PwC’s provision of other permitted non-audit services to us and
our related entities is compatible with PwC’s independence.
Based
upon the foregoing considerations, our audit committee recommended to the board
of directors that our audited financial statements be included in our 2008
Annual Report on Form 10-K for filing with the SEC.
Members
of our audit committee of the board of directors respectfully submit the
foregoing report.
|
Norman
S. Edelcup
Chairman
of our Audit Committee
|
Paul
M. Bass, Jr.
Member
of our Audit Committee
|
Ann
Manix
Member
of our Audit Committee
|
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MATTERS
Independent
Registered Public Accounting Firm. PwC served as our
independent registered public accounting firm for the year ended
December 31, 2008. Our audit committee has appointed PwC to
review our quarterly unaudited condensed consolidated financial statements to be
included in our Quarterly Reports on Form 10-Q for the first quarter of
2009. We expect PwC will be considered for appointment
to:
|
·
|
review
our quarterly unaudited condensed consolidated financial statements to be
included in our Quarterly Reports on Form 10-Q for the second and third
quarters of 2009 and the first quarter of 2010;
and
|
|
·
|
audit
our annual consolidated financial statements and internal control over
financial reporting for the year ending December 31,
2009.
|
Representatives
of PwC are not expected to attend the annual meeting.
Fees Paid to
PricewaterhouseCoopers LLP. The following table shows the
aggregate fees that our audit committee has authorized and PwC has billed or is
expected to bill to us for services rendered for 2007 and
2008. Additional fees for 2008 may subsequently be authorized and
paid to PwC, in which case the amounts disclosed below for fees paid to PwC for
2008 would be adjusted to reflect such additional payments in our proxy
statement relating to next year’s annual stockholder meeting. In this
regard, the fees shown below for 2007 have been adjusted from amounts disclosed
in our proxy statement for last year’s annual stockholder meeting.
|
Type
of Fees
|
2007
|
2008
|
||||||
|
Audit
Fees
(1)
|
$ | 675,000 | $ | 693,600 | ||||
|
Audit-Related
Fees
(2)
|
7,500 | 6,600 | ||||||
|
Tax
Fees
(3)
|
10,400 | 14,000 | ||||||
|
All
Other
Fees
|
-0- | -0- | ||||||
|
Total
|
$ | 692,900 | $ | 714,200 | ||||
——————————
|
(1)
|
Fees
for the following services:
|
|
|
(a)
|
audits
of consolidated year-end financial statements and of internal control over
financial reporting for each year based on the scope required for our
parent companies to report on their internal control over financial
reporting;
|
|
|
(b)
|
reviews
of the unaudited quarterly financial statements appearing in Forms 10-Q
for each of the first three quarters of each
year;
|
|
|
(c)
|
consents
and/or assistance with registration statements filed with the
SEC;
|
|
|
(d)
|
normally
provided statutory or regulatory filings or engagements for each year;
and
|
|
|
(e)
|
the
estimated out-of-pocket costs PwC incurred in providing all of such
services, for which PwC is
reimbursed.
|
|
(2)
|
Fees
for assurance and related services reasonably related to the audit or
review of financial statements for each year. These services
included accounting consultations and attest services concerning financial
accounting and reporting standards and advice concerning internal control
over financial reporting.
|
|
(3)
|
Permitted
fees for tax compliance, tax advice and tax planning
services.
|
Preapproval
Policies and Procedures. For the purpose of maintaining the
independence of our independent registered public accounting firm, our audit
committee has adopted policies and procedures for the preapproval of audit and
other permitted services the firm provides to us or any of our
subsidiaries. We may not engage the firm to render any audit or
permitted non-audit service unless the service is approved in advance by our
audit committee pursuant to the committee’s amended and restated preapproval
policy. Pursuant to the policy:
|
·
|
the
committee must specifically preapprove, among other things, the engagement
of our independent registered public accounting firm for audits and
quarterly reviews of our financial statements, services associated with
certain regulatory filings, including the filing of registration
statements with the SEC, and services associated with potential business
acquisitions and dispositions involving us;
and
|
|
·
|
for
certain categories of other permitted services provided by our independent
registered public accounting firm, the committee may preapprove limits on
the aggregate fees in any calendar year without specific approval of the
service.
|
These
other permitted services include:
|
·
|
audit-related
services, such as certain consultations regarding accounting treatments or
interpretations and assistance in responding to certain SEC comment
letters;
|
|
·
|
audit-related
services, such as certain other consultations regarding accounting
treatments or interpretations, employee benefit plan audits, due diligence
and control reviews;
|
|
·
|
tax
services, such as tax compliance and consulting, transfer pricing, customs
and duties and expatriate tax services;
and
|
|
·
|
assistance
with corporate governance matters and filing documents in foreign
jurisdictions not involving the practice of
law.
|
The
policy also lists certain services for which the independent auditor is always
prohibited from providing to us under applicable requirements of the SEC or the
Public Company Accounting Oversight Board.
Pursuant
to the policy, our audit committee has delegated preapproval authority to the
chairman of the committee or his designee to approve any fees in excess of the
annual preapproved limits for these categories of other permitted services
provided by our independent registered public accounting firm. The
chairman must report any action taken pursuant to this delegated authority at
the next meeting of the committee.
For 2008,
our audit committee preapproved all PwC’s services provided to us or any of our
subsidiaries in compliance with our amended and restated preapproval policy
without the use of the SEC’s de minimis exception to such
preapproval requirement.
OTHER MATTERS
The board
of directors knows of no other business that will be presented for consideration
at the annual 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 reasonable
judgment.
2008 ANNUAL REPORT ON FORM 10-K
A copy of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2008
is included as part of the annual report mailed to our stockholders with this
proxy statement and may also be accessed on our website at www.compx.com.
ADDITIONAL COPIES
Pursuant
to an SEC rule concerning the delivery of annual reports and proxy statements, a
single set of these documents may be sent to any household at which two or more
stockholders reside if they appear to be members of the same
family. Each stockholder continues to receive a separate proxy
card. This procedure, referred to as householding, reduces the volume
of duplicate information stockholders receive and reduces mailing and printing
expenses. A number of brokerage firms have instituted
householding. Certain beneficial stockholders who share a single
address may have received a notice that only one annual report and proxy
statement would be sent to that address unless a stockholder at that address
gave contrary instructions. If, at any time, a stockholder who holds
shares through a broker no longer wishes to participate in householding and
would prefer to receive a separate proxy statement and related materials, or if
such stockholder currently receives multiple copies of the proxy statement and
related materials at his or her address and would like to request householding
of our communications, the stockholder should notify his or her
broker. Additionally, we will promptly deliver a separate copy of our
2008 annual report or this proxy statement to any stockholder at a shared
address to which a single copy of such documents was delivered, upon the written
or oral request of the stockholder.
To obtain
copies of our 2008 annual report or this proxy statement without charge, please
mail your request to the attention of A. Andrew R. Louis, corporate secretary,
at CompX International Inc., Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700,
Dallas, Texas 75240-2697, or call him at 972.233.1700.
CompX
International Inc.
Dallas,
Texas
April 24,
2009
CompX
International Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
Important Notice Regarding the
Availability of Proxy Materials for the
Annual
Stockholder Meeting to Be Held on May 27, 2009.
The proxy statement is available at www.compx.com/proxy and the annual report to
stockholders
(including CompX’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2008) is available at www.compx.com/annual.
▼ IF
YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD
ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE. ▼
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 27, 2009
The
undersigned hereby appoints David A. Bowers, Darryl R. Halbert 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 2009
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 Wednesday,
May 27, 2009, at 10:00 a.m. (local time), and at any adjournment or
postponement of the 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 card.
THIS
PROXY AUTHORIZATION MAY BE REVOKED AS SET FORTH IN THE PROXY STATEMENT THAT
ACCOMPANIED THIS PROXY CARD.
The
agents named on this proxy card, if this card is properly executed, will vote in
the manner directed on this card. If no direction is made, the agents
will vote “FOR” all nominees named on the reverse side of this card for election
as directors and, to the extent allowed by applicable law, in the discretion of
the agents 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 CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
SEE
REVERSE SIDE.
(Items to
be voted appear on reverse side.)
CompX
International Inc.
Electronic
Voting Instructions
You
can vote by Internet or telephone!
Available
24 hours a day, 7 days a week!
Instead
of mailing your proxy card, you may choose one of the two voting methods
outlined below to instruct how the agents named on this proxy card should vote
your shares.
VALIDATION
DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxy
instructions submitted by the Internet or telephone must be received by 1:00
a.m., Central Time, on May 27, 2009.
Vote
by Internet
|
·
|
Log
on to the Internet and go to
|
www.investorvote.com/cix
|
·
|
Follow
the steps outlined on the secured
website.
|
Vote
by telephone
|
·
|
Call
toll free 1-800-652-VOTE (8683) within the United States, Canada &
Puerto Rico any time on a touch tone telephone. There is NO CHARGE to you for the
call.
|
|
·
|
Follow
the instructions provided by the recorded
message.
|
|
Using
a black ink pen, mark your
votes with an X as
shown
in
x
this
example. Please do not write outside the designated areas.
|
|
Annual Meeting Proxy
Card
▼
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD
ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE. ▼
A Election of Directors – The Board of
Directors recommends a vote FOR the listed
nominees.
|
1.
|
Nominees:
|
|
For
|
Withhold
|
For
|
Withhold
|
For
|
Withhold
|
|||||
|
01
– Paul M. Bass, Jr.
|
¨
|
¨
|
02
– David A. Bowers
|
¨
|
¨
|
03
– Norman S. Edelcup
|
¨
|
¨
|
||
|
04
– Edward J. Hardin
|
¨
|
¨
|
05
– Ann Manix
|
¨
|
¨
|
06
– Glenn R. Simmons
|
¨
|
¨
|
||
|
07
– Steven L. Watson
|
¨
|
¨
|
|
2.
|
In
their discretion, the agents named on this proxy
card
|
are authorized to vote upon such other
business as may
properly come before the Meeting and
any adjournment
or postponement thereof.
B
Non-Voting
Items
Change of Address - Please
print new address below.
C
Authorized Signatures – This section
must be completed for your vote to be counted. – Date and Sign
Below
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.
|
Date
(mm/dd/yyyy) – Please print date below.
|
Signature
1 – Please keep signature within the box
|
Signature
2 – Please keep signature within the box
|
||
|
/ /
|