<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
/X/ Filed by Registrant
/ / Filed by a Party other than Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12 for:
MARSHALL INDUSTRIES
- - --------------------------------------------------------------------------------
Payment of Filing Fee (check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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:(1)
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
/ / 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:
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
MARSHALL INDUSTRIES
9320 TELSTAR AVENUE
EL MONTE, CALIFORNIA 91731-2895
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Marshall Industries will be held at
the office of the Company, 9320 Telstar Avenue, El Monte, California, on Monday,
October 24, 1994 at 9 a.m., local time, for the following purposes:
1. To amend the Articles of Incorporation of the Company to provide that
the number of directors shall be no less than seven (7) and no more than
thirteen (13).
2. To elect directors for the year. Gordon S. Marshall, Richard D. Bentley,
William Bone, Richard C. Colyear, Lathrop Hoffman, Raymond G. Rinehart,
Robert Rodin and Howard C. White have been nominated for election as
directors. Subject to approval of the proposal to amend the Articles of
Incorporation of the Company, Jose Menendez and Jean Fribourg have been
nominated to serve as directors.
3. To consider and act upon a proposal to ratify the appointment of Arthur
Andersen & Co. as the Company's independent auditors for the fiscal year
ending May 31, 1995.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on August 25, 1994 are
entitled to notice of, and to vote at, the meeting.
If you do not plan to attend personally, please promptly sign and return the
enclosed proxy in the accompanying envelope. Your proxy is solicited on behalf
of the management of the Company. It is necessary to have a majority of all
outstanding shares represented at the meeting in order to transact official
business. A proxy statement is set forth on the following pages.
By Order of the Board of Directors
GORDON S. MARSHALL
Chairman
9320 Telstar Avenue
El Monte, California 91731-2895
September 2, 1994
<PAGE>
MARSHALL INDUSTRIES
9320 TELSTAR AVENUE
EL MONTE, CALIFORNIA 91731-2895
PROXY STATEMENT
MAILED -- SEPTEMBER 2, 1994
The accompanying proxy is solicited on behalf of the management of Marshall
Industries for use at the Annual Meeting of Shareholders on October 24, 1994,
and the expense of such solicitation will be borne by the Company. Proxies
properly executed and received by the Company prior to the meeting, and not
revoked, will be voted.
A shareholder giving a proxy has the power to revoke it at any time prior to
its use by filing with the Secretary of the Company a written revocation or a
proxy bearing a later date, or if personally present at the meeting, by electing
to vote in person.
The holders of common stock of record on the books of the Company at the
close of business on August 25, 1994 are eligible to vote at the meeting. On
that date, there were 17,232,864 shares outstanding held by approximately 6,000
shareholders. Each shareholder is entitled to one vote for each share owned. A
shareholder is entitled to cumulate votes for the election of directors (that
is, cast for any one or more candidates a number of votes equal to the number of
the shareholder's shares multiplied by the number of directors to be elected).
However, no shareholder may cumulate votes for the election of directors unless
the names of such candidates have been placed in nomination prior to the voting,
and the shareholder has given notice of his intention to cumulate votes at the
meeting prior to the voting. If any one shareholder has given such notice, each
shareholder may cumulate his votes and give one candidate all of his votes or
distribute his votes among as many candidates as he sees fit. If any shareholder
elects cumulative voting, the proxyholders are authorized in their discretion to
vote their proxies cumulatively.
A majority of the outstanding shares of the Company's Common Stock,
represented in person or by proxy, will constitute a quorum at the Annual
Meeting. Shares with respect to which authority to vote is withheld, abstentions
and shares held of record by a broker or its nominee ("broker shares") that are
voted on any matter will be included in determining the shares present. Broker
shares that are not voted on any matter will not be included in determining the
shares present. The amendment of the Articles of Incorporation of the Company
requires the approval of a majority of the outstanding shares. The election of
each director and the approval of any other matter submitted to a vote of the
shareholders requires the affirmative vote of a majority of the shares voting.
Shares with respect to which authority is withheld, abstentions and broker
shares that are not voted will not be included in determining the number of
shares voting on the election of directors or any other matter submitted to a
vote of the shareholders.
1
<PAGE>
AMENDMENT OF THE ARTICLES OF INCORPORATION
The Articles of Incorporation of the Company currently provide that the
number of directors of the Company may from time to time be specified by the
Bylaws of the Company at not less than five nor more than eight directors. The
Board of Directors in January, 1992, established the present number of directors
at eight.
The Company has recently entered into a strategic alliance with Sonepar
Electronique International ("SEI"), a European distributor of electronic
components and a subsidiary of Sonepar, S.A. The Sonepar group of companies had
total sales of over $4 billion in 1993. The agreements with SEI provide, among
other things, for the election of two SEI representatives to serve on the Board
of Directors of the Company. There are no vacancies on the Board and the Board
believes that it is in the best interests of the Company to retain all the
present Board members. Accordingly, the Board of Directors has approved a
proposed amendment to Article Fifth of the Company's Articles of Incorporation
and has voted to recommend to the shareholders the approval and adoption of the
proposed amendment. The proposed amendment would authorize the Company's Bylaws
to provide for a minimum of seven and a maximum of thirteen directors. The Board
of Directors has also adopted an amendment to the Company's Bylaws, conditioned
upon shareholder approval of the proposed amendment to the Articles of
Incorporation, which provides that the Board of Directors will be increased to
ten members.
If the proposed amendment is approved by the shareholders, the shareholders
will elect a total of ten directors at the Annual Meeting. The Board of
Directors of the Company believes it is advisable and in the best interest of
the Company to increase the size of the Board from eight to ten members.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock entitled to vote at the meeting is required for approval of the
amendment of the Articles of Incorporation.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS VOTE
FOR THE PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION OF THE COMPANY.
ELECTION OF DIRECTORS
At present, the Bylaws of the Company provide for eight directors. If the
amendment of the Articles of Incorporation is approved by the shareholders, the
Bylaws of the Company will be amended to provide for ten directors. Unless
otherwise instructed, the proxyholders will vote the proxies received by them
for the first eight nominees shown below for the term of one year and until
their successors are duly elected and qualified. In addition, subject to
shareholder approval of the amendment of the Articles of Incorporation, the
proxies will be voted for the election of Jose Menendez and Jean Fribourg. All
of the nominees have consented to being named in this Proxy Statement, and to
serve as directors if elected. Although it is not contemplated that any of the
nominees will subsequently decline or be unable to serve as a director, in
either event, the proxies will be voted by the proxyholders for such other
persons as may be designated by the present Board of Directors.
2
<PAGE>
The following table sets forth certain information as of July 29, 1994 with
respect to those persons who are nominees for election as directors of the
Company, each of whom, if elected, will serve until the next annual meeting of
shareholders.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
--------------------------
<S> <C> <C> <C> <C>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AGE POSITION OWNERSHIP OF CLASS
- - -------------------------- --------- ----------------------------------- ------------- -----------
Gordon S. Marshall 74 Chairman of the Board 1,298,180(2) 7.5%
Richard D. Bentley 54 Director and Executive Vice 47,672(3) *
President
William Bone 52 Director 2,000(4) *
Richard C. Colyear 55 Director 2,000 *
Lathrop Hoffman 69 Director 4,000 *
Raymond G. Rinehart 72 Director 5,500(5) *
Robert Rodin 40 Director, President and Chief 44,500(6) *
Executive Officer
Howard C. White 53 Director 1,400 *
Jose Menendez 57 Director -- *
Jean Fribourg 49 Director -- *
<FN>
- - --------------
* Represents less than 1%.
(1) Unless otherwise indicated, each nominee has sole voting and investment
power with respect to the shares shown as beneficially owned by him.
(2) Includes 25,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1994.
(3) Includes 10,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1994.
(4) These shares are held in a revocable trust for which Mr. Bone is the
trustee.
(5) Includes 1,600 shares held in a revocable trust for which Mr. Rinehart is
the trustee.
(6) Includes 35,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1994.
</TABLE>
Mr. Marshall is the founder of the Company and has been its Chairman of the
Board since October 1954 and Chief Executive Officer of the Company until April,
1994. Additionally, he served as President of the Company from April 1982 to
June 1992. Mr. Marshall is also a member of the Board of Amistar Corporation.
Mr. Bentley became a Vice President in October 1986 and was appointed Senior
Vice President in April 1988. He was promoted to Executive Vice President of the
Company in August 1989.
3
<PAGE>
Mr. Bone has served as a director since August 1984. Mr. Bone is the
founder, Chairman of the Board and Chief Executive Officer of Sunrise Company, a
privately held diversified real estate firm specializing in the development of
country club communities, hotels and other commercial developments. Mr. Bone has
been engaged in this business since 1963.
Mr. Colyear has served as a director of the Company since August 1991. Mr.
Colyear is President of Colyear Development Corporation, a privately held real
estate firm which develops and operates both office and industrial properties.
From 1967 to 1989, Mr. Colyear was employed by Security Pacific National Bank in
various capacities, including First Vice President, in connection with its
commercial lending activities.
Mr. Hoffman has served as director since August 1984. Mr. Hoffman, through
several corporations, owns and operates Acura, General Motors, Honda, Isuzu and
Saturn automobile dealerships in Southern California. Mr. Hoffman is also
Chairman of the Board of Granite State Bank (formerly The Bank of Monrovia) in
Monrovia, California.
Mr. Rinehart has been a director of the Company since 1982. Mr. Rinehart
formerly served as Chairman of the Executive Committee of the Board of
Directors, Chairman of the Board, President and Chief Executive Officer of Clow
Corporation. Mr. Rinehart is currently the Chairman of the Board of RGR
Enterprises, and is a director of Goshen Rubber Co.
Mr. Rodin became a Vice President in October 1988 and was promoted to Senior
Vice President in August 1989, to President and Chief Operating Officer in June
1992 and to Chief Executive Officer in April 1994. He joined the Company as a
Sales Manager in October 1983.
Mr. White has been a director since January 1992. From 1965 to 1991, Mr.
White was associated with the international accounting and consulting firm of
Arthur Andersen & Co., SC. Until his retirement in 1991, Mr. White was Managing
Director of Finance for Arthur Andersen & Co's worldwide organization and had
also served as Managing Partner, Accounting, Audit and Financial Consulting
Practice, Los Angeles/ Southern California, Hawaii and Nevada.
Mr. Menendez has been the Chairman of the Executive Boards of SEI and
Sonepar Distribution since 1990 and 1991, respectively. Mr. Menendez also has
held the position of Managing Director and is a member of the Executive Board of
Sonepar, S.A. since 1992. Mr. Menendez has held management and executive
positions with the Sonepar companies for over ten years.
Mr. Fribourg has been the Chief Executive Officer of SEI since 1992 and is a
member of the SEI and Sonepar Distribution Executive Boards. During the last ten
years, Mr. Fribourg has held several management and executive positions with
Sonepar and SEI, including SEI Country Manager (Spain) and Sonepar Distribution
Country Manager (Spain and Portugal).
COMMITTEES
Among the committees created by the Board of Directors are an Audit
Committee and a Stock Option and Compensation Committee. The Board has not
designated a nominating committee. The members of the Audit Committee are all of
the outside directors. The Audit Committee reviews and makes recommendations to
the Board of Directors with respect to (i) the engagement or reengagement of an
independent accounting firm to audit the Company's financial statements for the
then current fiscal year, and the terms of such engagement; (ii) the Company's
policies and procedures for maintaining the Company's books and records and
furnishing information to the independent auditors; (iii) the procedures to
encourage access to the Audit Committee and to facilitate the timely reporting
during the year of the Company's independent
4
<PAGE>
auditors' recommendations and advice to the Audit Committee; (iv) the
implementation by management of the independent auditors' recommendations and
advice; (v) the implementation by management of the recommendations made by the
independent auditors in its annual management letter; (vi) the adequacy and
implementation of the Company's internal accounting controls and the adequacy
and competency of the related personnel; and (vii) such other matters relating
to the Company's financial affairs and accounts as the Committee may in its own
discretion deem desirable. One Audit Committee meeting was held during the last
fiscal year.
The Stock Option and Compensation Committee members are all of the outside
directors. The Stock Option and Compensation Committee recommends changes in
employees' salaries, incentives, pensions, savings plans and other fringe
benefits to the Board, and administers the Company's stock option plans. As
administrator of the stock option plans, the Committee determines which
employees are eligible for participation in the plans, designates the optionees
and, within the restrictions of each particular plan, determines the terms of
the grant and exercise of options under the plans. The Stock Option and
Compensation Committee also makes recommendations from time to time to the Board
of Directors regarding possible modifications or amendments of the Company's
stock options plans. The Stock Option and Compensation Committee held three
meetings during the last fiscal year.
The Board of Directors held a total of four meetings during the last fiscal
year. Each director attended all of the meetings of the Board and the Committees
on which he served, except for Mr. Colyear who attended three of the four
meetings.
SECTION 16 REPORTS
Based on its review of copies of Forms 3, 4 and 5 filed by the officers and
directors of the Company with the Securities and Exchange Commission, the
Company believes that all such Forms required to be filed with respect to the
fiscal year ended May 31, 1994 were timely filed pursuant to Section 16 of the
Securities Exchange Act of 1934.
REMUNERATION OF DIRECTORS
Directors who are employees receive no additional compensation for serving
as directors. All other directors receive monthly retainers of $1,500 and $1,500
for each meeting.
5
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of July 29, 1994,
with respect to each shareholder known by the Company to be the beneficial owner
of more than 5% of its outstanding Common Stock, and share ownership by all
executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- - --------------------------------------------------------- ------------------ -----------
<S> <C> <C>
FMR Corp. 1,718,700(2) 10.0%
82 Devonshire Street
Boston, Massachusetts 02109
Strong/Corneliuson Capital Management, Inc. 1,329,500 7.7%
Gordon S. Marshall 1,298,180(3) 7.5%
9320 Telstar Avenue
El Monte, California 91731-2895
The Prudential Insurance 1,142,300(4) 6.6%
Company of America
All executive officers and directors as a Group 1,423,252(5) 8.3%
(9 persons)
<FN>
- - --------------
(1) Unless otherwise indicated, each shareholder has sole voting and investment
power with respect to the shares shown as beneficially owned by that
shareholder.
(2) Pursuant to a schedule 13G dated February 11, 1994 and filed with the
Securities and Exchange Commission, FMR Corp. reported beneficial ownership
of over 5% of the Company's Common Stock. Based on information subsequently
obtained, the Company believes that on July 29, 1994, it had sole voting
power with respect to 85,200 shares and sole dispositive power with respect
to 1,178,700 shares.
(3) Includes 25,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1994.
(4) Pursuant to a schedule 13G dated January 31, 1994 and filed with the
Securities and Exchange Commission, The Prudential Insurance Company of
America reported beneficial ownership of over 5% of the Company's Common
Stock. Based on information subsequently obtained, the Company believes
that on July 29, 1994, it had sole voting and dispositive power with
respect to 625,300 shares and shared voting and dispositive power with
respect to 517,000 shares.
(5) Includes 86,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1994.
</TABLE>
6
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information with respect to those
persons who are executive officers of the Company as of July 29, 1994.
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ------------------------ --------- ---------------------------------------------------------------
<S> <C> <C>
Gordon S. Marshall 74 Chairman of the Board
Robert Rodin 40 President and Chief Executive Officer
Richard D. Bentley 54 Executive Vice President
Henry W. Chin 47 Vice President, Finance, Chief Financial Officer and Secretary
</TABLE>
Mr. Marshall is the founder of the Company and has been its Chairman of the
Board since October 1954. He served as President of the Company from April 1982
to June 1992 and was Chief Executive Officer of the Company from October 1954 to
April 1994.
Mr. Rodin became a Vice President in October 1988 and was promoted to Senior
Vice President in August 1989, to President and Chief Operating Officer in June
1992 and to Chief Executive Officer in April, 1994. He joined the Company as a
Sales Manager in October 1983 and has held various management positions with the
Company, including Division Manager-Boston, and Regional Vice
President-Northeast.
Mr. Bentley became a Vice President in October 1986 and was appointed Senior
Vice President in April 1988. He was promoted to Executive Vice President of the
Company in August 1989. He joined Marshall in June 1978 as Northeast Regional
Manager. Prior to joining the Company, Mr. Bentley was associated with Cramer
Electronics for fifteen years.
Mr. Chin joined the Company as Corporate Controller in November 1984 and was
promoted to Vice President in August 1989 and to Chief Financial Officer in
October 1991. Mr. Chin is a Certified Public Accountant.
Each officer serves at the pleasure of the Board and, unless earlier
removed, is elected annually for a one year term.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning the
compensation for the last three fiscal years of the Chief Executive Officer and
each of the other executive officers of the Company.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------------------------- COMPENSATION(6)
INCENTIVE ----------------
NAME AND PAYMENTS OTHER ANNUAL STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION FISCAL YEAR SALARY (1)(2) COMPENSATION (3) (NO. OF OPTIONS) COMPENSATION
- - ------------------------------ ----------- ---------- ---------- ----------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gordon S. Marshall (5) 1994 $ 500,000 $ 211,796 $ 4,497 -- --
Chairman of the Board 1993 468,649 214,144 4,497 -- --
1992 433,858 90,414 4,364 50,000 --
Robert Rodin 1994 358,333 149,637 5,612 50,000 --
President and 1993 275,138 128,642 5,292 -- $ 109,265(4)
Chief Executive Officer 1992 194,983 48,394 4,989 120,000 102,083(4)
Richard D. Bentley 1994 304,167 126,080 5,326 -- --
Executive Vice President 1993 258,521 125,120 4,448 -- --
1992 239,896 49,990 4,556 120,000 --
Henry W. Chin 1994 172,500 72,959 5,314 -- --
Vice President, Finance, 1993 140,388 85,609 5,292 -- --
Chief Financial Officer 1992 120,062 24,415 3,612 20,000 --
and Secretary
<FN>
- - --------------
(1) The Company has an incentive plan in which all full-time employees are
participants and is based on the Company's pre-tax profits. Under this
incentive plan, the Company's officers can earn up to 80% of their base
salaries as incentive compensation.
(2) In addition to the incentive plan, described above, the Company adopted a
bonus Plan for fiscal 1992 pursuant to which up to one percent of its net
income before taxes (approximately $319,000 in fiscal 1992) was available
for payment of bonuses to key executives. Bonus payments of $60,000 were
paid to Mr. Marshall and $40,000 each to Messrs. Rodin, Bentley and Chin
and are included in fiscal 1993 compensation amounts. This Plan was
discontinued as of the end of fiscal 1992.
(3) Amounts contributed by the Company under the Marshall Industries Tax
Deferred Profit Sharing Plan which provides for participation by any
employee of Marshall who has completed six months of employment. Each
participant may defer from 2% to 12% of his earnings each payroll period,
the amount of which is placed by the Company in a nonforfeitable, fully
vested account on the employee's behalf. Under the tax laws, the maximum
amount which can be deferred for calendar years 1992, 1993 and 1994 were
$8,728, $8,994 and $9,240, respectively. The Company contributes quarterly
an amount equal to 50% of the employee's contributions in the quarter up to
a maximum amount equal to 3% of the employee's earnings in the quarter.
After an employee joins the plan, he has a 20% vested interest in the
Company's contributions for each year of service to the Company.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
(4) Includes reimbursement for the payment of principal, interest and related
income taxes, with respect to the Company loan provided to Mr. Rodin in
connection with his relocation from Boston to Southern California. Such
loan assistance was approved by the shareholders in 1990. The loan was paid
off during fiscal 1993.
(5) In addition to the distribution of component parts, the Company provides a
variety of value added services to its customers. Through the use of third
party contractors, the Company provides cable assembling and manufacturing
capabilities. One of the third party contract manufacturing arrangements is
with Amistar, a company of which Mr. Marshall is a director and a
substantial shareholder. Under this arrangement, Marshall accepts orders
from its customers and provides the necessary components, which Amistar
then "mounts" on circuit boards. Marshall pays Amistar for its services and
invoices the customers for the completed product. The Company believes that
the amounts paid to Amistar are not in excess of the amounts that would be
charged by unaffiliated manufacturers for the same services. During the
fiscal years ended May 31, 1992, 1993 and 1994, the Company paid Amistar
approximately $637,000, $2,378,000 and $1,857,000, respectively, under this
arrangement.
(6) All share data have been adjusted to reflect the two-for-one stock split
paid on February 28, 1994.
</TABLE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to the stock option
grants made during the 1994 fiscal year under the Company's Stock Option Plans
to the named executive officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(4) POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSIGNED RATES
NUMBER OF % OF TOTAL OF
SECURITIES OPTION STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE EXPIRATION ------------------------
GRANTED(1) FISCAL YEAR PRICE(2) DATE 5%(3) 10%(3)
----------- ------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Rodin 50,000 100% $ 24.00 4/20/04 $ 754,800 $ 1,912,800
No options were granted to any of the other named executive officers during the 1994 fiscal year.
<FN>
- - --------------
(1) Each option will become exercisable in four equal and successive annual
installments, with the first such installment to become exercisable one
year after the grant date. The grant date is April 20, 1994.
(2) At fair market value at date of grant.
(3) Represents gain that would be realized assuming the options were held for
the entire ten-year option period and the stock price increased at annual
compounded rates of 5% and 10%. Actual gains, if any, on stock option
exercises and common stock holdings will be dependent on overall market
conditions and on the future performance of the company and its common
stock. There can be no assurance that the amounts reflected in this table
will be achieved.
(4) All share data have been adjusted to reflect the two-for-one stock split
paid on February 28, 1994.
</TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table provides information concerning the exercise of stock
options during the 1994 fiscal year by each of the named executive officers and
the year-end value of their unexercised options.
9
<PAGE>
All share data have been adjusted to reflect the two-for-one stock split
paid on February 28, 1994.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES AGGREGATE OPTIONS AT FISCAL YEAR END FISCAL YEAR END(2)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gordon S. Marshall 127,500 $ 1,972,375 25,000 37,500 $ 377,625 $ 560,250
Robert Rodin 7,500 141,563 35,000 175,000 572,000 1,363,000
Richard D. Bentley 30,000 486,250 10,000 125,000 162,500 1,338,000
Henry W. Chin 0 0 16,000 10,000 206,400 105,000
<FN>
- - --------------
(1) Based on the fair market of the shares on the exercise date less the
exercise price paid for the shares.
(2) Based on the fair market value of the shares or $24.50 per share on the
last day of the fiscal year less the exercise price payable for such
shares.
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee consists entirely of independent outside
directors and has responsibility for administering the Company's stock option
plans and setting the senior executives' annual salaries.
The Company's executive compensation programs are intended to enable it to
attract and retain talented executives and to reward them appropriately. The
Compensation Committee attempts to determine the appropriate total levels of
compensation, as well as the appropriate mix of basic salary, short-term
incentives and long-term incentives.
All of the Company's executive officers, as well as a majority of its
employees, participate in the Company's incentive plan. The plan is based on
pre-tax profits of the Company. The Company's officers can earn up to 80% of
their base salaries as incentive compensation.
In making its salary and stock option decisions, the Compensation Committee
considers a number of factors. However, its ultimate determination is a
subjective one and is based on the total mix of information. The Compensation
Committee reviews the compensation practices of six of the Company's competitors
as reported in their public filings. Those competitors are Anthem Electronics,
Inc., Arrow Electronics, Inc., Avnet, Inc., Bell Industries, Pioneer-Standard
Electronics, Inc. and Wyle Laboratories. These companies are included in the
peer group comparisons elsewhere in this Proxy Statement. The Compensation
Committee also compares the Company's short and long-term results with the
performance of those same competitors, to ensure a pay-for-performance linkage.
The primary performance measures examined are earnings results, total
shareholder return and the strength of the Company's strategic position. By
these measures, the Compensation Committee believes that the Company achieves
above average to superior results.
The Committee meets without the CEO to evaluate his performance, and with
the CEO to evaluate the performance of other executive officers. The 1994
salaries for the Company's CEO and executive officers
10
<PAGE>
were reviewed and approved at a meeting of the Compensation Committee held on
October 19, 1993. The Committee believes that the total compensation of its
executives is competitive and appropriately rewards their achievements.
William Bone, Chairman
Richard C. Colyear
Lathrop Hoffman
Raymond G. Rinehart
Howard C. White
11
<PAGE>
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG
MARSHALL INDUSTRIES, S&P 500 INDEX AND PEER GROUP INDEX
The following graph compares cumulative total shareholder return on the
Company's Common Stock for the periods indicated with the cumulative total
return of Companies on the Standard & Poor's 500 Stock Index and a group
consisting of the Company's peer corporations. The corporations making up the
peer companies group are the 36 electronic component distributor companies
included in SIC Code 5065 -- Electronic Parts & Equipment, N.E.C. The
information for the graph was provided by Media General Financial Services. This
graph assumes that $100 was invested on June 1, 1989 in the Company and each of
the two indices, and that dividends were reinvested. It should be noted that the
Company has not paid dividends on its Common Stock, and no dividends are
included in the representation of the Company's performance.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
MARSHALL INDUSTRIES, S&P 500 INDEX AND SIC CODE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MARSHALL INDUSTRIES S&P 500 INDEX BROAD MARKET
<S> <C> <C> <C>
100 100 100
1990 142 129 117
1991 125 131 130
1992 180 185 143
1993 227 210 160
1994 266 205 167
</TABLE>
ASSUMES $100 INVESTED ON JUNE 1, 1989
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING MAY 31, 1994
12
<PAGE>
PROPOSAL -- SELECTION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Arthur Andersen & Co. as
independent accountants for the Company for the fiscal year ending May 31, 1995.
Representatives of Arthur Andersen & Co. are expected to be present at the
meeting and will have an opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS VOTE
FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN & CO.
SHAREHOLDER PROPOSALS
Copies of resolutions proposed by shareholders to be presented at the 1995
Annual Meeting of Shareholders must be received by the Company at its corporate
headquarters, 9320 Telstar Avenue, El Monte, California 91731-2895 on or before
May 1, 1995 to have such resolutions included in the proxy statement and form of
proxy for such Annual Meeting.
OTHER MATTERS
The management does not know of any other matters to be acted upon at the
meeting. If any other matters should properly come before the meeting, or an
adjournment thereof, the proxies will be voted with respect thereto in
accordance with the discretion of the proxy holders.
GORDON S. MARSHALL
Chairman
FORM 10-K
The Company's Annual Report to Shareholders for the fiscal year
ended May 31, 1994 includes a copy of its Annual Report on Form 10-K,
including the financial statements and schedules thereto, filed with the
Securities and Exchange Commission.
13
<PAGE>
MARSHALL INDUSTRIES/PROXY 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby appoint Gordon S. Marshall and Henry W. Chin, and each of them or
either of them with full power to act without the other and with full power of
substitution, my true and lawful attorneys and proxies, to vote all the shares
of stock of Marshall Industries held of record by me on August 25, 1994 and to
act for me and in my name, place and stead at the Annual Meeting of Shareholders
to be held on Monday, October 24, 1994 or any adjournment thereof, for the
purpose of considering and voting upon the following:
1. AMENDMENT OF ARTICLES OF INCORPORATION
/ / FOR / / AGAINST / / ABSTAIN
2. ELECTION OF DIRECTORS.
/ / For ALL Nominees listed below
/ / Withhold authority to vote ALL Nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
<TABLE>
<S> <C> <C> <C> <C>
Gordon S. Marshall William Bone Lathrop Hoffman Robert Rodin Jose Menendez
Richard D. Bentley Richard C. Colyear Raymond G. Rinehart Howard C. White Jean Fribourg
</TABLE>
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN & CO. AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MAY 31, 1995.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and to vote the proxies
cumulatively in their discretion if cumulative voting is in effect at the
meeting.
(Please sign and date the reverse side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.
Please sign exactly as name appears
below. This Proxy should be dated,
signed by the shareholder as name
appears hereon, and returned promptly
in the enclosed envelope. Persons
signing in a fiduciary capacity
should so indicate.
-------------------------------------
Signature
-------------------------------------
Signature if held jointly
DATED: ________________________, 1994
