<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
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))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to 14a-11(c) or Rule 14a-12
Plexus Corp.
- --------------------------------------------------------------------------------
(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):
[X] 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.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[LOGO]
PLEXUS CORP.
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH, WISCONSIN 54957-0156
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
ON MARCH 3, 1999
To the Shareholders of Plexus Corp.:
The annual meeting of shareholders of Plexus Corp. will be held at the
Valley Inn, located at 123 East Wisconsin Avenue, Neenah, Wisconsin, on
Wednesday, March 3, 1999 at 10:00 a.m., for the following purposes:
(1) To elect seven directors to serve until the next annual
meeting and until their successors have been duly elected.
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record on the books of Plexus at the close of
business on January 4, 1999 will be entitled to vote at the meeting or any
adjournment of the meeting.
Your attention is called to the Proxy Statement accompanying this
notice for a more complete statement regarding the matters to be acted upon at
the meeting.
By Order of the Board of Directors
/s/ Joseph D. Kaufman
---------------------
Joseph D. Kaufman
Secretary
Neenah, Wisconsin
January 18, 1999
PLEASE INDICATE YOUR VOTING DIRECTIONS, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER FIND THAT YOU MAY BE
PRESENT AT THE MEETING OR FOR ANY OTHER REASON DESIRE TO REVOKE YOUR PROXY, YOU
MAY DO SO AT ANY TIME BEFORE IT IS VOTED.
<PAGE> 3
PROXY STATEMENT
PLEXUS CORP.
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH, WISCONSIN 54957-0156
* * * * * * *
SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Plexus Corp. ("Plexus" or the "Company")
for the annual meeting of shareholders on Wednesday, March 3, 1999. Shares which
are represented by properly executed proxies received by Plexus will be voted at
the meeting and any adjournment thereof in accordance with the terms of such
proxies, unless revoked. Proxies may be revoked at any time prior to the voting
thereof either by written notice filed with the secretary or acting secretary of
the meeting or by oral notice to the presiding officer during the meeting.
Shareholders of record at the closing of business on January 4, 1999
will be entitled to one vote on each matter presented for each share so held. At
that date there were 14,982,248 shares of Common Stock outstanding. Any
shareholder entitled to vote may vote either in person or by duly authorized
proxy. Representation of a majority of the outstanding shares will constitute a
quorum at the meeting. Abstentions and shares which are the subject of broker
non-votes will be counted for the purpose of determining whether a quorum exists
at the meeting. Shares represented at a meeting for any purpose are counted in
the quorum for all matters to be considered at the meeting. The voted proxies
will be tabulated by the persons appointed as inspectors of election.
Directors are elected by a plurality of the votes cast by the holders
of the Company's Common Stock entitled to vote at the election at a meeting at
which a quorum is present. "Plurality" means that the individuals who receive
the highest number of votes are elected as directors, up to the number of
directors to be chosen at the meeting. Any votes attempted to be cast "AGAINST"
a candidate are not given legal effect and are not counted as votes cast in the
election of directors. Therefore, any shares which are not voted, whether by
withheld authority, broker non-vote or otherwise, have no effect in the election
of directors except to the extent that the failure to vote for any individual
results in another individual receiving a relatively larger number of votes.
Shareholders who own shares as part of Plexus' Employee Stock Savings
Plan (the "Savings Plan") will receive a separate proxy for the purpose of
voting their shares held in their account. Shares held by the Savings Plan for
which designations are not received will be voted by the Savings Plan's Trustee
at its discretion, as provided in the Savings Plan.
Expenses in connection with the solicitation of proxies will be paid by
Plexus. Upon request, Plexus will reimburse brokers, dealers, banks and voting
trustees, or their nominees, for reasonable expenses incurred in forwarding
copies of the proxy material and annual report to the beneficial owners of
shares which such persons hold of record. Solicitation of proxies will be
principally by mail. Proxies may also be solicited in person, or by telephone,
telegraph or fax, by officers and regular employees of Plexus who will not be
separately compensated for those services.
This proxy material is being mailed to shareholders commencing on or
about January 18, 1999.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock by each Director, each
nominee as director, each executive officer appearing in the Summary
Compensation Table, the only persons known to the Company to be the beneficial
owner of 5% or more of the Common Stock, and all directors and executive
officers as a group as of January 4, 1999.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME OWNED (1) OUTSTANDING
---- ------------ -----------
<S> <C> <C>
David J. Drury 0 *
Rudolph T. Hoppe (3) 12,666 *
Harold R. Miller 205,848 1.4%
John L. Nussbaum (2) 208,559 1.4%
Gerald A. Pitner 313,166 2.1%
Thomas J. Prosser 71,600 *
Peter Strandwitz 568,462 3.8%
Jan K. Ver Hagen 0 *
Joseph D. Kaufman 46,300 *
Thomas B. Sabol (2) 32,470 *
All executive officers and directors
as a group (12 persons) 1,521,446 9.8%
Allan C. Mulder (4) 1,051,126 7.0%
Riggs National Bank (5) 774,897 5.2%
</TABLE>
- ------------------
* Less than 1%
(1) The specified persons have sole voting and sole dispositive powers as
to all such shares, except as otherwise indicated. The above amounts
include shares subject to options granted under the Company's 1998
Stock Option Plan (the "Option Plan") and the 1995 Directors' Stock
Option Plan (the "Directors' Option Plan") which are exercisable within
60 days. These options include those held by Mr. Strandwitz (251,333),
Mr. Nussbaum (63,333), Mr. Pitner (69,000), Messrs. Miller, Prosser and
Hoppe (10,500 each), Mr. Kaufman (34,216), Mr. Sabol (24,832) and all
officers and directors as a group (525,764).
(2) Mr. Nussbaum and Mr. Sabol share voting and dispositive power with
their spouses with respect to 143,254 and 3,450 shares, respectively.
(3) Excludes 1,900 shares owned by Mr. Hoppe's wife, of which he disclaims
beneficial ownership because he does not share voting or dispositive
power.
(4) Mr. Mulder's address is 10618 Spicewood Trail, Boynton Beach, Florida.
According to recent information provided to the Company, Mr. Mulder, as
trustee, beneficially owned 655,087 shares of Company Common Stock held
by the Allan C. Mulder Revocable Trust U/A 1/10/92, and, as a
shareholder in the Mulder Company, beneficially owns 396,039 shares of
Common Stock.
(5) According to information provided by Riggs National Bank ("Riggs"), at
December 11, 1998, Riggs held shared voting and dispositive power as to
774,897 shares of Common Stock. The Company believes that substantially
all of these shares were held by Riggs as trustee of the Savings Plan.
Riggs' address is 1120 Vermont Avenue, N.W., Washington D.C.
20005-3598.
-2-
<PAGE> 5
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16")
requires the Company's officers and directors, and persons who beneficially own
more than 10% of the Company's Common Stock, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than 10% shareholders (collectively "insiders") are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
All publicly held companies are required to disclose the names of any
insiders who fail to make any such filing on a timely basis within the preceding
two years, and the number of delinquent filings and transactions, based solely
on a review of the copies of the Section 16(a) forms furnished to the Company,
or written representations that no such forms were required. On the basis of
filings and written representations received by the Company, the Company
believes that, during fiscal 1998 and the preceding fiscal year, the Company's
insiders have complied with all Section 16(a) filing requirements applicable to
them.
ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the Board of Directors
has determined that there shall be seven directors elected at the annual meeting
of shareholders to serve until their successors are duly elected and qualified.
Rudolph T. Hoppe, who has served as a director of the Company since
1987, is retiring from the Board and therefore not standing for re-election. The
Board of Directors wishes to thank Mr. Hoppe for his many years of service to
the Company and its shareholders.
The persons who are nominated as directors and for whom proxies will be
voted (unless otherwise specified by a shareholder) are named below. If any of
the nominees should decline or be unable to act as a director, which eventuality
is not foreseen, the proxies will be voted with discretionary authority for a
substitute nominee designated by the Board of Directors.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE AND BUSINESS EXPERIENCE (1) SINCE
------------ --------------------------- --------
<S> <C> <C>
David J. Drury, 50 (2) Independent Consultant since 1997; 1998
previously, President of Stolper-Fabralloy
Co. LLC (engine component manufacturer) from
1994 to 1997, independent consultant from
1993 to 1994, and Executive Vice President
of Oldenburg Group (diversified
manufacturing) prior thereto
Harold R. Miller, 70 (3)(4) Retired; previously Chairman of the Board 1980
and Chief Executive Officer of Marathon
Engineers/Architects/Planners, Inc.
(architectural and engineering services)
John L. Nussbaum, 56 President, Chief Operating Officer and 1980
Director of the Company
Gerald A. Pitner, 57 Executive Vice President of the Company 1980
(commencing part-time status in 1998)
Thomas J. Prosser, 62 (3)(4)(5) Senior Vice President-Investment Banking 1987
of Robert W. Baird & Co., Incorporated
(brokerage and other financial services);
Chairman of Menasha Corporation (paper
products) since 1998
</TABLE>
-3-
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE AND BUSINESS EXPERIENCE (1) SINCE
------------ --------------------------- --------
<S> <C> <C>
Peter Strandwitz, 61 Chairman of the Board, Chief Executive 1979
Officer and Director of the Company
Jan K. Ver Hagen, 61 (6) Senior Vice President of Corporate Projects Nominee
of Emerson Electric Co. since January 1999;
previously, Vice Chairman of United Dominion
Industries (manufacturing) in 1998, and
executive officer thereof from 1994 to 1998;
previously Vice Chairman of Emerson Electric
Co.
</TABLE>
- --------------------
(1) Unless otherwise noted, all directors have been employed in their
principal occupation listed above for the past five years or more.
(2) Also director of Jason Incorporated (diversified manufacturing) and St.
Francis Capital Corp. (savings bank holding company).
(3) Member (together with Mr. Hoppe) of the Compensation Committee, which
held two meetings during fiscal 1998. The Compensation Committee
considers and makes recommendations to the Board of Directors with
respect to officers' salaries and bonuses, reviews, approves and
administers compensation plans, and awards stock options.
(4) Member (together with Mr. Hoppe) of the Audit Committee, which met two
times in fiscal 1998. The Audit Committee selects outside auditors,
monitors their activities and reviews their final reports.
(5) Mr. Prosser coordinates the identification and recommendation of
candidates for Board membership. If shareholders wish to propose
candidates for consideration, they should forward relevant information
in writing to the Company in care of Joseph D. Kaufman, corporate
Secretary.
(6) Also director, and non-executive Chairman, of Wolverine Tube, Inc.
(manufacturing), and a director of United Dominion Industries.
The Board of Directors held four meetings during fiscal 1998. Each
Director attended at least 75% of the aggregate of the total number of meetings
of the Board and the total number of meetings of all committees of the Board on
which such director served during the year.
Directors' Compensation
Each director of the Company who is not an officer or employee of the
Company or a subsidiary receives an annual directors' fee of $8,000 and an
additional $1,000 fee per meeting date on which the director attends a meeting
of the Board of Directors or any of its committees. Effective for fiscal 1999,
the annual directors' fee was changed to $10,000, and meeting fees changed to
$1,000 for each board meeting and $500 for each committee meeting.
In addition, each director who is not an officer or employee of the
Company or a subsidiary is entitled in each fiscal year to receive an option for
1,500 shares of Company Common Stock, at its market value on the date of grant,
under the Directors' Option Plan. The Directors' Option Plan was approved by
Company shareholders in 1995. Options thereunder are fully vested upon grant,
may be exercised after a minimum six month holding period, and must be exercised
prior to the earlier of ten years after grant or one year after the person
ceases to be a director. In accordance with the Directors' Option Plan, each of
the then-serving non-employees directors received a fiscal 1998 option for 1,500
shares exercisable at $27.0625 per share on December 1, 1997 and a fiscal 1999
option for 1,500 shares exercisable at $29.625 per share on December 1, 1998.
-4-
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total
compensation of the Company's Chief Executive Officer, and its four other
highest compensated executive officers, for fiscal 1998 and the preceding two
fiscal years.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation (1) Awards
------------------------------------------------ -------------
Other Securities
Annual Underlying All Other
Name and Fiscal Compen- Options/ Compen-
Principal Position Year Salary ($) Bonus ($) sation($) SARs #(2) sation ($)(3)
- ------------------ ------ ---------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter Strandwitz, 1998 $240,348 $ 17,600 -0- 25,000 $194,023
Chairman and CEO 1997 $218,869 $165,000 -0- 44,000 $195,183
1996 $190,844 -0- -0- 34,000 $ 17,776
John L. Nussbaum, 1998 $214,400 $ 16,000 -0- 20,000 $ 94,046
President and COO 1997 $186,093 $150,000 -0- 40,000 $ 93,890
1996 $156,790 -0- -0- 30,000 $ 11,107
Thomas B. Sabol 1998 $131,235 $ 14,600 -0- 10,000 $ 3,129
VP-Finance and CFO 1997 $113,625 $ 90,000 -0- 20,000 $ 1,577
(4) 1996 $ 65,385 -0- $ 36,532 24,000 -0-
Joseph D. Kaufman 1998 $115,872 $ 11,360 -0- 7,500 $ 2,097
VP, Secretary and 1997 $102,273 $ 79,500 -0- 15,000 $ 2,213
General Counsel 1996 $ 88,574 -0- -0- 10,000 $ 2,212
Gerald A. Pitner, 1998 $102,957 $ 10,000 -0- -0- $ 60,581
Executive VP (5) 1997 $122,861 $ 93,750 -0- 12,000 $ 61,427
1996 $115,408 -0- -0- 12,000 $ 8,250
</TABLE>
- ------------------
(1) While the named individuals received perquisites or other personal
benefits in the years shown, in accordance with SEC regulations, the
value of these benefits are not shown since they did not exceed, in the
aggregate, the lesser of $50,000 or 10% of the individual's salary and
bonus in any year.
(2) Represents the number of shares for which options were granted under
the Option Plan. No SARs have been granted.
(3) Includes: the Company's contributions to the accounts of Messrs.
Strandwitz, Nussbaum, Sabol, Kaufman and Pitner in the Savings Plan of
$423, $3,125, $3,129, $2,097 and $1,663, respectively, in fiscal 1998;
and the Company's fiscal 1998 contributions to accounts of Messrs.
Strandwitz, Nussbaum and Pitner under the supplemental retirement
arrangements of $193,600, $90,921 and $58,918, respectively.
(4) Mr. Sabol's employment with the Company began in January 1996; other
annual compensation for Mr. Sabol in fiscal 1996 represents
reimbursement of certain relocation expenses.
(5) Mr. Pitner's position became part-time, and ceased being deemed an
executive officer position under the Securities Exchange Act of 1934,
effective as of October 31, 1998.
-5-
<PAGE> 8
STOCK OPTIONS
The following table sets forth information with respect to the grant of
stock options in fiscal 1998 to the five executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants(1)
--------------------------------------------------------------------
Potential
% of Realized Value at
Number of Total Assumed Annual
Securities Options/ Rates of Stock Price
Underlying SARs Granted Appreciation
Options/ to Employees Exercise or for Option Term (2)
SARs Granted in Fiscal Base Price Expiration --------------------
Name (#) Year ($/sh) Date 5% 10%
- ---- ------------ ------------ ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Peter Strandwitz 25,000 6.8% $ 21.188 4/23/08 $333,125 $844,205
John Nussbaum 20,000 5.5% $ 21.188 4/23/08 $266,500 $675,364
Thomas Sabol 10,000 2.7% $ 21.188 4/23/08 $133,250 $337,682
Joseph Kaufman 7,500 2.0% $ 21.188 4/23/08 $ 99,938 $253,262
</TABLE>
- ----------------
(1) No SARs have been granted; all grants reflect stock options under the
Option Plan. Mr. Pitner did not receive a grant of stock options in
fiscal 1998.
(2) Assumes the stated appreciation from the date of grant.
-6-
<PAGE> 9
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
The following table sets forth information with respect to the five
executive officers named in the Summary Compensation Table concerning the number
and value of options outstanding at September 30, 1998.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised In-the-
Unexercised Options/ Money Options/SARs
Shares SARs at FY-End (#)(2) at FY-End ($)(3)
Acquired on Value ------------------------- -------------------------
Name Exercise (#) Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Peter Strandwitz -0- -0- 251,333/65,667 $3,453,777/$375,667
John Nussbaum 40,000 $857,815 103,333/56,667 $1,337,501/$337,500
Thomas Sabol 2,500 $ 17,891 21,000/30,500 $ 239,011/$184,500
Joseph Kaufman 6,200 $106,947 36,217/20,833 $ 467,213/$121,042
Gerald Pitner -0- -0- 74,000/24,000 $ 983,606/$114,500
</TABLE>
- -------------------
(1) Represents the difference between the exercise price and the reported
closing price on the date of exercise.
(2) Represents options granted under the Option Plan. No SARs have been
granted.
(3) Represents the difference between the exercise price and the $19.375
reported closing price of the Company's Common Stock on the NASDAQ
Stock Market on September 30, 1998.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors (the
"Committee") sets general compensation policies for the Company. The Committee
makes the primary decisions with respect to compensation of the Chairman/Chief
Executive Officer (the "CEO"), the President/Chief Operating Officer
("President") and the Executive Vice President of the Company; compensation
decisions as to all other Company officers are recommended by the CEO and the
President, subject to approval by the Committee. The Company's other
compensation programs, such as the Savings Plan and the Option Plans, are either
originated or approved by the Committee; the Committee grants stock options
under the Option Plans.
The Company's policy, which is adhered to by the Committee, is to
fairly compensate individuals for their contributions to the Company, but also
to provide value to the Company's shareholders and to consider the ability of
the Company to fund any compensation decisions, plans or programs. The Committee
believes that fair compensation packages are necessary to attract and retain
qualified executive officers. To be effective in attracting and retaining
competent individuals, compensation packages must balance short-term and
long-term considerations, as well as provide incentives to individuals based
upon the performance of the Company. For the past several fiscal years, the
Committee has evaluated compensation of Company executive officers in the
context of continuing growth, but also the continuing need for capital to
support that growth and the occasional effect on earnings of that growth. The
Committee historically had not retained outside consultants, or relied in a
significant fashion upon outside market surveys commissioned by the Company;
however, in fiscal 1997, the Company engaged outside consultants to assist it in
evaluating compensation Company-wide (including executive officers).
-7-
<PAGE> 10
In determining the compensation of the CEO, the Committee reviews
numerous factors, although most of these factors are not subject to
quantification or specific weight. The primary factors reviewed (in no
particular order) are the importance of the individual's contribution to the
Company's strategic planning and long-term success; the importance of the
individual to key customer relationships; special projects and tasks undertaken
by the individual during the preceding year; and performance of the Company's
sales and earnings. In addition, the Committee also reviewed a sampling, which
it believed to be representative, of compensation paid by other companies in the
Company's geographic area and comparable companies in the electronics
manufacturing services industry (which group of companies did not coincide with
the more extensive list of companies in the NASDAQ electronics components sector
used in the following performance graph). Historically, Company salaries had
generally been determined in July or August of each year. In fiscal 1998, the
Company changed to a March/April review cycle for its employees, and the
Committee adopted the same cycle for key executives. New salaries become
effective at the time of the review.
In establishing the CEO's compensation, the Committee noted his roles
as the Company's chief strategic planner and as contact for several Company
customers. The Committee also reviewed salaries paid to CEO's in other companies
in the geographic area and the industry. In August 1997, the Committee noted the
improvement to date in the Company's results in fiscal 1997, with both sales and
income, improving substantially. Through June 30, 1997 (the most recent
information the Committee then had at its disposal), net sales increased 22%
from the previous fiscal year period, and net income increased 156% for that
period. The Committee also expected increases in sales and net income in the
fourth quarter, which increases in fact occurred. Based upon these factors and
the prior year's increases, and with a desire to keep salaries within the range
of salaries at comparable companies, the Committee determined in August 1997,
that the CEO's (and the other named executive officers') compensation level
should be adjusted to reflect improved sales, earnings and prospects. Based upon
the above factors, the Committee approved a 5% increase in the CEO's salary
effective August 1997. The next review was in April 1998, in accordance with the
new Company schedule for reviews. At that time, the Committee had available full
fiscal 1997 sales and net income information, which indicated full year
increases of 22% and 121%, respectively, over fiscal 1996. For the quarter ended
December 31, 1997, the Company's net sales and net income had increased 10% and
31%, respectively over the same fiscal 1997 period. Based on these factors, the
Committee approved a 9% salary increase for the CEO effective April 1998.
Beginning in fiscal 1995, the Committee determined it would be in the
Company's best interests to provide, its executive officers with a tangible
performance-based incentive beyond that contained in the Option Plans. Such a
bonus arrangement would further motivate officers to continue the improved
performance, and provide specific non-market criteria to evaluate performance.
Under the bonus plan then adopted, senior executive officers were eligible to
receive bonuses ranging from 2.5% up to 100% of their annual salary provided the
Company achieves certain performance goals established in advance by the
Committee with respect to return on average equity and earnings per share.
Effective for fiscal 1998, the Committee adopted a new bonus plan (the "1998
Bonus Plan"). The 1998 Bonus Plan functions similarly to the prior bonus plan;
however, bonuses are determined 40% by reference to earnings per share, 40% by
sales growth, and 20% by individual performance. The possible ranges of bonus,
if targets are met, are from 10% to 80% of base salary for executive officers,
which amounts are chosen in advance by the Committee and may vary from person to
person, and year to year.
For fiscal 1998, for the target bonus to be earned, the Company was
required to increase pre-bonus earnings per share to $1.45 per post-split share
(approximately a 29% increase over fiscal 1997) and corporate sales growth over
fiscal 1997 equal to at least 23%. If these were met, the CEO would earn a bonus
of 40% of his salary; for results above or below target, bonus (if any) would
vary between 0% and 80%. The Committee believed that both targets were very
aggressive. In fact, the Company achieved pre-bonus fully-diluted earnings per
share of approximately $1.22 (approximately a 9% increase over fiscal 1997) and
sales growth of approximately 3%. Although the target numerical goals were not
achieved in fiscal 1998, the Committee awarded a bonus to the CEO based upon
individual performance. Therefore, he earned a bonus of 8% of salary, which
equaled 20% of the maximum bonus which could be earned based on the 40% target
bonus adopted for fiscal 1998.
The Committee believes that the Company's Option Plan provides
participants with a long-term incentive to increase the overall value of the
Company by providing them with a stake in the increasing value of the Company's
-8-
<PAGE> 11
Common Stock on a long-term basis. Consistent with this approach, the Committee
granted to the CEO options for 25,000 shares during fiscal 1998. Previously, the
Committee granted the CEO options for 44,000 shares in fiscal 1997 and 34,000
shares in fiscal 1996. The 1998 award level reflects the Committee's
determination to grant the CEO an increased number of options as compared to the
previous year in view of the improved results (although due to the Company's
two-for-one stock split in August 1997, the restated prior years' option grants
amounts appear greater).
In 1996, the Committee established special retirement arrangements for
three executive officers. The Committee believed that those arrangements would
both reward past service and maintain an additional incentive for those
officers' continued performance for the Company. As a result, the Company and
the CEO have entered into a supplemental retirement agreement designed to
provide specified retirement and death benefits additional to those provided
under the Company's 401(k) Savings Plan. While the arrangement is designed to
provide a 15-year annual payout on retirement at or after age 65 of 60% of final
pay, the Company's commitment under each agreement is to annually contribute a
fixed dollar amount ($193,600 for the CEO) for each year until age 65 if he
remains in the Company's employ. The contributions are invested in a life
insurance policy acquired by the Company on the CEO's life. On retirement at or
after age 65, the agreement provides for a 15-year annual installment payment
stream, with each payment to be measured by the cash values then held in the
policy. The Company's contributions would also continue to be made should the
CEO's employment terminate after a change in control, attainment of age 55 and
completion of 10 years of service or disability, should the CEO terminate for
"good reason" as defined in the agreement, or should the Company terminate the
executive, but not for "cause" as defined in the agreement. Provided the CEO is
able to and does perform such duties as may be provided under a separate
consulting agreement, the 15-year installment payments would commence at 65. If
the executive voluntarily terminates other than for "good reason" and before
payments under the agreement have started, a 15-year installment payment
arrangement starts at that time, based on the then existing policy cash values.
Lump sum payments based on policy cash values become due if at any time after a
change in control the Company's consolidated tangible net worth drops below $35
million, or if the ratio of the Company's consolidated total debt to
consolidated tangible net worth becomes greater than 2.5 to 1. To the extent
that any of the payments constitute excess parachute payments subjecting the CEO
to an excise tax, the agreement provides for an additional payment (the
"Gross-Up Payment") to be made by the Company to the CEO so that after the
payment of all taxes imposed on the Gross-Up Payment, the CEO retains an amount
of the Gross-Up Payment equal to the excise tax imposed. Should the CEO die
while employed or prior to receiving all of the 15-year installment payments,
certain death benefit payments become due. If the executive is terminated by the
Company for "cause" at any time before payments start and prior to a change in
control, all benefits are forfeited.
The Committee also believes that the Savings Plan provides an
additional stock-based incentive. Although employees (including the CEO) may
choose from a variety of investment funds for their contributions under the
Savings Plan, Company matching contributions on behalf of participants are made
to the Company Stock Fund of the Savings Plan, having the effect of increasing
the participants' stock ownership.
The factors used to determine other executive officers' compensation
are essentially the same as those used for the CEO. As with the CEO, Messrs.
Nussbaum, Sabol, Kaufman and Pitner, and other executive officers, were
considered for salary increases effective in July 1997 and in April 1998.
Increases in executive officers' salaries (other than the CEO) in both July 1997
varied from 0% to 20%, and in April 1998 varied from 0% to 11%. The increases
varied depending upon the Committee's view of the adequacy of the particular
officers' compensation compared to that officer's performance and duties
(especially when those duties significantly changed since the last salary
increase) and expected changes in circumstances in the coming year. For fiscal
1998, all eligible executive officers received a bonus under the 1998 Bonus Plan
equaling from 2% to 12% of base salary, depending upon individual performance.
The Committee also approved stock option awards for most of the other executive
officers of the Company, which awards varied from zero to 20,000 shares. The
number of shares subject to options granted to executive officers was generally
the same or greater than the number granted upon ordinary grants in the
preceding fiscal year, with appropriate changes to reflect the Committee's
perception of individual circumstances and adjusted for the 1997 stock split.
The Company has also entered into supplemental retirement agreements with Mr.
Nussbaum and Mr. Pitner, which are similar to the agreement with the CEO;
however, the Company's commitment under the agreement with Mr. Nussbaum and Mr.
Pitner requires fixed annual contributions of $90,921 and $58,918, respectively.
-9-
<PAGE> 12
The Committee believes that it is highly unlikely that the compensation
of any executive officer, including the CEO, will exceed $1 million in any
fiscal year. Therefore, except with respect to the Option Plan, it has not taken
any action with respect to the provisions of Section 162 of the Internal Revenue
Code which limits the deductibility of compensation to certain executive
officers of over $1 million in any fiscal year. Because of the shareholders'
approval of the Option Plan, the Committee believes that any compensation income
under it would not be subject to the Internal Revenue Code's deduction
limitation.
Members of the Compensation Committee: Rudolph T. Hoppe, Chair
Harold R. Miller
Thomas J. Prosser
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No Company insiders are members of the Committee. All of the directors
who are Committee members are non-employees of the Company and have never been
employed by the Company or any of its subsidiaries.
CERTAIN TRANSACTIONS
The Company provides certain engineering design and development
services for Memorylink Corp., a developer of electronic products. Messrs.
Strandwitz and Pitner are directors and shareholders of Memorylink. Memorylink
was billed $610,358 by the Company in fiscal 1998 for those services; the
amounts billed were determined in accordance with the Company's standard
charges. Account payments were current throughout fiscal 1998.
PERFORMANCE GRAPH
The following graph compares the cumulative total return on Company
Common Stock with the NASDAQ Stock Market Index for U.S. Companies and the
NASDAQ Stock Market Index for Electronics Components Companies (both of which
include the Company). The values on the graph show the relative performance of
an investment of $100 made on September 30, 1993, in Company Common Stock and in
each of the indices.
Comparison of Cumulative Total Return
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NASDAQ-US 100 101 139 165 227 232
NASDAQ-Electronics 100 97 194 231 405 324
Plexus 100 70 109 96 460 254
</TABLE>
-10-
<PAGE> 13
AUDITORS
The Board of Directors intends to reappoint the firm of
PricewaterhouseCoopers LLP (formerly known as Coopers & Lybrand L.L.P.) as
independent auditors to audit the financial statements of Plexus for fiscal
1999. Representatives of PricewaterhouseCoopers LLP are expected to be present
at the annual meeting of shareholders to respond to appropriate questions and
make a statement if they desire to do so.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than
September 21, 1999 in order to be considered for inclusion in next year's annual
meeting proxy statement. In addition, the Company's bylaws provide that any
proposal for action, or nomination to the Board of Directors, proposed other
than by the Board of Directors must be received by the Company in writing,
together with specified accompanying information, at least 70 days prior to an
annual meeting in order for such action to be considered at the meeting. The
year 2000 annual meeting of shareholders is tentatively scheduled for March 1,
2000, and notice of intent to consider other questions and/or nominees (and
related information) must therefore be received by December 1, 1999. The purpose
of the bylaw is to assure adequate notice of, and information regarding, any
such matter as to which shareholder action may be sought.
By Order of the Board of Directors
/s/ Joseph D. Kaufman
---------------------
Joseph D. Kaufman
Secretary
Neenah, Wisconsin
January 18, 1999
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1998, WILL BE PROVIDED WITHOUT CHARGE TO EACH RECORD OR BENEFICIAL
OWNER OF SHARES OF THE COMPANY'S COMMON STOCK AS OF JANUARY 4, 1999, ON THE
WRITTEN REQUEST OF SUCH PERSON DIRECTED TO: THOMAS B. SABOL, VICE
PRESIDENT-FINANCE AND CFO, PLEXUS CORP., 55 JEWELERS PARK DRIVE, P.O. BOX 156,
NEENAH, WISCONSIN 54957-0156.
-11-
<PAGE> 14
PLEXUS CORP.
PROXY FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Peter Strandwitz, John L. Nussbaum and Joseph D.
Kaufman, and any of them, proxies, with full power of substitution, to vote all
shares of stock which the undersigned is entitled to vote at the annual meeting
of shareholders of Plexus Corp. to be held at the Valley Inn, located at 123
East Wisconsin Avenue, Neenah, Wisconsin, on Wednesday, March 3, 1999 at 10:00
a.m. Central Time, or at any adjournment thereof, as follows, hereby revoking
any proxy previously given:
(1) ELECTION OF DIRECTORS:
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as specified to the contrary below) to vote for all nominees
listed below
David J. Drury, Harold R. Miller, John L. Nussbaum,
Gerald A. Pitner, Thomas J. Prosser, Peter Strandwitz, Jan K. Ver Hagen
(INSTRUCTION: To withhold authority to vote for any individual nominee, please
print that nominee's name on the following line.)
- --------------------------------------------------------------------------------
(2) In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof;
all as set out in the Notice and Proxy Statement relating to the annual meeting,
receipt of which is hereby acknowledged.
(Continued and to be signed on reverse side)
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" EACH OF THE DIRECTORS LISTED IN PROPOSAL (1).
Dated......................................, 1999
.................................................
(Please sign exactly as name appears at left.)
.................................................
(If stock is owned by more than one person, all
owners should sign. Persons signing as executors,
administrators, trustees or in similar capacities
should so indicate.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
