<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Section 240.14a-11(c) or Section 240.14a-12
KENT ELECTRONICS CORPORATION
- --------------------------------------------------------------------------------
(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)(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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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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Notes:
<PAGE>
KENT ELECTRONICS CORPORATION
1111 GILLINGHAM LANE
SUGAR LAND, TEXAS 77478
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 1998
To the Shareholders of
Kent Electronics Corporation:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Kent Electronics Corporation (the "Company") will be held at the
offices of the Company located at 1111 Gillingham Lane, Sugar Land, Texas
77478, at 10:00 a.m., local time, on Thursday, June 25, 1998, for the
following purposes:
1. To elect three persons to serve as directors on the classified Board
of Directors until the 2001 annual meeting and until their successors have
been elected and have qualified.
2. To adopt an Amended and Restated 1996 Non-Employee Director Stock
Option Plan, as more fully set forth under "Proposal No. 2."
3. To ratify the appointment of Grant Thornton LLP as the Company's
independent public accountants for the fiscal year ending April 3, 1999.
4. To transact such other business as may properly come before the Annual
Meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on May 5, 1998 will be
entitled to notice of and to vote at the Annual Meeting, or any adjournment or
adjournments thereof. Shareholders are cordially invited to attend the Annual
Meeting in person. Those who will not attend and who wish their shares voted
are requested to sign, date and mail promptly the enclosed proxy for which a
stamped return envelope is provided.
By Order of the Board of Directors
Stephen J. Chapko, Secretary
Houston, Texas
May 20, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO SIGN,
DATE AND MAIL PROMPTLY THE ENCLOSED PROXY. IF YOU ATTEND THE ANNUAL MEETING,
YOU CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
<PAGE>
KENT ELECTRONICS CORPORATION
1111 GILLINGHAM LANE
SUGAR LAND, TEXAS 77478
---------------------
PROXY STATEMENT
---------------------
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement and accompanying proxy card are furnished in connection
with the solicitation of proxies on behalf of the Board of Directors of Kent
Electronics Corporation, a Texas corporation (the "Company"), for use at the
annual meeting of shareholders to be held on Thursday, June 25, 1998, at the
offices of the Company located at 1111 Gillingham Lane, Sugar Land, Texas
77478, at 10:00 a.m., local time, or at any adjournment or adjournments
thereof (such meeting or adjournment(s) thereof being referred to as the
"Annual Meeting"). Copies of the accompanying Notice, this Proxy Statement and
the accompanying proxy card are being mailed to shareholders on or about May
20, 1998.
In addition to solicitation by mail, solicitation of proxies may be made by
personal interview, special letter, telephone or telecopy by the officers,
directors and employees of the Company. Brokerage firms will be requested to
forward proxy materials to beneficial owners of shares registered in their
names and will be reimbursed for their expenses. In addition, the Company has
retained the services of Morrow & Co., Inc. to assist in the solicitation of
proxies either in person or by mail, telephone or telecopy, at an estimated
cost of $4,000 plus expenses. The cost of solicitation of proxies will be paid
by the Company.
A proxy received by the Board of Directors may be revoked by the shareholder
giving the proxy at any time before it is exercised. A shareholder may revoke
a proxy by notification in writing to the Company at 1111 Gillingham Lane,
Sugar Land, Texas 77478, Attention: Secretary. A proxy may also be revoked by
execution of a proxy bearing a later date or by attendance at the Annual
Meeting and voting by ballot. A proxy in the form accompanying this Proxy
Statement, when properly executed and returned, will be voted in accordance
with the instructions contained therein. A proxy received by management which
does not withhold authority to vote or on which no specification has been
indicated will be voted for the nominees for the Board of Directors named in
Proposal No. 1 of this Proxy Statement and in favor of Proposal No. 2 and
Proposal No. 3 of this Proxy Statement. A majority of the outstanding shares
of common stock, without par value, of the Company ("Common Stock") will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
will be counted for purposes of determining the presence or absence of a
quorum for the transaction of business. Abstentions will be counted in
tabulations of the votes cast on proposals presented to shareholders, whereas
broker non-votes will not be counted for purposes of determining whether a
proposal has been approved.
At the date of this Proxy Statement, management of the Company does not know
of any business to be presented at the Annual Meeting other than those matters
which are set forth in the Notice accompanying this Proxy Statement. If any
other business should properly come before the Annual Meeting, the shares of
Common Stock represented by proxies at the Annual Meeting will be voted with
respect to such business in accordance with the judgment of the persons named
in the proxy.
COMMON STOCK OUTSTANDING AND PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on May 5, 1998 as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting. At that date there were outstanding 27,189,974
shares of Common Stock, and the holders thereof will be entitled to one vote
for each share of Common Stock held of record by them on that date for each
proposal to be presented at the Annual Meeting.
1
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The following table sets forth information with respect to the shares of
Common Stock (the only outstanding class of voting securities of the Company)
owned of record and beneficially as of May 5, 1998, unless otherwise
specified, by (i) all persons who own of record or are known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
each director, (iii) the chief executive officer and the four most highly
compensated executive officers of the Company during fiscal 1998 (the "Named
Executive Officers"), and (iv) all directors and executive officers of the
Company as a group:
<TABLE>
<CAPTION>
SHARES OWNED TOTAL STOCK-BASED
BENEFICIALLY(1) HOLDINGS(2)
--------------------- ---------------------
NAME AND ADDRESS NUMBER PERCENT NUMBER PERCENT
---------------- --------- ------- --------- -------
<S> <C> <C> <C> <C>
Morrie K. Abramson................. 834,150(3) 3.0% 1,234,150(4) 4.4%
Stephen J. Chapko.................. 36,667(5) * 87,500(6) *
Richard J. Hightower............... 19,167(7) * 32,500(8) *
Larry D. Olson..................... 83,267(9) * 171,600(10) *
Mark A. Zerbe...................... 125,067(11) * 213,400(12) *
Terrence M. Hunt................... 621,734(13) 2.3% 621,734(13) 2.3%
Max S. Levit....................... 26,750(14) * 26,750(14) *
David Siegel....................... 51,750(15) * 51,750(15) *
Richard C. Webb.................... 40,000(16) * 40,000(16) *
Alvin L. Zimmerman................. 60,250(17) * 60,250(17) *
AMVESCAP PLC
1315 Peachtree Street NE
Atlanta, Georgia 30309............ 1,561,100(18) 5.7% 1,561,100(18) 5.7%
Pilgrim, Baxter & Associates, Ltd.
825 Duportail Road
Wayne, Pennsylvania 19087......... 1,400,800(19) 5.2% 1,400,800(19) 5.2%
All executive officers and
directors as a group
(16 persons)...................... 2,040,488(20) 7.2% 2,826,651(21) 9.7%
</TABLE>
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* Less than 1%
(1) The persons listed have the sole power to vote and dispose of shares
beneficially owned by them except as otherwise indicated. The calculation
of shares that may be acquired upon the exercise of outstanding options as
indicated in the footnotes includes options exercisable within 60 days.
(2) The amounts in this column include the equity securities shown in the
"Shares Owned Beneficially" column and options that are not currently
exercisable within 60 days.
(3) Includes 670,000 shares that may be acquired upon the exercise of
outstanding options. Also includes 5,000 shares held in trust for Mr.
Abramson's children, as to which shares Mr. Abramson disclaims beneficial
ownership.
(4) Includes 400,000 shares subject to options that are not currently
exercisable, of which options to acquire 175,000 shares have been assigned
by Mr. Abramson to trusts for his children. Mr. Abramson disclaims
beneficial ownership of the options held in trust for his children.
(5) Includes 6,667 shares that may be acquired upon exercise of outstanding
options.
(6) Includes 50,833 shares subject to options that are not currently
exercisable.
(7) Includes 9,167 shares that may be acquired upon exercise of outstanding
options.
2
<PAGE>
(8) Includes 13,333 shares subject to options that are not currently
exercisable.
(9) Includes 41,667 shares that may be acquired upon exercise of outstanding
options.
(10) Includes 88,333 shares subject to options that are not currently
exercisable.
(11) Includes 111,667 shares that may be acquired upon exercise of outstanding
options.
(12) Includes 88,333 shares subject to options that are not currently
exercisable.
(13) Includes 589,134 shares held by THMJH Family Trust, 5,000 shares held by
THMJH Family Partners, Ltd. and 11,850 shares held in trust for Mr.
Hunt's children.
(14) Includes 19,250 shares that may be acquired upon the exercise of
outstanding options.
(15) Includes 32,750 shares that may be acquired upon the exercise of
outstanding options, and 6,500 shares that are owned of record by Mr.
Siegel's wife.
(16) Includes 12,500 shares that may be acquired upon the exercise of
outstanding options.
(17) Includes 38,750 shares that may be acquired upon the exercise of
outstanding options.
(18) As reported in a Schedule 13G filed by AMVESCAP PLC with the Securities
and Exchange Commission on February 11, 1998.
(19) As reported in a Schedule 13G filed by Pilgrim, Baxter & Associates, Ltd.
with the Securities and Exchange Commission on February 12, 1998.
(20) Includes 1,016,504 shares that may be acquired upon the exercise of
outstanding options.
(21) Includes 786,163 shares subject to options that are not currently
exercisable.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
GENERAL
Three directors are to be elected at the Annual Meeting. The Company
recommends voting for the election of each of the nominees for director listed
below. The persons named as proxy holders in the accompanying proxy intend to
vote each properly signed and submitted proxy for the election as a director
of each of the persons named as a nominee below under "Nominees for Director"
unless authority to vote in the election of directors is withheld on such
proxy. If, for any reason, at the time of the election one or more of such
nominees should be unable to serve, the proxy will be voted for a substitute
nominee or nominees selected by the Board of Directors. Directors are elected
by a plurality of votes cast at the Annual Meeting. Pursuant to the Company's
Bylaws, any nomination of other persons to be elected as directors at the
Annual Meeting must be received by the Secretary of the Company not later than
the close of business on the tenth day following the date on which notice of
the Annual Meeting is first given.
Unless otherwise specified, all properly executed proxies received by the
Company will be voted for the election of Messrs. Max S. Levit, Larry D. Olson
and Richard C. Webb to hold office until the 2001 annual meeting of
shareholders and until each of their respective successors is elected and
qualified.
THE COMPANY RECOMMENDS VOTING "FOR" THE NOMINEES.
3
<PAGE>
NOMINEES FOR DIRECTOR
The following table sets forth the name and age of each nominee listed in
the enclosed form of proxy for director to hold office until the 2001 annual
meeting of shareholders, his principal position with the Company and the year
he became a director of the Company.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE POSITION
---- --- -------------- --------
<S> <C> <C> <C>
Max S. Levit...................... 63 1995 Director
Larry D. Olson.................... 41 1998 Director, President, Chief
Operating Officer and
President of K*TEC
Richard C. Webb................... 64 1986 Director
</TABLE>
Mr. Levit, President of Grocers Supply Company, Inc. since January 1992, has
served as a director of the Company since April 1995. Mr. Levit also serves on
the Board of M.D. Anderson Hospital and The University of Texas--Houston
Health Science Center.
Mr. Olson was appointed President, Chief Operating Officer and a director in
May 1998, and he was appointed President of K*TEC Electronics Corporation
("K*TEC"), the Company's wholly-owned manufacturing subsidiary, in November
1997. He previously served as Executive Vice President of the Company since
1994, and as President of Kent Components since January 1997. Mr. Olson joined
the Company as a Vice President in 1992, after the Company's acquisition of
Shelley-Ragon, Inc. He had been President of Shelley-Ragon, Inc. since 1991.
Mr. Webb, a founder of Harris Webb & Garrison, a Houston-based investment
banking and brokerage firm, has served as a director of the Company since June
1986. He has been involved in the investment banking business since 1960, and
was a founder of Lovett Underwood Neuhaus & Webb, Inc., a subsidiary of Kemper
Securities.
OTHER DIRECTORS
The following table sets forth the name and age of each director of the
Company not up for election this year, his principal position with the
Company, the year he became a director of the Company and the year that his
term as a director expires.
<TABLE>
<CAPTION>
TERM DIRECTOR
NAME AGE EXPIRES SINCE POSITION
---- --- ------- -------- --------
<S> <C> <C> <C> <C>
Morrie K. Abramson............. 63 1999 1973 Chairman of the Board and
Chief Executive Officer
Terrence M. Hunt............... 50 2000 1997 Director, Executive Vice
President and President of
Futronix Systems
David Siegel................... 72 2000 1990 Director
Alvin L. Zimmerman............. 54 1999 1986 Director
</TABLE>
Mr. Abramson, a co-founder of the Company, has served as Chief Executive
Officer and a director since 1973 and Chairman of the Board since 1977. He has
been in the electronics distribution business since 1956. Mr. Abramson has
also been Chairman of the Board of K*TEC since its incorporation in 1983. He
previously served as President of the Company since 1995.
Mr. Hunt has served as Executive Vice President, President of Futronix
Systems and as a director since January 1997. Prior to joining the Company,
Mr. Hunt served as President of Futronix Corporation, which was acquired by
the Company in January 1997. Mr. Hunt founded Futronix Corporation in 1991.
Mr. Siegel has served as a director of the Company since September 1990, and
has been in the electronics distribution business since 1954. Mr. Siegel is
Vice President, director and the founder of Great American
4
<PAGE>
Electronics, a distribution company serving industrial distributors. He is
also a director of Micronetics and Surge Components.
Mr. Zimmerman has served as a director of the Company since June 1986. As a
judge he presided over the 309th Family District Court and the 269th Civil
District Court of Harris County, Texas from 1980 to 1984. Since 1984, he has
been a shareholder, officer and director in the law firm of Zimmerman,
Axelrad, Meyer, Stern & Wise, P.C. and its predecessor firms.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the Company's last fiscal year, the Board of Directors held seven
meetings. All directors attended all of the meetings of the Board of Directors
and the committees on which they served in fiscal 1998, with the exception of
one director who missed one meeting of the Board of Directors.
The Audit Committee, which was composed of Messrs. Levit, Siegel, Webb and
Zimmerman, met on two occasions during the last fiscal year. The Audit
Committee reviews with the Company's independent auditors the plan, scope and
results of the annual audit and the procedures for and results of internal
controls.
The Compensation Committee, which was composed of Messrs. Levit, Siegel,
Webb and Zimmerman, met on three occasions during the last fiscal year. The
Compensation Committee is authorized to determine the compensation of Mr.
Abramson. In addition, it is authorized to make recommendations to the Board
of Directors regarding the compensation of the Company's other officers.
The Stock Option Committee, which was composed of Messrs. Levit, Siegel and
Webb, met on three occasions during the last fiscal year. The Stock Option
Committee is authorized to grant options under, and to otherwise administer,
the Company's stock option plans, other than the Company's 1996 Non-Employee
Director Stock Option Plan, which is administered by the entire Board of
Directors.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $1,000 per meeting
for attendance at the meetings of the Board of Directors and $500 per meeting
for attendance at meetings of each committee on which such director serves (in
the case of committee meetings not held before or after Board meetings). In
addition to the above fees, directors who are not employees of the Company
receive an annual retainer in the amount of $18,000 and committee chairmen
receive $2,000 annually, with total compensation not to exceed $50,000
annually.
EXECUTIVE OFFICERS
The following table sets forth the names, ages and positions of the persons
who are not directors and who are executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Keith K. Ayers............. 59 Vice President
Frank M. Billone........... 52 Executive Vice President and Chief Information
Officer
Stephen J. Chapko.......... 44 Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
William H. Fountain........ 41 Vice President
R. Michael Gibbons......... 40 Vice President of the Company and Executive Vice
President and General Manager of K*TEC
Richard J. Hightower....... 38 Executive Vice President and
President of Kent Components
Pamela P. Huffman.......... 39 Vice President
David D. Johnson........... 33 Vice President, Corporate Controller
Mark A. Zerbe.............. 37 Executive Vice President and
President of Kent Datacomm
</TABLE>
5
<PAGE>
Mr. Ayers joined the Company in 1976 as a purchasing agent. Since then, he
has served in various capacities, including manager of the management
information systems. Mr. Ayers currently serves as Vice President and has
responsibilities for training, special projects and administrative matters.
Mr. Billone was appointed Executive Vice President in May 1998 and Chief
Information Officer in June 1997. He previously served as Vice President of
Information Services--Distribution since joining the Company in January 1996.
Prior to joining the Company, he held various information systems positions
with General Electric since 1967.
Mr. Chapko was appointed Executive Vice President, Chief Financial Officer
in January 1997. He served as Vice President and Treasurer of the Company
since 1989, and he was appointed Secretary in 1993. He joined the Company as
Assistant Treasurer in 1987.
Mr. Fountain has been Vice President since 1987 and is responsible for
product management in the distribution operations. He joined the Company in
1980 as a purchasing agent.
Mr. Gibbons joined the Company in February 1997 as Director of Quality for
K*TEC. In January 1998, he was appointed Vice President of the Company and
Executive Vice President and General Manager of K*TEC. Prior to joining the
Company, Mr. Gibbons was Manager, Product Center Quality at Schlumberger
Dowell since 1993 and held various quality and engineering positions with
divisions of Schlumberger since 1984.
Mr. Hightower was appointed Executive Vice President and President of Kent
Components in May 1998, and previously served as Vice President and General
Manager of Kent Components since November 1997. He joined the Company in 1993
as a General Manager and was appointed Regional Manager in 1995. Prior to
joining the Company, Mr. Hightower was a General Manager at Future Electronics
since 1990.
Ms. Huffman joined the Company as K*TEC Human Resources Manager in 1988 and
in 1989 was appointed Corporate Human Resources Manager. In January 1997, she
was appointed Vice President of Human Resources.
Mr. Johnson was appointed Vice President, Corporate Controller in January
1996. He joined the Company in 1988 as Accounts Payable Supervisor.
Mr. Zerbe has served as Executive Vice President of the Company since 1994
and became President of Kent Datacomm in January 1997. He previously served as
a Vice President of the Company since 1988. Mr. Zerbe joined the Company as a
sales representative in 1985.
Other than as set forth below under the heading "Executive Agreements," the
executive officers serve at the pleasure of the Board of Directors.
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE(1)
The Compensation Committee of the Board of Directors (the "Compensation
Committee") and the Stock Option Committee of the Board of Directors (the
"Stock Option Committee")(collectively, the "Committees") are both composed
entirely of outside directors, and together, the Committees are responsible
for developing and making recommendations to the Board with respect to the
Company's executive compensation policies. This Report sets forth the
components of the Company's executive officer compensation and describes the
basis on which the fiscal 1998 compensation determinations were made by the
Committees with respect to the executive officers of the Company.
- --------
(1) Notwithstanding filings by the Company with the Securities and Exchange
Commission ("SEC") that have incorporated or may incorporate by reference
other SEC filings (including this proxy statement) in their entirety, this
Report of the Compensation Committee and the Stock Option Committee shall
not be incorporated by reference into such filings and shall not be deemed
to be "filed" with the SEC except as specifically provided otherwise or to
the extent required by Item 402 of Regulation S-K.
6
<PAGE>
The Committees have designed the Company's executive compensation programs
based on their belief that executive compensation should reflect the value
created for shareholders while supporting the Company's strategic goals. To
achieve these objectives, the Committees have adopted the following guidelines
for the Company's executive compensation programs:
1. Executive compensation should be meaningfully related to the value
created for shareholders.
2. Executive compensation programs should support the short-term and
long-term strategic goals and objectives of the Company.
3. Executive compensation programs should reflect and promote the
Company's value and reward individuals for outstanding contributions to the
Company's success.
4. Short-term and long-term executive compensation must play a critical
role in the Company's efforts to attract and retain well-qualified
executives.
The Company's executive compensation program consists of three components: a
base salary, a related bonus program tied to Company performance and a stock
option program. The Compensation Committee is responsible for the base salary
and bonus components of the program, and the Stock Option Committee is
responsible for the stock option component of the program. The Committees
regularly review the components of the Company's executive compensation
program for which they are responsible to ensure that they are consistent with
the Company's objectives.
Base Salary--The Compensation Committee, in determining the appropriate base
salaries of the Company's executive officers, generally considers the level of
executive compensation in similar companies in the industry. In addition, the
Compensation Committee takes into account (i) the performance of the Company
and the roles of the individual executive officers with respect to such
performance, and (ii) the particular executive officer's specific
responsibilities and the performance of such executive officer in those areas
of responsibility. From time to time surveys are undertaken to provide
competitive information to the Compensation Committee. In this regard the
Compensation Committee has conferred with third party compensation and
employee benefit consultants and has reviewed published information which
members of the Compensation Committee have obtained.
Annual Incentives--The bonus program provides direct financial incentives in
the form of an annual cash bonus to executive officers to achieve and exceed
the Company's annual goals. The Company currently maintains for Mr. Abramson
an incentive cash bonus plan (the "CEO Bonus Plan"). Bonuses pursuant to the
CEO Bonus Plan are based upon the Company's achievement of certain budgeted
goals as determined by the Compensation Committee. Ninety percent of such
bonus is based on the Company's pre-tax earnings, 5% is based on the growth of
the Company's earnings per share, and 5% is based on the Company's stock
performance.
The Company has developed bonus programs in which the Named Executive
Officers participate, pursuant to which they receive cash bonuses resulting
from the achievement of certain targeted goals for the Company as a whole or
for certain divisions of the Company.
Long-Term Incentives--The Company currently maintains the 1996 Employee
Incentive Plan (the "Incentive Plan"), the Amended and Restated 1987 Stock
Option Plan, a Chief Executive Officer Stock Option Plan and Agreement, an
Executive Vice President of Sales-Distribution Stock Option Plan and
Agreement, an Executive Vice President of Operations-Distribution Stock Option
Plan and Agreement, a Vice President, Secretary and Treasurer Stock Option
Plan and Agreement and a Vice President, Corporate Controller Stock Option
Plan and Agreement. These stock option plans align executive officer
compensation and shareholder return, and enable executive officers to develop
and maintain a significant, long-term stock ownership position in the
Company's Common Stock.
Named Executive Officers--Consistent with the Company's compensation program
outlined above, compensation for each of the Named Executive Officers, as well
as other senior executives, consists of a base salary, bonus and stock
options. The base salaries for the Named Executive Officers for fiscal 1998
were believed
7
<PAGE>
to be at levels below competitive amounts paid to executives of other
companies engaged in the same or similar business as the Company with
comparable qualifications, experience and responsibilities. Cash bonuses have
been accrued for payment to all Named Executive Officers of the Company as a
result of the Company achieving its targeted goals, and the guidance and
performance of such officers in assisting the Company to achieve those goals
during fiscal 1998.
Chief Executive Officer--In addition to the long-term incentive components,
the Compensation Committee believes that the cash compensation of the chief
executive officer ("CEO") should be impacted by Company performance. Mr.
Abramson, who has served as CEO of the Company since 1973, earned a base
salary in fiscal 1998 of $435,741, which the Compensation Committee believes
to be below the average of the base salary for chief executive officers of
other companies engaged in the same or similar business as the Company with
comparable qualifications, experience and responsibilities. Moreover, Mr.
Abramson earned a bonus of $1,700,268 in fiscal 1998 under the CEO Bonus Plan.
The Company maintains an employment agreement with Mr. Abramson (the
"Employment Agreement"), which provides for the Company's continued employment
of Mr. Abramson until March 31, 2001 for a minimum annual base salary and
bonus of $950,000. The Compensation Committee believes that the Employment
Agreement secures Mr. Abramson's commitment to continue leading the Company
over the next three years.
Limitation of Tax Deduction for Executive Compensation--The Committees
desire their compensation policy to be cost and tax effective. In light of
federal tax laws that prohibit publicly traded companies from receiving a tax
deduction on compensation paid to Named Executive Officers in excess of $1
million annually, the Committees continually review all compensation
components to ensure the Company is maximizing corporate tax deductions, when
feasible and consistent with its prior commitments to the Company's Named
Executive Officers.
Compensation Committee: Max S. Levit, David Siegel, Richard C. Webb and
Alvin L. Zimmerman.
Stock Option Committee: Max S. Levit, David Siegel and Richard C. Webb.
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
No member of the Compensation Committee or the Stock Option Committee was,
during fiscal 1998, an officer or employee of the Company or any of its
subsidiaries, or was formerly an officer of the Company or any of its
subsidiaries or had any relationships requiring disclosure by the Company.
During fiscal 1998, no executive officer of the Company served as (i) a
member of the compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive officers
served on the Compensation Committee or the Stock Option Committee, (ii) a
director of another entity, one of whose executive officers served on the
Compensation Committee or Stock Option Committee, or (iii) a member of the
compensation committee (or other board committee performing equivalent
functions) of another entity, one of whose executive officers served as a
director of the Company.
8
<PAGE>
COMPENSATION TABLES
The following table sets forth compensation information for the Named
Executive Officers for services rendered to the Company or any of its
subsidiaries during the Company's fiscal years 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------------
OTHER ANNUAL SECURITIES ALL OTHER
FISCAL SALARY BONUS COMPENSATION UNDERLYING OPTIONS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
--------------------------- ------ ------------------- ------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Morrie K. Abramson........................ 1998 435,741 1,700,268 92,974(2) 0 71,267
Chairman of the Board and 1997 390,250 1,767,268 44,382 500,000 69,000
Chief Executive Officer 1996 391,500 1,771,109 9,430 0 29,163
Mark A. Zerbe............................. 1998 193,700 308,034 8,746 0 14,169
Executive Vice President and 1997 164,602 110,138 6,875 20,000 13,425
President of Kent Datacomm 1996 160,251 132,908 6,509 75,000 10,557
Larry D. Olson............................ 1998 206,696 251,719 5,415 0 17,302
President and Chief Operating Officer 1997 164,602 110,138 6,474 20,000 16,102
1996 160,385 132,908 4,569 75,000 4,661
Stephen J. Chapko......................... 1998 175,006 150,000 8,092 0 13,611
Executive Vice President, Chief Financial 1997 99,523 100,000 8,075 20,000 9,804
Officer, Treasurer and Secretary 1996 91,032 75,000 7,145 37,500 4,110
Richard J. Hightower...................... 1998 125,104 164,650 4,154 10,000 10,923
Executive Vice President and 1997 100,893 50,981 0 5,000 7,508
President of Kent Components 1996 95,110 37,385 0 22,500 8,001
</TABLE>
- --------
(1) Includes, in fiscal 1998, Company matching contributions of $5,303,
$5,085, $5,442, $5,405 and $6,510, respectively, pursuant to the Company's
Tax-Deferred Savings and Retirement Plan and Trust, and Company matching
contributions of $65,964, $9,084, $11,860, $8,206 and $4,413,
respectively, pursuant to the Company's Deferred Compensation Plan.
(2) Includes $66,321 attributable to travel on aircraft in which the Company has
an aggregate undivided ownership interest of 25%. The Board of Directors has
adopted a policy that directs Mr. Abramson to use the Company's aircraft to
the fullest extent practicable for his business and personal air travel.
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE OF POTENTIAL REALIZABLE VALUE
TOTAL OPTIONS MARKET AT ASSUMED STOCK
GRANTED TO EXERCISE PRICE ON PRICE APPRECIATION
OPTIONS EMPLOYEES IN PRICE (PER DATE OF FOR OPTION TERMS
GRANTED FISCAL YEAR SHARE) GRANT EXPIRATION ---------------------------
NAME (#) (%) ($) ($) DATE (5%) (10%)
---- ------- ------------- ---------- -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Morrie K. Abramson...... 0 0 0 0 -- 0 0
Mark A. Zerbe........... 0 0 0 0 -- 0 0
Larry D. Olson.......... 0 0 0 0 -- 0 0
Stephen J. Chapko....... 0 0 0 0 -- 0 0
Richard J. Hightower.... 10,000 2.1% 20.19 20.19 12/22/07 $ 126,974 $ 321,777
</TABLE>
9
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Morrie K. Abramson...... 0 $ 0 670,000/400,000 $10,391,600/$ 800,000
Mark A. Zerbe........... 0 $ 0 111,667/88,333 $ 1,330,052/$1,138,499
Larry D. Olson.......... 0 $ 0 41,667/88,333 $ 450,002/$1,138,499
Stephen J. Chapko....... 0 $ 0 6,667/50,833 $ 30,002/$ 599,249
Richard J. Hightower.... 8,501 $237,047 9,167/13,333 $ 82,202/$ 29,399
</TABLE>
PERFORMANCE GRAPHS
The following graphs compare the performance of the Company's Common Stock to
a Peer Group Index (as defined below) and the New York Stock Exchange Market
Index (the "NYSE Market Index") for the Company's last five fiscal years and
last ten fiscal years, respectively. The Peer Group Index is made up of the
companies whose common stock has traded publicly for the last ten years and
whose primary four-digit SIC Code is the same as the Company's.
FIVE YEAR CUMULATIVE TOTAL RETURN
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
FISCAL YEAR
1993 1994 1995 1996 1997 1998
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Kent Electronics Corporation............ 100 99.54 164.57 394.69 264.98 241.28
Peer Group Index(1)..................... 100 100.23 111.51 142.50 154.41 171.45
NYSE Market Index....................... 100 104.11 115.48 150.82 176.11 256.48
</TABLE>
Assumes $100 invested on April 4, 1993 in Company Common Stock or Index and
that dividends are reinvested.
10
<PAGE>
TEN YEAR CUMULATIVE TOTAL RETURN
[GRAPH APPEARS HERE]
FISCAL YEAR
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Kent Electronics
Corporation............ 100.00 88.68 124.53 269.80 301.88 405.65 403.77 667.57 1,601.04 1,074.90 978.73
Peer Group Index(1)..... 100.00 94.41 125.17 130.30 173.56 217.39 217.90 242.41 309.79 335.67 372.73
NYSE Market Index....... 100.00 114.42 133.01 150.59 165.68 190.14 197.96 219.58 286.78 334.87 487.68
</TABLE>
Assumes $100 invested on April 3, 1988 in Company Common Stock or Index and
that dividends are reinvested.
- --------
(1) Includes the following companies:
All American Semiconductor, Arrow Electronics, Avnet, Bell Industries, Bell
Microproducts, Brightpoint, Cellstar, Communications World International,
Dunn Computer, Electrocon International, Farmstead Telephone Group, Gentner
Communications, Highwaymaster Communications, Intellicell, Internet
Communications, Jaco Electronics, Kent Electronics, Marshall Industries,
Norstan, Nu-Horizons Electronics, Pioneer-Standard Electronics, Premier
Farnell, Rada Electronics Industries, Reptron Electronics, Richardson
Electronics, Richey Electronics, Savoir Technology Group, Sterling
Electronics, Taitron Components, Tech Electro Industries, Tessco
Technologies, Universal Security Instruments, Video Display, View Tech and
World Access.
EXECUTIVE AGREEMENTS
Abramson Agreements
The Employment Agreement between Mr. Abramson and the Company expires on
March 31, 2001 and provides for a minimum annual base salary and bonus of at
least $950,000. The Employment Agreement also provides that Mr. Abramson or his
spouse, or the estate of either Mr. Abramson or his spouse, will receive an
LOGO
11
<PAGE>
annual retirement benefit of $750,000 for the greater of (i) 15 years, (ii)
Mr. Abramson's life or (iii) the life of his spouse, upon termination of Mr.
Abramson's employment for any reason other than for Just Cause or without Good
Reason (each as defined in the Employment Agreement). If Mr. Abramson dies or
becomes disabled prior to March 31, 2001, the annual retirement benefit will
be $950,000 until March 31, 2001, and then $750,000 annually thereafter. The
Employment Agreement provides for termination by the Company for Just Cause or
by Mr. Abramson for Good Reason. Upon a termination for Just Cause or Mr.
Abramson's resignation without Good Reason prior to March 31, 2001, no
retirement benefits would be paid. If prior to a Change in Control (as defined
in the Employment Agreement), Mr. Abramson is discharged without Just Cause or
resigns for Good Reason, or if Mr. Abramson's employment is terminated for any
reason after a Change in Control, Mr. Abramson shall be entitled to receive a
cash lump sum payment equal to all compensation due to him for the remainder
of the term of the Employment Agreement. A Change in Control in the Employment
Agreement is deemed to have occurred on the earliest of the following: (i) if
any entity or person becomes the beneficial owner of 20% or more of the Common
Stock of the Company; (ii) the approval by the shareholders of the Company of
a definitive agreement to sell or otherwise dispose of substantially all of
the assets, merge or consolidate the Company in which the Company is not the
surviving corporation; or (iii) the date upon which, during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reason to constitute at
least a majority thereof.
In January 1993, the Company entered into an Executive Health Care Benefits
and Consulting Agreement with Mr. Abramson pursuant to which he may provide
consulting services to the Company after retirement and will be covered under
the Company's health care plan. Under such agreement, Mr. Abramson will pay
all required premiums and other costs for Medicare coverage. Under the
Company's health care plan, the Company will provide medical, dental and
prescription drug benefits for Mr. Abramson and his spouse for those items and
expenses which are eligible to be covered under the health care plan to the
extent not covered by Medicare.
In March 1993, the Company entered into an agreement with Mr. Abramson
pursuant to which the Company, upon a change in control of the Company, will
make a cash payment to him in an amount sufficient to pay all excise taxes
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), so as to place such executive officer in the same after-tax position
had there been no such taxes.
Hunt Agreements
The Company entered into an Employment Agreement with Mr. Hunt (the "Hunt
Employment Agreement") that became effective upon the acquisition by the
Company of Futronix Corporation and Wire & Cable Specialties Corporation,
which together formed the Company's Futronix Systems division ("Futronix").
The Hunt Employment Agreement expires April 1, 2000 (the "Employment Term").
Under the Hunt Employment Agreement, Mr. Hunt receives an annual salary of
$150,000 that may be adjusted upward on an annual basis by the Company's Board
of Directors, but the salary cannot be decreased (such amount, as adjusted, is
referred to as "Salary"), and Mr. Hunt is entitled to fringe benefits
comparable to those provided to other officers of the Company and its
subsidiaries in comparable executive positions (the "Fringe Benefits"). In
addition, Mr. Hunt is entitled to receive a bonus (the "Bonus") as may be
determined from time to time by the Company's Board of Directors, provided
that Mr. Hunt will participate in the Company's bonus plans on the same basis
as other officers of the Company and its subsidiaries in comparable executive
positions. Upon the resignation of Mr. Hunt or the termination of the Hunt
Employment Agreement for "cause", Mr. Hunt will receive any unpaid Salary and
Fringe Benefits that have accrued through the date of termination. If Mr. Hunt
becomes totally disabled, Futronix may terminate the Hunt Employment
Agreement, and upon such termination, Mr. Hunt would be entitled to (i) any
unpaid Salary and Fringe Benefits that have accrued through the date of
termination; (ii) any benefits that he may be entitled to receive under any
then existing disability benefit plans of Futronix (including plans included
in the Fringe Benefits), and (iii) in the fiscal year immediately following
the fiscal year of termination, the Bonus to which Mr. Hunt would have been
entitled if he had been employed for the full period to which the Bonus
relates, but reduced proportionately to correspond to the portion of the
period for which Mr. Hunt was actually employed (a "Proportionate Bonus").
Upon Mr. Hunt's death, the Company
12
<PAGE>
must pay to Mr. Hunt's estate any unpaid Salary and Fringe Benefits that have
accrued through the date of death and a Proportionate Bonus. If the Hunt
Employment Agreement is terminated without cause, Mr. Hunt would be entitled
to an amount equal to (i) the Salary for the remainder of the Employment Term
plus (ii) an amount equal to (a) the Bonus paid to Mr. Hunt for the fiscal
year immediately preceding the fiscal year of termination divided by 12,
multiplied by (b) the number of months from the end of the last fiscal year
for which a Bonus was paid through the end of the Employment Term; provided,
however, that if the aggregate amount payable to Mr. Hunt upon termination
without cause is not at least equal to one year's Salary, then the Company may
either increase the amount to be paid to Mr. Hunt to one year's Salary or
release Mr. Hunt from the covenants not to compete to which he is subject.
The distribution center of Futronix in Houston, Texas is leased from a trust
of which Mr. Hunt is the trustee. The base annual rent of Futronix for the
property is based on the sales of Futronix for the preceding calendar year and
is calculated each December 31 for the following year's rent. Futronix is
currently at a sales level requiring it to pay an annual rent of $300,000, the
maximum annual rent permitted under the lease. In addition to the base amount
of rent, Futronix is responsible for all expenses related to the operation of
the property including maintenance, utilities, taxes and insurance. The term
of the lease expires on December 31, 2003, and Futronix has an option to renew
the lease for an additional five-year term. The Company believes that the
terms of the lease, including the annual rent, are on terms no less favorable
than those that could be obtained from an unrelated third party.
CERTAIN TRANSACTIONS
Mr. Zimmerman, a director of the Company, is a shareholder, officer and
director of the law firm of Zimmerman, Axelrad, Meyer, Stern & Wise, P.C., a
firm retained by the Company.
During fiscal 1997 and 1998, the Company made loans to certain current and
former executive officers and directors of the Company to finance their
purchase of Company Common Stock. Such persons with loans from the Company of
$60,000 or more, and their respective loan balances and weighted-average
interest rates, are stated in the table below. The loan balances in the table
below include outstanding principal and accrued interest.
<TABLE>
<CAPTION>
LARGEST LOAN
BALANCE IN LOAN BALANCE AT INTEREST
NAME FISCAL 1998 MARCH 28, 1998 RATE
---- ------------ --------------- --------
<S> <C> <C> <C>
Morrie K. Abramson..................... $467,033 $467,033 6.36%
Frank M. Billone....................... $168,912 $168,912 6.47%
Stephen J. Chapko...................... $101,771 $101,771 6.02%
Randy J. Corporron..................... $235,472 -- 6.84%
Rodney J. Corporron.................... $238,236 -- 6.84%
William H. Fountain.................... $234,522 $234,522 6.74%
Richard J. Hightower................... $213,282 $213,282 6.02%
David D. Johnson....................... $482,134 $482,134 6.35%
Max S. Levit........................... $183,054 $183,054 6.27%
Cathy L. O'Leary....................... $167,430 -- 6.57%
Larry D. Olson......................... $321,705 $321,705 6.26%
David Siegel........................... $114,503 $114,503 6.33%
Richard C. Webb........................ $446,369 $446,369 6.43%
Mark A. Zerbe.......................... $271,865 $271,865 6.18%
</TABLE>
13
<PAGE>
PROPOSAL NO. 2--ADOPTION OF AMENDED AND RESTATED
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Company's 1996 Non-Employee Director Stock Option Plan (the "Plan") was
adopted by the Company's shareholders at the Company's annual meeting held on
June 27, 1996, with the Plan's effective date being May 7, 1996. The Board of
Directors has adopted, subject to approval by the shareholders, an amended and
restated Plan (the "Amended Plan") which, among other things, (i) increases by
100,000 to 200,000 the number of shares of Common Stock that may be purchased
under stock options granted under the Plan, (ii) increases from 5,000 to 7,500
the number of shares of Common Stock that may be purchased under stock options
granted under the Plan on the date of each annual meeting of the Company
beginning with the Annual Meeting, and (iii) provides for a one-time grant of
an option to purchase 2,500 shares of Common Stock as of September 3, 1997,
the date the Amended Plan was adopted by the Company's Board of Directors. The
Board of Directors has directed that the Amended Plan be submitted to the
shareholders of the Company for approval at the Annual Meeting. This summary
of the material terms of the Amended Plan is qualified in its entirety by
reference to the complete text of the Amended Plan which is attached to this
Proxy Statement as Appendix A.
Purpose. The purpose of the Amended Plan is to provide the non-employee
directors of the Company additional incentive for their service as directors.
The success of the Company's business is dependent on the incentive, effort
and judgment of its directors.
Shares of Stock Available for Grant of Options. The Plan currently provides
for the grant of options to purchase an aggregate of 100,000 shares of Common
Stock. As of the date of this Proxy Statement (and excluding the one-time
grant to each non-employee director of an option to purchase 2,500 shares of
Common Stock as of September 3, 1997 as provided in the Amended Plan), options
to purchase 60,000 shares of Common Stock are available for grant under the
Plan. If the Amended Plan is approved by the shareholders, the Amended Plan
will provide for the grant of options to purchase a total of 200,000 shares of
Common Stock, which would permit the grant of options to purchase an
additional 160,000 shares of Common Stock under the Amended Plan (including
the one-time grant to each non-employee director of an option to purchase
2,500 shares of Common Stock as of September 3, 1997 and an option to purchase
7,500 shares of Common Stock on the date of the Annual Meeting as provided in
the Amended Plan). The Common Stock subject to the Amended Plan may be
treasury shares or authorized but unissued shares. In the event a stock option
lapses unexercised or partially unexercised or is surrendered for
cancellation, the shares of Common Stock allocable to the unexercised portion
of that stock option may again be subject to a stock option under the Amended
Plan.
The Amended Plan provides that the number of shares subject thereto and
shares covered by outstanding options granted under the Amended Plan will be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend (but only on the Common Stock), a stock
split, a reverse stock split, or any other increase or decrease in the number
of such shares effected without receipt of consideration by the Company, as
well as in the event of a spin-off, spin-out or other distribution of assets
to shareholders of the Company, to the extent necessary to prevent dilution of
the interests of grantees pursuant to the Plan or the Amended Plan or of the
other shareholders of the Company, as applicable.
Term. The Amended Plan was adopted effective September 3, 1997, subject to
approval by the shareholders at the Annual Meeting. The term of the Amended
Plan will continue until the earlier of (1) May 7, 2006 or (2) the date on
which there have been granted to eligible directors pursuant to the Plan and
the Amended Plan options to purchase an aggregate of 200,000 shares of Common
Stock consistent with the terms of the Plan and the Amended Plan; provided,
however, that all outstanding stock options granted under the Plan and the
Amended Plan will continue to be governed by the terms and conditions of the
Amended Plan.
Administration. The Amended Plan will be administered by the Board of
Directors, and all questions of interpretation and application of the Plan and
the Amended Plan are determined by the Board of Directors.
14
<PAGE>
Participation. All non-employee directors are eligible to participate in the
Plan and will be eligible to participate in the Amended Plan. Under the Plan
currently, stock options to purchase 5,000 shares are automatically granted
upon each non-employee director's initial election to the Board, and stock
options to purchase 5,000 shares are automatically granted to each non-
employee director effective each year on the date of the annual meeting of
shareholders. If the Amended Plan is approved, non-employee directors will be
granted options as follows: an option to purchase 7,500 shares of Common Stock
will be granted to a non-employee director if his initial election is at the
Company's annual meeting of shareholders or after the Company's annual meeting
of shareholders, but before the end of the Company's second fiscal quarter; an
option to purchase 5,625 shares of Common Stock will be granted to a non-
employee director if his initial election is during the Company's third fiscal
quarter; an option to purchase 3,750 shares of Common Stock will be granted to
a non-employee director if his initial election is during the Company's fourth
fiscal quarter; and an option to purchase 1,875 shares of Common Stock will be
granted to a non-employee director if his initial election is during the
Company's first fiscal quarter, but before the Company's annual meeting of
shareholders. In addition, under the Amended Plan, each non-employee director
shall, after his initial election to the Board of Directors and effective as
of the date of each annual meeting of the shareholders beginning with the 1998
Annual Meeting, be granted a stock option to purchase from the Company 7,500
shares of Common Stock. Moreover, under the Amended Plan, each non-employee
director will be granted a stock option to purchase from the Company 2,500
shares of Common Stock effective as of September 3, 1997.
Stock Options. Under the Amended Plan, each stock option shall be evidenced
by a stock option agreement containing terms and conditions not inconsistent
with the provisions of the Amended Plan. Each stock option shall have a term
of five years from the grant thereof. Each stock option shall vest
immediately; provided, however, that the sales of shares upon the exercise of
such stock option shall not be allowed until at least six months after the
later of (i) the approval of the Amended Plan by the shareholders or (ii) the
grant of the stock option. The purchase price payable upon the exercise of a
stock option will be equal to the fair market value of the Common Stock on the
date the stock option is granted. On September 3, 1997, the last reported
sales price of the Common Stock was $40.13 per share. Payment in full for the
number of shares purchased upon the exercise of stock options granted under
the Amended Plan shall be made in cash, or certified or cashier's check, or by
Common Stock of the Company already owned by and in the possession of the
stock option holder, or any combination thereof, at the same time the stock
option is exercised.
A stock option granted under the Amended Plan shall lapse in the following
situations: (i) if the directorship of the non-employee director terminates
for any reason other than death, all unexercised stock options theretofore
granted shall expire ten days after the date of such termination of
directorship, unless such stock options shall have terminated earlier under
the terms or under other provisions of the Amended Plan, or (ii) if the
directorship of the non-employee director terminates by reason of death, all
unexercised stock options, if any, shall become immediately exercisable and
may be exercised until the expiration of one year from the date of death of
the non-employee director or until the expiration of the term of the stock
option, whichever is earlier. Such stock option may be exercised by any
designated beneficiary of the non-employee director, subject to all other
provisions of the Amended Plan.
Except as set forth below, stock options granted under the Amended Plan
shall not be transferable otherwise than by will or operation of the laws of
descent and distribution or pursuant to a qualified domestic relations order.
During the lifetime of the non-employee director, stock options granted under
the Amended Plan shall be exercisable only by the non-employee director or the
non-employee director's guardian or legal representative. In addition to non-
transferable stock options, the Board of Directors may allow stock options to
be granted that are transferable, without payment of consideration, to
immediate family members of the non-employee director or to trusts or
partnerships for such family members; the Board of Directors may also amend
outstanding stock options to provide for such transferability.
Amendment of the Plan. The Board of Directors may amend, terminate or
suspend the Amended Plan at any time, provided that the Amended Plan may not
be amended more than once every six months, other than to comport with changes
in the Code, the Employee Retirement Income Security Act of 1974, as amended,
or the
15
<PAGE>
rules thereunder. No termination or amendment of the Amended Plan may, without
the consent of the holder of any option then outstanding, adversely affect the
rights of such holder under the options.
Change in Control. If (i) the Company is merged into or consolidated with
another corporation and the Company is not the surviving corporation, (ii) the
Company is recapitalized in such manner that shares of Common Stock are
converted into or exchanged for other securities of the Company, (iii) the
Company sells or otherwise disposes of substantially all of its assets, (iv)
over 30% of the outstanding Common Stock of the Company is acquired by another
person, corporation or entity in exchange for securities of such person,
corporation or entity, or (v) over 30% of the then outstanding Common Stock is
acquired in a single transaction or a series of related transactions, then
each holder of an outstanding stock option shall be entitled, upon exercise of
such stock option, to receive shares of such stock or other securities of the
Company or the surviving or acquiring corporation as the holders of the
Company's Common Stock received pursuant to the terms of the merger,
consolidation, exchange, recapitalization, sale or acquisition. If the terms
of any such transaction provide for the cancellation of all outstanding stock
options, each holder of an outstanding stock option shall have the right to
exercise such stock option in full during a 30-day period preceding the
effective date of any such transaction.
Federal Tax Consequences. The grant of a stock option under the Amended Plan
will not result in the recognition of any taxable income by the non-employee
director. A non-employee director will recognize ordinary income on the date
of exercise of the option equal to the excess, if any, of (i) the fair market
value of the shares acquired as of the exercise date, over (ii) the exercise
price. The tax basis of these shares for purposes of a subsequent sale
includes the option price paid and the ordinary income reported on exercise of
the option. The income reportable on exercise of an option is subject to
federal income and employment tax withholding. Generally, the Company will be
entitled to a deduction in the amount reportable as income by the non-employee
director on the exercise of an option.
Shareholder Approval Requirement. With the exception of the increase from
100,000 to 200,000 in the number of shares of Common Stock that may be
purchased under stock options granted under the Plan, the amendments to the
Plan included in the Amended Plan do not require shareholder approval under
the Plan, applicable law, charter or bylaw provisions of the Company or New
York Stock Exchange rules. The Board of Directors, however, recognizes that
important corporate decisions are increasingly being submitted to shareholders
for their approval, even when such approval is not required. This is
especially true for decisions relating to the issuance of securities to
directors and officers. Accordingly, the Board of Directors has directed that
the Amended Plan in its entirety be submitted to the Company's shareholders
for approval at the Annual Meeting. The approval of the Amended Plan requires
the affirmative vote of a majority of the shares of Common Stock voting on the
proposal. If the Amended Plan is not approved by the Company's shareholders at
the Annual Meeting, the Plan will remain in effect without any amendment or
modification to its terms as approved by shareholders at the Company's annual
meeting held on June 27, 1996.
Award of Stock Options Under the Amended Plan. The following table sets
forth the stock options that the Company's non-employee directors will receive
effective September 3, 1997 and at each annual meeting of shareholders
beginning with the Annual Meeting, if the Amended Plan is approved by the
Company's shareholders at the Annual Meeting. Executive officers and employee
directors are not eligible to participate in the Amended Plan.
16
<PAGE>
NEW PLAN BENEFITS TABLE
AMENDED AND RESTATED 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME DOLLAR VALUE($) NUMBER OF UNITS
---- --------------- ---------------
<S> <C> <C>
Non-Employee Director Group--September 3,
1997...................................... (1) 10,000
Non-Employee Director Group--Annual Awards
beginning at the Annual Meeting........... (1) 30,000(2)
</TABLE>
- --------
(1) Dollar value is dependent upon the future value of Company Common Stock.
(2) Assumes that four non-employee directors will continue to serve on the
Board of Directors.
THE COMPANY RECOMMENDS VOTING "FOR" PROPOSAL NO. 2.
PROPOSAL NO. 3--RATIFICATION AND APPOINTMENT OF
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Grant Thornton LLP as its
independent public accountants to audit the accounts of the Company for the
fiscal year ending April 3, 1999. Grant Thornton has advised the Company that
it will have a representative in attendance at the Annual Meeting who will
respond to appropriate questions presented at such meeting.
Management recommends that the appointment of Grant Thornton LLP as
independent public accountants of the Company for the fiscal year ending April
3, 1999, be ratified by the shareholders. Unless otherwise specified, all
properly executed proxies received by the Company will be voted for such
ratification at the meeting or any adjournment thereof.
THE COMPANY RECOMMENDS VOTING "FOR" PROPOSAL NO. 3.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished
to the Company during its most recent fiscal year, and Forms 5 and amendments
thereto furnished to the Company with respect to its most recent fiscal year,
the Company believes that Forms 5 were not filed by the following former
executive officers of the Company: Barbara A. Alberto, Randy J. Corporron,
Rodney J. Corporron, Carolyn S. Davis and Cathy L. O'Leary.
OTHER MATTERS
The Board of Directors knows of no matters other than those described above
which are likely to come before the Annual Meeting. If any other matters
properly come before the Annual Meeting, persons named in the accompanying
form of proxy intend to vote such proxy in accordance with their best judgment
on such matters.
PROPOSALS AND NOMINATIONS FOR NEXT ANNUAL MEETING
Any proposals of holders of Common Stock of the Company intended to be
presented at the annual meeting of Shareholders of the Company to be held in
1999 must be received by the Company, addressed to the Secretary of the
Company, 1111 Gillingham Lane, Sugar Land, Texas 77478, no later than January
20, 1999, to be included in the proxy statement relating to that meeting.
17
<PAGE>
Pursuant to the Company's Bylaws, any nomination of persons to be elected as
directors at the annual meeting of Shareholders of the Company to be held in
1999 must be received by the Secretary of the Company not later than the close
of business on the tenth day following the date on which notice of the 1999
annual meeting is first given to shareholders. Such nomination or nominations
must be in writing from a shareholder of record and must attach a written
consent of each person so nominated to serve on the Board of Directors. In
addition, the notice must set forth (i) the name, age, business address and
residence address of each nominee proposed in such notice, (ii) the principal
occupation or employment of each nominee, (iii) the number of shares of stock
of the Company that are beneficially owned by each nominee and (iv) such other
information in respect of each nominee as would be required by the federal
securities laws and the rules and regulations promulgated thereunder in
respect of an individual nominated as a director of the Company and for whom
proxies are solicited by the Board of Directors.
By Order of the Board of Directors
Stephen J. Chapko, Secretary
May 20, 1998
THE COMPANY WILL FURNISH WITHOUT CHARGE ADDITIONAL COPIES OF ITS ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 28, 1998 TO INTERESTED
SECURITY HOLDERS ON REQUEST. THE COMPANY WILL FURNISH TO ANY SUCH PERSON ANY
EXHIBITS DESCRIBED IN THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF
REASONABLE FEES RELATING TO THE COMPANY'S FURNISHING SUCH EXHIBITS. REQUESTS
FOR COPIES SHOULD BE DIRECTED TO THE SECRETARY AT THE COMPANY'S ADDRESS
PREVIOUSLY SET FORTH.
18
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APPENDIX A
KENT ELECTRONICS CORPORATION
AMENDED AND RESTATED
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
ARTICLE I
PURPOSE
Kent Electronics Corporation, a Texas corporation (the "Company"), is
dependent for the successful conduct of its business on the initiative, effort
and judgment of its directors. This Amended and Restated 1996 Non-Employee
Director Stock Option Plan (the "Plan") is intended to provide the independent
directors of the Company additional compensation for their service as
directors and an incentive, through options to acquire stock in the Company,
to increase the value of the Company's common stock, without par value
("Common Stock").
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company (the
"Board"). Subject to the express provisions of the Plan and the policies of
each stock exchange on which any of the Company's stock at any time may be
traded, the Board shall have plenary authority (i) to construe and interpret
the Plan, (ii) to define the terms used therein, (iii) to prescribe, amend and
rescind rules and regulations relating to the Plan, and (iv) to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Board shall be binding and
conclusive on all participants in the Plan and their legal representatives and
beneficiaries. No member of the Board shall be liable for any action, failure
to act, determination or interpretation made in good faith with respect to the
Plan or any transaction under the Plan.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
Under the Plan each director who is not a full-time employee of the Company
or any of its subsidiaries (each, a "Non-Employee Director") shall, effective
as of the date of his initial election to the Board, be granted a stock option
to purchase from the Company a certain number of shares of Common Stock to be
determined as follows: 7,500 shares if his initial election is at the
Company's annual meeting of shareholders or after the Company's annual meeting
of shareholders, but before the end of the Company's second fiscal quarter;
5,625 shares if his initial election is during the Company's third fiscal
quarter; 3,750 shares if his initial election is during the Company's fourth
fiscal quarter; and 1,875 shares if his initial election is during the
Company's first fiscal quarter, but before the Company's annual meeting of
shareholders. In addition, each Non-Employee Director (i) shall, after his
initial election to the Board and effective as of the date of each annual
meeting of shareholders beginning with the Company's 1998 annual meeting of
shareholders, be granted a stock option to purchase from the Company 7,500
shares of Common Stock and (ii) shall, effective as of September 3, 1997, be
granted a stock option to purchase from the Company 2,500 shares of Common
Stock. All options to purchase Common Stock granted under this Article III
shall be at a price determined and set forth in Article IV.
ARTICLE IV
TERMS AND CONDITIONS OF STOCK OPTIONS;
STOCK OPTION PRICE; TRANSFERABILITY
(a) Each stock option granted under the Plan shall be evidenced by a Stock
Option Agreement (the "Agreement") in such form as may be hereafter approved
by the Board on the advice of counsel to the Company. The Agreement shall be
executed by the Company and the optionee. The sale of the shares issued on
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the exercise of a stock option by any person subject to Section 16 of the 1934
Act shall not be allowed until at least six months after the later of (i) the
approval of this Plan by the shareholders of the Company in accordance with
Article VIII hereof or (ii) the grant of the stock option. Such determination
for each stock option is to be made prior to or at the time that stock option
is granted. Each stock option granted hereunder shall expire if not exercised
within five years of the date of grant.
(b) The per share stock option price shall be an amount equal to the Fair
Market Value (as defined below) of the Common Stock on the date of grant of
the stock option. In no event shall the stock option price be less than the
par value of the Company's Common Stock.
(c) Except as set forth below, the stock options granted hereunder shall not
be transferable otherwise than by will or operation of the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Internal Revenue Code of 1986, as amended (the "Code"), or Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
rules thereunder. During the lifetime of the optionee, stock options granted
hereunder shall be exercisable only by the optionee, the optionee's guardian
or legal representative. In addition to non-transferable stock options, the
Board may grant stock options that are transferable, without payment of
consideration, to immediate family members of the optionee or to trusts or
partnerships for such family members; the Board may also amend outstanding
stock options to provide for such transferability.
(d) No stock option granted hereunder shall be exercisable unless the Plan
and all shares issuable on the exercise thereof have been registered under the
Securities Act of 1933, as amended (the "1933 Act") and all other applicable
securities laws, and there is available for delivery a prospectus meeting the
requirements of Section 10 of the 1933 Act, or the Company shall have first
received the opinion of its counsel that registration under the 1933 Act and
all other applicable securities laws is not required in connection with such
issuance. At the time of exercise, if the shares with respect to which the
stock option is being exercised have not been registered under the 1933 Act
and all other applicable securities laws, the Company may require the optionee
to provide the Company whatever written assurance counsel for the Company may
require that the shares are being acquired for investment and not with a view
to the distribution thereof, and that the shares will not be disposed of
without the written opinion of such counsel that registration under the 1933
Act and all other applicable securities laws is not required. Share
certificates issued to the optionee upon exercise of the stock option shall
bear a legend to the foregoing effect to the extent counsel for the Company
deems it advisable.
(e) For all purposes under the Plan, the Fair Market Value of a share of
Common Stock on a particular date, or on the most recent prior date on which
Common Stock was traded, shall be equal to the reported closing price per
share as reported by the New York Stock Exchange, Inc. or other principal
exchange or market on which the Common Stock is traded. In the event Common
Stock is not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its Fair Market Value
shall be made by the Board of Directors in such manner as it deems
appropriate.
(f) A stock option shall lapse in the following situations:
(1) If the directorship of a Non-Employee Director terminates for any
reason other than death, all unexercised stock options theretofore granted
shall expire ten days after the date of such termination of directorship,
unless such stock options shall have terminated earlier under the terms or
under other provisions of the Plan.
(2) If the directorship of a Non-Employee Director terminates by reason
of death, all unexercised stock options, if any, shall become immediately
exercisable and may be exercised until the expiration of one year from the
date of death of the Non-Employee Director or until the expiration of the
term of the stock option, whichever is earlier. Such stock option may be
exercised by any designated beneficiary of the Non-Employee Director,
subject to all other provisions of the Plan.
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ARTICLE V
SHARES SUBJECT TO PLAN AND DURATION OF PLAN
The term of the Plan shall continue until the earlier to occur of (i) May 7,
2006, ten years from the effective date of the Plan as originally approved by
the shareholders of the Company, or (ii) the date on which there have been
granted to Non-Employee Directors pursuant to the Plan stock options to
purchase an aggregate of 200,000 shares of the Common Stock; provided,
however, that all outstanding stock options granted under the Plan shall
continue to be governed by the terms and conditions of the Plan. Shares
subject to stock options under the Plan may be either authorized and unissued
shares or issued shares that have been acquired by the Company and held in its
treasury, in the sole discretion of the Board. When stock options have been
granted under the Plan and have lapsed unexercised or partially unexercised or
have been surrendered for cancellation by the optionee thereof, the
unexercised shares which were subject thereto may be reoptioned under the
Plan.
ARTICLE VI
ADJUSTMENTS
(a) Adjustments Upon Changes in Capitalization. Subject to any required
action by the Company's directors and shareholders, the number of shares
provided for in each outstanding stock option and the price per share thereof,
and the number of shares provided for in the Plan, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of the
Company's Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend (but only on the Common Stock), a stock
split, a reverse stock split, or any other increase or decrease in the number
of such shares effected without receipt of consideration by the Company, and
shall also be proportionately adjusted in the event of a spin-off, spin-out,
or other distribution of assets to shareholders of the Company, to the extent
necessary to prevent dilution of the interests of grantees pursuant to the
Plan or of the other shareholders of the Company, as applicable. If the
Company shall engage in a merger, consolidation, reorganization or
recapitalization, each outstanding stock option (or if such transaction
involves less than all of the shares of the Company's Common Stock, then a
number of stock options proportionate to the number of such involved shares),
shall become exercisable for the securities and other consideration to which a
holder of the number of shares of the Company's Common Stock subject to each
such stock option would have been entitled to receive in any such merger,
consolidation, reorganization or recapitalization.
(b) If, while unexercised stock options remain outstanding under the Plan,
(i) the Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation or where the
Common Stock is converted into other securities, cash or other property in
connection with such merger or consolidation, (ii) the Company is
recapitalized in such a manner that shares of the Common Stock are converted
into or exchanged for other securities of the Company, (iii) the Company sells
or otherwise disposes of substantially all of its assets to another person,
corporation or entity, (iv) over 30% of the Common Stock of the Company is
acquired by another person, corporation or entity in exchange for stock (or
stock and securities) of such corporation or (v) over 30% of the then
outstanding Common Stock is acquired in a single transaction or a series of
related transactions, then, unless the terms of the transaction described in
clauses (i), (ii), (iii), (iv) or (v) above provide that after the effective
date of such merger, consolidation, recapitalization, exchange, sale or
acquisition, as the case may be, each holder of an outstanding stock option
shall be entitled, upon exercise of such stock option to receive, in lieu of
shares of the Company's Common Stock, shares of such stock or other securities
of the Company or the surviving or acquiring corporation or such other
property at the same rate per share as the holders of shares of the Company's
Common Stock received pursuant to the terms of the merger, consolidation,
exchange, recapitalization, sale or acquisition, all outstanding stock options
shall be cancelled as of the effective date of any such merger, consolidation,
recapitalization, exchange, sale or acquisition. At least 30 days notice of
such cancellation shall be given to each holder of a stock option and each
holder of a stock option shall have the right to exercise such stock options
in full during a 30-day period preceding the effective date of such merger,
consolidation, recapitalization, exchange, sale or acquisition.
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(c) Change of Par Value. In the event of a change in the Company's Common
Stock which is limited to a change of all of its authorized shares without par
value into the same number of shares with a par value, the shares resulting
from any such change shall be deemed to be Common Stock within the meaning of
the Plan.
(d) Miscellaneous. The adjustments provided for in this Article shall be
made by the Board whose determination in that respect shall be final, binding
and conclusive. Except as hereinbefore expressly provided in this Article, the
holder of a stock option shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock or other stock not actually issued
and delivered to the holder, and any issue by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class,
shall not affect and no adjustment by reason thereof shall be made with
respect to the number or price of shares of the Company's Common Stock subject
to any stock option. The grant of a stock option pursuant to the Plan shall
not affect in any way the right or power of the Company to, among other
things, make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to dissolve or
liquidate or sell or transfer all or any part of its business or assets.
ARTICLE VII
POWER TO AMEND
The Board of Directors may amend, terminate or suspend this Plan at any time
and from time to time; provided, however, that the Plan shall not be amended
more than once every six months, other than to comport with changes in the
Code, ERISA, or the regulations thereunder. However, no termination or
amendment of the Plan may, without the consent of the holder of any Option
then outstanding, adversely affect the rights of such holder under the
Options.
ARTICLE VIII
EFFECTIVE DATE; SHAREHOLDER APPROVAL
The Plan shall be effective as of September 3, 1997, the date on which it
received the unanimous approval of the Board. However, the Plan and all stock
options granted under the Plan shall be void if the Plan is not approved by
the shareholders within 12 months from the date the Plan is approved by the
Board. The Plan shall be deemed approved by the holders of the outstanding
voting stock of the Company by the affirmative votes of the holders of a
majority of the outstanding voting stock of the Company present, or
represented, and entitled to vote at a meeting of such shareholders duly held
in accordance with the applicable laws of the state or other jurisdiction in
which the Company is incorporated. No stock option granted under the Plan
shall be exercisable in whole or in part unless and until such shareholder
approval is obtained.
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[Map to location of meeting appears here]
Kent Electronics Corporation
1998 Annual Meeting of Shareholders
June 25, 1998, 10:00 a.m.
Meeting to be held at the Company's offices located at
1111 Gillingham Lane, Sugar Land, TX 77478 (281) 243-4000
[KENT ELECTRONICS
LOGO APPEARS HERE]
<PAGE>
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<CAPTION>
PROXY KENT ELECTRONICS CORPORATION PROXY
1111 GILLINGHAM LANE
SUGAR LAND, TEXAS 77478
ANNUAL MEETING OF SHAREHOLDERS JUNE 25, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) of Kent Electronics Corporation (the "Company") hereby appoints MORRIE K. ABRAMSON and STEPHEN
J. CHAPKO, and each of them, attorneys-in-fact and proxies of the undersigned, with full power of substitution, to vote in respect
of the undersigned's shares of the Company's Common Stock at the Annual Meeting of Shareholders of the Company to be held on June
25, 1998, at 10:00 a.m., local time, at the offices of the Company located at 1111 Gillingham Lane, Sugar Land, Texas 77478 and at
any adjournment(s) thereof, the number of shares the undersigned would be entitled to cast if personally present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH BELOW AND "FOR" EACH OF PROPOSALS 2 AND 3 BELOW.
====================================================================================================================================
<S> <C> <C>
PROPOSAL 1: ELECTION OF DIRECTORS [_] FOR the nominees listed below [_] WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for the nominees listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Max S. Levit
Larry D. Olson
Richard C. Webb
PROPOSAL 2: TO ADOPT THE AMENDED AND RESTATED FOR AGAINST ABSTAIN
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN [_] [_] [_]
PROPOSAL 3: TO RATIFY THE APPOINTMENT OF GRANT THORNTON LLP FOR AGAINST ABSTAIN
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS [_] [_] [_]
FOR THE FISCAL YEAR ENDING APRIL 3, 1999
4. In their discretion, on such other matters as may properly FOR AGAINST ABSTAIN
come before the 1998 Annual Meeting of Shareholders or any [_] [_] [_]
adjournment(s) thereof; all as more particularly described
in the Proxy Statement, receipt of which is hereby acknowledged.
====================================================================================================================================
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE DIRECTOR NOMINEES SET FORTH ON THE REVERSE SIDE AND EACH OF PROPOSALS 2 AND 3.
All prior proxies are hereby revoked.
_____________________________________________________
_____________________________________________________
Signature(s)
Dated _________________________________________, 1998
(PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. WHEN SIGNING
AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC.,
GIVE FULL TITLE AS SUCH. FOR JOINT ACCOUNTS, EACH JOINT OWNER
SHOULD SIGN.)
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PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE PROXY CARD USING THE ENCLOSED ENVELOPE.
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</TABLE>
