<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 (S) 240.14a-11(c) or (S) 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
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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:
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Notes:
<PAGE>
(KENT ELECTRONICS LOGO APPEARS HERE)
KENT ELECTRONICS CORPORATION
1111 Gillingham Lane
Sugar Land, Texas 77478
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Thursday, June 29, 2000
10:00 a.m., Central time
May 26, 2000
Dear Shareholder:
On behalf of the Board of Directors, you are cordially invited to attend
the 2000 Annual Meeting of Shareholders of Kent Electronics Corporation to be
held at our Sugar Land Distribution Center located at 1400 Gillingham Lane,
Sugar Land, Texas 77478, at 10:00 a.m., Central time, on Thursday, June 29,
2000. The Annual Meeting will be held for the following purposes:
. to elect directors;
. to ratify the appointment of independent auditors for the fiscal year
ending March 31, 2001; and
. to conduct other business properly brought before the Annual Meeting.
Only shareholders of record at the close of business on May 11, 2000, will
be entitled to vote at the Annual Meeting. Whether or not you plan to attend
the Annual Meeting, your vote is important. We urge you to vote, date, sign
and return the enclosed Proxy card.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
/s/ Stephen J. Chapko
Stephen J. Chapko
Secretary
<PAGE>
KENT ELECTRONICS CORPORATION
1111 Gillingham Lane
Sugar Land, Texas 77478
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
----------------
This proxy statement is furnished in connection with solicitation of the
enclosed proxy by the Board of Directors of Kent Electronics Corporation
("Kent") for use at Kent's 2000 Annual Meeting of Shareholders. The
approximate date on which this proxy material is first being sent to
shareholders is May 26, 2000.
VOTING MATTERS
Common Stock Outstanding and Record Date
Kent's only class of capital stock outstanding with voting rights is its
common stock. The record date for the Annual Meeting is May 11, 2000, and each
share of Kent common stock you owned as of May 11, 2000 entitles you to one
vote on each proposal presented to the shareholders for action. On May 11,
2000 there were 28,353,983 shares of Kent common stock outstanding.
Quorum
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will be present if shareholders holding a majority of the outstanding shares
of Kent common stock are present in person or by proxy. Abstentions and broker
non-votes are counted as present for establishing a quorum. 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.
Vote Required
Directors are elected by a plurality vote of shares present at the Annual
Meeting, meaning that the two nominees who receive the greatest number of
votes properly cast in the election of directors will be elected. All
proposals other than the election of directors must be approved by an
affirmative vote of the majority of shares present in person or by proxy at
the Annual Meeting.
Votes submitted by mail will be voted by the individuals named on the proxy
card in the manner you indicate. If you do not specify how you want your
shares voted, they will be voted in accordance with management's
recommendations. You may change your vote by voting in person at the Annual
Meeting or by submitting another proxy that is dated later.
THE KENT BOARD OF DIRECTORS
Structure
Our Board of Directors is divided into three classes for purposes of
election. One class is elected at each annual meeting of shareholders to serve
for a three-year term. The two directors that will be elected at the Annual
Meeting will be elected to a three-year term expiring in 2003. Kent's other
directors are not up for election this year and will continue to serve in
accordance with Kent's bylaws.
1
<PAGE>
PROPOSAL 1 -- ELECTION OF DIRECTORS
Directors Up For Election This Year for Terms Expiring in 2003
. LEROY MORGAN, 59, has been the Chief Financial Officer of Bergquist
Company since 1993. Bergquist Company is a privately held manufacturer of
thermal products, touch screens and membrane switches in Minneapolis,
Minnesota. Mr. Morgan previously served as Vice President of Finance for
ADC Telecommunications, Inc. from 1972 to 1993.
. DAVID SIEGEL, 74, is vice president, director and the founder of Great
American Electronics, a distribution company serving industrial
distributors. Mr. Siegel has been in the electronics distribution
business since 1954. Other directorships: Micronetics and Surge
Components. Mr. Siegel has been a Kent director since 1990.
KENT'S BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES PRESENTED IN
PROPOSAL 1.
Directors with Terms Expiring in 2001
. MAX S. LEVIT, 65, has been President of Grocers Supply Company, Inc.
since January 1992. Other directorships: M.D. Anderson Hospital and The
University of Texas--Houston Health Science Center. Mr. Levit has been a
Kent director since 1995.
. LARRY D. OLSON, 43, has been Kent's President and Chief Operating Officer
since 1998, and has been President of K*TEC Electronics Corporation
("K*TEC"), Kent's wholly-owned manufacturing subsidiary, since November
1997. Mr. Olson previously served as Kent's Executive Vice President
since 1994 and as President of Kent Components since January 1997. Mr.
Olson has been a Kent director since 1998.
. RICHARD C. WEBB, 66, is an Executive Vice President of Sanders Morris
Harris, Inc., a Houston-based investment banking and brokerage firm and a
wholly-owned subsidiary of the Pinnacle Global Group. Mr. Webb has been
in the investment banking business since 1960 and was a founder of Lovett
Underwood Neuhaus & Webb, Inc., a subsidiary of Kemper Securities. Mr.
Webb has been a Kent director since 1986.
Directors with Terms Expiring in 2002
. MORRIE K. ABRAMSON, 65, a co-founder of Kent, has served as Chief
Executive Officer and a director since 1973 and as Chairman of the Board
since 1977. Mr. Abramson also served as President of Kent from 1995 to
1998. Mr. Abramson 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.
. ALVIN L. ZIMMERMAN, 56, has been a shareholder, officer and director in
the law firm of Zimmerman, Axelrad, Meyer, Stern & Wise, P.C. and its
predecessor firms since 1984. 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. Mr. Zimmerman has been a Kent director
since 1986.
BOARD MEETINGS AND COMMITTEES
During Kent's last fiscal year, the Board of Directors held six meetings.
All directors attended all of the meetings of the Board of Directors and the
committees on which they served in fiscal 2000.
The Audit Committee reviews with Kent's independent auditors the plan,
scope and results of the annual audit and the procedures for and results of
internal controls. Present members of the Committee are Max Levit, David
Siegel, Richard Webb and Alvin Zimmerman. The Committee held two meetings
during fiscal 2000.
2
<PAGE>
The Compensation Committee is authorized to determine the compensation of
Mr. Abramson and to make recommendations to the Board regarding compensation
of Kent's other officers. Present members of the Committee are David Siegel,
Richard Webb and Alvin Zimmerman. The Committee held two meetings during
fiscal 2000.
The Stock Option Committee is authorized to grant options under, and to
otherwise administer, Kent's stock option plans, other than Kent's Amended and
Restated 1996 Non-Employee Director Stock Option Plan, which the entire Board
administers. Present members of the Committee are Max Levit, David Siegel and
Richard Webb. The Committee held two meetings during fiscal 2000.
DIRECTOR COMPENSATION
Board members that are not salaried employees of Kent receive separate
compensation for Board service, which may not exceed $50,000 in cash annually.
That compensation includes:
<TABLE>
<S> <C>
Annual Retainer: $18,000
Attendance Fees: $1,000 for each Board meeting
$500 for each Board Committee meeting that is
not held before or after a Board meeting
Committee Chairman Stipend: $2,000 annually
Stock Options: 7,500 shares annually
</TABLE>
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 Kent:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Frank M. Billone............. 55 Executive Vice President and Chief Information
Officer
Stephen J. Chapko............ 46 Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
Richard J. Hightower......... 40 Executive Vice President of Kent and President
of Kent Components
David D. Johnson............. 35 Vice President, Corporate Controller
John M. Stacy................ 50 Vice President
Mark A. Zerbe................ 39 Executive Vice President of Kent and President
of Kent Datacomm
Karl Zoldan.................. 53 Vice President
</TABLE>
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 Kent in January 1996. Prior
to joining Kent, he held various information systems positions with General
Electric since 1967.
Mr. Chapko was appointed Executive Vice President and Chief Financial
Officer in January 1997. He served as Vice President and Treasurer of Kent
since 1989, and he was appointed Secretary in 1993. He joined Kent as
Assistant Treasurer in 1987.
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 Kent in 1993 as a
General Manager and was appointed Regional Manager in 1995. Prior to joining
Kent, Mr. Hightower was a General Manager at Future Electronics since 1990.
3
<PAGE>
Mr. Johnson was appointed Vice President, Corporate Controller in January
1996. He joined Kent in 1988 as Accounts Payable Supervisor.
Mr. Stacy joined Kent in April 1999 as Director of Human Resources and was
appointed Vice President, Human Resources in April 2000. He joined Kent from
Westlake Petrochemicals where he was Corporate Manager of Human Resources
since March 1997. Prior to Westlake, he served as Vice President, Human
Resources of DSI Transports, Inc. since April 1995.
Mr. Zerbe has served as Executive Vice President of Kent since 1994 and
became President of Kent Datacomm in January 1997. He previously served as a
Vice President of Kent since 1988. Mr. Zerbe joined Kent as a sales
representative in 1985.
Mr. Zoldan was appointed Vice President, Credit Administration in April
2000, and previously served as Director of Credit since joining Kent in
November 1997. Prior to joining Kent, he was Director of Credit of Ply Gem
Industries since 1993.
Other than as set forth below under the heading "Executive Agreements," the
executive officers serve at the pleasure of the Board of Directors.
4
<PAGE>
KENT COMMON STOCK BENEFICIALLY OWNED
BY DIRECTORS, OFFICERS AND FIVE PERCENT SHAREHOLDERS
The following table shows the beneficial ownership of Kent common stock as
of May 11, 2000, unless otherwise specified, by (1) each director and nominee
for director, (2) Kent's chief executive officer and the four most highly
compensated executive officers during fiscal 2000 (the "Named Executive
Officers"), (3) all persons who are known by Kent to own beneficially more
than 5% of the outstanding shares of common stock, and (4) Kent's directors
and executive officers 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................. 829,150(3) 2.9% 1,129,150(4) 3.9%
Stephen J. Chapko.................. 54,250(5) * 112,500(6) *
Richard J. Hightower............... 25,000(7) * 55,000(8) *
Larry D. Olson..................... 168,800(9) * 421,300(10) 1.5%
Mark A. Zerbe...................... 71,300(11) * 147,800(12) *
Max S. Levit....................... 50,438(13) * 58,438(14) *
Leroy Morgan....................... -- * -- *
David Siegel....................... 78,813(15) * 86,813(16) *
Richard C. Webb.................... 58,500(17) * 66,500(18) *
Alvin L. Zimmerman................. 88,813(19) * 96,813(20) *
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111....... 2,040,947(21) 6.7% 2,040,947(21) 6.7%
State of Wisconsin Investment Board
P.O. Box 7842
Madison, Wisconsin 53707.......... 2,634,000(22) 9.3% 2,634,000(22) 9.3%
All executive officers and
directors as a group
(14 persons)...................... 1,531,389(23) 5.2% 2,410,539(24) 8.0%
</TABLE>
- --------
* 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 400,000 shares that may be acquired upon the exercise of
outstanding options, of which 200,000 shares have been transferred to
trusts for the benefit of Mr. Abramson's children. Mr. Abramson disclaims
beneficial ownership of the 200,000 shares. Also includes 5,000 shares
held in trust for Mr. Abramson's children, as to which shares Mr. Abramson
disclaims beneficial ownership.
(4) Includes 300,000 shares subject to options that are not currently
exercisable.
(5) Includes 19,250 shares that may be acquired upon exercise of outstanding
options.
(6) Includes 58,250 shares subject to options that are not currently
exercisable.
(7) Includes 15,000 shares that may be acquired upon exercise of outstanding
options.
(8) Includes 30,000 shares subject to options that are not currently
exercisable.
(9) Includes 92,500 shares that may be acquired upon exercise of outstanding
options.
(10) Includes 252,500 shares subject to options that are not currently
exercisable.
(11) Includes 41,000 shares that may be acquired upon exercise of outstanding
options.
(12) Includes 76,500 shares subject to options that are not currently
exercisable.
(13) Includes 42,938 shares that may be acquired upon the exercise of
outstanding options.
5
<PAGE>
(14) Includes 8,000 shares subject to options that are not currently
exercisable.
(15) Includes 6,500 shares that are owned by Mr. Siegel's wife. Also, includes
59,813 shares that may be acquired upon the exercise of outstanding
options, of which 30,500 shares may be acquired upon the exercise of
outstanding options that have been transferred to Mr. Siegel's children.
Mr. Siegel disclaims beneficial ownership of the options transferred to
his children.
(16) Includes 8,000 shares subject to options that are not currently
exercisable.
(17) Includes 34,500 shares that may be acquired upon the exercise of
outstanding options.
(18) Includes 8,000 shares subject to options that are not currently
exercisable.
(19) Includes 67,313 shares that may be acquired upon the exercise of
outstanding options.
(20) Includes 8,000 shares subject to options that are not yet exercisable.
(21) As reported in a Schedule 13G filed by Loomis, Sayles & Company, L.P.
with the Securities and Exchange Commission on February 3, 2000.
Represents shares that may be acquired upon conversion of Kent's 4 1/2%
Convertible Subordinated Notes Due 2004.
(22) As reported on Schedule 13G filed by the State of Wisconsin Investment
Board with the Securities and Exchange Commission on February 2, 2000.
(23) Includes 852,414 shares that may be acquired upon the exercise of
outstanding options.
(24) Includes 879,150 shares subject to options that are not currently
exercisable.
REPORT OF THE COMPENSATION COMMITTEE AND THE STOCK OPTION COMMITTEE(1)
The Compensation Committee and the Stock Option Committee (collectively,
the "Committees") are both composed entirely of outside directors, and
together, the Committees develop and make recommendations to the Board
regarding Kent's executive compensation policies. This Report describes Kent's
executive officer compensation program and the basis on which the Committees
made compensation determinations for Kent's executive officers in fiscal 2000.
The Committees have designed Kent's executive compensation program based on
their belief that executive compensation should reflect the value created for
shareholders while supporting Kent's strategic goals. The Committees' goals
are to establish a compensation program that:
. links the interests of management and shareholders;
. links executive compensation with the short-term and long-term strategic
goals and objectives of Kent;
. rewards outstanding contributions to Kent; and
. attracts and retains executives of high caliber and ability.
For fiscal 2000, that program consisted of base salary, a related bonus
program tied to Kent's 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 Kent's executive compensation program for which they are
responsible to ensure that they are consistent with Kent's objectives.
- --------
(1) Notwithstanding filings by Kent 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>
Base Salary. In determining the appropriate base salaries of Kent's
executive officers, the Compensation Committee generally considers the level
of executive compensation in similar companies in the industry. In addition,
the Compensation Committee takes into account (1) the performance of Kent and
the roles of the individual executive officers with respect to such
performance, and (2) the particular executive officer's specific
responsibilities and the performance of such executive officer in those areas
of responsibility. From time to time, the Compensation Committee also confers
with third party compensation and employee benefit consultants and reviews
published information, in order to acquire competitive information.
Annual Incentives. The bonus program provides an annual cash bonus to
executive officers as a direct financial incentive to achieve and exceed
Kent's annual goals. Kent also currently maintains for Mr. Abramson an
incentive cash bonus plan (the "CEO Bonus Plan"), which provides that Mr.
Abramson's annual bonus will be tied to Kent's achievement of certain budgeted
goals as determined by the Compensation Committee.
In addition, Kent maintains bonus programs for the Named Executive
Officers, pursuant to which they receive cash bonuses based on the achievement
of certain targeted goals for the entire company, or for certain divisions of
Kent.
Long-Term Incentives. Kent currently maintains the 1996 Employee Incentive
Plan (the "Incentive Plan"), the Amended and Restated 1987 Stock Option Plan,
the Amended and Restated 1998 Stock Option Plan, the 1999 Stock Option Plan,
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 link executive officer
compensation and shareholder return and enable executive officers to develop
and maintain a significant, long-term stock ownership position in Kent's
common stock.
Chief Executive Officer. Kent maintains an employment agreement with Mr.
Abramson (the "Employment Agreement"), which provides for Kent'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
Kent over the next year.
The Compensation Committee believes that the cash compensation of the chief
executive officer ("CEO") should be impacted by Kent's performance. Mr.
Abramson, who has served as CEO of Kent since 1973, earned a base salary in
fiscal 2000 of $500,035, 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 businesses as Kent with comparable
qualifications, experience and responsibilities. In addition, Mr. Abramson
earned a bonus of $1,202,125 in fiscal 2000 under the CEO Bonus Plan.
Named Executive Officers. Consistent with Kent'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 Compensation Committee believes that the base salaries for the
Named Executive Officers for fiscal 2000 were at levels below competitive
amounts paid to executives of other companies engaged in the same or similar
businesses as Kent with comparable qualifications, experience and
responsibilities. Cash bonuses have been accrued for payment to all other
Named Executive Officers as a result of Kent achieving its targeted goals, and
the guidance and performance of such officers in assisting Kent to achieve
those goals during fiscal 2000.
7
<PAGE>
Limitation of Tax Deduction for Executive Compensation. The Committees
desire their compensation programs to be cost and tax effective. Certain
federal tax laws prohibit publicly traded companies from receiving a tax
deduction on compensation paid to Named Executive Officers in excess of $1
million annually. Consequently, the Committees continually review all
compensation components to maximize corporate tax deductions when feasible and
consistent with its employment agreements and annual commitments to the Named
Executive Officers.
Compensation Committee: David Siegel, Richard C. Webb and Alvin L.
Zimmerman.
Stock Option Committee: Max S. Levit, David Siegel and Richard C. Webb.
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee or the Stock Option Committee had,
during fiscal 2000, any relationships requiring disclosure by Kent, except Mr.
Zimmerman, who is a shareholder, officer and director of Zimmerman, Axelrad,
Meyer, Stern & Wise, P.C., a law firm retained by Kent.
8
<PAGE>
COMPENSATION TABLES
The following table sets forth compensation information for the Named
Executive Officers during Kent's fiscal years 2000, 1999 and 1998.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
----------------- ------------
Other Annual Securities All Other
Name and Principal Fiscal Salary Bonus Compensation Underlying Compensation(1)
Position Year ($) ($) ($) Options (#) ($)
------------------ ------ ------- --------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Morrie K. Abramson...... 2000 500,035 1,202,125 71,081(2) 200,000 4,973
Chairman of the Board
and 1999 484,126 532,763 116,862 0 68,241
Chief Executive Officer 1998 435,741 1,700,268 92,974 0 71,267
Larry D. Olson.......... 2000 325,037 601,275 9,441 200,000 4,973
President and 1999 305,747 158,383 6,926 50,000 7,357
Chief Operating Officer 1998 206,696 251,719 5,415 0 17,302
Richard J. Hightower.... 2000 223,920 491,044 6,217 10,000 4,874
Executive Vice
President and 1999 217,068 29,981 6,345 20,000 6,243
President of Kent
Components 1998 125,104 164,650 4,154 10,000 10,923
Mark A. Zerbe........... 2000 230,401 268,386 9,065 10,000 4,918
Executive Vice
President and 1999 217,100 271,979 8,977 20,000 18,953
President of Kent
Datacomm 1998 193,700 308,034 8,746 0 14,169
Stephen J. Chapko....... 2000 230,337 225,531 8,621 10,000 4,918
Executive Vice
President, 1999 217,087 75,000 8,396 30,000 14,225
Chief Financial 1998 175,006 150,000 8,092 0 13,611
Officer, Treasurer and
Secretary
</TABLE>
- --------
(1) Includes, in fiscal 2000, company matching pursuant to Kent's Tax-Deferred
Savings and Retirement Plan and Trust.
(2) Includes, in fiscal 2000, $48,263 attributable to travel on an aircraft in
which Kent has an aggregate undivided ownership interest of 18.75%. The
Board has adopted a policy that directs Mr. Abramson to use Kent's
aircraft to the fullest extent practicable for his business and personal
air travel.
9
<PAGE>
Option Grants in Fiscal 2000
<TABLE>
<CAPTION>
Potential Realizable
% of Total Value at Assumed
Options Exercise Market Annual Rates of Stock
Granted to Price Price on Price Appreciation
Options Employees (per Date of for Option Terms
Granted in Fiscal share) Grant Expiration ---------------------
Name (#) 2000 ($) ($) Date (5%) (10%)
---- ------- ---------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Morrie K. Abramson...... 200,000 22.5% $12.00 $12.00 05/14/09 $1,509,347 $3,824,982
Larry D. Olson.......... 200,000 22.5% $12.00 $12.00 05/14/09 $1,509,347 $3,824,982
Richard J. Hightower.... 10,000 1.1% $12.00 $12.00 05/14/09 $ 75,467 $ 191,249
Mark A. Zerbe........... 10,000 1.1% $12.00 $12.00 05/14/09 $ 75,467 $ 191,249
Stephen J. Chapko....... 10,000 1.1% $12.00 $12.00 05/14/09 $ 75,467 $ 191,249
</TABLE>
Aggregated Option Exercises in Fiscal 2000 and 2000 FY-End Option Values
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options At
Acquired At 2000 Fiscal Year End 2000 Fiscal Year End
on Value ---------------------------- ----------------------------
Name Exercise Realized (Exercisable) (Unexercisable) (Exercisable) (Unexercisable)
---- -------- -------- ------------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Morrie K. Abramson...... 0 $ 0 400,000 300,000 $4,587,000 $3,631,000
Larry D. Olson.......... 0 $ 0 92,500 252,500 $1,624,950 $4,712,250
Richard J. Hightower.... 0 $ 0 15,000 30,000 $ 211,680 $ 515,520
Mark A. Zerbe........... 7,500 $ 55,350 41,000 76,500 $ 685,680 $1,613,370
Stephen J. Chapko....... 20,000 $236,369 19,250 58,250 $ 402,705 $1,199,445
</TABLE>
10
<PAGE>
PERFORMANCE GRAPHS
The following graphs compare the performance of Kent's common stock to a
Peer Group Index (as defined below) and the New York Stock Exchange Market
Index (the "NYSE Market Index") for Kent'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 Kent's.
FIVE YEAR CUMULATIVE TOTAL RETURN
[Graph]
<TABLE>
<CAPTION>
FISCAL YEAR
1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Kent Electronics Corporation......... 100.00 239.83 161.02 146.61 69.92 197.88
Peer Group Index(1).................. 100.00 127.80 138.48 153.76 80.04 159.27
NYSE Market Index.................... 100.00 130.60 152.51 222.10 237.63 257.28
</TABLE>
Assumes $100 invested on April 1, 1995 in Kent common stock or Index and
that dividends are reinvested.
11
<PAGE>
TEN YEAR CUMULATIVE TOTAL RETURN
[Graph]
<TABLE>
<CAPTION>
FISCAL YEAR
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------ -------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Kent Electronics
Corporation............ 100.00 216.66 242.42 325.75 324.24 536.09 1,285.71 863.20 785.96 374.81 1,060.82
Peer Group Index(1)..... 100.00 104.09 138.66 173.68 174.08 193.66 247.49 268.17 297.78 155.00 308.45
NYSE Market Index....... 100.00 113.21 124.56 142.95 148.83 165.08 215.61 251.76 366.65 392.29 424.72
</TABLE>
Assumes $100 invested on March 31, 1990 in Kent common stock or Index and
that dividends are reinvested.
- --------
(1) Includes the following companies:
@ Track Communications, All American Semiconductor, Arrow Electronics,
Avnet, Bell Industries, Bell Microproducts, Brightpoint, Cellstar, Dunn
Computer, Farmstead Telephone Group, Focus Affiliates, Gentner
Communications, Getgo Mail.com, Internet Communications, Jaco Electronics,
Kent Electronics, Norstan, Nu-Horizons Electronics, Pioneer-Standard
Electronics, Premier Farnell, Rada Electronics Industries, Reptron
Electronics, Richardson Electronics, Savoir Technology Group, Somera
Communications, Taitron Components, Tessco Technologies, Video Display,
View Tech and World Access.
12
<PAGE>
Executive Agreements
Abramson Agreements
The Employment Agreement between Mr. Abramson and Kent expires on March 31,
2001 and provides for a minimum annual base salary and bonus of at least
$950,000. Upon the termination of Mr. Abramson's employment for any reason
(other than for "just cause" or without "good reason" prior to a "change in
control" (as such terms are defined in the Employment Agreement)), he or his
spouse, or the estate of either, will receive an annual retirement benefit of
$750,000 for the greater of (1) 15 years, (2) Mr. Abramson's life or (3) the
life of his spouse. 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 $750,000 per year thereafter. No retirement benefits would be paid,
however, if prior to a change in control, Kent terminates Mr. Abramson for
just cause or he resigns without good reason. The retirement benefits payable
under the Employment Agreement will be adjusted annually to reflect increases
in the cost of living as measured by the Consumer Price Index. Mr. Abramson
has the right to require Kent to secure its obligations to pay the retirement
benefits payable under the Employment Agreement by contributing cash to a
trust in an amount sufficient to purchase an annuity contract and to pay the
anticipated income taxes payable upon the receipt of the annuity contract. To
date, Mr. Abramson has not required Kent to secure its obligations to pay the
retirement benefits, but he reserves the right to do so in the future. If
prior to a change in control Kent discharges Mr. Abramson without just cause
or he resigns for good reason, 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. 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 five times the highest
amount of his annual cash compensation during the time his Employment
Agreement was in force or the year of the change in control. Upon a change in
control, Kent shall establish a trust for the benefit of Mr. Abramson, into
which Kent shall contribute cash in an amount sufficient to satisfy its
obligations to pay Mr. Abramson the amounts to which he would be entitled if
his employment is terminated after a change in control.
In January 1993, Kent entered into an Executive Health Care Benefits and
Consulting Agreement with Mr. Abramson. This agreement provides that Mr.
Abramson may provide consulting services to Kent after retirement and that he
will be covered under Kent's health care plan. Mr. Abramson will pay all
required premiums and other costs for Medicare coverage. Kent 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, Kent entered into an agreement with Mr. Abramson pursuant to
which Kent, upon a change in control of Kent, will make a cash payment to him
sufficient to pay all excise taxes imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended. Such payment will place him in the same
after-tax position as if there had been no such taxes.
Severance Agreements
In November 1998, Kent entered into severance agreements with Messrs.
Billone, Chapko, Hightower, Olson and Zerbe. In June 1999, Kent entered into a
severance agreement with Mr. Johnson (each of Messrs. Billone, Chapko,
Hightower, Johnson, Olson and Zerbe are referred to as an "Officer"). In
general, these agreements provide that if, after a change in control, the
Officer's employment is terminated for any reason, the Officer shall be
entitled to a cash lump sum payment equal to the highest amount of his annual
cash compensation (two times that amount, in Mr. Olson's case) during the five
years preceding or the year of the change in control. In addition, all of the
stock options granted to the Officer shall immediately vest on the date of
termination following a change in control. Kent will also make a cash payment
to the Officer sufficient to pay all excise taxes imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended. Such payment will place the
Officer in the same after-tax position as if there had been no such taxes.
13
<PAGE>
Certain Transactions
Mr. Zimmerman, a director of Kent, is a shareholder, officer and director
of the law firm of Zimmerman, Axelrad, Meyer, Stern & Wise, P.C., a firm
retained by Kent.
During fiscal 1997 and 1998, Kent made loans to certain current and former
executive officers and directors of Kent to finance their purchase of Kent
common stock. Such persons with loans from Kent of $60,000 or more, and their
respective loan balances and weighted-average interest rates, are set forth in
the table below. The loan balances in the table below include outstanding
principal and accrued interest.
<TABLE>
<CAPTION>
Largest Loan Loan Balance
Balance in at Interest
Name Fiscal 2000 April 1, 2000 Rate
---- ------------ ------------- --------
<S> <C> <C> <C>
Morrie K. Abramson....................... $523,357 $523,357 6.36%
Frank M. Billone......................... $186,136 $ 65,982 6.02%
Stephen J. Chapko........................ $109,608 -- 6.02%
Richard J. Hightower..................... $238,750 $238,750 6.02%
David D. Johnson......................... $540,263 $540,263 6.35%
Max S. Levit............................. $205,172 $205,172 6.27%
Larry D. Olson........................... $344,160 $233,530 6.02%
David Siegel............................. $128,326 $128,326 6.33%
Richard C. Webb.......................... $500,723 $500,723 6.43%
Mark A. Zerbe............................ $304,563 $304,563 6.18%
</TABLE>
PROPOSAL 2--RATIFICATION AND APPOINTMENT OF AUDITORS
The Board of Directors has appointed Grant Thornton LLP as Kent's
independent auditors for the fiscal year ending March 31, 2001, and Kent is
asking shareholders to ratify this appointment. Representatives of Grant
Thornton will be at the Annual Meeting to respond to appropriate questions.
KENT'S BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon a review of our records, all reports required to be filed
pursuant to Section 16(a) of the Exchange Act were filed on a timely basis,
except that Kent believes that Forms 5 were not filed by the following former
reporting persons of the Company: Keith K. Ayers, William H. Fountain, R.
Michael Gibbons and Terrence A. Hunt.
Shareholder Proposals for the 2001 Annual Meeting
If you want to submit a proposal for possible inclusion in Kent's 2001
Proxy Statement, we must receive it on or before January 26, 2001.
Proposals and Nominations for the 2001 Annual Meeting
Under Kent's bylaws, a shareholder that desires to nominate a person to be
elected as a director of Kent or to bring any other matter before the annual
meeting must give adequate notice to Kent's Secretary. To be adequate, that
notice must contain information specified in our bylaws and be received by us
not less than 90 days nor more than 120 days prior to the date that is the one
year anniversary of the previous year's annual
14
<PAGE>
meeting. If, however, the date of the annual meeting has changed by more than
30 days from the anniversary date, notice of a nomination or other matter to
be brought before the annual meeting must be received by the 10th day
following the earlier of (1) the date on which notice of the annual meeting
was mailed or (2) the date on which public disclosure of the date of the
annual meeting was made. Under this criteria, shareholders must provide us
with notice of a nomination or other matter to be brought before the 2001
annual meeting between March 1, 2001 and March 31, 2001.
Solicitation of Proxies
Kent is soliciting this proxy on behalf of its Board of Directors. This
solicitation is being made by mail but also may be made in person or by
special letter, telephone, or fax. We have hired Morrow & Co. at an estimated
cost of $3,500, plus out-of-pocket expenses, to assist in the solicitation.
Revocability of Proxy
You may revoke the enclosed proxy by filing a written notice of revocation
with the Secretary of Kent or by providing a later executed proxy.
KENT WILL FURNISH WITHOUT CHARGE ADDITIONAL COPIES OF ITS ANNUAL REPORT ON
FORM 10-K FOR THE FISCAL YEAR ENDED APRIL 1, 2000 TO INTERESTED SECURITY
HOLDERS ON REQUEST. KENT WILL FURNISH TO ANY SUCH PERSON ANY EXHIBITS
DESCRIBED IN THE LIST ACCOMPANYING SUCH REPORT UPON PAYMENT OF REASONABLE FEES
RELATING TO KENT'S FURNISHING SUCH EXHIBITS. REQUESTS FOR COPIES SHOULD BE
DIRECTED TO THE SECRETARY AT KENT'S ADDRESS PREVIOUSLY SET FORTH.
15
<PAGE>
[MAP APPEARS HERE]
[LOGO APPEARS HERE]
<PAGE>
PROXY PROXY
KENT ELECTRONICS CORPORATION
1111 GILLINGHAM LANE
SUGAR LAND, TEXAS 77478
ANNUAL MEETING OF SHAREHOLDERS JUNE 29, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) of Kent Electronics Corporation ("Kent")
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 Kent Common
Stock at Kent's Annual Meeting of Shareholders to be held on June 29, 2000, at
10:00 a.m., Central time, at Kent's Sugar Land Distribution Center located at
1400 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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
KENT'S BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH BELOW AND "FOR" PROPOSAL PLEASE MARK
2 BELOW. YOUR VOTES AS [X]
INDICATED IN
THE EXAMPLE
PROPOSAL 1: To elect directors:
FOR all nominees WITHHOLD Nominees: Leroy Morgan, David Siegel
listed to the right AUTHORITY
(except as marked to vote for all nominees Instruction: To withhold authority to vote for any individual nominee,
to the contrary) listed to the right write such name or names in the space provided below.
[_] [_]
_______________________________________________________________________
PROPOSAL 2: To ratify the appointment of Grant Thornton LLP 3: In their discretion, on such other matters as may properly come
as Kent's independent public accountants for the before the 2000 Annual Meeting of Shareholders or any
fiscal year ending March 31, 2001. adjournment(s) thereof; all as more particularly described in
the Proxy Statement, receipt of which is hereby acknowledged.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[_] [_] [_] [_] [_] [_]
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 ABOVE AND PROPOSAL 2. All prior proxies
are hereby revoked.
_______________________________________________________
| PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE |
| PROXY CARD USING THE ENCLOSED ENVELOPE. |
_______________________________________________________
SIGNATURE __________________________________________ SIGNATURE ___________________________________________ DATE ___________________
NOTE: Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee, guardian, etc., please give full title as such.
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
