<PAGE>
SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ESSEX INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
ESSEX INTERNATIONAL INC.
1601 WALL STREET
FORT WAYNE, IN 46802
March 26, 1998
Dear Stockholder:
I am pleased to invite you to attend the first annual meeting of
stockholders of Essex International Inc. (the "Company") to be held on
Wednesday, April 29, 1998 at 11:00 a.m. local time, at the Grand Wayne Center,
120 West Jefferson Blvd., Fort Wayne, Indiana.
At this meeting, you will be asked to consider and vote upon (i) the
election of two directors of the Company and (ii) a proposal to approve the
Company's 1997 Stock Option Plan for Nonemployee Directors.
The Board of Directors appreciates and encourages stockholder participation
in the Company's affairs and invites you to attend the annual meeting in
person. It is important, however, that your shares be represented at the
annual meeting in any event and we ask that you take a moment to sign, date
and mail the enclosed proxy card in the envelope provided whether or not you
plan to attend the meeting.
We thank you for your support.
Very truly yours,
Steven R. Abbott
President and Chief Executive
Officer
<PAGE>
ESSEX INTERNATIONAL INC.
1601 WALL STREET
FORT WAYNE, IN 46802
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 1998
To the Stockholders of Essex International Inc.
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Essex
International Inc. (the "Company"), a Delaware corporation, will be held on
Wednesday, April 29, 1998 at 11:00 a.m. local time, at the Grand Wayne Center,
120 West Jefferson Blvd., Fort Wayne, Indiana, for the purposes of considering
and voting upon the following matters, as more fully described in the attached
Proxy Statement:
1. To elect two directors of the Company;
2. To approve the Company's 1997 Stock Option Plan for Nonemployee
Directors;
3. To transact any other business that may properly come before the
annual meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 13, 1998 as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the annual meeting.
By Order of the Board of Directors,
Debra F. Minott
Secretary
Fort Wayne, Indiana
March 26, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT TO THE COMPANY IN THE ENVELOPE
ENCLOSED (TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES).
IF YOU ATTEND THE MEETING IN PERSON, YOU CAN WITHDRAW YOUR PROXY AND VOTE IN
PERSON. THE PROMPT RETURN OF PROXIES WILL ENSURE A QUORUM AND SAVE THE COMPANY
THE EXPENSE OF FURTHER SOLICITATION.
<PAGE>
ESSEX INTERNATIONAL INC.
1601 WALL STREET
FORT WAYNE, IN 46802
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 1998
This Proxy Statement is being furnished to the stockholders of Essex
International Inc. (the "Company") in connection with the solicitation of
proxies, in the accompanying form, by the Company, for use at the annual
meeting of stockholders to be held on Wednesday, April 29, 1998 at 11:00 a.m.
local time, at the Grand Wayne Center, 120 West Jefferson Blvd., Fort Wayne,
Indiana and at any and all adjournments or postponements thereof.
The stockholders of record at the close of business on March 13, 1998 will
be entitled to receive notice of, and to vote at, the meeting and any
adjournments or postponements thereof. As of March 13, 1998, there were issued
and outstanding, 30,152,819 shares of the Company's common stock, par value
$0.01 per share (the "Common Stock"), the only class of voting securities
outstanding. The stockholders of record will be entitled to one vote for each
share of Common Stock registered in his or her name on the record date. A
majority of all the outstanding shares of Common Stock constitutes a quorum
and is required to be present in person or represented by proxy to conduct
business at the annual meeting.
A proxy may be revoked by a stockholder at any time before it is voted (i)
by returning to the Company another properly signed proxy bearing a later
date, (ii) by otherwise delivering a written revocation to the Secretary of
the Company or (iii) by attending the annual meeting or any adjourned session
thereof and voting the shares covered by the proxy in person. Solicitation of
proxies will be made chiefly through the mails, but additional solicitation
may be made by telephone, facsimile, or similar means by the officers or
regular employees of the Company (who will not be specifically compensated for
such services). The Company will reimburse brokers, banks and other
custodians, nominees and fiduciaries and other persons for their reasonable
charges and expenses in forwarding solicitation materials to their principals.
All solicitation expenses, including the costs of preparing, assembling and
mailing proxy material, will be borne by the Company. This Proxy Statement and
accompanying form of proxy are being mailed to stockholders on or about March
26, 1998.
Shares of Common Stock represented by executed and unrevoked proxies will be
voted in accordance with the instructions specified thereon. It is the
intention of the persons named in the proxy, unless otherwise specifically
instructed in the proxy, to vote all proxies received by them (i) in favor of
Rodney A. Cohen and Stuart S. Janney, III for election as directors and (ii)
in favor of the Company's 1997 Stock Option Plan for Nonemployee Directors
(the "Directors' Stock Option Plan"). The Board of Directors does not know of
any other matters that may be presented for consideration at the annual
meeting. However, if other matters properly come before the annual meeting,
the persons named in the accompanying proxy intend to vote thereon in
accordance with their judgment.
If a quorum is present at the meeting, those nominees receiving a plurality
of the votes cast will be elected as directors. The affirmative vote of the
majority of the shares represented in person or by proxy at the meeting and
entitled to vote will be required to approve the Directors' Stock Option Plan.
Abstentions from voting on a proposal by those present in person at the
meeting or represented by proxy and entitled to vote will have the effect of a
"no" vote. Broker non-votes are not considered shares present, are not
entitled to vote and therefore will not affect the outcome of the vote on a
proposal.
GENERAL
Essex International Inc. is a holding company whose operations are conducted
solely through Essex Group, Inc. ("Essex"), its wholly owned subsidiary. Where
the context requires, "Company" includes Essex
<PAGE>
International Inc. and its consolidated subsidiaries, including Essex. The
Company was acquired (the "Acquisition") in a merger in October 1992 by
certain of its existing and former stockholders. On May 1, 1997, the Company
completed an initial public offering (the "IPO") and on October 3, 1997
completed a follow-on secondary offering (together with the IPO, the
"Offerings"). The Company's Common Stock is listed on the New York Stock
Exchange (the "NYSE") with the trading symbol "SXC."
The Company's principal executive offices are located at 1601 Wall Street,
Fort Wayne, Indiana 46802, telephone (219) 461-4000.
PROPOSAL I: ELECTION OF DIRECTORS
The persons named in the enclosed proxy intend to vote each share as to
which a proxy has been properly executed and returned and not revoked in favor
of the election as a director of each of Rodney A. Cohen and Stuart S. Janney,
III, who are each now a director of the Company, unless authority to vote for
the election of such nominee is withheld by marking the proxy to that effect.
Pursuant to the Company's Second Amended and Restated Certificate of
Incorporation, the Board of Directors (the "Board") is divided into three
classes (Classes A, B and C), as nearly equal in number as possible. Each
director serves for three years, with one class of directors being elected
each year. Mr. Cohen and Mr. Janney are the only directors designated as Class
A directors, whose terms expire at the 1998 annual meeting. The enclosed proxy
cannot be voted for more than two persons.
If Proposal I is approved, Rodney A. Cohen and Stuart S. Janney, III will be
elected as directors for a term of three years, expiring at the annual meeting
of stockholders to be held in the year 2001.
It is expected that each of the nominees will be able to serve, but if
either of the nominees is unable or declines to serve, the persons named in
the accompanying form of proxy reserve the right to vote the shares
represented by such proxy for another person duly nominated by the Board or,
if no other person is nominated, to vote such shares only for the remaining
nominee. Each nominee has indicated a willingness to serve as a director if
elected and the Company has no reason to believe that either nominee will be
unable or will decline to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE
FOR THE ELECTION OF RODNEY A. COHEN AND STUART S. JANNEY, III AS DIRECTORS.
2
<PAGE>
INFORMATION WITH RESPECT TO NOMINEES
<TABLE>
<CAPTION>
AGE (AS OF YEAR FIRST
MARCH 1, ELECTED BUSINESS EXPERIENCE
NAME 1998) DIRECTOR AND CURRENT DIRECTORSHIPS
---- ---------- ---------- -------------------------
<S> <C> <C> <C>
Rodney A. Cohen......... 36 1996 Mr. Cohen is the sole shareholder and president of
a corporation that is a manager of the limited
liability company that is the general partner of
Bessemer Holdings, L.P. ("BHLP"), Bessec Holdings,
L.P. ("Bessec", and together with BHLP, the "BH
Group"). From July 1993 to December 1997, Mr.
Cohen was a principal, and since January 1998 Mr.
Cohen has been the sole shareholder of a
corporation that is a general partner, of a
partnership affiliated with BH Group, to which
Essex and the Company paid the fees described in
"Certain Transactions--Advisory Services." From
September 1991 to July 1993, he was a principal of
Bessemer Securities Corporation ("BSC"), a
principal limited partner in the partnerships
comprising the BH Group. Mr. Cohen is a director
of a number of private companies.
Stuart S. Janney, III... 49 1997 Mr. Janney was elected in January 1995 as Chairman
of the Board of Directors of BSC, the Bessemer
Group Incorporated, Bessemer Trust Company, N.A.
and Bessemer Trust Company of Florida. He was
elected Chairman of the Board of Managers of
Bessemer Securities LLC ("BSLLC") in June 1996.
BSLLC is a principal limited partner in one of,
and BSC is a principal limited partner in, the
partnerships comprising the BH Group. Prior to
January 1995, Mr. Janney was with Alex. Brown &
Sons Incorporated, where he spent nine years, most
recently as Managing Director and head of asset
management. Mr. Janney is a director of Graphic
Controls Corporation, a medical products company,
and a number of other private companies,
foundations and institutions.
INFORMATION WITH RESPECT TO CURRENT DIRECTORS
Steven R. Abbott........ 50 1996 Mr. Abbott was appointed President and Chief
Executive Officer of the Company and Essex in
February 1996. He was President of the Wire and
Cable Sector of Essex from September 1995 to
February 1996 and President of the Wire and Cable
Division of Essex from September 1993 to September
1995. Mr. Abbott was President of the Magnet Wire
and Insulation Division from 1987 to 1993 and has
been employed by Essex since 1967. Mr. Abbott is a
Class C director whose term will expire at the
Company's annual meeting of stockholders to be
held in the year 2000.
W.L. Lyons Brown, Jr.... 61 1997 Mr. Brown served as Chairman of the Board of
Brown-Forman Corporation ("Brown-Forman"), a
diversified producer and marketer of fine consumer
products, until his retirement in 1995 and
remained a director thereof until 1996. He served
as Chief Executive Officer of Brown-Forman from
1975 until 1993. Mr. Brown is a director of the
Pennzoil Company and Westvaco Corporation. He is
also Chairman of the Board of Trustees of the
Winterthur Museum and is a
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
AGE (AS OF YEAR FIRST
MARCH 1, ELECTED BUSINESS EXPERIENCE
NAME 1998) DIRECTOR AND CURRENT DIRECTORSHIPS
- ---- ---------- ---------- -------------------------
<S> <C> <C> <C>
member of the Board of Trustees of the World
Monuments Fund as well as the Alumni Board of
Trustees of the University of Virginia Endowment
Fund. Mr. Brown from time to time consults with
the BH Group, for which he does not receive any
consideration, with respect to potential
investment opportunities and is also a shareholder
of other companies controlled by the BH Group. Mr.
Brown is a Class C director whose term will expire
at the Company's annual meeting of stockholders to
be held in the year 2000.
Edward O. Gaylord....... 65 1997 Mr. Gaylord has served as the Chairman of the
Board of EOTT Energy Corp., an oil trading and
transportation firm, since January 1993 and also
operates Gaylord & Company, a private venture
capital firm based in Houston, Texas. He served as
Chairman and Chief Executive Officer of Presto
Industries, Inc., a plastics manufacturer, from
1985 to 1988. Mr. Gaylord is a director of the
Houston Branch of the Federal Reserve Bank of
Dallas, Imperial Holly Corporation, Kinder Morgan
G.P. Inc., Seneca Foods Corporation and the
National Museum of Natural History, Smithsonian
Institution, and a trustee of MD Anderson
Hospital, Baylor College of Medicine and the
Houston Ballet. Mr. Gaylord is a Class C director
whose term will expire at the Company's annual
meeting of stockholders to be held in the year
2000.
Robert D. Lindsay....... 43 1992 Mr. Lindsay is the sole shareholder and president
of a corporation that is a principal manager of
the limited liability company that is the general
partner of the partnerships comprising the BH
Group and certain affiliated investment
partnerships. He is also the sole shareholder of a
corporation that is a managing general partner of
the partnership affiliated with BH Group to which
the Company paid the fees described in "Certain
Transactions--Advisory Services." Mr. Lindsay was
a Managing Director of BSC from January 1991 to
June 1993. Mr. Lindsay is a director of several
private companies. Mr. Lindsay is a Class B
director whose term will expire at the Company's
annual meeting of stockholders to be held in 1999.
Ward W. Woods........... 55 1992 Mr. Woods is Chairman of the Board of Directors of
the Company. Mr. Woods is the sole shareholder and
president of a corporation that is a principal
manager of the limited liability company that is
general partner of each of the partnerships
comprising the BH Group. He is also the sole
shareholder of a corporation that is a managing
general partner of the partnership affiliated with
BH Group to which the Company paid the fees
described in "Certain Transactions--Advisory
Services." Mr. Woods is President and Chief
Executive Officer of BSLLC and BSC. Mr. Woods
joined BSC in 1989. He is a director of Boise
Cascade Corporation, Graphic Controls Corporation,
Kelley Oil & Gas Corporation and several private
companies. Mr. Woods is a Class B director whose
term will expire at the Company's annual meeting
of stockholders to be held in 1999.
</TABLE>
4
<PAGE>
BOARD AND COMMITTEE MEETINGS
The Board of Directors held five meetings during 1997. There are also four
committees of the Board, the functions of each of which are more fully
described below.
The Executive Committee has all powers and rights necessary to exercise the
full authority of the Board of Directors in the management of the business and
affairs of the Company when necessary in between meetings of the Board of
Directors. The Executive Committee did not meet during 1997 but approved
various actions pursuant to written consents. The current members of the
Executive Committee are Messrs. Abbott, Lindsay and Woods.
The Compensation Committee has the responsibility of reviewing the
performance of the executive officers of the Company (other than the Chief
Executive Officer) and approving annual salary and bonus amounts for executive
officers of the Company (other than the Chief Executive Officer), based in
part on the recommendation of the Chief Executive Officer. The Compensation
Committee may also make recommendations to the Stock Option Committee
concerning awards of options to purchase Common Stock ("Options") to employees
of the Company, including awards to executive officers. The Compensation
Committee held two meetings during 1997. The current members of the
Compensation Committee are Messrs. Brown, Cohen, Lindsay and Woods.
The Stock Option Committee has the responsibility of (i) reviewing
recommendations of the Compensation Committee for the award of Options and
(ii) approving the award of Options. The Stock Option Committee also reviews
the performance of the Chief Executive Officer and sets annual salary and
bonus amounts for the Chief Executive Officer. The Stock Option Committee
consists of at least two directors who are "outside directors" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.
The Stock Option Committee did not meet during 1997. The current members of
the Stock Option Committee are Messrs. Brown, Gaylord and Janney.
The Audit Committee has the responsibility of reviewing and supervising the
financial controls of the Company. The Audit Committee's responsibilities
include (i) making recommendations to the Board of Directors with respect to
the Company's financial statements and the appointment of independent
auditors, (ii) reviewing significant audit and accounting policies and
practices of the Company, (iii) meeting with the Company's independent
auditors concerning, among other things, the scope of audits and reports and
(iv) reviewing the performance of overall accounting and financial controls of
the Company. The Audit Committee held two meetings during 1997. The current
members of the Audit Committee are Messrs. Brown, Gaylord and Janney.
The Company has no standing Nomination Committee.
During 1997, each member of the Board attended at least 75% of the meetings
of the Board and any committees on which he served that were held during the
time he served.
5
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
Set forth below is certain information regarding the executive officers of
the Company.
<TABLE>
<CAPTION>
AGE (AS OF POSITION WITH THE COMPANY
NAME MARCH 1, 1998) AND OTHER BUSINESS EXPERIENCE
---- -------------- -----------------------------
<S> <C> <C>
Steven R. Abbott........ 50 See biography in "Information With Respect to
Current Directors."
Robert J. Faucher....... 53 Mr. Faucher was appointed Executive Vice President
of the Company in March 1997. He was appointed
Executive Vice President of Essex in September
1995. Mr. Faucher was President of the Engineered
Products Division of Essex from January 1992 to
September 1995 and Vice President, Operations in
the Industrial Products Division of Essex from
June 1988 to January 1992. Mr. Faucher joined
Essex in 1985 as Vice President, Planning.
Dominic A. Lucenta...... 44 Mr. Lucenta was appointed Senior Vice President of
the Company in March 1997. He was appointed Senior
Vice President in charge of Human Resources of
Essex in April 1994. From October 1992 to April
1994 he was Vice President of Human Resources and
from 1990 to 1992 he was Director of Human
Resources for various divisions of Essex. Mr.
Lucenta joined Essex in 1979.
Charles W. McGregor..... 56 Mr. McGregor was appointed Executive Vice
President of the Company in March 1997. He was
appointed Executive Vice President of Essex in
October 1996. Mr. McGregor was President of the
Magnet Wire and Insulation Sector of Essex from
September 1995 to October 1996. He was President
of the Magnet Wire and Insulation Division of
Essex from September 1993 to September 1995 and
prior to that was Director of Manufacturing for
the Division from 1987 to 1993. Mr. McGregor
joined Essex in 1970.
Debra F. Minott......... 42 Ms. Minott was appointed Senior Vice President of
the Company in March 1997 and was appointed Vice
President, General Counsel and Secretary of the
Company in April 1995. She was appointed Senior
Vice President and General Counsel of Essex in
October 1994 and was appointed Secretary of Essex
in April 1995. Ms. Minott joined Essex in 1994.
From September 1983 to October 1994, Ms. Minott
held various legal positions at Eli Lilly &
Company.
Curtis A. Norton........ 51 Mr. Norton was appointed Senior Vice President of
the Company in March 1997. He was appointed Senior
Vice President in charge of Corporate Support
Operations of Essex in April 1996. Mr. Norton was
Vice President of Corporate Support Operations
from September 1995 to April 1996. He was Vice
President of Purchasing from April 1994 to
September 1995 and Director of Purchasing from
1989 to 1994. Mr. Norton joined Essex in 1981.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
AGE (AS OF POSITION WITH THE COMPANY
NAME MARCH 1, 1998) AND OTHER BUSINESS EXPERIENCE
---- -------------- -----------------------------
<S> <C> <C>
David A. Owen........... 52 Mr. Owen was appointed Executive Vice President of
the Company in March 1997. He was appointed Vice
President, Treasurer and Chief Financial Officer
of the Company in March 1993. Mr. Owen was
appointed Executive Vice President and Chief
Financial Officer of Essex in March 1994. He was
appointed Vice President--Finance and Chief
Financial Officer of Essex in March 1993 and
Treasurer of Essex in April 1992. Prior to that
time, Mr. Owen was Director, Treasury and
Financial Services of Essex. Mr. Owen joined Essex
in 1976.
Gregory R. Schriefer.... 45 Mr. Schriefer was appointed Executive Vice
President of the Company in March 1997. He was
appointed Executive Vice President of Essex in
October 1996. Mr. Schriefer was Vice President and
General Manager of Building Wire Products of Essex
from September 1995 to October 1996 and was Vice
President, Manufacturing of the Wire and Cable
Division from April 1994 to September 1995. Mr.
Schriefer has been employed in various positions
with the Company since 1981.
</TABLE>
Each executive officer of the Company serves at the pleasure of the Board of
Directors.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table and footnotes thereto set forth information regarding
the beneficial ownership of Common Stock as of January 30, 1998 by (a) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock, (b) each of the Company's directors, (c)
each named executive officer and (d) all directors and executive officers of
the Company as a group. Unless otherwise noted in the footnotes, the persons
named in the table have sole voting and investment power with respect to all
shares of Common Stock indicated as beneficially owned by them.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED(A)
--------------------
NUMBER PERCENT
NAME OF SHARES OWNERSHIP
---- ---------- ---------
<S> <C> <C>
Steven R. Abbott(b)(c)(d)................................ 491,000 1.6
W.L. Lyons Brown, Jr.(e)................................. 8,602 *
Rodney A. Cohen(f)(g).................................... 71,170 *
Robert J. Faucher(b)(c)(h)............................... 291,488 1.0
Edward O. Gaylord(i)..................................... 2,000 *
Stuart S. Janney, III(j)................................. 0 *
Robert D. Lindsay(f)(k).................................. 660,483 2.2
Charles W. McGregor(b)(c)(l)............................. 163,623 *
David A. Owen(b)(c)(m)................................... 168,414 *
Gregory R. Schriefer(c)(n)............................... 74,046 *
Ward W. Woods(f)(o)...................................... 1,089,803 3.7
All directors and executive officers as a group (14
persons(p))............................................. 14,757,120 48.2
Bessemer Holdings, L.P. (q)(r)(s)........................ 11,547,231 38.9
</TABLE>
- --------
* Represents holdings of less than one percent.
(a) At January 30, 1998 there were 29,709,812 shares of Common Stock
outstanding, excluding 2,453,485.5 shares of Common Stock underlying
Options. Percentages have been calculated assuming, in the case of each
person or group listed, the exercise of all Options owned (that are
exercisable within sixty days following January 30, 1998) by each such
person or group, respectively, but not the exercise of any Options owned
by any other person or group.
(b) Pursuant to the terms of certain option agreements, the aggregate number
of shares issuable upon exercise of certain Options can be reduced. See
"Executive Compensation--Stock Option Plan".
(c) The address for each of these beneficial owners is c/o Essex
International Inc., 1601 Wall Street, Fort Wayne, IN 46802.
(d) Includes 334,000 shares issuable upon exercise of Options held by Mr.
Abbott, 136,500 of which, pursuant to the applicable option agreement,
may be reduced to 88,076 shares.
(e) The address of Mr. Brown is 501 Fourth Avenue, Louisville, KY 40202.
(f) The address for each of these directors is c/o Bessemer Partners & Co.,
630 Fifth Avenue, New York, NY 10111.
(g) All these shares are held for the benefit of Mr. Cohen and his family by
entities controlled by Mr. Cohen.
(h) Includes 185,000 shares issuable upon exercise of Options held by Mr.
Faucher, 72,500 of which, pursuant to the applicable option agreement,
may be reduced to 45,598 shares.
(i) The address for Mr. Gaylord is 5851 San Felipe, Suite 900, Houston, TX
77057.
(j) The address for Mr. Janney is c/o BSLLC, 630 Fifth Avenue, New York, NY
10111.
(k) Includes 545,041 shares held for the benefit of Mr. Lindsay and his
family by entities controlled by Mr. Lindsay. On December 18, 1997, Mr.
Lindsay gave 30,000 shares of Common Stock to the Robert and Teresa
Lindsay Family Foundation.
(l) Includes 125,250 shares issuable upon exercise of Options held by Mr.
McGregor, 22,750 of which, pursuant to the applicable option agreement,
may be reduced to 14,438 shares.
8
<PAGE>
(m) Includes 126,000 shares issuable upon exercise of Options held by Mr.
Owen, 26,000 of which, pursuant to the applicable option agreement, may
be reduced to 16,420 shares.
(n) Includes 36,250 shares issuable upon exercise of Options held by Mr.
Schriefer.
(o) Includes 874,232 shares held for the benefit of Mr. Woods and his family
by entities controlled by Mr. Woods. On December 18, 1997, Mr. Woods gave
45,000 shares of Common Stock to the Woods Foundation.
(p) Consists of the 11,547,231 shares owned or controlled by the BH Group,
that, together with the shares described below, may be deemed to be
beneficially owned by Messrs. Woods, Lindsay and Cohen (which beneficial
ownership is disclaimed by Messrs. Woods, Lindsay and Cohen--see footnote
(q) below), 455,806 shares owned by the executive officers of the
Company, 1,832,058 shares owned by the directors of the Company (other
than Mr. Abbott) and 922,025 shares issuable to the executive officers of
the Company upon exercise of Options that, pursuant to the applicable
option agreements may be reduced to 812,701 shares.
(q) BHLP is a limited partnership the only activity of which is to make
private structured investments. The primary limited partner of BHLP is
BSC. Each of Messrs. Woods, Lindsay and Cohen, directors of the Company,
and Mr. Adam P. Godfrey, is a sole shareholder of a corporation that is a
manager and controls a family partnership or corporation that is a member
of the limited liability company that is the sole general partner of BHLP.
That limited liability company is also the sole general partner of Bessec,
a limited partnership that holds 230,328 additional shares. Mr. Janney is
a director of BSC and a manager of BSLLC. BSC is a principal limited
partner of BHLP and Bessec. BSLLC is a principal limited partner of
Bessec. In addition, Messrs. Woods, Lindsay, Cohen and Godfrey are the
sole shareholders of the corporations that are the general partners of the
partnership affiliated with BHLP to which the Company paid the fees
described in "Certain Transactions--Advisory Services." Mr. Woods is the
President and Chief Executive Officer of BSLLC and BSC. Each of Messrs.
Woods, Lindsay, Cohen and Godfrey disclaims beneficial ownership of the
shares of Common Stock owned or controlled by BHLP or Bessec.
(r) The share ownership figure for BHLP includes 230,328 shares owned by
Bessec.
(s) The address for BHLP and Bessec is 630 Fifth Avenue, 39th Floor, New York,
NY 10111.
9
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is made up of Messrs.
Brown, Cohen, Lindsay and Woods. The principal function of the Compensation
Committee, on behalf of the Board of Directors, is to review current and
proposed employment arrangements with existing and prospective senior
management employees. The Stock Option Committee of the Board of Directors
reviews the performance and compensation arrangements of the Chief Executive
Officer.
Since the Company only recently became a public company, the Compensation
Committee recognizes that a transition period is necessary to establish fully
its long-range compensation objectives and complete its assessment of how the
deductibility limit of Section 162(m) of the Internal Revenue Code can serve
the best interests of the Company and the shareholders. The Compensation
Committee is responsible for the general oversight of the Company's executive
compensation philosophy. The following is a general framework within which the
Compensation Committee expects to operate.
The general philosophy of the Compensation Committee is to link overall
executive compensation with the performance of the Company and the individual
executive. The focus is on both annual and long-term incentives. By providing
a combination of incentives to the key employees of the Company, upon whose
efforts and commitment depend the continued success and growth of the Company,
the Committee intends not only to reward those efforts, but provide a means by
which those employees can share in the growth of the Company.
The executive compensation policy is designed to attract and retain highly
qualified executive officers, to reinforce strategic performance objectives
through the use of incentive compensation programs, and to create a mutuality
of interest between executive officers and stockholders through compensation
structures that share the rewards and risks of strategic business planning and
implementation. Total compensation is intended to be competitive with that
paid to qualified executives of similar companies.
The foregoing report is submitted by the members of the Compensation
Committee.
W.L. Lyons Brown, Jr.
Rodney A. Cohen
Robert D. Lindsay
Ward W. Woods
STOCK OPTION COMMITTEE REPORT ON COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Stock Option Committee is made up of Messrs. Brown, Gaylord and Janney,
all of whom are independent outside directors who are neither officers nor
employees of the Company, its subsidiaries or of BH Group. The principal
functions of the Stock Option Committee are to administer the Company's Stock
Option Plan and, on behalf of the Board of Directors, to review the
performance of the Chief Executive Officer and set annual salary and bonus
amounts for the Chief Executive Officer. During fiscal 1997, the Chief
Executive Officer of the Company received $1,344,760.
In reviewing the compensation paid to Mr. Abbott for fiscal 1997, the Stock
Option Committee considered the fact that Mr. Abbott had significant
responsibilities as chief executive officer of the Company, Essex and Essex's
subsidiaries. The Stock Option Committee believes Mr. Abbott's total
compensation from Essex for fiscal 1997 was appropriate and reasonable. This
judgment is based on the Committee's conclusion that Mr. Abbott has fully and
effectively discharged the responsibilities of his position with the Company
to the Company's substantial benefit, particularly with respect to the
Company's operating and financial performance and integration of acquisitions.
Moreover, the Committee believes that Mr. Abbott's strong leadership, guidance
and direction to the Company as President and Chief Executive Officer during
fiscal 1997 and through its recent public offerings have contributed to the
Company's success during this period. In reviewing the appropriateness of the
compensation of Mr. Abbott, the Stock Option Committee considered (i) data
regarding compensation of
10
<PAGE>
chief executive officers at companies with comparable organization structures,
and (ii) the input of other directors regarding the performance of Mr. Abbott.
Overall, the Stock Option Committee believes that Mr. Abbott is being
appropriately compensated in a manner that is consistent with the long-term
interests of stockholders.
The foregoing report is submitted by the members of the Stock Option
Committee.
W.L. Lyons Brown, Jr.
Edward O. Gaylord
Stuart S. Janney, III
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Cohen, Lindsay and Woods are each members of Compensation Committee
and are affiliated with the partnership to which Essex and the Company paid
the fees described in "Certain Transactions--Advisory Services." See footnote
(q) of "Security Ownership and Certain Beneficial Owners and Management" for a
description of the relationship among such partnership, BH Group and Messrs.
Cohen, Lindsay and Woods.
EXECUTIVE COMPENSATION TABLES
The Company, as a holding company with no business operations of its own,
conducts its business through Essex. The executive officers of the Company
receive no compensation for their services to the Company. Accordingly, the
following tables present certain information concerning compensation paid or
accrued for services rendered to the Company and to Essex in all capacities
during the three years ended December 31, 1997 for the Chief Executive Officer
and the four other most highly compensated executive officers of Essex.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------- ------------
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(A)
- --------------------------- ---- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Steven R. Abbott (b)............. 1997 519,830 780,000 50,000 44,930
President and Chief 1996 287,993 600,000 125,000 27,531
Executive Officer 1995 193,757 250,000 37,500 12,999
Charles W. McGregor.............. 1997 212,366 325,000 15,000 17,642
Executive Vice President 1996 167,001 275,000 40,000 11,356
1995 157,503 210,000 32,500 9,684
David A. Owen.................... 1997 212,116 325,000 15,000 12,008
Executive Vice President and 1996 167,001 250,000 37,500 9,195
Chief Financial Officer 1995 157,503 185,000 25,000 8,120
Robert J. Faucher................ 1997 212,116 325,000 15,000 16,522
Executive Vice President 1996 167,001 250,000 50,000 11,972
1995 157,503 175,000 25,000 11,356
Gregory R. Schriefer............. 1997 190,696 325,000 15,000 16,622
Executive Vice President 1996 129,510 225,000 57,500 11,062
</TABLE>
- --------
(a) All Other Compensation in fiscal 1997 consists of Essex contributions to
the defined contribution and deferred compensation plans on behalf of the
named executive officer and imputed income on excess Essex-paid life
insurance premiums. The following table identifies and quantifies these
amounts for the named executive officers:
11
<PAGE>
<TABLE>
<CAPTION>
S.R. C.W. D.A. R.J. G.R.
ABBOTT MCGREGOR OWEN FAUCHER SCHRIEFER
------- -------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Company matching under the defined
contribution and deferred
compensation plans................. $38,995 $13,895 $ 9,753 $14,368 $15,471
Imputed income on excess life
insurance premiums................. 5,935 3,747 2,255 2,154 1,151
------- ------- ------- ------- -------
Total............................... $44,930 $17,642 $12,008 $16,522 $16,622
======= ======= ======= ======= =======
</TABLE>
- --------
(b)Mr. Abbott was appointed Chief Executive Officer of the Company and of
Essex in February 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
------------------------------------------------- ASSUMED ANNUAL
NUMBER OF RATES OF
SECURITIES % OF TOTAL EXERCISE STOCK PRICE
UNDERLYING OPTIONS/SARS OR APPRECIATION FOR
OPTIONS/SARS GRANTED TO BASE OPTION TERM(B)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#)(A) FISCAL YEAR 1997 ($/SH) DATE 5%($) 10%($)
- ---- ------------ ---------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Steven R. Abbott........ 50,000 16.0 32.21 1/20/08 1,013,000 2,566,500
Charles W. McGregor..... 15,000 4.8 32.21 1/20/08 303,900 769,950
David A. Owen........... 15,000 4.8 32.21 1/20/08 303,900 769,950
Robert J. Faucher....... 15,000 4.8 32.21 1/20/08 303,900 769,950
Gregory R. Schriefer.... 15,000 4.8 32.21 1/20/08 303,900 769,950
</TABLE>
- --------
(a)The Options were granted on January 20, 1998 with one-third of the grant
becoming exercisable each year on January 20 for three years.
(b)The potential realizable value assumes a per-share market price at the time
of the grant to be approximately $32.21 with an assumed rate of appreciation
of 5% and 10%, respectively, compounded annually for 10 years. These values
are provided pursuant to the rules and regulations of the Securities and
Exchange Commission. No assurance can be given as to the appreciation, if
any, of the Common Stock.
12
<PAGE>
The following table details the December 31, 1997, year-end estimated value
of each named executive officer's unexercised Options. All unexercised Options
are to purchase the number of shares of Common Stock indicated, although the
Board of Directors may require that, in lieu of the exercise of any Roll-over
Options (as defined under "--Stock Option Plan"), such Options be surrendered
without payment of the exercise price, in which case the number of shares
issuable upon exercise of such Roll-over Options shall be reduced by the
quotient of (A) the aggregate exercise price otherwise payable upon such
exercise and (B) the amount paid for each share of the Company's Common Stock
in the Acquisition, in each case as adjusted for any stock splits or other
similar corporate transactions. See "--Stock Option Plan".
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES YEAR-END (#) YEAR-END ($)
ACQUIRED ON VALUE EXERCISABLE (E)/ EXERCISABLE (E)/
NAME EXERCISE(#) REALIZED ($) UNEXERCISABLE (U)(A) UNEXERCISABLE (U)(B)
- ---- ----------- ------------ ---------------------- --------------------
<S> <C> <C> <C> <C>
Steven R. Abbott........ -- -- 334,000(E) 7,995,050(E)
37,500(U) 901,125(U)
Charles W. McGregor..... -- -- 125,250(E) 2,921,188(E)
32,500(U) 780,975(U)
David A. Owen........... -- -- 126,000(E) 2,961,250(E)
25,000(U) 600,750(U)
Robert J. Faucher....... -- -- 185,000(E) 4,492,500(E)
25,000(U) 600,750(U)
Gregory R. Schriefer.... 6,428 $64,280 36,250(E) 731,988(E)
31,250(U) 643,938(U)
</TABLE>
- --------
(a) The Options granted in 1997 became exercisable on January 30, 1998. The
Options granted in 1996 become exercisable three years from the date of
grant. All other Options granted prior to those issued in 1996 are
currently exercisable.
(b) The estimated value of in-the-money stock options held at the end of 1997
is based on the closing price of $29.75 of the Common Stock on December
31, 1997.
PENSION PLANS
Essex provides benefits under a defined benefit pension plan (the "Pension
Plan") and a supplemental executive retirement plan (the "SERP"). The
following table illustrates the estimated annual normal retirement benefits at
age 65 that will be payable under the Pension Plan and SERP.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
125,000............................ $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
150,000............................ 33,750 45,000 56,250 67,500 78,750
175,000............................ 39,375 52,500 65,625 78,750 91,875
200,000............................ 45,000 60,000 75,000 90,000 105,000
225,000............................ 50,625 67,500 84,375 101,250 118,125
250,000............................ 56,250 75,000 93,750 112,500 131,250
300,000............................ 87,500 90,000 112,500 135,000 157,500
400,000............................ 90,000 120,000 150,000 180,000 210,000
450,000............................ 101,250 135,000 168,750 202,500 236,250
500,000............................ 112,500 150,000 187,500 225,000 262,500
</TABLE>
13
<PAGE>
The remuneration utilized in calculating the benefits payable under the
Pension Plan and the SERP is the compensation reported in the Summary
Compensation Table under the captions Salary and Bonus. The formula utilizes
the remuneration for the five consecutive plan years within the ten completed
calendar years preceding the participant's retirement date that produces the
highest final average earnings.
As of December 31, 1997, the years of credited service under the Pension
Plan for each of the executive officers named in the Summary Compensation
Table were as follows: Mr. Abbott, twenty-eight years and seven months; Mr.
Owen, twenty-one years and nine months; Mr. McGregor, twenty-seven years and
eleven months; Mr. Faucher, twenty-five years and six months; and Mr.
Schriefer, sixteen years and three months.
The benefits listed in the Pension Plan Table are based on the formula in
the Pension Plan using a straight- life annuity and are subject to an offset
of 50% of the participant's annual unreduced Primary Insurance Amount under
Social Security. In addition, benefits for credited service for years prior to
1974 are calculated using the formula in effect at that time and would reflect
a lesser benefit than outlined in the Pension Plan Table for those years.
Benefits under the Pension Plan are also offset by benefits to which the
participant is entitled under any defined benefit plan of United Technologies
Corporation (a predecessor corporation of Essex) (other than accrued benefits
transferred to the Pension Plan).
STOCK OPTION PLAN
Grants of Options have been made to management and employees of the Company
(including executive officers) pursuant to, and are subject to the provisions
of, the Company's Amended and Restated Stock Option Plan (the "Stock Option
Plan"), and individual stock option agreements. Options granted pursuant to
the Stock Option Plan prior to January 1, 1997 are exercisable: (i) in full,
upon the third anniversary of the grant of the Options; (ii) in full, upon the
death, retirement or disability of the optionee; (iii) in part, upon the
occurrence of a Company Sale (as defined below), in which case the Option
becomes exercisable in a portion equal to the percentage of the Company's then
outstanding voting stock transferred pursuant to the transactions constituting
the Company Sale; and (iv) in part, upon the sale by the BH Group or its
affiliates of 25% or more of the then outstanding Common Stock, in which case
the Option becomes exercisable in a portion equal to the percentage of the
then outstanding Common Stock sold by the BH Group or its affiliates pursuant
to the sale. Options granted on January 30, 1997 pursuant to the Stock Option
Plan are exercisable: (i) in full, upon the first anniversary of the grant of
the Options and (ii) in full or in part, as described in clauses (ii), (iii)
and (iv) of the prior sentence. Options granted after January 30, 1997
pursuant to the Stock Option Plan will be exercisable: (i) in full, upon the
third anniversary of the grant of the Options, provided that during the second
year the Option is outstanding it may be exercised as to not more than one-
third ( 1/3) of the total number of shares covered by the Option and during
the third year the Option is outstanding it may be exercised as to,
cumulatively, not more than two-thirds ( 2/3) of the total number of shares
covered by the Option, (ii) in full, upon the death, retirement or disability
of the optionee and (iii) in full upon the occurrence of a Change-in-Control
(as defined below).
Options granted pursuant to the Stock Option Plan are generally not
transferable. For the purposes of the Stock Option Plan, a "Company Sale" is
deemed to have occurred if any person (other than the BH Group and its
affiliates) becomes the beneficial owner of 50% or more of the combined voting
power of the Company's securities or acquires substantially all the assets of
the Company or Essex. For the purposes of the Stock Option Plan, "Change-in-
Control" has the same meaning as under the Termination Benefits Agreements (as
defined under "--Termination Benefits Agreements").
The Board of Directors may require that certain Options granted pursuant to
the Stock Option Plan in connection with the Acquisition (the "Roll-over
Options") be surrendered and canceled without payment of the exercise price.
In this event, the optionee is entitled to receive a number of shares of
Common Stock equal to the number specified in the grant, reduced by the
quotient of (A) the aggregate exercise price otherwise payable upon such
exercise divided by (B) the amount paid for each share of the Common Stock in
the Acquisition, in each case as adjusted for any stock splits or other
similar corporate transactions.
14
<PAGE>
TERMINATION BENEFITS AGREEMENTS
The Company has entered into agreements dated as of April 11, 1997 (each a
"Termination Benefits Agreement"), with each of Messrs. Abbott, Faucher,
Lucenta, McGregor, Norton, Owen and Schriefer and with Ms. Minott (each an
"Executive") providing for certain benefits (the "Termination Benefits") if
the Executive's employment is terminated by the Company or by the Company's
successor following a Change-in-Control (as defined therein) other than
termination (a) by reason of the Executive's death, (b) by reason of the
Executive's "disability" (as defined therein), (c) as a result of reaching the
retirement age of 65 or (d) for "cause" (as defined therein).
The Company is also obligated to pay Termination Benefits if, following a
Change-in-Control during the term of the agreement, the Executive terminates
his or her employment for "good reason." Good reason includes: (i) the
assignment of duties that are materially inconsistent with the Executive's
duties prior to the Change-in-Control; (ii) a reduction in the Executive's
annual salary from that in effect immediately prior to the Change-in-Control;
(iii) failure to maintain incentive compensation programs for such Executive;
(iv) failure to maintain benefit programs for such Executive; (v) the
relocation of the Executive's place of employment to a place other than the
metropolitan area of the Company office where the Executive was located
immediately prior to the Change-in-Control, except for required travel on the
Company's business in accordance with past practice; (vi) the failure by the
Company to obtain an agreement from any successor to assume and agree to
perform the Company's obligations under the applicable Termination Benefits
Agreement; (vii) failure to reappoint the Executive to the corporate offices
held immediately prior to the Change-in-Control; (viii) a request by the
Company, or the person obtaining control of the Company in a Change-in-
Control, for the resignation of the Executive; (ix) if terminated, failure to
terminate the Executive's employment in accordance with the applicable
Termination Benefits Agreement; (x) breach by the Company of any provision of
the applicable Termination Benefits Agreement.
The Termination Benefits consist of a payment from the Company to the
Executive of a multiple of the Executive's annual base salary and incentive
compensation bonus paid within the 12 months preceding the Change-in-Control.
The multiples are as follows: Mr. Abbott three times; and for the remaining
named Executives, two times. Each Termination Benefits Agreement runs for a
two-year term that automatically extends for one additional year prior to the
start of the second year of the term until notice that the term will not be
extended is provided to the other party prior to the start of the second year.
Notwithstanding the prior sentence, the term of each Termination Benefits
Agreement will run for two years from the time of any Change- in-Control
during the term of the Agreement.
The Termination Benefits Agreements provide that the applicable Executive
will keep confidential all confidential information of the Company and will
not, during the two years following the Executive's termination, solicit any
employee of the Company to leave the Company's employment.
For the purposes of the Termination Benefits Agreements, "Change-in-Control"
means the occurrence of any of the following during the term of the agreement;
(a) any person other than the BH Group and its affiliates acquires 35% or more
of the voting power or common stock of the Company (other than by an
acquisition from or by the Company or any employee benefit plan sponsored by
the Company or any Permitted Reorganization (as defined below)) and owns a
greater percentage of the voting power or Common Stock of the Company than
does the BH Group and its affiliates; (b) a change in the Company's Board of
Directors occurs with the result that the members of the Board on April 11,
1997 (the "Incumbent Directors") no longer constitute a majority of such Board
of Directors, provided that any person becoming a director (other than a
director whose initial assumption of office occurs as a result of either an
actual or threatened election contest or other threatened solicitation of
proxies or consents by or on behalf of a person other than the Board of
Directors) whose election or nomination for election was supported by a
majority of the then Incumbent Directors shall be considered an Incumbent
Director for purposes hereof; (c) the stockholders of the Company approve a
reorganization, merger or consolidation of the Company, unless following such
transaction, (i) more than 50% of the voting power and common stock of the
surviving entity is beneficially owned by the prior stockholders of the
Company, in
15
<PAGE>
substantially the same proportions as before the transaction, (ii) at least a
majority of the Board of Directors of the surviving entity were members of the
Incumbent Board prior to such transaction and (iii) no person other than the
BH Group and its affiliates acquires 35% or more of the voting power or Common
Stock of the Company and a greater percentage of the voting power or Common
Stock of the Company than has the BH Group and its affiliates (a transaction
complying with the requirements of this clause (c) is referred to herein as a
"Permitted Reorganization"); or (d) the stockholders of the Company approve
the sale of all or substantially all of the property or assets of the Company
other than in a Permitted Reorganization.
DIRECTOR COMPENSATION
Nonemployee directors are paid an annual stipend of $25,000 per director per
year plus $1,000 for attendance at each meeting of the Board of Directors or
any committee thereof, plus reimbursement of reasonable out-of-pocket expenses
("Expenses") incidental to attendance at such meetings. Nonemployee directors
can elect to receive up to all of their yearly director's compensation
(excluding reimbursement of Expenses) in the form of Options. See "--
Directors' Stock Option Plan."
DIRECTORS' STOCK OPTION PLAN
On July 22, 1997, the Board of Directors approved, subject to stockholder
approval, the 1997 Stock Option Plan for Nonemployee Directors (the
"Directors' Stock Option Plan"), and the issuance of up to 100,000 shares of
Common Stock pursuant to grants thereunder.
The purpose of the Directors' Stock Option Plan is to encourage ownership of
Company Common Stock by Company directors who are not employees of the
Company.
A summary of the material terms of the Directors' Stock Option Plan is
provided below. This summary does not purport to be complete and is subject
to, and is qualified in its entirety by, the Directors' Stock Option Plan
attached as Appendix A.
GENERAL
The Directors' Stock Option Plan is administered by the Compensation
Committee of the Board. Participation is limited to Board members who are not
employees of the Company or any of its subsidiaries. The maximum number of
shares of Common Stock that may be issued pursuant to Options granted under
the Directors' Stock Option Plan is 100,000, subject to adjustment for any
stock splits or other similar corporate transactions. If Options granted
pursuant to the Directors' Stock Option Plan expire or are terminated without
having been exercised in full, shares underlying such Options will be
available for future grants under the Directors' Stock Option Plan. Options
shall be granted to each participating director on December 31 of each year.
OPTION SHARES
The number of shares of Common Stock subject to an individual Option granted
under the Directors' Stock Option Plan is equal to the Elected Portion of
Directors Compensation (as defined below) divided by the Fair Market Value
Spread (as defined below), rounded to the nearest share. "Elected Portion of
Directors' Compensation" means the portion up to one hundred percent of yearly
directors' compensation (annual retainer and meeting fees, in each case
exclusive of reimbursement of expenses) elected to be received by such
director in the form of Options. "Fair Market Value Spread" means (i) the
average of the high and low price for a share of Common Stock on February 14,
May 15, August 15 and November 15 for each applicable year (or for 1997, on
October 31, as reported on the NYSE Composite Transaction Tape, or if no
trading occurs on any such date, on the immediately preceding date when
trading is reported), minus (ii) the exercise price.
16
<PAGE>
TERMS OF OPTIONS
The Options granted under the Directors' Stock Option Plan are governed by
individual stock option agreements and the terms set forth in the Directors'
Stock Option Plan. Options are exercisable for 10 years from their grant date;
provided, however, that no Option may be exercised after expiration of three
years from the date upon which the director terminates his/her position as a
director. Options are generally not transferable and are not entitled to
special tax treatment under Section 422 of the Internal Revenue Code.
CHANGE IN CONTROL
Upon a Change in Control (as defined in "Executive Compensation--Termination
Benefits Agreements"), the Elected Portion of Directors' Compensation earned
for the year in which such event occurs, which would otherwise have been paid
in the form of Options, shall be promptly paid to each director in cash.
As of the date of this Proxy Statement, Options to purchase 5,133 shares of
Common Stock had been granted pursuant to the Directors' Stock Option Plan,
subject to stockholder approval of the Directors' Stock Option Plan.
17
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return (assuming reinvestment of
dividends) of (i) the Standard & Poor's ("S&P") 500 Stock Index and (ii) the
S&P Electrical Equipment Index from April 18, 1997, the date the Company's
Common Stock began to trade on the NYSE, through December 31, 1997, the last
trading date of fiscal 1997. The cumulative total stockholder return is based
on $100 invested in Common Stock of the Company and the respective indices on
April 18, 1997 (including reinvestment of dividends).
[GRAPH]
TOTAL STOCKHOLDER RETURNS
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
S&P ELECTRICAL
DOLLARS ESSEX INTERNATIONAL INC. S&P 500 EQUIPMENT INDEX
04/18/1997 100 100 100
Dec-97 175.00 128.93 136.82
18
<PAGE>
COMPARISON OF MONTHLY CUMULATIVE TOTAL
RETURN OF ESSEX INTERNATIONAL INC., THE S&P 500 STOCK INDEX AND THE
S&P ELECTRICAL EQUIPMENT INDEX
The stock prices on the Performance Graph are not necessarily indicative of
future stock price performance. None of (i) the Compensation Committee Report
on Executive Compensation, (ii) the Stock Option Committee Report on
Compensation of the Chief Executive Officer or (iii) the Performance Graph
shall be deemed incorporated by reference by any general statement
incorporating this Proxy Statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934 (the "Exchange Act"), except
to the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such acts.
CERTAIN TRANSACTIONS
ADVISORY SERVICES
The Company incurred advisory fees of approximately $1.0 million for each
year during the three-year period ending December 31, 1997, payable to an
advisory partnership that is an affiliate of the BH Group. Pursuant to an
advisory services agreement among the Company, Essex and the advisory
partnership, Essex agreed to pay such affiliate an annual advisory fee of $1.0
million. The agreement is terminable by any party on 30 days prior notice to
the other parties. See footnote (q) of "Security Ownership of Certain
Beneficial Owners and Management" for a description of the relationship of
Messrs. Cohen, Lindsay and Woods, directors of the Company, to BH Group.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent (10%) of the
Company's Common Stock, to file with the SEC and the NYSE, initial reports of
beneficial ownership and reports of changes in beneficial ownership of Common
Stock of the Company. Such persons are required by regulations of the Exchange
Act to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the reports and
representations furnished to the Company during the last fiscal year, the
Company believes that each of the persons required to file reports under
Section 16(a) of the Exchange Act is in compliance with all applicable filing
requirements, except that the Form 3, Initial Statements of Beneficial
Ownership, for the executive officers, directors, and ten percent
shareholders, filed at the time of the IPO, were on average filed nine days
after the effective date of the Registration Statement. Also, the Form 3's for
directors W.L.L. Brown and E.O. Gaylord, who joined the Board on May 22, 1997,
were inadvertently not filed. Proper disclosure was made of that fact on the
Form 5's filed for Mr. Brown and Mr. Gaylord in February 1998. All
acquisitions and dispositions of Common Stock of the Company and derivative
securities were properly reported.
PROPOSAL II: APPROVAL OF THE 1997 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS
On July 22, 1997, the Board of Directors approved, subject to stockholder
approval, the Directors' Stock Option Plan, and the issuance of 100,000 shares
of Common Stock pursuant to grants thereunder. The affirmative vote of the
holders of a majority in voting power of the shares of the Common Stock
present, or represented by proxy, and entitled to vote at the annual meeting
is required to approve the Directors' Stock Option Plan.
A summary of the material terms of the Directors' Stock Option Plan is
provided under "Directors' Compensation--Directors' Stock Option Plan." The
summary does not purport to be complete and is subject to, and is qualified in
its entirety by, the Directors' Stock Option Plan attached as Appendix A.
19
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE
FOR THE PROPOSAL TO APPROVE THE DIRECTORS' STOCK OPTION PLAN.
AUDIT MATTERS
Ernst & Young LLP has been retained to audit the financial statements of the
Company for the fiscal year ending December 31, 1997, and to report the
results of their examination.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will be afforded the opportunity to make a statement if he
or she desires to do so and to respond to appropriate questions from
stockholders.
OTHER MATTERS
The Company's Board of Directors does not know of any other matters that may
be brought before the annual meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of proxy to vote the shares represented thereby in
accordance with their judgment on such matters.
ANNUAL REPORT
The Company has provided without charge to each person whose proxy is
solicited hereby a copy of the 1997 Annual Report of the Company. The
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 has been filed with the SEC. A copy of the Company's 10-K and additional
copies of the Annual Report may be obtained without charge upon written
request to the Company, Essex International Inc., 1601 Wall Street, Fort
Wayne, IN 46802, Attn: Corporate Secretary.
MISCELLANEOUS
It is important that proxies be returned promptly. All stockholders are
urged to mark, sign and date the accompanying proxy and mail it in the
enclosed return envelope, which requires no postage if mailed in the United
States, so that their votes can be recorded.
STOCKHOLDER PROPOSALS
It is contemplated that the 1999 annual meeting of stockholders of the
Company will take place during the first week of May, 1999. Stockholder
proposals intended to be presented at the 1999 annual meeting of stockholders
of the Company must be received by the Company not less than 120 days in
advance of the date this Proxy Statement is released to stockholders in order
to be considered for inclusion in the Company's proxy statement relating to
such meeting. In addition, the Company's By-laws require that, among other
things, stockholders give written notice of any proposal or the nomination of
a director to the Secretary of the Company not less than 60 days nor more than
90 days prior to the scheduled annual meeting of stockholders. Stockholder
proposals or the nominations for director that do not meet the notice
requirements of the Company's By-laws will not be acted upon at the 1999
annual meeting.
By Order of the Board of Directors,
Debra F. Minott
SECRETARY
Fort Wayne, IN
March 26, 1998
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<PAGE>
ESSEX INTERNATIONAL INC.
1997 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
1. Purpose. The purpose of the Essex International Inc. 1997 Stock Option
Plan for Nonemployee Directors (the "Plan") is to encourage ownership of
shares of common stock of Essex International Inc. (the "Company"), par value
$0.01 per share ("Common Stock"), by members of the Board of Directors of the
Company (the "Board") who are not employees of the Company.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Board (the "Committee"). The Committee shall have full
authority to administer the Plan, including authority to interpret and
construe any provision of the Plan and to adopt such rules for the
administration of the Plan as it may deem necessary or appropriate. Decisions
of the Committee shall be final and binding on all persons who have an
interest in the Plan.
3. Participation in the Plan. A member of the Board (a "Director") who is
not an employee of the Company or any of its subsidiaries is eligible to
participate in the Plan.
4. Number of Shares. The maximum number of shares of Common Stock (the
"Shares") which may be issued pursuant to options granted under the Plan (the
"Options") shall be one hundred thousand (100,000), subject to adjustment as
provided in Paragraph 21.
5. Nonexercised Shares. If any outstanding Option under the Plan for any
reason expires or is terminated without having been exercised in full, the
Shares allocable to the unexercised portion of such Option shall again become
available for issuance under Options granted pursuant to the Plan.
6. Share Issuance. Upon the exercise of an Option, the Company may issue
authorized but unissued Shares, treasury stock or reissue Shares previously
purchased by or on behalf of the Company.
7. Option Grant Dates. Options shall be granted to each participating
Director on December 31 of each year (or, if December 31 is not a business
day, on the immediately preceding business day) (the "Grant Date").
8. Option Price. Except as otherwise determined by the Committee, the
purchase price per Share for the Shares covered by each Option shall be $10.00
(the "Option Price").
9. Number of Option Shares. The number of Shares subject to an Option
("Option Shares") granted to a participating Director on the Grant Date in
each year will be the aggregate number of Shares equal to the nearest whole
number determined by the following formula in accordance with the definitions
set forth below:
Elected Portion of Annual Retainer
Number and Meeting Fees For Such Year Number
- --------------------------------------------- = of
Fair Market Value For Such Year minus the Option Price Option Shares
Definitions. For purposes of determining the number of Option Shares granted
under this paragraph, the following definitions will apply:
"Annual Retainer". The dollar amount of compensation payable to a
participating Director each year which is identified by the Company as an
annual retainer.
"Meeting Fees". The amount of compensation, in excess of the Annual
Retainer, payable to a participating Director for his/her service as a
Director, including but not limited to fees earned for Board and committee
meeting participation, but excluding reimbursement for actual expenses.
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"Elected Portion of Annual Retainer and Meeting Fees". A dollar amount
determined each year for each Director equal to the dollar amount of both
the percentage of the Annual Retainer, if any, and the percentage of
Meeting Fees, if any, which a participating Director has elected, in
writing, to have be paid in the form of Options granted under the Plan.
Elections may only be revoked with the consent of the Committee. Except as
provided in the following sentence, This written election must be received
by the Secretary of the Company on or before December 31 of each year and
shall specify a percentage, up to 100%, of the Director's Annual Retainer
and a percentage, up to 100%, of the Director's Meeting Fees for the
following year, to be paid on the Grant Date in such following year in the
form of Options. For 1997, the election must be received by the Secretary
of the Company on or before August 31, 1997, and shall apply to a
percentage, up to 33.33%, of the Director's Annual Retainer for 1997 and a
percentage, up to 100%, of the Director's Meeting Fees earned after
September 1, 1997. A Director initially elected or appointed to office as a
Director after adoption of the Plan may make a written election under this
paragraph within 30 days following his/her initial election or appointment
to office, which election shall be effective for Annual Retainer and
Meeting Fee amounts earned during the calendar year of his/her initial
election or appointment to office.
"Fair Market Value". The average of the high and low price for a share of
Common Stock at the middle of each quarter during the applicable year
(February 14, May 15, August 15 and November 15, or for 1997, on October 31
as reported on the New York Stock Exchange Composite Transaction Tape, or
if no report of trading occurs on any one or more of those dates, on the
immediately preceding date.
10. Director Termination. If a Director participating in the Plan retires,
resigns, dies, or otherwise terminates his/her service as a Director, he/she
shall only be granted on December 31 of the year in which the termination
occurs, an Option for Shares based on the Elected Portion of Annual Retainer
and Meeting Fees that would have been paid to the Director during the portion
of the year in which he or she was a participant in the Plan.
11. Written Option Agreement. Each grant of an Option shall be evidenced by
a written agreement (the "Stock Option Agreement"), which shall comply with
and be subject to the terms and conditions contained in the Plan.
12. Nonstatutory Stock Options. Options granted under the Plan shall not be
entitled to special tax treatment under Section 422 of the Internal Revenue
Code of 1986, as amended.
13. Period of Option. Except as provided in this Paragraph 13 or in any
related Stock Option Agreement, Options shall be exercisable for a period of
10 years from their Grant Date. No Option shall be exercisable after
expiration of three years from the date upon which the Option holder
terminates his/her position as a Director.
14. Exercise of Options. Options may be exercised only by written notice to
the Secretary of the Company and payment of the exercise price in (i) cash or
(ii) delivery of an irrevocable written notice instructing the Company to
deliver the Shares being purchased to a broker, subject to the broker's
written guarantee to deliver cash to the Company, in each case equal to the
full consideration of the Option Price for the Options which are being
exercised. Options may be exercised in whole or in part.
15. Options Nontransferable. Each Option granted under the Plan shall not be
transferable by the participant otherwise than by will or by the laws of
descent and distribution or pursuant to a domestic relations order. No Option
granted under this Plan, or any interest therein, may be otherwise
transferred, assigned, pledged, or hypothecated by the Director to which the
Option was granted during his/her lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment, or similar process.
16. Exercise by Beneficiary Following Death of Director. A Director, by
written notice to the Company, may designate one or more persons (and from
time to time change such designation), including his/her legal representative,
who, by reason of the Director's death, shall acquire the right to exercise
all or a portion of an Option granted under the Plan. Any exercise by a
beneficiary shall be subject to the provisions of the Plan.
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<PAGE>
17. Effect of a Change in Control.
(i) Definition of Change in Control. As used in this Plan, "Change in
Control" of the Company means any of the following that occurs during the
term of this Plan:
(A) the acquisition by any individual, entity or group (a "Person")
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) other than
Bessemer Holdings, L.P. ("BHLP"), or any affiliate of BHLP
(collectively, the "BH Group") of (X) beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act as in effect
from time to time) of thirty-five percent (35%) or more of either (a)
the then outstanding shares of common stock of the Company or (b) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors and (Y)
beneficial ownership of a greater percentage than the BH Group of
either (a) the then outstanding shares of common stock of the Company
or (b) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors; provided, however, that the following acquisitions shall not
constitute an acquisition of control: (i) any acquisition directly from
the Company (excluding an acquisition by virtue of the exercise of a
conversion privilege), (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company, or (iv) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subparagraph (i)(C) of this Paragraph 17
are satisfied;
(B) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(C) approval by the stockholders of, and the consummation by, the
Company of a reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or consolidation, (i)
more than fifty percent (50%) of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power
of the then outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively,
of the outstanding Company common stock and outstanding Company voting
securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of
the outstanding Company common stock and outstanding Company voting
securities, as the case may be, (ii) no Person (excluding the Company,
any employee benefit plan or related trust of the Company or such
corporation resulting from such reorganization, merger or consolidation
and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
thirty-five percent (35%) or more of the outstanding Company common
stock or outstanding voting securities of the Company, as the case may
be) beneficially owns, directly or indirectly, (X) thirty-five percent
(35%) or more of, either the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors and (Y) a greater percentage than the BH Group of
either the then outstanding shares of common stock of the corporation
resulting from
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<PAGE>
such reorganization, merger or consolidation or the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization, merger or
consolidation; or
(D) approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company,
other than to a corporation with respect to which following such sale
or other disposition (a) more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the outstanding
Company common stock and outstanding Company voting securities
immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale
or other disposition, of the outstanding Company common stock and
outstanding Company voting securities, as the case may be, (b) no
Person (excluding the Company and any employee benefit plan or related
trust of the Company or such corporation and any Person beneficially
owning, immediately prior to such sale or other disposition, directly
or indirectly, thirty-five percent (35%) or more of the outstanding
Company common stock or outstanding Company voting securities, as the
case may be) beneficially owns, directly or indirectly, (X) thirty-five
percent (35%) or more of, either the then outstanding shares of common
stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (Y) beneficial ownership of
a greater percentage than the BH Group of either the then outstanding
shares of common stock of such corporation or the combined voting power
of the then outstanding voting securities of such corporation entitled
to vote generally in the election of directors and (c) at least a
majority of the members of the board of directors of such corporation
were members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such sale or
other disposition of assets of the Company.
(ii) Consequence of Change in Control. Upon a Change in Control, any
amounts of the Elected Portion of Annual Retainer and Meeting Fees earned
for the year in which such event occurs, which would otherwise have been
paid in the form of Options granted under this Plan, shall be promptly paid
to each participating Director in cash.
18. Effective Date of the Plan. The Plan shall be effective for elections as
of August 31, 1997, subject to approval of the Plan by the stockholders of the
Company.
19. Duration of the Plan. The Plan shall remain in effect until all Shares
subject to Options have been purchased or all unexercised Options have
expired.
20. Amendment of the Plan. The Committee may suspend or discontinue the Plan
or revise or amend it in any respect, provided, however, that without approval
of a majority of the Company's stockholders, no revision or amendment shall
(i) change the number of Shares subject to the Plan (except as provided in
Paragraph 21), (ii) change the designation of the class of Directors eligible
to participate in the Plan, (iii) change the formulas to determine the amount,
price, or timing for the grants, or (iv) materially increase the benefits
accruing to participants under the Plan. No amendment, modification, or
termination of the Plan shall in any manner adversely affect the rights of
Directors holding Options granted under the Plan without the consent of the
affected Director.
21. Change in Capital Structure; Conversion of Shares. (i) If the number of
issued Shares is increased or reduced by a change in par value, combination,
split-up, recapitalization, redemption, reclassification, distribution of a
dividend payable in stock, or the like, the number of Shares for which Options
may be granted specified in Paragraph 4, the Option Price specified in
Paragraph 8 and, if appropriate, any amounts referred to
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<PAGE>
herein, shall be appropriately adjusted. The number of Shares subject to
outstanding Options and the Option Prices therefore shall likewise be
appropriately adjusted whenever the number of issued Shares is increased or
reduced by any of the foregoing events or actions after the date or dates on
which such Shares were optioned.
(ii) In the event of a reorganization, recapitalization, merger,
consolidation, acquisition of property or stock, extraordinary dividend or
distribution (other than as covered by Paragraph 21(i)), dissolution or
liquidation of the Company, or any other event similarly affecting the
Company, the Board or the Committee shall have the right, but not the
obligation, notwithstanding the Stock Option Agreements or anything else to
the contrary in this Plan, to provide that outstanding Options granted
under this Plan shall (A) be canceled in respect of a cash payment or the
payment of securities or property, or any combination thereof, with a per
share value determined by the Board in good faith to be equal to the value
received by the stockholders of the Company in such event in respect of
each Share, with appropriate deductions of Option Prices or equivalents
thereof, or (B) be adjusted to represent options to receive cash,
securities, property, or any combination thereof, with a per share value
determined by the Board in good faith to be equal to the value received by
the stockholders of the Company in such event in respect of each Share, at
such exercise prices as the Board or the Committee in its discretion may
determine is appropriate.
22. Limitation of Rights. Neither the Plan, nor the granting of an Option
under the Plan, nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will retain a Director for any period of time or at
any particular rate of compensation. Further, a participant shall have no
rights as a stockholder with respect to the Shares covered by his/her Options
until the date of the issuance to him/her of a stock certificate therefor.
23. Assignments. The rights and benefits under the Plan may not be assigned
except as provided in Paragraphs 15 and 16.
24. Notice. Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the Secretary of the Company and
shall become effective when it is received.
25. Stockholder Approval and Registration Statement. The Plan shall be
submitted to the Board and the Company's stockholders for approval. Directors
may elect to participate in the Plan prior to stockholder approval and prior
to the filing (and the effectiveness of) a registration statement with the
Securities and Exchange Commission covering the Shares to be issued upon the
exercise of Options. Any Options granted under the Plan prior to the
effectiveness of the registration statement shall not be exercisable until,
and are expressly conditional upon, the effectiveness of a registration
statement covering the Shares and approval by the stockholders of the Company.
26. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by and construed in accordance with the laws
of the State of New York.
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<PAGE>
ESSEX INTERNATIONAL INC.
1601 Wall Street
Fort Wayne, IN 46802
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven R. Abbott, Robert D. Lindsay and
Debra F. Minott as proxies, each with the power to appoint his or her
substitute, and hereby authorizes a majority (or if only one, then that one) of
them to represent and to vote, as designated below, all shares of common stock
of Essex International Inc. held of record by the undersigned on March 13, 1998
at the annual meeting of stockholders to be held on April 29, 1998 and any
adjournments or postponements thereof.
[X] Please mark votes as in this example.
1. Election of two directors.
Nominees: Rodney A. Cohen and Stuart S. Janney, III.
STOCKHOLDERS MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY DRAWING A
LINE THROUGH OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE.
[_] GRANT authority to vote for the two nominees.
[_] WITHHOLD authority to vote for the two nominees.
2. Approval of the Company's 1997 Stock Option Plan for Nonemployee Directors.
[_] FOR [_] AGAINST
[_] ABSTAIN
3. Authority to vote in their discretion on such other business as may
properly come before the meeting.
[_] FOR [_] AGAINST
[_] ABSTAIN
[FRONT]
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for each of the proposals listed above.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE
Dated , 1998
[name and address of stockholder]
(Signature)
[number of shares]
(Second Signature, if applicable)
(Title, if applicable)
Please sign exactly as name appears
hereon. If shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by an authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
[BACK]
