BLACK BOX CORP, DEF 14A, 1998-07-06

BLACK BOX CORP
DEF 14A, 1998-07-06
COMPUTER COMMUNICATIONS EQUIPMENT

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<PAGE> 1

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:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

BLACK BOX 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)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials:

- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement no.:

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(3) Filing Party:

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(4) Date Filed:

- --------------------------------------------------------------------------------
<PAGE> 2

BLACK BOX CORPORATION
1000 PARK DRIVE
LAWRENCE, PENNSYLVANIA 15055

------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 10, 1998

------------------------

To the Stockholders of
Black Box Corporation:

The Annual Meeting of Stockholders of Black Box Corporation will be held at
the offices of Buchanan Ingersoll Professional Corporation, One Oxford Centre,
301 Grant Street, 20th Floor, Pittsburgh, Pennsylvania 15219 on Monday, August
10, 1998, at 11:00 a.m., to consider and act upon the following matters:

1. The election of five (5) members of the Board of Directors;

2. The approval of an amendment to the 1992 Stock Option Plan to
increase the number of shares authorized under the Plan;

3. The approval of an amendment to the 1992 Director Stock Option Plan
to increase the number of shares authorized under the Plan;

4. Ratification of the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal year
ending March 31, 1999; and

5. Such other matters as may properly come before the meeting.

The Board of Directors has established the close of business on Friday,
June 19, 1998, as the record date for the determination of the stockholders
entitled to notice of and to vote at the Annual Meeting.

IT IS REQUESTED, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, THAT
YOU COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ENCLOSED ENVELOPE.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ FRED C. YOUNG
------------------------
Fred C. Young, Secretary

June 29, 1998
<PAGE> 3

BLACK BOX CORPORATION
1000 PARK DRIVE
LAWRENCE, PENNSYLVANIA 15055
------------------------

PROXY STATEMENT FOR ANNUAL MEETING
OF STOCKHOLDERS

AUGUST 10, 1998

This proxy statement is being furnished to the holders of the Common Stock,
par value $.001 per share (the "Common Stock"), of Black Box Corporation, a
Delaware corporation (the "Company"), in connection with the solicitation by the
Board of Directors of the Company (the "Board of Directors" or the "Board") of
proxies to be voted at the annual meeting of stockholders (the "Annual Meeting")
scheduled to be held on Monday, August 10, 1998, at 11:00 a.m., at the offices
of Buchanan Ingersoll Professional Corporation, One Oxford Centre, 301 Grant
Street, 20th Floor, Pittsburgh, Pennsylvania 15219, or at any adjournment
thereof. This proxy statement and form of proxy was first mailed to stockholders
on or about July 1, 1998. A copy of the Company's Annual Report to Stockholders
for the year ended March 31, 1998 is being furnished with this proxy statement.

Only holders of the Common Stock of record as of the close of business on
Friday, June 19, 1998 are entitled to notice of and to vote at the Annual
Meeting and any adjournment thereof. On that date, 16,774,331 shares of Common
Stock, each entitled to one vote per share, were outstanding.

All shares of Common Stock represented by valid proxies received by the
Secretary of the Company prior to the Annual Meeting will be voted as specified
in the proxy. If no specification is made, the shares will be voted FOR the
election of each of the Board's nominees to the Board of Directors and each of
the matters submitted by the Board of Directors for vote by the stockholders.
Unless otherwise indicated by the stockholder, the proxy card also confers
discretionary authority on the Board-appointed proxies to vote the shares
represented by the proxy on any matter that is properly presented for action at
the Annual Meeting. A stockholder giving a proxy has the power to revoke it any
time prior to its exercise by delivering to the Secretary of the Company a
written revocation or a duly executed proxy bearing a later date (although no
revocation shall be effective until actual notice thereof has been given to the
Secretary of the Company), or by attendance at the meeting and voting his or her
shares in person.

Under the Company's Second Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), and Restated By-Laws, as amended
(the "By-Laws"), and applicable state law, abstentions and broker non-votes
(which arise from proxies delivered by brokers and others, where the record
holder has not received direction on voting and does not have discretionary
authority to vote on one or more matters) are each included in the determination
of the number of shares present. Abstentions and broker non-votes, if any, are
tabulated on the proposals presented to stockholders. Abstentions and broker
non-votes will have no effect on the proposals presented in this Proxy
Statement.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES NAMED BELOW FOR ELECTION AS DIRECTOR, FOR APPROVAL OF AN INCREASE IN
THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED UNDER THE 1992 STOCK
OPTION PLAN, FOR APPROVAL OF AN INCREASE IN THE NUMBER OF SHARES FOR WHICH
OPTIONS MAY BE GRANTED UNDER THE 1992 DIRECTOR STOCK OPTION PLAN, AND FOR THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 1999.
<PAGE> 4

PROPOSAL 1

ELECTION OF DIRECTORS

The Company's By-Laws provide that the number of directors constituting the
entire Board shall be nine (9), or such other number as shall be fixed by the
stockholders or by the Board of Directors. At present, the Board has fixed the
number of directors at seven (7) members, and has directed that the number of
directors be decreased to five (5) members effective as of the date of the
Annual Meeting.

All directors of the Company are elected each year. Therefore, five (5)
directors are to be elected at the Annual Meeting to hold office for a term of
one (1) year and until their respective successors are elected and qualified,
subject to the right of the stockholders to remove any director as provided in
the By-Laws. Any vacancy in the office of a director may be filled by the
stockholders. In the absence of a stockholder vote, a vacancy in the office of a
director may be filled by the remaining directors then in office, even if less
than a quorum, or by the sole remaining director. Any director elected by the
Board of Directors to fill a vacancy shall serve until his successor is elected
and has qualified or until his or her earlier death, resignation or removal. If
the Board of Directors increases the number of directors, any vacancy so created
may be filled by the Board of Directors.

The holders of Common Stock have one vote for each share owned as of the
record date in the election of directors. The five (5) nominees receiving the
greatest number of affirmative votes will be elected as directors for terms
expiring in 1999.

The persons named as proxies on the enclosed proxy card were selected by
the Board of Directors and have advised the Board of Directors that, unless
authority is withheld, they intend to vote the shares represented by them at the
Annual Meeting for the election of William F. Andrews, William R. Newlin,
William Norred, Brian D. Young and Fred C. Young, nominees of the Board of
Directors, each of whom presently serves as a director of the Company.

The Board of Directors knows of no reason why any nominee for director
would be unable to serve as director. If at the time of the Annual Meeting any
of the named nominees is unable or unwilling to serve as a director of the
Company, the persons named as proxies intend to vote for such substitute as may
be nominated by the Board of Directors.

The following sets forth certain information concerning the Company's
nominees for election to the Board of Directors at the Annual Meeting.

WILLIAM F. ANDREWS, 66, was elected a director of the Company on May 18,
1992. He currently is Chairman of Scovill Fasteners, Inc. (leading manufacturer
of apparel fasteners) and was Chairman of Schrader-Bridgeport International,
Inc. (worldwide manufacturer of automotive tire valves and industrial valves)
until May 1998. He was Chairman, President and Chief Executive Officer and a
director of Amdura Corporation from January 1993 to January 1995, and was also
an advisor/consultant to Investor International (U.S.), Inc. and had held such
position from February 1992 to February 1994. Prior to such time, Mr. Andrews
was the President and Chief Executive Officer of UNR Industries, Inc. from April
1990 to January 1992. He is also a director of Navistar (International
Harvester), Southern New England Telephone Company, Corrections Corporation of
America, Johnson Controls, Katy Industries, Northwestern Steel & Wire and Dayton
Superior.

WILLIAM R. NEWLIN, 57, was elected a director of the Company on December
18, 1995. He has served as Managing Partner of Buchanan Ingersoll Professional
Corporation (attorneys at law) since 1980. He also serves as a Managing General
Partner of CEO Venture Funds (private venture capital funds). He is also
Chairman of the Board of Kennametal Inc. and JLK Direct Distribution Inc. and a
director of National City Bank of Pennsylvania, Parker/Hunter Incorporated and
the Pittsburgh High Technology Council.

The Company engaged Buchanan Ingersoll Professional Corporation to perform
legal services during fiscal 1998 and fiscal 1999.

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<PAGE> 5

WILLIAM NORRED, 57, was elected a director of the Company on May 18, 1992.
He is currently the President and Chief Executive Officer of Sportsmen's Lodge
and has held these positions since August 1990. He is also the President and
Chief Executive Officer of Quor Resorts, Inc. and has held these positions since
October 1987. He has over 20 years of experience in the data communications
industry, including the founding of MICOM Systems, Inc. in 1973.

BRIAN D. YOUNG, 43, was elected a director of the Company on September 17,
1988. From February 1989 through January 1992, he was President of the Company.
He has been a General Partner of Eos Partners, L.P. (investment partnership)
since January 1994. He was a General Partner of Odyssey Partners from February
1986 to December 1993. He is also a director of Gundle Environmental Systems,
Inc. and Archer Resources, Ltd.

FRED C. YOUNG, 42, was elected a director of the Company on December 18,
1995, President on May 9, 1997 and Chairman and Chief Executive Officer as of
June 24, 1998. He also has been the Secretary of the Company since joining the
Company in 1991. He also has served as Vice President from 1991 until May 1996,
Chief Financial Officer and Treasurer from 1991 until May 1997, Senior Vice
President from May 1996 until May 1997 and Chief Operating Officer from May 1996
until June 1998.

BOARD OF DIRECTORS AND CERTAIN BOARD COMMITTEES

The Company's Board of Directors held four meetings during the fiscal year
ended March 31, 1998 ("fiscal 1998"). Each director attended at least 75% of the
aggregate of the number of meetings of the Board of Directors and any committee
of which he was a member, except Mr. Michael E. Barker who attended 25% of such
meetings.

During fiscal 1998, directors who were not employees of the Company
received directors' fees of $7,500 per annum and an additional fee of $375 for
each meeting of the Board of Directors attended in person. In addition, the
Company maintains directors' and officers' liability insurance.

AUDIT COMMITTEE

The Board has an Audit Committee consisting of Messrs. Brian D. Young (as
Chairman), Andrews and Barker. The Audit Committee's duties include recommending
to the Board of Directors the appointment of the independent auditors of the
Company, reviewing with the independent auditors their report as well as any
recommendations with respect to the Company's accounting policies, procedures
and internal controls. In addition, this committee is charged with reviewing the
independent auditor's fees for audit and non-audit services, and determining
whether there are any conflicts of interest in financial or business matters
between the Company and any of its officers or employees. The Audit Committee
met twice in fiscal 1998.

COMPENSATION COMMITTEE

The Board has a Compensation Committee, consisting of Messrs. Brian D.
Young (as Chairman), Andrews, Barker and Norred, which is responsible for
reviewing and approving the compensation of the executive officers of the
Company, and approving and recommending changes to the incentive plans of the
Company. The Committee is also responsible for administering the Company's
Employee Stock Option Plan and Director Stock Option Plan. The Compensation
Committee met twice in fiscal 1998.

NOMINATING COMMITTEE; NOMINATION PROCEDURES

The Company does not have a standing nominating committee. The Board of
Directors, however, is responsible for the evaluation and recommendation of
qualified nominees, as well as other matters pertaining to Board composition and
size. The Board will give appropriate consideration to qualified persons
recommended by stockholders for nomination as director in accordance with the
Company's By-Laws, as summarized below.

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<PAGE> 6

In general, such recommendations can only be made by a stockholder entitled
to notice of, and to vote at, a meeting at which directors are to be elected,
must be in writing and must be received by the Secretary of the Company within a
prescribed period prior to the annual or special meeting, as the case may be. A
copy of the By-Laws is available from the Company upon request.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth all cash compensation paid by the Company
and its subsidiaries, as well as other compensation paid or accrued, to the
Company's chief executive officer, to the other executive officers of the
Company at the end of fiscal 1998 whose annual salary and bonus in fiscal year
1998 exceeded $100,000 (the "Named Executive Officers") for each of fiscal years
1996, 1997 and 1998, respectively. Such compensation was paid for services
rendered in all capacities to the Company and its subsidiaries:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
----------------- --------------------
AWARDS PAYOUTS
------ -------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS PAYOUTS COMPENSATION(2)
- --------------------------- ---- ------ ----- ------- ------- ---------------
($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Jeffery M. Boetticher, 1998 365,576 281,250 203,060 900,000(5) 10,086
Chairman of the Board 1997 329,229 380,000 65,000 -- 6,895
and Chief Executive Officer (1) 1996 297,681 384,045 220,000 -- 6,439
Anna M. Baird, 1998 127,517 100,000 70,000 200,000 10,414
Vice President, Chief Financial 1997 99,923 100,000 16,000 -- 6,211
Officer and Treasurer (3)
Kathleen Bullions, 1998 124,115 100,000 70,000 200,000 10,414
Vice President of Operations (3) 1997 99,769 100,000 16,000 -- 6,211
Fred C. Young, 1998 312,890 285,000 220,000 861,000 10,746
President, Chief Operating Officer 1997 266,553 380,000 65,000 -- 6,895
and Secretary (4) 1996 221,154 324,045 178,000 -- 6,493
</TABLE>

- ---------

(1) Mr. Boetticher resigned from his positions as Chairman of the Board and
Chief Executive Officer of the Company as of June 24, 1998.

(2) Represents amounts accrued by the employer for the individual under the
401(k) plan of the Company.

(3) Ms. Baird and Ms. Bullions became Named Executive Officers in April 1996.

(4) Mr. Young became Chairman to the Board and Chief Executive Officer and
ceased to be Chief Operating Officer as of June 24, 1998.

(5) Mr. Boetticher received $50,000 within the first 45 days of fiscal 1999 and
will receive the remaining $850,000 no later than December 1998.

STOCK OPTION PLANS

The Board of Directors and stockholders of the Company have adopted the
Company's 1992 Employee Stock Option Plan, as amended (the "Employee Plan"), and
have authorized the issuance of options and stock appreciation rights covering
up to 3,200,000 shares of Common Stock under this plan (subject to appropriate
adjustments in the event of stock splits, stock dividends and similar dilutive
events). Options and

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<PAGE> 7

stock appreciation rights may be granted under the Employee Plan to key salaried
employees (including those who may also be directors but who are not members of
the Compensation Committee) of the Company and its subsidiaries.

The Board of Directors and stockholders have also adopted the Company's
1992 Director Stock Option Plan, as amended (the "Director Plan"), and have
authorized the issuance of options and stock appreciation rights covering up to
75,000 shares of Common Stock under this plan (subject to appropriate
adjustments in the event of stock splits, stock dividends and similar dilutive
events). Under the Director Plan, options and stock appreciation rights may be
granted by the Compensation Committee to non-employee Directors of the Company.

The following table sets forth information concerning the stock options
granted to each of the Company's Named Executive Officers in fiscal 1998:

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
----------------------------------------------------- ------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE OR EXPIRATION
NAME GRANTED FISCAL YEAR BASE PRICE DATE 5% 10%
---- ------- ----------- ---------- ---- -- ---
(#) (%) ($/SHARE) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Jeffery M.
Boetticher........... 45,000 4.3 21.44 4/23/07 606,570(2) 1,537,348(3)
158,060 15.1 30.25 1/13/08 3,006,925(4) 7,620,172(5)
Anna M. Baird.......... 10,000 1.0 21.44 4/23/07 134,793(2) 341,633(3)
60,000 5.7 30.25 1/13/08 1,141,437(4) 2,892,638(5)
Kathleen Bullions...... 10,000 1.0 21.44 4/23/07 134,793(2) 341,633(3)
60,000 5.7 30.25 1/13/08 1,141,437(4) 2,892,638(5)
Fred C. Young.......... 45,000 4.3 21.44 4/23/07 606,570(2) 1,537,348(3)
175,000 16.7 30.25 1/13/08 3,329,191(4) 8,436,861(5)
All Stockholders....... 16,765,110 21.44 225,993,683(2) 572,863,808(3)
16,765,110 30.25 318,872,392(4) 808,245,953(5)
</TABLE>

- ---------

(1) Assumes, from the date of grant of the option through its ten year
expiration date, a hypothetical 5% and 10% per year appreciation (compounded
annually) in the fair market value of the Common Stock. The 5% and 10% rates
of appreciation are set by the Securities and Exchange Commission and,
therefore, are not intended to forecast possible future appreciation, if
any, in the Common Stock. If the Common Stock does not increase in value
from the date of grant of the stock option, such option would be valueless.

(2) Assumes a fair market value of the Common Stock of $34.92 per share.

(3) Assumes a fair market value of the Common Stock of $55.61 per share.

(4) Assumes a fair market value of the Common Stock of $49.27 per share.

(5) Assumes a fair market value of the Common Stock of $78.46 per share.

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<PAGE> 8

The following table sets forth information with respect to each of the
Company's Named Executive Officers concerning the exercise of options during
fiscal 1998 and unexercised options held as of March 31, 1998:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES ACQUIRED VALUE AT FISCAL AT FISCAL
NAME ON EXERCISE REALIZED YEAR END YEAR END
---- ----------- -------- -------- --------
(#) ($) (# EXERCISABLE/ ($ EXERCISABLE/
# UNEXERCISABLE) $ UNEXERCISABLE)
<S> <C> <C> <C> <C>
Jeffery M. Boetticher..... 65,000 2,212,634 483,332/319,728 11,966,601/3,887,310
Anna M. Baird............. -0- -0- 62,332/90,668 1,537,251/933,543
Kathleen Bullions......... -0- -0- 50,332/90,668 1,199,041/933,543
Fred C. Young............. -0- -0- 462,332/322,668 11,667,924/3,703,971
</TABLE>

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee of the Board of Directors is charged with
administering the Company's compensation programs for executive officers,
including basic compensation and incentive compensation plans, and the Company's
stock option plans, including the Employee Plan. The Company believes that its
total executive compensation package should be designed to facilitate the
achievement of short- and long-range Company goals, to recognize individual
executive performance and contribution, and to promote increased value creation
for the Company's stockholders. To this end, the Company and the Compensation
Committee seek to:

- Hire, train, develop, compensate and retain the highest quality
executives possible for the Company's success.

- Reward executives for outstanding contributions to the achievement of the
Company's goals and overall success.

- Provide incentives for executives to align their goals with those of the
stockholders through pay-for-performance and growth-driven compensation
in the form of cash compensation and stock option plans.

BASIC COMPENSATION

Basic compensation for executives is paid based upon performance,
experience, the requirements of the position and the executive's relative
ability to impact the Company's overall growth and success. The Company and the
Compensation Committee believe that the basic compensation paid to the Company's
executives is competitive with that paid to executives in other direct marketing
and computer companies. The cash compensation paid during fiscal 1998 to the
Company's executives as a group is in the middle range compared with that of
such peer group. Historically, in making compensation decisions the Company has
relied upon its Board of Directors and the Compensation Committee regarding
their collective knowledge of the industry, the functions that Company
executives perform and comparative salaries. Salaries and bonuses for fiscal
1998 were set in May 1997.

The primary goals for executives, in their own respective positions, are to
help the Company achieve its yearly sales, profit and growth targets as
established by the Board of Directors. Salaries for the executives are reviewed
by the Compensation Committee on an annual basis and may be increased or
decreased based upon

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<PAGE> 9

the Compensation Committee's decision that they are competitive in the industry,
and/or that a particular executive's contributions to the Company have been
significant during the year.

As a group, the Company's executives received salary increases averaging
18% for fiscal 1998.

INCENTIVE COMPENSATION PLANS

The Company has a variable compensation plan covering all employees,
including executive officers. This plan provides for the payment of a bonus to
participants, equal to a percentage of base salary, in the event that certain
annual performance targets for revenue and operating profits are achieved. Any
payments under this plan are subject to approval by the Board of Directors on an
annual basis. Payments made to the Named Executive Officers in fiscal 1998 under
this plan are set forth in the Summary Compensation Table under the caption
"Annual Compensation--Bonus."

The Company had a long-term incentive compensation plan covering fiscal
1996, 1997 and 1998 which was paid following the completion of the fiscal 1998
audit and within the first 45 days of fiscal 1999, as the three-year targets
were achieved. Payments made to the Named Executive Officers under this plan are
set forth in the Summary Compensation Table under the caption "Long-Term
Compensation--Payouts--LTIP Payouts." The Compensation Committee has approved
and the Company is in the process of establishing a similar plan for fiscal
1999-2001.

The Company's incentive compensation plans are predicated on the Company's
belief that executives contribute to stockholder returns by increasing the
Company's stock price, maximizing earnings and profit, and providing for
long-term growth.

STOCK OPTION PLAN

In fiscal 1993, the Company's Board of Directors and stockholders approved
the Employee Plan, pursuant to which stock options may be granted by the
Compensation Committee to key employees, including those who may be executive
officers of the Company. This plan was amended in fiscal 1995, fiscal 1996,
fiscal 1997 and fiscal 1998 pursuant to a vote of stockholders to increase the
number of shares available for the grant of options thereunder. Information with
respect to the options granted to the Named Executive Officers in fiscal 1998 is
set forth in the table entitled "Option Grants in Last Fiscal Year' appearing
elsewhere in this proxy statement. The Compensation Committee believes that the
options granted are consistent with the Company's overall compensation policies
and the individual compensation packages of each Named Executive Officer.

Historically, all options granted under the Plan were exercisable at the
fair market value of the stock on the date of grant of the option. As amended in
fiscal 1998, the Plan requires that all options have an exercise price of not
less than the fair market value of the stock on the date of grant of the option.

CHIEF EXECUTIVE OFFICER'S COMPENSATION ANALYSIS

In determining the total compensation for Mr. Boetticher, the Chief
Executive Officer, the Compensation Committee used the same criteria described
above in the opening paragraphs of this section and the Basic Compensation
section. In addition, the Committee considered the Company's performance against
goals established by the Board of Directors at the beginning of the year.

The Compensation Committee believes that the increase in base salary and
grants of options to Mr. Boetticher were appropriate for fiscal 1998 because of
the performance of the Company, his individual performance, general executive
compensation trends and the overall business environment.

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<PAGE> 10

SUMMARY

In the aggregate, an average of 45% (not including the long-term incentive
plan payment) of the Company's Named Executive Officers' cash compensation for
fiscal 1998 came from incentives directly related to Company performance. The
Company believes that the compensation paid to its executives for fiscal 1998
was reasonable in view of the Company's performance and the contributions of
those executives to that performance, as well as the comparison of their
compensation with that of other direct marketing and computer companies.

COMPENSATION COMMITTEE:
Brian D. Young, Chairman
William F. Andrews
Michael E. Barker
William Norred

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<PAGE> 11

PERFORMANCE GRAPH

<TABLE>
<CAPTION>
NASDAQ NASDAQ
MEASUREMENT PERIOD MARKET COMPUTER OLD PEER
(FISCAL YEAR COVERED) BLACK BOX INDEX MANUFACTURES GROUP
<S> <C> <C> <C> <C>
6/6/94 100 100 100 100
3/95 126 111 136 110
3/96 145 151 209 168
3/97 229 168 229 141
3/98 314 255 406 174
</TABLE>

The above graph represents and compares the value, through March 31, 1998,
of a hypothetical investment of $100 made on June 6, 1994, the date of the
spin-off of MICOM Communications Corp. ("MICOM"), in each of (i) the Company's
Common Stock, (ii) the Nasdaq Market Index, (iii) the Nasdaq Computer
Manufacturers Index and (iv) the Company's former peer group (consisting of CDW
Computer Centers, Inc., Micro Warehouse, Inc., Sigma-Aldrich Corp. and Viking
Office Products, Inc. (the "Former Peer Group")) assuming, in each case, the
reinvestment of dividends. The cumulative stockholder return through March 31,
1998 indicates that the Company has performed comparably to the Nasdaq Computer
Manufacturers Index, the Nasdaq Market Value Index and the Former Peer Group.
The Company decided to change to the Nasdaq Computer Manufacturers Index as its
peer group because the Company believes that this index is more relevant as it
is a larger group of companies in the same industry.

The Company believes any comparisons of the price of the Company's Common
Stock before June 6, 1994, would not be useful to stockholders since the value
of the Company's Common Stock prior to that date included the value of MICOM,
which was spun off at that time. On June 3, 1994, the date on which the spin-
off was consummated, the closing price of the post-spin-off Company Common Stock
was $12.00. On June 6, 1994, the last trading day prior to the consummation of
the spin-off, the closing price of historical combined common stock was $21.25.

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<PAGE> 12

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In fiscal 1998, the Compensation Committee of the Board of Directors
consisted of Mr. Brian D. Young, as Chairman, and Messrs. Andrews, Barker and
Norred.

Mr. Barker was formerly Chairman of the Board of the Company from March
1991 until November 1995, although he received no compensation from the Company
for serving in such capacity; however, he did receive certain fees under a
services agreement with Odyssey Investors, Inc. This services agreement provided
for the provision of consulting and advisory services by Odyssey Investors, Inc.
for an annual fee of $150,000. Beginning January 1, 1995, one-half of this fee
was paid to Odyssey Investors, Inc. and one-half to Mr. Barker, a former
principal of Odyssey Partners which was affiliated with Odyssey Investors, Inc.
In fiscal 1996 and fiscal 1995 Mr. Barker received $65,250 and $18,750,
respectively. This services agreement expired in December 1995.

Mr. Barker was formerly the President of the Company until June 3, 1994
preceded by Mr. Brian D. Young as President from February 1989 until January
1992.

In October 1994, Mr. Barker entered into a Quotaholder Agreement with Black
Box do Brazil Industria e Comercio Ltda. ("Black Box Brazil"), a subsidiary of
the Company (the "Quotaholder Agreement"). The Quotaholder Agreement provided
for Mr. Barker to receive 27,000 quotas (the equivalent of shares), or 15%
equity ownership, in Black Box Brazil in return for providing managerial
expertise to Black Box Brazil. Under the Quotaholder Agreement, the Company has
the option to purchase Mr. Barker's (and another party's) quotas after three
years and is obligated to purchase such quotas after five years based upon a
predetermined formula. The Quotaholder Agreement further provides for
pre-emptive rights in the event that additional quotas are issued, and restricts
Mr. Barker from competing with Black Box Brazil for a period of two years after
having had any affiliation with Black Box Brazil. In November 1997, the Company
exercised its option under the Quotaholder Agreement to repurchase Mr. Barker's
minority interest. Mr. Barker has objected to the valuation of his interest and
the matter is currently in arbitration.

Mr. Norred founded MICOM Systems, Inc., the predecessor of the Company, and
served as its President and Chief Executive Officer until December 1987.

CHANGE OF CONTROL AGREEMENT

The Company has a change of control agreement with Fred C. Young, Chairman
of the Board and Chief Executive Officer, President and Secretary. The purpose
of this agreement is to encourage the executive to remain with the Company, and
thereby assure the Company of the continued availability of his services and
this advice, in the event of an attempted change in control of the Company. This
agreement is for a five-year term and becomes operative only upon a "change in
control" of the Company, as defined in the agreement. If, within the term of the
agreement and after a change of control, the executive's employment is
terminated by the Company other than for cause or is terminated by the executive
for "good reason" (such as a reduction in salary or benefits or diminution in
duties), the executive will be entitled to a lump sum payment of generally up to
three times the sum of his base salary (as defined) plus the average cash award
received by him under the Company's incentive compensation or bonus plan for the
prior two years. The Company is also required to maintain the executive's other
benefits (life insurance, health insurance, etc.) through the unexpired term of
the agreement. The agreement also provides for the immediate vesting of any
outstanding stock appreciation rights or options. If the executive terminates
his employment without "good reason," the executive would not be entitled to
receive further salary and benefits under the agreement. In addition, the
Company may terminate the executive for "cause" (as defined), at which time all
salary and other benefits to the executive would cease.

SEPARATION AGREEMENT

In connection with Mr. Boetticher's separation of employment from the
Company, the Company entered into an agreement with him pursuant to which in
exchange for confirmation of noncompete and nonsolicitation covenants, as well
as certain releases and waivers of rights by Mr. Boetticher, the Company agreed
to vest all

10
<PAGE> 13

options held by Mr. Boetticher as of September 1, 1998. Mr. Boetticher also
agreed to be available to consult with the Company for a period ending August
31, 1999.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information available to the Company as of
June 19, 1998, regarding the beneficial ownership of the Company's Common Stock
by all those known by the Company to be beneficial owners of more than five
percent of its outstanding Common Stock.

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES SHARES
------ ------
<S> <C> <C>
William Blair & Company, L.L.C. (1)......................... 1,996,600 11.9
222 W. Adams Street, Chicago, Illinois 60606
FMR Corp. (2)............................................... 1,863,100 11.1
82 Devonshire Street, Boston, Massachusetts 02109
RCM General Corporation
RCM Limited, L.P.
Dresdner RCM Global Investors LLC(3)........................ 1,452,200 8.7
Four Embarcadero Center, Suite 2900, San Francisco,
California 94111
J&W Seligman & Co. Incorporated (4)......................... 1,121,925 6.7
100 Park Avenue, 4th Floor, New York, New York 10017
AMVESCAP PLC (5)............................................ 980,200 5.8
11 Devonshire Square, London EC2M 4YR England
The Capital Group Companies, Inc.(6)........................ 964,000 5.7
333 S. Hope Street, Los Angeles, California 90071
</TABLE>

- ---------

(1) William Blair & Company is a registered investment advisor and has sole
dispositive power over all of the shares held and sole voting power for
877,950 shares.

(2) FMR Corp. is a parent holding company and includes shares held by Fidelity
Management & Research Company, a registered investment advisor, and Fidelity
Low-Priced Stock Fund, a registered investment company. Such shares may also
be deemed to be held by Mr. Edward C. Johnson 3d and Ms. Abigail P. Johnson
as a result of their control of FMR Corp. Of the 1,863,100 shares
beneficially owned, all are held without voting power and with sole
dispositive power.

(3) RCM General Corporation is the general partner of RCM Limited, L.P. RCM
Limited, L.P. is the Managing Agent of Dresdner RCM Global Investors LLC, a
registered investment advisor. Of the 1,452,200 shares beneficially owned,
1,212,200 shares are held with sole voting power, 1,405,200 shares are held
with sole dispositive power and 47,000 shares are held with shared
dispositive power.

(4) J&W Seligman & Co. Incorporated is a registered investment advisor and has
shares dispositive power for all of the shares held and sole voting power
for 948,700 shares. Such shares may also be deemed to be beneficially owned
by Mr. William C. Morris as a control person of J&W Seligman & Co.
Incorporated.

(5) AMVESCAP PLC is a parent holding company which, along with certain
subsidiaries, hold the securities reported on behalf of other persons and
therefore share voting and dispositive power over such shares.

(6) The Capital Group Companies, Inc. is a parent holding company and includes
shares held by Capital Research and Management Company, a registered
investment advisor and wholly owned subsidiary of The Capital Group
Companies, Inc. Of the shares beneficially owned, all are held without
voting power and with sole dispositive power.

11
<PAGE> 14

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth certain information available to the Company
as of May 15, 1998, regarding the shares of the Company's Common Stock
beneficially owned by (i) each of the Company's directors and nominees; (ii)
each of the Company's Named Executive Officers; and (iii) all directors and
executive officers of the Company as a group.

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES SHARES
------ ------
<S> <C> <C>
William F. Andrews (1)...................................... 9,221 *
Anna M. Baird (3)........................................... 69,204 *
Michael E. Barker........................................... 0 *
Jeffery M. Boetticher (2)(3)................................ 534,832 3.2%
Kathleen Bullions (3)....................................... 60,998 *
William R. Newlin (1)....................................... 24,088 *
William Norred (1).......................................... 9,421 *
Brian D. Young (1).......................................... 3,221 *
Fred C. Young (3)........................................... 518,736 3.1%
All directors and executive officers as a group (9 persons)
(1)-(3)................................................... 1,229,721 7.3%
</TABLE>

- ---------

(1) Includes, for each of Messrs. Andrews and Norred, 7,221 shares and for Mr.
Newlin, 3,888 shares and for Mr. Brian D. Young, 2,221 shares pursuant to
rights to acquire such shares as a result of options granted pursuant to the
Director Plan.

(2) Includes 2,500 shares owned by Mr. Boetticher's spouse for which he
disclaims beneficial ownership.

(3) Includes, for Mr. Boetticher, Ms. Baird, Ms. Bullions and Mr. Fred C. Young,
and for all directors and executive officers as a group, 532,332, 68,998,
56,998, 511,332 and 1,190,211 shares, respectively, acquirable within 60
days of May 15, 1998, pursuant to options granted under the Employee Plan
and the Director Plan.

* Represents less than 1% of the Common Stock outstanding.

12
<PAGE> 15

PROPOSAL 2

APPROVAL OF AMENDMENTS TO COMPANY EMPLOYEE STOCK OPTION PLAN

In November 1992, the Board of Directors and stockholders adopted the
Employee Plan. The Employee Plan authorized the issuance of options and stock
appreciation rights covering up to 1,000,000 shares of Common Stock (subject to
appropriate adjustments in the event of stock-splits, stock dividends and
similar dilutive events). In prior years, the Board of Directors adopted and the
stockholders approved increases in the number of shares available for the grant
of options under the Plan from 1,000,000 to 3,200,000. The Employee Plan
constitutes a key element of the Company's incentive program and is utilized to
attract, retain and motivate key employees of the Company and to align key
employee and stockholder interests.

As a result of the prior grant of stock options under the Employee Plan,
the number of shares available for grant of stock options or stock appreciation
rights as of June 15, 1998 is 18,888 shares. The Board of Directors has
determined that this amount is insufficient to continue to maintain the
Company's needs under its incentive program. As a result, the Board has adopted
and proposes that the stockholders approve an amendment to the Employee Plan
which will increase the total number of shares available for the grant of stock
options under the Employee Plan by 700,000 shares, thereby increasing the
aggregate number of shares which would be available for the grant of options or
stock appreciation rights from 3,200,000 to 3,900,000.

The Board believes that the increase in the number of shares available for
issuance under the Employee Plan will strengthen the Company's ability to
attract, retain and motivate key employees of the Company and motivate such
parties to attain individual performance and overall corporate goals. Currently,
excluding options granted to MICOM employees prior to the spinoff of MICOM and
assuming all of the options granted are ultimately exercised, Black Box
employees would own 12.6% of the outstanding shares. The proposed increase in
the shares available for issuance would increase that percentage to 16% which
based on an independent study completed by Buck Consultants, Inc. in early 1998,
the similar percentage for S&P Small Cap companies was 7-16%, for High
Technology companies was 16% and for companies with revenues of $100 million to
$500 million was 13-18%. Therefore, the Board believes this proposed increase is
appropriate. The affirmative vote by the holders of a majority of the shares of
Common Stock entitled to vote and present at the meeting is required to approve
the amendment to the Employee Plan.

Because executive officers (who also may be members of the Board of
Directors) are eligible to receive awards under the Employee Plan, each of them
may be deemed to have a personal interest in the adoption of this proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 2.

SUMMARY PLAN DESCRIPTION

The following description is not a complete statement of the Employee Plan
and is qualified in its entirety by reference to the complete text of the
Employee Plan, a copy of which is available from the Company upon request.

ADMINISTRATION. The Employee Plan is administered by a committee consisting
of at least two directors of the Company who are appointed by and serve at the
pleasure of the Board of Directors (the "Committee"). The Committee, from time
to time at its discretion, makes determinations with respect to the persons who
shall be granted options ("Options") or stock appreciation rights ("Rights"),
the number of shares of the Common Stock that may be purchased pursuant to such
Options or Rights and the designation of Options as Incentive Stock Options or
Non-Qualified Stock Options, as defined below. The interpretation and
construction by the Committee of any provisions of the Employee Plan or of an
Option or Right granted thereunder is binding and conclusive on all optionees
and on their legal representatives and beneficiaries.

TYPES OF OPTIONS. The Committee, in its discretion, may grant Options to
purchase shares of Common Stock either in the form of incentive stock options
("Incentive Stock Options") qualified as such under the
13
<PAGE> 16

Internal Revenue Code of 1986, as amended (the "Code"), or other options
("Non-Qualified Stock Options"), as designated in the optionee's stock option
agreement. Historically, the Company has only granted Non-Qualified Stock
Options.

RIGHTS. The Committee, in its discretion, may grant Rights either alone,
simultaneously with the grant of an Incentive Stock Option or Non-Qualified
Stock Option and in conjunction therewith, or subsequent to the grant of a
Non-Qualified Stock Option and in conjunction therewith or in the alternative
thereto.

ELIGIBILITY. Any key salaried employee who is not a member of the Committee
may be granted Incentive Stock Options, Non-Qualified Stock Options or Rights
under the Employee Plan until November 30, 2002.

EXERCISE PRICE. The Committee shall determine the exercise price for each
Option or Right granted under the Employee Plan, provided however, that the
exercise price: (1) in the case of an Incentive Stock Option granted to an
employee, other than an employee who owns more than 10% of the total combined
voting power of all classes of outstanding stock of the Company (a "Ten-Percent
Stockholder"), shall not be less than the fair market value of the shares to
which the Option relates on the date of grant; (2) in the case of an Incentive
Stock Option granted to an employee who is a Ten-Percent Stockholder, shall not
be less than 110% of the fair market value of the shares to which the Option
relates on the date of grant; (3) in the case of a Right granted alone, shall
not be less than 100% of the fair market value of the shares to which the Right
relates.

The Employee Plan requires all Non-Qualified Stock Options to be granted at
the fair market value on the date of grant.

EXERCISE PERIOD AND EXERCISE OF OPTIONS OR RIGHTS. An Option or Right may
be exercised in whole at any time, or in part from time to time, within such
period or periods as may be determined by the Committee and set forth in the
grantee's agreement, provided that: (1) no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years from the date of grant; and
(2) no Incentive Stock Option granted to an employee who is a Ten-Percent
Stockholder shall be exercisable after the expiration of five years from its
date of grant. Options granted to date have vested in the grantee after three
years from the date of the grant. Options are not transferable by the optionee
except by will or by the laws of descent and distribution.

TERMINATION OF EMPLOYMENT; DISABILITY; DEATH. Upon termination of
employment, an Option or Right previously granted to an employee, unless
otherwise specified by the Compensation Committee and to the extent not
previously exercised, shall terminate and become null and void, provided that:
(i) if the employee shall die while in the employ of the Company or within three
(3) months of retirement from such employment or within one (1) year of
retirement from employment by reason of disability, the legal representative or
heirs of such employee shall be entitled to exercise such Option or Right (to
the extent otherwise exercisable) for a one-year period following the date of
death; (ii) if the employment shall have been terminated by reason of
retirement, disability or termination other than for cause (as defined in the
Employee Plan), then such employee shall be entitled to exercise such Option or
Right (to the extent otherwise exercisable) at any time up to (a) three months
after termination by reason of retirement or other than for cause and (b) one
(1) year after termination by reason of disability. If an employee voluntarily
terminates his employment or is terminated for cause, any Option or Right,
unless otherwise specified by the Committee, shall immediately terminate.

PAYMENT. The exercise price of shares purchased pursuant to an Option shall
be paid in full at the time of any exercise either in cash or by certified
check; provided, however, to the extent that the terms of such Option provide,
the purchase price may be paid for, in whole or in part, by delivering
previously-owned shares of Common Stock or, in part, by promissory note (for not
more than 80% of such purchase price subject to applicable margin requirements).

LIMITATION ON ANNUAL AWARDS. The aggregate fair market value of stock for
which Incentive Stock Options are exercisable for the first time by an optionee
during any calendar year under the terms of the Employee Plan shall not exceed
the sum of $100,000.

14
<PAGE> 17

ADJUSTMENTS, AMENDMENT OR DISCONTINUANCE. In the event of any change in the
outstanding Common Stock through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, or other like change in capital
structure of the Company, the Committee shall make such adjustment to each
outstanding Option and Right that it, in its sole discretion, deems appropriate.
In addition, in the event of any such change, the Committee shall make any
further adjustment as may be appropriate to the maximum number of shares which
may be acquired under the Employee Plan pursuant to the exercise of Options and
Rights, the maximum number of shares which may be so acquired by one employee
and the number of shares and prices per share subject to outstanding Options and
Rights as shall be equitable to prevent dilution or enlargement of rights under
such Options or Rights, and the determination of the Committee as to these
matters shall be conclusive.

In the event of a "change in control" of the Company, as defined in the
Employee Plan, all then outstanding Options and Rights shall immediately become
exercisable. The Committee, in its discretion, may determine that, upon the
occurrence of a change in control transaction, each Option or Right outstanding
under the Employee Plan shall terminate within a specified number of days after
notice to the holder, and such holder shall receive, with respect to each share
subject to such Option or Right, cash in an amount equal to the excess of the
fair market value of such share immediately prior to such transaction over the
exercise price per share of such Option or Right.

The Board of Directors or the Committee, as the case may be, may, from time
to time, amend the Employee Plan, provided that no amendment shall be made,
without the approval of the stockholders of the Company, that will (i) increase
the total number of shares reserved for Options under the Employee Plan (other
than an increase resulting from an adjustment of outstanding Common Stock), (ii)
reduce the exercise price of any Incentive Stock Option granted under the
Employee Plan below the price required by the Employee Plan, (iii) modify the
provisions of the Employee Plan relating to eligibility, or (iv) materially
increase the benefits accruing to participants under the Employee Plan. The
rights and obligations under any Option or Right granted before amendment of the
Employee Plan or any unexercised portion of such Option or Right shall not be
adversely affected by amendment of the Employee Plan, Option or Right without
the consent of the holder of such Option or Right. The Board of Directors may at
any time suspend or terminate the Employee Plan.

TERM OF PLAN. Options and Rights may be granted under the Employee Plan
until November 30, 2002.

FEDERAL INCOME TAX CONSEQUENCES

The following summary is based upon an interpretation of present federal
tax laws and regulations and may be inapplicable if such laws and regulations
are changed. The Employee Plan is not subject to the protective provisions of
the Employee Retirement Income Security Act of 1974 and is not qualified under
Section 401(a) of the Code.

INCENTIVE STOCK OPTIONS. Some options to be issued under the Employee Plan
will be designated as Incentive Stock Options and are intended to qualify under
Section 422 of the Code. Under the provisions of Section 422 and the related
regulations, an optionee will not be required to recognize any income for
federal income tax purposes at the time of grant of an Incentive Stock Option,
nor is the Company entitled to any deduction. The exercise of an Incentive Stock
Option is also is not a taxable event, although the difference between the
option price and the fair market value on the date of exercise is an item of tax
preference for purposes of the alternative minimum tax. The taxation of gain or
loss upon the sale of stock acquired upon exercise of an Incentive Stock Option
depends in part on whether the stock is held for at least two years from the
date the option was granted and at least one year from after the date the stock
was transferred to the optionee (the "ISO Holding Period").

If the ISO Holding Period is not met, then, upon disposition of such shares
(a "disqualifying disposition"), the optionee will realize compensation, taxable
as ordinary income, in an amount equal to the excess of the fair market value of
the shares at the time of exercise over the option price, limited, however to
the gain on sale. Any additional gain would be taxable as capital gain (see
below). If the optionee disposes of

15
<PAGE> 18

the shares in a disqualifying disposition at a price that is below the fair
market value of the shares at the time the Incentive Stock Option was exercised
and such disposition is a sale or exchange to an unrelated party, the amount
includible as compensation income to the optionee will be limited to the excess
of the amount received on the sale or exchange over the exercise price.

If the optionee recognizes ordinary income upon a disqualifying
disposition, the Company generally will be entitled to a tax deduction in the
same amount.

If the ISO Holding Period is met, the treatment of the gain upon the sale
of the shares depends on the date the shares were sold and the period such
shares were held by the optionee. With respect to sales after July 28, 1997, if
the shares were held at least 18 months as of the sale date, the gain is taxable
as a long-term capital gain at a maximum rate of 20%. If, however, the sale
occurs on or after July 28, 1997 and the shares were held at least one year (so
as to satisfy the ISO Holding Period) but less than 18 months, the gain is
taxable as a "mid-term gain" at a maximum rate of 28%.

A maximum capital gains rate of 18% will apply to certain sales after
December 1, 2000 of shares acquired upon the exercise of an Incentive Stock
Option if such shares have been held for at least five years.

If the Incentive Stock Option is exercised by delivery of previously-owned
shares of common stock in partial or full payment of the option price, no gain
or loss will ordinarily be recognized by the optionee on the transfer of such
previously-owned shares. However, if the previously-owned transferred shares
were acquired through the exercise of an Incentive Stock Option, the optionee
may realize ordinary income with respect to the shares used to exercise an
Incentive Stock Option if such transferred shares have not been held for the ISO
Holding Period. If the optionee recognizes ordinary income upon a disqualifying
disposition, the Company generally will be entitled to a tax deduction in the
same amount. If an Incentive Stock Option is exercised through the payment of
the exercise price by the delivery of common stock, to the extent that the
number of shares received exceeds the number of shares surrendered, such excess
shares will possibly be considered Incentive Stock Option stock with a zero
basis.

NON-QUALIFIED STOCK OPTIONS. Some options to be issued under the Employee
Plan will be designated as Non-Qualified Stock Options. If (as in the case of
Non-Qualified Stock Options granted under the Employee Plan at this time) the
Non-Qualified Stock Option does not have a "readily ascertainable fair market
value" at the time of the grant, the Non-Qualified Stock Option is not included
as compensation income at the time of grant. Rather, the optionee realizes
compensation income only when the Non-Qualified Stock Option is exercised and
the optionee has become substantially vested in the shares transferred. The
shares are considered to be substantially vested when they are either
transferable or not subject to a substantial risk of forfeiture. The amount of
income realized is equal to the excess of the fair market value of the shares at
the time the shares become substantially vested over the sum of the exercise
price plus the amount, if any, paid by the optionee for the Non-Qualified Stock
Option.

If a Non-Qualified Stock Option is exercised through payment of the
exercise price by the delivery of common stock, to the extent that the number of
shares received by the optionee exceeds the number of shares surrendered,
ordinary income will be realized by the optionee at that time only in the amount
of the fair market value of such excess shares, and the tax basis of such excess
shares will be such fair market value.

Generally, the optionee's basis in the shares will be the exercise price
plus the compensation income realized at the time of exercise and the amount, if
any, paid by the optionee for the Non-Qualified Stock Option. The capital gain
or loss will be short-term if the shares are disposed of within one year after
the option is exercised; such short-term gains are taxable as ordinary income.
With respect to sales after July 28, 1997, if the shares were held at least 18
months as of the sale date, the gain is taxable as a long-term capital gain at a
maximum rate of 20%. If, however, the sale occurs on or after July 28, 1997 and
the shares were held at least one year but less than 18 months, the gain is
taxable as a "mid-term gain" at a maximum rate of 28%.

A maximum capital gains rate of 18% will apply to certain sales after
December 31, 2000, of shares acquired upon the exercise of an Non-Qualified
Stock Option if such shares have been held for at least five years.

16
<PAGE> 19

If a Non-Qualified Stock Option expires without being exercised, the
optionee will have no tax consequences unless the optionee paid for the
Non-Qualified Stock Option. In such case, the optionee would recognize a loss in
the amount of the price paid by the optionee for the Non-Qualified Stock Option.

The Company is generally entitled to a deductible compensation expense in
an amount equivalent to the amount included as compensation income to the
optionee. This deduction is allowed in the Company's taxable year in which the
income is included as compensation to the optionee.

The preceding discussion is based upon federal tax laws and regulations in
effect on the date of this Proxy Statement, which are subject to change, and
upon an interpretation of the relevant sections of the Code, their legislative
histories and the income tax regulations which interpret similar provisions of
the Code. Furthermore, the foregoing is only a general discussion of the federal
income tax aspects of the Employee Plan and does not purport to be a complete
description of all federal income tax aspects of the Employee Plan. Optionees
may also be subject to state and local taxes in connection with the grant or
exercise of options granted under the Employee Plan and the sale or other
disposition of shares acquired upon the exercise of the options. Each employee
receiving a grant of options should consult with his or her personal tax advisor
regarding the federal, state and local tax consequences of participating in the
Employee Plan.

The foregoing rules regarding time of taxation of optionees upon the
disposition of stock acquired upon the exercise of an Incentive Stock Option and
upon the exercise of a Non-Qualified Stock Option may differ somewhat with
respect to Options that are exercised within six months of the date of grant by
optionees who are subject to the short-swing profit restrictions of Section
16(b) of the Exchange Act.

If the option price is paid by an optionee in part by promissory note, the
interest paid by the optionee under the promissory note is investment
indebtedness which is deductible by the optionee as an itemized deduction from
gross income to the extent the optionee has net investment income; interest that
is disallowed because of this limitation may be carried over to succeeding tax
years and is deductible in the carryover year, subject to the net investment
income limitation.

Rights are treated very similarly to Options for tax purposes. The holder
of a Right will not normally realize any taxable income upon the grant of a
Right. Upon the exercise of a Right, the person exercising the Right will
realize compensation taxable as ordinary income equal to either (i) the cash
received upon the exercise of the Right or (ii) if shares are received upon the
exercise of the Right, the fair market value of such shares as of the exercise
date. The basis of any shares acquired upon exercise of a Right will be their
fair market value on the date of exercise, and the holding period will commence
at that time. The Company will be entitled to a deduction for compensation paid
in the same amount which the holder of the Right realizes as ordinary income.

PROPOSAL 3

APPROVAL OF AMENDMENTS TO COMPANY DIRECTOR STOCK OPTION PLAN

In November 1992, the Board of Directors and stockholders adopted the
Director Plan. The Director Plan authorized the issuance of options and stock
appreciation rights covering up to 25,000 shares of Common Stock (subject to
appropriate adjustments in the event of stock-splits, stock dividends and
similar dilutive events). In August 1996, the stockholders approved an increase
in the number of shares available for the grant of options under the Director
Plan to 75,000. The Director Plan constitutes a key element of the Company's
incentive program which is utilized to attract and retain the services of
persons capable of filling director positions of the Company.

As a result of the prior grant of stock options under the Director Plan,
only shares are currently available for grant of stock options or stock
appreciation rights. The Board of Directors has determined that this amount is
insufficient to continue to maintain the Company's needs. As a result, the Board
has adopted and proposes that the stockholders approve an amendment to the
Director Plan which will increase the total number of shares available for the
grant of stock options under the Director Plan by 25,000 shares, thereby
increasing the

17
<PAGE> 20

aggregate number of shares which would be available for the grant of options or
stock appreciation rights from 75,000 to 100,000.

The Board believes that the increase in the number of shares available for
issuance under the Director Plan will strengthen the Company's ability to
attract and retain directors capable of filling such position. The affirmative
vote by the holders of a majority of the shares of Common Stock entitled to vote
and present at the meeting is required to approve the amendment to the Director
Plan.

Because non-employee Directors are eligible to receive awards under the
Director Plan, each of them may be deemed to have a personal interest in the
adoption of this proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 3.

SUMMARY PLAN DESCRIPTION

The following is a summary description of the Director Plan as proposed to
be amended, is not a complete statement of the Director Plan and is qualified in
its entirety by reference to the complete text of the Director Plan, a copy of
which is available from the Company upon request.

ADMINISTRATION. The Director Plan is administered by the Board or a
committee consisting of at least two directors of the Company who are appointed
by and serve at the pleasure of the Board of Directors (the "Plan
Administrator"). The Plan Administrator, from time to time at its discretion,
makes determinations with respect to the persons who shall be granted Options or
Rights, and the number of shares of the Common Stock that may be purchased
pursuant to such Options or Rights. The interpretation and construction by the
Plan Administrator of any provisions of the Director Plan or of an Option or
Right granted thereunder is binding and conclusive on all optionees and on their
legal representatives and beneficiaries.

TYPES OF OPTIONS. The Options granted under the Director Plan will be
Non-Qualified Stock Options under the Code.

RIGHTS. The Plan Administrator, in its discretion, may grant Rights either
alone, simultaneously with the grant of an Option and in conjunction therewith,
or subsequent to the grant of an Option and in conjunction therewith or in the
alternative thereto.

ELIGIBILITY. Any non-employee director may be granted Options or Rights
under the Director Plan until November 30, 2002.

EXERCISE PRICE. The Plan Administrator shall determine the exercise price
for each Option or Right granted under the Director Plan; provided however, that
the exercise price shall not be less than 100% of the fair market value on the
date of grant of the shares to which the Option or Right relates.

All Options granted to date have been at the fair market value on the date
of grant and the Director Plan is being amended to make this be a requirement.

EXERCISE PERIOD AND EXERCISE OF OPTIONS OR RIGHTS. An Option or Right may
be exercised in whole at any time, or in part from time to time, within such
period or periods as may be determined by the Plan Administrator and set forth
in the grantee's agreement. Options are not transferable by the optionee except
by will or by the laws of descent and distribution.

TERMINATION OF EMPLOYMENT; DISABILITY; DEATH. Upon cessation of such
person's status as a director, an Option or Right previously granted to the
director, unless otherwise specified by the Plan Administrator and to the extent
not previously exercised, shall terminate and become null and void, provided
that: (i) if the director shall die while in the employ of the Company or within
three (3) months of retirement or within one (1) year of retirement by reason of
disability, the legal representative or heirs of such director shall be entitled
to exercise such Option or Right (to the extent otherwise exercisable) for a
one-year period following the date of death; (ii) if the employment shall have
been terminated by reason of retirement, disability or removal other than for
cause (as defined in the Director Plan), then such director shall be entitled to
exercise such Option or

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<PAGE> 21

Right (to the extent otherwise exercisable) at any time up to (a) three months
after termination by reason of retirement or removal other than for cause and
(b) one (1) year after termination by reason of disability. If a director
voluntarily terminates his service or is terminated for cause, any Option or
Right, unless otherwise specified by the Plan Administrator, shall immediately
terminate.

ADJUSTMENTS, AMENDMENT OR DISCONTINUANCE. In the event of any change in the
outstanding Common Stock through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, or other like change in capital
structure of the Company, the Plan Administrator shall make such adjustment to
each outstanding Option and Right that it, in its sole discretion, deems
appropriate. In addition, in the event of any such change, the Plan
Administrator shall make any further adjustment as may be appropriate to the
maximum number of shares which may be acquired under the Director Plan pursuant
to the exercise of Options and Rights, the maximum number of shares which may be
so acquired by one director and the number of shares and prices per share
subject to outstanding Options and Rights as shall be equitable to prevent
dilution or enlargement of rights under such Options or Rights, and the
determination of the Plan Administrator as to these matters shall be conclusive.

In the event of a "change in control" of the Company, as defined in the
Director Plan, all then outstanding Options and Rights shall immediately become
exercisable. The Plan Administrator, in its discretion, may determine that, upon
the occurrence of a change in control transaction, each Option or Right
outstanding under the Director Plan shall terminate within a specified number of
days after notice to the holder, and such holder shall receive, with respect to
each share subject to such Option or Right, cash in an amount equal to the
excess of the fair market value of such share immediately prior to such
transaction over the exercise price per share of such Option or Right.

The Board of Directors or the Plan Administrator, as the case may be, may,
from time to time, amend the Director Plan, provided that no amendment shall be
made, without the approval of the stockholders of the Company, that will (i)
increase the total number of shares reserved for Options under the Director Plan
(other than an increase resulting from an adjustment of outstanding Common
Stock), (ii) reduce the exercise price of any Option granted under the Director
Plan below the price required by the Director Plan, (iii) modify the provisions
of the Director Plan relating to eligibility, or (iv) materially increase the
benefits accruing to participants under the Director Plan. The rights and
obligations under any Option or Right granted before amendment of the Director
Plan or any unexercised portion of such Option or Right shall not be adversely
affected by amendment of the Director Plan, Option or Right without the consent
of the holder of such Option or Right. The Board of Directors may at any time
suspend or terminate the Director Plan.

TERM OF PLAN. Options and Rights may be granted under the Director Plan
until November 30, 2002.

FEDERAL INCOME TAX CONSEQUENCES

The following summary is based upon an interpretation of present federal
tax laws and regulations and may be inapplicable if such laws and regulations
are changed. The Director Plan is not subject to the protective provisions of
the Employee Retirement Income Security Act of 1974 and is not qualified under
Section 401(a) of the Code.

An option to be issued under the Director Plan will be designated as a
Non-Qualified Stock Option. If (as in the case of a Non-Qualified Stock Option
granted under the Director Plan at this time) the Non-Qualified Stock Option
does not have a "readily ascertainable fair market value" at the time of the
grant, the Non-Qualified Stock Option is not included as compensation income at
the time of grant. Rather, the optionee realizes compensation income only when
the Non-Qualified Stock Option is exercised and the optionee has become
substantially vested in the shares transferred. The shares are considered to be
19
<PAGE> 22

substantially vested when they are either transferable or not subject to a
substantial risk of forfeiture. The amount of income realized is equal to the
excess of the fair market value of the shares at the time the shares become
substantially vested over the sum of the exercise price plus the amount, if any,
paid by the optionee for the Non-Qualified Stock Option.

A maximum capital gains rate of 18% will apply to certain sales after
December 31, 2000, of shares acquired upon the exercise of a Non-Qualified Stock
Option if such shares have been held for at least five years.

The preceding discussion is based upon federal tax laws and regulations in
effect on the date of this Proxy Statement, which are subject to change, and
upon an interpretation of the relevant sections of the Code, their legislative
histories and the income tax regulations which interpret similar provisions of
the Code. Furthermore, the foregoing is only a general discussion of the federal
income tax aspects of the Director Plan and does not purport to be a complete
description of all federal income tax aspects of the Director Plan. Optionees
may also be subject to state and local taxes in connection with the grant or
exercise of options granted under the Director Plan and the sale or other
disposition of shares acquired upon exercise of the options. Each director
receiving a grant of options should consult with his or her personal tax advisor
regarding the federal, state and local tax consequences of participating in the
Director Plan.

The foregoing rules regarding time of taxation of optionees upon the
disposition of stock acquired upon the exercise of an Option may differ somewhat
with respect to Options that are exercised within six months of the date of
grant by optionees because of the short-swing profit restrictions of Section
16(b) of the Exchange Act.

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<PAGE> 23

entitled to a deduction for compensation paid in the same amount which the
holder of the Right realizes as ordinary income.

PROPOSAL 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

Subject to stockholder ratification, the Board of Directors, upon
recommendation of the Audit Committee, has appointed Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal year ending March
31, 1999. The affirmative vote of a majority of the shares of Common Stock
present and entitled to vote on this matter at the meeting is required for the
ratification of such appointment.

Unless otherwise directed by the stockholders, proxies will be voted for
the ratification of the appointment of Arthur Andersen LLP as independent
accountants of the Company for the fiscal year ending March 31, 1999. A
representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting, will not be making a statement and will be available to respond to
appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR APPROVAL OF PROPOSAL 4.

FORM 10-K ANNUAL REPORT TO THE SECURITIES
AND EXCHANGE COMMISSION

A copy of the Annual Report on Form 10-K of the Company for the fiscal year
ended March 31, 1998, as filed with the Securities and Exchange Commission, is
available to stockholders. A stockholder may obtain a copy of the Form 10-K
without charge and a copy of any exhibits thereto upon payment of a reasonable
charge limited to the Company's costs of providing such exhibits by writing to
Investor Relations Department, Anna M. Baird, Chief Financial Officer, Black Box
Corporation, 1000 Park Drive, Lawrence, Pennsylvania 15055.

OTHER MATTERS

The Company knows of no other matters to be presented for action at the
meeting. However, if any other matters should properly come before the meeting,
it is intended that votes will be cast pursuant to the proxy in respect thereto
in accordance with the best judgment of the persons acting as proxies.

The Company will pay the expenses in connection with the printing,
assembling and mailing to the holders of Common Stock of the Company the notice
of meeting, this proxy statement and the accompanying form of proxy. In addition
to the use of the mails, proxies may be solicited by directors, officers or
regular employees of the Company personally or by telephone or telegraph. The
Company may request the persons holding stock in their names, or in the names of
their nominees, to send proxy material to, and obtain proxies from, their
principals, and will reimburse such persons for their expense in so doing.

STOCKHOLDER PROPOSALS

Stockholders who intend to submit a proposal at the Annual Meeting of the
stockholders of the Company expected to be held in August 1999 must submit such
proposal to the attention of the Secretary of the Company at the address of its
executive offices no later than March 1, 1999.

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<PAGE> 24
BLACK BOX CORPORATION
1000 Park Drive
Lawrence, Pennsylvania 15055
----------------------------
This Proxy is Solicited on Behalf of the
----------------------------
Board of Directors of the Company

PROXY

The undersigned stockholder hereby appoints Fred C. Young and Brian D.
Young, and each of them as proxies for the undersigned, each with full power of
substitution for and in the name of the undersigned to act for the undersigned
and to vote, as designated on the reverse, to vote all of the shares of stock of
the Black Box Corporation (the "Company") that the undersigned is entitled to
vote at the 1998 Annual Meeting of Stockholders of the Company, to be held on
Monday, August 10, 1998, at 11:00 a.m., local time at the offices of Buchanan
Ingersoll Professional Corporation, One Oxford Centre, 301 Grant Street, 20th
Floor, Pittsburgh, Pennsylvania 15219 to consider and act upon the following
matters:

(continued and to be signed on the reverse side)
<PAGE> 25
Please Detach and Mail in the Envelope Provided

A [ ] Please mark your votes as in this example.

The Board of Directors recommends a vote "FOR" proposals numbers 1, 2, 3
and 4.

FOR WITHHOLD

1. Election of five (5) [ ] [ ] Nominees: William F. Andrews
members of the William R. Newlin
Board of Directors: William Norred
Brian D. Young
(Instructions: To withhold authority to vote Fred C. Young
for any individual nominee, write the
nominee's name in the space below.)

- -------------------------------------------

FOR AGAINST ABSTAIN
2. The approval of an amendment to the 1992 [ ] [ ] [ ]
Stock Option Plan to increase the
number of shares authorized under the
Plan; and

FOR AGAINST ABSTAIN
3. The approval of an amendment to the 1992 [ ] [ ] [ ]
Director Stock Option Plan to increase
the number of shares authorized under
the Plan; and

FOR AGAINST ABSTAIN
4. Ratification of an appointment of Arthur [ ] [ ] [ ]
Anderson LLP as the Independent public
accountants of the Company for the
fiscal year ending March 31, 1998.

Unless otherwise specified in the squares provided, the proxies shall vote
in the election of directors for the nominees listed above and for each of the
other proposals, and shall have discretionary power to vote upon such matters as
may properly come before the meeting or any adjournment thereof.

Signature
------------------------------- --------------------------------
(Signature if held jointly)

Dated 1998
------------------------------- ,

IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you may plan to attend the meeting. When 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
president or other authorized officer. If a partnership, please
sign in partnership name by a duly authorized person.