<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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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<PAGE> 2
BLACK BOX CORPORATION
1000 PARK DRIVE
LAWRENCE, PENNSYLVANIA 15055
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 8, 2000
---------------
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 Tuesday,
August 8, 2000, at 11:00 a.m., to consider and act upon the following matters:
1. The re-election of five (5) members member of the Board of
Directors;
2. The approval of an amendment to the Company's Second Restated
Certificate of Incorporation to increase the number of
authorized shares of Common Stock of the Company from forty
million (40,000,000) to one hundred million (100,000,000);
3. The approval of an amendment to the 1992 Stock Option Plan to
increase the number of shares authorized under the Plan;
4. The approval of an amendment to the 1992 Stock Option Plan to
allow participation by key hourly employees;
5. Ratification of the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal
year ending March 31, 2001.
Stockholders also will be asked to consider such other matters as may
properly come before the meeting. The Board of Directors has established the
close of business on Friday, June 16, 2000, 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
Anna M. Baird, Secretary
June __, 2000
<PAGE> 3
BLACK BOX CORPORATION
1000 PARK DRIVE
LAWRENCE, PENNSYLVANIA 15055
---------------
PROXY STATEMENT FOR ANNUAL MEETING
OF STOCKHOLDERS
AUGUST 8, 2000
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 Tuesday, August 8, 2000, 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 June ____, 2000. A copy of the Company's Annual Report to
Stockholders for the fiscal year ended March 31, 2000 is being furnished with
this proxy statement.
Only holders of the Common Stock of record as of the close of business
on Friday, June 16, 2000 are entitled to notice of and to vote at the Annual
Meeting and any adjournment thereof. On that date, ____________ 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 other 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. At the Annual Meeting, matters, other than the
election of directors, will be decided by the affirmative vote of a majority of
the shares of Common Stock entitled to vote. Abstentions and broker non-votes
will be counted as shares present for purposes of determining whether a quorum
is present. Abstentions will count as shares entitled to vote and present in
person or by proxy at the meeting and not voting in favor of the proposal.
Broker non-votes will not count as shares entitled to vote and represented at
the meeting and will not be included in calculating the number of votes
necessary for approval of the matter.
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 AUTHORIZED SHARES OF COMMON STOCK OF THE COMPANY, FOR APPROVAL OF AN
INCREASE IN THE NUMBER OF SHARES AUTHORIZED UNDER THE 1992 STOCK OPTION PLAN,
FOR APPROVAL OF AN AMENDMENT TO THE 1992 STOCK OPTION PLAN ALLOWING
PARTICIPATION BY KEY HOURLY EMPLOYEES, 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, 2001.
<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 five (5) members.
All directors of the Company are elected each year. The Board has
nominated five (5) persons for election to the Board at the Annual Meeting.
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 2001.
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, Thomas G. Greig, William
R. Newlin, 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, 68, 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 Chairman of Northwestern Steel & Wire Co.
(steel mill-- rod wire and structurals). 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), Johnson Controls, Katy Industries,
Northwestern Steel & Wire, Dayton Superior and Trex Corporation.
THOMAS G. GREIG, 52, was elected as a director of the Company on August
10, 1999. Mr. Greig is a Managing Director of Liberty Partners, a private equity
partnership, since 1998. From 1973 to 1998, Mr. Greig worked in the investment
banking industry, principally in the technology investment banking area. He has
worked with a variety of technology companies in communications equipment,
computer systems, electronic components, semiconductors, software and
manufacturing service areas. Mr. Greig is a director of a number of privately
held companies.
WILLIAM R. NEWLIN, 59, 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 Technology Council.
The Company engaged Buchanan Ingersoll Professional Corporation to
perform legal services during fiscal 2000 and fiscal 2001.
BRIAN D. YOUNG, 45, 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.
<PAGE> 5
He was a General Partner of Odyssey Partners from February 1986 to December
1993. He is also a director of Bargo Energy Company.
FRED C. YOUNG, 44, was elected a director of the Company on December
18, 1995, President on May 9, 1997 and Chairman and Chief Executive Officer on
June 24, 1998. He also has served as Vice President from 1991 until May 1996,
Chief Financial Officer and Treasurer from 1991 until May 1997, Secretary from
1991 until May 2000, 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 4 meetings during the fiscal year
ended March 31, 2000 ("fiscal 2000"). Each director attended all meetings except
that one director attended approximately 90% of the aggregate of the number of
meetings of the Board of Directors and any committee of which he was a member.
During fiscal 2000, 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 William F. Andrews,
William R. Newlin and Brian D. Young. 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 was scheduled to meet, and did meet, twice in fiscal 2000. A copy of
the Board's Audit Committee Charter is attached to this Proxy Statement as
Annex A.
COMPENSATION COMMITTEE
The Board has a Compensation Committee, consisting of William F.
Andrews, Thomas G. Greig and Brian D. Young, 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 was
scheduled to meet, and did meet, twice in fiscal 2000.
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.
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 and to the other executive officers of the
Company at the end of fiscal year 2000 whose annual salary and bonus in fiscal
year 2000 exceeded $100,000 (the "Named Executive Officers") for each of fiscal
years 1998, 1999 and 2000, respectively. Such compensation was paid for services
rendered in all capacities to the Company and its subsidiaries:
<PAGE> 6
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
-------------------- ---------------------
AWARDS PAYOUTS
----------- ---------
SECURITIES
UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS PAYOUTS COMPENSATION(2)
------------------------------ ------ -------- --------- ----------- --------- ----------------
($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Fred C. Young, 2000 474,994 315,000(3) 195,000 -- 8,131
Chairman of the Board and 1999 400,000 380,000 195,000 -- 7,756
Chief Executive Officer (1) 1998 312,890 285,000 220,000 861,000 6,946
Anna M. Baird, 2000 160,000 150,000 45,000 -- 7,539
Vice President, Chief 1999 150,000 125,000 40,000 -- 7,168
Financial Officer, 1998 127,517 100,000 70,000 200,000 6,614
Treasurer and Secretary
Kathleen Bullions, 2000 160,000 150,000 45,000 -- 7,539
Vice President 1999 150,000 125,000 40,000 -- 7,168
of Operations 1998 124,115 100,000 70,000 200,000 6,614
</TABLE>
----------
(1) Mr. Young became Chairman to the Board and Chief Executive Officer as
of June 24, 1998.
(2) Represents amounts accrued by the employer for the individual under the
401(k) plan of the Company and payments for life insurance premiums.
(3) Mr. Young requested that he be granted options to purchase shares of
Common Stock in exchange for a reduction in the cash bonus payable to
him for fiscal 2000 from $665,000 to $315,000. On April 8, 2000, the
Compensation Committee of the Company's Board of Directors granted Mr.
Young options to purchase 20,000 shares of Common Stock in exchange for
such bonus reduction. Such options have an exercise price equal to the
fair market value of a share of Common Stock on the date of the grant
of the options.
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 4,600,000 shares of Common Stock under this plan (subject to appropriate
adjustments in the event of stock splits, stock dividends and similar dilutive
events). Currently, options and 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
150,000 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.
<PAGE> 7
The following table sets forth information concerning the stock options
granted to each of the Company's Named Executive Officers in fiscal 2000:
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>
Anna M. Baird 10,000 1.2 32.14 04/08/09 202,131 (2) 512,240 (3)
35,000 4.2 45.06 08/30/09 991,885 (4) 2,513,631 (5)
Kathleen Bullions 10,000 1.2 32.14 04/08/09 202,131 (2) 512,240 (3)
35,000 4.2 45.06 08/30/09 991,885 (4) 2,513,631 (5)
Fred C. Young 20,000 2.4 32.14 04/08/09 404,262 (2) 1,024,480 (3)
30,000 3.6 45.06 08/30/09 850,187 (4) 2,154,541 (5)
145,000 17.3 49.31 10/29/09 4,496,793 (6) 11,395,757 (7)
All Stockholders 18,440,217 32.14 372,676,786 (2) 944,507,915 (3)
18,440,217 45.06 522,595,750 (4) 1,324,191,982 (5)
18,440,217 49.31 571,831,129 (6) 1,449,216,654 (7)
</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 $52.35 per share.
(3) Assumes a fair market value of the Common Stock of $83.36 per share.
(4) Assumes a fair market value of the Common Stock of $73.40 per share.
(5) Assumes a fair market value of the Common Stock of $116.87 per share.
(6) Assumes a fair market value of the Common Stock of $80.32 per share.
(7) Assumes a fair market value of the Common Stock of $127.90 per share.
The following table sets forth information with respect to each of the
Company's Named Executive Officers concerning the exercise of options during
fiscal 2000 and unexercised options held as of March 31, 2000:
<PAGE> 8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES ACQUIRED VALUE AT FISCAL AT FISCAL
NAME ON EXERCISE REALIZED YEAR END YEAR END
------------------- --------------- --------- ---------------- ---------------------
(#) ($) (# EXERCISABLE/ ($ EXERCISABLE/
# UNEXERCISABLE) $ UNEXERCISABLE)
<S> <C> <C> <C> <C>
Fred C. Young 42,000 1,672,858 734,666/398,334 37,870,854/13,302,383
Anna M. Baird 12,000 629,985 130,999/95,001 6,302,770/3,371,236
Kathleen Bullions -0- -0- 130,999/95,001 6,314,570/3,371,236
</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:
o Hire, train, develop, compensate and retain the highest
quality executives possible for the Company's success.
o Reward executives for outstanding contributions to the
achievement of the Company's goals and overall success.
o 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 network services
companies. The cash compensation paid during fiscal 2000 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 2000 were set
in May 1999.
The primary goals for executives, in their own respective positions,
are to help the Company achieve its yearly revenues, 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 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. In making its decision,
the Compensation Committee will also consider the amount of each executive's
overall compensation which is in the form of base salary versus compensation
that is at-risk.
The increases in the compensation paid to the Company's executives also
reflect their increased responsibilities and promotions.
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 revenues 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 2000 under
this plan are set forth in the Summary Compensation Table under the caption
"Annual Compensation -- Bonus."
The Company has a long-term incentive compensation plan covering fiscal
1999, 2000 and 2001 under which it would pay awards following the completion of
the fiscal 2001 audit if the three-year targets are achieved.
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.
<PAGE> 9
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 through
fiscal 2000 pursuant to stockholder votes 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 2000 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 Employee 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 Employee 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. Fred C. Young, the
Chairman and CEO of the Company, 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 and his promotions.
The Compensation Committee believes that the increase in base salary
and grants of options to Mr. Young were appropriate for fiscal 2000 because of
the performance of the Company, his individual performance, general executive
compensation trends and the overall business environment.
SUMMARY
In the aggregate, an average of 44% of the Company's Named Executive
Officers' cash compensation for fiscal 2000 came from incentives directly
related to Company performance. The Company believes that the compensation paid
to its executives for fiscal 2000 was reasonable in view of the Company's
performance and the contributions of those executives to that performance, the
increased responsibilities undertaken by the executive team and the comparison
of their compensation with that of other direct marketing, technical services
and computer companies.
COMPENSATION COMMITTEE:
Brian D. Young
William F. Andrews
Thomas G. Greig
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
BLACK BOX NASDAQ MARKET RUSSELL 2000
CORPORATION INDEX GROUP
----------- ------------- ------------
<S> <C> <C> <C>
'3/95' 100.00 100.00 100.00
'3/96' 115.25 135.79 127.24
'3/97' 182.20 150.95 147.57
'3/98' 250.00 228.88 211.24
'3/99' 210.17 309.19 164.70
'3/00' 469.38 574.68 186.53
'4/00' 521.61 485.53 186.53
</TABLE>
The above graph represents and compares the value, through April 30,
2000, of a hypothetical investment of $100 made on March 31, 1995, in each of
(i) the Company's Common Stock, (ii) the Russell 2000 Group, (iii) the Nasdaq
Market Index assuming, in each case, the reinvestment of dividends.
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In fiscal 2000, the Compensation Committee of the Board of Directors
consisted of William F. Andrews, Thomas G. Greig and Brian D. Young, as
co-chairmen.
Mr. Brian D. Young was formerly the President of the Company from
February 1989 until January 1992.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information available to the Company as of
May 24, 2000, 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>
FMR Corp. (1)........................................... 2,279,800 14.7
82 Devonshire Street, Boston, Massachusetts 02109
Capital Research and Management Company (2)............. 1,648,300 8.9
333 S. Hope Street, Los Angeles, California 90071
</TABLE>
----------
(1) Includes 2,520,924 shares beneficially owned by Fidelity Management &
Research Company, a wholly-owned subsidiary of FMR Corp., 1,420,000 of
which are owned by one investment company, Fidelity Low-Priced Stock
Fund. Also includes 321,600 shares owned by Fidelity Management Trust
Company, a wholly-owned subsidiary of FMR Corp. FMR Corp. and Edward C.
Johnson 3d each has sole dispositive power over all such shares and
sole voting power over 321,600 shares. Fidelity Low-Priced Stock Fund
has the sole power to vote 1,420,000 shares. The sole power to vote the
remainder of the shares resides with the funds holding such shares. All
information is derived from FMR Corp.'s Schedule 13G, Amendment No. 3,
filed on February 14, 2000.
(2) All shares are held without voting power and with sole dispositive
power. All information is derived from Capital Research and Management
Company's Schedule 13G, Amendment No. 2, filed on February 10, 2000.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information available to the
Company as of April 30, 2000, 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)............................ 24,667 *
Anna M. Baird (2)................................. 131,206 *
Kathleen Bullions (2)............................. 135,000 *
Thomas G. Greig (1) .............................. 1 *
William R. Newlin (1)............................. 31,867 *
Brian D. Young (1)................................ 24,667 *
Fred C. Young (2)................................. 742,071 4.0
All directors and executive officers as a group
(7 persons) (1)-(2)............................. 1,089,479 5.9
</TABLE>
----------
(1) Includes, for Mr. Andrews, Mr. Newlin, and for Mr. Brian D. Young,
16,666, 11,666 and 11,666 shares, respectively, pursuant to rights to
acquire such shares as a result of options granted pursuant to the
Director Plan.
(2) Includes, for Ms. Baird, Ms. Bullions and Mr. Fred C. Young, and for
all directors and executive officers as a group, 130,999, 130,999,
734,660 and 1,036,662 shares, respectively, acquirable within 60 days
of April 30, 2000, pursuant to options granted under the Employee Plan
and the Director Plan.
* Represents less than 1% of the Common Stock outstanding.
<PAGE> 11
PROPOSAL 2
ADOPTION OF AMENDMENT TO THE COMPANY'S
SECOND RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Article FOURTH of the Company's Second Restated Certificate of
Incorporation gives the Company the authority to issue Forty-Five Million
(45,000,000) shares of all classes of stock in the aggregate as follows: Forty
Million (40,000,000) shares of Common Stock and Five Million (5,000,000) shares
of Preferred Stock. Management and the Board recommend that the stockholders
amend Article FOURTH of the Company's Second Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock to One
Hundred Million (100,000,000) shares. This will increase the aggregate number of
shares of all classes of stock that the Company may issue to One Hundred Five
Million (105,000,000). No stockholder of the Company has any preferential,
preemptive or other rights of subscription to any shares of the Company allotted
or sold or to be allotted or sold or to any obligations or securities
convertible into stock of the Company.
Of the Forty Million (40,000,000) shares of the Company's Common Stock
now authorized for issuance, 18,611,582 shares were issued and outstanding as of
May 26, 2000, and an additional 3,288,533 shares of Common Stock were reserved
to be issued under the Company's stock option plans and for past acquisitions of
other companies. In addition, if the amendments to the Company's Employee Plan
are approved by the Company's stockholders at the Annual Meeting, an additional
850,000 shares of Common Stock will be reserved for issuance. Therefore, the
Company has only 17,249,885 authorized but unissued, unreserved and uncommitted
shares of Common Stock available for issuance. An increase will allow the
Company greater flexibility to effect stock splits, issue stock dividends that
may be declared in the future, use stock for future acquisitions, issue stock
and stock options under employee benefit plans and issue stock for other general
corporate purposes. The increase will enable the Company to effect such purposes
without the delay and expense of a special meeting of stockholders.
ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
PROPOSAL 2, WHICH IS THE FOLLOWING PROPOSED AMENDMENT TO ARTICLE FOURTH OF THE
COMPANY'S SECOND RESTATED CERTIFICATE OF INCORPORATION:
FOURTH: (a) the total number of shares of all classes of stock which
the Corporation shall have the authority to issue is 105,000,000 shares,
consisting of:
(i) 5,000,000 shares of Preferred Stock, par value $1.00 per
share, and
(ii) 100,000,000 shares of Common Stock, having a par value of
$.001 per share.
The holders of shares of Common Stock shall have one (1) vote for each share of
Common Stock held of record on each matter submitted to the holders of shares of
Common Sock.
It should be noted that the availability of additional shares of Common Stock
may make it more difficult to effect, or may discourage an attempt, to gain
control of the Company by means of a merger, tender offer, or proxy contest that
is not approved by the Company's management because it could be used to dilute
the percentage stock ownership of persons seeking to obtain control of the
Company. In this sense, the proposal to increase the number of authorized shares
of Common Stock may have an anti-takeover effect, although the Board of
Directors does not view or intend the proposed amendment to have an
anti-takeover effect
A vote FOR Proposal 2 by a majority of the shares represented and eligible to
vote at the Meeting, in person or by proxy, is required to adopt the proposed
amendment to Article FOURTH of the Company's Second Restated Certificate of
Incorporation.
IT IS INTENDED THAT, UNLESS OTHERWISE INSTRUCTED, THE SHARES REPRESENTED BY THE
PROXY WILL BE VOTED IN FAVOR OF ADOPTING THE AMENDMENT TO ARTICLE FOURTH OF THE
COMPANY'S SECOND RESTATED CERTIFICATE OF INCORPORATION.
<PAGE> 12
PROPOSAL 3
APPROVAL OF AMENDMENT TO COMPANY EMPLOYEE STOCK OPTION PLAN
In November 1992, the Board of Directors and stockholders adopted the
Employee Plan. 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 ___, 2000 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 850,000 shares, thereby increasing the
aggregate number of shares which would be available for the grant of options or
stock appreciation rights from 4,600,000 to 5,450,000.
If the amendment to the Employee Plan is approved, the Company intends
to broaden the scope of the employees who will receive options. In particular,
the Company expects that granting options to certain supervisory and other key
employees will allow it to reduce future annual salary costs in excess of
$300,000 in the aggregate. These salary controls, coupled with the increase in
option grants, will result in such supervisory and key employees having a
greater percentage of their overall compensation at-risk. The Company expects to
grant to such employees options having an exercise price equal to the fair
market value of one share of Common Stock on the date of grant.
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,
Black Box employees would own 14% of the outstanding shares, assuming all
options were exercised. The proposed increase in the shares available for
issuance would increase that percentage to 17%. 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 that 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 in person or by proxy at the meeting is required to approve the
amendment to the Employee Plan.
Because executive officers (one of whom also is a member 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 3.
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 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.
<PAGE> 13
ELIGIBILITY. Under the current language of the Employee Plan, 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"), or in the case of a Non-Qualified Stock Option, 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; and (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.
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 (a) while in the employ of the Company or (b)
within three (3) months of retirement from such employment or (c) 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.
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.
<PAGE> 14
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.
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. If the shares were held more than 12 months as of the sale
date, the gain is taxable as a long-term capital gain at a maximum rate of 20%.
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.
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.
<PAGE> 15
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 Non-Qualified 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.
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 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 gain is taxable as a long-term
capital gain at a maximum rate of 20%.
A maximum capital gains rate of 18% will apply to certain sales after
December 31, 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 be considered Incentive Stock Option stock with a zero
basis.
PROPOSAL 4
APPROVAL OF AMENDMENT TO COMPANY EMPLOYEE STOCK OPTION PLAN
In conjunction with the proposed increase in the number of options
available for grant, the Company intends to broaden the scope of employees
eligible to participate in the Employee Plan. Currently, the Employee Plan
contemplates that options may only be issued to key salaried employees. However,
the Board feels that certain hourly employees also are vital to the Company's
success, but are prohibited from participating in the Employee Plan. The Board
believes that including hourly employees as eligible participants in the
Employee Plan will help in aligning the hourly employees' interests with those
of the Company, which could have the effect of attaining and exceeding corporate
goals. The Board also believes that such an amendment will aid in the
attraction, retention and motivation of key hourly employees. Therefore, the
Board believes that the proposal to amend the Employee Plan to include hourly
employees as well as salaried employees is in the best interests of the Company.
The affirmative vote by the holders of a majority of the shares of Common Stock
entitled to vote and present in person or by proxy at the meeting is required to
approve the amendment to the Employee Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR APPROVAL OF PROPOSAL 4.
PROPOSAL 5
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, 2001. The affirmative vote of a majority of the shares of Common Stock
entitled to vote on this matter and present in person or by proxy at the meeting
is required for the ratification of such appointment.
<PAGE> 16
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, 2001. 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 5.
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, 2000, 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.
SOLICITATION OF 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 NOMINATIONS AND PROPOSALS
Stockholders who believe they are eligible to have their proposals
included in the Company's proxy statement for the annual meeting expected to be
held in August 2001, in addition to other applicable requirements established by
the SEC, must ensure that their proposals are received by the Secretary of the
Company not later than February __, 2001.
The By-laws of the Company establish an advance notice procedure for
eligible Stockholders to make nominations for director and to propose business
to be transacted at an annual meeting. The Company's By-laws provide that
nominations for director and proposals for business must be given to the
Secretary of the Company not later than 150 days prior to the anniversary date
of the prior year's annual meeting. The Company's By-laws also require that
certain specific information accompany a stockholder notice of nomination or
proposal for business. The Company's By-laws, however, do not limit or restrict
the ability of a stockholder to present any proposal made by such stockholder in
accordance with the SEC requirements referred to above. A copy of the Company's
By-laws is available from the Company upon request.
OTHER MATTERS
Management does not intend to present, nor, in accordance with the
Company's By-laws, has it received proper notice from any person who intends to
present, any matter for action by stockholders at the Annual Meeting, other than
as stated in the Notice of Annual Meeting of Stockholders accompanying this
Proxy Statement. The enclosed proxy, however, confers discretionary authority
with respect to the transaction of any other business which properly may come
before the meeting, and it is the intention of the persons named in the enclosed
proxy to vote on any such matters in accordance with their best judgment.
<PAGE> 17
ANNEX A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
BLACK BOX CORPORATION
I. PURPOSE
The primary purpose of the Audit Committee (the "Committee") of the
Board of Directors (the "Board") of Black Box Corporation ("Black Box") or (the
"Company") is to provide independent objective oversight of the financial
reporting functions and internal, controls of Black Box Corporation and its
subsidiaries to oversee the objectivity of its financial statements. The
Committee and the Board shall have the ultimate authority and responsibility to
select, evaluate and, where appropriate, replace the independent accountants.
II. FUNCTIONS
The Audit Committee shall:
1. INDEPENDENT ACCOUNTANTS - Select, evaluate and replace the
independent accountants to be employed by the Company. The
Committee will also recommend for approval the proposed annual
audit fees. The independent accountants shall be ultimately
accountable to the Committee and the Board.
2. PLAN OF AUDIT - Consult with the independent accountants
regarding the plan of audit. The Committee also shall review with
the independent accountants both their audit report(s) and the
independent accountants' suggested changes or improvements in the
Company's accounting practices and internal controls.
3. ACCOUNTING PRINCIPLES AND DISCLOSURE - Review with the independent
accountants and Black Box management any significant proposed
changes in accounting principles and financial statements.
4. INTERNAL ACCOUNTING CONTROLS - Consult with the independent
accountants regarding the adequacy of internal accounting
controls.
5. FINANCIAL REPORTING - Conduct quality of earnings discussions with
the independent accountants and appropriate members of management,
including the Chief Financial Officer and Controller.
6. OVERSIGHT OF INDEPENDENT ACCOUNTANTS - Ensure that the independent
accountants submit to the Committee a formal written statement
regarding relationships and services, which may affect objectivity
and independence. It will also discuss matters it deems relevant
with the independent accountants and oversee the independence of
the accountants.
<PAGE> 18
7. REVIEW AND REASSESSMENT - Review and reassess the adequacy of
this Charter at least annually. Submit the Charter to the Board of
Directors for approval and have the document published in
accordance with applicable Securities and Exchange Commission and
NASD regulations.
III. COMPOSITION & INDEPENDENCE
The Committee shall consist of not less than three members, appointed
by the Board, each of whom is independent and can read and understand
fundamental financial statements. At least one member of the Committee shall
have past employment experience in finance and accounting, requisite
professional certification in accounting, or other comparable experience or
background. No member of the Committee shall be employed or otherwise affiliated
with the Company's independent accountants.
IV. QUORUM AND MEETINGS
A quorum of the Committee shall be declared when a majority of the
appointed members of the Committee are in attendance. It is expected that the
Committee will meet at least twice per year, usually in May and November. The
Committee may ask members of management to attend the meeting and to provide
pertinent information as necessary.
V. Reports
The Committee may provide a report to the full Board after each
Committee meeting. The Committee may keep minutes of its meetings and will make
any such minutes available for the full Board of its review.
The Committee shall provide a written report to the stockholders in the
company's proxy statement for its annual meeting whether the Committee has
satisfied its responsibilities under this Charter.
VI. SCOPE OF DUTIES
While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan, direct or
conduct audits, or to determine whether the Company's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditors. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditors or to assure compliance with laws and regulations and any internal
rules or codes of conduct of the Company.
<PAGE> 19
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 2000 Annual Meeting of Stockholders of the Company, to be held on
Tuesday, August 8, 2000, 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> 20
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, 4 and 5.
FOR WITHHOLD
1. Election of five (5) [ ] [ ] Nominees: William F. Andrews
Board of Directors: Thomas G. Greig
Board of Directors: William R. Newlin
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 [ ] [ ] [ ]
Company's Second Restated Certificate
of Incorporation to increase the
number of authorized shares of Common
Stock of the Company;
FOR AGAINST ABSTAIN
3. The approval of an amendment to the 1992 [ ] [ ] [ ]
Stock Option Plan to increase
the number of shares authorized under
the Plan;
FOR AGAINST ABSTAIN
4. The approval of an amendment to the 1992 [ ] [ ] [ ]
Stock Option Plan to allow participation
by key hourly employees; and
FOR AGAINST ABSTAIN
5. Ratification of an appointment of Arthur [ ] [ ] [ ]
Andersen LLP as the Independent public
accountants of the Company for the
fiscal year ending March 31, 2001.
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 other
matters as may properly come before the meeting or any adjournment thereof.
The Board of Directors has established the close of business on Friday, June 16,
2000, as the record date for the determination of the stockholders entitled to
notice of and to vote at the Annual Meeting.
Signature
------------------------------- --------------------------------
(Signature if held jointly)
Dated 2000
-------------------------------,
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.
