. AVX
. NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
. TO BE HELD JULY 18, 1996
AVX CORPORATION
. 801 17TH AVENUE SOUTH
. MYRTLE BEACH, SOUTH CAROLINA 29577
To our Shareholders:
The Annual Meeting of Shareholders of AVX Corporation, a
Delaware corporation, will be held at the Kingston Plantation
Radisson Resort, 9800 Lake Drive, Myrtle Beach, South Carolina,
on Thursday, July 18, 1996, at 10:00 a.m., for the purpose of
acting upon the following matters, as well as such other
business as may properly come before the Annual Meeting or any
adjournment thereof:
. 1. To elect thirteen directors;
. 2. To ratify the appointment of Coopers & Lybrand, L.L.P.
as the Company's independent auditors for the fiscal year
commencing April 1, 1996; and
. 3. To transact any other business that may properly come
before the Annual Meeting or any adjournment thereof.
Only shareholders of record on the books of the Company on May
25, 1996, will be entitled to vote at the Annual Meeting or any
adjournment thereof.
. In order that your shares of stock may be represented at the
Annual Meeting, please date and sign the enclosed proxy card and
return it promptly in the enclosed envelope. If you attend the
Annual Meeting, you may vote in person even though you have
previously sent in your proxy card.
/s/ John S. Gilbertson
John S. Gilbertson
Corporate Secretary
Myrtle Beach, South Carolina
June 4, 1996
. YOUR VOTE IS IMPORTANT
. PLEASE COMPLETE, DATE AND SIGN YOUR PROXY CARD AND
. PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
. AVX Corporation
. 801 17th Avenue South, Myrtle Beach, SC 29577
. ____________________
. PROXY STATEMENT
. Annual Meeting of Shareholders
. To be held July 18, 1996
. ____________________
This Proxy Statement is furnished to the shareholders of AVX
Corporation ("AVX" or the "Company") in connection with the
solicitation on behalf of the Board of Directors (the "Board")
of proxies to be used at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held on July 18, 1996, at 10:00 a.m., at
the Kingston Plantation Radisson Resort, 9800 Lake Drive, Myrtle
Beach, South Carolina and any adjournment thereof. The Company
expects that this Proxy Statement, with the accompanying proxy
and the Annual Report for fiscal year ended March 31, 1996, will
be mailed to shareholders on or about June 5, 1996.
Each share of AVX Corporation common stock, par value $.01,
("Common Stock") outstanding at the close of business on May 24,
1996, will be entitled to one vote on all matters acted upon at
the Annual Meeting. On May 25, 1996, the date for determining
shareholders entitled to vote at the Annual Meeting, 88,000,000
shares of Common Stock were outstanding.
Shares will be voted in accordance with the instructions
indicated in a properly executed proxy. In the event that the
voting instructions are omitted on any such proxy, the shares
represented by such proxy will be voted as recommended by the
Board. Shareholders have the right to revoke their proxies at
any time prior to a vote being taken, by (i) delivering written
notice of revocation before the Annual Meeting to the Corporate
Secretary at the Company's principal offices; (ii) executing a
proxy bearing a later date or time than the proxy being revoked
provided the new proxy is received by Wachovia Bank of South
Carolina (which will have a representative present at the Annual
Meeting); or (iii) voting in person at the Annual Meeting.
The presence at the Annual Meeting, in person or by proxy, of
shareholders holding in the aggregate a majority of the
outstanding shares of the Company's Common Stock entitled to
vote shall constitute a quorum for the transaction of business.
Proxies indicating stockholder abstentions will, in accordance
with Delaware law, be counted as represented at the Annual
Meeting for purposes of determining whether there is a quorum
present, but will not be voted for or against the proposal.
However, the effect of marking a proxy for abstention on any
proposal, other than the election of directors, has the same
effect as a vote against the proposal. Shares represented by
"broker non-votes" (i.e., shares held by brokers or nominees
that are represented at a meeting but with respect to which the
broker or nominee is not empowered to vote on a particular
proposal) will be counted for purposes of determining whether
there is a quorum, but will not be voted on such matter and will
not be counted for purposes of determining the number of votes
cast on such matter. With respect to any matter brought before
the Annual Meeting requiring the affirmative vote of a majority
or other proportion of the outstanding shares, an abstention or
broker non-vote will have the same effect as a vote against the
matter being voted upon.
The Company has been informed by the Trustee for the Company's
Stock Bonus Plans and the Deferred Compensation Plan that shares
of Common Stock held by the Trustee for such plans will be voted
by the Trustee in accordance with instructions received from the
participants, and if no instructions are received, such shares
will be voted in the same proportion as shares for which
instructions are received from other participants in the plan.
At the date of this Proxy Statement, management does not know
of any matter to be brought before the Annual Meeting for action
other than the matters described in the Notice of Annual Meeting
and matters incident thereto. If any other matters should
properly come before the Annual Meeting, the holders of the
proxies will vote and act with respect to such matters in
accordance with their best judgment. Discretionary authority to
do so is conferred by the enclosed proxy.
. PROPOSAL I
. ELECTION OF DIRECTORS
The following thirteen directors have been nominated by the
Board. All the proposed nominees are currently directors of the
Company. Unless contrary instructions are given, it is intended
that the votes represented by the proxies will be cast for the
election of the persons listed below as directors. In the event
that any of the nominees should become unavailable, the Board
may designate a substitute. It is intended that all properly
executed and returned proxies will be voted for such substitute
nominee. All directors hold office until the next Annual
Meeting of shareholders or until their successors have been duly
elected and qualified.
KAZUO INAMORI Age 64 Chairman of the Board since the Company's
acquisition by Kyocera Corporation ("Kyocera") in
January 1990. Chairman of the Board of Kyocera,
which he founded in 1959.
BENEDICT P. ROSEN Age 60 President and Chief Executive Officer
of the Company since April 1993 and a member
of the Board since January 1990. Executive
Vice President from February 1985 to March 1993
and employed by the Company since 1972. Senior
Managing and Representative Director of Kyocera
since June 1995 and previously served as a
Managing Director of Kyocera from 1992 to June
1995. Director of Nitzanim-AVX/Kyocera-Venture
Capital Fund Ltd. and Aerovox Corporation
JOHN S. GILBERTSON Age 52 Executive Vice President and Chief
Operating Officer of the Company since April 1994,
Corporate Secretary of the Company since April 1996
and a member of the Board since January 1990.
Executive Vice President from April 1992 to March
1994, Senior Vice President from September 1990 to
March 1992 and employed by the Company since 1981.
Director of Kyocera since June 1995. Director of
MDT Corporation
DONALD B. CHRISTIANSEN Age 57 Vice President of Finance, Chief
Financial Officer and Treasurer of the
Company since April 1994 and a member of the
Board since April 1992. Chief Financial
Officer from March 1992 to April 1994.
Prior to joining the Company in 1992,
employed for 33 years in various financial
positions, including Vice President of
Finance and Chief Financial Officer,
with Sprague Technologies, Inc., an
electronic components manufacturer.
MARSHALL D. BUTLER Age 69 Member of the Board since December
1973 and Chairman of the Board from December
1973 to January 1990. Chief Executive Officer
from December 1973 until his retirement from
the Company in March 1993. Director of Kyocera
from 1990 to June 1995. Chairman of the Board
of Nitzanim-AVX/Kyocera-Venture Capital Fund
Ltd. and Alpha Technologies Group,
Incorporated and a Director of MassMutual
Corporate Investors and MassMutual
Participation Investors.
CARROLL A. CAMPBELL, JR. Age 56 Member of the Board since August
1995. Presently President and Chief
Executive Officer of the American Council
of Life Insurance. Governor of South
Carolina from January 1987 to January 1995.
Director of Fluor Corporation and DART, Inc.
KENSUKE ITOH Age 58 Member of the Board since January 1990.
President of Kyocera since June 1989 and a
Representative Director of Kyocera since 1985.
RODNEY N. LANTHORNE Age 51 Member of the Board since January
1990. President of a United States
subsidiary of Kyocera since January 1987.
A Managing Director of Kyocera since 1990.
MASATO TAKEDA Age 52 Member of the Board since February 1993.
Director of Kyocera since June 1991.
Employee of Kyocera since 1979.
RICHARD TRESSLER Age 54 Member of the Board since October 1995.
Professor and head of the Department of
Material Science and Engineering at
Pennsylvania State University since 1991.
MASAHIRO UMEMURA Age 52 Member of the Board since January 1990.
General Manager of the Corporate Development
Group of Kyocera since June 1992 and
Managing Director of Kyocera since June
1993. Executive Vice President and
Treasurer of a United States
subsidiary of Kyocera from April
1986 to June 1992.
MASAHIRO YAMAMOTO Age 54 Member of the Board since February
1993. Senior Managing and Representative
Director of Kyocera since June 1995.
Employee of Kyocera since 1977.
YUZO YAMAMURA Age 54 Member of the Board since July 1995.
President of Kyocera Elco Corporation,
a subsidiary of Kyocera. Senior Managing
and Representative Director of Kyocera since
June 1995. Employee of Kyocera since 1965.
. Ownership of Securities by Directors and Officers
The Common Stock is the only class of equity securities of the
Company outstanding. As of March 31, 1996, the directors of the
Company and each executive officer named in the Summary
Compensation Table, individually, and all directors and
executive officers of the Company as a group beneficially owned
shares of Common Stock of the Company as follows:
<TABLE>
<CAPTION>
. Amount of Beneficial Ownership
Name of Direct &
Beneficial Indirect Percent of
Owner Ownership <F1> Class
<S> <C> <C>
Kazuo Inamori 0 *
Benedict P. Rosen 40,398 *
John S. Gilbertson 45,137 *
Donald B. Christiansen 5,081 *
C. Marshall Jackson 175 *
Kim Ritchie 7,713 *
Marshall D. Butler 3,000 *
Carroll A. Campbell, Jr. 500 *
Kensuke Itoh 66,150,000 75.2% <F2>
Rodney N. Lanthorne 1,500 *
Masato Takeda 0 *
Richard Tressler 0 *
Masahiro Umemura 0 *
Masahiro Yamamoto 0 *
Yuzo Yamamura 0 *
All directors and
executive officers
as a group (a total
of 22 individuals
including those named
above) 66,296,413 75.3% <F2>
* Less than 1%
<FN>
<F1>
Does not include any options granted under the 1995 Stock
Option Plan and the Non-Employee Directors Stock Option Plan
because as of March 31, 1996 none of these options granted were
exercisable within 60 days.
<F2>
Includes the 66,150,000 shares of Common Stock owned
directly or indirectly by Kyocera as to which Mr. Itoh, as
President and Representative Director of Kyocera, may be deemed
to have voting and investor power.
</FN>
</TABLE>
The information provided in the above chart as to each director
and named executive officer, individually, and all directors and
executive officers as a group, is based on information received
from such individuals. However, the listing of such shares is
not necessarily an admission of beneficial ownership by the
person. Unless otherwise indicated in the footnotes, such
individuals held, together with certain members of their family,
sole voting and investment power over the shares.
Security Ownership of Certain Beneficial Owners
Set forth below is a table indicating those persons whom the
management of the Company believes to be beneficial owners of
more than 5% of any class of the Company's securities as of May
25, 1996.
Name and Address Shares
of Beneficial Owner Beneficially Percent
Owned of class
Kyocera Corporation
5-22 Kitainoue-cho
Higashino Yamashina-ku,
Kyoto 607, Japan 66,150,000 75.2%
Except for Mr. Itoh, who may be deemed to beneficially own the
shares held by Kyocera as a result of his voting and investment
power of these shares, to the best of the Company's knowledge,
as of May 25, 1996, no other person owned more than 5% of the
outstanding voting securities of the Company.
Compliance With Section 16(a) of the Securities Exchange Act of
1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and officers, and persons who own more
than 10% of the Company's Common Stock, to file reports of
ownership and changes in ownership of any class of the Company's
registered equity securities with the Securities and Exchange
Commission and the New York Stock Exchange. The Company
believes that during fiscal year ended March 31, 1996, all
Section 16(a) filing requirements applicable to its directors
and officers were complied with.
. Board of Directors -Meetings Held and Committees
The Board held four meetings during fiscal year ended March 31,
1996. During that period, all the directors attended more than
75% of the meetings of the Board and meetings of the committees
of the Board on which they served, except Messrs. Takeda,
Yamamoto and Yamamura who are residents of Japan and are
representatives on the Board for Kyocera. Because of time and
logistics to travel, Messrs. Yamamoto and Yamamura only
attended one Board meeting and Mr. Takeda did not attend any
Board meetings.
The Board has the following standing committees:
Executive Committee. The Executive Committee has been, and
from time to time is, delegated authority by the Board to
exercise the powers of the Board in matters pertaining to the
management of the business. The Executive Committee did not
hold any meetings during fiscal year ended March 31, 1996. The
members of the Executive Committee are Messrs. Inamori
(Chairman), Rosen, Butler, Lanthorne and Umemura.
Audit Committee. The functions of the Audit Committee include
(a) making recommendations to the full Board as to engagement of
the Company's independent auditors, (b) reviewing with the
independent auditors the plan and results of the audit
engagement, (c) reviewing the scope and results of the Company's
internal audit procedures, and (d) reviewing proposed audit fees
and other fees of the independent auditors. The Audit
Committee held one meeting during fiscal year ended March 31,
1996. The members of the Audit Committee are Messrs. Butler
(Chairman), Campbell and Tressler.
Compensation Committee. The Compensation Committee has the
full power and authority of the Board with respect to the
determination of compensation for all executive officers of the
Company. The Compensation Committee also has full power and
authority over any compensation plan approved by the Board,
including the issuance of shares of Common Stock, as such
Compensation Committee may deem necessary or desirable in
accordance with such compensation plans. The Compensation
Committee held one meeting during the fiscal year ended March
31, 1996. The members of the Compensation Committee are Messrs.
Inamori (Chairman), Itoh, Campbell and Tressler.
Special Advisory Committee. The Special Advisory Committee is
required to review and approve all material contracts and
transactions between the Company and related parties. The
Special Advisory Committee did not hold any meetings during
fiscal year ended March 31, 1996. The members of the Special
Advisory Committee are Messrs. Campbell (Chairman), Butler and
Tressler.
. Compensation of Directors
Each director who is not an employee of the Company or Kyocera
is paid an annual director's fee of $30,000, an attendance fee
of $2,500 per Board meeting and reimbursement of travel
expenses. Non-employee directors who are required to attend
committee meetings will receive $2,500 in addition to reasonable
expenses for each meeting attended. In addition, each director
who is not an employee of the Company is granted stock options
pursuant to the 1995 Non-Employee Directors Stock Option Plan.
Pursuant to an Employment Agreement dated January 18, 1990, Mr.
Butler served as chief executive officer of the Company through
March 31, 1993, in which capacity he received compensation of
$1,200,000 in the fiscal year ended March 31, 1993. In
accordance with that Agreement, he was retained as an advisor
for the four years ending March 31, 1997, for a fee of $300,000
per year. That Employment Agreement was terminated effective
July 31, 1995, in exchange for payment of $428,000.
Non-Employee Directors Stock Option Plan
Pursuant to the 1995 Non-Employee Directors Stock Option Plan
adopted by the Company, options are granted to members of the
Board who are not employees of the Company (a "Non-Employee
Director") for the purchase of an aggregate of up to 100,000
shares of Common Stock. The 1995 Non-Employee Directors Stock
Option Plan is administered by the Board.
Each Non-Employee Director serving on the Board on August 14,
1995, and each other Non-Employee Director subsequently elected
for the first time shall automatically receive an option for
7,500 shares of Common Stock (the "Initial Option"). Beginning
in the year in which the fifth anniversary of the grant of the
Initial Option occurs and in each year thereafter, each
Non-Employee Director who has been re-elected as a member of the
Board shall automatically receive an additional option for 1,000
shares of Common Stock. Each Initial Option granted under the
1995 Non-Employee Directors Stock Option Plan will vest at the
rate of 25% of the shares subject to the initial grant
commencing on the first anniversary of the date of grant, so
that such Initial Options will be fully vested as of the fourth
anniversary of the initial grant. All options other than
Initial Options become exercisable in full beginning on the
first anniversary of the date of the grant of the option. In
the event the Non-Employee Director ceases to be a director by
reason of retirement, incapacity or death, the total number of
shares of Common Stock covered by option grants shall thereupon
become exercisable; otherwise, options granted shall
automatically be forfeited if such person shall cease to be a
director. Retirement shall mean resignation from the Board upon
reaching retirement age or otherwise resigning or not standing
for re-election with the approval of the Board but shall not
include any termination of service as a result of fraud,
intentional misrepresentation, embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any
majority owned subsidiary. The 1995 Non-Employee Directors
Stock Option Plan requires that options granted thereunder will
expire on the date which is ten years after the date of grant.
All options granted to Non-Employee Directors have an exercise
price equal to the average of the high and low sales prices of
the Common Stock as reported on the New York Stock Exchange
Composite Transactions Tape on the date of the grant. Options
may be exercised by the payment of cash, the tendering of shares
of Common Stock or a combination of cash and shares. Options
granted under the 1995 Non-Employee Directors Stock Option Plan
are not assignable.
Unless sooner terminated by action of the Board, the 1995
Non-Employee Directors Stock Option Plan will terminate on
August 1, 2005. Subject to certain exceptions, the 1995
Non-Employee Directors Stock Option Plan may be amended or
discontinued by the Board without stockholder approval.
Federal Income Tax Consequences
There are no Federal tax consequences either to the
Non-Employee Directors or to the Company upon the grant of an
option. On exercise of an option, the excess of the
date-of-exercise fair market value of the shares acquired over
the option price will generally be taxable to the Non-Employee
Director as ordinary income and deductible by the Company. The
disposition of shares acquired upon exercise of the option
generally result in a capital gain or loss for the Non-Employee
Director but will have no tax consequences for the Company.
. Executive Compensation
Cash Compensation
The following table shows cash compensation paid and certain
other compensation paid or accrued, by the Company during the
fiscal years ended March 31, 1996, 1995, and 1994, to each of
the Company's five most highly compensated executive officers,
including the Chief Executive Officer, in all capacities in
which they served. All individuals included in the table were
executive officers of the Company as of March 31, 1996, and at
all times during the periods shown.
<TABLE>
<CAPTION>
. SUMMARY COMPENSATION TABLE
. Number of
Other Securities All
Annual Underlying Other
Fiscal Salary Bonus Compensation Options Compensation
Name & Position Year ($) ($) ($) (#) ($)
S> <C> <C> <C> <C> <C> <C>
<F1> <F2>
Benedict P. Rosen 1996 $465,000 $730,716 $15,484 150,000 $31,963
President 1995 450,000 762,830 3,788 31,721
Chief Executive Officer 1994 420,000 425,052 6,190 19,500
John S. Gilbertson 1996 322,500 505,470 9,056 125,000 32,019
Executive Vice President 1995 300,000 471,280 8,919 31,721
Chief Operating Officer 1994 270,000 231,157 7,835 19,500
Donald B. Christiansen 1996 190,000 136,530 10,307 100,000 31,940
Chief Financial Officer 1995 178,000 99,240 9,639 30,972
Vice President 1994 166,000 70,000 8,596 19,500
C. Marshal Jackson 1996 170,000 134,797 8,303 100,000 30,750
Senior Vice President of 1995 158,000 122,640 8,357 26,303
Marketing 1994 145,000 90,071 7,619 19,500
Kim Ritchie 1996 203,000 98,640 9,566 50,000 19,583
Senior Vice President 1995 192,000 95,360 9,476 28,818
Technology 1994 160,000 82,794 9,295 19,500
<FN>
<F1>
The stock options granted during the fiscal year ended March
31, 1996, were grated pursuant to the 1995 Stock Option Plan.
<F2>
All other Compensation includes: (i) the Company's contribution on
behalf of the respective executive officer pursuant to the terms of the AVX
Corporation Deferred Compensation Plan ("DCP"), AVX Corporation
Stock Bonus Plan ("Bonus Plan") and the AVX Corporation
Retirement Plan ("Savings Plan"). The table below sets forth
the component of All Other Compensation described above, for the
fiscal year ended March 31, 1996, for the above named executive
officers:
</FN>
</TABLE>
DCP Bonus Plan Savings Plan
........ .......... ............
Benedict P. Rosen $12,350 $4,613 $15,000
John S. Gilbertson 12,350 4,669 15,000
Donald B. Christiansen 12,350 4,590 15,000
C. Marshal Jackson 12,350 3,400 15,000
Kim Ritchie _ 4,583 15,000
Stock Options Grants
The following table provides certain information concerning the
grant of options during the fiscal year ended March 31, 1996 to
the executive officers named in the summary Compensation Table.
In addition, hypothetical gains or spreads, calculated based on
assumed rates of annual compounded stock price appreciation of
5% and 10% over the term of the option, have been included in
the table.
<TABLE>
<CAPTION>
. Options Granted During the Fiscal Year Ended March 31, 1996
. Individual Grants <F1> <F2>
Number of % Total
Securities Options Potential Realizable Value
Underlying Granted Exercise Assumed Annual Rates Of Stock
Options Employees Base Price Expiration Appreciation for Option Term
Name Granted In Fiscal Year ($/share) <F3> Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Benedict P. Rosen 150,000 14.0% $25.50 8/15/05 $2,406,000 $6,096,055
John S. Gilbertson 125,000 11.7 25.50 8/15/05 2,005,000 5,080,000
Donald B. Christiansen 100,000 9.4 25.50 8/15/05 1,604,000 4,064,000
C. Marshal Jackson 100,000 9.4 25.50 8/15/05 1,604,000 4,064,000
Kim Ritchie 50,000 4.7 25.50 8/15/05 802,000 2,032,000
<FN>
<F1>
Each option was granted on August 14, 1995, to purchase
shares of Common Stock. Twenty five percent of the shares
subject to the options become exercisable one year from the date
of grant and 25% become exercisable on each of the three
succeeding anniversaries, provided the optionee continues to be
employed by the Company or any of its subsidiaries. Upon the
optionee's voluntary termination for any reason other than
death, retirement or incapacity or upon his or her termination
by the Company or any subsidiary for cause, the option shall
immediately terminate. In the event the optionee's employment is
terminated by the Company for any reason other than cause, only
those options exercisable as of the date of the optionee's
termination may be exercised during the 90-day period following
such termination date; except that, upon termination by (i)
retirement after age 55, (ii) disability, any not then
exercisable shall, (a) at the discretion of the Compensation
Committee, become immediately exercisable and (b) shall be
exercised, to the extent vested, including options vested under
(a) above, during the one-year period following such
termination: provided that in no event shall options be
exercisable after the expiration of 10 years from the date of
grant. The actual value an optionee receives is dependent on
future stock market conditions, and there an be no assurance
that the amounts reflected in the right hand columns of the
table will actually be realized. No gain to the optionee is
possible without an appreciation in the stock value which will
benefit all shareholders commensurately.
<F2>
The options were granted pursuant to the 1995 Stock Option
Plan which do not provided for tandem or stand alone stock
appreciation rights.
<F3>
Payment for shares of Common stock upon exercise of a stock
option may be made in cash, or with the Company's consent shares
of Common Stock or a combination of cash and shares of Common
Stock.
</FN>
</TABLE>
Stock Option Plan
Pursuant to the 1995 Stock Option Plan adopted by the Company,
options may be granted to officers and key employees for the
purchase of up to an aggregate of 1,550,000 shares of Common
Stock. The 1995 Stock Option Plan is administered by the
Compensation Committee which determines, in its discretion, the
number of shares subject to each option granted and the related
purchase price and option period. Incentive stock options
("ISO"), as defined by the Internal Revenue Code of 1986, as
amended (the "Code") and nonqualified stock options ("NQSO") may
be granted under the 1995 Stock Option Plan. No person,
however, may be granted options under this plan representing on
aggregate of more than 300,000 shares of Common Stock. The 1995
Stock Option Plan requires that the exercise price for each
stock option may not be less than 100% of the fair market value
of the Common Stock on the date the option is granted.
Under the 1995 Stock Option Plan, no ISO may be granted to an
employee who owns more than 10% of the total combined voting
power of all classes of outstanding stock of the Company unless
the option price is at least 110% of the fair market value of
the Common Stock at the date of grant. An ISO may not be
granted to any employee if the aggregate fair market value of
the Common Stock (determined as of the date of grant) with
respect to which such options have been granted are exercisable
for the first time by such employee during any calendar year
exceeds $100,000.
The 1995 Stock Option Plan requires that each stock option
shall expire on the date specified by the Compensation
Committee, but not more than ten years from its date of grant;
however, in the case of an employee who at the time of such
grant owns more than 10% of the total combined voting power of
all classes of outstanding stock of the Company, such options
shall not be exercisable after the expiration of five years
after the date of grant. Options will become exercisable in
accordance with the stock option agreement; provided, however,
that no options shall be exercisable until the six-month
anniversary of the date of its grant. Except as provided
otherwise in the applicable agreement or upon termination of
employment due to death, retirement after age 55 ("Retirement")
or incapacity, if the employee voluntarily terminates his
employment or he is terminated for cause, his or her option
(whether or not vested) shall immediately terminate. If the
employee's employment is terminated by the Company for reasons
other than cause, the option may be exercised within 90 days of
such termination but in no event beyond the scheduled expiration
of the option. If the employee's employment is terminated due
to death, Retirement or incapacity, the option may (a) at the
discretion of the Compensation Committee, become fully vested
and (b) be exercised, to the extent vested, including options
vested in accordance with (a) above, during the one-year period
following such termination. Options may be exercised by the
payment of cash, or unless prohibited by the option agreement,
by the delivery of shares of Common Stock. Options granted
under the 1995 Stock Option Plan are not assignable.
Federal Income Tax Consequences
The following brief description of the tax consequences of
awards under the 1995 Stock Option Plan is based on Federal tax
laws currently in effect and does not purport to be a complete
description of such Federal tax consequences.
Options
There are no Federal tax consequences either to the optionee or
to the Company upon the grant of an ISO or of a NQSO. On the
exercise of an ISO, the optionee will not recognize any income
and the Company will not be entitled to a deduction, although
such exercise may give rise to alternative minimum tax liability
for the optionee. Generally, if the optionee disposes of shares
acquired upon exercise of an ISO within two years of the date of
grant or one year of the date of exercise, the optionee will
recognize ordinary income and, subject to the limitation
described below, the Company will be entitled to a deduction,
equal to the excess of the fair market value of the shares on
the date of exercise over the option price (limited generally to
the gain on the sale). The balance of any gain, and any loss,
will be treated as a capital gain or loss to the optionee. If
the shares are disposed of after the foregoing holding
requirements are met, the Company will not be entitled to any
deduction, and the entire gain or loss for the optionee will be
treated as a capital gain or loss.
On exercise of a NQSO, the excess of the date-of-exercise fair
market value of the shares acquired over the option price will
generally be taxable to the optionee as ordinary income and,
subject to the limitation described below, deductible by the
Company. The disposition of shares acquired upon exercise of a
NQSO will generally result in a capital gain or loss for the
optionee, but will have no tax consequences for the Company.
Limitation on Company's Deduction
Pursuant to Code Section 162(m), the Company's tax deduction
for all compensation paid to specified officers in any one year
is limited to $1,000,000. The Company's deduction arising from
an underlying stock acquired through the exercise of an option
(or the sale of the underlying stock acquired through the
exercise of an ISO before the required holding periods are met)
will be exempt from this limitation if certain outside director
and shareholder approval requirements are met.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended March 31, 1996, the Compensation
Committee was comprised of Messrs. Inamori, Itoh, Campbell and
Tressler. Mr. Inamori is Chairman of the Board and Mr. Itoh is
President, of Kyocera. Kyocera owns 66,150,000 shares, or
75.2%, of the Company's outstanding Common Stock and has engaged
in a significant number and variety of related company
transactions.
Report of Compensation Committee
This report provides an overview of the Company's executive
compensation philosophy and describes the role of the
Compensation Committee.
The Board established a Compensation Committee in August 1995,
in connection with the Company's initial public offering.
However, in view of the timing of that committee's formation,
the Board established the compensation program for executive
officers for fiscal year ended March 31, 1996. Beginning with
fiscal year commencing April 1, 1996, the Compensation Committee
will, subject to review by the Board, make determinations
regarding salary levels and annual incentive bonus opportunities
for executive officers, and will make the final determination
regarding awards of stock options and other stock-based awards
to such persons in accordance with Rule 16b-3 of the Securities
Act of 1934 and perform such other compensation related
functions as are delegated to the Compensation Committee by the
Board.
The Company's compensation policy reflects a commitment to an
executive compensation plan which enables the Company to
attract, retain and motivate highly qualified management
professionals. The Company's compensation philosophy is to
directly align executive compensation with the financial
performance of the organization. The Company believes that the
relationship between executive compensation and Company
performance will create benefit for all shareholders.
The Executive compensation program has been developed by the
Compensation Committee using various factors which include,
historical earnings, review of industry competition executive
compensation plans, and consultation with compensation experts.
The key elements of the executive compensation program are base
salary, annual incentive bonus and stock options in addition to
those benefits provided under the Company's retirement plans.
The Compensation Committee will review and approve each element
of the Company's executive compensation program and periodically
assess the effectiveness of the program as a whole. This
program covers the chief executive officer, the four other named
executive officers and all other executive officers of the
Company. Specifically, the Compensation Committee will approve
the salaries of all executive officers, cash awards under the
Company's Officers' Annual Incentive Program ("OAIP"), the grant
of stock options under the 1995 Stock Option Plan ("SOP"), and
the provision of any special benefits or perquisites to
executive officers.
The Base Salary Program
The base salary program is intended to provide base salary
levels that are externally competitive and internally equitable,
and to reflect each individual's sustained performance and
cumulative contribution to the Company. Each executive
officer's individual performance is reviewed to arrive at merit
increase determinations. These merit increases are then
reviewed within the context of the total merit increase budget
to determine reasonableness.
The Officers' Annual Incentive Program
The OAIP provides for annual cash incentive compensation based
on various performance measures for executive officer positions.
Bonus awards are paid under the OAIP only if the Company's
financial performance exceeds a predetermined performance
target. The bonus awards for the Chief Executive Officer and
the Chief Operating Officer are based on a percentage of
profits. The rest of the executive officer bonuses are derived
from a pool determined based on a percentage of profits.
Stock Option Plan
The SOP is designed to reward executive officers and other key
employees directly for appreciation in the long-term price of
the Company's stock. The plan directly links the compensation
of executive officers to gains by the shareholders and
encourages executive officers to adopt a strong stakeholder
orientation in their work. The SOP also places what can be a
significant element of compensation at risk because the options
have no value unless there is appreciation over time in the
value of Company stock.
With the understanding that the value (if any) of stock options
is based on future performance, the Company bases stock option
grants on levels of expected value for long-term incentive
grants among other companies and other comparable corporate
employers. The Compensation Committee will periodically review
the practices, grant levels, and grant values of other companies
to ensure the plan continues to meet the Company's objectives.
Chief Executive Officer Compensation
As President and Chief Executive Officer of the Company, Mr.
Rosen's base salary and merit increase for fiscal year ended
March 31, 1996, reflect his substantial responsibilities. Based
on these responsibilities, the Board awarded Mr. Rosen a base
salary of $465,000 reflecting a merit increase of 3.3% over the
prior year.
Mr. Rosen received an Annual Incentive Bonus. Such bonus was
based on the Company's financial results for the fiscal year
ended March 31, 1996. In August 1995, the Board awarded Mr.
Rosen stock options for 150,000 shares of Common Stock.
Deferred Compensation Plan
Each employee of the Company whose annual compensation is in
excess of $150,000, is eligible to participate in the deferred
compensation plan. The Company contributes an equivalent amount
that the officer would have been entitled to under the Company's
regular retirement program, up to allowable statutory
limitations, but is otherwise limited under regulatory
requirements.
Summary
The Compensation Committe believes the executive compensation
program is adequate to accomplish the program's goals of
attracting, retaining, and motivating highly qualified
management professionals. The Committe additionally believes
the executive compensation program is fair to both the executive
officers and the Company.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD:
Kazuo Inamori, Chairman
Carroll A. Campbell, Jr.
Kensuke Itoh
Richard Tressler
Employment Agreement
Benedict Rosen has an employment agreement that provides for a
two year advisory period upon his retirement from the Company.
During this advisory period Mr. Rosen will receive an annual
payment equivalent to his most recent base salary. If Mr. Rosen
dies previous to or during the two year advisory period, his
heirs will be entitled to the compensation Mr. Rosen would have
received.
. Performance Graph
The following chart compares the percentage change in the
cumulative total shareholder return on the Company's Common
Stock from August 15, 1995 through March 15, 1996, with the
cumulative total return of the S&P 500 Stock Index and a Peer
Group Index. The Peer Group is comprised of the following
companies: AMP, Amphenol, Augat, Kemet, Methode, Molex and
Vishay.
. Comparison of 7 Month Cumulative Total Return:
. AVX, Peer Group, S&P 500
. Value of $100 Invested on August 15, 1995
.
8/15/95 9/15/95 10/13/95 11/15/95 12/15/95 1/15/95 2/15/95 3/15/95
AVX 100.00 117.00 106.07 97.73 72.99 72.59 74.35 75.16
Custom
Peer Group 100.00 100.27 96.10 94.37 89.59 87.02 95.34 95.88
S&P 500 100.00 104.68 105.07 107.02 111.28 108.46 118.01 116.47
The Stock Price Performance Graph above and the foregoing
Report of Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Act of 1934,
except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed
filed under such Acts.
. PROPOSAL II
. PROPOSED RATIFICATION OF APPOINTMENT
. OF INDEPENDENT AUDITORS
The Board has appointed Coopers & Lybrand, L.L.P. as the
independent auditors to examine the accounts of the Company for
the fiscal year commencing April 1, 1996. Coopers & Lybrand
L.L.P. has been serving the Company in this capacity for many
years. In the event that ratification of this selection of
auditors is not approved by the affirmative vote of a majority
of the shares voting on the proposal, the selection of
independent auditors will be reconsidered by the Board.
A member of Coopers & Lybrand L.L.P. is expected to be in
attendance at the Annual Meeting with the opportunity to make a
statement and respond to questions.
The Board recommends a vote FOR ratification of the appointment
of Coopers & Lybrand L.L.P. as the Company's independent
auditors.
. Shareholder Proposals
If any shareholder intends to present a proposal to the Company
for inclusion in its proxy statement relating to the Annual
Meeting of Shareholders expected to be held in July 1997, or
wishes to recommend nominees to the Board, such proposal, in
writing and addressed to the Corporate Secretary, must be
received by the Company no later than January 17, 1997.
In general, stockholder proposals intended to be presented at
an Annual Meeting, including proposals for the nomination of
directors, must be received by the Company 60 days in advance of
the meeting, or prior to May 17, 1997, to be considered for the
1997 Annual Meeting.
. Proxy Solicitation
The entire cost of this solicitation will be borne by the
Company, including reimbursement of banks, brokerage firms,
custodians, nominees and fiduciaries for their reasonable
expenses in sending proxy materials to the beneficial owners of
stock. Solicitation will primarily be made by mail, but proxies
may be solicited personally, by telephone or by facsimile. In
addition, the Company has retained Wachovia Bank of South
Carolina to assist in the solicitation of proxies at a fee
estimated to be $6,000, excluding out-of-pocket expenses.
. By order of the Board,
. /s/ John S. Gilbertson
. John S. Gilbertson
. Corporate Secretary
. June 4, 1996
. PROXY
. This Proxy is Solicited on Behalf of the Board of Directors
. AVX CORPORATION
. 17th Ave. South Myrtle Beach, South Carolina 29577
The undersigned hereby appoints Benedict P. Rosen, President and
Chief Executive Officer, or John S. Gilbertson, Executive Vice
President, Chief Operating Officer and Corporate Secretary, as
Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated
below, all the shares of Common Stock of AVX Corporation held of
record by the undersigned on May 25, 1996, at the Annual Meeting
of Shareholders to be held on July 18, 1996, or any adjournment
thereof.
DIRECTORS RECOMMEND VOTING FOR 1 AND 2
1. ELECTION OF DIRECTORS: FOR all Nominees WITHHOLD on all Nominees
Withhold On The Following Nominees Only (Insert
Name):_________________________________________
Nominees -- Kazuo Inamori, Benedict P. Rosen, John S.
Gilbertson, Donald B. Christiansen, Marshall D. Butler, Carroll
A. Campbell, Jr., Kensuke Itoh, Rodney N. Lanthorne, Masato
Takeda, Richard Tressler, Masahiro Umemura, Masahiro Yamamoto,
Yuzo Yamamura
2. PROPOSAL TO APPROVE THE ELECTION OF COOPERS & LYBRAND LLP,
CERTIFIED PUBLIC ACCOUNTANTS, AS THE INDEPENDENT AUDITORS OF THE
CORPORATION.
FOR AGAINST ABSTAIN
3. In their discretion the Proxies are authorized to vote upon
other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Date ----------------------
Signature ----------------------
----------------------
Please sign this proxy exactly as your name appears hereon. 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 authorized person. PLEASE MARK, SIGN,DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
