AVX
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD JULY 16, 1998
<PAGE>
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 Wyndham Myrtle Beach Resort (formerly Myrtle
Beach Hilton), Oceanfront Golf Resort, 10,000 Beach Club Drive, Myrtle
Beach, South Carolina, on Thursday, July 16, 1998, 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 ratify amendment to the Company's By-laws to provide for a
classified Board of Directors;
2. To elect thirteen Directors following revised By-Law guidelines;
3. To ratify amendment of the AVX Corporation Non-Employee Directors'
Stock Option Plan;
4. To ratify the appointment of Coopers & Lybrand, L.L.P. as the
Company's independent auditors for the fiscal year commencing
April 1, 1998; and
5. 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 22, 1998, 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/ Kurt Cummings
Kurt Cummings
Corporate Secretary
Myrtle Beach, South Carolina
June 5, 1998
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY CARD AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
AVX Corporation
801 17th Avenue South, Myrtle Beach, SC 29577
____________________
PROXY STATEMENT
Annual Meeting of Shareholders
To be held July 16, 1998
____________________
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 16, 1998,
at 10:00 a.m., at the Wyndham Myrtle Beach Resort (formally the Myrtle
Beach Hilton), 10,000 Beach Club 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, 1998, will be mailed to shareholders on or about June 8, 1998.
Each share of AVX Corporation common stock, par value $.01 ("Common Stock"),
outstanding at the close of business on May 22, 1998, will be entitled to one
vote on all matters acted upon at the Annual Meeting. On May 22, 1998, the
date for determining shareholders entitled to vote at the Annual Meeting,
88,084,125 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 North 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 shareholder 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 Plans 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.
<PAGE>2
PROPOSAL I
RATIFY AMENDMENT TO THE COMPANY'S BY-LAWS TO PROVIDE FOR A CLASSIFIED
BOARD OF DIRECTORS
The Board has approved, and recommends the shareholders adopt,an amendment
to the Company's By-laws that would divide the Board into three classes with
staggered terms. The proposal would amend Article III, Section 2 of the
By-laws to read as follows:
"Section 2. Number, Election, Qualification and Term of Office. The
number of directors shall be as fixed from time to time by resolution of the
Board of Directors or of the shareholders but in no case shall the number be
less than three. Beginning on July 16, 1998, the Board of Directors shall
be divided into three classes of numbers as equal as possible. The term of
office of one of such classes shall expire each year. At each annual meeting
of shareholders, there shall be elected (i) the directors of the class the
term of office of which shall then expire; (ii) directors to fill any
vacancies in any other class; (iii) directors to succeed any directors who
shall have been elected to fill vacancies in any other class since the next
preceding annual meeting; and (iv) directors to be added to a respective
class as a result of an increase in the number of directors. Directors to
be elected as provided in clauses (ii) and (iii) shall be elected for the
unexpired portions of the original terms of the respective classes.
Directors to be elected as provided in clause (iv) shall be elected to the
class recommended by the Board of Directors. Except as otherwise provided
in the Certificate of Incorporation or in these By-laws, directors shall be
elected by a plurality of the votes of the shareholders entitled to vote at
each meeting of shareholders for the election of a director or directors.
At any meeting of shareholders where directors of more than one class are
to be elected, the directors of the class or classes being elected for the
shortest terms shall be elected first.
Election of directors need not be by ballot. Directors need not be
shareholders. Each director shall have been duly elected and qualified and
shall continue to serve until death, or until the director shall resign, or
until such director shall have been removed in the manner hereinafter
provided."
If the proposal is adopted, then at the 1998 annual meeting, the directors
of Class I shall be elected to a term of three years; the directors of Class
II shall be elected to a term of two years; and the directors of Class III
shall be elected to a term of one year. At each annual meeting of
shareholders following the 1998 annual meeting, the number of directors
equal to the number of directors in the class whose term expires at the
time of such meeting shall be elected to serve until the third ensuing
annual meeting of shareholders.
The Board recommends that the shareholders vote to approve the proposed
By-law amendment. The amendment is intended to provide continuity and
stability to the Company's management by increasing the term of office of
the directors and thereby increasing the average number of years' experience
with the Company of the directors sitting at a given time. With lower rates
of turnover the Board would be able to take an appropriately long-term view
of the matters affecting the Company.
While the Board believes the proposed amendment to the By-laws should be
adopted for the reasons set forth above, the Board is aware the proposed
amendment may have potential anti-takeover effects. The proposed provisions,
along with other provisions in the Company's Certificate of Incorporation
prohibiting the removal of directors other than for cause and allowing the
issuance of additional common shares that are presently authorized but
unissued, may tend to deter any unfriendly tender offers or other efforts to
gain control of a block of shares of the Company. This result might deprive
shareholders of opportunities to sell shares at higher-than-market prices.
The Company has not received indications that it will be the target of a
hostile takeover. Although the antitakeover effect of the proposed amendment
is mitigated by Kyocera Corporation's ownership of approximately 75.0% of
the Company's outstanding Common Stock, such effect could become relevant in
the future.
The affirmative vote of shareholders holding a majority of the outstanding
Common Stock is required to approve the proposed amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE AMENDMENT TO THE BY-LAWS.
<PAGE>3
PROPOSAL II
ELECTION OF DIRECTORS
NOMINATIONS FOR THE BOARD OF DIRECTORS
The Board of Directors hereby nominates the following persons for the Board
of Directors with terms as follows:
CLASS I
Nominations for Terms Expiring at the Annual Meeting in July of 2001:
KAZUO INAMORI Age 66 Chairman Emeritus of the Board
effective July 1997. Chairman of the Board from the Company's acquisition
by Kyocera Corporation ("Kyocera") in January 1990 to July 1997. Chairman
Emeritus of the Board of Kyocera effective July 1997, having served as
Chairman of the Board of Kyocera, which he founded, since in 1959.
KENSUKE ITOH Age 60 Vice Chairman of the Board of
Directors effective July 1997. Member of the Board since January 1990.
President of Kyocera since June 1989 and a Representative Director of
Kyocera since 1985.
BENEDICT P. ROSEN Age 62 Chairman of the Board and
Chief Executive Officer effective July 1997. Chief Executive Officer and
President of the Company from April 1993 until July 1997 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.
RICHARD TRESSLER Age 56 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 54 Member of the Board since January
1990. Senior Managing and Representative Director of Kyocera effective
June 1997. 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.
CLASS II
Nominations for Terms Expiring at the Annual Meeting in July of 2000:
CARROLL A. CAMPBELL, JR. Age 58 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, Wackenhut Corporation and Norfolk Southern
Corporation.
JOHN S. GILBERTSON Age 54 President since July 1997. Chief
Operating Officer of the Company since April 1994, and a member of the Board
since January 1990. Executive Vice President from April 1992 to July 1997,
Senior Vice President from September 1990 to March 1992 and employed by the
Company since 1981. Director of Kyocera since June 1995.
RODNEY N. LANTHORNE Age 53 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.
MICHIHISA YAMAMOTO Age 56 Member of the Board since July 1997.
Senior Managing and Representative Director of Kyocera since June 1992.
Employee of Kyocera since 1970.
<PAGE>
CLASS III
Nominations for Terms Expiring at the Annual Meeting in July of 1999:
MARSHALL D. BUTLER Age 71 Member of the Board since December 1973.
Director of Kyocera from January 1990 to June 1995. Senior Managing
Representative and Director effective 1993. Chairman of the Board of Nitzanim-
AVX/Kyocera-Venture Capital Fund Ltd and Alpha Technologies Group, Inc.
A Director of MassMutual Corporate Investors and a Director of MassMutual
Participation Investors.
DONALD B. CHRISTIANSEN Age 59 Senior Vice President of Finance,
Chief Financial Officer and Treasurer of the Company since July 1997 and a
member of the Board since April 1992. Vice President of Finance,
Chief Financial Officer and Treasurer from April 1994 to July 1997.
Chief Financial Officer from March 1992 to April 1994.
MASAHIRO YAMAMOTO Age 56 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 56 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.
The thirteen directors have been nominated by the Board. 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 above as
directors. The affirmative vote of the holders of a plurality of the shares
of Common Stock of the Company present in person or represented by proxy and
entitled to vote at the Annual Meeting is required for the election of the
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.
PROPOSAL III
AMENDMENT OF THE AVX CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
The Board has adopted, subject to shareholder approval, an amendment
to the AVX Corporation Non-Employee Directors' Stock Option Plan
("Non-Employee Directors' Plan") initially adopted in July 1995.
The proposed amendment will (i) increase the number of shares of common
stock of the Company ("Common Stock") authorized to be issued pursuant to
the Non-Employee Directors' Plan from 100,000 to 250,000 shares; (ii)
provide for an additional grant of an option to purchase 7,500 shares of
Common Stock to each non-employee director as of the first day of the month
following the 1998 annual meeting of shareholders (or as of the date on which
a non-employee director is elected for the first time, if later) and
as of each third annual anniversary thereof; and (iii) provide that all
options granted, or to be granted, under the Plan in 1995 become exercisable
with respect to 33 1/3% of the total number of shares subject to the option
one year after the date of grant and with respect to an additional 33 1/3% at
the end of each of the following two years provided that the non-employee
director continues to be a director at the date of exercise or his service
terminates due to retirement, death or disability. Previously, the options
for 7,500 shares granted under the Plan in August 1995 were exercisable over
a five year period and new options were to be granted on the fifth
anniversary.
AVX Corporation feels that it is important for the Board of Directors to be
shareholders of the Company and to have an incentive to help the Company grow
and prosper and to share in that prosperity. This amendment will help toward
this goal.
The following summary describes the material terms of the Non-Employee
Directors' Plan as proposed to be amended as described above. The summary
is not intended to be a complete description of all the provisions of the
Plan.
Pursuant to the Non-Employee Directors' Plan options are granted to members
of the Board who are not employees of the Company (a "Non-Employee Director").
Options may be granted under the Plan for an aggregate of 250,000 shares of
Common Stock. The Non-Employee Directors' Plan is administered by the Board.
<PAGE>5
Each Non-Employee Director serving on the Board on July 16, 1998, and each
other Non-Employee Director subsequently elected for the first time shall
automatically receive an option for 7,500 shares of Common Stock. Beginning
in the year in which the third anniversary of the grant occurs and in each
year in which a subsequent third anniversary occurs thereafter, each
Non-Employee Director who has been re-elected as a member of the Board shall
automatically receive an additional option for 7,500 shares of Common Stock.
Each option granted under the Non-Employee Directors' Plan will vest at the
annual rate of 33 1/3% of the shares subject to the grant commencing on the
first anniversary of the date of grant, so that such options will be fully
vested as of the third anniversary of the grant. 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 cover
aching 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 Non-Employee Directors' 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 Non-Employee Directors' Plan are not assignable.
Unless sooner terminated by action of the Board, the Non-Employee Directors'
Plan will terminate on August 1, 2005. Subject to certain exceptions, the
Non-Employee Directors' Plan may be amended or discontinued by the Board.
The affirmative vote of shareholders holding a majority of the outstanding
Common Stock is required to approve the proposed amendment.
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
AMENDMENT TO THE NON-EMPLOYEE DIRECTORS'' STOCK OPTION PLAN.
PROPOSAL IV
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 April1,
1998. 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 OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT AUDITORS.
________________________________
<PAGE>6
Ownership of Securities by Directors, Director Nominees and Executive Officers
The Common Stock is the only class of equity securities of the Company
outstanding. As of March 31, 1998, the directors and director nominees
and each executive officer named in the Summary Compensation Table,
individually, and all directors, director nominees and executive officers
of the Company as a group, beneficially owned shares of Common Stock of the
Company as follows:
Amount of Beneficial Ownership
Name of
Beneficial Owner Direct Shares Under Total Percent of
& Indirect Execisable Shares Class
Ownership 1/ Options 2/
Benedict P. Rosen 50,143 93,750 143,893 *
Kazuo Inamori 10,000 3,750 13,750 *
John S. Gilbertson 28,822 78,125 106,947 *
Donald B. Christiansen 15,562 -0- 15,562 *
C. Marshall Jackson 1,460 62,500 63,960 *
Ernie Chilton 3,800 62,500 66,300 *
Marshall D. Butler 3,000 3,750 6,750 *
Carroll A. Campbell, Jr. 623 3,750 4,373 *
Kensuke Itoh 66,153,000 3,750 66,156,750 75.0%3/
Rodney N. Lanthorne 1,500 3,750 5,250 *
Richard Tressler 882 3,750 4,632 *
Masahiro Umemura 1,000 3,750 4,750 *
Masahiro Yamamoto 1,000 3,750 4,750 *
Michihisa Yamamoto 1,000 -0- 1,000 *
Yuzo Yamamura 1,000 3,750 4,750 *
All directors, director
nominees and executive
officers as a group
(a total of 22
individuals
including those
named above) 66,292,789 385,500 66,678,289 75.6%3/
* Less than 1%
1/ Includes interests, if any, in shares held in the Company's
Deferred Compensation, Stock Bonus andRetirement Plan Trusts.
2/Includes shares under options exercisable as of March 31, 1998, and
options which become exercisable within 60 days thereof.
3/ 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
investment power.
The information provided in the above chart as to each director, director
nominee and named executive officer, individually, and all directors,director
nominees 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.
<PAGE>7
Security Ownership of Certain Beneficial Owners
Set forth below is a table indicating those persons whom the management of
the Company believed to be beneficial owners of more than 5% of any class of
the Company's securities as of May 22, 1998.
Name and Address of
Beneficial Owner Shares Beneficially Owned Percent of Class
Kyocera Corporation 5-22
Kitainoue-cho Higashino
Yamashina-ku, Kyoto 607, Japan 66,150,000 75.0%
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 22, 1998, 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, 1998, 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 the fiscal year ended March 31, 1998.
During that period, all the directors attended 75% of the meetings of the
Board and meetings of the committees of the Board on which they served,
except Mr. Inamori who is a resident of Japan and is a representative on
the Board for Kyocera. Due to illness Mr. Inamori attended only two 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 held no meetings during the fiscal year ended March 31, 1998. 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
two meetings during the fiscal year ended March31, 1998. 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
other than the 1995 Stock Option Plan, 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, 1998. The members of the
Compensation Committee are Messrs. Inamori (Chairman), Itoh, Campbell and
Tressler.
Equity Compensation Committee. The Equity Compensation Committee is a
subcommittee of the Compensation Committee and is responsible for any action
on all matters concerning the 1995 Stock Option Plan. This committee
consists of Messrs. Tressler (Chairman), Campbell and Butler. The Equity
Compensation Committee held three meetings during the fiscal year ended March
31, 1998.
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 held one
meeting during fiscal year ended March 31, 1998. The members of the Special
Advisory Committee are Messrs. Campbell (Chairman), Butler and Tressler.
<PAGE>8
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 or
committee meeting and reimbursement of travel expenses. Effective in
February 1998, each director who is not an employee of the Company is paid
an attendance fee of $2,500 per Board or committee meeting and reimbursement
of travel expenses. In addition, each director who is not an employee of the
Company is granted stock options pursuant to the 1995 Non-Employee Directors'
Stock Option Plan.
Non-Employee Directors' Stock Option Plan
See Proposal III above for description of the Non-Employee Directors' Stock
Option Plan as proposed to be ammended.
Executive Compensation
Cash Compensation
The following table shows cash compensation paid and certain other
compensation paid or accrued, by the Company during the fiscal years ended
March 31, 1998, 1997, and 1996, to each of the Company's five most highly
compensated executive officers as of the end of the last completed fiscal
year, including the Chief Executive Officer, in all capacities in which they
served.
SUMMARY COMPENSATION TABLE
Other Securities All
Annual Underlying Other
Fiscal Salary Bonus Compens- Options Compen-
sation sation
Name & Position Year ($) ($) ($) (#)1/ ($)2/
Benedict P. Rosen 1998 $520,000 $622, 950 $14,100 90,000 $78,412
Chairman and 1997 495,000 184,650 17,100 75,000 32,725
Chief Executive Officer 1996 465,000 730,716 15,484 150,000 31,963
John S. Gilbertson 1998 $400,000 476,340 $ 8,994 80,000 $67,497
President and 1997 348,000 128,775 10,035 62,500 32,691
Chief Operating Officer 1996 322,500 505,470 9,056 125,000 32,019
Donald B. Christiansen 1998 $220,000 170,530 15,939 50,000 $34,105
Sr.VP Finance, Chief
Financial Officer and
Treasurer 1997 205,000 52,480 12,032 50,000 32,613
1996 190,000 136,530 10,307 100,000 31,940
C. Marshall Jackson 1998 200,000 168,885 7,643 50,000 31,915
Senior Vice President
of Sales and 1997 183,500 46,870 8,357 50,000 32,601
Marketing 1996 170,000 134,797 8,303 100,000 30,750
Ernie Chilton 1998 194,500 85,000 17,000 $26,300
Senior Vice President of1997 180,850 20,000 15,745 50,000 24,400
Tantalum 1996 162,800 123,000 9,939 100,000 22,000
1/ The stock options granted during the fiscal years ended March 31, 1998,
1997 and 1996, were granted pursuant to the 1995 Stock Option Plan.
2/ All other Compensation includes: (i) the Company's contribution on
behalf of the respective executive officer pursuant to the terms of the AVX
Ltd. Pension Plan ("Pension Plan"), AVX Corporation Deferred Compensation
Plan ("DCP"), AVX Corporation Stock Bonus Plan ("Bonus Plan") and the AVX
Corporation Retirement Plan ("Savings Plan"). Mr. Chilton participates in a
defined benefit pension plan maintained by AVX Limited, a wholly-owned
subsidiary of AVX Corporation. The pension plan provides for a retirement
benefit at a normal Pension Date, as defined, equal to 60% of the Final
Pensionable Salary, as defined, after having completed at least 20 years of
continuing service. Mr. Chilton has been employed by AVX Limited since 1979.
The table below sets forth the component of All Other Compensation described
above, for the fiscal year ended March 31, 1998, for the above named
executive officers:
<PAGE>9
Pension Plan DCP Bonus Plan Savings Plan
Benedict P. Rosen $57,200 $5,212 $16,000
John S. Gilbertson 46,506 4,991 16,000
Donald B. Christiansen 13,080 5,025 16,000
C. Marshall Jackson 10,890 5,025 16,000
Ernie Chilton $ 26,300
Stock Option Grants
The following table provides certain information concerning the
grant of options during the fiscal year ended March 31, 1998, 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.
Options Granted During the Fiscal Year Ended March 31, 1998
Individual Grants 1/ 2/
Potential
Realizable Value
at Assumed
Number of % Total Annual Rate Of
Securities Options at Assumed
Underlying granted Annual Rate Of
Options Employees Exercise Stock Appreciation
Name Granted In Fiscal Base Price Expiration for Option Term
Year ($/share)3/ Date 5% 10%
Benedict P.
Rosen 90,000 14.4% $19.50 12/23/07 $1,103,400 $2,797,200
John S.
Gilbertson 80,000 12.8 19.50 12/23/07 980,800 2,486,400
Donald B.
Christiansen 50,000 8.0 19.50 12/23/07 613,000 1,554,000
C. Marshall
Jackson 50,000 8.0 19.50 12/23/07 613,000 1,554,000
1/ Each option was granted on July 21, 1997, to purchase shares of Common
Stock. Twenty five percent of the shares subject to the options become
exercisable one year from the date of grant and 25% become exercisable on
each of the three succeeding anniversaries, provided the optionee continues
to be employed by the Company or any of its subsidiaries. The actual value
an optionee receives is dependent on future stock market conditions, and
there can be no assurance that the amounts reflected in the right hand
columns of the table will actually be realized. No gain to the optionee is
possible without an appreciation in the stock value which will benefit all
shareholders commensurately.
2/ The options were granted pursuant to the 1995 Stock Option Plan and do
not provide for tandem or stand alone stock appreciation rights.
3/ Payment for shares of Common Stock upon exercise of a stock option may
be made in cash, or with the Company's consent, shares of Common Stock or
a combination of cash and shares of Common Stock.
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End at Fiscal Year End
Shares Value
Acquired Realized
On Upon
Name Exercise Execise Exercisable Unexercisable Exercisable Unexercisable
(#) ($)1/ (#) (#) ($) ($)
Benedict P.
Rosen 93,750 221,250 $37,500 $168,750
John S.
Gilbertson 78,125 189,375 31,250 143,750
Donald B.
Christiansen 62,500 $766,698 -0- 137,500 -0- 106,250
C. Marshall
Jackson 62,500 137,500 25,000 106,250
Ernie
Chilton 62,500 87,500 25,000 75,000
1/ Represents the market value of the Common Stock on the date of exercise
less the excercise price of the option.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended March31, 1998, the Compensation Committee was
comprised of Messrs. Inamori, Itoh, Campbell and Tressler. Mr. Inamori is
Chairman Emeritus of the Board and Mr. Itoh is President of Kyocera.
Kyocera owns 66,150,000 shares, or approximately 75.0%, of the Company's
outstanding Common Stock and has engaged in a significant number and variety
of related company transactions.
<PAGE>10
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 . Beginning with
fiscal year commencing April1, 1996, the Compensation Committee, subject to
review by the Board, made determinations regarding salary levels and annual
incentive bonus opportunities for executive officers, and performed such
other compensation related functions that were 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 and its subcommittee, the Equity
Compensation Committee, 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 committees 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 generally 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 officers' 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 Equity Compensation Committee
periodically reviews the practices, grant levels and grant values of other
companies to ensure the plan continues to meet the Company's objectives.
<PAGE>11
Chief Executive Officer Compensation
As Chairman and Chief Executive Officer of the Company, Mr. Rosen's base
salary and merit increase for fiscal year ended March 31, 1998, reflect his
substantial responsibilities. Based on these responsibilities, the Board
awarded Mr. Rosen a base salary of $520,000 reflecting a merit increase of
5.0% 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, 1998.
Deferred Compensation Plans
Each employee of the Company whose annual compensation is in excess of
$160,000, is eligible to participate in one of the deferred compensation
plans. The Company contributes an equivalent amount that the participant
would have been entitled to under the Company's regular retirement program,
up to allowable statutory limitations, but is otherwise limited under
regulatory requirements. Under the other deferred compensation plan,
participants selected by the Chief Executive Officer can elect to defer
additional amounts of compensation.
Summary
The Compensation Committee believes the executive compensation program is
adequate to accomplish the program's goals of attracting, retaining, and
motivating highly qualified management professionals. The Committee
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
<PAGE>
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 August15, 1995,
through March 31, 1998, with the cumulative total return of the S&P500
Stock Index and a Peer Group Index. The Peer Group is comprised of the
following companies: AMP, Amphenol, Kemet, Methode, Molex and Vishay.
Comparison of Quarterly
Cumulative Total Return:
AVX, Peer Group, S&P 500
Value of $100 Invested on August 15, 1995
Aug-15-95 Mar-31-96 Mar-31-97 Mar-31-98
AVX 100 86 83 81
S&P 100 117 140 208
Peer Group 100 96 88 115
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.
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 1999, 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
16, 1999.
In general, shareholder 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 15, 1999, to be considered for the 1999 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 North Carolina to
assist in the solicitation of proxies at a fee estimated to be $8,000,
excluding out-of-pocket expenses.
By order of the Board,
/s/ Kurt Cummings
Kurt Cummings
Corporate Secretary
June5, 1998
<PAGE>
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 Chairman and Chief Executive Officer,
or John S. Gilbertson, President and Chief Operating Officer, as Proxies
each with the power to appoint his substitute, and hereby authorizes them top
represent and to vote, as designated on the reverse side, all the shares of
Common Stock of AVX Corporation held of record by the undersigned on May 22,
1998 at the Annual Meeting of Shareholders to be held on July 16, 1998, or
any adjournment thereof.
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, 2, 3 AND 4.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE
Please sign this proxy exactly as your name(s) appear(s) 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.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
______________________________ ________________________________
_____________________________ _________________________________
_____________________________ _________________________________
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
FOR AGAINST ABSTAIN
1. Ratify amendment to the
Company's By-laws to provide
for a classified Board of Directors.
Directors Recommend Voting
For 1,2,3,and 4
2. Election of Directors
FOR AGAINST ABSTAIN
Class I Nominees for Terms
Expiring at the Annual Meeting
July 2001.
Kazuo Inamori
Richard Tressler
Kensuke Itoh
Masahiro Umemura
Benedict P. Rosen
Class II Nominees for Terms
Expiring at the Annual Meeting in
July 2000
Carroll A. Campbell, Jr.
Rodney N. Lanthorne
John S. Gilbertson
Michihisa Yamamoto
Class III Nominees for Terms
Expiring at the Annual
Meeting in July of 1999
Marshall D. Butler
Masahiro Yamamoto
Donald B. Christiansen
Yuzo Yamamura
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
mark the "For All Except" box and strike a line through that nominee's
name in the list provided above.
FOR AGAINST ABSTAIN
3. Amendment of the AVX Corporation
Non-Employee Directors'' Stock
Option Plan
FOR AGAINST ABSTAIN
4. Proposed ratification of
appointment of independent auditors.
5. In their discretion, the Proxies
are authorized to vote on such other
business as may properly come before
the meeting.
Please be sure to sign and date this Proxy Date ----------------------
Shareholder sign here Co-owner sign here
