Schedule 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate:
[ ] Preliminary proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e) (2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AVX Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the Appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined:
(4) Proposed maximum aggregate value transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid
(2) Form, Schedule or Registration Statement No. :
(3) Filing Party:
(4) Date Filed:
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AVX
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 15, 1999
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 Crown Reef Resort and Conference
Center, 2913 South Ocean Boulevard, Myrtle Beach, South Carolina
29577, on Thursday, July 15, 1999, 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 five Directors,
2. To ratify a proposed amendment to the AVX Corporation
1995 Stock Option Plan;
3. To ratify the Management Incentive Plan;
4. To ratify the appointment of PRICEWATERHOUSECOOPERS, LLP
as the Company's independent auditors for the fiscal year
commencing April 1, 1999; 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 21, 1999,
will be entitled to notice of, and 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 complete, 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 7, 1999
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY CARD AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE.
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AVX Corporation
801 17th Avenue South, Myrtle Beach, SC 29577
____________________
PROXY STATEMENT
Annual Meeting of Shareholders
To be held July 15, 1999
____________________
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 15, 1999, at 10:00 a.m., at the Crown Reef Resort and Conference Center,
2913 South Ocean Boulevard, Myrtle Beach, South Carolina 29577, and any
adjournment thereof. The Company expects that this Proxy Statement, with
the accompanying proxy and the Annual Report to Shareholders for the fiscal
year ended March 31, 1999, will be mailed to shareholders on or about
June 10, 1999.
Each share of AVX Corporation common stock, par value $.01
("Common Stock"), outstanding at the close of business on May 21, 1999,
will be entitled to one vote on all matters acted upon at the Annual Meeting.
On May 21, 1999, the date for determining shareholders entitled to vote at
the Annual Meeting, 86,255,025 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
American Stock Transfer and Trust Company (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 any proposal to which the abstention relates. 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 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 with respect to any shares, 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.
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PROPOSAL I
ELECTION OF DIRECTORS
NOMINATIONS FOR THE BOARD OF DIRECTORS
The Board of Directors is currently divided into three classes
elected for staggered terms. At the 1998 Annual Meeting of Shareholders, the
directors of Class I were elected to a term of three years; the directors of
Class II were elected to a term of two years; and the directors of Class III
were elected to a term of one year.
The current one year term of directors of Class III expires at the
Annual Meeting. The Board of Directors proposes that the nominees identified
below, three of whom are currently serving as Class III directors, be elected
to Class III for a new term of three years.
CLASS III
Nominations for Terms Expiring at the Annual Meeting in July of 2002
Directors Standing for Election
DONALD B. CHRISTIANSEN Age 60 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 57 Member of the Board since February 1993.
Senior Managing and Representative Director of
Kyocera Corporation ("Kyocera") since June 1995.
Employee of Kyocera since 1977.
YUZO YAMAMURA Age 57 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.
YASUO NISHIGUCHI Age 55 Vice President of Kyocera since June 1997 and
Representative Director of Kyocera since June
1992.
HENRY C. LUCAS Age 54 Professor of Information Systems at New York
University since 1984.
The five 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
to stand for election, the Board may designate a substitute. It is intended
that all properly executed and returned proxies will be voted for such
substitute nominee.
CLASS I
Terms Expiring at the Annual Meeting in July of 2001
Directors Continuing in Office
KAZUO INAMORI Age 67 Chairman Emeritus of the Board since
July 1997. Chairman of the Board from
the Company's acquisition by Kyocera in
January 1990 to July 1997. Chairman
Emeritus of the Board of Directors of
Kyocera effective July 1997, having
served as Chairman of the Board of
Directors of Kyocera, which he founded,
since 1959.
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KENSUKE ITOH Age 61 Vice Chairman of the Board since
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 63 Chairman of the Board and Chief Executive
Officer since 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, Aerovox
Corporation and Nordson Corporation.
RICHARD TRESSLER Age 57 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 55 Member of the Board since January 1990.
Senior Managing and Representative
Director of Kyocera since 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
Terms Expiring at the Annual Meeting in July of 2000
MICHIHISA YAMAMOTO Age 57 Member of the Board since July 1997.
Senior Managing and Representative
Director of Kyocera since June 1992.
Employee of Kyocera since 1970.
CARROLL A. CAMPBELL, JR. Age 59 Member of the Board since August 1995.
President and Chief Executive Officer
of the American Council of Life Insurance
since 1995. Governor of South Carolina
from January 1987 to January 1995.
Director of Fluor Corporation, Wackenhut
Corporation and Norfolk Southern
Corporation.
JOHN S. GILBERTSON Age 55 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 54 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.
PROPOSAL II
PROPOSED RATIFICATION OF AN AMENDMENT TO THE 1995 STOCK OPTION PLAN
The Board has adopted, subject to shareholder approval, amendments to
the AVX Corporation 1995 Stock Option Plan (the "1995 Stock Option Plan") to
(i) increase the number of shares that may be issued under the plan by 500,000
and (ii) modify the 300,000 share limit on the stock options that may be
granted to any one individual during any five-year period to a 500,000 share
limit.
As of March 31, 1999, 2,328,075 shares of Common Stock were subject to
outstanding options granted under the 1995 Stock Option Plan. The purpose of
the 1995 Stock Option Plan is to promote Company success by aligning employee
financial interests with long-term shareholder value. The Board believes that
the number of shares remaining available for issuance will be insufficient to
achieve the purpose of the plan unless the additional shares are authorized.
The modification of the share limit with respect to which any one individual
may be granted stock options allows the Company more flexibility in providing
equity incentives to its employees while assuring that any compensation
deemed paid by the Company in connection with the exercise of these options
will qualify as performance-based compensation which is not subject to the $1
million limitation on the tax deductibility of executive compensation per
covered individual imposed under Section 162 (m) of the Internal Revenue Code
of 1986, as amended (the "Code").
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The material terms of the 1995 Stock Option Plan are summarized below.
(The summary is not intended to be a complete description of all the provisions
of the plan.)
Stock Option Plan
Pursuant to the 1995 Stock Option Plan, options may be granted to
officers and key employees of the Company and its Subsidiaries for the purchase
of up to an aggregate of 2,650,000 shares of Common Stock, not reflecting the
proposed 500,000 share increase referred to above which is the subject of this
Proposal. As of March 31, 1999, approximately 224 employees (including 12
officers) of the Company were participants in the 1995 Stock Option Plan.
The 1995 Stock Option Plan is administered by the Equity Compensation Committee
of the Board which determines, at its discretion, the number of shares subject
to each option granted and the related purchase price and option period.
Incentive stock options ("ISO's"), as defined by the Code, and nonqualified
stock options ("NQSO's") may currently be granted under the 1995 Stock Option
Plan. No person, however, may be granted options under this plan during any
five-year period representing an aggregate of more than 300,000 shares of
Common Stock (not reflecting the further modification referred to above which
is the subject of this Proposal). 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 (as defined in the plan) 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 granted to such employees 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 Equity 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
entered into with respect to each option grant; 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 reaching age 55
("Retirement") or incapacity, if the employee voluntarily terminates employment
or 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 after reaching age 55 or incapacity, the option may (a) at the
discretion of the Equity 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, but in
no event beyond the scheduled expiration of the option. Options may be
exercised by the payment of cash or, unless prohibited by the option
agreement, by the delivery of shares of Common Stock.
The Board may amend or discontinue the 1995 Stock Option Plan at any
time, provided that shareholder approval is required for any amendment that
would increase the maximum number of shares of Common Stock that may be issued
thereunder (except to the extent of adjustments for changes in capitalization
and other such adjustments permitted thereby) and any amendment that would
change the class of employees eligible to participate therein. No amendment
or termination may adversely affect the rights of a participant who then holds
an option without the participant's consent.
6
<PAGE>
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
consquences.
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, be 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.
Certain additional rules apply if the option price is paid in shares
of Common Stock.
Limitation on Company's Deduction
Pursuant to Code Section 162(m), the Company's tax deduction for
individual compensation paid to specified officers in any one year is limited
to $1 million. The Company's deduction arising from the exercise of a NQSO
(or the sale of 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.
The affirmative vote of a majority of the votes cast by the holders
of shares of Common Stock of the Company present in person or represented by
proxy at the Annual Meeting and entitled to vote on the Proposal is required
for approval of the amendment to the 1995 Stock Option Plan. The amendment
to the 1995 Stock Option Plan is conditional upon and will be of no force and
effect unless the proposal receives approval by the requisite vote of the
shareholders.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF THE AMENDMENT TO THE 1995
STOCK OPTION PLAN.
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PROPOSAL III
PROPOSED RATIFICATION OF THE
MANAGEMENT INCENTIVE PLAN
Shareholder approval of the terms of the Management Incentive Plan
(the "MIP") is required under Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"), so that individual compensation in excess of
$1 million is considered "performance-based" and, therefore, tax deductible
by the Company.
The Management Incentive Plan is administered by the Compensation
Committee of the Board of Directors and its purpose is to promote the interests
of the Company and its Subsidiaries by providing their employees incentives
to continue and increase their efforts with respect to, and remain in the
employ of, the Company and its Subsidiaries.
The Compensation Committee is responsible for managing the plan, for
granting awards and for determining the individuals to whom bonus awards are
to be granted.
The performance goals are established by the Compensation Committee
at the beginning of each performance period. Each bonus award is established
in dollars and is based on the Company's income before income taxes. The
amount paid out upon satisfying the performance goals shall not exceed 200%
of the employee's base salary. In making an award, the Compensation Committee
takes into account an employee's responsibility level, performance, cash
compensation level and such other considerations as it deems appropriate.
Due to the fact that established performance goals were not met, no
bonus awards were granted to any of the Company's officers during the fiscal
year 1999.
THE BOARD RECOMMENDS A VOTE "FOR" RATIFICATION OF THE MANAGEMENT INCENTIVE PLAN.
PROPOSAL IV
PROPOSED RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board has appointed PRICEWATERHOUSECOOPERS, LLP as the
independent auditors to examine and audit the accounts of the Company for the
fiscal year commencing April 1, 1999. 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 PRICEWATERHOUSECOOPERS, LLP is expected to be in
attendance at the Annual Meeting and have the opportunity to make a
statement and respond to questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS, LLP AS THE COMPANY'S INDEPENDENT
AUDITORS.
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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, 1999, the directors and director nominees and
each executive officer named in the Summary Compensation Table below,
individually, and all directors, director nominees and executive and corporate
officers of the Company as a group, beneficially owned shares of Common Stock
of the Company as follows:
Amount and Nature Number of Shares Percentage of
of benficial Onwnership Underlying Exer- Total Common
Name of Outstanding Shares 1/ cisable Options 2/ Shares Stock
Benedict P. Rosen 50,670 172,500 223,170 *
Kazuo Inamori 10,000 7,500 17,500 *
John S. Gilbertson 28,715 145,000 173,715 *
Donald B. Christiansen 16,703 50,000 66,703 *
C. Marshall Jackson 2,367 112,500 114,867 *
Ernie Chilton 3,800 100,000 103,800 *
Marshall D. Butler 2,300 7,500 9,800 *
Carroll A. Campbell, Jr.2,254 4/ 7,500 9,754 *
Kensuke Itoh 66,153,000 7,500 66,160,500 76.7% 3/
Rodney N. Lanthorne 1,500 7,500 9,000 *
Henry C. Lucas 0 0 0
Richard Tressler 1,620 5/ 7,500 9,120 *
Masahiro Umemura 1,000 7,500 8,500 *
Masahiro Yamamoto 1,000 7,500 8,500 *
Michihisa Yamamoto 1,000 2,500 3,500 *
Yuzo Yamamura 1,000 7,500 8,500 *
All directors,
director nominees
and executive and
corporate officers
as a group (a total
of 23 individuals
including those
named above) 66,296,363 771,010 67,067,373 77.7% 3/
* Less than 1%
1/ Includes interests, if any, in shares held in the Company's Deferred
Compensation and Retirement Plan Trusts.
2/Includes shares under options exercisable as of March 31, 1999, and options
which become exercisable within 60 days thereof under the 1995 Stock Option
Plan or the AVX Corporation Non-Employee Directors Stock Option Plan
(the "Non-Employee Directors Plan") described below.
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.
See "Security Ownership of Certain Beneficial Owners".
4/ Includes 2,254 phantom shares accrued under the Deferred Compensation Plan
for Non-Employee Directors.
5/ Includes 1,120 phantom shares accrued under the Deferred Compensation
Plan for Non-Employee Directors.
The information provided in the above chart as to each director, director
nominee and named executive and corporate officers, 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 such
persons. Unless otherwise indicated in the footnotes, such individuals
held, together with certain members of their family, sole voting and
investment power over the shares.
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Security Ownership of Certain Beneficial Owners
Set forth below is a table indicating those persons whom the
management of the Company believe to be beneficial owners of more than 5%
of any class of the Company's securities as of May 21, 1999.
Name and Address Shares Percent
of Beneficial Owner Beneficially Owned of Class
Kyocera Corporation
6 Takeda Tobadono-cho
Fushimi-ku, Kyoto 612-8501, Japan 66,150,000 76.7%
Except for Mr. Itoh, who may be deemed to beneficially own the
shares held by Kyocera as a result of his position as President and
Representative Director of Kyocera, to the best of the Company's knowledge,
as of May 21, 1999, no other person owned more than 5% of the outstanding
voting securities of the Company.
Certain Relationships and Related Transactions
During the fiscal year ended March 31, 1999, Mr. Lucas, a current
year nominee for election as a director, was paid $71,875 in connection with
information technology consulting services provided to the Company and its
Subsidiaries. For additional information regarding Company relationships,
see "Compensation Committee Interlocks and Insider Participation".
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, 1999, all of its directors and officers
complied with all applicable Section 16(a) filing requirements.
Board of Directors -Meetings Held and Committees
The Board held four meetings during the fiscal year ended March 31,
1999. During that period, all the directors attended at least 75% of the
meetings of the Board and meetings of the committees of the Board on which
they served, except for Dr. Inamori and Mr. Itoh, who are residents of Japan
and are representatives on the Board for Kyocera.
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, 1999.
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 March 31, 1999. 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 and corporate 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 two meetings during the fiscal year ended March 31
, 1999. The members of the Compensation Committee are Messrs. Inamori
(Chairman), Itoh, Campbell and Tressler.
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Equity Compensation Committee. The Equity Compensation Committee 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, 1999.
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 a meeting
during the fiscal year ended March 31, 1999. 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 or committee meeting and reimbursement of travel expenses. Each
director who is an employee of Kyocera 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
The Non-Employee Directors' Stock Option Plan, as amended (the "Plan")
authorizes the issuance of 250,000 shares, making available the grant of an
option to purchase 7,500 shares of Common Stock to each non-employee director
as of the date on which a non-employee director is elected for the first time
and every third anniversary thereafter. The option become exercisable 33 1/3%
one year after the date of the grant and 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. However, if the
non-employee director's service terminates due to retirement, death or
disability, his options shall thereupon become fully vested. Options have an
exercise price equal to the fair market value (as defined in the Plan) of the
Common Stock on the date of grant. This plan is administered by the Board.
The Plan requires that options granted thereunder will expire on the date
which is ten years after the date of grant. Unless sooner terminated by
action of the Board, the Plan will terminate on August 1, 2005. Subject to
certain exceptions which require shareholder approval, the Plan may be
amended or discontinued by the Board. Options granted under the Plan are not
assignable. 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 an option generally result in a capital
gain or loss for the non-employee director but will have no tax consequences
for the Company. AVX feels that it is important for members of the Board to
be shareholders of the Company and to have an incentive to help the Company
grow and prosper and to share in that prosperity.
Executive Compensation
Cash Compensation
The following table shows cash compensation paid and certain other
compensation paid or accrued, by the Company related to the fiscal years ended
March 31, 1999, 1998, and 1997, to each of the Company's five most highly
compensated executive offices, including the Chief Executive Officer, in all
capacities in which they served.
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SUMMARY COMPENSATION TABLE
Annual Compensation Long Term
Compensation
Other Securities All
Annual Underlying Other
Fiscal Salary Bonus Compensation Options Compensation
Name & Position Year ($)1/ ($) ($) (#)2/ ($)3/
Benedict P. Rosen 1999 $545,000 $ 32,700 $17,664 -0- $78,600
Chairman and 1998 520,000 622,950 14,100 90,000 78,412
Chief Executive
Officer 1997 495,000 184,650 17,100 75,000 32,725
John S. Gilbertson 1999 424,000 25,440 10,063 -0- 78,761
President and 1998 400,000 476,340 8,994 80,000 67,497
Chief Operating
Officer 1997 348,000 128,775 10,035 62,500 32,691
Donald B.
Christiansen 1999 230,000 13,800 16,194 -0- 52,167
Sr.VP Finance, 1998 220,000 170,530 15,939 50,000 34,105
Chief Financial
Officer and
Treasurer 1997 205,000 52,480 12,032 50,000 32,613
C. Marshall Jackson 1999 215,000 12,900 1,778 -0- 49,905
Senior Vice President
of Sales and 1998 200,000 168,885 7,643 50,000 31,915
Marketing 1997 183,500 46,870 8,357 50,000 32,601
Ernie Chilton 1999 200,000 -0- 18,000 -0- 27,000
Senior Vice 1998 194,500 85,000 17,000 -0- 26,300
President of
Tantalum 1997 180,850 20,000 15,745 50,000 24,400
1/Includes amounts earned but deferred by the executive officer at the
election of those officers pursuant to the Company's savings or
deferred compensation plans.
2/ The stock options granted during the fiscal years ended March 31,
1998 and 1997 were granted pursuant to the 1995 Stock Option Plan.
3/ 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 the Pension Plan, 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 components of all other compensation described above, for the
fiscal year ended March 31, 1999, for the above named executive officers:
Pension Plan DCP Bonus Plan Savings Plan
Benedict P. Rosen $57,200 $5,400 $16,000
John S. Gilbertson 57,200 5,561 16,000
Donald B. Christiansen 31,067 5,100 16,000
C. Marshall Jackson 28,768 5,137 16,000
Ernie Chilton $ 27,000
The amounts shown for each named executive officer may exclude
certain perquisities and other personal benefits that did not exceed, in the
aggregate, the lesser of either $50,000 or 10% of the total of annual salary
and bonus reported for the named executive officer for any year included in
this table.
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Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth information with respect options
exercised during fiscal 1999 by the named executive officers and year-end
values of unexercised options held by the named executive officers at
year-end (all of which options were granted by the Company pursuant to the
1995 Stock Option Plan).
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at Fiscal Year End at Fiscal Year End
Shares
Accquired on Value
Exercised Realized Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
Name
<S> <C> <C> <C> <C> <C>
Benedict P. Rosen -0- $ -0- 172,500 142,500 $ -0- $ -0-
John S. Gilbertson -0- -0- 145,000 122,500 -0- -0-
Donald B. Christiansen -0- -0- 50,000 87,500 -0- -0-
C. Marshall Jackson -0- -0- 112,500 87,500 -0- -0-
Ernie Chilton -0- -0- 100,000 50,000 -0- -0-
</TABLE>
No options were granted to, or exercised by, any officer of the
Company in fiscal year 1999. Options to purchase 383,300 shares of common
stock for $6,250,820 were granted under the 1995 Stock Option Plan to other
employees of the Company.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended March 31, 1999, the Compensation Committee
was comprised of Messrs. Inamori, Itoh, Campbell and Tressler. Dr. Inamori
is Chairman Emeritus of the Board and Mr. Itoh is President, of Kyocera.
Kyocera owns 66,150,000 shares, or approximately 76.7%, of the Company's
outstanding Common Stock and has engaged in a significant number and variety
of related company transactions. The more significant arrangements and
agreements between the Company and Kyocera are described in the Company's
Annual Report on Form 10-K and disclosed in the footnotes to the financial
statements in the Annual Report to Shareholders.
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 April 1, 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 or, the Equity Compensation Committee, as
applicable, 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 Management Incentive Program ("MIP"), the
grant of stock options under the 1995 Stock Option Plan, and the provision of
any special benefits or perquisites to executive officers.
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<PAGE>
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.
Management Incentive Plan
The MIP provides for annual cash incentive compensation based on
various performance measures for executive officer positions. Bonus awards
are paid under the MIP 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 and corporate officers' bonuses are
derived from a pool determined based on a percentage of profits.
1995 Stock Option Plan
The 1995 Stock Option Plan 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 1995 Stock Option
Plan 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.
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, 1999, reflect
his substantial responsibilities. Based on these responsibilities, the Board
awarded Mr. Rosen a base salary of $545,000 reflecting a merit increase of
4.8% over the prior year. Mr. Rosen received no MIP bonus award for fiscal
year 1999.
Corporate Officer Death Benefit
In addition to the Company sponsored life insurance benefit provided
to most employees (two times annual salary, as defined), if a corporate officer
dies while employed by the Company, the Company will pay the officer's
survivor, or estate, the equivalent of two year's base salary during the
ensuing two years.
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. Under one of these plans, the Company contributes an amount equal to
the amount to which the participant would have been entitled (but for
regulatory limitations) under the Company's regular retirement program, up to
allowable statutory limitations. Under the other deferred compensation plan,
all executive and corporate officers can elect to defer additional amounts of
compensation.
Deductibility of Executive Compensation
With respect to Section 162(m) of the Code and the underlying Internal
Revenue Service (the "IRS") regulations pertaining to the deductibility of
compensation to certain executive officers in excess of $1 million, the
Compensation Committee has adopted a policy that it will attempt to comply
with such limitations, to the extent practicable, including its presentation
of incentive compensation plans to the shareholders, for prior approval,
where appropriate. However, the Compensation Committee has also determined
that some flexibility is required, notwithstanding these IRS regulations,
in negotiating and implementing the Company's incentive compensation program.
It has, therefore, retained the option to award some bonus payments based on
non-quantitative performance objectives and other criteria which it may
determine, at its discretion, from time to time.
14
<PAGE>
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
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 prior to or during the two year
advisory period, his heirs will be entitled to the compensation Mr. Rosen
would have received.
Stock Price 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 31, 1999, with the cumulative total return of the S&P 500 Stock
Index and a Peer Group Index. for such period.
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 Mar. 31-99
AVX 100 86 83 81 66
S&P 500 100 117 140 208 246
Old Peer Group 100 96 88 115 124
New Peer Group 100 91 90 118 106
The "Old Peer Group" is comprised of the following companies: AMP,
Amphenol, Kemet, Methode, Molex and Vishay. The "New Peer Group" reflects
the same companies, with the exclusion of AMP, which has agreed to merge with
Tyco International. 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 Exchange 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.
15
<PAGE>
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 2000, 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 February 10, 2000.
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.
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 American Stock Transfer & Trust Company to
assist in the solicitation of proxies at a fee estimated to be $10,000,
excluding out-of-pocket expenses.
Requests for a copy of AVX's Annual Report on Form 10-K filed with the
Securities and Exchange Commission should be directed to Mr. Donald B.
Christiansen, Chief Financial Officer, AVX Corporation, PO Box 867, Myrtle
Beach, South Carolina 29578.
By order of the Board,
/s/ Kurt Cummings
------------------------
Kurt Cummings
Corporate Secretary
June 7, 1999
16
<PAGE>
Please date, sign and mail your proxy card back as soon as possible!
Annual Meeting of Shareholders
AVX CORPORATION
July 15, 1999
{Please Detach and Mail in the Envelope Provided}
17
<PAGE>
A X Please mark your votes as in this example.
DIRECTORS RECOMMEND VOTING FOR 1,2,3,4 AND 5.
1. To elect five Class III Directors for terms Expiring at the Annual
Meeting in July of 2002
FOR all nominees listed (except as marked to
the contrary)
WITHHOLD AUTHORITY to vote for all listed
nominees at right.
(Instruction: to withhold authority to vote for any individual nominee
strike out that nominee's name in the list provided at right.)
Nominees: Donald B. Christiansen
Masahiro Yamamoto
Yuzo Yamamura
Yasuo Nishiguchi
Henry C. Lucas, Jr.
FOR AGAINST ABSTAIN
2. To ratify a proposed amendment to the 1995 Stock Option Plan;
3. To ratify the Management Incentive Plan;
4. To ratify the appointment of PricewaterhouseCoopers, LLP as
the Company's independent auditors for the fiscal year commencing
April 1, 1999;
5. To transact any other business that may properly come before the
Annual Meeting or any adjournment thereof.
Please mark box at right if an address change or comment has been noted on
the reverse side of this card.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY.
Signature____________________Co-owner sign here_______ _______Date______1999
Note: (Signatures should conform to names as registered For jointly owned
shares, each owner should sign. When signing as attorney, executor,
administrator, trustee, guardian or officer of a corporation, please give
full title.)
18
<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 P. Rosen, 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 to represent and to vote, as designated on the
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, 4 AND 5.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your names(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
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
_____________________________ ______________________________
_____________________________ ______________________________
_____________________________ ______________________________
