LITTELFUSE, INC.
800 East Northwest Highway
Des Plaines, Illinois 60016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 1, 1998
The annual meeting of the stockholders of Littelfuse, Inc. (the
"Company") will be held in The First Chicago NBD Corporation Dining Room located
on the 57th floor at One First National Plaza, Chicago, Illinois 60670, on
Friday, May 1, 1998, at 9:00 a.m., local time, for the following purposes as
described in the attached Proxy Statement:
1. To elect a Board of six Directors;
2. To approve and ratify the appointment by the Board of Directors
of the Company of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending January 2, 1999;
3. To approve an amendment to the 1993 Stock Plan for Employees and
Directors of Littelfuse, Inc. which would increase the maximum
aggregate number of shares of Common Stock as to which awards of
options, restricted shares, units or rights may be made from time
to time thereunder from 1,200,000 to 1,800,000 shares;
and to transact such other business as may properly come before the annual
meeting or any adjournment thereof.
Stockholders of record of the Company at the close of business on March
13, 1998, will be entitled to vote at the meeting.
PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
Mary S. Muchoney
Secretary
March 24, 1998
<PAGE>
LITTELFUSE, INC.
800 East Northwest Highway
Des Plaines, Illinois 60016
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
May 1, 1998
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of the Company of proxies for use at the Company's
annual meeting of stockholders to be held on May 1, 1998.
Any stockholder giving a proxy will have the right to revoke it at any
time prior to the time it is voted. A proxy may be revoked by written notice to
the Company, execution of a subsequent proxy or attendance at the annual meeting
and voting in person. Attendance at the annual meeting will not automatically
revoke the proxy. All shares represented by effective proxies will be voted at
the annual meeting or at any adjournment thereof.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, officers and employees of the Company may
solicit proxies by telephone or in person.
The Company's annual report, including financial statements, was mailed
to each stockholder on or about March 24, 1998. The financial statements
contained in the Company's annual report are not deemed material to the exercise
of prudent judgment in regard to the matters to be acted upon at the annual
meeting and, therefore, are not incorporated by reference into this Proxy
Statement. This Proxy Statement and form of proxy are first being mailed to
stockholders on or about March 24, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL OF THE
NOMINEES FOR DIRECTOR NAMED IN PROPOSAL 1, A VOTE FOR THE APPROVAL AND
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AS
DISCUSSED IN PROPOSAL 2, AND A VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE
1993 STOCK PLAN FOR EMPLOYEES AND DIRECTORS OF LITTELFUSE, INC. (THE "1993 STOCK
PLAN") AS DISCUSSED IN PROPOSAL 3.
THE COMPANY
The Company was incorporated under the laws of the State of Delaware on
November 25, 1991. The Company's first full fiscal year was 1992. The Company is
the successor to the business and assets of a corporation of the same name ("old
Littelfuse"), which was originally formed in 1927 and subsequently acquired by
Tracor, Inc. in 1968.
VOTING
Stockholders of record on the books of the Company at the close of
business on March 13, 1998, will be entitled to notice of and to vote at the
meeting. A list of the stockholders entitled to vote at the meeting shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting at LaSalle National Bank, 135 South LaSalle Street, Chicago,
Illinois 60603. The Company had outstanding on March 13, 1998, 20,932,212 shares
of its common stock, par value $.01 per share (the "Common Stock"), and warrants
to purchase an additional 2,789,663 shares of Common Stock at a current exercise
price of $4.18 per share. Each outstanding share of Common Stock entitles the
holder to one vote on each matter submitted to a vote at the meeting. A warrant
to purchase shares of Common Stock does not entitle the holder to vote at the
meeting.
The shares represented by proxies will be voted as directed in the
proxies. In the absence of specific direction, the shares represented by proxies
will be voted FOR the election of all of the nominees as Directors of the
Company, FOR the approval and ratification of the appointment of Ernst & Young
LLP as independent auditors, and FOR the approval of the amendment to the 1993
Stock Plan. In the event any nominee for Director shall be unable to serve,
which is not now contemplated, the shares represented by proxies may be voted
for a substitute nominee. If any matters are to be presented at the annual
meeting other than the matters referred to in this Proxy Statement, the shares
represented by proxies will be voted in the discretion of the proxy holders.
The Company's Bylaws provide that a majority of all of the shares of
Common Stock entitled to vote, whether present in person or represented by
proxy, shall constitute a quorum for the transaction of business at the meeting.
Votes for and against, abstentions and "broker non-votes" will each be counted
as present for purposes of determining the presence of a quorum. To determine
whether a specific proposal has received sufficient votes to be passed, for
shares deemed present, an abstention will have the same effect as a vote
"against" the proposal, while a broker non-vote will not be included in vote
totals and will have no effect on the outcome of the vote. The affirmative vote
by the holders of a majority of the shares present (whether in person or by
proxy) at the meeting will be required for the approval of the ratification of
Ernst & Young LLP as independent auditors and the approval of the amendment to
the 1993 Stock Plan. With respect to the election of Directors, the six nominees
who receive the most votes at the meeting will be elected.
OWNERSHIP OF LITTELFUSE, INC. COMMON STOCK
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of March 13, 1998, by each Director,
by each person known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock, by each executive officer named in the Summary
Compensation Table and by all of the Directors and executive officers of the
Company as a group. <TABLE>
NUMBER OF SHARES OF
COMMON STOCK
BENEFICIALLY OWNED (1) (5)
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT
- --------------------------------------------------------------------------
<S> <C> <C>
Janus Capital Corporation(2)............................................. 2,302,500 11.0%
100 Fillmore Street
Suite 300
Denver, Colorado 80206-4923
- --------------------------------------------------------------------------
The Capital Group Companies, Inc.(3) 1,793,900 9.0%
333 South Hope Street
Los Angeles, California 90017
- --------------------------------------------------------------------------
Wellington Management Co. LLP 1,408,400 7.1%
75 State Street
Boston, Massachusetts 02109
- --------------------------------------------------------------------------
Howard B. Witt........................................................... 422,800 2.1%
- --------------------------------------------------------------------------
John P. Driscoll......................................................... 211 *
- --------------------------------------------------------------------------
Anthony Grillo........................................................... 28,712 *
- --------------------------------------------------------------------------
Bruce A. Karsh(4)........................................................ 299,006 1.5%
- --------------------------------------------------------------------------
John E. Major............................................................ 25,712 *
- --------------------------------------------------------------------------
John J. Nevin............................................................ 53,712 *
- --------------------------------------------------------------------------
James F. Brace........................................................... 67,800 *
- --------------------------------------------------------------------------
William S. Barron........................................................ 66,200 *
- --------------------------------------------------------------------------
David J. Krueger......................................................... 75,680 *
- --------------------------------------------------------------------------
Lloyd J. Turner.......................................................... 76,800 *
- --------------------------------------------------------------------------
All Directors and executive officers as a group (13 persons)............. 1,197,403 6.0%
- --------------------
<FN>
(1) The number of shares listed includes 554,160 shares of Common
Stock which may be acquired through the exercise of stock options within 60
days of March 13, 1998.
(2) Includes 1,137,325 shares of Common Stock issuable upon the
exercise of warrants that are immediately exercisable.
(3) The Capital Group Companies, Inc. is the parent holding company of
a group of investment management companies. The investment management
companies provide investment advisory advice and management services for
their respective clients which include registered investment companies and
institutional accounts. The shares reported herein are owned by accounts
under the discretionary investment management of one or more of the
investment management companies owned by The Capital Group Companies, Inc.
The Capital Group Companies, Inc., does not have investment power or voting
power over any of the securities reported herein; however, The Capital
Group Companies, Inc., may be deemed to "beneficially own" such securities
by virtue of Rule 13d-3 under the Securities Exchange Act of 1934. Capital
Research and Management Company, an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940 and a wholly-owned
subsidiary of The Capital Group Companies, Inc., is the beneficial owner of
1,390,000 shares of Common Stock as a result of acting as investment
adviser to various investment companies. The remaining shares reported as
being beneficially owned by The Capital Group Companies, Inc. are
beneficially owned by other subsidiaries of The Capital Group Companies,
Inc., none of which by itself owns 5% or more of the outstanding Common
Stock.
(4) Includes 14,000 shares of Common Stock held in an IRA and in trust
for Mr. Karsh's children, and 14,230 shares of Common Stock issuable upon
the exercise of warrants that are immediately exercisable.
(5) Information concerning persons known to the Company to be
beneficial owners of more than 5 percent of its Common Stock is based upon
the most recently available reports furnished by such persons on Schedule
13G as filed with the Securities and Exchange Commission.
* Indicates ownership of less than 1% of Common Stock.
</FN>
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers, Directors and
holders of more than 10% of the Common Stock to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. The Company believes that during the fiscal year ended January 3, 1998,
with the exception of the following, its executive officers, Directors and
holders of more than 10% of the Common Stock complied with all Section 16(a)
filing requirements. Mr. Grillo filed a late Form 4 in 1997. In making these
statements, the Company has relied upon the written representations of its
executive officers and Directors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Six Directors are to be elected at the annual meeting to serve terms of
one year or until their respective successors have been elected. The nominees
for Director, all of whom are now serving as Directors of the Company, are
listed below together with certain biographical information. Except as otherwise
indicated, each nominee for Director has been engaged in his present principal
occupation for at least the past five years.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE NOMINEES LISTED BELOW AS DIRECTORS.
Howard B. Witt, age 57, has been a Director of the Company since
November 1991. Mr. Witt was promoted to President and Chief Executive Officer of
Old Littelfuse in February 1990 and continues to serve in these positions with
the Company. In May 1993, Mr. Witt was elected as the Chairman of the Board of
the Company. Prior to his appointment as President and Chief Executive Officer,
Mr. Witt served in several other key management positions with Old Littelfuse,
including Operations Manager from March 1979 to January 1986, Vice
President-Manufacturing Operations from January 1986 to January 1988, and
Executive Vice President with full operating responsibilities for all U.S.
activities from January 1988 to February 1990. Prior to joining Littelfuse, Mr.
Witt was a division president of Keene Corporation from 1974 to 1979. Mr. Witt
currently serves as a member of the Board of Directors of Franklin Electric Co.,
Inc. and Material Sciences Corporation and is a member of the Electronic
Industries Association Board of Governors. He is also a director of the Artisan
Mutual Fund.
John P. Driscoll, age 62, was elected a Director of the Company by the
Board of Directors on February 6, 1998. Mr. Driscoll is an Executive Vice
President of Murata Electronics North America, Inc. He is responsible for
corporate policy and strategy and oversees government and industry relations.
Mr. Driscoll joined Murata Electronics in 1979 as Vice President of Marketing
and Sales. He was appointed Senior Vice President Marketing and Sales in 1985
and assumed his current position in 1995. Previously he was general manager of
Worldwide Marketing for Sprague Electric Company, where he held a number of
sales and marketing positions. Mr. Driscoll is a former Vice President,
Components Group of the Electronic Industries Association, and a member of its
Board of Governors. He is also affiliated with the Electronics Component and
Technology Conference and the Japan American Society.
Anthony Grillo, age 42, has been a Director of the Company since
December 1991. He is a member of the Audit Committee. Mr. Grillo is a Senior
Managing Director of the Blackstone Group L.P., an investment banking firm.
Since joining the Blackstone Group in 1991, Mr. Grillo has been responsible for
generating and overseeing advisory engagements and investment opportunities
within its Restructuring and Reorganization Group. From November 1989 through
May 1991, he was a Managing Director with the corporate finance division,
Restructuring and Reorganization Group of Chemical Bank. From March 1988 through
November 1989, Mr. Grillo was a Senior Vice President of American Securities
Corporation, a privately held investment bank. For eight years prior, Mr. Grillo
had concentrated his efforts working as a financial advisor for AMA Management
Corporation, a private fund; and as Vice President for Manufacturers Hanover
Trust Company. Mr. Grillo currently serves as a member of the Board of Directors
of Tracor, Inc., People's Choice TV Corp., and Bar Technologies, Inc. as well as
on the boards of several privately held companies.
Bruce A. Karsh, age 42, has been a Director of the Company since December
1991. He is a member of the Compensation Committee. Mr. Karsh currently serves
as President of Oaktree Capital Management, LLC, an investment management firm
which he co-founded in 1995. Prior to that, Mr. Karsh established the TCW
Special Credits group of funds at The TCW Group, Inc. and had primary portfolio
management responsibility for their operation. Mr. Karsh resigned from TCW in
1995. Before joining TCW in 1987, he previously worked as Assistant to the
Chairman of Sun Life Insurance Company and of SunAmerica Inc., its parent. Mr.
Karsh currently serves as a member of the Board of Directors of Furniture Brands
International and Triangle Pacific Corp.
John E. Major, age 52, has been a Director of the Company since December
1991. He is a member of the Compensation Committee. Mr. Major currently serves
as Corporate Executive Vice President of QUALCOMM, Inc. and President of its
Code Division Multiple Access Wireless Infrastructure Division. Prior to joining
QUALCOMM Mr. Major served most recently as Senior Vice President and Staff Chief
Technical Officer at Motorola. Mr. Major currently serves on the Board of
Directors Executive Committee for the Telecommunications Industry Association
(TIA) and is Chairman for the Electronics Industry Association (EIA). He also
serves on the Board of Directors of Lennox Corporation. He serves on the
Visitor's Board for the Software Engineering Institute of Carnegie Mellon and
serves on the Computer Science and Telecommunications Board for the National
Academy of Science. Additionally, he is on the Trustee's Council for the
University of Rochester.
John J. Nevin, age 70, has been a Director of the Company since December
1991. He is a member of the Audit Committee. Mr. Nevin was Chairman of the Board
of Bridgestone/Firestone, Inc. from May 1, 1988, to December 31, 1989. Mr. Nevin
joined The Firestone Tire & Rubber Company (predecessor of
Bridgestone/Firestone, Inc.) on December 1, 1979, as President and Chief
Operating Officer and was elected to its Board of Directors on February 9, 1980.
He was named Chief Executive Officer on September 1, 1980, and was elected
Chairman of the Board on February 2, 1981. Prior to joining The Firestone Tire &
Rubber Company, Mr. Nevin held senior management positions with several major
industrial corporations, including Chairman of the Board and Chief Executive
Officer of Zenith Radio Corporation and Vice President of Marketing for Ford
Motor Company. Mr. Nevin is a life trustee of Northwestern University.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
Compensation of Directors. Directors who are not employees of the
Company are currently being paid an annual Director's fee of $20,000, $800 for
each of the four regularly scheduled Board meetings attended and $400 for
attendance at any special teleconference Board meetings, plus reimbursement of
reasonable expenses relating to attendance at meetings. No such fees are paid to
Directors who are also full-time employees of the Company.
Under the Littelfuse Deferred Compensation Plan for Non-employee
Directors, a Director, at his election, may defer receipt of his Director's
fees. Such deferred fees are used to purchase shares of the Common Stock and
such shares and any distributions thereon are deposited with a third party
trustee for the benefit of the Director until the Director attains the age of 72
or ceases to be a Director of the Company. All Non-employee Directors have
elected to be compensated in Common Stock.
The 1993 Stock Plan for Employees and Directors of Littelfuse, Inc.
provides for the annual granting to each Non-employee Director of non-qualified
stock options to purchase 5,000 shares of the Common Stock. In 1997, each
Non-employee Director (except Mr. Driscoll who was first elected on February 6,
1998) was granted an option to purchase 5,000 shares of the Common Stock.
Audit Committee. The Audit Committee consists of two outside Directors.
It is the responsibility of the Audit Committee to (i) recommend each year to
the Board of Directors independent auditors to audit the financial statements of
the Company and its consolidated subsidiaries, (ii) review the scope of the
audit plan, (iii) discuss with the auditors the results of the Company's annual
audit and any related matters, and (iv) review transactions posing a potential
conflict of interest among the Company and its Directors, officers and
affiliates. The Audit Committee met two times in 1997. Members of the Audit
Committee are Anthony Grillo and John J. Nevin.
Compensation Committee. The Compensation Committee consists of two outside
Directors. It is the responsibility of the Compensation Committee to make
recommendations to the Board of Directors with respect to compensation and
benefit programs, including the stock-based plans, for Directors, officers and
employees of the Company and its subsidiaries. The Compensation Committee met
three times in 1997. Members of the Compensation Committee are Bruce A. Karsh
and John E. Major.
Attendance at Meetings. The Board of Directors held five meetings
during 1997. All of the Directors attended at least 75% of the meetings of the
Board of Directors and the committees on which they served.
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF
APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval of the stockholders, the Board of Directors has
appointed Ernst & Young LLP, certified public accountants, as independent
auditors to examine the annual consolidated financial statements of the Company
and its subsidiary companies for the fiscal year ending January 2, 1999. The
stockholders will be asked at the meeting to approve and ratify such
appointment. A representative of Ernst & Young LLP will be present at the
meeting to make a statement, if such representative so desires, and to respond
to stockholders' questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
FOLLOWING RESOLUTION WHICH WILL BE PRESENTED AT THE MEETING:
RESOLVED: That the appointment by the Board of Directors of the Company
of Ernst & Young LLP as the Company's independent auditors for the fiscal year
ending January 2, 1999, be approved and ratified.
PROPOSAL NO. 3:
APPROVAL OF THE AMENDMENT TO THE 1993 STOCK PLAN FOR EMPLOYEES
AND DIRECTORS OF LITTELFUSE, INC.
The Board of Directors recommends to the stockholders the approval of a
proposed amendment to the 1993 Stock Plan which would increase the maximum
aggregate number of shares of Common Stock as to which awards of options,
restricted shares, units or rights may be made from time to time thereunder from
1,200,000 to 1,800,000 shares. The 1993 Stock Plan currently provides that a
total of 1,200,000 shares of Common Stock may be issued pursuant to options,
restricted shares, units or rights which may be granted or awarded thereunder.
As of March 13, 1998, a total of 79,780 shares of Common Stock were available
for such purpose. After giving effect to the proposed amendment to the 1993
Stock Plan, such maximum aggregate number of shares of Common Stock under the
1993 Stock Plan would be increased to 1,800,000 shares. Management believes that
this amendment will further promote the Company's goals of enhancing the
long-term profitability and stockholder value of the Company by offering
stock-based incentives to those individuals who are key to the growth and
success of the Company.
Capitalized terms not defined herein have the same meanings as in the 1993
Stock Plan. The major provisions of the 1993 Stock Plan relating to stock
options and the proposed amendments are described below:
Term. The 1993 Stock Plan became effective as of February 12, 1993, and has
no fixed expiration date.
Administration. The 1993 Stock Plan is administered by the Compensation
Committee of the Board of Directors (the "Compensation Committee") comprised of
Non-employee Directors, which has the exclusive authority to make awards under
the 1993 Stock Plan and all interpretations and determinations affecting the
1993 Stock Plan.
Participation. Participation in the 1993 Stock Plan is limited to
officers and other key employees of the Company and its subsidiaries
("Employees") who are selected from time to time by the Compensation Committee.
Employees who are participants in the 1993 Stock Plan are also eligible to
participate in any other incentive plan of the Company. All of the incumbent
Non-employee Directors (except Mr. Driscoll who was first elected on February 6,
1998) received in 1997 a grant of an option to purchase 5,000 shares of Common
Stock.
Shares Available for Awards. Currently, no more than 1,200,000 shares
may be issued in the aggregate under the 1993 Stock Plan (subject to adjustment
as described below for stock splits, stock dividends, recapitalizations, mergers
and the like). The proposed amendments would increase this amount to 1,800,000
shares. Generally, any shares which cease to be subject to purchase under a
granted option, or any forfeited restricted shares or restricted units, will
become available for subsequent awards under the 1993 Stock Plan.
Annual Grant of Stock Options to Non-employee Directors. Currently,
each Non-employee Director is automatically granted a non-qualified option to
purchase 5,000 shares of Common Stock, which option shall be granted on the date
of the first meeting of the Board of Directors of the Company following each
annual meeting of the stockholders of the Company ("Annual Non-employee Director
Stock Options"). The number of Annual Non-employee Director Stock Options to be
granted as of the date of any such meeting of the Board of Directors shall be
proportionately adjusted to reflect any stock splits, stock dividends,
recapitalizations or similar transactions causing an increase or decrease in the
number of issued and outstanding shares of Common Stock which have occurred
since the date of the most recent grant of Annual Non-employee Director Stock
Options. Any Non-employee Director may waive his or her right to be granted
Annual Non-employee Director Stock Options. In the event that the granting of
any Annual Non-employee Director Stock Options would cause the 1,200,000 share
limitation (or, in the event the proposed amendment is adopted, the 1,800,000
share limitation) of the 1993 Stock Plan to be exceeded, the total number of
Annual Non-employee Director Stock Options then to be granted shall be reduced
to a number which would cause said share limitation not to be exceeded and the
amount of non-qualified options to be granted to each Non-employee Director who
has not waived his or her right to receive Annual Non-employee Director Stock
Options shall be proportionately reduced.
Stock Options. The terms of non-qualified stock options granted to
Non-employee Directors (including the terms of the Annual Non-employee Director
Stock Options), the exercise price for shares purchasable under such options and
the date such options become exercisable are determined pursuant to the formula
provision of the 1993 Stock Plan. However, each option granted either to an
Employee or Non-employee Director will become exercisable in full at the
earliest of the death, Retirement (as defined in the 1993 Stock Plan) or Total
Disability (as defined in the 1993 Stock Plan) of the option holder or a Change
in Control (as defined in the 1993 Stock Plan) of the Company. Each option shall
be exercisable in full or in part, subject to certain requirements in the 1993
Stock Plan, by payment of the exercise price in cash or already owned shares for
the number of shares to be purchased or as otherwise permitted by the
Compensation Committee pursuant to the provisions of the 1993 Stock Plan.
Adjustments. The Compensation Committee may, in the event of any stock
dividend, stock split, recapitalization, merger, consolidation or other change
in the capitalization of the Company or similar corporate transaction or event
affecting the Common Stock, in such manner as it deems equitable, adjust, among
other things, (i) the maximum number of shares that may be issued under the 1993
Stock Plan; (ii) the number and class of shares that may be subject to stock
options, restricted shares or restricted units that have not been issued; (iii)
the exercise price to be paid for unexercised stock options; and (iv) the share
value used to determine the amount or value of any award under the 1993 Stock
Plan. Effective June 10, 1997, the maximum aggregate number of shares of Common
Stock as to which awards of options, restricted shares, units or rights could be
made from time to time under the 1993 Stock Plan was adjusted from 600,000 to
1,200,000 to reflect the stock dividend which was paid on the Common Stock on
that date.
Termination and Amendment. The Board of Directors may suspend,
terminate, modify or amend the 1993 Stock Plan at any time, but if any such
amendment requires stockholder approval in order to meet the requirements of the
then applicable rules under Section 16(b) of the Exchange Act, such amendment
may not be effected without obtaining stockholder approval. The Board of
Directors may terminate the 1993 Stock Plan, but the terms of the 1993 Stock
Plan will continue to apply to awards granted prior to such termination. No
suspension, termination, modification or amendment of the 1993 Stock Plan may
adversely affect the rights of an Employee or Non-employee Director under
previously granted awards.
FEDERAL INCOME TAX CONSEQUENCES
Non-Qualified Options. Under the applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), no tax will be
payable by the recipient of a non-qualified option at the time of grant. Upon
exercise of a non-qualified option, the excess, if any, of the fair market value
of the shares with respect to which the option is exercised over the total
exercise price of such shares will be treated for Federal tax purposes as
ordinary income. Any profit or loss realized on the sale or exchange of any
share actually received will be treated as a capital gain or loss. The Company
will be entitled to deduct the amount, if any, by which the fair market value on
the date of exercise of the shares with respect to which the option was
exercised exceeds the exercise price.
PROPOSED AMENDMENT
The proposed amendment would increase the maximum aggregate number of
shares of Common Stock as to which awards of options, restricted shares, units
or rights may be made from time to time thereunder from 1,200,000 to 1,800,000
shares. The 1993 Stock Plan currently provides that a total of 1,200,000 shares
of Common Stock may be issued pursuant to options, restricted shares, units or
rights which may be granted or awarded thereunder. After giving effect to the
proposed amendment to the 1993 Stock Plan, such maximum aggregate number of
shares of Common Stock under the 1993 Stock Plan would be increased to 1,800,000
shares.
PLAN BENEFITS TABLE
The number of shares of Common Stock which the executive officers of
the Company would have been granted options to purchase under the 1993 Stock
Plan in the future and the dollar value of such options cannot currently be
determined. The number of shares of Common Stock which the executive officers of
the Company were granted options to purchase under the 1993 Stock Plan in the
1997 fiscal year and the exercise price of such options are disclosed in the
"Option/SAR Grants in Last Fiscal Year" table under "COMPENSATION OF EXECUTIVE
OFFICERS" herein. In the 1997 fiscal year, all executive officers as a group
received options to purchase 104,000 shares of Common Stock at an average
exercise price of $23.00 per share, current directors who are not executive
officers as a group received options to purchase 20,000 shares of Common Stock
at an average exercise price of $23.00 per share, and all employees, including
all current officers who are not executive officers, as a group received options
to purchase 106,300 shares of Common Stock at an average exercise price of
$31.50 per share. Based upon the average of the high and low "sales" price of
shares of the Common Stock as reported on The Nasdaq Stock Market on January 3,
1998, the fair market value of these groups of options was $227,760, $43,800,
and $0, respectively.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING RESOLUTION
WHICH WILL BE PRESENTED AT THE ANNUAL MEETING:
RESOLVED: that the amendment to the 1993 Stock Plan for
Employees and Directors of Littelfuse, Inc. which would
increase the maximum aggregate number of shares of Common
Stock as to which awards of options, restricted shares, units
or rights may be made from time to time thereunder from
1,200,000 to 1,800,000 shares be approved.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Chief
Executive Officer and each of the other four most highly compensated executive
officers of the Company (the "named executive officers") for the last three (3)
fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(2) RESTRICTED SECURITIES ALL OTHER
STOCK UNDERLYING COMPENSATION($)(4)
AWARDS($) OPTIONS/
(3) SARS(#)
----------------------------------
<S> <C> <C> <C> <C> <C> <C>
...................Howard B. Witt 1997 370,000 180,000 775,700 50,000 95,042
Chairman of the Board, 1996 310,000 147,731 44,000 62,114
President and 1995 310,000 132,273 44,000 26,747
Chief Executive Officer
----------------------------------
...................James F. Brace 1997 159,500 50,058 251,900 12,000 5,121
Vice President, Treasurer and 1996 154,000 60,851 12,000 4,890
Chief Financial Officer 1995 148,000 46,284 12,000 3,675
----------------------------------
................William S. Barron 1997 153,000 60,877 251,900 12,000 8,877
Vice President 1996 141,000 45,470 10,000 4,811
1995 136,500 44,755 10,000 2,494
----------------------------------
.................David J. Krueger 1997 145,500 52,193 251,900 10,000 19,425
Vice President 1996 141,000 45,931 10,000 17,321
1995 136,500 45,090 10,000 9,628
----------------------------------
..................Lloyd J. Turner 1997 137,000 39,544 251,900 10,000 4,897
Vice President 1996 124,000 44,628 10,000 4,823
1995 119,500 39,763 10,000 2,022
- --------------------
<FN>
(1) Mr. Witt's salary increases have historically become effective on January 1
of each year. The salary increases of Messrs. Brace, Barron, Krueger and
Turner have historically become effective on July 1 of each year. As
discussed subsequently in the Section entitled "-Reports of the
Compensation Committee on Executive Compensation - Salaries," the salaries
of Messrs. Witt, Brace, Barron, Krueger and Turner were not increased in
1996 pursuant to Mr. Witt's recommendation to the Compensation Committee.
The increases shown for Messrs. Brace, Barron, Krueger and Turner for 1996
reflect their salary increases which became effective for them on July 1,
1995, and which extended into the first six months of 1996.
(2) The amounts disclosed in this column are awards under the Company's Annual
Incentive Compensation Program.
(3) At December 31, 1997, Messrs. Witt, Brace, Barron, Krueger and Turner held
restricted stock awards for 30,000; 10,000; 10,000; 10,000 and 10,000
shares, respectively. The restricted stock subject to such awards had
values listed in the table based upon a $25.19 share average of the high
and low "sales' price of Common Stock as reported on the Nasdaq Stock
Market on January 2, 1998. The shares of restricted stock awarded to the
executive officers are subject to the condition that the Company must
achieve both a specified return on net tangible assets and a specified
average annual percentage increase in earnings before interest, taxes,
depreciation and amortization during the three-year period commencing
January 1, 1996, and ending December 31, 1998. To the extent any restricted
shares are deemed to be earned based upon the full or partial attainment of
such financial goals, one-half of the earned restricted shares will be
issued to each recipient on March 15, 1999, and the balance of such earned
restricted shares shall be paid in cash in three annual installments on
January 2, 2000, 2001 and 2002. The restricted shares are subject to the
restriction that the recipient remain employed by the Company, but such
restriction shall lapse with respect to one-third of the restricted shares
on January 2, 2000, 2001 and 2002 provided the recipient is still employed
by the Company. Similarly, the recipient must remain employed by the
Company on January 2, 2000, 2001 and 2002 to receive each such cash
payment.
(4) The amounts disclosed in this column represent the compensation value to
the named executive officers of life insurance premiums paid by the Company
for life insurance policies on the lives of Mr. Witt, Mr. Brace, Mr.
Barron, Mr. Krueger and Mr. Turner. The amounts also include the amount
representing total imputed interest from interest-free loans obtained by
the individuals from the Company pursuant to the Littelfuse Executive Loan
Program in fiscal 1995, 1996 and 1997. Total imputed interest for each of
Mr. Witt, Mr. Brace, Mr. Barron, Mr. Krueger and Mr. Turner was $18,758,
$1,225, $84, $6,304 and $92, respectively, in fiscal 1995; $54,104, $2,171,
$2,317, $13,074 and $2,623, respectively, in fiscal 1996; and $86,582,
$2,447, $4,889, $13,874 and $2,623, respectively, in fiscal 1997.
</FN>
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal
1997 to the named executive officers.
<TABLE>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
PERCENTAGE
NUMBER OF OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR(2) ($/SHARE) DATE(3) 5%($) 10%($)
- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Howard B. Witt.............. 50,000 18.5% 23.00 4/25/2008 1,240,759 3,653,828
- -----------------------------
James F. Brace.............. 12,000 4.4%
23.00 4/25/2008 297,782 876,918
- -----------------------------
William S. Barron........... 12,000 4.4%
23.00 4/25/2008 297,782 876,918
- -----------------------------
David J. Krueger............ 10,000 3.7%
23.00 4/25/2008 248,151 730,765
- -----------------------------
Lloyd J. Turner............. 10,000 3.7%
23.00 4/25/2008 248,151 730,765
- --------------------
<FN>
(1) Potential realizable value is based on an assumption that the price of the
Common Stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the option term. These numbers are
calculated based on the requirements of the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
performance.
(2) The Company granted options representing 270,300 shares to employees in
fiscal 1997.
(3) The options become exercisable in 20% increments on April 25, 1998-2002.
The options expire 10 years after the date they become exercisable. The
expiration date shown is the expiration date of the options which will
become exercisable on April 25, 1998.
</FN>
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table provides information on option exercises in fiscal
1997 by the named executive officers and the value of such officers' unexercised
options at January 3, 1998.
<TABLE>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
EXERCISE VALUE REALIZED OPTIONS/SARS AT JANUARY 3, 1998($)(2)
JANUARY 3, 1998(#)(1)
NAME (#) ($)(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Howard B. Witt.......... 37,500 888,278 197,700 135,600 3,529,555 907,879
- -------------------------
James F. Brace.......... 9,000 194,777 31,000 34,000 486,981 224,813
- -------------------------
William S. Barron....... 0 0 39,800 31,200 692,577 204,481
- -------------------------
David J. Krueger........ 0 0 36,800 29,200 639,445 200,101
- -------------------------
Lloyd J. Turner......... 0 0 52,200 29,200 959,206 200,101
- --------------------
<FN>
(1) Future exercisability is subject to vesting and the optionee remaining
employed by the Company.
(2) Value is calculated by subtracting the exercise price from the assumed fair
market value of the securities underlying the option at fiscal year-end and
multiplying the result by the number of in-the-money options held. There is
no guarantee that if and when these options are exercised they will have
this value. Fair market value was calculated based on the average high and
low "sales" price of shares of the Common Stock as reported on The Nasdaq
Stock Market on January 2, 1998 ($25.19).
(3) Market value of underlying securities at exercise date (closing price as
reported on the Nasdaq Stock Market on exercise date), minus the exercise
price of in-the-money options.
</FN>
</TABLE>
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL EMPLOYMENT AGREEMENTS ENTERED
INTO WITH EXECUTIVE OFFICERS
The Company entered into an Employment Agreement dated September 1,
1996, with Howard B. Witt, the Chairman, President and Chief Executive Officer
of the Company. This Employment Agreement has a five-year term and provides that
Mr. Witt will receive an annual salary of no less than $310,000 plus bonuses to
be determined from time to time by the Board of Directors of the Company. To the
extent he is otherwise eligible, Mr. Witt will participate in and receive the
benefits of any and all stock options, pension, retirement, vacation, profit
sharing, health, disability insurance and other benefits, plans, programs and
policies maintained by the Company from time to time. The Employment Agreement
provides that during the term of the Employment Agreement, but subject to
election and removal by the Board of Directors of the Company in its sole
discretion, Mr. Witt shall serve as Chairman, President and Chief Executive
Officer of the Company.
The Employment Agreement provides for termination of Mr. Witt for Cause
(as defined therein). In the event that the Company were to terminate Mr. Witt's
employment without Cause, he would continue to be paid the compensation he would
otherwise have earned for the remaining balance of the term of the Employment
Agreement. Additionally, any of his unvested stock options would immediately
vest upon such a termination of his employment. Mr. Witt has agreed that, in the
event he were to terminate his employment with the Company in violation of the
terms of the Employment Agreement or the Company terminates his employment for
Cause, he will not compete with the Company for a period of two years
thereafter. If the Employment Agreement expires and is not renewed after its
initial five-year term, Mr. Witt has agreed that he will not compete with the
Company for a period of one year thereafter.
The Company entered into Change of Control Employment Agreements dated
September 1, 1996, with Howard B. Witt, Kenneth R. Audino, William S. Barron,
James F. Brace, David J. Krueger and Lloyd J. Turner. These Change of Control
Employment Agreements are designed to provide these individuals with certain
employment and compensation protection in the event that there was a Change of
Control (as defined therein) respecting the Company at any time during the
five-year period commencing September 1, 1996. If such a Change of Control were
to occur and Mr. Witt's employment with the Company was terminated at any time
during the three-year period thereafter, or any of the other individual's
employment with the Company was terminated at any time during the two-year
period thereafter, other than for Cause (as defined therein), or if during these
time periods any of these individuals were to terminate their employment for
Good Reason (as defined therein), then the Company would be obligated to make
certain payments to or for the benefit of these individuals.
In the case of Mr. Witt, the Company would pay him his compensation
which had accrued prior to the date of termination, including an annualized
bonus, plus an amount equal to the product of three times the sum of Mr. Witt's
annual base salary plus bonus. Additionally, the Company would contribute on
behalf of Mr. Witt to the Company's Supplemental Executive Retirement Plan (the
"SERP") an amount equal to the amount which would have been credited to Mr.
Witt's account under the SERP if Mr. Witt had continued in the employment of the
Company for an additional three years after the date of termination.
Additionally, Mr. Witt's SERP account balance would no longer be subject to
forfeiture in the event he were to be employed by a competitor of the Company.
Mr. Witt and his family would also be provided with medical insurance benefits
until he reaches the age of 62.
In the event that any payments received by Mr. Witt upon a Change of
Control would require him to pay the 20% excise tax imposed by Section 4999 of
the Internal Revenue Code, the Company would make an additional payment to Mr.
Witt in an amount such that, after payment by Mr. Witt of such excise tax, Mr.
Witt would retain the same amount of the payments made by the Company to him
which he would have retained if he had not paid the excise tax.
With respect to the other individuals, under their Change of Control
Employment Agreements they will be paid their accrued compensation and
annualized bonus, and will receive an amount equal to two times the sum of their
annual salary plus bonus, two additional years of crediting under the SERP and
two years of continuing medical insurance benefits. They will also receive the
tax "gross-up" payment described above. Additionally, if any individual were to
terminate his employment with the Company for Good Reason (as defined in the
Change of Control Employment Agreement) or be terminated by the Company other
than for Cause (as defined in the Change of Control Employment Agreement) during
the two-year period following a Change of Control, the individual's account
balance under the SERP would not be subject to forfeiture in the event he were
to work for a competitor of the Company within two years after his date of
termination.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee administers the Company's executive cash and
benefits compensation program.
The goals of the Company's integrated executive compensation program
are to:
1. Pay competitively to attract, retain and motivate a high-quality senior
management team;
2. Link annual salary increases to the attainment by each executive officer of
individual performance objectives;
3. Tie individual incentive cash compensation to Company and individual
performance goals; and
4. Align executive officers' financial interests with stockholder value.
As one of the factors in its consideration of compensation matters, the
Compensation Committee also considers the anticipated tax treatment to the
Company and to the executive officers of various payments and benefits. However,
since some types of compensation payments and their deductibility depend upon
the timing of an executive officer's exercise of stock options (e.g., the spread
on exercise of non-qualified options), and because interpretations and changes
in the tax laws and other factors beyond the control of the committees may also
affect the deductibility of compensation, the Compensation Committee will not
necessarily limit executive compensation to that which is deductible under
applicable provisions of the Internal Revenue Code. The Compensation Committee
will consider various alternatives to preserving the deductibility of
compensation payments and benefits to the extent reasonably practicable and to
the extent consistent with the Company's other compensation goals.
SALARIES
The Compensation Committee's determination of each executive officer's
base salary is designed to accomplish two goals. The first goal is to pay
executive officers competitively to attract, retain and motivate a high-quality
senior management team. The second goal is to link annual salary increases to
the attainment by each executive officer of individual performance objectives.
The base salary of each executive officer is targeted to be within a range of
80% to 120% of the average base salary received by executive officers in similar
positions with manufacturing companies having annual sales between $100 million
and $250 million.
In determining the base salary to be paid to each executive officer
other than the Chief Executive Officer (the "Other Executive Officers"), the
Compensation Committee reviews recommendations prepared by the Chief Executive
Officer. These recommendations are based, in part, on the executive compensation
guidelines prepared by an outside compensation consultant previously selected by
the outside Director members of the Compensation Committee as part of an
executive compensation review. This review included a survey of the base
salaries received by executive officers in similar positions in manufacturing
companies having annual sales between $100 million and $250 million and in
manufacturing companies which the outside consultant and management determined
to be the Company's competitors. These recommendations are also based on the
executive officer's attainment of individual performance objectives. After
consultation with the Chief Executive Officer, the Compensation Committee
reviews the recommendations and the supporting executive compensation review.
The Compensation Committee then determines the annual base salary of each of the
Other Executive Officers. The determination of the Chief Executive Officer's
annual base salary is specifically discussed below.
ANNUAL INCENTIVE COMPENSATION PROGRAM
The Annual Incentive Compensation Program is designed to accomplish the
goal of tying incentive cash compensation to Company and individual performance
goals. The Compensation Committee annually approves the Annual Incentive
Compensation Program and, after consultation with the Chief Executive Officer,
delegates the administration of the program as it relates to the Other Executive
Officers to the Chief Executive Officer. The Compensation Committee administers
the program as it relates to the Chief Executive Officer.
The Chief Executive Officer establishes a target and a maximum amount
that may be awarded to each of the Other Executive Officers as an annual
incentive compensation award. The target and maximum amounts established for
each of the other Executive Officers are percentages of such executive officer's
base salary. These amounts are established by the Chief Executive Officer based
on the executive compensation guidelines prepared by the outside compensation
consultant. In determining each of the Other Executive Officers' total award,
Company performance is determined based on the achievement by the Company of
specified levels of sales, earnings before interest, taxes and amortization
("EBITA") and cash flow while individual performance is determined based on each
of the Other Executive Officers' achievement of specified performance
objectives. In determining each of the Other Executive Officers' target amount,
the specified levels of sales, EBITA and cash flow which determine Company
performance are the budgeted amounts for the coming fiscal year. In determining
each of the Other Executive Officers' total award, the measures of Company
performance are weighted to reflect the executive officer's responsibilities
while individual performance is weighted equally for all executive officers.
Prior to the beginning of each fiscal year, the Chief Executive Officer
and James F. Brace, the Chief Financial Officer of the Company (the "Chief
Financial Officer"): (1) establish the target and maximum amount of each of the
Other Executive Officers' total award; (2) determine Company performance goals
by specifying the levels of achievement for sales, EBITA and cash flow; (3)
after individual input, determine individual performance goals by specifying
each of the Other Executive Officers' performance objectives; and (4) assign the
relative weight to each component of Company performance and to individual
performance. At the end of each fiscal year, the amount of the total award paid
to each of the Other Executive Officers is determined based on Company and
individual performance using the mathematical formula previously established by
the Chief Executive Officer and the Chief Financial Officer under the program.
The determination of whether each of the Other Executive Officers achieved his
or her specified performance objectives is made by the Chief Executive Officer
after consulting with the Compensation Committee. The Compensation Committee, in
administering the Annual Incentive Compensation Program as it relates to the
Chief Executive Officer, makes all of the determinations described above with
respect to the Chief Executive Officer. In 1997, the Compensation Committee
determined that the mathematical formula established under the Annual Incentive
Compensation Program would indicate bonuses that were too low for Messrs. Witt,
Brace and Audino in comparison with the performance of the Company and the
performance of those executive officers, and in the case of Mr. Audino,
significant added company responsibility assumed during 1997 and, therefore,
increased the amount of their bonuses by $31,128, $13,500 and $15,000,
respectively.
STOCK OPTIONS
Prior to April 25, 1997, the stock-based compensation programs of the
Company were administered by the Stock Option Committee of the Board of
Directors (the "Stock Option Committee"). On April 25, 1997, the Board of
Directors decided to transfer these duties to the Compensation Committee.
The granting of stock options by the Compensation Committee is designed
to accomplish the goal of aligning the financial interests of executive officers
with stockholder value. The number of stock options granted to executive
officers is determined by the executive officer's position and responsibilities.
Grants of stock options are intended to recognize different levels of
contribution to the achievement by the Company of its performance goals as well
as different levels of responsibility and experience as indicated by each
executive officer's position. Generally, all stock options granted to executive
officers have been granted with an exercise price equal to the fair market value
of the Common Stock on the date of grant.
Following the completion of the reorganization, the Stock Option
Committee approved a one-time grant of a significant number of stock options to
each executive officer in January 1992. In approving these grants, the Stock
Option Committee noted that the use of one-time grants of a significant number
of stock options to executive officers of companies emerging from reorganization
is common and that the executive officers would receive no value from the grants
unless the Common Stock increased in value. The Stock Option Committee
determined that this one-time grant of a significant number of stock options
would clearly align executive officers' financial interests with stockholder
value and provide the senior management team with additional incentive to
maximize stockholder value as the Company emerged from the reorganization.
Accordingly, the Stock Option Committee determined that the 1992 one-time grants
were appropriate and in the best interests of the Company and its stockholders.
The Stock Option Committee granted significantly less stock options to
executive officers in the years following 1992 and believes that the number of
stock options granted in future years should generally remain consistent from
year to year because the value produced to the executive officer only occurs
when the Common Stock increases in value after the date of grant. This closely
links a significant portion of executive officer compensation to benefits
produced for all stockholders.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee increased Mr. Witt's 1997 base salary from his
1996 base salary due to his performance as Chief Executive Officer and the
relationship of his compensation to the compensation of chief executive officers
of peer group companies. This increase was based, in part, on Mr. Witt's
attainment of individual performance objectives.
Mr. Witt's total award under the Annual Incentive Compensation Program
was determined based on Company and individual performance using the
mathematical formula established under the program by the Compensation Committee
prior to the beginning of the 1997 fiscal year. The Compensation Committee did
decide to increase Mr. Witt's award by $31,128 because it believed that the
award indicated by the formula would not have properly compensated him for his
superior performance.
The Compensation Committee in 1997 granted Mr. Witt options to purchase
50,000 shares of Common Stock. The number of stock options granted to Mr. Witt
reflects the Compensation Committee's recognition of the superior performance of
the Chief Executive Officer in the performance of his duties.
COMPENSATION
COMMITTEE
Bruce A. Karsh
John E. Major
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933 or the
Exchange Act that might incorporate by reference filings, including this Proxy
Statement, in whole or in part, the preceding reports and the Performance Graph
included in "Company Performance" shall not be incorporated by reference into
any such filings.
COMPANY PERFORMANCE
The following graph compares the five-year cumulative total return on
the Common Stock to the five-year cumulative total returns on the NASDAQ
Non-Financial Index and the S&P MidCap 400 Index.
The Company does not include a peer group because it does not believe
it can construct a peer group of companies that it competes with because most of
such entities are either privately-held or comprise a division of a much larger
entity. As a result, the Company has determined that a group of companies with
similar market capitalization is an appropriate peer group and has selected the
S&P MidCap 400 Index for such purpose.
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Littelfuse, Inc. $100 $132 $152 $191 $252 $258
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
NASDAQ Non-Financial $100 $115 $111 $155 $188 $221
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
S&P Midcap 400 $100 $102 $ 98 $129 $153 $203
- ------------------------------------------------------------------------------------------------------
</TABLE>
In the case of the NASDAQ Non-Financial Index and the S&P MidCap 400
Index, a $100 investment made on December 31, 1992, and reinvestment of all
dividends are assumed. In the case of the Company, a $100 investment made on
December 31, 1992, is assumed (the Company paid no dividends in 1993, 1994,
1995, 1996 or 1997). Returns are at December 31 of each year, with the exception
of 1996 and 1997, which are December 28, 1996 and January 3, 1998, respectively.
PENSION PLAN TABLE
The Company has two non-contributory defined benefit retirement plans
in which the named executive officers participate. One of these plans is
qualified under the applicable provisions of the Internal Revenue Code (the
"Qualified Plan"), and the other is a non-qualified Supplemental Executive
Retirement Plan ("SERP"). The total annual combined pension benefits payable
under the Qualified Plan and SERP to the named executive officers are determined
on the basis of a final five-year average annual compensation formula.
The compensation covered by the retirement plans for each of the named
executive officers is the sum of the amounts reported in the salary and bonus
columns of the Summary Compensation Table. The table shows the total combined
annual pension benefits payable under the current provisions of both retirement
plans assuming retirement of an employee who has continued employment to age 62.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
FINAL AVERAGE YEARS OF SERVICE
COMPENSATION 10 15 20 25 30 35
- ------------------
$ 125,000....... $ 61,006 $ 74,548 $ 74,548 $ 74,548 $ 74,548 $ 74,548
- ------------------
150,000....... 74,548 90,798 90,798 90,798 90,798 90,798
- ------------------
175,000....... 88,089 107,048 107,048 107,048 107,048 107,048
- ------------------
200,000....... 101,631 123,298 123,298 123,298 123,298 123,298
- ------------------
225,000....... 115,173 139,548 139,548 139,548 139,548 139,548
- ------------------
250,000....... 128,714 155,798 155,798 155,798 155,798 155,798
- ------------------
300,000....... 155,797 188,298 188,298 188,298 188,298 188,298
- ------------------
400,000....... 209,964 253,298 253,298 253,298 253,298 253,298
- ------------------
500,000....... 264,130 318,298 318,298 318,298 318,298 318,298
- --------------------
<FN>
(1) Payable in the normal form of payment which is a single life annuity for a
single person (if a person is married, the form of payment is joint and 50%
to surviving spouse). For 1998, the maximum annual social security payment
at age 62 for a single person is $13,404. The formula under the SERP is
offset for one-half of the $13,404.
(2) Maximum normal retirement benefit is earned after 12 years of service.
Under an alternative form, payments from the SERP can be guaranteed over 10
years.
The years of service (in nearest years) as of December 31, 1997, for the
named executive officers are as follows: Mr. Witt, 19 years; Mr. Brace, 6 years;
Mr. Barron, 7 years; Mr. Krueger, 16 years; and Mr. Turner, 9 years.
</FN>
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1995, the Board of Directors of the Company adopted the Littelfuse
Executive Loan Program to provide interest-free loans to management for the
purpose of enabling them to exercise their Company stock options and pay the
resulting income taxes. Pursuant to this Program, Mr. Witt has obtained
interest-free loans from the Company in the aggregate amount of $1,540,054.30.
The amount of the loan obtained by Mr. Witt in 1997 was $545,054.42. Imputed
interest on such loans for fiscal 1997 was $86,582. Funds obtained from such
loans were used by Mr. Witt to exercise Company stock options and to pay income
taxes arising from such exercise.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As discussed above, in fiscal 1995, the Board of Directors adopted the
Littelfuse Executive Loan Program to provide interest-free loans to management
for the purpose of enabling them to exercise their Company stock options and to
pay the resulting income taxes. In addition to Mr. Witt's loans described above,
Mr. Krueger and Mr. Barron, have each obtained interest-free loans from the
Company pursuant to the Littelfuse Executive Loan Program totaling $200,337,
$102,592,respectively. Imputed interest on such loans totaled $13,874 and $4,889
respectively, for fiscal 1997. No other executive officer of the Company has
obtained loans in excess of $60,000 pursuant to the Littelfuse Executive Loan
Program. In addition to Mr. Witt, two other members of management also obtained
interest-free loans pursuant to the Littelfuse Executive Loan Program during
fiscal 1997, both of which were less than $60,000. Each of the aforementioned
executive officers used such funds to exercise Company stock options and to pay
income taxes arising from such exercise.
Except as described above, the Company is not a party to any other
material transactions of the type required to be described herein.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 1999 annual
meeting of the Company's stockholders must be received at the principal
executive offices of the Company by November 19, 1998, in order to be considered
for inclusion in the Company's proxy materials relating to that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
to be brought before the meeting other than the matters referred to in this
Proxy Statement.
By order of the Board of Directors,
Mary S. Muchoney
Secretary
March 24, 1998
<PAGE>
PROXY LITTELFUSE, INC.
Proxy Card for Annual Meeting on May 1, 1998
The undersigned hereby appoints James F. Brace and Mary S. Muchoney,
jointly and severally, with full power of substitution, to vote all shares of
Common Stock which the undersigned is entitled to vote at the Annual Meeting of
Stockholders to be held in The First Chicago NBD Corporation Dining Room located
on the 57th Floor at One First National Plaza, Chicago, Illinois 60670, on
Friday, May 1, 1998, at 9:00 a.m. local time, and at any adjournment thereof,
with all powers the undersigned would possess if personally present, as follows:
(1) Election of six nominees to the Board of Directors to
serve terms of one year or until their successors are
elected.
--- FOR all nominees listed below --- WITHHOLD AUTHORITY
(Except as marked to the contrary below) to vote for all
nominees listed below
Howard B. Witt, John P. Driscoll, Anthony Grillo, Bruce A.
Karsh, John E. Major and John J. Nevin
(Instruction: To withhold authority to vote for any
individual nominee, strike a line through that nominee's
name)
(2) Approval and ratification of the Directors' appointment of
Ernst & Young LLP as the Company's independent auditors for the fiscal
year ending January 2, 1999.
--- FOR --- AGAINST ---- ABSTAIN
(3) Approval of the proposed amendment to the 1993 Stock Plan for the
Employees and Directors of Littelfuse, Inc. which would increase
the maximum aggregate number of shares of Common Stock as to
which awards of options, restricted shares, units or rights may
be made from time to time thereunder from 1,200,000 to 1,800,000
shares
--- FOR --- AGAINST --- ABSTAIN
The Board of Directors unanimously recommends a vote "FOR"
these proposals.
This Proxy is solicited by the Board of Directors of the Company.
(continued, and to be signed on the other side)
<PAGE>
Account No. of Shares Proxy No.
This proxy will be voted as directed, or If no instructions
are given, it will be voted "FOR" election of all nominees as Directors of the
Company, "FOR" approval and ratification of the appointment of independent
auditors, "FOR" approval of the proposed amendment to the 1993 Stock Plan for
the Employees and Directors of Littelfuse, Inc., and in the discretion of the
named proxies upon such other matters as may properly come before the Annual
Meeting or an adjournment thereof.
Dated: _________________, 1998
- -------------------------------------------
(Signature)
- -------------------------------------------
(Signature)
Please sign exactly as name appears on stock certificate(s). Executors,
administrators, trustees, guardians, attorneys-in-fact, etc., should give their
full titles. If signer is a corporation, please give full corporate name and
have a duly authorized officer sign, stating title. If a partnership, please
sign in partnership name by authorized person. If stock is registered in two
names, both should sign.
Please vote, sign, date and
return this proxy promptly.
<PAGE>
REVISED 2/6/98
1993 STOCK PLAN FOR EMPLOYEES AND DIRECTORS OF LITTELFUSE, INC.
1. Purpose. Littelfuse, Inc. (the "Corporation") desires to attract and
retain Employees and directors of outstanding talent. The 1993 Stock Plan for
Employees and Directors of Littelfuse, Inc. (the "Plan") affords eligible
Employees and directors the opportunity to acquire proprietary interests in the
Corporation and thereby encourages their highest levels of performance and
interest.
2. Scope and Duration.
a. Awards under the Plan may be granted in the following forms:
(1)incentive stock options ("incentive stock
options"), as provided in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and non-qualified stock
options ("non-qualified options"; the term "options" includes
incentive stock options and non-qualified options);
(2)shares of Common Stock of the Corporation (the "Common
Stock") which are restricted as provided in paragraph 10.
("restricted shares"); or
(3)rights to acquire shares of Common Stock which are
restricted as provided in paragraph 10. ("units" or
"restricted units").
Options may be accompanied by stock appreciation rights ("rights").
b. The maximum aggregate number of shares of Common Stock as
to which awards of options, restricted shares, units, or rights may be
made from time to time under the Plan is 1,200,000 shares. Shares
issued pursuant to this Plan may be in whole or in part, as the Board
of Directors of the Corporation (the "Board of Directors") shall from
time to time determine, authorized but unissued shares or issued shares
reacquired by the Corporation. If for any reason any shares as to which
an option has been granted cease to be subject to purchase thereunder
or any restricted shares or restricted units are forfeited to the
Corporation, or to the extent that any awards under the Plan
denominated in shares or units are paid or settled in cash or are
surrendered upon the exercise of an option, then (unless the Plan shall
have been terminated) such shares or units, and any shares surrendered
to the Corporation upon such exercise, shall become available for
subsequent awards under the Plan; provided, however, that shares
surrendered by the Corporation upon the exercise of an incentive stock
option and shares subject to an incentive stock option surrendered upon
the exercise of a right shall not be available for subsequent award of
additional stock options under the Plan.
c. No incentive stock option shall be granted hereunder
after February 11, 2003.
3. Administration.
a. The Plan shall be administered by the Stock Option
Committee or any successor thereto of the Board of Directors of the
Corporation or by such other committee (the "Committee") as shall be
determined by the Board of Directors. The Committee shall consist of
not less than two members of the Board of Directors, each of whom shall
qualify as a "disinterested person" to administer the Plan as
contemplated by Rule 16b-3, as amended, or other applicable rules under
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
b. The Committee shall have plenary authority in its sole
discretion, subject to and not inconsistent with the express provisions
of this Plan:
(1)to grant options, to determine the purchase price
of the Common Stock covered by each option, the term of each
option, the persons to whom, and the time or times at which,
options shall be granted and the number of shares to be
covered by each option;
(2)to designate options as incentive stock options or
non-qualified options and to determine which options shall
be accompanied by rights;
(3)to grant rights and to determine the purchase
price of the Common Stock covered by each right or related
option, the term of each right or related option, the
Employees and Eligible Directors (as such terms are defined
below) to whom, and the time or times at which, rights or
related options shall be granted and the number of shares to
be covered by each right or related option;
(4)to grant restricted shares and restricted units
and to determine the term of the Restricted Period (as defined
in paragraph 10.) and other conditions applicable to such
shares or units, the Employees to whom, and the time or times
at which, restricted shares or restricted units shall be
granted and the number of shares or units to be covered by
each grant;
(5)to interpret the Plan;
(6)to prescribe, amend and rescind rules and regulations
relating to the Plan;
(7)to determine the terms and provisions of the option and
rights agreements (which need not be identical) and the
restricted share and restricted unit agreements (which need
not be identical) entered into in connection with awards under
the Plan;
and to make all other determinations deemed necessary or advisable for the
administration of the Plan.
Without limiting the foregoing, the Committee shall have
plenary authority in its sole discretion, subject to, and not
inconsistent with, the express provisions of the Plan, to:
(1)select Participants (as defined below) for participation
in the Plan;
(2)determine the timing, price, and amount of any grant or
award under the Plan to any Participant; and
(3)either
(a)determine the form in which payment of any right granted
or awarded under the Plan will be made (i.e., cash, securities,
or any combination thereof), or
(b)approve the election of the Participant to receive cash
in whole or in part in settlement of any right granted or awarded
under the Plan.
As used in the Plan, the following terms shall have the following
meanings: the term "Littelfuse Officer" shall mean an officer (other
than an assistant officer) of the Corporation or any of its
Subsidiaries and any other person who may be designated as any
executive officer by the Board of Directors of the Corporation; the
term "Participant" shall mean an Employee or Eligible Director; the
term "Employee" shall mean a full-time, non-union, salaried employee of
the Corporation or any of its Subsidiaries; the term "Eligible
Director" shall mean any individual who is a member of the Board of
Directors of the Corporation who is not then an Employee or a
beneficial owner, either directly or indirectly, of more than ten
percent (10%) of the Common Stock of the Corporation; and the term
"Subsidiaries" shall mean all corporations in which the Corporation
owns, directly or indirectly, more than fifty percent (50%) of the
total voting power of all classes of stock.
(c)The Committee may delegate to one or more of its members
or to one or more agents such administrative duties as it may
deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee or
such person may have under the Plan; provided, that the Committee
may not delegate any duties to a member of the Board of Directors
who, if elected to serve on the Committee, would not qualify as a
"disinterested person" to administer the Plan as contemplated by
Rule 16b-3, as amended, or other applicable rules under the
Exchange Act. The Committee may employ attorneys, consultants,
accountants, or other persons, and the Committee, the
Corporation, its Subsidiaries, and their respective officers and
directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good
faith shall be final and binding upon all Participants, the
Corporation, its Subsidiaries, and all other interested persons.
No member or agent of the Committee shall be personally liable
for any action, determination, or interpretation made in good
faith with respect to the Plan or awards made hereunder, and all
members and agents of the Committee shall be fully protected by
the Corporation in respect of any such action, determination, or
interpretation.
4. Eligibility; Factors to Be Considered in Making Awards.
a. Persons eligible to participate in this Plan shall include
all Employees of the Corporation and all Eligible Directors; provided,
however, that Eligible Directors shall only be eligible to receive
grants of options pursuant to subparagraph 4.e.
b. In determining the Employees to whom awards shall be
granted and the number of shares or units to be covered by each award,
the Committee shall take into account the nature of the EmployeeAEs
duties, his or her present and potential contributions to the success
of the Corporation or any of its Subsidiaries and such other factors as
it shall deem relevant in connection with accomplishing the purposes of
the Plan.
c. Awards may be granted singly, in combination, or in tandem
and may be made in combination or in tandem with or in replacement of,
or as alternatives to, awards or grants under any other employee plan
maintained by the Corporation or any of its Subsidiaries. An award made
in the form of a unit or a right may provide, in the discretion of the
Committee, for
(1)the crediting to the account of, or the current
payment to, each Employee who has such an award of an amount
equal to the cash dividends and stock dividends paid by the
Corporation upon one share of Common Stock for each restricted
unit or share of Common Stock subject to a right included in
such award ("Dividend Equivalents"), or
(2)the deemed reinvestment of such Dividend
Equivalents and stock dividends in shares of Common Stock,
which deemed reinvestment shall be deemed to be made in
accordance with the provisions of paragraph 10., and credited
to the EmployeeAEs account ("Additional Deemed Shares").
Such Additional Deemed Shares shall be subject to the same restrictions
(including but not limited to provisions regarding forfeitures)
applicable with respect to the unit or right with respect to which such
credit is made. Dividend Equivalents not deemed reinvested as stock
dividends shall not be subject to forfeiture, and may bear amounts
equivalent to interest or cash dividends as the Committee may
determine.
d. The Committee, in its sole discretion, may grant to an
Employee who has been granted an award under the Plan or any other
employee plan maintained by the Corporation or any of its Subsidiaries,
or any successor thereto, in exchange for the surrender and
cancellation of such award, a new award in the same or a different form
and containing such terms, including, without limitation, a price which
is different (either higher or lower) than any price provided in the
award so surrendered and cancelled, as the Committee may deem
appropriate.
e. Each Eligible Director shall be automatically granted a
non-qualified option to purchase 2,000 shares of Common Stock, which
option shall be granted on the effective date of the Plan (hereinafter
referred to as the "Initial Eligible Director Stock Options").
Commencing in 1995, each Eligible Director shall be automatically
granted a non-qualified option to purchase 2,200 shares of Common
Stock, and commencing in 1997, each Eligible Director shall be
automatically granted a non-qualified option to purchase 2,500 shares
of Common Stock, which option shall be granted on the date of the first
meeting of the Board of Directors of the Corporation following each
annual meeting of the stockholders of the Corporation (hereinafter
sometimes referred to as the "Annual Eligible Director Stock Options"
and sometimes, together with the Initial Eligible Director Stock
Options, as the oEligible Director Stock Optionso). The number of
Annual Eligible Director Stock Options to be granted as of the date of
any such meeting of the Board of Directors shall be proportionately
adjusted to reflect any stock splits, stock dividends,
recapitalizations or similar transactions causing an increase or
decrease in the number of issued and outstanding shares of Common Stock
which have occurred since the date of the most recent grant of Annual
Eligible Director Stock Options. Any Eligible Director may waive his or
her right to be granted Eligible Director Stock Options. In the event
that the granting of any Annual Eligible Director Stock Options would
cause the 1,200,000 share limitation contained in Sectiona2.b. hereof
to be exceeded (after taking into account any waivers by Eligible
Directors to accept some or all of the Annual Eligible Director Stock
Options to which he or she would otherwise be entitled), the total
number of Annual Eligible Director Stock Options then to be granted
shall be reduced to a number which would cause said 1,200,000 share
limitation not to be exceeded and the amount of non-qualified options
to be granted to each Eligible Director who has not waived his or her
right to receive Annual Eligible Director Stock Options shall be
proportionately reduced. The purchase price for the Common Stock
covered by each Eligible Director Stock Option shall be the fair market
value (as defined below) of the Common Stock on the date the Eligible
Director Stock Option is granted, payable at the time and in the manner
provided in Section 5.b. below. Each Eligible Director Stock Option
granted to an Eligible Director shall be exercisable as follows: with
respect to twenty-percent (20%) of the Common Stock covered thereby
during the ten (10) year period commencing one (1) year following the
date of grant; with respect to an additional twenty percent (20%) of
the Common Stock covered thereby during the ten (10) year period
commencing two (2) years following the date of grant; with respect to
an additional twenty percent (20%) of the Common Stock covered thereby
during the ten (10) year period commencing three (3) years following
the date of grant; with respect to an additional twenty percent (20%)
of the Common Stock covered thereby during the ten (10) year period
commencing four (4) years following the date of grant; and with respect
to the remaining twenty percent (20%) of the Common Stock covered
thereby during the ten (10) year period commencing five (5) years
following the date of grant. The foregoing formula can only be amended
to the extent permitted by Rule 16b-3, as amended, under the Exchange
Act.
5. Option Price.
a. The purchase price of the Common Stock covered by each
option awarded to an Employee shall be determined by the Committee;
provided, however, that in the case of incentive stock options, the
purchase price shall not be less than 100% of the fair market value of
the Common Stock on the date the option is granted. Fair market value
shall mean,
(1)if the Common Stock is duly listed on a national
securities exchange or on the National Association of
Securities Dealers Automatic Quotation System/National Market
System ("NASDAQ") ("Duly Listed"), the closing price of the
Common Stock for the date on which the option is granted, or,
if there are no sales on such date, on the next preceding day
on which there were sales, or
(2)if the Common Stock is not Duly Listed, the fair
market value of the Common Stock for the date on which the
option is granted, as determined by the Committee in good
faith. Such price shall be subject to adjustment as provided
in paragraph 13.
The price so determined shall also be applicable in connection with the
exercise of any related right.
b. The purchase price of the shares as to which an option is
exercised shall be paid in full at the time of exercise; payment may be
made in cash, which may be paid by check or other instrument acceptable
to the Corporation, or, if permitted by the Committee, in shares of the
Common Stock, valued at the closing price of the Common Stock as
reported on either a national securities exchange or NASDAQ for the
date of exercise, or if there were no sales on such date, on the next
preceding day on which there were sales (or, if the Common Stock is not
Duly Listed, the fair market value of the Common Stock on the date of
exercise, as determined by the Committee in good faith), or, if
permitted by the Committee and subject to such terms and conditions as
it may determine, by surrender of outstanding awards under the Plan. In
addition, the Participant shall pay any amount necessary to satisfy
applicable federal, state, or local tax requirements promptly upon
notification of the amount due. The Committee may permit such amount to
be paid in shares of Common Stock previously owned by the Participant,
or a portion of the shares of Common Stock that otherwise would be
distributed to such Participant upon exercise of the option, or a
combination of cash and shares of such Common Stock.
6. Term of Options. The term of each incentive stock option granted
under the Plan shall be such period of time as the Committee shall
determine, but not more than ten years from the date of grant, subject
to earlier termination as provided in paragraphs 11. and 12. The term
of each non-qualified option granted under the Plan to Employees shall
be such period of time as the Committee shall determine, subject to
earlier termination as provided in paragraphs 11. and 12.
7. Exercise of Options.
a. Each option shall become exercisable, in whole or in part,
as the Committee shall determine; provided, however, that the Committee
may also, in its discretion, accelerate the exercisability of any
option in whole or in part at any time.
b. Subject to the provisions of the Plan and unless otherwise
provided in the option agreement, an option granted under the Plan
shall become exercisable in full at the earliest of the Participant's
death, Eligible Retirement (as defined below), Total Disability, or a
Change in Control (as defined in paragraph 12). For purposes of this
Plan, the term "Eligible Retirement" shall mean (1)the date upon which
an Employee, having attained an age of not less than sixty-two,
terminates his employment with the Corporation and its Subsidiaries,
provided that such Employee has been employed by the Corporation or any
of its Subsidiaries or any corporation of which the Corporation or any
of its Subsidiaries is the successor for a period of not less than five
(5) years prior to such termination, or (2)the date upon which an
Eligible Director, having attained the age of not less than sixty-two,
terminates his service as a director of the Corporation.
c. An option may be exercised, at any time or from time to
time (subject, in the case of an incentive stock option, to such
restrictions as may be imposed by the Code), as to any or all full
shares as to which the option has become exercisable; provided,
however, that an option may not be exercised at any one time as to less
than 100 shares or less than the number of shares as to which the
option is then exercisable, if that number is less than 100 shares.
d. Subject to the provisions of paragraphs 11. and 12., in the
case of incentive stock options, no option may be exercised at any time
unless the holder thereof is then an Employee.
e. Upon the exercise of an option or portion thereof in
accordance with the Plan, the option agreement and such rules and
regulations as may be established by the Committee, the holder thereof
shall have the rights of a shareholder with respect to the shares
issued as a result of such exercise.
8. Award and Exercise of Rights.
a. A right may be awarded by the Committee in connection with
any option granted under the Plan, either at the time the option is
granted or thereafter at any time prior to the exercise, termination or
expiration of the option ("tandem right"), or separately ("freestanding
right"). Each tandem right shall be subject to the same terms and
conditions as the related option and shall be exercisable only to the
extent the option is exercisable. No right shall be exercisable for
cash by a Littelfuse Officer within six (6) months from the date the
right is awarded (and then, as to a tandem right, only to the extent
the related option is exercisable) or, if the exercise price of the
right is not fixed on the date of the award, within six (6) months from
the date when the exercise price is so fixed, and in any case only when
the Littelfuse Officer's election to receive cash in full or partial
satisfaction of the right, as well as the Littelfuse Officer's exercise
of the right for cash, is made during a Quarterly Window Period (as
defined below); provided, that a right may be exercised by a Littelfuse
Officer for cash outside a Quarterly Window Period if the date of
exercise is automatic or has been fixed in advance under the Plan and
is outside the Littelfuse Officer's control. The term "Quarterly
Window Period" shall mean the period beginning on the third business
day following the date of release of each of the Corporation's
quarterly and annual summary statements of sales and earnings and
ending on the twelfth business day following such release; and the
date of any such release shall be deemed to be the date it either:
(1)appears on a wire service,
(2)appears on a financial news service,
(3)appears in a newspaper of general circulation, or
(4)is otherwise made publicly available, for example,
by press releases to a wire service, financial news service, or newspapers or
general circulation.
b. A right shall entitle the Employee upon exercise in
accordance with its terms (subject, in the case of a tandem right, to
the surrender unexercised of the related option or any portion or
portions thereof which the Employee from time to time determines to
surrender for this purpose) to receive, subject to the provisions of
the Plan and such rules and regulations as from time to time may be
established by the Committee, a payment having an aggregate value equal
to the product of
(1)the excess of
(a)the fair market value on the exercise date of one share
of Common Stock over
(b)the exercise price per share, in the case of a tandem
right, or the price per share specified in the terms of the
right, in the case of a freestanding right, multiplied by
(2)the number of shares with respect to which the
right shall have been exercised.
The payment may be made only in cash, subject to subparagraph 8.a. hereof.
c. The exercise price per share specified in a right shall be
as determined by the Committee, provided that, in the case of a tandem
right accompanying an incentive stock option, the exercise price shall
be not less than fair market value of the Common Stock subject to such
option on the date of grant.
d. If upon the exercise of a right the Employee is to receive
a portion of the payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the fair market
value of a share on the exercise date. The number of shares received
may not exceed the number of shares covered by any option or portion
thereof surrendered. Cash will be paid in lieu of any fractional share.
e. No payment will be required from an Employee upon exercise
of a right, except that any amount necessary to satisfy applicable
federal, state, or local tax requirements shall be withheld or paid
promptly by the Employee upon notification of the amount due and prior
to or concurrently with delivery of cash or a certificate representing
shares. The Committee may permit such amount to be paid in shares of
Common Stock previously owned by the Employee, or a portion of the
shares of Common Stock that otherwise would be distributed to such
Employee upon exercise of the right, or a combination of cash and
shares of such Common Stock.
f. The fair market value of a share shall mean the closing
price of the Common Stock as reported on either a national securities
exchange or NASDAQ for the date of exercise, or if there are no sales
on such date, on the next preceding day on which there were sales;
provided, however, that in the case of rights that relate to an
incentive stock option, the Committee may prescribe, by rules of
general application, such other measure of fair market value as the
Committee may in its discretion determine but not in excess of the
maximum amount that would be permissible under Section 422 of the Code
without disqualifying such option under Section 422.
g. Upon exercise of a tandem right, the number of shares
subject to exercise under the related option shall automatically be
reduced by the number of shares represented by the option or portion
thereof surrendered.
h. A right related to an incentive stock option may only be
exercised if the fair market value of a share of Common Stock on the
exercise date exceeds the option price.
9. Non-Transferability of Options, Rights, and Units; Holding
Periods for Littelfuse Officers and Eligible Directors.
a. Options, rights, and units granted under the Plan shall not
be transferable by the grantee thereof otherwise than by will or the
laws of descent and distribution; provided, however, that
(1)the designation of a beneficiary by a Participant shall
not constitute a transfer, and
(2)options and rights may be exercised during the lifetime
of the Participant only by the Participant or, unless such
exercise would disqualify an option as an incentive stock
option, by the Participant's guardian or legal
representative.
b. Notwithstanding anything contained in the Plan to the
contrary,
(1)any shares of Common Stock awarded hereunder to a
Littelfuse Officer may not be transferred or disposed of for
at least six (6) months from the date of award thereof,
(2)any option, right, or unit awarded hereunder to a
Littelfuse Officer or Eligible Director, or the shares of
Common Stock into which any such option, right or unit is
exercised or converted, may not be transferred or disposed
of for at least six (6) months following the date of
acquisition by the Littelfuse Officer or Eligible Director
of such option, right, or unit, and
(3)the Committee shall take no action whose effect would
cause a Littelfuse Officer or Eligible Director to be in
violation of clause (1) or (2) above.
c. Notwithstanding the foregoing and anything else contained
in the Plan to the contrary, up to 25% of the number of non-qualified
options (said percentage to be calculated using as the nominator the
sum of the amount of outstanding and unexercised non-qualified options
proposed to be transferred plus the number of non-qualified options
previously transferred by said Participant within the previous four
years and using as the denominator the aggregate number of
non-qualified options granted to said Participant within the previous
four years) may be transferred (but only on a gift basis) by a
Participant to an immediate family member of the Participant or a trust
which has as beneficiaries at the time of transfer only the Participant
and/or immediate family members of the Participant. As used herein, the
term "immediate family members" shall mean the spouse of the
Participant, children of the Participant and their spouses,
grandchildren of the Participant and their spouses and
great-grandchildren of the Participant and their spouses (hereinafter
referred to as a "Permitted Transferee"). All transferred non-qualified
options shall remain subject to all of the provisions of the Plan and
any agreement between the Participant and the Corporation pertaining
thereto, including, without limitation, all vesting, termination and
forfeiture provisions, and the rights and obligations of a transferee
with respect to a non-qualified option transferred thereto shall be
determined pursuant to the provisions of the Plan and any such
agreement as if the Participant remained the holder thereof. In no
event shall any transferee of a transferred non-qualified option be
entitled to transfer such non-qualified option except pursuant to the
laws of descent and distribution. Any transfer of non-qualified options
made pursuant to this subsection (c) must be made pursuant to legal
documentation provided by the Corporation, which legal documentation
may contain such terms and conditions as the Corporation, in its
discretion, deems appropriate, and shall be subject to verification by
the Corporation or its legal counsel that the proposed transferee is a
Permitted Transferee. Notwithstanding the foregoing, the Committee, in
its absolute discretion, may restrict or deny the transfer of
non-qualified options with respect to one or more Participants. The
provisions of this subsection (c) shall be deemed to override and
control over any provisions in any Non-Qualified Stock Option Agreement
between the Corporation and a Participant which is dated before January
1, 1998, to the extent such provisions would not allow a transfer of
non-qualified options pursuant to the provisions of this subsection
(c).
10. Award and Delivery of Restricted Shares or Restricted Units.
a. At the time an award of restricted shares or restricted
units is made, the Committee shall establish a period of time (the
"Restricted Period") applicable to such award. Each award of restricted
shares or restricted units may have a different Restricted Period. The
Committee may, in its sole discretion, at the time an award is made,
prescribe conditions for the incremental lapse of restrictions during
the Restricted Period and for the lapse or termination of restrictions
upon the satisfaction of other conditions in addition to or other than
the expiration of the Restricted Period with respect to all or any
portion of the restricted shares or restricted units. Subject to
paragraph 9., the Committee may also, in its sole discretion shorten,
or terminate the Restricted Period, or waive any conditions for the
lapse or termination of restrictions with respect to all or any portion
of the restricted shares or restricted units. Notwithstanding the
foregoing but subject to paragraph 9., all restrictions shall lapse or
terminate with respect to all restricted shares or restricted units
upon the earliest to occur of an Employee's Eligible Retirement, a
Change in Control, death, or Total Disability.
b. (1) Unless such shares are issued as uncertificated shares
pursuant to subparagraph 10.b.(2)(a) below, a stock certificate
representing the number of restricted shares granted to an Employee
shall be registered in the Employee's name but shall be held in custody
by the Corporation or an agent therefor for the Employee's account. The
Employee shall generally have the rights and privileges of a
shareholder as to such restricted shares, including the right to vote
such restricted shares, except that, subject to the provisions of
paragraphs 11. and 12., the following restrictions shall apply:
(a)the Employee shall not be entitled to delivery of
the certificate until the expiration or termination of the
Restricted Period and the satisfaction of any other conditions
prescribed by the Committee;
(b)none of the restricted shares may be sold,
transferred, assigned, pledged, or otherwise encumbered or
disposed of during the Restricted Period and until the
satisfaction of any other conditions prescribed by the
Committee; and
(c)all of the restricted shares shall be forfeited
and all rights of the Employee to such restricted shares shall
terminate without further obligation on the part of the
Corporation unless the Employee has remained an Employee until
the expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the
Committee applicable to such restricted shares. At the
discretion of the Committee,
(i)cash and stock dividends with respect to
the restricted shares may be either currently paid or
withheld by the Corporation for the Employee's
account, and interest may be paid on the amount of
cash dividends withheld at a rate and subject to such
terms as determined by the Committee, or
(ii)the Committee may require that all cash
dividends be applied to the purchase of additional
shares of Common Stock, and such purchased shares,
together with any stock dividends related to such
restricted shares (such purchased shares and stock
dividends are hereafter referred to as oAdditional
Restricted Shareso) shall be treated as Additional
Shares, subject to forfeiture on the same terms and
conditions as the original grant of the restricted
shares to the Employee.
(2) The purchase of any such Additional Restricted Shares shall be made
either
(a)through a dividend reinvestment plan that may be
established by the Corporation which satisfies the
requirements of Rule 16b-2 under the Exchange Act, in which
event the price of such shares so purchased through the
reinvestment of dividends shall be as determined in accordance
with the provisions of that plan and no stock certificate
representing such Additional Restricted Shares shall be in the
Employee's name, or
(b)in accordance with such alternative procedure as is
determined by the Committee in which event the price of such
purchased shares shall be
(i)if the Common Stock is Duly Listed, the
closing price of the Common Stock as reported on
either a national securities exchange or NASDAQ for
the date on which such purchase is made, or if there
were no sales on such date, the next preceding day on
which there were sales, or
(ii)if the Common Stock is not Duly Listed,
the fair market value of the Common Stock for the
date on which such purchase is made, as determined by
the Committee in good faith. In the event that the
Committee shall not require reinvestment, cash, or
stock dividends so withheld by the Committee shall
not be subject to forfeiture. Upon the forfeiture of
any restricted shares (including any Additional
Restricted Shares), such forfeited shares shall be
transferred to the Corporation without further action
by the Employee. The Employee shall have the same
rights and privileges, and be subject to the same
restrictions, with respect to any shares received
pursuant to paragraph 13.
c. Upon the expiration or termination of the Restricted Period
and the satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided for in paragraphs 11. and
12., the restrictions applicable to the restricted shares (including
Additional Restricted Shares) shall lapse and a stock certificate for
the number of restricted shares (including any Additional Restricted
Shares) with respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions, except any that may be
imposed by law, to the Employee or the Employee's beneficiary or
estate, as the case may be. The Corporation shall not be required to
deliver any fractional share of Common Stock but will pay, in lieu
thereof, the fair market value (determined as of the date the
restrictions lapse) of such fractional share to the Employee or the
Employee,s beneficiary or estate, as the case may be. No payment will
be required from the Employee upon the issuance or delivery of any
restricted shares, except that any amount necessary to satisfy
applicable federal, state, or local tax requirements shall be withheld
or paid promptly upon notification of the amount due and prior to or
concurrently with the issuance or delivery of a certificate
representing such shares. The Committee may permit such amount to be
paid in shares of Common Stock previously owned by the Employee, or a
portion of the shares of Common Stock that otherwise would be
distributed to such Employee upon the lapse of the restrictions
applicable to the restricted shares, or a combination of cash and
shares of such Common Stock.
d. In the case of an award of restricted units, no shares of
Common Stock shall be issued at the time the award is made, and the
Corporation shall not be required to set aside a fund for the payment
of any such award.
e. (1) Upon the expiration or termination of the Restricted
Period and the satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided in paragraphs 11. and
12., the Corporation shall deliver to the Employee or the Employee's
beneficiary or estate, as the case may be, one share of Common Stock
for each restricted unit with respect to which the restrictions have
lapsed ("vested unit").
(2) In addition, if the Committee has not required
the deemed reinvestment of such Dividend Equivalents pursuant to
paragraph 4., at such time the Corporation shall deliver to the
Employee cash equal to any Dividend Equivalents or stock dividends
credited with respect to each such vested unit and, to the extent
determined by the Committee, the interest thereupon. However, if the
Committee has required such deemed reinvestment in connection with such
restricted unit, in addition to the stock represented by such vested
unit, the Corporation shall deliver the number of Additional Deemed
Shares credited to the Employee with respect to such vested unit.
(3) Notwithstanding the foregoing, the Committee may,
in its sole discretion, elect to pay cash or part cash and part Common
Stock in lieu of delivering only Common Stock for the vested units and
related Additional Deemed Shares. If a cash payment is made in lieu of
delivering Common Stock, the amount of such cash payment shall be equal
to
(a)if the Common Stock is Duly Listed, the closing
price of the Common Stock as reported on either a national
securities exchange or NASDAQ for the date on which the
Restricted Period lapsed with respect to such vested unit and
related Additional Deemed Shares (the "Lapse Date") or, if
there are no sales on such date, on the next preceding day on
which there were sales, or
(b)if the Common Stock is not Duly Listed, the fair market
value of the Common Stock for the Lapse Date, as determined
by the Committee in good faith.
f. No payment will be required from the Employee upon the
award of any restricted units, the crediting or payment of any Dividend
Equivalents or Additional Deemed Shares, or the delivery of Common
Stock or the payment of cash in respect of vested units, except that
any amount necessary to satisfy applicable federal, state, or local tax
requirements shall be withheld or paid promptly upon notification of
the amount due. The Committee may permit such amount to be paid in
shares of Common Stock previously owned by the Employee, or a portion
of the shares of Common Stock that otherwise would be distributed to
such Employee in respect of vested units and Additional Deemed Shares,
or a combination of cash and shares of such Common Stock.
g. In addition, the Committee shall have the right, in its
absolute discretion, upon the vesting of any restricted shares
(including Additional Restricted Shares) and restricted units
(including Additional Deemed Shares) to award cash compensation to the
Employee for the purpose of aiding the Employee in the payment of any
and all federal, state, and local income taxes payable as a result of
such vesting, if the performance of the Corporation during the
Restricted Period meets such criteria as then or theretofore determined
by the Committee.
11. Termination of Employment or Service. In the event that the
employment of an Employee or the service as a director of an Eligible Director
to whom an option or right has been granted under the Plan shall be terminated
for any reason other than as set forth in paragraph 12., such option or right
may, subject to the provisions of the Plan, be exercised (but only to the extent
that the Employee or an Eligible Director was entitled to do so at the
termination of his employment or service as a director, as the case may be) at
any time within three (3) months after such termination, but in no case later
than the date on which the option or right terminates.
Unless otherwise determined by the Committee, if an Employee to whom
restricted shares or restricted units have been granted ceases to be an
Employee, for any reason other than as set forth in paragraph 12., prior to the
end of the Restricted Period and the satisfaction of any other conditions
prescribed by the Committee, the Employee shall immediately forfeit all
restricted shares and restricted units, including all Additional Restricted
Shares or Additional Deemed Shares related thereto.
Any option, right, restricted share or restricted unit agreement, or
any rules and regulations relating to the Plan, may contain such provisions as
the Committee shall approve with reference to the determination of the date
employment terminates and the effect of leaves of absence. Any such rules and
regulations with reference to any option agreement shall be consistent with the
provisions of the Code and any applicable rules and regulations thereunder.
Nothing in the Plan or in any award granted pursuant to the Plan shall confer
upon any Participant any right to continue in the employ or service of the
Corporation or any of its Subsidiaries or interfere in any way with the right of
the Corporation or its Subsidiaries to terminate such employment or service at
any time.
12. Eligible Retirement, Death, or Total Disability of Employee or
Eligible Director, Change in Control. If any Employee or Eligible Director to
whom an option, right, restricted share, or restricted unit has been granted
under the Plan shall die or suffer a Total Disability while employed by the
Corporation or in the service of the Corporation as a director, if any Employee
terminates his employment or any Eligible Director terminates his service as a
director pursuant to an Eligible Retirement, or if a Change in Control should
occur, such option or right may be exercised as set forth herein, or such
restricted shares or restricted unit shall be deemed to be vested, whether or
not the Participant was otherwise entitled at such time to exercise such option
or right, or be treated as vested in such share or unit. Subject to the
restrictions otherwise set forth in the Plan, such option or right shall be
exercisable by the Participant, a legatee or legatees of the Participant under
the Participant's last will, or by the Participant's personal representatives or
distributees, whichever is applicable, at the earlier of
a. the date on which the option or right terminates in
accordance with the term of grant, or
b. any time prior to the expiration of three (3) months
after the date of such ParticipantAEs Eligible Retirement,
his termination due to total disability, or the occurrence
of a Change in Control, or, if applicable, within one year
of such Participant's death.
For purposes of this paragraph 12., "Total Disability" is defined as the
permanent inability of a Participant, as a result of accident or sickness, to
perform any and every duty pertaining to such Participant's occupation or
employment for which the Participant is suited by reason of the Participant's
previous training, education, and experience.
A "Change in Control" shall be deemed to have occurred upon
a. a business combination, including a merger or
consolidation, of the Corporation and the shareholders of the
Corporation prior to the combination do not continue to own, directly
or indirectly, more than fifty-one percent (51%) of the equity of the
combined entity;
b. a sale, transfer, or other disposition in one or more
transactions (other than in transactions in the ordinary course of
business or in the nature of a financing) of the assets or earning
power aggregating more than forty-five percent (45%) of the assets or
operating revenues of the Corporation to any person or affiliated or
associated group of persons (as defined by Rule 12b-2 of the Exchange
Act in effect as of the date hereof);
c. the liquidation of the Corporation;
d. one or more transactions which result in the acquisition by
any person or associated group of persons (other than the Corporation,
any employee benefit plan whose beneficiaries are Employees of the
Corporation or any of its Subsidiaries, or TCW Special Credits or any
of its affiliates) of the beneficial ownership (as defined in Rule
13d-3 of the Exchange Act, in effect as of the date hereof) of forty
percent (40%) or more of the Common Stock of the Corporation,
securities representing forty percent (40%) or more of the combined
voting power of the voting securities of the Corporation which
affiliated persons owned less than forty percent (40%) prior to such
transaction or transactions; or
e. the election or appointment, within a twelve (12) month
period, of any person or affiliated or associated group, or its or
their nominees, to the Board of Directors of the Corporation, such that
such persons or nominees, when elected or appointed, constitute a
majority of the Board of Directors of the Corporation and whose
appointment or election was not approved by a majority of those persons
who were directors at the beginning of such period or whose election or
appointment was made at the request of an Acquiring Person.
An "Acquiring Person" is any person who, or which, together with all
affiliates or associates of such person, is the beneficial owner of twenty
percent (20%) or more of the Common Stock of the Corporation then outstanding,
except that an Acquiring Person does not include the Corporation or any employee
benefit plan of the Corporation or any of its Subsidiaries or any person holding
Common Stock of the Corporation for or pursuant to such plan. For the purpose of
determining who is an Acquiring Person, the percentage of the outstanding shares
of the Common Stock of which a person is a beneficial owner shall be calculated
in accordance with Rule 13d-e of the Exchange Act.
13. Adjustments Upon Changes in Capitalization, etc. Notwithstanding
any other provision of the Plan, the Committee may at any time make or provide
for such adjustments to the Plan, to the number and class of shares available
thereunder or to any outstanding options, restricted shares, or restricted units
as it shall deem appropriate to prevent dilution or enlargement of rights,
including adjustments in the event of distributions to holders of Common Stock
other than a normal cash dividend, changes in the outstanding Common Stock by
reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations, or exchanges of shares, separations,
reorganizations, liquidations, and the like. In the event of any offer to
holders of Common Stock generally relating to the acquisition of their shares,
the Committee may make such adjustment as it deems equitable in respect of
outstanding options, rights, and restricted units including in the Committee's
discretion revision of outstanding options, rights, and restricted units so that
they may be exercisable for or payable in the consideration payable in the
acquisition transaction. Any such determination by the Committee shall be
conclusive. No adjustment shall be made in the minimum number of shares with
respect to which an option may be exercised at any time. Any fractional shares
resulting from such adjustments to options, rights, limited rights, or
restricted units shall be eliminated.
14. Effective Date. The Plan as theretofore amended shall become
effective as of February 12, 1993, provided that the Plan shall be approved by
the Corporation's stockholders on or before February 11, 1994. The Committee
may, in its discretion, grant awards under the Plan, the grant, exercise, or
payment of which shall be expressly subject to the conditions that, to the
extent required at the time of grant, exercise, or payment,
a. the shares of Common Stock covered by such awards shall
be Duly Listed, upon official notice of issuance, and
b. if the Corporation deems it necessary or desirable, a
Registration Statement under the Securities Act of 1933 with
respect to such shares shall be effective.
15. Termination and Amendment. The Board of Directors of the
Corporation may suspend, terminate, modify, or amend the Plan, provided that if
any such amendment requires shareholder approval to meet the requirement of the
then applicable rules under Section 16(b) of the Exchange Act, such amendment
shall be subject to the approval of the Corporation's stockholders. If the Plan
is terminated, the terms of the Plan shall, notwithstanding such termination,
continue to apply to awards granted prior to such termination. In addition, no
suspension, termination, modification, or amendment of the Plan may, without the
consent of the Employee or Eligible Director to whom an award shall theretofore
have been granted, adversely affect the rights of such Employee or Eligible
Director under such award.
16. Written Agreements. Each award of options, rights, restricted
shares, or restricted units shall be evidenced by a written agreement, executed
by the Participant and the Corporation, which shall contain such restrictions,
terms and conditions as the Committee may require.
17. Effect on Other Stock Plans. The adoption of the Plan shall have
no effect on awards made, or to be made, pursuant to other stock plans covering
Employees or Eligible Directors of the Corporation or any successors thereto.
