Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
(Mark One) for the fiscal year ended January 3, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the
transition period from to
Commission file number 0-20388
Littelfuse, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3795742
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
800 East Northwest Highway,
Des Plaines, Illinois 60016
(Address of principal executive offices) (Zip Code)
847/824-1188
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value, and Warrants to purchase shares of Common Stock, $.01 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of 19,734,809 shares of voting stock held by
non-affiliates of the registrant was approximately $520,505,587 based on the
last reported sale price of the registrant's Common Stock, $.01 par value, as
reported on the Nasdaq stock market on March 13, 1998.
As of March 13, 1998, the registrant had outstanding 20,932,212 shares
of Common Stock, $.01 par value, and Warrants to purchase 2,789,663 shares of
Common Stock, $.01 par value.
Portions of the following documents have been incorporated herein by
reference to the extent indicated herein:
Littelfuse, Inc. Proxy Statement dated March 24, 1998 (the "Proxy
Statement") --Part III.
Littelfuse, Inc. Annual Report to Stockholders for the year ended January
3, 1998 (the "Annual Report") -- Parts II and III.
<PAGE>
Part I
ITEM 1. BUSINESS
General
Littelfuse, Inc. (the "Company" or "Littelfuse") is a leading
manufacturer and seller of fuses and other circuit protection devices for use in
the electronic, automotive and general industrial markets. Management believes
the Company is ranked first in market share in the electronic market, first in
the automotive market and third in the power fuse market in North America.
Management believes that the Company, together with its licensees, is also first
in market share in the electronic market and first in the automotive market
worldwide.
In the electronic market, leading manufacturers such as 3Com, Canon,
Compaq, Hewlett Packard, IBM, LG Electronics, Lucent Technologies, Motorola,
Nortel, Panasonic, Samsung, Sharp, Sony, and Toshiba obtain a substantial
portion of their electronic circuit protection requirements from the Company. In
the automotive market, the Company or its licensees have customer relationships
with all leading automobile manufacturers throughout the world. Littelfuse
provides substantially all of the automotive fuse requirements for vehicles
manufactured domestically by General Motors Corporation and is the primary
supplier for Ford Motor Company, Chrysler Corporation and all Japanese and most
European auto manufacturer transplants. The Company also competes in the power
fuse market selling to companies such as the Allen Bradley division of Rockwell
International and Reliance Electric. In addition to fuses, the Company
manufactures and supplies switches, circuit breakers and indicator lights to the
automotive industry and to appliance and general electronics manufacturers. See
"Business Environment: Circuit Protection Market."
The Company manufactures its products on fully integrated manufacturing
and assembly equipment, much of which is designed and built by its own
engineers. The Company fabricates and assembles a majority of its products and
maintains product quality through a rigorous quality assurance program with all
sites (except the Philippines) certified under ISO 9000 standards and its world
headquarters now certified under the QS9000 standards.
The Company's products are sold worldwide through a direct sales force
and manufacturers' representatives. In Asia Pacific, the Company has licensed
its automotive fuse technology to a Japanese firm that supplies automotive fuses
to Pacific Rim customers. For the year ended January 3, 1998, approximately 41%
of the Company's net sales were to customers outside the United States (exports
and foreign operations).
The Company was incorporated under the laws of the State of Delaware on
November 25, 1991. 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. ("Tracor") in 1968. Any
references to performance, financial results or other aspects of the Company
prior to December 27, 1991, relate to Old Littelfuse.
References herein to "1995" or "fiscal 1995" refer to the calendar year
ended December 31, 1995. References herein to "1996" or "fiscal 1996" refer to
the fiscal year ended December 28, 1996. References herein to "1997" or "fiscal
1997" refer to the fiscal year ended January 3, 1998. Business Environment:
Circuit Protection Market
The circuit protection market can be broadly categorized into five
major product areas: electronic, automotive, industrial (power), high voltage
and residential. The Company sells products designed for the electronic,
automotive and industrial areas. The Company entered the circuit protection
market in 1927 with the development and introduction of the first small,
fast-acting fuse capable of protecting sensitive test meters. Since that time,
the Company has diversified its involvement in the circuit protection market to
become a leader in the production of electronic and automotive fuses. The
Company also entered the power fuse market in 1983 with a broad line of fuses,
including several proprietary products. The Company believes it is the circuit
protection leader because it designs and produces almost all the products it
sells in all three markets including the two markets where it holds the number
one market share position. See "Littelfuse Products."
Electronic Products. Electronic circuit protection products are used to
protect power circuits in a multitude of electronic systems. Electronics
products fall into three major categories: (1) fuses, (2) protectors and (3)
resettables. Electronics fuses generally are of two types - miniature and
subminiature. Miniature fuses are generally tubular in shape with glass, ceramic
and composition bodies. Subminiature devices are used where space is at a
premium. Protectors are fuses produced to a less rigorous specification.
Resettables are polymer PTC devices that limit the current when an overcurrent
condition exists and let current pass again after the cause of the overcurrent
is removed. Applications for electronic products include telecommunications
equipment, computers and computer peripherals, power supplies, test and medical
instrumentation, and consumer electronic products. There is also a special
segment of the electronic circuit protection market directed toward the
aerospace industry. These special high-reliability fuses are manufactured in
small quantities under extremely high quality control standards.
Automotive Products. Fuses are extensively used in automobiles, trucks,
buses and off-road equipment to protect electrical circuits and wiring harnesses
supplying electrical power to operate lights, heating, air conditioning,
windshield wipers, radios, windows and controls. Currently, a typical automobile
contains 30 to 70 fuses, depending upon the options installed. The market for
automotive fuses is expected to grow in the coming years as more electronic
features are included in automobiles and as larger amperage fuses replace
existing low technology fuses in wiring harnesses. Certain new vehicles, such as
the Cadillac Seville, Ford 150 series truck, Chrysler Concorde and the Jaguar,
contain as many as 50 to 90 fuses and this higher fuse count is expected to
spread to other vehicles.
Power Products. Power fuses include both current limiting and
non-current limiting devices used to protect electrical systems against
overcurrents. Power fuses are rated and listed under one of many Underwriters'
Laboratories fuse classifications. The three main end user market segments for
power fuses include original equipment manufacturers ("OEMs"), industrial
maintenance and repair operations ("MROs") and new commercial and industrial
construction. Major applications for power fuses include protection from
over-load and short-circuit currents in motor branch circuits, heating and
cooling systems, control systems, lighting circuits and electrical distribution
networks. Other applications include the protection of semiconductor devices
such as SCRs, diodes, thyristors, triacs and similar solid state devices.
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Littelfuse Products
General. The Company is a leading manufacturer and seller of fuses and
other circuit protection devices for use in the electronic, automotive and
general industrial markets. The Company's products are marketed under the
general trademarked names of Littelfuse(R) and, where appropriate, Slo-Blo(R)
Fuse as well as the trademarked names of certain of its products listed below in
the description of the Company's electronic, automotive and power fuse products.
Product Sales. Net sales of the Company's products by industry category for
the periods indicated are as follows:
<TABLE>
Fiscal Year
(in thousands)
-----------------------------------------------------------------
-------------------- --------------------- ----------------------
1997 1996 1995
-------------------- --------------------- ----------------------
-------------------- --------------------- ----------------------
<S> <C> <C> <C>
Electronics $135,344 $112,667 $103,809
Automotive 102,774 94,391 83,372
Industrial (Power) 37,047 34,388 32,354
-------------------- --------------------- ----------------------
==================== ===================== ======================
Total $275,165 $241,446 $219,535
==================== ===================== ======================
</TABLE>
Electronic Products. The Company manufactures and sells a wide range of
electronic circuit protection products, including miniature and subminiature
fuses, protectors and resettables. Electronic miniature and subminiature fuses
are designed to provide circuit protection in the limited space requirements of
electronic equipment. The Company entered the protector market in late 1994 and
the resettable polymer PTC device market in late 1996. While the Company
continues to develop its own resettable fuse products, the Company also entered
into agreements with Raychem Corp. in 1996 which allows the Company to sell
resettable fuses using certain of Raychem's technology.
The Company's electronic circuit protection products are marketed under the
following trademarked and brand names:
PICO(R) II Fuse is a very fast-acting subminiature fuse with axial
leads which can be automatically inserted into a circuit board. It
is used in consumer electronics, computers, medical instruments,
power supplies and telecommunication line cards. It was originally
developed for the aerospace industry where extremely small size
and high reliability were prime requisites. This fuse is
encapsulated with an epoxy coating which protects the fuse from
adverse environmental conditions. It can stand up under the rough
treatment found in high speed automated circuit board assembly
processes used by many different manufacturers.
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<PAGE>
2AG fuses are a miniature version of the standard 1/4" diameter by
1-1/4" long glass bodied fuses manufactured for more than 40
years. The fuse occupies about 1/3 of the space but still provides
the performance of the larger sized product. The Company has
developed a strong market in the telecommunications industry for a
leaded version of the 2AG fuse. These fuses are used in business
and personal telephone systems, answering machines and other
equipment connected to phone lines. They are used to protect the
system from lightning surges and accidental contact with power
lines. These fuses also are used extensively in electronic
ballasts for lighting.
MICRO(TM) Fuse is a plug-in style fuse about the size of a pencil
eraser. It is a very fast acting fuse and, like the PICO(R) Fuse,
was originally designed for the emerging aerospace industry.
Applications are particularly suited to equipment where the user
might "blow" a fuse during testing or by accidental shorting out
of the power supply. The "plug-in" feature allows the fuse to be
quickly and easily replaced without the need for special
de-soldering equipment. The Company also manufactures sockets for
the MICRO(TM) Fuse.
NANO2 (R) SMF Fuse represents our fourth generation surface mount
fuse product line. The compact size (.240" x .100" x .100") of
this rectangular shaped fuse is very attractive to design
engineers. In addition, the flat side design permits efficient
pick and placement by automated assembly equipment. The NANO2 (R)
SMF Fuse is used where space considerations are critical including
laptop computers, camcorders and battery chargers.
ALF(TM) II or "1206" SMF is a very fast acting thin film surface
mount fuse measuring only .12 inch x .06 inch. The super small
subminiature size assures additional space savings in surface
mount applications. It is completely compatible with common
soldering systems used in surface mount assembly applications and
it is available on 8mm reels for use with automatic placement
equipment.
"0603" SMF is a very fast acting thin film surface mount fuse
measuring only .06 inch x .03 inch. The 0603 is the smallest fuse
available and has a very low profile .018 inches. The small
physical size along with low values for resistance and voltage
drop are significant features of this new fuse for battery and
other low voltage applications.
SMTelecom is the first surface mount fuse to comply with UL 1459
and UL 1950 third edition power cross requirements for
telecommunications. The new SMTelecom Fuse protects all phone line
connected equipment against current surges resulting from power
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<PAGE>
cross, power induction and lightning strikes. It is rated for 250
volts with a 600 volt short circuit rating. Four current ratings
are offered, from 0.75 to 1.5 amperes. Applications include
modems, fax machines, desktop telephones, answering machines and
line cards.
Surface Mount PTC is the first in Littelfuse's line of PTC
devices. Its dimensions of 0.200" x 0.290" x 0.120" are ideal for
circuit board applications where space is at a premium. It also is
available in an 0.340" x 0.250" x 0.10" configuration. This
polymer surface mount PTC has the ability to reset itself once the
fault or overcurrent condition has cleared. This new product is
used primarily for computer and peripheral applications such as
motherboards, disk drives, PC cards, modems, printers, etc.
Radial Leaded PTC series is a 60-volt radial leaded surface mount
product. This series was introduced in early 1997. Radial leaded
PTC applications include process and industrial controls, test and
measurement equipment, security systems, motors and automotive.
Automotive Products. The Company is a primary supplier of automotive
fuses to United States, Japanese and European automotive OEMs, automotive
component parts manufacturers and automotive parts distributors. The Company
also sells its fuses in the replacement parts market, with its products being
sold through mass merchandisers, discount stores and service stations, as well
as under private label by national firms. Management believes that it currently
is the leading worldwide supplier of automotive fuses for new vehicle production
and a leader for the aftermarket/replacement market.
The Company invented and owns all of the U.S. patents related to the
blade type fuse which is the standard and most commonly used fuse in the
automotive industry. The Company believes that, together with its licensees, it
supplies substantially all of the blade type fuses used in the North American
and Japanese markets and a majority in the European market. The Company's
automotive fuse products are marketed under the following trademarked and brand
names:
AUTOFUSE(R) or ATO(R), a standard blade type fuse, is used in
automobiles produced worldwide and designed to provide superior
circuit protection in a small, heat resistant package for low
ampere applications.
MINI(R) Fuse, smaller than its predecessor AUTOFUSE(R), is offered
in a range from two amps to 30 amps and is designed to permit more
fuses in the same amount of space than prior products.
MAXI(TM) Fuse, a larger version of the AUTOFUSE(R), replaces the
commonly used low technology fusible wire or fusible links in
automobile electrical harnesses and is offered in a range from 20
amps to 80 amps.
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<PAGE>
MIDI(R) Fuse is a bolt down version of the MAXI(TM) fuse. This
style is preferred by some European customers in the 50 to 100 amp
range. Its primary use is for heating, air conditioning and motor
control circuits.
J-CASE Fuse, is a cartridge version of the Maxi(TM) fuse. This
style is popular with Japanese customers in the 40 to 80 amp
range. Its primary use is for branch circuit protection and
protection of circuits with inductive loads.
MEGA(R)Fuse, a higher current fuse with ratings of 100 to 200
amps, is used for protection of battery cables.
Over half of the Company's North American automotive (blade type) fuse
sales are made to wire harness manufacturers that incorporate the fuses into
their products. The remaining automotive fuse sales are made directly to
automotive manufacturers and through distributors who in turn sell most of their
products to automotive product wholesalers, such as warehouse distributors,
discount stores and service stations.
The Company believes it currently has adequate production capacity to
meet the anticipated increased demand for automotive fuses referred to in
"Business Environment: Circuit Protection Market -- Automotive Fuses." Any
required expenditures for additional machinery and equipment are expected to be
funded by cash flow from operations.
The Company has licensed its patented ATO(R), Mini(R) and Maxi(TM)
automotive fuse designs to Bussmann, a division of Cooper Industries. Bussmann
is the Company's largest domestic competitor. Additionally, the Company has
entered into a licensing agreement with Pacific Engineering Company, Ltd., a
Japanese fuse manufacturer, which produces and distributes the Company's
patented ATO(R) and Mini(R) automotive fuses to the Pacific Rim manufacturing
operations of Pacific Rim-based automobile manufacturers. See "Competition" and
"Business -- Patents, Trademarks and Other Intellectual Property."
Power Products. The Company entered the power fuse market in 1983 and
manufactures and sells a broad range of low-voltage circuit protection products
to electrical distributors and their customers in the construction, OEM and MRO
markets. Power fuses are used to protect circuits in various types of industrial
equipment and circuits in industrial plants, office buildings and residential
units. The Company's power fuse products are marketed under the following
classifications:
Class L fuses are commonly used as the first line of electrical
protection in building service entrance equipment of high capacity
electrical systems. Other applications include switchboard mains
and feeders, distribution equipment and branch circuit protection
for large motors.
Class R fuses are commonly used downstream from Class L fuses in a
variety of branch circuit applications. Both time delay and fast
acting versions cover a range of applications including main
feeder, motor,
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<PAGE>
transformer and solenoids. The Company's RK5 INDICATOR fuse series
has won numerous product awards and wide recognition by industrial
plant personnel. These fuses have an integrated blown fuse
indicator that turns from clear to dark once a fuse has blown.
This reduces troubleshooting time significantly and helps improve
safety.
Class J fuses are less than half the size of Class R to provide
substantial space savings. Applications for Class J are similar to
Class R. Additional applications include back up protection for
circuit breakers and protection for both IEC and NEMA rated
devices.
Class CC fuses, Littelfuse's KLDR (for transformer protection) and
CCMR (for motor branch circuit protection) provide protection
formerly supplied by fuses 10 times larger. Littelfuse was the
first to the market with these products and is the only company
with a CCMR rated up to 60 amps.
Semiconductor fuses, designed for supplementary protection of
semiconducting devices, are used in electronic equipment and power
equipment, such as variable speed drives, power rectifiers, UPS
systems and DC power suppliers.
Midget fuses, seven different series provide supplementary
overcurrent protection in such diverse applications as control
circuits, control power transformers, solenoids, street lighting
and computers.
Other Products. In addition to the above products, the Company supplies
switches, circuit breakers and indicator lights to the automotive industry and
to appliance and general electronics manufacturers. The Company is also a
supplier of fuse holders (including OMNI-BLOK(R)), fuse blocks (including
Powr-Blok(R) power distribution systems) and fuse clips primarily to customers
that purchase circuit protection devices from the Company.
The LITTELITES(R) indicating lights product line includes cartridge
lamps with miniature and subminiature lampholders and snap-mount plastic lights.
These lights come in incandescent, neon and solid state versions. LITTELITES(R)
are sold to producers of industrial machinery, office machines, appliances,
instruments and computers.
Product Design and Development
The Company employs scientific, engineering and other personnel to
improve its existing product lines and to develop new products at its research
and engineering facility in Des Plaines, Illinois. The Engineering Department
consists of approximately 60 engineers, chemists, metallurgists, fusologists and
technicians. This department is primarily responsible for the design and
development of new products and consists of eight major groups. Two of the
groups are dedicated to the design of certain types of products, specifically
electronic fuses, including automotive and general electronic fuses; electrical
fuses, including power and industrial fuses.
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<PAGE>
There are two engineering groups dedicated to materials engineering which brings
metallurgy, plating and other technologies to bear on the development of new
products. One of the eight groups is responsible for developing the technology
for advanced new products. There is one group responsible for manufacturing
engineering automation. Finally, the two remaining engineering support groups
oversee trademark compliance, drafting rooms and an electronics lab. The
electronics lab develops the necessary tooling, hardware and software for
testing the standards and tolerances of sample products and maintains the model
shop.
Proposals for the development of new products are initiated primarily
by marketing managers, members of the sales staff and customers. The entire
product development process typically takes between 12 and 18 months. During the
fiscal years ended January 3, 1998, December 28, 1996, and December 31, 1995,
the Company expended approximately $7.9 million, $7.3 million and $7.9 million,
respectively, on product design and development.
Patents, Trademarks and Other Intellectual Property
The Company generally relies on patent and trademark laws and license
and nondisclosure agreements to protect its rights in its trade secrets and its
proprietary products. In cases where it is deemed necessary by management, key
employees are required to sign an agreement that they will maintain the
confidentiality of the Company's proprietary information and trade secrets. This
is information, which for business reasons, is not disclosed to the public.
As of January 3, 1998, the Company owned 101 patents in North America,
19 patents in the European Economic Community and 27 patents in other foreign
countries. The Company has also registered trademark protection for certain of
its brand names and logos. The 101 North American patents are in the following
categories: 48 Electronic, 5 Resettable, 25 Automotive, 15 Power Fuse and 8
miscellaneous. Of the 25 automotive patents, 7 are article and process patents
for the ATO(R) type fuses, 9 are for the MINI(R) and MAXITM type fuses, 3 are
for the MEGA(R) and MIDI(R) type fuses and 6 are for other automotive products.
Patents expiring in 1998 cover products that accounted for 1% of 1997 sales.
Patents covering products that accounted for the balance of 1997 sales expire
between 1999 and 2016.
The first article patent covering the AUTOFUSE(R) or ATO(R) fuse
expired on September 30, 1992. However, the last improvement patent covering the
ATO(R) fuse expires on August 10, 1999. The ATO(R) fuse product is further
protected by trademark and trade dress protection which has a remaining
indefinite life so long as it is continued to be correctly used by the Company
and its licensees.
New products are continually being developed to replace older products.
The Company regularly applies for patent protection on such new products.
Although in the aggregate the Company's patents are important in the operation
of its businesses, the Company believes that the loss by expiration or otherwise
of any one patent or group of patents would not materially affect its business.
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<PAGE>
The Company currently licenses its MINI(R) and MAXI(TM) automotive fuse
technology to Bussmann, a division of Cooper Industries and the Company's
largest domestic competitor. The license granted in 1987 is nonexclusive and
grants the Company the right to receive royalties of 4% of the licensee's
revenues from the sale of the licensed products with an annual minimum of
$25,000. Each license expires upon the expiration of the licensed product
patents.
The Company currently licenses its ATO(R) automotive fuse technology to
Pacific Engineering Company, Ltd., a Japanese manufacturer that produces and
distributes the Company's patented automotive fuses to Pacific Rim operations of
Pacific Rim-based automotive manufacturers. The license is exclusive as to Japan
and non-exclusive as to other specified Pacific Rim territories and provides
that the Company will receive royalties of 1.5% of the licensee's revenues from
the sales of the licensed products with a $25,000 annual minimum. This license
expires on August 10, 1999. In addition, a second license covering the MINI(R)
Fuse technology was granted with similar territory arrangements to Pacific
Engineering and grants the Company the right to receive royalties of 2.5% of the
licensee's revenues from the sale of the licensed products, with an annual
minimum of $100,000. The second license expires on April 6, 2006.
License royalties amounted to $332,000, $266,000 and $349,000 for 1997,
1996 and 1995 respectively.
Manufacturing
Much of the Company's manufacturing equipment is custom designed by its
engineers, and the Company conducts the majority of its own fabrication. The
Company stamps most of the metal components used in its fuses, holders and
switches from raw metal stock and makes its own contacts and springs. However,
the Company does depend upon a single source for a substantial portion of its
stamped metal end caps for electronic fuses. The Company believes that
alternative stamping sources are available at prices which would not have a
material adverse effect on the Company. The Company also performs its own
plating (silver, nickel, zinc, tin and oxides). In addition, all thermoplastic
molded component requirements used for such products as the AUTOFUSE(R), MINI(R)
and MAXI(TM) product lines are met through the Company's in-house molding
capabilities.
After components are stamped, molded, plated and readied for assembly,
final assembly is accomplished on fully automatic and semi-automatic assembly
machines. Quality assurance and operations personnel, using techniques such as
Statistical Process Control, perform tests, checks and measurements during the
production process to maintain the highest levels of product quality and
customer satisfaction.
The principal raw materials for the Company's products include copper
and copper alloys, heat resistant plastics, zinc, melamine, glass, silver,
solder, sulphate clipboard and linerboard. The Company depends upon a sole
source for several heat resistant plastics. The Company believes that suitable
alternative heat resistant plastics are available from other sources at prices
which would not have a material adverse effect on the Company. All of the other
raw materials are purchased from a number of readily available outside sources.
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<PAGE>
A computer-aided design and manufacturing system (CAD/CAM) expedites
product development and machine design, while reliability and high power
laboratories test new products, prototype concepts and production run samples.
The Company participates in "Just-in-Time" delivery programs with many of its
major suppliers and actively promotes the building of strong cooperative
relationships with its suppliers by involving them in pre-engineering product
and process development. The Company also sponsors an annual major supplier
conference and conducts a vendor certification program.
Marketing
The Company's domestic sales staff of approximately 65 people maintains
relations with major OEMs and distributors. The Company's sales and engineering
personnel interact directly with the OEM engineers to ensure maximum circuit
protection and reliability within the parameters of the OEM design.
Internationally, the Company maintains a sales staff of approximately 25 people
and sales offices in The Netherlands, England, Singapore, Korea and China. The
Company also markets its products indirectly through a worldwide organization of
approximately 125 manufacturers' representatives and distributes through an
extensive network of electronic, automotive and electrical distributors.
In addition to the normal risks associated with the Company's domestic
operations, the Company's international operations entail such further risks as
currency fluctuations and the effect of international relations or the domestic
affairs of foreign countries on the conduct of business. As of January 3, 1998,
the Company's operations have been slightly effected by the currency turmoil in
Asia Pacific during the fourth quarter of 1997. For information relating to the
constant currency effect see "Item 7. Management Discussion and Analysis of
Financial Conditions and Results of Operations - 1997 Compared to 1996." For
information relating to foreign sales, see note 8 to the Company's consolidated
financial statements.
Electronic. The Company has retained 23 manufacturers' representatives
to sell its electronic products domestically and additional representatives to
sell its electronic products internationally. These representatives call on
major OEMs and distributors. Since the manufacturers' representatives do not
maintain inventories, the Company distributes approximately 38% of its domestic
products directly to OEMs, with the remainder distributed by more than 600
distributors nationwide.
In Asia Pacific, the Company maintains a direct sales staff of five
people in Singapore, one in Hong Kong, four in Korea, and one or more
manufacturers' representatives in Japan, Singapore, Korea, Hong Kong, Taiwan,
China, Malaysia, Thailand, Philippines and Australia. The Company also maintains
an engineering facility in Japan. In Europe, the Company's distribution methods
differ from its domestic methods in that it maintains a direct sales force of
eight people to call on OEMs exclusively and utilizes approximately 15
manufacturers' representatives to approach distributors and smaller OEMs. Unlike
its domestic representatives, these manufacturers' representatives purchase
inventory from the Company to facilitate delivery and reduce financial risks
associated with currency exchange rate fluctuations.
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<PAGE>
Automotive. The Company sells automotive fuses through a direct sales
force in Detroit consisting of four employees. Salespersons service all the
major automotive OEMs (including the United States manufacturing operations of
foreign-based OEMs) through both the engineering and purchasing departments of
these companies. Twenty-eight manufacturers' representatives distribute the
Company's products to aftermarket fuse retailers such as Autozone, Pep Boys,
K-Mart and NAPA. In Europe, the Company uses both a direct sales force and
manufacturers' representatives to distribute its products to Mercedes Benz, BMW,
Volvo, Saab, Jaguar and other OEMs, as well as aftermarket distributors. In Asia
Pacific, the Company has licensed its automotive fuse technology to a Japanese
firm which supplies the majority of the automotive fuses to the Japanese
manufacturing operations in the region including Toyota, Honda and Nissan.
Power. The Company markets and sells its power fuses through 42
manufacturers' representatives across North America. These representatives sell
power fuse products through an electrical distribution network comprised of
approximately 1,200 distributors. These distributors have customers that include
electrical contractors, municipalities, utilities and factories (including both
MRO and OEM). Some of the manufacturers' representatives have consigned
inventory in order to facilitate rapid customer delivery.
The Company's field sales force (including application engineers) and
manufacturers' representatives call on both distributors and end-users
(consulting engineers, municipalities, utilities and OEMs) in an effort to
educate these customers on the capabilities and characteristics of the Company's
products.
Customers
The Company sells to over 10,000 customers worldwide. No single
customer accounted for more than 10% of net sales during the last three years
except for its Japanese stocking representative which accounted for 11% in 1997.
The Japanese stocking representative serves over 100 customers in the Asia
Pacific electronics market. During the 1997, 1996 and 1995 fiscal years, net
sales to customers outside the United States (exports and foreign operations)
accounted for approximately 40.6%, 38.5% and 35.3%, respectively, of the
Company's total net sales.
Competition
The Company's products compete with similar products of other
manufacturers, many of which have substantially greater financial resources than
the Company. In the electronic fuse market, the Company's competitors are
Bussmann, a division of Cooper Industries, Bel Fuse, Inc., Raychem Corp., San-O
Industrial Corp. and Wickmann-Werke GmbH. In the fuseholder portion of this
market, the Company's principal competitor is Schurter, Inc. In the automotive
fuse market, the Company's major competitor, both in sales to automobile
manufacturers and in the aftermarket, is Bussmann. The Company licenses several
of its automotive fuse designs to Bussmann. Other auto fuse competitors include
Pudenz and MTA. In the power fuse market,
-11-
<PAGE>
the Company's major competitors include Bussmann, Gould, Inc and Ferraz. The
Company believes that it competes primarily on the basis of innovative products,
the breadth of available product lines, the quality and design of its products
and the responsiveness of its customer service rather than through price
competition.
Backlog
The Company does not consider backlog to be a predictive measure of
results due to the Company's short delivery time. The Company manufactures high
volume products based on its demand forecasts and manufactures low volume
products based on customer orders. The Company attempts to ship such products to
the customer within five business days of the date of the order. Over 90% of all
orders, which request delivery within three weeks of the date of the order, are
filled on time from available stock or current production.
Employees
During 1997, the Company employed approximately 2,845 persons.
Approximately 50 employees in Des Plaines and 465 employees in Mexico are
covered by collective bargaining agreements. The Des Plaines agreement expires
March 31, 1999 and the Mexico agreement expires January 31, 1999. The Company
has not experienced any work stoppage or other form of labor dispute within the
last 20 years. The Company believes that its employee relations are excellent
and that its employees, many of whom have long experience with the Company,
represent a valuable resource. The Company emphasizes employee training and
development and has established Quality Improvement Process (QIP) training for
its employees worldwide so as to promote product quality and customer
satisfaction.
Environmental Regulation
The Company is subject to numerous federal, state and local regulations
relating to air and water quality, the disposal of hazardous waste materials,
safety and health. Compliance with applicable environmental regulations has not
significantly changed the Company's competitive position, capital spending or
earnings in the past and the Company does not presently anticipate that
compliance with such regulations will change its competitive position, capital
spending or earnings for the foreseeable future. The Company employs an
environmental engineer to monitor regulatory matters and believes that it is
currently in compliance in all material respects with applicable environmental
laws and regulations.
ITEM 2. PROPERTIES
Littelfuse Facilities
The Company's operations are located in 20 owned or leased facilities
worldwide, containing approximately 714,000 square feet. The U.S. headquarters
and principal fabrication and distribution facility is located in Des Plaines,
Illinois, supported by three additional plants in
-12-
<PAGE>
Illinois and one in Mexico. European headquarters and the primary European
distribution center is in Utrecht, The Netherlands, with manufacturing plants in
the United Kingdom and Switzerland. Asia Pacific operations include a
distribution center located in Singapore, with manufacturing plants in Korea,
China and the Philippines. The Company does not believe that it will encounter
any difficulty in renewing its existing leases upon the expiration of their
current terms. Management believes that the Company's facilities are adequate to
meet its requirements for the foreseeable future.
The following table provides certain information concerning the
Company's facilities:
<TABLE>
Lease
Expir-
Size Lease/ Ation Industry
Location Use (sq.ft.) Own Date Focus
<S> <C> <C> <C> <C> <C>
Des Plaines, Illinois Administrative, 340,000 Owned -- Auto, Electronic, Power
Engineering,
Manufacturing,
Testing and Research
Centralia, Illinois Manufacturing 45,200 Owned -- Electronic
Arcola, Illinois Manufacturing 36,000 Owned -- Power
Watseka, Illinois Manufacturing 26,000 Leased(1) 1999 Auto, Electronic
Watseka, Illinois Storage 5,000 Owned -- Other
Farmington Hills, Michigan Administrative 1,562 Leased 1999 Auto
Piedras Negras, Mexico Manufacturing 50,300 Leased 2000 Auto, Electronic, Power
Piedras Negras, Mexico Manufacturing 11,848 Leased 1998 Electronic and Power
Washington, Manufacturing, 60,000 Owned -- Electronic, Auto, Other
England Sales and
Distribution
Utrecht, The Netherlands Warehousing 8,680 Leased 1998 Auto, Electronic, Other
-13-
<PAGE>
Utrecht, The Netherlands Sales, 12,000 Owned -- Auto, Electronic, Other
Administrative and
Engineering
Grenchen, Switzerland Manufacturing 11,000 Owned -- Auto
Singapore Sales and 5,845 Leased 1998 Electronic
Distribution
Seoul, Korea Sales and 20,000 Leased 1998 Electronic, Auto
Manufacturing
Seoul, Korea Sales and 29,175 Owned -- Electronic
Manufacturing
Philippines Manufacturing 7,530 Leased 1998 Electronic
Suzhou, China Manufacturing 40,000 Owned -- Electronic
Hong Kong, China Sales 920 Leased 1998 Electronic
Yokohama, Japan Engineering 1,815 Leased 1999 Electronic
Sao Paulo, Brazil Sales and
Distribution 1,200 Leased 1998 Electronic, Auto
<FN>
(1)...........The lease of the manufacturing facility in Watseka, Illinois,
provides that the Company may purchase the leased facility upon certain terms
and conditions.
</FN>
</TABLE>
ITEM 3. Legal Proceedings
The Company is not a party to any legal proceedings which it believes
will have a material adverse effect upon the conduct of its business or its
financial position.
ITEM 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to the Company's stockholders during
the fourth quarter of fiscal 1997.
-14-
<PAGE>
Executive Officers of Registrant
The executive officers of the Company are as follows:
Name Age Position
Howard B. Witt 57 Chairman of the Board, President
and Chief Executive Officer
Kenneth R. Audino 54 Vice President, Quality Assurance
and Reliability
William S. Barron 55 Vice President, Marketing and
Sales
James F. Brace 52 Vice President, Treasurer
and Chief Financial Officer
David J. Krueger 60 Vice President, Engineering
Lloyd J. Turner 54 Vice President, Operations
Hans Ouwehand 51 Vice President, European
Operations
Mary S. Muchoney 52 Secretary
Officers of Littelfuse are elected by the Board of Directors and serve at the
discretion of the Board.
Howard B. Witt was elected to the position of Chairman of the Board in
May, 1993. He was promoted to President and Chief Executive Officer of Old
Littelfuse in February 1990. 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 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 Old 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. He also is a member of the
Electronic Industries Association Board of Governors and is a director of the
Artisan Mutual Funds.
Kenneth R. Audino, Vice President, Quality Assurance and Reliability,
oversees all product reliability and quality assurance activities
corporate-wide. He also directs corporate environmental affairs and serves as
the acting human resources department head. Mr. Audino
-15-
<PAGE>
joined Old Littelfuse as a Control Technician in 1964. From 1964 to 1977, he
progressed through several quality and reliability positions to Manager of
Reliability and Standards. In 1983, he became Managing Director of the European
Headquarters of Old Littelfuse and later was named Corporate Director of Quality
Assurance and Reliability. He was promoted to his current position in 1988.
William S. Barron, Vice President, Sales and Marketing, has responsibility
for the general direction of all sales, marketing and related support functions.
He also is responsible for the Information Services Department. Mr. Barron
joined Old Littelfuse in March 1991. From August 1981 to March 1991, Mr. Barron
served as Director of Sales and Marketing of Cinch Manufacturing and the General
Manager of one of its domestic divisions. Cinch Manufacturing is a subsidiary of
Labinal Corporation.
James F. Brace, Vice President, Treasurer and Chief Financial Officer,
has responsibility for the treasury, financial control and financial reporting
functions of the Company. Mr. Brace joined the Company in May 1992. From April
1987 to May 1992, he was employed by Sanford Corporation, a marker, writing
instrument and office supplies manufacturer. At Sanford he was elected Chief
Financial Officer in April 1987, Treasurer in April 1988 and Vice President in
July 1989. From March 1983 to April 1987 he was Vice President - Finance and
Administration of Iroquois Industries Corp., a paper and office supplies
distributor.
David J. Krueger, Vice President, Engineering, directs all product
feasibility, design, development and testing activities. Joining Old Littelfuse
as an Industrial Fuse Engineering Manager in 1982, he was named Manager of
Circuit Protection Devices in 1984, promoted to Director of Engineering in
January 1986 and promoted to his current position one year later. Prior to
joining Old Littelfuse, Mr. Krueger worked for 15 years as an Engineering
Manager for the Economy Fuse Division of Federal Electric, and for six years as
a Plant Manager for Federal Pacific Reliance Electric.
Lloyd J. Turner, Vice President, Operations, has responsibility for
manufacturing operations and related support functions. Mr. Turner joined Old
Littelfuse in October 1988, as Director of Manufacturing Operations after having
served as an Operations Manager with Texas Instruments from November 1984 to
September 1988. He was promoted to his current position in 1991.
Hans Ouwehand, Vice President, European Operations, has complete
responsibility for all sales, marketing, research and development, and
manufacturing activities covering the entire range of electronic, automotive and
aftermarket products sold by the Company in Europe. Mr. Ouwehand joined Old
Littelfuse in 1984 as Sales Manager, Europe, Electronics Division. He was later
promoted to the position of European Sales and Marketing Manager for all
Littelfuse products and in 1986 to the position of General Manager-European
Operations. Prior to joining Old Littelfuse, his industrial background included
research and development work with Sperry Rand and sales and product management
with Lameris Medical Instruments.
-16-
<PAGE>
Mary S. Muchoney has served as Corporate Secretary since 1991, after
joining Old Littelfuse in 1977. She is responsible for providing all secretarial
and administrative functions for the President and Littelfuse Board of
Directors. Ms. Muchoney is a member of the American Society of Corporate
Secretaries.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters
The information set forth under "Quarterly Stock Price" on page 39 of the
Annual Report to Stockholders is incorporated herein by reference. It is also
included in Exhibit 13.1 as filed with the SEC. As of March 13, 1997, there were
301 holders of record of the Company's Common Stock and in excess of 2,400
beneficial holders of its Common Stock.
Since September 22, 1992, shares of the Common Stock have been traded
in the over-the-counter market and quotations are reported using the symbol
"LFUS" on the Nasdaq stock market.
The Company has not paid any cash dividends since reorganization.
Future dividend policy will be determined by the Board of Directors based upon
their evaluation of earnings, cash availability and general business prospects.
Currently, there are restrictions on the payment of dividends contained in the
Company's Credit Agreement which relate to the maintenance of certain restricted
payment ratios.
ITEM 6. Selected Financial Data
The information set forth under "Selected Financial Data - Six Year
Summary" on page 39 of the Annual Report to Stockholders is incorporated herein
by reference. It is also included in Exhibit 13.1 as filed with the SEC.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information set forth under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 20 through 25 of the
Annual Report to Stockholders is incorporated herein by reference. It is also
included in Exhibit 13.1 as filed with the SEC.
ITEM 8. Financial Statements and Supplementary Data
The Report of Independent Auditors, and the Consolidated Financial
Statements and Notes thereto of the Company set forth on pages 26 through 37 of
the Annual Report to Stockholders are incorporated herein by reference. They are
also included in Exhibit 13.1 as filed with the SEC.
-17-
<PAGE>
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
The information set forth under "Election of Directors" in the Proxy
Statement is incorporated herein by reference. The information set forth under
"Executive Officers of the Registrant" in Part I of this Report is incorporated
herein by reference.
ITEM 11. Executive Compensation
The information set forth under "Compensation of Executive Officers" in
the Proxy Statement is incorporated herein by reference, except for the sections
captioned "Reports of the Compensation Committee on Executive Compensation" and
"Company Performance."
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under "Ownership of Littelfuse, Inc. Common
Stock" in the Proxy Statement is incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions
The information set forth under "Certain Relationships and Related
Transactions" in the Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements and Schedules
(1) Financial Statements. The following financial
statements included in the Annual Report to
Stockholders are incorporated herein by reference.
(i) Report of Independent Auditors (page 38)
(ii) Consolidated Statements of Financial Condition
as of January 3, 1998 and December 28, 1996
(pages 26 and 27).
(iii) Consolidated Statements of Income for the years
ended January 3, 1998, December 28, 1996 and
December 31, 1995 (page 28).
-18-
<PAGE>
(iv) Consolidated Statements of Cash Flows for the
years ended January 3, 1998, December 28, 1996
and December 31, 1995 (page 29).
(v) Consolidated Statements of Shareholders' Equity
for the years ended January 3, 1998, December
28, 1996 and December 31, 1995.
(page 30).
(vi) Notes to Consolidated Financial Statements
(pages 30-37).
(2) Financial Statement Schedules. The following financial
statement schedules are submitted herewith for the periods
indicated therein.
(I) Schedule II-Valuation and Qualifying Accounts and
Reserves
All other schedules for which provision is made in the
applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been
omitted.
(3) Exhibits
See Exhibit Index on pages 22-24, incorporated herein by
reference.
(b) Reports on Form 8-K
There were no reports on Form 8-K during the fourth quarter of
1997.
-19-
<PAGE>
<TABLE>
LITTELFUSE, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(In Thousands)
Additions
Balance at Charged to Balance at
Beginning Costs and Deductions End of
Description Of Year Expenses (A) Year
---------- ---------- ---------- -------
Year ended January 3, 1998
Allowance for losses on
<S> <C> <C> <C> <C>
accounts receivable . . . . . . $ 896 $ 410 $ 188 $ 1,118
======== ======= ======= =======
Reserves for sales discounts
and allowances . . . . . . . . $ 4,161 $ 620 $ -- $ 4,781
======= ====== ========= =======
Year ended December 28, 1996
Allowance for losses on
accounts receivable . . . . . $ 863 $ 236 $ 203 $ 896
========= ======= ======= ========
Reserves for sales discounts
and allowances . . . . . . . $ 3,038 $ 1,123 $ -- $ 4,161
======== ======= ========= ========
Year ended December 31, 1995
Allowance for losses on
accounts receivable . . . . . $ 716 $ 275 $ 128 $ 863
========= ======= ========= ========
Reserves for sales discounts
and allowances . . . . . . . $ 2,525 $ 513 $ -- $ 3,038
======== ======= ========= ========
<FN>
(A) Write-off of uncollectible accounts, net of recoveries and foreign currency
translation.
</FN>
</TABLE>
-20-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Littelfuse, Inc.
By /s/ Howard B. Witt
Howard B. Witt,
Chairman, President and
Chief Executive Officer
Date: March 24, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
/s/ Howard B. Witt Chairman of the Board, President
Howard B. Witt and Chief Executive Officer
/s/ John P. Driscoll Director
John P. Driscoll
/s/ Anthony Grillo Director
Anthony Grillo
/s/ Bruce A. Karsh Director
Bruce A. Karsh
/s/ John E. Major Director
John E. Major
/s/ John J. Nevin Director
John J. Nevin
/s/ James F. Brace Vice President, Treasurer
James F. Brace and Chief Financial Officer
(Principal Financial Officer)
-21-
<PAGE>
<TABLE>
LITTELFUSE INC.
INDEX TO EXHIBITS
<S> <C> <C>
Sequentialc)
Page Number
Number Description of Exhibit a)
2.1 Plan of Reorganization under Chapter 11 of the Bankruptcy Code of
Old Littelfuse.
b) 3.1 Certificate of Incorporation (as amended to date).
3.1A Certificate of Designations of Series A Preferred Stock (filed as Exhibit
4.2 to the Company's Current Report on Form 8-K dated December 1, 1995
(1934 Act File No. 0-20388) and incorporated herein by reference.)
b)3.2 Bylaws
4.1 Credit Agreement among Littelfuse, Inc., as borrower, the lenders named
therein and the First National Bank of Chicago, as agent, dated as of
August 31, 1993. (filed as exhibit 4.1 to the Company's Form 10K for the
year ended December 31, 1993) and incorporated herein by reference.
4.1A Amendment No. 1 to Credit Agreement, dated as of March 31, 1994. (Filed as
Exhibit 4.1A to the Company's Form 10-K for the year ended December 31,
1995.) and incorporated herein by reference).
4.1B Amendment No. 2 to Credit Agreement, dated as of June 16, 1995. (Filed as
Exhibit 4.1A to the Company's Form 10-K for the year ended December 31,
1995.) and incorporated herein by reference).
4.2 Registration Rights Agreement, dated as of December 27, 1991, between
Littelfuse, Inc. and The Toronto-Dominion Bank Trust Company, as agent.
4.3 Warrant Agreement, dated as of December 27, 1991, between Littelfuse, Inc.,
and LaSalle National Trust, N.A., as warrant agent, together with form of
Warrant. (filed as exhibit 4.3A to the Company's Form 10-Q for the
quarterly period ended June 28, 1997 (1934 Act File No. -20388) and
incorporated herein by reference).
- ------------
<FN>
a) All of the exhibits, (except those filed herewith or specifically noted as
being incorporated by reference from a different filing under the
Securities as of 1933 or Securities act of 1934) were filed as exhibits to
the Company's Form 10 as filed with the Securities and Exchange Commission
which became effective on September 16, 1992 (1934 Act File No. 0-20388)
and are incorporated herein by reference.
b) Filed herewith.
c) This information appears only in the manually signed copy of the report.
d) Indicates an employee benefit plan, management contract or compensatory
plan or arrangement in which a named executive officer participates.
</FN>
</TABLE>
-22-
<PAGE>
<TABLE>
<S> <C> <C>
Sequentialc)
Page Number
Description of Exhibit a)
Number
b)4.4 Stock Plan for Employees and Directors of Littelfuse, Inc. d)
4.5 Form of Stock Option Agreement
4.6 Specimen Common Stock certificate.
4.7 Littelfuse, Inc. Retirement Plan dated January 1, 1992, as amended and
restated.d)
4.8 Littelfuse, Inc. 401(k) Savings Plan.d)
4.9 Note Purchase Agreement, dated as of August 31, 1993, relating to
$45,000,000 principal amount of Littelfuse, Inc. 6.31% Senior Notes due
August 31, 2000.
b)4.10 Littelfuse Rights Plan Agreement, dated as of December 15, 1995, between
Littelfuse, Inc. and LaSalle National Bank, as Rights Agent, together with
Exhibits thereto.
10.1 Lease Agreement (with option to purchase), dated December 27, 1991, between
Littelfuse, Inc. and Westmark Systems, Inc.
10.2 Tax Indebtedness Sharing Agreement, dated December 27, 1991, between
Littelfuse, Inc., Tracor, Inc. and certain other companies.
10.3 Patent License Agreement, dated as of July 28, 1995, between Littelfuse,
Inc. and Pacific Engineering Company, Ltd.(filed as exhibit 10.3 to the
Company's Form 10K for the year ended December 28, 1996)
10.4 MINI(R) and MAXITM License Agreement, dated as of June 21, 1989, between
Littelfuse, Inc. and McGraw-Edison Company.
10.5 Patent License Agreement, dated as of January 1, 1987, between Littelfuse,
Inc. and Cooper Industries, Inc.
b)10.6 1993 Stock Plan for Employees and Directors of Littelfuse, Inc. d)
</TABLE>
-23-
<PAGE>
<TABLE>
<S> <C> <C>
Sequentialc)
Page Number
Number Description of Exhibit a)
10.7 Littelfuse, Inc. Supplemental Executive Retirement Plan.d)
10.8 Littelfuse Deferred Compensation Plan for Non-employee Directors. (filed as
exhibit 10.8A to the Company's Form 10-Q for the quarterly period ended
June 28, 1997 (1934 Act File No. 0-20388) and incorporated herein by
reference.)d)
10.9 Littelfuse Executive Loan Program (filed as Exhibit 10.2 to the Company's
Form 10Q for the quarterly period ended June 30, 1995 (1934 Act File No.
0-20388) and incorporated herein by reference.)d)
10.10 Employment Agreement dated as of September 1, 1996 between Littelfuse, Inc.
and Howard B. Witt. d)
10.11 Change of Control Employment Agreement dated as of September 1, 1996
between Littelfuse, Inc. and Howard B. Witt. d)
10.12 Form of change of Control Employment Agreement dated as of September 1,
1996 between Littelfuse, Inc. and Messrs. Anderson, Audino, Barron, Brace,
Krueger and Turner. d)
b)13.1 Portions of Littelfuse Annual Report to Stockholders for the fiscal year
ended January 3, 1998.
b)22.1 Subsidiaries.
b)23.1 Consent of Independent Auditors.
</TABLE>
-24-
<PAGE>
Exhibit 22.1
SUBSIDIARIES
Littelfuse, S.A. de C.V.
Littelfuse FSC
Littelfuse Do Brazil
Littelfuse, B.V.
Littelfuse, A.G.
Littelfuse Limited
Littelfuse Far East PTE Ltd.
Littelfuse HK Limited
Littelfuse Holdings Pte Ltd
Suzhou Littelfuse OVS Ltd
Sam Hwa Littelfuse Inc. (65% owned)
Littelfuse KK
Littelfuse Triad Inc.
Littelfuse Phils Inc
-25-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> usd
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Jan-03-1998
<PERIOD-START> Dec-29-1997
<PERIOD-END> Jan-03-1998
<EXCHANGE-RATE> 1
<CASH> 755
<SECURITIES> 0
<RECEIVABLES> 37,458
<ALLOWANCES> 5,899
<INVENTORY> 39,075
<CURRENT-ASSETS> 83,856
<PP&E> 141,230
<DEPRECIATION> 70,467
<TOTAL-ASSETS> 221,885
<CURRENT-LIABILITIES> 51,725
<BONDS> 0
0
0
<COMMON> 199
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 221,885
<SALES> 275,165
<TOTAL-REVENUES> 275,165
<CGS> 164,034
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,103
<INCOME-PRETAX> 40,652
<INCOME-TAX> 15,310
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,342
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.07
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-28-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-28-1996 DEC-31-1995
<EXCHANGE-RATE> 1 1
<CASH> 1,427 1,308
<SECURITIES> 0 0
<RECEIVABLES> 35,468 29,722
<ALLOWANCES> 5,057 3,901
<INVENTORY> 31,586 30,076
<CURRENT-ASSETS> 73,809 65,023
<PP&E> 121,311 104,764
<DEPRECIATION> 57,422 43,535
<TOTAL-ASSETS> 209,951 205,186
<CURRENT-LIABILITIES> 51,044 45,817
<BONDS> 0 0
0 0
0 0
<COMMON> 198 102
<OTHER-SE> 0 (3,533)
<TOTAL-LIABILITY-AND-EQUITY> 209,951 205,186
<SALES> 241,446 219,535
<TOTAL-REVENUES> 241,446 219,535
<CGS> 143,158 129,663
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 4,235 4,279
<INCOME-PRETAX> 34,094 29,880
<INCOME-TAX> 12,359 10,608
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 21,735 19,272
<EPS-PRIMARY> 1.09 0.95
<EPS-DILUTED> 0.91 0.78
</TABLE>
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
LITTELFUSE, INC.
Pursuant to Sectiona242 of the General Corporation Law of the State of
Delaware, LITTELFUSE, INC., a corporation organized and existing under and by
virtue of the provisions of the General Corporation Law of the State of Delaware
(hereinafter referred to as the oCorporationo), does hereby certify:
FIRST: That the original Certificate of Incorporation of the Corporation
was filed in the Office of the Secretary of State of Delaware on Novembera25,
1991.
SECOND: That, pursuant to the affirmative vote of all of the directors
of the Corporation at a meeting of the board of directors held on February 7,
1997, and the affirmative vote by stockholders of the Corporation representing
more than a majority of the outstanding shares of the Common Stock, par value
$.01 per share, of the Corporation at the annual meeting of the stockholders of
the Corporation held on April 25, 1997, all in accordance with the provisions of
Sectiona242 of the General Corporation Law of the State of Delaware, the board
of directors and stockholders of the Corporation duly approved and adopted a
resolution providing that Section 1 of Article IV of the Certificate of
Incorporation of the Corporation be amended in its entirety to read as follows:
Section 1. The aggregate number of shares of capital stock
which the Corporation shall have authority to issue is Thirty-five
Million (35,000,000) shares, of which Thirty-four Million (34,000,000)
shares shall be designated Common Stock, par value $.01 per share
(oCommon Stocko), and One Million (1,000,000) shares shall be
designated Preferred Stock, par value $.01 per share (oPreferred
Stocko). The shares designated as Common Stock shall have identical
rights and privileges in every respect.
THIRD: That said amendment to the Certificate of Incorporation shall
become effective upon filing of this Certificate of Amendment in the Office of
the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, LITTELFUSE, INC. has caused this Certificate of
Amendment to be executed by its President as of the 25th day of April, 1997.
LITTELFUSE, INC.
By
Howard B. Witt, President
Exhibit 3.2
AMENDED 2/6/98
==============================================================================
BYLAWS
OF
LITTELFUSE, INC.
=============================================================================
<PAGE>
<TABLE>
TABLE OF CONTENTS
SECTION HEADING PAGE
<S> <C>
ARTICLE I. OFFICES...............................................................................................1
Section 1. Registered Office.................................................................................1
Section 2. Other Offices.....................................................................................1
ARTICLE II. STOCKHOLDERS..........................................................................................1
Section 1. Annual Meeting....................................................................................1
Section 2. Special Meeting...................................................................................1
Section 3. Place of Meeting..................................................................................1
Section 4. Notice of Meeting.................................................................................1
Section 5. Quorum and Adjournment............................................................................2
Section 6. Proxies...........................................................................................2
Section 7. Notice of Stockholder Business and Nominations....................................................2
Section 8. Procedure for Election of Directors; Required Vote................................................4
Section 9. Inspectors of Election; Opening and Closing the Polls.............................................5
Section 10. Record Date for Action by Written Consent.........................................................5
Section 11. Inspectors of Written Consent.....................................................................5
Section 12. Effectiveness of Written Consent..................................................................6
ARTICLE III. DIRECTORS.............................................................................................6
Section 1. Management........................................................................................6
Section 2. Number; Election..................................................................................6
Section 3. Change in Number..................................................................................6
Section 4. Removal...........................................................................................6
Section 5. Vacancies and Newly Created Directorships.........................................................7
Section 6. Election of Directors; Cumulative Voting Prohibited...............................................7
Section 7. Place of Meetings.................................................................................7
Section 8. First Meetings....................................................................................7
Section 9. Regular Meetings..................................................................................7
Section 10. Special Meetings..................................................................................7
Section 11. Quorum............................................................................................7
Section 12. Action Without Meeting; Telephone Meetings........................................................8
Section 13. Chairman of the Board.............................................................................8
Section 14. Compensation......................................................................................8
ARTICLE IV. COMMITTEES............................................................................................8
Section 1. Designation.......................................................................................8
Section 2. Number; Qualification; Term.......................................................................8
Section 3. Authority.........................................................................................9
Section 4. Committee Changes; Removal........................................................................9
Section 5. Alternate Members of Committees...................................................................9
Section 6. Regular Meetings..................................................................................9
Section 7. Special Meetings..................................................................................9
Section 8. Quorum; Majority Vote.............................................................................9
Section 9. Minutes...........................................................................................9
Section 10. Compensation......................................................................................9
Section 11. Responsibility...................................................................................10
ARTICLE V. NOTICES..............................................................................................10
Section 1. Method...........................................................................................10
Section 2. Waiver...........................................................................................10
Section 3. Exception to Notice Requirement..................................................................10
ARTICLE VI. OFFICERS.............................................................................................11
Section 1. Officers.........................................................................................11
Section 2. Election.........................................................................................11
Section 3. Compensation.....................................................................................11
Section 4. Removal and Vacancies............................................................................11
Section 5. President........................................................................................11
Section 6. Vice Presidents..................................................................................11
Section 7. Secretary........................................................................................12
Section 8. Assistant Secretaries............................................................................12
Section 9. Treasurer........................................................................................12
Section 10. Assistant Treasurers.............................................................................12
ARTICLE VII. CERTIFICATES REPRESENTING SHARES.....................................................................12
Section 1. Certificates.....................................................................................12
Section 2. Legends..........................................................................................13
Section 3. Lost Certificates................................................................................13
Section 4. Transfer of Shares...............................................................................13
Section 5. Registered Stockholders..........................................................................13
ARTICLE VIII. GENERAL PROVISIONS...................................................................................13
Section 1. Dividends........................................................................................13
Section 2. Reserves.........................................................................................14
Section 3. Checks...........................................................................................14
Section 4. Fiscal Year......................................................................................14
Section 5. Seal.............................................................................................14
Section 6. Indemnification..................................................................................14
Section 7. Transactions with Directors and Officers.........................................................14
Section 8. Amendments.......................................................................................14
Section 9. Table of Contents; Headings......................................................................15
</TABLE>
<PAGE>
BYLAWS
OF
LITTELFUSE, INC.
(the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation shall be
at 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
Section 2. Other Offices. The Corporation may also have offices at such other
places, both within and without the State of Delaware, as the Board of Directors
may from time to time determine or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. An annual meeting of the stockholders of the
Corporation shall be held each calendar year on such date and at such place and
time as may be fixed by resolution of the Board of Directors.
Section 2. Special Meeting. Subject to the rights of the holders of any series
of stock having a preference over the Common Stock of the Corporation as to
dividends or upon liquidation (oPreferred Stocko) with respect to such series of
Preferred Stock, special meetings of the stockholders may be called only by the
Chairman of the Board or by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors which the Corporation
would have if there were no vacancies (the oWhole Boardo).
Section 3. Place of Meeting. The Board of Directors or the Chairman of the
Board, as the case may be, may designate the place of meeting for any annual
meeting or for any special meeting of the stockholders called by the Board of
Directors or the Chairman of the Board. If no designation is so made, the place
of meeting shall be the principal office of the Corporation.
Section 4. Notice of Meeting. Written or printed notice, stating the place, day
and hour of any annual meeting or special meeting of the stockholders and the
purpose or purposes for which the meeting is called, shall be delivered by the
Corporation not less than ten (10) days nor more than sixty (60) days before the
date of the meeting, either personally or by mail, to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail with postage thereon prepaid,
addressed to the stockholder at the address therefor as it appears on the stock
transfer books of the Corporation. Such further notice shall be given as may be
required by law. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
CorporationAEs notice of meeting. Meetings may be held without notice if all
stockholders entitled to vote are present or if notice is waived by those not
present in accordance with Sectiona2 of ArticleaV of these Bylaws. Any
previously scheduled meeting of the stockholders may be postponed, and (unless
the Certificate of Incorporation otherwise provides) any special meeting of the
stockholders may be cancelled, by resolution of the Board of Directors upon
public notice given prior to the date previously scheduled for such meeting of
stockholders.
Section 5. Quorum and Adjournment. Except as otherwise provided by the
Certificate of Incorporation, the holders of a majority of the outstanding
shares of the Corporation entitled to vote generally in the election of
directors (the oVoting Stocko), represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, except that when specified
business is to be voted on by a class or series of stock voting as a class, the
holders of a majority of the shares of such class or series shall constitute a
quorum of such class or series for the transaction of such business. The
Chairman of the meeting or a majority of the shares so represented may adjourn
the meeting from time to time, whether or not there is such a quorum. No notice
of the time and place of adjourned meetings need be given except as required by
law. The stockholders present at a duly called meeting at which a quorum is
present may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 6. Proxies. At all meetings of stockholders, a stockholder may vote by
proxy executed in writing (or in such manner prescribed by the General
Corporation Law of the State of Delaware) by the stockholder, or by such
stockholderAEs duly authorized attorney in fact.
Section 7. Notice of Stockholder Business and Nominations.
(A) Annual Meeting of Stockholders. (1) Nominations of
persons for election to the Board of Directors of the Corporation and
the proposal of business to be considered by the stockholders may be
made at an annual meeting of stockholders (a) pursuant to the
Corporation's notice of meeting, (b) by or at the direction of the
Board of Directors or (c) by any stockholder of the Corporation who was
a stockholder of record at the time of giving of notice provided for in
this Section 7(A) who is entitled to vote at the meeting and who
complies with the notice procedures set forth in this Section 7(A).
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of
Section 7(A)(1) of these Bylaws, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation and such
other business must otherwise be a proper matter for stockholder
action. To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive offices of the Corporation not
later than the close of business on the 60th day nor earlier than the
close of business on the 90th day prior to the first anniversary of the
preceding year's annual meeting of stockholders; provided, however,
that in the event that the date of the annual meeting to which such
stockholder's notice relates is more than 30 days before or more than
60 days after such anniversary date, notice by the stockholder to be
timely must be so delivered not earlier than the close of business on
the 90th day prior to such annual meeting and not later than the close
of business on the later of the 60th day prior to such annual meeting
or the 10th day following the day on which public announcement of the
date of such annual meeting is first made by the Corporation. In no
event shall the public announcement of an adjournment of an annual
meeting commence a new time period for the giving of a stockholder's
notice as described above. Such stockholder's notice shall set forth
(a) as to each person whom the stockholder proposes to nominate for
election or re-election as a director all information relating to such
person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
(including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (b) as
to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such stockholder
and the beneficial owner, if any, on whose behalf the proposal is made;
and (c) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (i)
the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class
and number of shares of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
Section 7(A)(2) of these Bylaws to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the
Corporation is increased and there is no public announcement by the
Corporation naming all of the nominees for director or specifying the
size of the increased Board of Directors at least 70 days prior to the
first anniversary of the preceding yearAEs annual meeting, a
stockholder's notice required by this Section 7(A) shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the
Secretary at the principal executive offices of the Corporation not
later than the close of business on the 10th day following the day on
which such public announcement is first made by the Corporation.
(B) Special Meetings of Stockholders. Only such business
shall be conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to the CorporationAEs notice
of meeting. Nominations of persons for election to the Board of
Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of
meeting (a) by or at the direction of the Board of Directors or (b)
provided that the Board of Directors has determined that directors
shall be elected at such special meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of
notice provided for in this Section 7(B), who shall be entitled to vote
at the meeting and who complies with the notice procedures set forth in
this Section 7(B). In the event the Corporation calls a special meeting
of stockholders for the purpose of electing one or more directors to
the Board of Directors, any such stockholder may nominate a person or
persons (as the case may be), for election to such position(s) as
specified in the Corporatio'Es notice of meeting, if the
stockholder's notice required by Section 7(A)(2) of these Bylaws shall
be delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the close of business on the 90th day
prior to such special meeting and not later than the close of business
on the later of the 60th day prior to such special meeting or the 10th
day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board
of Directors to be elected at such meeting. In no event shall the
public announcement of an adjournment of a special meeting commence a
new time period for the giving of a stockholder's notice as described
above.
(C) General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this Section 7 shall be
eligible to serve as directors and only such business shall be
conducted at a meeting of stockholders as shall have been brought
before the meeting in accordance with the procedures set forth in this
Section 7. Except as otherwise provided by law, the Certificate of
Incorporation or these Bylaws, the Chairman of the meeting shall have
the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the
case may be, in accordance with the procedures set forth in this
Section 7 and, if any proposed nomination or business is not in
compliance with this Section 7, to declare that such defective proposal
or nomination shall be disregarded.
(2) For purposes of this Section 7, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(3) Notwithstanding the foregoing provisions of this
Section 7, a stockholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section 7.
Nothing in this Section 7 shall be deemed to affect any rights (a) of
stockholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rulea14a-8 under the Exchange Act or (b) of
the holders of any series of Preferred Stock to elect directors under
specified circumstances.
Section 8. Procedure for Election of Directors; Required Vote. Election of
directors at all meetings of the stockholders at which directors are to be
elected shall be by ballot and, subject to the rights of the holders of any
series of Preferred Stock to elect directors under specified circumstances, a
plurality of the votes cast thereat shall elect directors. Except as otherwise
provided by law, the Certificate of Incorporation or these Bylaws, in all
matters other than the election of directors, the affirmative vote of a majority
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the matter shall be the act of the stockholders.
Section 9. Inspectors of Election; Opening and Closing the Polls. The Board of
Directors by resolution shall appoint one or more inspectors, which inspector or
inspectors may include individuals who serve the Corporation in other
capacities, including, without limitation, as officers, employees, agents or
representatives, to act at a meeting of stockholders and make a written report
thereof. One or more persons may be designated as alternative inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act or is able to act at a meeting of stockholders, the Chairman of
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before discharging his or her duties, shall take and sign an oath to
execute faithfully the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall have the
duties prescribed by law. The Chairman of the meeting shall fix and announce at
the meeting the date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote at the meeting.
Section 10. Record Date for Action by Written Consent. In order that the
Corporation may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. Any
stockholder of record seeking to have the stockholders authorize or take
corporate action by written consent shall, by written notice to the Secretary,
request the Board of Directors to fix a record date. The Board of Directors
shall promptly, but in all events within ten (10) days after the date on which
such a request is received, adopt a resolution fixing the record date. If no
record date has been fixed by the Board of Directors within ten (10) days of the
date on which such request is received, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in Delaware, its principal
place of business or to any officer or agent of the Corporation having custody
of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board of Directors
is required by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the date on which the Board of Directors adopts the
resolution taking such prior action.
Section 11. Inspectors of Written Consent. In the event of the delivery, in the
manner provided by Section 10 of this Article II, to the Corporation of the
requisite written consent or consents to take corporate action and/or related
revocation or revocations, the Corporation shall engage nationally recognized
independent inspectors of elections for the purpose of promptly performing a
ministerial review of the validity of the consents and revocations. For the
purpose of permitting the inspectors to perform such review, no action by
written consent without a meeting shall be effective until such date as the
independent inspectors certify to the Corporation that the consents delivered to
the Corporation in accordance with Section 10 of this Article II represent at
least the minimum number of votes that would be necessary to take the corporate
action. Nothing contained in this Sectiona11 shall in any way be construed to
suggest or imply that the Board of Directors or any stockholder shall not be
entitled to contest the validity of any consent or revocation thereof, whether
before or after such certification by the independent inspectors, or to take any
other action (including, without limitation, the commencement, prosecution or
defense of any litigation with respect thereto, and the seeking of injunctive
relief in such litigation).
Section 12. Effectiveness of Written Consent. Every written consent shall bear
the date of signature of each stockholder who signs the consent and no written
consent shall be effective to take the corporate action referred to therein
unless, within 60 days of the date the earliest dated written consent was
received in accordance with Section 10 of this Article II, a written consent or
consents signed by a sufficient number of holders to take such action are
delivered to the Corporation in the manner prescribed in Section 10 of this
Article II.
ARTICLE III
DIRECTORS
Section 1. Management. The business and affairs of the Corporation shall be
managed by its Board of Directors, who may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute, the
Certificate of Incorporation or these Bylaws directed or required to be
exercised or done by the stockholders. The Board of Directors shall keep regular
minutes of its proceedings.
Section 2. Number; Election. The number of directors which shall constitute the
whole Board of Directors shall be six (6). No directors need be stockholders or
residents of the State of Delaware. The directors shall be elected at the annual
meeting of the stockholders, except as hereinafter provided, and each director
elected shall hold office until his successor is elected and qualified or until
his earlier resignation or removal.
Section 3. Change in Number. The number of directors may be increased or
decreased from time to time by resolution of the Board of Directors, but no
decrease shall have the effect of shortening the term of any incumbent director.
Section 4. Removal. Any director may be removed, with or without cause, at any
annual or special meeting of stockholders, by the affirmative vote of the
holders of a majority of the shares represented in person or by proxy at such
meeting and entitled to vote for the election of such director, if notice of the
intention to act upon such matters shall have been given in the notice calling
such meeting.
Section 5. Vacancies and Newly Created Directorships. Vacancies and
newly-created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director. Each director so
chosen shall hold office until the first annual meeting of stockholders held
after his election and until his successor is elected and qualified or until his
earlier resignation or removal. If at any time there are no directors in office,
an election of directors may be held in the manner provided by statute. Except
as otherwise provided in these Bylaws, when one or more directors shall resign
from the Board of Directors, effective at a future date, a majority of the
directors then in office, including those who have so resigned, shall have the
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each director so
chosen shall hold office as provided in these Bylaws with respect to the filling
of other vacancies.
Section 6. Election of Directors; Cumulative Voting Prohibited. At every
election of directors, each stockholder shall have the right to vote in person
or by proxy the number of voting shares owned by him for as many persons as
there are directors to be elected and for whose election he has a right to vote.
Cumulative voting shall be prohibited.
Section 7. Place of Meetings. The directors of the Corporation may hold their
meetings, both regular and special, either within or without the State of
Delaware.
Section 8. First Meetings. The first meeting of each newly elected Board shall
be held without further notice immediately following the annual meeting of
stockholders, and at the same place, unless by unanimous consent of the
directors then elected and serving, such time or place shall be changed.
section 9. Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at such time and place as shall from time to time be
determined by the Board of Directors.
Section 10. Special Meetings. Special meetings of the Board of Directors may be
called by the President on twenty-four (24) hoursAE notice to each director, if
by telecopier, electronic facsimile or hand delivery, or on three (3) daysAE
notice to each director, if by mail or by telegram. Special meetings may be
called in like manner and on like notice on the written request of any one of
the directors. Except as may be otherwise expressly provided by statute, the
Certificate of Incorporation or these Bylaws, neither the business to be
transacted at, nor the purpose of, any special meeting need be specified in a
notice or waiver of notice.
Section 11. Quorum. At all meetings of the Board of Directors, the presence of a
majority of the directors shall be necessary and sufficient to constitute a
quorum for the transaction of business, and the vote of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors, except as may be otherwise specifically provided by
statute, or the Certificate of Incorporation or these Bylaws. If a quorum shall
not be present at any meeting of directors, the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 12. Action Without Meeting; Telephone Meetings. Any action required or
permitted to be taken at a meeting of the Board of Directors or of any committee
thereof may be taken without a meeting if a consent in writing, setting forth
the action so taken, is signed by all the members of the Board of Directors or
committee, as the case may be. Such consent shall have the same force and effect
as a unanimous vote at a meeting. Subject to applicable notice provisions and
unless otherwise restricted by the Certificate of Incorporation, members of the
Board of Directors, or any committee designated by the Board of Directors, may
participate in and hold a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such meeting shall constitute
presence in person at such meeting, except where a personAEs participation is
for the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
Section 13. Chairman of the Board. The Board of Directors may elect a Chairman
of the Board to preside at their meetings and to perform such other duties as
the Board of Directors may from time to time assign to him.
Section 14. Compensation. Directors, as such, shall not receive any stated
salary for their services, but, by resolution of the Board of Directors, a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors; provided, that nothing
herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
COMMITTEES
Section 1. Designation. The Board of Directors may, by resolution passed by a
majority of the entire Board of Directors, designate one or more committees.
Section 2. Number; Qualification; Term. Each committee shall consist of one or
more directors appointed by resolution adopted by a majority of the entire Board
of Directors. The number of committee members may be increased or decreased from
time to time by resolution adopted by a majority of the entire Board of
Directors. Each committee member shall serve as such until the earliest of
(i) the expiration of his term as director, (ii) his resignation as a committee
member or as a director, or (iii) his removal as a committee member or as a
director.
Section 3. Authority. Each committee, to the extent expressly provided in the
resolution of the Board of Directors establishing such committee, shall have and
may exercise all of the authority of the Board of Directors in the management of
the business and affairs of the Corporation except to the extent expressly
restricted by statute, the Certificate of Incorporation or these Bylaws.
Section 4. Committee Changes; Removal. The Board of Directors shall have the
power at any time to fill vacancies in, to change the membership of, and to
discharge any committee. The Board of Directors may remove any committee member,
at any time, with or without cause.
Section 5. Alternate Members of Committees. The Board of Directors may designate
one or more directors as alternate members of any committee. Any such alternate
member may replace any absent or disqualified member at any meeting of the
committee.
Section 6. Regular Meetings. Regular meetings of any committee may be held
without notice at such time and place as may be designated from time to time by
the committee and communicated to all members thereof.
Section 7. Special Meetings Special meetings of any committee may be held
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee member
at least (i)atwenty-four (24) hours before such special meeting if notice is
given by telecopy, electronic facsimile or hand delivery or (ii)aat least three
days before such special meeting if notice is given by mail or by telegram.
Neither the business to be transacted at, nor the purpose of, any special
meeting of any committee need be specified in the notice or waiver of notice of
any special meeting.
Section 8. Quorum; Majority Vote. At meetings of any committee, a majority of
the number of members designated by the Board of Directors shall constitute a
quorum for the transaction of business. If a quorum is not present at a meeting
of any committee, a majority of the members present may adjourn the meeting from
time to time, without notice other than an announcement at the meeting, until a
quorum is present. The act of a majority of the members present at any meeting
at which a quorum is in attendance shall be the act of a committee, unless the
act of a greater number is required by law, the Certificate of Incorporation or
these Bylaws.
Section 9. Minutes. Each committee shall cause minutes of its proceedings to be
prepared and shall report the same to the Board of Directors upon the request of
the Board of Directors. The minutes of the proceedings of each committee shall
be delivered to the Secretary of the Corporation for placement in the minute
books of the Corporation.
Section 10. Compensation. Committee members may, by resolution of the Board of
Directors, be allowed a fixed sum and expenses of attendance, if any, for
attending any committee meetings or a stated salary.
Section 11. Responsibility. The designation of any committee and the delegation
of authority to it shall not operate to relieve the Board of Directors or any
director of any responsibility imposed upon it or such director by law.
ARTICLE V
NOTICES
Section 1. Method. Whenever by statute, the Certificate of Incorporation, or
these Bylaws, notice is required to be given to any committee member, director,
or stockholder and no provision is made as to how such notice shall be given,
personal notice shall not be required, and any such notice may be given (a)ain
writing, by mail, postage prepaid, addressed to such committee member, director,
or stockholder at his address as it appears on the books or (in the case of a
stockholder) the stock transfer records of the Corporation, or (b)aby any other
method permitted by law (including but not limited to overnight courier service,
telegram, telex, or telefax). Any notice required or permitted to be given by
mail shall be deemed to be given when deposited in the United States mail as
aforesaid. Any notice required or permitted to be given by overnight courier
service shall be deemed to be given at the time delivered to such service with
all charges prepaid and addressed as aforesaid. Any notice required or permitted
to be given by telegram, telefex, or telefax shall be deemed to be delivered and
given at the time transmitted with all charges prepaid and addressed as
aforesaid.
Section 2. Waiver. Whenever any notice is required to be given to any
stockholder, director, or committee member of the Corporation by statute, the
Certificate of Incorporation or these Bylaws, a written waiver thereof, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be equivalent to notice. Attendance of a stockholder,
director, or committee member at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends for the express purpose of
objecting at the beginning of the meeting to the transaction of any business on
the ground that the meeting is not lawfully called or convened.
Section 3. Exception to Notice Requirement. The giving of any notice required
under any provision of the General Corporation Law of Delaware, the Certificate
of Incorporation or these Bylaws shall not be required to be given to any
stockholder to whom (i) notice of two consecutive annual meetings, and all
notices of meetings or of the taking of action by written consent without a
meeting to such stockholder during the period between such two consecutive
annual meetings, or (ii) all, and at least two, payments (if sent by first class
mail) of dividends or interest on securities during a twelve-month period, have
been mailed addressed to such person at his address as shown on the records of
the Corporation and have been returned undeliverable. If any such stockholder
shall deliver to the Corporation a written notice setting forth his then current
address, the requirement that notice be given to such stockholder shall be
reinstated.
ARTICLE VI
OFFICERS
Section 1. Officers. The officers of the Corporation shall be elected by the
directors and shall be a President, a Vice President, a Secretary, and a
Treasurer. The Board of Directors may also choose a Chairman of the Board,
additional Vice Presidents and one or more Assistant Secretaries and Assistant
Treasurers. Any two or more offices may be held by the same person, except that
no person shall be both the President and the Secretary.
Section 2. Election. The Board of Directors at its first meeting after each
annual meeting of stockholders shall elect the officers of the Corporation, none
of whom need be a member of the Board, a stockholder or a resident of the State
of Delaware. The Board of Directors may appoint such other officers and agents
as it shall deem necessary, who shall be appointed for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
Section 3. Compensation. The compensation of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
Section 4. Removal and Vacancies. Each officer of the Corporation shall hold
office until his successor is elected and qualified or until his earlier
resignation or removal. Any officer or agent elected or appointed by the Board
of Directors may be removed either for or without cause by a majority of the
directors represented at a meeting of the Board of Directors at which a quorum
is represented, whenever in the judgment of the Board of Directors the best
interests of the Corporation will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed. If
the office of any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
Section 5. President. The President shall be the chief executive officer of the
Corporation. He shall preside at all meetings of the stockholders and the Board
of Directors unless the Board of Directors shall elect a Chairman of the Board,
in which event the President shall preside at Board meetings in the absence of
the Chairman of the Board. The President shall have general and active
management of the business and affairs of the Corporation, shall see that all
orders and resolutions of the Board are carried into effect, and shall perform
such other duties as the Board of Directors shall prescribe.
Section 6. Vice Presidents. In the absence of the President or in the event of
his inability to refusal to act, the Vice President (or in the event there is
more than one Vice President, the vice presidents in the order designated by the
Board, or in the absence of any designation, then in the order of their election
or appointment) shall perform the duties of the President, and when so acting
shall have all the powers of and be subject to all of the restrictions upon the
President. Each Vice President shall have only such powers and perform only such
duties as the Board of Directors may from time to time prescribe or as the
President may from time to time delegate to him.
Section 7. Secretary. The Secretary shall attend all sessions of the Board of
Directors and all meetings of the stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for any committee when required. Except as otherwise
provided herein, the Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of Directors
or President, under whose supervision he shall be. He shall keep in safe custody
the seal of the Corporation and, when authorized by the Board of Directors,
affix the same to any instrument requiring it, and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or an Assistant
Secretary.
Section 8. Assistant Secretaries. Each Assistant Secretary shall have only such
powers and perform only such duties as the Board of Directors may from time to
time prescribe or as the President may from time to time delegate.
Section 9. Treasurer. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements of the Corporation and shall deposit all monies and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President and directors, at the
regular meetings of the Board of Directors, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial condition of
the Corporation, and shall perform such other duties as the Board of Directors
may prescribe. If required by the Board of Directors, he shall give the
Corporation a bond in such form, in such sum, and with such surety or sureties
as shall be satisfactory to the Board of Directors for the faithful performance
of the duties of his office and for the restoration to the Corporation, in case
of his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in his possession
or under his control belonging to the Corporation.
Section 10. Assistant Treasurers. Each Assistant Treasurer shall have only such
powers and perform only such duties as the Board of Directors may from time to
time prescribe.
ARTICLE VII
CERTIFICATES REPRESENTING SHARES
Section 1. Certificates. The shares of the Corporation shall be represented by
certificates in such form as shall be determined by the Board of Directors. Such
certificates shall be consecutively numbered and shall be entered in the books
of the Corporation as they are issued. Each certificate shall state on the face
thereof the holderAEs name, the number and class of shares, and the par value of
such shares or a statement that such shares are without par value. Each
certificate shall be signed by the President or a Vice President and by the
Secretary or an Assistant Secretary and may be sealed with the seal of the
Corporation or a facsimile thereof. Any or all of the signatures on a
certificate may be facsimile.
Section 2. Legends. The Board of Directors shall. have the power and authority
to provide that certificates representing shares of stock shall bear such
legends as the Board of Directors shall authorize, including, without
limitation, such legends as the Board of Directors deems appropriate to assure
that the Corporation does not become liable for violations of federal or state
securities laws or other applicable law.
Section 3. Lost Certificates. The Corporation may issue a new certificate
representing shares in place of any certificate theretofore issued by the
Corporation, alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. The Board of Directors, in its discretion and as a
condition precedent to the issuance thereof, may require the owner of such lost,
stolen or destroyed certificate, or his legal representative, to advertise the
same in such manner as it shall specify and/or to give the Corporation a bond in
such form, in such sum, and with such surety or sureties as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfer of Shares. Shares of stock shall be transferable only on the
books of the Corporation by the holder thereof in person or by his duly
authorized attorney. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation or the transfer agent of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
Section 5. Registered Stockholders. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof for any and all purposes, and, accordingly, shall not be bound to
recognize any equitable or other claim or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. The directors, subject to any restrictions contained in
the Certificate of Incorporation, may declare dividends upon the shares of the
CorporationAEs capital stock. Dividends may be paid in cash, in property, or in
shares of the Corporation, subject to the provisions of the General Corporation
Law of Delaware and the Certificate of Incorporation.
Section 2. Reserves. By resolution of the Board of Directors, the directors may
set apart out of any of the funds of the Corporation such reserve or reserves as
the directors from time to time, in their discretion, think proper to provide
for contingencies, or to equalize dividends, or to repair or maintain any
property of the Corporation, or for such other purposes as the directors shall
think beneficial to the Corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
Section 3. Checks. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
Section 5. Seal. The corporate seal shall have inscribed thereon the name of the
Corporation. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
Section 6. Indemnification. The Corporation shall indemnify its directors,
officers, employees and agents to the fullest extent permitted by the General
Corporation Law of Delaware and the Certificate of the Incorporation.
Section 7. Transactions with Directors and Officers. No contract or other
transaction between the Corporation and any other corporation and no other act
of the Corporation shall, in the absence of fraud, be invalidated or in any way
affected by the fact that any of the directors of the Corporation are
pecuniarily or otherwise interested in such contract, transaction or other act,
or are directors or officers of such other corporation. Any director of the
Corporation, individually, or any firm or corporation of which any such director
may be a member, may be a party to, or may be pecuniarily or otherwise
interested in, any contract or transaction of the Corporation; provided,
however, that the fact that the director, individually, or the firm or
corporation is so interested shall be disclosed or shall have been known to the
Board of Directors or a majority of such members thereof as shall be present at
any annual meeting or at any special meeting, called for that purpose, of the
Board of Directors at which action upon any contract or transaction shall be
taken. Any director of the Corporation who is so interested may be counted in
determining the existence of a quorum at any such annual or special meeting of
the Board of Directors which authorizes such contract or transaction, any may
vote thereat to authorize such contract or transaction with like force and
effect as if he were not such director or officer of such other corporation or
not so interested. Every director of the Corporation is hereby relieved from any
disability which might otherwise prevent him from carrying out transactions with
or contracting with the Corporation for the benefit of himself or any firm,
corporation, trust or organization in which or with which he may be in anywise
interested or connected.
Section 8. Amendments. These Bylaws may be altered, amended or repealed or new
Bylaws may be adopted by the stockholders or by the Board of Directors at any
regular meeting of the stockholders or the Board of Directors, at any special
meeting of the stockholders or the Board of Directors if notice of such
alteration, amendment, repeal, or adoption of new Bylaws be contained in the
notice of such special meeting, or by written consent of the Board of Directors
or the stockholders without a meeting.
Section 9. Table of Contents; Headings. The Table of Contents and headings used
in these Bylaws have been inserted for convenience only and do not constitute
matters to be construed in interpretation.
Exhibit 4.4
REVISED 2/6/98
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 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 1,000,000 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
December 15, 2001.
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 odisinterested persono to
administer the Plan as contemplated by Rulea16b-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
paragrapha10.) 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 oLittelfuse Officero 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 oParticipanto shall
mean an Employee or Eligible Director; the term oEmployeeo
shall mean a full-time, non-union, salaried employee of the
Corporation or any of its Subsidiaries; the term oEligible
Directoro 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 oSubsidiarieso 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 odisinterested persono
to administer the Plan as contemplated by Rulea16b-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 subparagrapha4.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 (oDividend Equivalentso), 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
paragrapha10., and credited to the EmployeeAEs account (oAdditional
Deemed Shareso).
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 4,000 shares of Common Stock, which option
shall be granted on the earlier of the January, 1992 meeting of the Committee or
the first meeting of the Committee following the date on which the Eligible
Director is first elected as a member of the Board of Directors of the
Corporation. The purchase price for the Common Stock covered by each such option
shall be the fair market value (as defined below) of such Common Stock on the
date the option is granted, payable at the time and in the manner provided in
subparagrapha5.b. below. Each 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 Rulea16b-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 paragrapha13.
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 paragraphsa11. 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 ParticipantAEs 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
OfficerAEs 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 subparagrapha8.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 ParticipantAEs 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
clausea(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 amountaof
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 oimmediate
family memberso 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 oPermitted Transfereeo). 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 oRestricted Periodo)
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
paragrapha9., 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
paragrapha9., all restrictions shall lapse or terminate with respect to all
restricted shares or restricted units upon the earliest to occur of an
EmployeeAEs 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 "Additional Restricted Shares") 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 EmployeeAEs 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
oLapse Dateo) 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 paragrapha12., 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 paragrapha12., 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 ParticipantAEs
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 CommitteeAEs
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 Decembera16, 1991, provided that the Plan shall be approved by
the Corporation's stockholders on or before December 15, 1992. 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.
Exhibit 4.10
FIRST AMENDMENT
TO
LITTELFUSE RIGHTS PLAN AGREEMENT
THIS FIRST AMENDMENT is made and entered into as of the 1st day of
August, 1996, by and between LITTELFUSE, INC., a Delaware corporation
(hereinafter referred to as the "Company"), and LASALLE NATIONAL BANK, as Rights
Agent (hereinafter referred to as the "Rights Agent");
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent have heretofore executed that
certain Littelfuse Rights Plan Agreement dated as of December 15, 1995
(hereinafter referred to as the "Rights Plan"); and
WHEREAS, the Company and the Rights Agent wish to amend the Rights Plan
in certain respects, all in accordance with the terms and provisions hereof;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the parties hereto hereby agree as follows:
1. The definition of "Acquiring Person" contained in the Rights Plan is
hereby amended by adding the following language to the end of the first sentence
of Section 1(a) of the Rights Plan:
; provided, however, that for purposes of calculating said
15%, there shall be included in the number of Common Shares of
the Company then outstanding the number of Common Shares of
the Company into which the then outstanding Warrants to
purchase Common Shares of the Company issued pursuant to that
certain Warrant Agreement dated December 20, 1991, between the
Company and LaSalle National Trust, N.A., as Warrant Agent,
are then exercisable.
2. Except as specifically amended hereby the Rights Plan shall remain
unchanged and continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Littelfuse Rights Plan Agreement as of the day and year first above
written.
LITTELFUSE, INC.
By
Its_________________________
LASALLE NATIONAL BANK, as Rights Agent
By
Its________________________
<PAGE>
CERTIFICATE
OF
ADJUSTMENT
FILED WITH
LASALLE NATIONAL BANK
AS (i) RIGHTS AGENT UNDER THAT CERTAIN
LITTELFUSE RIGHTS PLAN AGREEMENT (THE "RIGHTS PLAN")
DATED AS OF DECEMBER 15, 1995,
BETWEEN
LITTELFUSE, INC. ("LITTELFUSE")
AND
LASALLE NATIONAL BANK, AS RIGHTS AGENT,
AND
(ii) AS THE TRANSFER AGENT FOR THE COMMON STOCK,
$.01 PAR VALUE, OF LITTELFUSE
On April 25, 1997, the Board of Directors of Littelfuse declared a
stock dividend of one share of the Littelfuse common stock, $.01 par value per
share (the "Common Stock"), on each issued and outstanding share of the Common
Stock, which was paid and distributed on June 10, 1997, to those holders of
record of the Common Stock at the close of business on May 20, 1997.
Pursuant to Section 11(n) of the Rights Plan, on June 10, 1997, each
Right under the Rights Plan shall entitle the holder thereof to purchase
1/200ths of a Preferred Share for a purchase price of $67.50. Each Right
previously represented a right to purchase 1/100th of a Preferred Share for a
purchase price of $135.00. This adjustment reflects said stock dividend.
IN WITNESS WHEREOF, Littelfuse has caused this Certificate to be duly
executed as of the 10th day of June, 1997.
LITTELFUSE, INC.
By
Its________________________________
Exhibit 10.6
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 odisinterested persono 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
oSubsidiarieso 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 odisinterested persono 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 Employee's
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 Employee's 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 'Eligible Director Stock Options"). 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 Section 2.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 ParticipantAEs
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)athe 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)athe 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 amountaof 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 oimmediate family memberso 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 EmployeeAEs
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 "Additional
Restricted Shares") 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 ParticipantAEs last will, or by the ParticipantAEs 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 Participant's 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 CommitteeAEs
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.
Exhibit 13.1
Management's Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion provides an analysis of the information contained in
the consolidated financial statements and accompanying notes beginning on page
26 for the three years ended January 3, 1998.
Highlights
The engine of our sales growth in 1997 again was electronics. Electronics sales
increased 20% in US dollars and 22 % in constant currency. Over the last five
years, electronics sales have grown at a compounded annual rate of 15%.
Automotive sales in 1997 increased 9% in US dollars and 13% in constant
currency. Europe's automotive sales were very strong in local currencies. Over
the last five years, automotive sales have grown at a compounded annual rate of
12%. Power fuse sales in 1997 increased 8% both in US dollars and in constant
currency. Over the last five years, power fuse sales have grown at a compounded
annual rate of 10%. The company's focus on international sales and marketing
produced significant results in 1997 as sales outside North America grew 20%
compared to 11% sales growth in North America.
Sales increased 14 percent during 1997 compared to 1996. Operating income for
1997 increased 16 percent compared to the prior year and net income increased by
17 percent. Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased 10 percent in 1997 compared to the prior year. The company
repurchased 210,000 warrants and 205,000 shares of its common stock for $8.6
million during the year and our debt decreased $4.0 million. The company reduced
its total debt to equity ratio to .40 to 1 at the end of 1997 from .50 to 1 at
the end of 1996.
The company made significant new product introductions and international
facility expansions during 1997. In the spring, we introduced a new alarm
indicating fuse for use in the electronics industry and a new JCASE cartridge
style fuse for 20 to 60 amp applications in the automotive market. In the fall,
we introduced an expanded line of indicating fuses in the electrical market and
a surface mount polymeric PTC device for use in the electronics industry. This
latest device is our downsized SMD entry into the conductive polymeric
resettable market.
The company also made significant investments for the future, completing a
facility addition in Switzerland for molding equipment and auto MAXI fuse
production and substantially completing a small facility addition in Des Plaines
to increase thin-film production capacity. The company also made a significant
investment in equipment and tooling to add capacity for auto MINI fuses and for
electronic PICO fuses and to support our new electronic surface mount resettable
PTC device production.
Results of Operations
1997 Compared with 1996
Littelfuse had record sales and earnings for the sixth straight year. Sales
increased 14 percent to $275.2 million in 1997 from $241.4 million in 1996. The
gross margin was 40.4% compared to 40.7% the prior year and operating income was
15.9% of net sales compared to 15.6% the prior year. EBITDA was $65.1 million
compared to $59.4 million in 1996. As a result, the company during 1997 was able
to invest $18.9 million in capital improvements and to repurchase $8.6 million
of its warrants and common stock, while decreasing its debt $4.0 million.
Sales increased $33.8 million during 1997. The sales growth was strongest in the
electronics segment, followed by automotive and power fuses. Electronic sales
increased $22.7 million or 20 percent to $135.3 million in 1997 compared to
$112.7 million in 1996. The electronics business was very strong in personal
computers, tele- and data-communications as well as consumer electronics
throughout the year. Electronics sales enjoyed significant growth Asia-Pacific,
Europe and North America in 1997. Automotive sales increased $8.4 million or 9
percent to $102.8 million in 1997 compared to $94.4 million in 1996. Automotive
sales were very strong in the OEM markets, while they declined slightly in the
automotive aftermarkets on a worldwide basis. Power fuse sales increased $2.7
million or 8 percent to $37.0 million in 1997 compared to $34.4 million in 1996.
The company believes that its power fuse business grew twice as fast as the
underlying markets for capital equipment and construction spending during 1997.
The company's business is dependent on general economic conditions in North
America, Europe and Asia-Pacific. The company's electronic and automotive
product sales fluctuate with the trends in their respective end-product markets,
while power fuse sales are dependent on conditions within the construction and
capital equipment markets. North American and Asia- Pacific sales are
denominated primarily in US dollars, while European sales generally are
denominated in Dutch guilders or British pounds. On a constant currency basis,
our European sales growth would have been 16 percent rather than the 5 percent
reported, our Asia-Pacific sales growth would have been 36 percent rather than
the 32 percent reported, and our consolidated sales growth would have been 16
percent rather than the 14 percent reported.
Gross profit was 40.4% at $111.1 million for 1997 compared to 40.7% at $98.3
million in 1996. The gross margin decline of 32 basis points was primarily
caused by the lower margins of our new China and Korean operations having a
greater impact than our margin improvements due to cost reductions and spreading
our fixed costs over higher sales in North America and Europe. Margins for both
the automotive and power fuse product segments improved during 1997, while the
margins for the electronic segment declined slightly primarily due to lower
Asia-Pacific margins. Auto margins improved due to favorable mix as the fuse
portion of automotive OEM sales grew to about 94 percent of sales in 1997
compared to about 90 percent of sales in 1996.
Selling, general and administrative expenses were 21.9% of sales for 1997
compared to 22.2% for 1996, with selling expenses accounting for approximately
three-fifths of the expenses. The 34 basis point decrease was due primarily to
fixed selling expenses being spread over higher sales. The increase in general
and administrative expense was due primarily to the installation of new
information systems. The decrease in research and development was due to lower
legal patent expense. Amortization of reorganization value and other intangibles
was 2.6% of sales for 1997 compared to 2.9% the prior year. The total operating
expenses including intangible amortization were 24.5% of sales for 1997 compared
to 25.1% of sales for 1996.
Operating income for 1997 after the intangible amortization was $43.7 million or
15.9% of sales compared to $37.7 million or 15.6% of sales the prior year. On a
constant currency basis, Europe's operating income was unchanged since the
currency translation losses were offset by currency translation gains on
intercompany transactions with the US. On a constant currency basis,
Asia-Pacific's operating income was reduced since the currency translation
losses were additive to the translation losses on the intercompany transactions.
The Asia- Pacific operating income would have been $0.5 million more and taxes
would have been $0.3 million less on a constant currency basis.
Interest expense was $4.1 million for 1997 compared to $4.2 million for 1996 due
to declining debt levels during the year. Other income, net, consisting of
royalties, minority interest adjustments, revaluation of the Korean non-compete
agreement and government grants, was $1.0 million compared to $0.7 million the
prior year.
Income before taxes was $40.7 million in 1997 compared to $34.1 million in 1996.
Income tax expense was $15.3 million in 1997 compared to $12.4 million the prior
year. The company's effective tax rate was 37 2/3% in 1997 compared to 36 1/4%
in 1996. Net income for the year was $25.3 million in 1997 compared to $21.7
million the prior year. Diluted earnings per share (split adjusted) increased to
$1.07 in 1997 compared to $0.91 in 1996.
EBITDA grew $5.7 million or 10% to $65.1 million in 1997 compared to $59.4
million in 1996. EBITDA was 23.7% of sales in 1997 compared to 24.6% of sales in
1996. EBITDA for 1997 consisted of the reported operating income of $43.8
million plus other income of $1.0 million, depreciation of $13.2 million, and
amortization of intangibles of $7.2 million.
1996 Compared with 1995
Sales increased 10 percent to $241.4 million in 1996 from $219.5 million in
1995. The gross margin was 40.7% compared to 40.9% the prior year and operating
income was 15.6% of net sales compared to 15.4% the prior year. EBITDA was $59.4
million compared to $52.4 million in 1995. As a result, the company during 1996
was able to invest $17.1 million in capital improvements and to repurchase $26.8
million of its warrants and common stock, while only increasing its debt $3.7
million.
Sales increased $21.9 million during 1996. The sales growth was strongest in the
automotive segment, followed by electronics and power fuses. Electronic sales
increased $8.9 million or 9 percent to $112.7 million in 1996 compared to $103.8
million in 1995. The electronics business was very strong in consumer
electronics and datacommunications all year. This resulted in very strong sales
growth in Japan for the year. However, the electronics business was relatively
weak in personal computers, telecommunications and general industrial until late
in the year. Automotive sales increased $11.0 million or 13 percent to $94.4
million in 1996 compared to $83.4 million in 1995. Automotive sales were very
strong in Europe for the year and automotive OEM markets were relatively
stronger than automotive aftermarkets all year in North America and Europe.
Power fuse sales increased $2.0 million or 6 percent to $34.4 million in 1996
compared to $32.4 million in 1995. The company believes that its power fuse
business grew slightly faster than the underlying markets for capital equipment
and construction spending during 1996. The company's reported sales in North
America increased 6 percent during 1996, while its sales in Europe increased 11
percent, and its sales in Asia-Pacific increased 28 percent. On a constant
currency basis our European sales growth would have been 15 percent rather than
the 11 percent reported and our consolidated sales growth would have been 11
percent rather than the 10 percent reported.
Gross profit was 40.7% at $98.3 million for 1996 compared to 40.9% at $89.9
million in 1995. The gross margin decline of 20 basis points was primarily
caused by the relatively low margins of our new China and Korean operations
having a greater impact than our margin improvements due to cost reductions and
spreading our fixed costs over higher sales in North America and Europe. Margins
for both the automotive and power fuse product segments improved during 1996,
while the margins for the electronic segment declined slightly primarily due to
lower volume than planned. Auto margins improved due to favorable mix as the
fuse portion of automotive OEM sales grew to about 90 percent of sales in 1996
compared to about 80 percent of sales in 1995.
Selling, general and administrative expenses were 22.2% of sales for 1996
compared to 22.6% for 1995, with selling expenses accounting for approximately
three-fifths of the expenses. The 40 basis point decrease was due to the general
and administrative expense increase of 20 basis points being more than offset by
the research and development decrease of 60 basis points. The increase in
general and administrative expense was due primarily to the installation of new
information systems. The decrease in research and development was due to lower
project and patent expenses. Amortization of reorganization value and other
intangibles was 2.9% of sales for 1996 compared to 3.0% the prior year. The
total operating expenses including intangible amortization were 25.1% of sales
for 1996 compared to 25.6% of sales for 1995.
Operating income for 1996 after the intangible amortization was $37.7 million or
15.6% of sales compared to $33.7 million or 15.4% of sales the prior year. On a
constant currency basis, Europe's increase in operating income would have been
$0.5 million higher. Therefore, currency changes reduced Europe's operating
income about 4 percent and reduced consolidated operating income about 1
percent.
Interest expense was $4.2 million for 1996 compared to $4.3 million for 1995.
Interest rates declined slightly and debt increased slightly year over year due
to the stock and warrant repurchase program. Other income, net, consisting
primarily of minority interest adjustments and royalties, was $0.7 million
compared to $0.4 million the prior year.
Income before taxes was $34.1 million in 1996 compared to $29.9 million in 1995.
Income tax expense was $12.4 million in 1996 compared to $10.6 million the prior
year. The company's effective tax rate was 36 1/4% in 1996 compared to 35 1/2%
in 1995. Net income for the year was $21.7 million in 1996 compared to $19.3
million the prior year. Diluted earnings per share (split adjusted) increased to
$0.91 in 1996 compared to $0.78 in 1995, in part because the company's stock and
warrant repurchase program reduced the number of shares outstanding.
EBITDA grew $7.0 million or 13 1/2% to $59.4 million in 1996 compared to $52.4
million in 1995. EBITDA was 24.6% of sales in 1996 compared to 23.8% of sales in
1995 -- an improvement of 80 basis points. EBITDA for 1996 consisted of the
reported operating income of $37.7 million plus other income of $0.7 million,
depreciation of $14.0 million, and amortization of intangibles of $7.0 million.
Geographical Business Segments
During the last five years, the company's international sales have grown
dramatically as a result of increased Asia-Pacific and European sales efforts,
new product introductions, and generally strong Asia-Pacific and European
economies. International sales increased 20% in 1997 compared to 20% in 1996,
32% in 1995 and 35% in 1994. USA sales growth was 10 percent in 1997 compared to
5 percent in 1996, 5 percent in 1995 and 16 percent in 1994. Over the last five
years international sales have increased at a compounded annual rate of 23%
versus a USA sales compounded annual growth rate of 8 1/4%.
The geographic area of greatest sales growth during the past five years has been
the Asia Pacific region. Sales growth in Europe has averaged higher than in the
U.S.A. International sales grew to 40.6% of net sales in 1997 compared to 38.5 %
of net sales in 1996, 35.3% of net sales in 1995 and 30.1% of net sales in 1994.
The following table summarizes sales based upon destination and total
international sales compared to total company net sales (in thousands):
<TABLE>
1997 1996 1995 1994
---------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
USA Destinations $163,539 $148,588 $142,070 $135,865
Other Americas 9,775 8,009 6,398 6,144
Europe 39,949 38,077 34,448 25,017
Asia-Pacific & other 61,902 46,772 36,619 27,428
---------------- ----------------- ----------------- ------------------
Total company sales $275,165 $241,446 $219,535 $194,454
================ ================= ================= ==================
Total international sales $111,626 $92,858 $77,465 $58,589
================ ================= ================= ==================
As percent of total company sales 40.6% 38.5% 35.3% 30.1%
================ ================= ================= ==================
</TABLE>
Liquidity and Capital Resources
Assuming no material adverse changes in market conditions, management expects
that the company will have sufficient cash from operations to support both its
operations and its debt obligations for the foreseeable future. Approximately
eighty percent of the company's sales are denominated in US dollars with the
balance primarily in two European currencies, Dutch guilders and British pounds,
and in one Asian currency, Korean won. Since over seventy percent of European
costs also are in European currencies and the rest of Europe's and the company's
costs predominately are denominated in US dollars, the company has decided not
to hedge its monetary assets, liabilities or commitments at this time. The
company did not have any foreign exchange derivative positions at year end 1997.
Littelfuse started 1997 with $1.4 million of cash. Net cash provided by
operations was $36.8 million for the year. Cash used to invest in net property,
plant and equipment was $18.9 million, to invest in a new Korean acquisition
called Samjoo was $5.3 million and to make a non-compete payment was $0.4
million. Cash used in financing activities included net payments of long term
debt of $5.2 million. The purchase of the company's warrants and common stock
for $8.6 million was partially offset by cash proceeds from the exercise of
stock options of $1.0 million. The effect of exchange rate changes decreased
cash by $0.1 million. The net of cash provided by operations, less investing
activities, less financing activities, plus the effect of exchange rates
resulted in an $0.6 million net decrease in cash. This left the company with a
cash balance of $0.8 million at the end of 1997.
Net working capital used $9.4 million of cash flow from operations for 1997. All
asset categories used working capital. Accounts receivable increased $3.3
million and inventory increased $8.3 million. Most accruals provided working
capital for the year. Accounts payable, accrued payroll, and accrued and
deferred taxes each increased by a little less than $1 million and provided
funds over $2.5 million. Accrued expenses declined $0.6 million using funds of
that amount. Net working capital changes in 1998 probably will result in a small
use of cash, as the company expects current asset increases to exceed current
liability increases in 1998.
Littelfuse started 1996 with $1.3 million of cash. Net cash provided by
operations was $40.3 million for the year, a significant improvement over 1995.
Cash used to invest in net property, plant and equipment was $17.1 million and
to make a non-compete payment was $0.3 million. Cash used in financing
activities included net borrowings of long term debt of $4.2 million. The
purchase of the company's warrants and common stock for $26.8 million was
partially offset by cash proceeds from the exercise of stock options of $0.3
million. The effect of exchange rate changes decreased cash by $0.4 million. The
net of cash provided by operations, less investing activities, less financing
activities, plus the effect of exchange rates resulted in an $0.1 million net
increase in cash. This left the company with a cash balance of $1.4 million at
the end of 1996.
Net working capital used only $1.3 million of cash flow from operations for
1996. All asset categories used working capital, except prepaid expenses, which
declined $0.4 million. Accounts receivable increased $5.6 million and inventory
increased $1.8 million. All accruals provided working capital for the year. The
greatest benefit in 1996 compared to 1995 came from large increases in accrued
taxes of $2.4 million. Accounts payable, accrued payroll, and accrued expenses
each increased by about $1.0 million and provided funds of almost $2.9 million.
The company's capital expenditures were $18.9 million in 1997, $17.1 million in
1996 and $14.6 million in 1995. The company expects that capital expenditures
will be approximately $22 million or 7.3% of sales in 1998 compared to 6.9% of
sales in 1997, 7.1% in 1996 and 6.7% in 1995. The primary purposes for capital
expenditures are for capacity expansion and new product tooling and production
equipment. As in 1996, capital expenditures in 1997 are expected to be financed
by cash flow from operations.
The company decreased total debt $5.2 million in 1997, after increasing debt by
$4.2 million in 1996 and increasing debt by $17.1 million in 1995. The company
is required to repay $9.0 million of long-term debt in 1998. The company also
repurchased 210,000 warrants and 205,000 common shares for $8.6 million in 1997,
1,342,000 warrants and 570,000 common shares for $26.8 million in 1996, and
220,000 common shares for $3.5 million in 1995.
Net working capital (working capital less cash and the current portion of
long-term debt), as a percent of sales was 15.1% at year-end 1997 compared to
13.0% at year-end 1996 and to 12.7% at year-end 1995. The days sales in
receivables was approximately 52 days at year-end 1997 compared to 52 days at
year-end 1996 and 51 days at year-end 1995. This was excellent performance as
our international sales increased but our days sales outstanding did not
increase. The days inventory outstanding was approximately 89 days at year-end
1997 compared to 79 days at year-end 1996 and 89 days at year-end 1995. The days
inventory outstanding increase in 1997 of 10 days or about $4.0 million was due
to new products such as electronic resettables and power fuse indicator product.
The ratio of current assets to current liabilities was 1.6 to 1 at year-end 1997
compared to 1.4 to 1 at year-end 1996 and 1.4 to 1 at year-end 1995. The ratio
of long-term debt to equity was 0.3 to 1 at year-end 1997 compared to 0.4 to 1
at year-end 1996 and 1995.
Long-term debt at year-end 1997 consisted of five types of debt totaling $50.6
million. They are as follows: (1) senior notes due August 2000, totaling $27.0
million, (2) US revolver borrowings totaling $20.0 million, (3) foreign revolver
borrowings totaling $2.3 million, (4) notes payable relating to an agreement not
to compete totaling $0.5 million, and (5) mortgage notes totaling $0.8 million.
These five items include $10.2 million of senior notes, non-compete notes and
mortgage notes, which are considered to be current liabilities, resulting in net
long-term debt totaling $40.4 million at the end of the year. The revolver
carried an interest rate of LIBOR + 0.5% during 1997 or approximately 6.4%. The
company expects the interest rate paid on the bank debt to be approximately the
same during the first half of 1998. The company at the end of 1997 had unused
revolver availability of $45.0 million. In addition, the company had outstanding
letters of credit totaling $1.8 million at year-end 1997.
On April 25, 1997 the company announced that its Board of Directors had
authorized the company to repurchase up to 2,000,000 shares of its common stock
or 2,000,000 of its warrants, or any combination not to exceed 2,000,000 shares
of common stock and warrants, from time to time depending on market conditions.
The company repurchased 105,000 common shares since the April 25, 1997,
authorization through year-end 1997.
On April 25, 1997, the Company's Board of Directors approved a two-for-one stock
split to stockholders of record on May 20, 1997, payable June 10, 1997, in the
form of a stock dividend. All prior year number of share and per share amounts
have been restated to reflect the stock split.
Recently Issued Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income" (SFAS 130). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in the financial statements. SFAS 130 is
effective for fiscal years beginning after December 15, 1997. The company is in
the process of evaluating the specific requirements of SFAS 130. However, it
believes the adoption of SFAS 130 will have no impact on the company's
consolidated results of operations, financial position, or cash flows.
In June 1997, the FASB issued SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131). SFAS 131 establishes standards
for the way in which public business enterprises report information about
operating segments in annual financial statements and interim financial reports
issued to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. SFAS 131 is
effective for financial statements for fiscal years beginning after December 15,
1997. Management has evaluated the disclosure requirements of SFAS 131 and
believes that its adoption will not have a significant impact on the company's
reported segments.
Year 2000 Issues
Many currently installed computer systems and software programs, including many
of those used by the company, are coded to accept only two digit entries into
the date code field. Beginning in the year 2000, these date code fields will
need to accept four digit entries to distinguish 21st century dates from 20th
century dates. Therefore, the company's date critical functions related to the
year 2000 and beyond, such as sales, distribution, purchasing, inventory
control, planning and replenishment, facilities, and financial systems may be
adversely affected unless these computer systems are or become year 2000
compliant.
The company has hired two outside consulting firms to assess the systems and
procedures and to inform us what actions will be needed to address our year 2000
issues. The company expects that the results of the assessment will indicate
that the company will have to replace or modify certain portions of its software
so that the company's computer systems will function properly with respect to
dates in the year 2000 and after. Certain software used by the company is
licensed from third party vendors who have planned releases addressing this
issue. Other software has been internally generated by the company.
We currently have in excess of one million dollars in our total planned
expenditures for the next two years to address the year 2000 issues. The company
has the cash resources to increase this investment if our circumstances call for
a higher level of expenditure.
Outlook
Littelfuse has enjoyed compounded annual sales growth of 13% for the last five
years. Although Littelfuse expects to increase market share during 1998 -
particularly in the electronics segment in South Asia and Europe, in the
automotive segment in Europe, and in the power fuse segment in North America -
the company expects the sales increases in 1998 to be lower than our last five
year average. We expect sales growth to be slower in the first and fourth
quarter and stronger in the second and third quarter.
Littelfuse expects costs to increase modestly in 1998. Although costs and
expenses will rise with inflationary pressures, the company's productivity gains
and continued control of spending should help to offset this pressure as we have
previously succeeded in doing. The company does expect modest gross margin
pressure from expenses related to the consolidation of the Korean operations and
the launching of new products including the downsized surface mount resettable
PTC devices, the automotive JCASE, and the electronic SMT fuse and chip
protector.
The development of new products, global expansion, and reinvestment for the
future are the cornerstones of Littelfuse's growth strategy. Accordingly, the
company intends to continue its commitment to funding research and development,
international sales and marketing activity, and investments in capital equipment
and operations improvements.
Littelfuse has significantly improved its return on net assets and its return on
capital employed the last five years. The company's return on net tangible
assets was 25.8% in 1997 compared to 25.0% in 1996 and 23.8% in 1995, or over 50
percent better than the S&P 500 return on net tangible assets. The company's
return on capital employed was 14.6% in 1997 compared to 13.3% in 1996 and 11.8%
in 1995, or over 25 percent better than the S&P 500 return on capital employed.
These two comparisons demonstrate the company's ability to deliver above-average
returns on investment for its shareholders.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995 The statements under "Outlook" and the other statements which are not
historical facts contained in this report are forward-looking statements that
involve risks and uncertainties, including, but not limited to, product demand
and market acceptance risks, the effect of economic conditions, the impact of
competitive products and pricing, product development, commercialization and
technological difficulties, capacity and supply constraints or difficulties, the
results of financing efforts, actual purchases under agreements, the effect of
the company's accounting policies, and other risks which may be detailed in the
company's Securities and Exchange Commission filings.
<PAGE>
Report of Independent Auditors
The Board of Directors and Shareholders
Littelfuse, Inc.
We have audited the consolidated statements of financial condition of
Littelfuse, Inc. and subsidiaries as of January 3, 1998 and December 28, 1996,
and the related consolidated statements of income, shareholders' equity, and
cash flows for each of the three years in the period ended January 3, 1998.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Littelfuse, Inc.
and subsidiaries as of January 3, 1998 and December 28, 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended January 3, 1998, in conformity with generally
accepted accounting principles.
January 23, 1998
<PAGE>
Littelfuse, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
<TABLE>
January 3 1998 December 28 1996
------------------------------------
(In Thousands)
Assets
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 755 $ 1,427
Accounts receivable, less allowances (1997 -
$5,899; 1996 - $5,057) 37,458 35,468
Inventories 39,075 31,586
Deferred income taxes 3,672 3,100
Prepaid expenses and other current assets 2,896 2,228
------------------------------------
------------------------------------
Total current assets 83,856 73,809
Property, plant, and equipment:
Land 6,355 5,383
Buildings 23,152 19,271
Equipment 111,723 96,657
------------------------------------
141,230 121,311
Less: Allowances for depreciation and amortization 70,467 57,422
------------------------------------
------------------------------------
70,763 63,889
Intangible assets, net of amortization:
Reorganization value in excess of amounts allocable to
identifiable assets 41,202 44,635
Patents and licenses 8,785 11,102
Distribution network 7,126 7,935
Trademarks 3,527 3,784
Other 3,348 1,157
------------------------------------
63,988 68,613
Other assets 3,278 3,640
------------------------------------
$221,885 $209,951
====================================
</TABLE>
<PAGE>
Littelfuse, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (continued)
<TABLE>
January 3 1998 December 28 1996
------------------------------------
(In Thousands)
Liabilities and shareholders' equity Current liabilities:
<S> <C> <C>
Accounts payable $ 13,858 $ 12,775
Accrued payroll 10,316 9,330
Accrued expenses 7,427 8,159
Accrued income taxes 9,952 10,775
Current portion of long-term debt 10,172 10,005
------------------------------------
------------------------------------
Total current liabilities 51,725 51,044
Long-term debt, less current portion 40,385 44,556
Deferred income taxes 6,205 5,417
Minority interest in subsidiary 65 312
Shareholders' equity:
Preferred stock, par value $.01 per share: 1,000,000 shares
authorized; no shares issued and outstanding - -
Common stock, par value $.01 per share: 38,000,000 shares
authorized; shares issued and outstanding, 1997 - 19,873,140;
1996 - 19,775,358 199 198
Additional paid-in capital 52,540 54,569
Notes receivable - Common stock (1,960) (1,470)
Cumulative foreign currency translation adjustment (4,767) (870)
Retained earnings 77,493 56,195
------------------------------------
123,505 108,622
------------------------------------
$221,885 $209,951
====================================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Littelfuse, Inc. and Subsidiaries
Consolidated Statements of Income
Year ended Year ended Year ended
January 3 December 28 December 31
1998 1996 1995
-----------------------------------------------------------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C>
Net sales $275,165 $241,446 $219,535
Cost of sales 164,034 143,158 129,663
-----------------------------------------------------------
-----------------------------------------------------------
Gross profit 111,131 98,288 89,872
Selling expenses 38,266 34,369 31,278
Research and development expenses 7,927 7,330 7,901
General and administrative expenses 13,960 11,912 10,334
Amortization of intangibles 7,210 7,008 6,630
-----------------------------------------------------------
Operating income 43,768 37,669 33,729
Interest expense 4,103 4,235 4,279
Other income, net (987) (660) (430)
-----------------------------------------------------------
-----------------------------------------------------------
Income before income taxes 40,652 34,094 29,880
Income taxes 15,310 12,359 10,608
===========================================================
Net income $ 25,342 $ 21,735 $ 19,272
===========================================================
===========================================================
Net income per share:
Basic $ 1.28 $ 1.09 $ 0.95
Diluted $ 1.07 $ 0.91 $ 0.78
===========================================================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Littelfuse, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Year ended Year ended Year ended
January 3 December 28 December 31
1998 1996 1995
------------------------------------------------------
(In Thousands)
Operating activities
<S> <C> <C> <C>
Net income $25,342 $21,735 $19,272
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 13,184 14,057 11,569
Amortization of intangibles 7,210 7,008 6,630
Provision for bad debts 410 236 160
Deferred income taxes 215 (962) (78)
Minority interest (159) (411) (61)
Changes in operating assets and liabilities:
Accounts receivable (3,331) (5,630) (3,303)
Inventories (8,281) (1,816) (1,782)
Accounts payable and accrued expenses
1,950 6,550 1,408
Other, net 217 (424) 1,086
------------------------------------------------------
------------------------------------------------------
Net cash provided by operating activities 36,757 40,343 34,901
Investing activities
Purchases of property, plant, and
equipment, net (18,936) (17,094) (14,636)
Purchase of business (5,268) - -
Other (357) (341) (276)
------------------------------------------------------
Net cash used in investing activities (24,561) (17,435) (14,912)
Financing activities
Proceeds (payments) of long-term debt, net (5,192) 4,196 (17,028)
Proceeds from exercise of stock options and warrants 1,055 276 570
Purchases of common stock and redemption of warrants (8,642) (26,845) (3,533)
------------------------------------------------------
Net cash used in financing activities (12,779) (22,373) (19,991)
Effect of exchange rate changes on cash (89) (416) 48
------------------------------------------------------
------------------------------------------------------
Increase (decrease) in cash and cash equivalents
(672) 119 46
Cash and cash equivalents at beginning
of year 1,427 1,308 1,262
======================================================
Cash and cash equivalents at end of year $ 755 $ 1,427 $ 1,308
======================================================
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
Littelfuse, Inc. and Subsidiaries
Consolidated Statements of Shareholders' Equity
Period from January 1, 1995 to January 3, 1998
Cumulative
Notes Foreign Currency
Additional Receivable - Translation
Common Paid-in Common Stock Adjustment Retained
Stock Capital Earnings Total
-------------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 $202 $70,484 $ - $ (855) $25,868 $ 95,699
Stock options and warrants exercised 2 1,778 (571) - - 1,209
Purchase of 220,000 shares of common stock (2) (768) - - (2,763) (3,533)
Translation adjustment - - - 735 - 735
Net income for the year - - - - 19,272 19,272
-------------------------------------------------------------------------------------
Balance at December 31, 1995 202 71,494 (571) (120) 42,377 113,382
Stock options and warrants exercised 2 1,997 (899) - - 1,100
Purchase of 570,260 shares of common stock (6) (1,986) - - (7,917) (9,909)
Redemption of 1,342,120 warrants - (16,936) - - - (16,936)
Translation adjustment - - - (750) - (750)
Net income for the year - - - 21,735 21,735
-------------------------------------------------------------------------------------
Balance at December 28, 1996 198 54,569 (1,470) (870) 56,195 108,622
Stock options and warrants exercised 3 2,567 (490) - - 2,080
Purchase of 205,000 shares of common stock (2) (720) - - (4,044) (4,766)
Redemption of 210,250 warrants - (3,876) - - - (3,876)
Translation adjustment - - - (3,897) - (3,897)
Net income for the year - - - - 25,342 25,342
=====================================================================================
Balance at January 3, 1998 $199 $52,540 $(1,960) $(4,767) $77,493 $123,505
=====================================================================================
See accompanying notes.
</TABLE>
<PAGE>
Littelfuse, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
January 3, 1998 and December 28, 1996
1. Summary of Significant Accounting Policies and Other Information
Nature of Operations
Littelfuse, Inc. and its subsidiaries (the Company) design, manufacture, and
sell fuses and other circuit protection devices for use in the automotive,
electronic, and general industrial markets throughout the world. The Company
also manufactures and supplies relays, switches, circuit breakers, and indicator
lights to the automotive industry and to appliance and general electronics
manufacturers. The Company's operations represent a single industry segment for
accounting purposes.
Fiscal Year
Effective January 1, 1996, the Company changed its fiscal year end from December
31 to a 52-53-week year ending on the Saturday nearest December 31. The
Company's 1997 fiscal year ended January 3, 1998 contained 53 weeks. The
Company's 1996 fiscal year ended December 28, 1996 contained 52 weeks.
Principles of Consolidation
The consolidated financial statements include the accounts of Littelfuse, Inc.
and its subsidiaries. All significant intercompany accounts and transactions
have been eliminated.
Cash Equivalents
All highly liquid investments, with a maturity of three months or less when
purchased, are considered to be cash equivalents.
Accounts Receivable
The Company performs credit evaluations of customers' financial condition and
generally does not require collateral. Credit losses are provided for in the
financial statements and consistently have been within management's
expectations.
Inventories
Inventories are stated at the lower of cost (first in, first out method) or
market, which approximates current replacement cost.
Property, Plant, and Equipment
Land, buildings, and equipment are carried at cost. Depreciation is provided
under accelerated methods using useful lives of 21 years for buildings, 7 to 9
years for equipment, and 7 years for furniture and fixtures. Tooling and
computer software are depreciated using the straight-line method over 5 years
and 3 years, respectively.
Intangible Assets
Reorganization value in excess of amounts allocable to identifiable assets and
trademarks are amortized using the straight-line method over 20 years. Patents
are amortized using the straight-line method over their estimated useful lives,
which average approximately 10 years. The distribution network is amortized
using an accelerated method over 20 years. Licenses are amortized using an
accelerated method over their estimated useful lives, which average
approximately nine years. Other intangible assets consist principally of an
agreement not to compete that is being amortized over the three-year term of the
agreement and goodwill that is being amortized over 20 years. Accumulated
amortization of these intangible assets was $39.9 million at January 3, 1998,
and $34.3 million at December 28, 1996.
Revenue Recognition
Sales and associated costs are recognized when products are shipped to
customers.
Advertising Costs
The Company expenses advertising costs as incurred which amounted to $2.8
million in 1997, $2.7 million in 1996, and $3.1 million in 1995.
Foreign Currency Translation
The financial statements of foreign entities have been translated in accordance
with Statement of Financial Accounting Standards No. 52 and, accordingly,
unrealized foreign currency translation adjustments are reflected as a component
of shareholders' equity.
Per-Share Data
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share"
(SFAS 128). SFAS 128 simplifies the standards for computing earnings per share
and is effective for financial statements for both interim and annual periods
ending after December 15, 1997. The Company has adopted SFAS 128, and has
restated all prior periods presented to conform with the requirements of SFAS
128.
Stock-Based Compensation
The Company accounts for stock option grants to employees and directors in
accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB No. 25). The Company grants stock options for a fixed
number of shares with an exercise price equal to the market price of the
underlying stock at the date of grant and, accordingly, does not recognize
compensation expense.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income"
(SFAS 130). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in the financial statements. SFAS 130 is
effective for fiscal years beginning after December 15, 1997. The Company is in
the process of evaluating the specific requirements of SFAS 130. However, it
believes the adoption of SFAS 130 will have no impact on the Company's
consolidated results of operations, financial position, or cash flows.
In June 1997, the FASB issued SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131). SFAS 131 establishes standards
for the way in which public business enterprises report information about
operating segments in annual financial statements and interim financial reports
issued to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. SFAS 131 is
effective for financial statements for fiscal years beginning after December 15,
1997. Management has evaluated the disclosure requirements of SFAS 131 and
believes that its adoption will not have a significant impact on the Company's
reported segments.
Reclassifications
Certain amounts in the 1996 and 1995 financial statements have been reclassified
to conform with the 1997 financial statement presentation.
2. Acquisition of Business
On May 30, 1997, the Company invested $5.3 million in exchange for a 97%
interest in Samjoo Elec. Ind. Co. Ltd., a Korean fuse manufacturer, now doing
business as Littelfuse Triad. This acquisition has been accounted for through
the use of the purchase method of accounting. Accordingly, the accompanying
financial statements include the results of its operations since the acquisition
date. Goodwill arising from this acquisition of approximately $2.9 million is
being amortized over twenty years. Pro forma results of operations, assuming
this acquisition had occurred as of January 1, 1996, would not differ materially
from reported results of operations.
3. Inventories
The components of inventories are as follows at January 3, 1998 and December 28,
1996 (in thousands):
<TABLE>
1997 1996
-------------------------------------
-------------------------------------
<S> <C> <C>
Raw materials $ 8,788 $ 8,411
Work in process 3,556 3,263
Finished goods 26,731 19,912
-------------------------------------
=====================================
$39,075 $31,586
=====================================
</TABLE>
<PAGE>
4. Long-Term Debt
The carrying amounts of long-term debt, which approximate fair value, are as
follows at January 3, 1998 and December 28, 1996 (in thousands):
<TABLE>
1997 1996
-------------------------------------
-------------------------------------
<S> <C> <C>
Senior Notes $27,000 $36,000
Revolver 20,000 16,500
Other 3,557 2,061
-------------------------------------
-------------------------------------
50,557 54,561
Less: Current maturities 10,172 10,005
=====================================
$40,385 $44,556
=====================================
</TABLE>
The Company has an unsecured financing arrangement consisting of Senior Notes
with insurance companies and a Credit Agreement with banks that provides a
$65,000,000 revolving loan facility. The Senior Notes require a minimum
principal payment of $9,000,000 annually. The first payment was made August 30,
1996. Additional principal payments will be made each year through 2000. No
principal payments are required for borrowings against the revolving line of
credit until the line matures on August 31, 2000. A commitment fee on the daily
unborrowed portion of the revolving credit line is based on the Company's
debt-to-capital ratio, and is payable quarterly. The Company can make additional
prepayments under the Credit Agreement at any time without penalty.
Interest is payable semiannually on the Senior Notes at 6.31%. Interest is
payable quarterly under the Credit Agreement borrowings at LIBOR plus a
Eurodollar margin. The Eurodollar margin, which is based on the Company's debt
to capital ratio, amounted to .5% at January 3, 1998. The Company's interest
rate under the Credit Agreement was 6.41% at January 3, 1998.
The Credit Agreement provides for letters of credit of up to $3 million as part
of the available credit under the revolving line of credit. At January 3, 1998,
the Company had $1.9 million of outstanding letters of credit. The Company is
required to pay a fee of .625% of the face amount of each letter of credit
issued.
The Senior Notes and Credit Agreement contain covenants that, among other
matters, impose limitations on the incurrence of additional indebtedness, future
mergers, sales of assets, payment of dividends, and changes in control, as
defined. In addition, the Company is required to satisfy certain financial
covenants and tests relating to, among other matters, interest coverage, working
capital, leverage, and net worth.
<PAGE>
4. Long-Term Debt (continued)
Aggregate maturities of long-term debt at January 3, 1998, are as follows (in
thousands):
1998 $10,172
1999 10,002
2000 29,372
2001 244
2002 and thereafter 767
===================
$50,557
===================
Interest paid on long-term debt approximated $4.0 million in 1997, 1996, and
1995.
5. Benefit Plans
The Company has a defined-benefit pension plan (the Plan) covering substantially
all of its North American employees. The amount of the retirement benefit is
based on years of service and final average monthly pay. The Plan also provides
postretirement medical benefits to retirees and their spouses if the retiree has
reached age 62 and has provided at least ten years of service prior to
retirement. Such benefits generally cease once the retiree attains age 65. The
Company's contributions are made in amounts sufficient to satisfy ERISA funding
requirements.
The components of pension cost are as follows (in thousands):
<TABLE>
1997 1996 1995
-------------------------------------------
<S> <C> <C> <C>
Service cost - Benefits earned during the period $1,657 $1,669 $1,056
Interest cost on projected benefit obligation 2,654 2,558 2,055
Actual return on plan assets (6,365) (3,810) (6,512)
Net amortization and deferral 3,832 1,705 4,933
-------------------------------------------
===========================================
Total pension cost $1,778 $2,122 $1,532
===========================================
</TABLE>
<PAGE>
5. Benefit Plans (continued)
Substantially all Plan assets are invested in listed stocks and bonds. The
funded status and amounts recognized in the consolidated statements of financial
condition at January 3, 1998 and December 28, 1996, are as follows (in
thousands): <TABLE>
1997 1996
------------------------------------
------------------------------------
Actuarial present value of benefit obligations:
<S> <C> <C>
Vested benefit obligation $ 29,754 $ 26,267
====================================
Accumulated benefit obligation $ 32,426 $ 29,366
====================================
====================================
Projected benefit obligation $(41,649) $(37,385)
Plan assets at fair value 39,703 34,381
Unrecognized net experience loss 4,094 5,866
Unrecognized prior service cost 311 377
------------------------------------
====================================
Pension asset recognized in the consolidated statements of
financial condition $ 2,459 $ 3,239
====================================
</TABLE>
The following significant assumptions were used in determining pension cost for
the years ended January 3, 1998, December 28, 1996, and December 31, 1995:
<TABLE>
1997 1996 1995
-------------------------------------------------
<S> <C> <C> <C>
Discount rate 7.0% 7.5% 7.0%
Rate of increase in compensation levels 4.5 4.5 4.5
Expected long-term rate of return on assets 9.0 9.0 9.0
</TABLE>
The Company provides additional retirement benefits for certain key executives
through its unfunded Supplemental Executive Retirement Plan. The charge to
expense for this plan approximated $832,000, $747,000 and $640,000 in 1997,
1996, and 1995, respectively.
The Company also maintains a 401(k) savings plan covering substantially all U.S.
employees. The Company matches 50% of the employee's annual contributions for
the first 4% of the employee's gross wages. Employees vest in the Company
contributions after two years of service. Company matching contributions
amounted to $523,000, $457,000 and $472,000 in 1997, 1996 and 1995,
respectively.
<PAGE>
6. Shareholders' Equity
Stock Split
On April 29, 1997, the Company's Board of Directors approved a two-for-one stock
split to stockholders of record on May 20, 1997, payable June 10, 1997, in the
form of a stock dividend. All prior year number of share and per share amounts
have been restated to reflect the stock split.
Stock Purchase Warrants
Warrants to purchase 3,815,582 shares of common stock at $4.18 per share are
outstanding at January 3, 1998. The warrants are exercisable at the option of
the holder at any time prior to December 27, 2001, and are not callable by the
Company.
Stock Options
The Company has stock option plans authorizing the granting of both incentive
and nonqualified options and other stock of up to 2,200,000 shares to employees
and directors. The stock options vest over a five-year period and are
exercisable over a ten- year period commencing from the date of vesting. A
summary of stock option information follows: <TABLE>
1997 1996 1995
-------------------------------------------------------------------------------------
Weighted-Average Weighted-Average Weighted-Average
Exercise Price Exercise Price Exercise Price
Options Options Options
-------------------------------------------------------------------------------------
Outstanding at
<S> <C> <C> <C> <C> <C> <C>
beginning of year 1,257,380 $10.95 1,236,800 $ 8.76 1,207,000 $ 6.54
Granted 274,300 25.29 251,400 18.40 237,600 16.35
Exercised (156,170) 6.70 (174,900) 5.81 (197,200) 4.30
Forfeited (14,200) 15.69 (55,920) 10.43 (10,600) 9.59
=====================================================================================
Outstanding at end
of year 1,361,310 14.28 1,257,380 $10.95 1,236,800 $ 8.76
=====================================================================================
=====================================================================================
Exercisable at end
of year 671,126 461,820 332,100
Available for
future grant 138,420 398,520 594,000
Weighted-average
value of options
granted $11.16 $ 9.31 $ 8.04
</TABLE>
<PAGE>
6. Shareholders' Equity (continued)
As of January 3, 1998, the Company had the following outstanding options:
<TABLE>
Weighted- Weighted-
Exercise Options Average Average Options
Price Outstanding Exercise Price Remaining Life Exercisable
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$3.688 to $5.532 306,400 $ 3.86 4.2 303,600
$7.50 to $11.25 228,200 10.18 5.9 157,440
$11.625 to $12.625 121,350 11.94 6.3 82,330
$16.125 to $23.00 597,060 19.01 6.8 127,756
$28.875 to $34.125 108,300 28.95 9.6 -
</TABLE>
Disclosure of pro forma information regarding net income and net income per
share is required by Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation, and has been determined as if the
Company had accounted for its stock options granted in 1997, 1996, and 1995
under the fair value method using the Black-Scholes option pricing model. The
following assumptions were utilized in the valuation: <TABLE>
1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C>
Risk-free interest rate 6.63% 6.76% 6.67%
Expected dividend yield 0% 0% 0%
Expected stock price volatility .195% .265% .273%
Expected life of options 8 years 8 years 8 years
</TABLE>
Had compensation cost for the Company's stock options granted in 1997, 1996 and
1995 been determined based on the fair value at the dates of grant, the
Company's net income and net income per share would have been reduced to the pro
forma amounts indicated: <TABLE>
1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C>
Pro forma net income (in thousands of dollars) $24,621 $21,340 $19,132
Pro forma basic net income per share $ 1.24 $ 1.08 $ 0.95
Pro forma diluted net income per share $ 1.04 $ 0.90 $ 0.78
</TABLE>
<PAGE>
6. Shareholders' Equity (continued)
The pro forma effect on net income for 1997, 1996, and 1995 is not
representative of the pro forma effect on net income in future years as the pro
forma disclosures reflect only the fair value of stock options granted in 1997,
1996, and 1995 and do not reflect the fair value of outstanding options granted
prior to 1995.
Restricted Stock Plan
In 1997, the Company established a Restricted Stock Plan for certain management
employees. Under terms of the plan, up to 120,000 shares and equivalent shares
of the Company's common stock may be awarded in 1999 based on the attainment of
certain financial performance targets. The awarded shares vest over various
dates through 2002. The charge to expense for the plan during 1997 was $340,000.
Notes Receivable - Common Stock
In 1995, the Company established the Executive Loan Program under which certain
management employees may obtain interest-free loans from the Company to
facilitate their exercise of stock options and payment of the related income tax
liabilities. Such loans, limited to 90% of the exercise price plus related tax
liabilities, have a five-year maturity, subject to acceleration for termination
or death of the employee. Such loans are classified as a reduction of
shareholder's equity.
Preferred Stock
The Board of Directors may authorize the issuance from time to time of Preferred
Stock in one or more series with such designations, preferences, qualifications,
limitations, restrictions, and optional or other special rights as the Board may
fix by resolution. In connection with the Rights Plan, the Board of Directors
has reserved, but not issued, 200,000 shares of preferred stock.
Treasury Shares
During 1997, the Company elected to constructively retire shares of common stock
held in treasury. For financial statement presentation, the constructive
retirement has been retroactively applied.
<PAGE>
6. Shareholders' Equity (continued)
Rights Plan
In December 1995, the Company adopted a shareholder rights plan providing for a
dividend distribution of one preferred share purchase right for each share of
common stock outstanding on and after December 15, 1995. The rights can be
exercised only if an individual or group acquires or announces a tender offer
for 15% or more of the Company's common stock and warrants. If the rights first
become exercisable as a result of an announced tender offer, each right would
entitle the holder to buy 1/200th of a share of a new series of preferred stock
at an exercise price of $67.50. Once an individual or group acquires 15% or more
of the Company's common stock, each right held by such individual or group
becomes void and the remaining rights will then entitle the holder to purchase a
number of common shares having a market value of twice the exercise price of the
right. If the attempted takeover succeeds, each right will then entitle the
holder to purchase a number of the acquiring Company's common shares having a
market value of twice the exercise price of the right. After an individual or
group acquires 15% of the Company's common stock and before they acquire 50%,
the Company's Board of Directors may exchange the rights in whole or in part, at
an exchange ratio of one share of common stock or 1/200th of a share of a new
series of preferred stock per right. Before an individual or group acquires 15%
of the Company's common stock, or a majority of the Company's Board of Directors
are removed by written consent, whichever occurs first, the rights are
redeemable for $.01 per right at the option of the Company's Board of Directors.
The Company's Board of Directors is authorized to reduce the 15% threshold to no
less than 10%. Each right will expire on December 15, 2005, unless earlier
redeemed by the Company.
7. Income Taxes
Federal, state, and foreign income tax expense consists of the following (in
thousands):
<TABLE>
1997 1996 1995
------------------------------------------------------
Current:
<S> <C> <C> <C>
Federal $ 7,845 $7,091 $ 5,552
State 1,859 1,440 815
Foreign 5,391 4,790 4,319
------------------------------------------------------
------------------------------------------------------
15,095 13,321 10,686
Deferred (credit):
Federal 5 (872) 21
Foreign 210 (90) (99)
------------------------------------------------------
------------------------------------------------------
215 (962) (78)
======================================================
$15,310 $12,359 $10,608
======================================================
</TABLE>
<PAGE>
7. Income Taxes (continued)
Domestic and foreign income before income taxes is as follows (in thousands):
<TABLE>
1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C>
Domestic $26,494 $21,299 $15,908
Foreign 14,158 12,795 13,972
------------------------------------------------------
======================================================
$40,652 $34,094 $29,880
======================================================
</TABLE>
A reconciliation between income taxes computed on income before income taxes at
the federal statutory rate and the provision for income taxes is provided below
(in thousands): <TABLE>
1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C>
Tax expense at statutory rate of 35% $14,228 $11,933 $10,458
State and local taxes, net of federal tax benefit 1,208 936 530
Foreign income taxes (705) (181) (482)
Foreign losses for which no tax benefit is available 974 703 -
Other, net (395) (1,032) 102
------------------------------------------------------
======================================================
$15,310 $12,359 $10,608
======================================================
</TABLE>
Deferred income taxes are provided for the tax effects of temporary differences
between the financial reporting bases and the tax bases of the Company's assets
and liabilities. Significant components of the Company's deferred tax assets and
liabilities at January 3, 1998 and December 28, 1996, are as follows (in
thousands): <TABLE>
1997 1996
------------------------------------
Deferred tax liabilities
<S> <C> <C>
Tax over book depreciation and amortization $4,740 $3,200
Prepaid expenses 1,346 1,588
Other 639 632
------------------------------------
------------------------------------
Total deferred tax liabilities 6,725 5,420
Deferred tax assets
Accrued expenses 3,146 2,373
Foreign net operating loss carryforwards 1,820 703
Other 1,045 730
------------------------------------
Total deferred tax assets 6,011 3,806
Less: Valuation allowance (1,820) (703)
------------------------------------
Net deferred tax assets 4,191 3,103
====================================
====================================
Net deferred tax liabilities $2,534 $2,317
====================================
</TABLE>
<PAGE>
7. Income Taxes (continued)
The deferred tax asset valuation allowance is related to deferred tax assets
from foreign net operating losses. The net operating loss carryforwards will
expire at various dates through the year 2002. The Company paid income taxes of
$14.0 million in 1997, $9.0 million in 1996, and $9.3 million in 1995.
8. Business Segment and Geographical Information
The Company operates in one business segment, circuit protection. Products
include electronic, automotive and power fuses which serve customers worldwide.
The Company operates in three principal geographic areas: North America, Europe
and Asia Pacific. A summary of the Company's operations by area is presented
below:
<TABLE>
1997 1996 1995
------------------------------------------------------
(In Thousands)
Net sales:
<S> <C> <C> <C>
North America $174,097 $158,049 $147,973
Europe 40,096 38,243 34,784
Asia Pacific 60,972 45,154 36,778
======================================================
$275,165 $241,446 $219,535
======================================================
Operating income:
North America $ 33,227 $ 28,553 $ 24,516
Europe 11,352 9,210 8,956
Asia Pacific 6,399 6,914 6,887
Corporate (7,210) (7,008) (6,630)
======================================================
$ 43,768 $ 37,669 $ 33,729
======================================================
Identifiable assets:
North America $112,462 $100,537 $ 98,588
Europe 23,442 23,310 17,800
Asia Pacific 17,960 12,424 7,242
Corporate 68,021 73,680 80,242
======================================================
$221,885 $209,951 $203,872
======================================================
</TABLE>
Corporate assets consist primarily of cash, intangible assets, and prepaid
pension costs. Corporate operating expense consists of the amortization of
intangible assets.
The Company's Asia Pacific sales and operating income include export sales from
the United States and Europe into the region. The Company's export sales from
the United States amounted to approximately $22.0 million in 1997, $19.6 million
in 1996, and $11.7 million in 1995.
9. Lease Commitments
The Company leases certain office and warehouse space under noncancelable
operating leases, as well as certain machinery and equipment. Rental expense
under these leases was approximately $1.3 million in 1997 and 1996 and $1.0 in
1995. Future minimum payments for all noncancelable operating leases with
initial terms of one year or more at January 3, 1998, are as follows (in
thousands):
1998 $509
1999 365
2000 93
2001 2
2002 and thereafter -
-------------------
$969
===================
<PAGE>
10. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
1997 1996 1995
------------------------------------------------------
(In Thousands)
Numerator:
<S> <C> <C> <C>
Net income $25,342 $21,735 $19,272
Denominator:
Denominator for basic earnings per share -
Weighted average shares 19,824 19,888 20,207
Effect of dilutive securities:
Warrants 3,335 3,520 4,081
Employee stock options and restricted
shares 464 393 642
======================================================
Denominator for diluted earnings per share -
Adjusted weighted average shares and
assumed conversions $23,623 $23,801 $24,930
======================================================
Basic earnings per share $ 1.28 $ 1.09 $ 0.95
======================================================
Diluted earnings per share $ 1.07 $ 0.91 $ 0.78
======================================================
</TABLE>
<PAGE>
<TABLE>
Selected Financial Data
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six Year Summary
- -----------------------------------------------------------------------------------------------------------------------------------
($ In Thousands, Except Per-Share Data)
1997 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $275,165 $241,446 $219,535 $194,454 $160,712 $149,832
Gross profit 111,131 98,288 89,872 77,416 62,588 51,485
Operating income 43,768 37,669 33,729 27,846 19,359 10,756
Net income 25,342 21,735 19,272 15,227 9,987 654
Net income per share- Diluted 1.07 0.91 0.78 0.63 0.42 0.03
Net working capital $ 41,548 $ 31,343 $ 27,963 $ 25,061 $ 17,641 $ 21,855
Total assets 221,885 209,951 205,186 199,328 193,294 197,749
Long-term debt 40,385 44,556 40,804 60,344 80,906 100,965
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Quarterly Results of Operations (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
($ In Thousands, Except Per-Share Data)
1997 1996
4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 70,761 $ 68,993 $ 69,828 $ 65,583 $ 61,042 $ 60,483 $ 60,843 $ 59,078
Gross profit 27,843 27,860 28,609 26,819 24,794 24,535 24,847 24,112
Operating income 10,196 11,220 11,770 10,582 9,576 9,633 9,574 8,886
Net income 5,767 6,412 6,896 6,267 5,499 5,575 5,436 5,225
Net income per share:
Basic 0.29 0.32 0.35 0.32 0.28 0.28 0.27 0.26
Diluted 0.24 0.27 0.29 0.27 0.23 0.24 0.23 0.21
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Quarterly Stock Price
- -----------------------------------------------------------------------------------------------------------------------------------
1997 1996
4Q 3Q 2Q 1Q 4Q 3Q 2Q 1Q
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High 35 1/2 34 1/2 28 1/2 25 24 1/3 19 7/8 20 19 1/4
Low 21 3/4 27 1/4 22 22 1/8 19 1/2 16 3/8 18 16 3/8
Close 25 1/2 33 7/8 27 23 1/8 24 1/4 19 3/8 18 3/4 18 7/8
</TABLE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Littelfuse, Inc. of our report dated January 23, 1998, included in the 1997
annual Report to Stockholders of Littelfuse, Inc.
Our audit also included the financial statement schedule of Littelfuse, Inc.
listed in Item 14(a). This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements
(No. 33-55943, 33-64442, 33-95020, and 333-03260) on Form S-8 of our report
dated January 23, 1998, with respect to the consolidated financial statements
incorporated herein by reference, and our report included in the preceding
paragraph with respect to the financial statement schedule included in this
Annual Report (Form 10-K) of Littelfuse, Inc.
Chicago, Illinois
March 24, 1998
/S/ Ernst & Young LLP
