LITTELFUSE, INC.
800 East Northwest Highway
Des Plaines, Illinois 60016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 30, 1999
The annual meeting of the stockholders of Littelfuse, Inc. (the
"Company") will be held at the offices of the Company located at 800 East
Northwest Highway, Des Plaines, Illinois, on Friday, April 30, 1999, at 9:00
a.m., local time, for the following purposes as described in the attached Proxy
Statement:
1. To elect a Board of six Directors;
2. To approve and ratify the appointment by the Board of Directors of the
Company of Ernst & Young LLP as the Company's independent auditors for
the fiscal year of the Company ending January 1, 2000;
3. To approve an amendment to the 1993 Stock Plan for Employees and
Directors of Littelfuse, Inc. which provides that no individual will
receive in any calendar year awards of options, restricted shares,
units or rights for more than 100,000 shares of Common Stock of the
Company;
and to transact such other business as may properly come before the annual
meeting or any adjournment thereof.
Stockholders of record of the Company at the close of business on March
12, 1999, will be entitled to vote at the meeting.
PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
Mary S. Muchoney
Secretary
March 18, 1999
<PAGE>
LITTELFUSE, INC.
800 East Northwest Highway
Des Plaines, Illinois 60016
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
April 30, 1999
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of the Company of proxies for use at the Company's
annual meeting of stockholders to be held on April 30, 1999.
Any stockholder giving a proxy will have the right to revoke it at any
time prior to the time it is voted. A proxy may be revoked by written notice to
the Company, execution of a subsequent proxy or attendance at the annual meeting
and voting in person. Attendance at the annual meeting will not automatically
revoke the proxy. All shares represented by effective proxies will be voted at
the annual meeting or at any adjournment thereof.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, officers and employees of the Company may
solicit proxies by telephone or in person.
The Company's annual report, including financial statements, was mailed
to each stockholder on or about March 18, 1999. The financial statements
contained in the Company's annual report are not deemed material to the exercise
of prudent judgment in regard to the matters to be acted upon at the annual
meeting and, therefore, are not incorporated by reference into this Proxy
Statement. This Proxy Statement and form of proxy are first being mailed to
stockholders on or about March 18, 1999.
The Board of Directors recommends a vote FOR the election of all of the
nominees for Director named in Proposal 1, a vote FOR the approval and
ratification of the appointment of Ernst & Young LLP as independent auditors as
discussed in Proposal 2, and a vote FOR the approval of the amendment to the
1993 Stock Plan for Employees and Directors of Littelfuse, Inc. (the "1993 Stock
Plan") as discussed in Proposal 3.
VOTING
Stockholders of record on the books of the Company at the close of
business on March 12, 1999, will be entitled to notice of and to vote at the
meeting. A list of the stockholders entitled to vote at the meeting will be
available for examination by any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting at the Company's headquarters located at 800 East Northwest
Highway, Des Plaines, Illinois 60016 or at LaSalle National Bank, 135 South
LaSalle Street, Chicago, Illinois 60603. The Company had outstanding on March
12, 1999, 19,660,879 shares of its common stock, par value $.01 per share (the
"Common Stock"), and warrants to purchase an additional 2,474,618 shares of
Common Stock at a current exercise price of $4.18 per share. Each outstanding
share of Common Stock entitles the holder to one vote on each matter submitted
to a vote at the meeting. A warrant to purchase shares of Common Stock does not
entitle the holder to vote at the meeting.
The shares represented by proxies will be voted as directed in the
proxies. In the absence of specific direction, the shares represented by proxies
will be voted FOR the election of all of the nominees as Directors of the
Company, FOR the approval and ratification of the appointment of Ernst & Young
LLP as independent auditors, and FOR the approval of the amendment to the 1993
Stock Plan. In the event any nominee for Director is unable to serve, which is
not now contemplated, the shares represented by proxies may be voted for a
substitute nominee. If any matters are to be presented at the annual meeting
other than the matters referred to in this Proxy Statement, the shares
represented by proxies will be voted in the discretion of the proxy holders.
The Company's bylaws provide that a majority of all of the shares of
Common Stock entitled to vote, whether present in person or represented by
proxy, shall constitute a quorum for the transaction of business at the meeting.
Votes for and against, abstentions and "broker non-votes" will each be counted
as present for purposes of determining the presence of a quorum. To determine
whether a specific proposal has received sufficient votes to be passed, for
shares deemed present, an abstention will have the same effect as a vote
"against" the proposal, while a broker non-vote will not be included in vote
totals and will have no effect on the outcome of the vote. The affirmative vote
by the holders of a majority of the shares present (whether in person or by
proxy) at the meeting will be required for the approval of the ratification of
Ernst & Young LLP as independent auditors and the approval of the amendment to
the 1993 Stock Plan. With respect to the election of Directors, the six nominees
who receive the most votes at the meeting will be elected.
Ownership of Littelfuse, Inc. Common Stock
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of March 12, 1999, by each Director,
by each person known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock, by each executive officer named in the Summary
Compensation Table and by all of the Directors and executive officers of the
Company as a group. <TABLE>
NUMBER OF SHARES OF
COMMON STOCK
BENEFICIALLY OWNED (1) (5)
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT
- ---------------------------------------------------------------------------
<S> <C> <C>
Ariel Capital Management, Inc............................................. 3,464,460 17.6%
307 North Michigan Avenue
Suite 500
Chicago, Illinois 60601
- ---------------------------------------------------------------------------
Wellington Management Co. LLP .............. 1,751,600 8.9%
75 State Street
Boston, Massachusetts 02109
- ---------------------------------------------------------------------------
The Capital Group Companies, Inc.(3) ....... 1,390,000 7.1%
333 South Hope Street
Los Angeles, California 90071
- ---------------------------------------------------------------------------
Stein Roe & Farnham Incorporated (2) ....... 1,237,200 6.3%
One South Wacker Drive
Chicago, Illinois 60606-4685
- ---------------------------------------------------------------------------
Howard B. Witt............................................................ 455,400 2.3%
- ---------------------------------------------------------------------------
John P. Driscoll.......................................................... 2,291 *
- ---------------------------------------------------------------------------
Anthony Grillo............................................................ 39,352 *
- ---------------------------------------------------------------------------
Bruce A. Karsh(4)......................................................... 293,966 1.5%
- ---------------------------------------------------------------------------
John E. Major............................................................. 31,352 *
- ---------------------------------------------------------------------------
John J. Nevin............................................................. 57,352 *
- ---------------------------------------------------------------------------
William S. Barron......................................................... 74,200 *
- ---------------------------------------------------------------------------
David J. Krueger.......................................................... 52,780 *
- ---------------------------------------------------------------------------
Lloyd J. Turner........................................................... 86,800 *
- ---------------------------------------------------------------------------
Kenneth R. Audino 56,800 *
- ---------------------------------------------------------------------------
Philip G. Franklin........................................................ 2,400 *
- ---------------------------------------------------------------------------
All Directors and executive officers as a group (14 persons).............. 1,208,863 6.1%
-------------------
<FN>
(1) The number of shares listed includes 560,920 shares of Common Stock
which may be acquired through the exercise of stock options within 60
days of March 12, 1999.
(2) Includes 547,200 shares of Common Stock issuable upon the exercise of
warrants that are immediately exercisable.
(3) The Capital Group Companies, Inc. is the parent holding company of a
group of investment management companies. The investment management
companies provide investment advisory advice and management services
for their respective clients which include registered investment
companies and institutional accounts. The shares reported herein are
owned by accounts under the discretionary investment management of one
or more of the investment management companies owned by The Capital
Group Companies, Inc. The Capital Group Companies, Inc., does not have
investment power or voting power over any of the securities reported
herein; however, The Capital Group Companies, Inc. may be deemed to
"beneficially own" such securities by virtue of Rule 13d-3 under the
Securities Exchange Act of 1934. Capital Research and Management
Company, an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940 and a wholly-owned subsidiary of The
Capital Group Companies, Inc. is the beneficial owner of 1,390,000
shares of Common Stock as a result of acting as investment adviser to
various investment companies. The remaining shares reported as being
beneficially owned by The Capital Group Companies, Inc. are
beneficially owned by other subsidiaries of The Capital Group
Companies, Inc., none of which by itself owns 5% or more of the
outstanding Common Stock. (4) Includes 14,000 shares of Common Stock
held in an IRA and in trust for Mr. Karsh's children, and 14,230
shares of Common Stock issuable upon the exercise of warrants that are
immediately exercisable. (5) Information concerning persons known to
the Company to be beneficial owners of more than 5% of its Common
Stock is based upon the most recently available reports furnished by
such persons on Schedule 13G as filed with the Securities and Exchange
Commission.
* Indicates ownership of less than 1% of Common Stock.
</FN>
</TABLE>
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers, Directors and
holders of more than 10% of the Common Stock to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. The Company believes that during the fiscal year ended January 2, 1999,
its executive officers, Directors and holders of more than 10% of the Common
Stock complied with all Section 16(a) filing requirements. In making these
statements, the Company has relied upon the written representations of its
executive officers and Directors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Six Directors are to be elected at the annual meeting to serve terms of
one year or until their respective successors have been elected. The nominees
for Director, all of whom are now serving as Directors of the Company, are
listed below together with certain biographical information. Except as otherwise
indicated, each nominee for Director has been engaged in his present principal
occupation for at least the past five years.
The Board of Directors recommends that the stockholders vote FOR the
election of all of the nominees listed below as Directors.
Howard B. Witt, age 58, has been a Director of the Company since
November 1991 and President and Chief Executive Officer since December 1991. In
May 1993, Mr. Witt was elected as the Chairman of the Board of the Company.
Prior to his appointment as President and Chief Executive Officer, Mr. Witt
served in several other key management positions with the predecessor company of
the Company ("Old Littelfuse"), including Operations Manager from March 1979 to
January 1986, Vice President-Manufacturing Operations from January 1986 to
January 1988, and Executive Vice President with full operating responsibilities
for all U.S. activities from January 1988 to February 1990. Prior to joining 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 and is a member of
the Electronic Industries Association Board of Governors. He is also a director
of the Artisan Mutual Fund.
John P. Driscoll, age 63, was elected a Director of the Company by the
Board of Directors on February 6, 1998. He is a member of the Compensation
Committee. Mr. Driscoll is President of Jack Driscoll Enterprises, Inc., a
management consulting firm. In June of 1998 Mr. Driscoll retired as Executive
Vice President of Murata Electronics North America, Inc. where he was mostly
recently responsible for corporate policy and strategy and oversaw government
and industry relations. Mr. Driscoll joined Murata Electronics in 1979 as Vice
President of Marketing and Sales. He was appointed Senior Vice President
Marketing and Sales in 1985 and assumed the position of Executive Vice President
in 1995. Previously, he was general manager of Worldwide Marketing for Sprague
Electric Company, where he held a number of sales and marketing positions. Mr.
Driscoll is a former Vice President, Components Group of the Electronic Industry
Alliance, and a fourteen-year member of its Board of Governors.
Anthony Grillo, age 43, is a partner of Joseph Littlejohn & Levy, Inc., a
private equity firm. He has been a Director of the Company since December 1991
and is a member of the Audit Committee. Before joining Joseph Littlejohn & Levy,
Inc. in 1999, Mr. Grillo was a Senior Managing Director of the Blackstone Group
L.P., an investment banking firm which he joined in 1991. Mr. Grillo is a
Director of Lancer Industries, Inc. and the Academy of Political Science.
Bruce A. Karsh, age 43, has been a Director of the Company since December
1991. He is a member of the Compensation Committee. Mr. Karsh currently serves
as President of Oaktree Capital Management, LLC, an investment management firm
which he co-founded in 1995. Prior to that, Mr. Karsh established the TCW
Special Credits group of funds at The TCW Group, Inc. and had primary portfolio
management responsibility for their operation. Mr. Karsh resigned from TCW in
1995. Before joining TCW in 1987, he previously worked as Assistant to the
Chairman of Sun Life Insurance Company and of SunAmerica Inc., its parent. Mr.
Karsh currently serves as a member of the Board of Directors of Furniture Brands
International and Triangle Pacific Corp.
John E. Major, age 53, has been a Director of the Company since
December 1991. He is a member of the Compensation Committee. Mr. Major is Chief
Executive Officer of WirelessKnowledge, a privately held venture that has been
initially funded by Microsoft, Inc. and QUALCOMM, Inc. Before joining
WirelessKnowledge in 1998, Mr. Major was the Corporate Executive Vice President
of QUALCOMM, Inc. and President of its CDMA Wireless Infrastructure Division.
Prior to joining QUALCOMM, Mr. Major served most recently as Senior Vice
President and Staff Chief Technical Officer at Motorola, Inc. Mr. Major
currently serves on the Board of Directors Executive Committee for the
Telecommunications Industry Association (TIA) and is Chairman for the
Electronics Industry Association (EIA). He also serves on the Board of Directors
of Lennox Corporation. He serves on the Visitor's Board for the Software
Engineering Institute of Carnegie Mellon and serves on the Computer Science and
Telecommunications Board for the National Academy of Science. Additionally, he
is on the Trustee's Council for the University of Rochester.
John J. Nevin, age 72, has been a Director of the Company since December
1991. He is a member of the Audit Committee. Mr. Nevin was Chairman of the Board
of Bridgestone/Firestone, Inc. from May 1, 1988, to December 31, 1989. Mr. Nevin
joined The Firestone Tire & Rubber Company (predecessor of
Bridgestone/Firestone, Inc.) on December 1, 1979, as President and Chief
Operating Officer and was elected to its Board of Directors on February 9, 1980.
He was named Chief Executive Officer on September 1, 1980, and was elected
Chairman of the Board on February 2, 1981. Prior to joining The Firestone Tire &
Rubber Company, Mr. Nevin held senior management positions with several major
industrial corporations, including Chairman of the Board and Chief Executive
Officer of Zenith Radio Corporation and Vice President of Marketing for Ford
Motor Company. Mr. Nevin is a life trustee of Northwestern University.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
Compensation of Directors. Directors who are not employees of the
Company are paid an annual Director's fee of $20,000, $800 for each of the four
regularly scheduled Board meetings attended and $400 for attendance at any
special teleconference Board meetings, plus reimbursement of reasonable expenses
relating to attendance at meetings. No such fees are paid to Directors who are
also full-time employees of the Company.
Under the Littelfuse Deferred Compensation Plan for Non-employee
Directors, a non-employee Director, at his election, may defer receipt of his
Director's fees. Such deferred fees are used to purchase shares of Common Stock,
and such shares and any distributions thereon are deposited with a third party
trustee for the benefit of the Director until the Director ceases to be a
Director of the Company. All non-employee Directors have elected to be
compensated in Common Stock under the deferred compensation plan.
The 1993 Stock Plan for Employees and Directors of Littelfuse, Inc.
provides for an annual grant to each non-employee Director of non-qualified
stock options to purchase 5,000 shares of Common Stock. In 1998, each
non-employee Director was granted an option to purchase 5,000 shares of Common
Stock.
Audit Committee. The Audit Committee consists of two non-employee
Directors. It is the responsibility of the Audit Committee to (i) recommend each
year to the Board of Directors independent auditors to audit the financial
statements of the Company and its consolidated subsidiaries, (ii) review the
scope of the audit plan, (iii) discuss with the auditors the results of the
Company's annual audit and any related matters, and (iv) review transactions
posing a potential conflict of interest among the Company and its Directors,
officers and affiliates. The Audit Committee met two times in 1998. Members of
the Audit Committee are Anthony Grillo and John J. Nevin.
Compensation Committee. The Compensation Committee consists of three
non-employee Directors. It is the responsibility of the Compensation Committee
to make recommendations to the Board of Directors with respect to compensation
and benefit programs, including the stock-based plans, for Directors, officers
and employees of the Company and its subsidiaries. The Compensation Committee
met one time and acted by written unanimous consent two times in 1998. Members
of the Compensation Committee are John P.
Driscoll, Bruce A. Karsh and John E. Major.
Attendance at Meetings. The Board of Directors held five meetings
during 1998. All of the Directors attended at least 75% of the meetings of the
Board of Directors and the committees on which they served.
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF
APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval of the stockholders, the Board of Directors has
appointed Ernst & Young LLP, certified public accountants, as independent
auditors to examine the annual consolidated financial statements of the Company
and its subsidiary companies for the fiscal year ending January 1, 2000. The
stockholders will be asked at the meeting to approve and ratify such
appointment. A representative of Ernst & Young LLP will be present at the
meeting to make a statement, if such representative so desires, and to respond
to stockholders' questions.
The Board of Directors recommends that the stockholders vote FOR the
following resolution which will be presented at the meeting:
RESOLVED: That the appointment by the Board of Directors of the Company
of Ernst & Young LLP as the Company's independent auditors for the fiscal year
of the Company ending January 1, 2000, be approved and ratified.
PROPOSAL NO. 3
APPROVAL OF THE AMENDMENT TO THE 1993 STOCK PLAN FOR EMPLOYEES
AND DIRECTORS OF LITTELFUSE, INC.
The Board of Directors recommends to the stockholders the approval of a
proposed amendment to the 1993 Stock Plan which provides that no individual will
receive in any calendar year awards of options, restricted shares, units or
rights for more than 100,000 shares of Common Stock.
The 1993 Stock Plan provides that the maximum aggregate number of
shares of Common Stock respecting which awards of options, restricted shares,
units or rights may be made from time to time under the 1993 Stock Plan is
1,800,000. There is currently no limit, however, respecting the amount of
options, restricted shares, units or rights which may be granted to any one
individual under the 1993 Stock Plan.
All of the stock options which have heretofore been granted under the
1993 Stock Plan have been non-qualified options having an exercise equal to the
fair market value of the Common Stock on the date of the grant. Consequently,
when a holder of these stock options exercises these stock options and purchases
Common Stock, the holder will be required to include the difference between the
exercise price and the fair market value of the Common Stock at the time of
exercise as ordinary income for Federal income tax purposes.
Section 162(m) of the Internal Revenue Code ("Section 162(m)") provides
that public companies such as the Company may not take a deduction for Federal
income tax purposes for certain compensation paid to its chief executive officer
and its next four most highly compensated officers in excess of $1,000,000 per
tax year. Included in calculating the $1,000,000 deduction limitation would be
salary, bonus and the gain realized by the officer upon the exercise of his or
her non-qualified stock options under the 1993 Stock Plan unless the 1993 Stock
Plan meets certain requirements described in Section 162(m).
The 1993 Stock Plan currently meets all but one of the requirements of
Section 162(m) for purposes of excluding from the $1,000,000 deduction
limitation the amount of gain recognized by the Company's officers upon the
exercise of their stock options. The 1993 Stock Plan does not provide for a
maximum number of shares of Common Stock with respect to which stock options or
rights may be granted to any one individual during a specified period.
Therefore, in order to allow the Company to be able to deduct for Federal income
tax purposes the full amount of any gain which is realized by its chief
executive officer and its next four most highly compensated officers upon the
exercise of their non-qualified stock options under the 1993 Stock Plan, the
Board of Directors is proposing to amend the 1993 Stock Plan to provide that no
individual will receive in any calendar year awards of options, restricted
shares, units or rights for more than 100,000 shares of Common Stock. In order
for this proposed amendment to have the effect of excluding gain from the
exercise of non-qualified stock options granted under the 1993 Stock Plan from
the $1,000,000 deduction limitation imposed by Section 162(m), this amendment
must be approved by the Company's stockholders.
The major provisions of the 1993 Stock Plan relating to stock options
and the proposed amendment are described below:
Term. The 1993 Stock Plan became effective as of February 12, 1993,
and has no fixed expiration date.
Administration. The 1993 Stock Plan is administered by the Compensation
Committee of the Board of Directors (the "Compensation Committee") comprised of
non-employee Directors, which has the exclusive authority to make awards under
the 1993 Stock Plan and all interpretations and determinations affecting the
1993 Stock Plan.
Participation. Participation in the 1993 Stock Plan is limited to
officers and other key employees of the Company and its subsidiaries
("Employees") who are selected from time to time by the Compensation Committee
and to non-employee Directors. Employees who are participants in the 1993 Stock
Plan are also eligible to participate in any other incentive plan of the
Company.
Shares Available for Awards. Currently, no more than 1,800,000 shares
may be issued in the aggregate under the 1993 Stock Plan (subject to adjustment
as described below for stock splits, stock dividends, recapitalizations, mergers
and the like), but there is no limit on the number of shares of Common Stock
respecting which, options, restricted shares, units or rights may be granted to
an individual under the 1993 Stock Plan. The proposed amendment would impose a
100,000 shares per calendar year limit for each individual. Currently, there are
517,340 shares of Common Stock available for the grant of options, restricted
shares, units or rights under the 1993 Stock Plan.
Annual Grant of Stock Options to Non-employee Directors. Currently,
each non-employee Director is automatically granted a non-qualified option to
purchase 5,000 shares of Common Stock, which option shall be granted on the date
of the first meeting of the Board of Directors of the Company following each
annual meeting of the stockholders of the Company ("Annual Non-employee Director
Stock Options"). All of the incumbent non-employee Directors received in 1998 a
grant of an option to purchase 5,000 shares of Common Stock. The number of
Annual Non-employee Director Stock Options to be granted as of the date of any
such meeting of the Board of Directors will be proportionately adjusted to
reflect any stock splits, stock dividends, recapitalizations or similar
transactions causing an increase or decrease in the number of issued and
outstanding shares of Common Stock which have occurred since the date of the
most recent grant of Annual Non-employee Director Stock Options. Any
non-employee Director may waive his or her right to be granted Annual
Non-employee Director Stock Options. In the event that the granting of any
Annual Non-employee Director Stock Options would cause the 1,800,000 share
limitation of the 1993 Stock Plan to be exceeded, the total number of Annual
Non-employee Director Stock Options then to be granted will be reduced to a
number which would cause the share limitation not to be exceeded and the amount
of non-qualified options to be granted to each non-employee Director who has not
waived his or her right to receive Annual non-employee Director Stock Options
will be proportionately reduced.
Stock Options. With respect to stock options granted to employees of
the company, the compensation Committee has discretion to determine the exercise
price of each stock option, the term of each stock option, the persons to whom,
and the time or times at which, options shall be granted, and the number of
shares of Common Stock to be covered by each stock option, except that no stock
option can have a term exceeding ten years from the date of grant and the
exercise price respecting incentive stock options shall not be less than 100% of
the fair market value on the date the incentive stock option is granted. The
terms of non-qualified stock options granted to Non-employee Directors
(including the terms of the Annual non-employee Director Stock Options), the
exercise price for shares purchasable under such options and the date such
options become exercisable are determined pursuant to the formula provision of
the 1993 Stock Plan. However, each option granted either to an employee or
non-employee Director will become exercisable in full at the earliest of the
death, retirement or total disability of the option holder or a Change in
Control (as defined in the 1993 Stock Plan) of the Company. Each option shall be
exercisable in full or in part, subject to certain requirements in the 1993
Stock Plan, by payment of the exercise price in cash or already owned shares for
the number of shares to be purchased or as otherwise permitted by the
Compensation Committee pursuant to the provisions of the 1993 Stock Plan.
Adjustments. The Compensation Committee may, in the event of any stock
dividend, stock split, recapitalization, merger, consolidation or other change
in the capitalization of the Company or similar corporate transaction or event
affecting the Common Stock, in such manner as it deems equitable, adjust, among
other things, (i) the maximum number of shares that may be issued under the 1993
Stock Plan; (ii) the number and class of shares that may be subject to stock
options, restricted shares or restricted units that have not been issued; (iii)
the exercise price to be paid for unexercised stock options; and (iv) the share
value used to determine the amount or value of any award under the 1993 Stock
Plan.
Termination and Amendment. The Board of Directors may suspend, modify
or amend the 1993 Stock Plan at any time. The Board of Directors may also
terminate the 1993 Stock Plan, but the terms of the 1993 Stock Plan will
continue to apply to awards granted prior to such termination. No suspension,
termination, modification or amendment of the 1993 Stock Plan may adversely
affect the rights of an employee or non-employee Director under previously
granted awards.
FEDERAL INCOME TAX CONSEQUENCES
Although incentive stock options may be granted under the 1993 Stock
Plan, all of the stock options which have been granted have been non-qualified
stock options. Under the applicable provisions of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code"), no tax will be payable by the
recipient of a non-qualified option at the time of grant. Upon exercise of a
non-qualified option, the excess, if any, of the fair market value of the shares
with respect to which the option is exercised over the total exercise price of
such shares will be treated for Federal tax purposes as ordinary income. Any
profit or loss realized on the sale or exchange of any share actually received
will be treated as a capital gain or loss. Provided the proposed amendment is
approved, and provided the exercise price of the non-qualified options granted
under the 1993 Stock Plan is greater than or equal to the fair market value of
the Common Stock on the date the non-qualified options are granted, the Company
will be entitled to deduct for Federal income tax purposes the amount, if any,
by which the fair market value on the date of exercise of the shares with
respect to which non-qualified options granted under the 1993 Stock Plan are
exercised exceeds the total exercise price.
PLAN BENEFITS TABLE
The number of shares of Common Stock which the executive officers of
the Company will be granted options to purchase under the 1993 Stock Plan in the
future and the dollar value of such options cannot currently be determined. The
number of shares of Common Stock which the executive officers of the Company
were granted options to purchase under the 1993 Stock Plan in the 1998 fiscal
year and the exercise price of such options are disclosed in the "Option/SAR
Grants in Last Fiscal Year" table under "COMPENSATION OF EXECUTIVE OFFICERS"
herein. In the 1998 fiscal year, all executive officers as a group received
options to purchase aggregate of 140,500 shares of Common Stock at an average
exercise price of $25.25 per share, Directors who are not executive officers as
a group received options to purchase an aggregate of 25,000 shares of Common
Stock at an average exercise price of $25.25 per share, and all employees,
including all current officers who are not executive officers, as a group
received options to purchase an aggregate of 148,000 shares of Common Stock at
an average exercise price of $23.25 per share. Based upon the average of the
high and low "sales" price of shares of the Common Stock as reported on The
Nasdaq Stock Market on December 31, 1998, the fair market value of all of these
options was on that date.
The Board of Directors recommends a vote FOR the following resolution
which will be presented at the annual meeting:
RESOLVED: That the 1993 Stock Plan for Employees and Directors of
Littelfuse, Inc. be amended by adding the following sentence
after the first sentence in Section 2b. of the 1993 Stock Plan:
"The maximum aggregate number of shares of Common
Stock as to which awards of options, restricted shares, units
or rights may be made to any one individual during any
calendar year shall be 100,000."
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Chief
Executive Officer, each of the other four most highly compensated executive
officers and one former executive officer of the Company (the "named executive
officers") for the last three (3) fiscal years.
<TABLE>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION AWARDS
ANNUAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(2) RESTRICTED STOCK SECURITIES ALL OTHER
AWARDS ($) (3) UNDERLYING COMPENSATION($) (4)
OPTIONS/
SARS(#)
- ----------------------------------
60,000
<S> <C> <C> <C> <C> <C>
...................Howard B. Witt 1998 400,000 50,000 50,000 131,035
Chairman of the Board, 1997 370,000 180,000 775,700 44,000 95,042
President and 1996 310,000 147,731 62,114
Chief Executive Officer
- ----------------------------------
20,000
................William S. Barron 1998 175,000 9,700 12,000 19,566
Vice President 1997 153,000 60,877 251,900 10,000 8,877
1996 141,000 45,470 4,811
- ----------------------------------
2,500
.................David J. Krueger 1998 155,000 10,200 10,000 22,333
Vice President 1997 145,500 52,193 251,900 10,000 19,425
1996 141,000 45,931 17,321
- ----------------------------------
12,000
..................Lloyd J. Turner 1998 155,000 29,700 10,000 7,872
Vice President 1997 137,000 39,544 251,900 10,000 4,897
1996 124,000 44,628 4,823
- ----------------------------------
12,000
................Kenneth R. Audino 1998 133,000 11,300 8,000 3,218
Vice President 1997 115,500 49,885 251,900 8,000 1,908
1996 106,000 23,256 1,889
- ----------------------------------
20,000
................James F. Brace(5) 1998 128,750 16,700 12,000 5,382
Vice President, Treasurer and 1997 159,500 50,058 251,900 12,000 5,121
Chief Financial Officer 1996 154,000 60,851 4,890
<FN>
(1) Mr. Witt's salary increases have historically become effective on January 1
of each year. The salary increases of Messrs. Audino, Brace, Barron, Krueger and
Turner have historically become effective on July 1 of each year.
(2) The amounts disclosed in this column are awards under the Company's Annual
Incentive Compensation Program.
(3) In 1997, the Compensation Committee granted
restricted shares awards under the 1993 Stock Plan to Mr. Witt for 30,000 shares
of Common Stock and to each of Messrs. Audino, Barron, Krueger, Turner and Brace
for 10,000 shares of Common stock. The restricted shares subject to such awards
had values listed in the table based upon a $25.19 share average of the high and
low "sales" price of Common Stock as reported on The Nasdaq Stock Market on
January 2, 1998. These restricted shares awards were subject to the Company
attaining certain financial performance goals relating to return on net tangible
assets and earnings before interest, taxes, depreciation and amortization during
the three-year period ending January 2, 1999. Since these financial performance
goals were not attained by the Company, however, these restricted shares awards
have terminated and no restricted shares will be issued and no cash payments
will be made pursuant to these awards.
(4) The amounts disclosed in this column represent the compensation value to the
named executive officers of life insurance premiums paid by the Company for life
insurance policies on the lives of Messrs. Witt, Brace, Barron, Krueger and
Turner. The amounts also include the amount representing total imputed interest
from interest-free loans obtained by the individuals from the Company pursuant
to the Littelfuse Executive Loan Program in fiscal 1996, 1997 and 1998. Total
imputed interest for each of Messrs. Witt, Brace, Barron, Krueger and Turner was
$54,104, $2,171, $2,317, $13,074 and $2,623, respectively, in fiscal 1996;
$86,582, $2,447, $4,889, $13,874 and $2,623, respectively, in fiscal 1997; and
$117,505, $3,468, $15,201, $16,384 and $3,058, respectively, in fiscal 1998. (5)
Mr. Brace served as the Company's Vice President, Treasurer and Chief Financial
Officer until September 25, 1998.
</FN>
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal
1998 to the named executive officers.
<TABLE>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
PERCENTAGE
NUMBER OF OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR(2) ($/SHARE) DATE(3) 5%($) 10%($)
- ----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Howard B. Witt 60,000 19.1% 25.25 5/01/2013 1,634,565 4,813,521
- ----------------------------
William S. Barron 20,000 6.4%
25.25 5/01/2013 544,855 1,604,507
- ----------------------------
David J. Krueger 2,500 0.8%
25.25 5/01/2013 68,106 200,563
- ----------------------------
Lloyd J. Turner 12,000 3.8%
25.25 5/01/2013 326,913 962,704
- ----------------------------
Kenneth R. Audino 12,000 3.8%
25.25 5/01/2013 326,913 962,704
- ----------------------------
James F. Brace(4) 20,000 6.4%
25.25 12/25/1998 0 0
<FN>
(1) Potential realizable value is based on an assumption that the price of the
Common Stock appreciates at the annual rate shown (compounded annually) from the
date of grant until the end of the option term. These numbers are calculated
based on the requirements of the Securities and Exchange Commission and do not
reflect the Company's estimate of future stock price performance.
(2) The Company granted options representing 313,500 shares to employees in
fiscal 1998.
(3) The options become exercisable in 20% increments on May 1, 1999-2003. The
options expire 10 years after the date they become exercisable. The expiration
date shown is the expiration date of the options which will become exercisable
on May 1, 1999.
(4) Mr. Brace served as the Company's Vice President, Treasurer and Chief
Financial Officer until September 25, 1998.
</FN>
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information on option exercises in fiscal
1998 by the named executive officers and the value of such officers' unexercised
options at January 2, 1999.
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
EXERCISE VALUE REALIZED OPTIONS/SARS AT JANUARY 2, 1999($)(2)
JANUARY 2, 1999(#)(1)
NAME (#) ($)(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Howard B. Witt....... 45,000 770,648 196,300 152,000 1,746,437 101,893
- --------------------------
William S. Barron........ 10,000 200,625 39,800 41,200 323,545 21,486
- --------------------------
David J. Krueger......... 20,000 300,221 26,400 22,100 138,329 21,486
- --------------------------
Lloyd J. Turner........ 2,500 36,406 59,300 31,600 624,481 21,486
- --------------------------
Kenneth R. Audino.... 0 0 35,400 27,600 331,275 16,576
- --------------------------
James F. Brace....... 35,000 453,273 0 0 0 0
<FN>
(1) Future exercisability is subject to vesting and the optionee remaining
employed by the Company.
(2) Value is calculated by subtracting the exercise price from the assumed fair
market value of the securities underlying the option at fiscal year-end and
multiplying the result by the number of in-the-money options held. There is no
guarantee that if and when these options are exercised they will have this
value. Fair market value was calculated based on the average high and low
"sales" price of shares of the Common Stock as reported on The Nasdaq Stock
Market on December 31, 1998 ($18.81).
(3) Market value of underlying securities at exercise date (closing price as
reported on The Nasdaq Stock Market on exercise date), minus the exercise price
of in-the-money options. </FN> </TABLE>
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL EMPLOYMENT AGREEMENTS ENTERED INTO
WITH EXECUTIVE OFFICERS
The Company entered into an Employment Agreement dated September 1,
1996, with Howard B. Witt, the Chairman, President and Chief Executive Officer
of the Company. This Employment Agreement has a five-year term and provides that
Mr. Witt will receive an annual salary of no less than $310,000 plus bonuses to
be determined from time to time by the Board of Directors of the Company. To the
extent he is otherwise eligible, Mr. Witt will participate in and receive the
benefits of any and all stock options, pension, retirement, vacation, profit
sharing, health, disability insurance and other benefits, plans, programs and
policies maintained by the Company from time to time. The Employment Agreement
provides that during the term of the Employment Agreement, but subject to
election and removal by the Board of Directors of the Company in its sole
discretion, Mr. Witt will serve as Chairman, President and Chief Executive
Officer of the Company.
The Employment Agreement provides for termination of Mr. Witt for Cause
(as defined therein). In the event that the Company were to terminate Mr. Witt's
employment without Cause, he would continue to be paid the compensation he would
otherwise have earned for the remaining balance of the term of the Employment
Agreement. Additionally, any of his unvested stock options would immediately
vest upon such a termination of his employment. Mr. Witt has agreed that, in the
event he were to terminate his employment with the Company in violation of the
terms of the Employment Agreement or the Company terminates his employment for
Cause, he will not compete with the Company for a period of two years
thereafter. If the Employment Agreement expires and is not renewed after its
initial five-year term, Mr. Witt has agreed that he will not compete with the
Company for a period of one year thereafter.
The Company entered into Change of Control Employment Agreements dated
September 1, 1996, with Howard B. Witt, Kenneth R. Audino, William S. Barron,
David J. Krueger and Lloyd J. Turner and dated January 4, 1999, with Philip G.
Franklin. These Change of Control Employment Agreements are designed to provide
these individuals with certain employment and compensation protection in the
event that there was a Change of Control (as defined therein) respecting the
Company at any time prior to September 2, 2001. If such a Change of Control were
to occur and Mr. Witt's employment with the Company was terminated at any time
during the three-year period thereafter, or any of the other individual's
employment with the Company was terminated at any time during the two-year
period thereafter, other than for Cause (as defined therein), or if during these
time periods any of these individuals were to terminate their employment for
Good Reason (as defined therein), then the Company would be obligated to make
certain payments to or for the benefit of these individuals.
In the case of Mr. Witt, the Company would pay him his compensation
which had accrued prior to the date of termination, including an annualized
bonus, plus an amount equal to the product of three times the sum of Mr. Witt's
annual base salary plus bonus. Additionally, the Company would contribute on
behalf of Mr. Witt to the Company's Supplemental Executive Retirement Plan (the
"SERP") an amount equal to the amount which would have been credited to Mr.
Witt's account under the SERP if Mr. Witt had continued in the employment of the
Company for an additional three years after the date of termination.
Additionally, Mr. Witt's SERP account balance would no longer be subject to
forfeiture in the event he were to be employed by a competitor of the Company.
Mr. Witt and his family would also be provided with medical insurance benefits
until he reaches the age of 62.
In the event that any payments received by Mr. Witt upon a Change of
Control would require him to pay the 20% excise tax imposed by Section 4999 of
the Internal Revenue Code, the Company would make an additional payment to Mr.
Witt in an amount such that, after payment by Mr. Witt of such excise tax, Mr.
Witt would retain the same amount of the payments made by the Company to him
which he would have retained if he had not paid the excise tax.
With respect to the other individuals, under their Change of Control
Employment Agreements they will be paid their accrued compensation and
annualized bonus, and will receive an amount equal to two times the sum of their
annual salary plus bonus, two additional years of crediting under the SERP and
two years of continuing medical insurance benefits. They will also receive the
tax "gross-up" payment described above. Additionally, if any individual were to
terminate his employment with the Company for Good Reason (as defined in the
Change of Control Employment Agreement) or be terminated by the Company other
than for Cause (as defined in the Change of Control Employment Agreement) during
the two-year period following a Change of Control, the individual's account
balance under the SERP would not be subject to forfeiture in the event he were
to work for a competitor of the Company within two years after his date of
termination.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee administers the Company's executive cash and
benefits compensation program.
The goals of the Company's integrated executive compensation program
are to: 1. Pay competitively to attract, retain and motivate a high-quality
senior management team; 2. Link annual salary increases to the attainment by
each executive officer of individual performance objectives; 3. Tie individual
incentive cash compensation to Company and individual performance goals; and 4.
Align executive officers' financial interests with stockholder value.
As one of the factors in its consideration of compensation matters, the
Compensation Committee also considers the anticipated tax treatment to the
Company and to the executive officers of various payments and benefits. However,
since some types of compensation payments and their deductibility depend upon
the timing of an executive officer's exercise of stock options (e.g., the spread
on exercise of non-qualified options), and because interpretations and changes
in the tax laws and other factors beyond the control of the Compensation
Committee may also affect the deductibility of compensation, the Compensation
Committee will not necessarily limit executive compensation to that which is
deductible under applicable provisions of the Internal Revenue Code. The
Compensation Committee will consider various alternatives (such as the one
described in Proposal 3 of this Proxy Statement) to preserving the deductibility
of compensation payments and benefits to the extent reasonably practicable and
to the extent consistent with the Company's other compensation goals.
SALARIES
The Compensation Committee's determination of each executive officer's
base salary is designed to accomplish two goals. The first goal is to pay
executive officers competitively to attract, retain and motivate a high-quality
senior management team. The second goal is to link annual salary increases to
the attainment by each executive officer of individual performance objectives.
The base salary of each executive officer is targeted to be within a range of
80% to 120% of the average base salary received by executive officers in similar
positions with manufacturing companies having comparable annual sales.
In determining the base salary to be paid to each executive officer
other than the Chief Executive Officer (the "Other Executive Officers"), the
Compensation Committee reviews recommendations prepared by the Chief Executive
Officer. These recommendations are based, in part, on the executive compensation
guidelines prepared by an outside compensation consultant previously selected by
the outside Director members of the Compensation Committee as part of an
executive compensation review. This review included a survey of the base
salaries received by executive officers in similar positions in manufacturing
companies having annual sales between $100 million and $250 million and in
manufacturing companies which the outside consultant and management determined
to be the Company's competitors. These recommendations are also based on the
executive officer's attainment of individual performance objectives. After
consultation with the Chief Executive Officer, the Compensation Committee
reviews the recommendations and the supporting executive compensation review.
The Compensation Committee then determines the annual base salary of each of the
Other Executive Officers. The determination of the Chief Executive Officer's
annual base salary is specifically discussed below.
ANNUAL INCENTIVE COMPENSATION PROGRAM
The Annual Incentive Compensation Program is designed to accomplish the
goal of tying incentive cash compensation to Company and individual performance
goals. The Compensation Committee annually approves the Annual Incentive
Compensation Program and, after consultation with the Chief Executive Officer,
delegates the administration of the program as it relates to the Other Executive
Officers to the Chief Executive Officer. The Compensation Committee administers
the program as it relates to the Chief Executive Officer.
The Chief Executive Officer establishes a target and a maximum amount
that may be awarded to each of the Other Executive Officers as an annual
incentive compensation award. The target and maximum amounts established for
each of the other Executive Officers are percentages of such executive officer's
base salary. These amounts are established by the Chief Executive Officer based
on the executive compensation guidelines prepared by the outside compensation
consultant. In determining each of the Other Executive Officers' total award,
Company performance is determined based on the achievement by the Company of
specified levels of sales, earnings before interest, taxes, depreciation and
amortization ("EBITDA") and cash flow while individual performance is determined
based on each of the Other Executive Officers' achievement of specified
performance objectives. In determining each of the Other Executive Officers'
target amount, the specified levels of sales, EBITDA and cash flow which
determine Company performance are the budgeted amounts for the coming fiscal
year. In determining each of the Other Executive Officers' total award, the
measures of Company performance are weighted to reflect the executive officer's
responsibilities while individual performance is weighted equally for all
executive officers.
Prior to the beginning of each fiscal year, the Chief Executive Officer
and the Chief Financial Officer of the Company (the "Chief Financial Officer"):
(1) establish the target and maximum amount of each of the Other Executive
Officers' total award; (2) determine Company performance goals by specifying the
levels of achievement for sales, EBITDA and cash flow; (3) after individual
input, determine individual performance goals by specifying each of the Other
Executive Officers' performance objectives; and (4) assign the relative weight
to each component of Company performance and to individual performance. At the
end of each fiscal year, the amount of the total award paid to each of the Other
Executive Officers is determined based on Company and individual performance
using the mathematical formula previously established by the Chief Executive
Officer and the Chief Financial Officer under the program. The determination of
whether each of the Other Executive Officers achieved his or her specified
performance objectives is made by the Chief Executive Officer after consulting
with the Compensation Committee. The Compensation Committee, in administering
the Annual Incentive Compensation Program as it relates to the Chief Executive
Officer, makes all of the determinations described above with respect to the
Chief Executive Officer.
STOCK OPTIONS
Prior to April 25, 1997, the stock-based compensation programs of the
Company were administered by the Stock Option Committee of the Board of
Directors (the "Stock Option Committee"). On April 25, 1997, the Board of
Directors decided to transfer these duties to the Compensation Committee.
The granting of stock options by the Compensation Committee is designed
to accomplish the goal of aligning the financial interests of executive officers
with stockholder value. The number of stock options granted to executive
officers is determined by the executive officer's position and responsibilities.
Grants of stock options are intended to recognize different levels of
contribution to the achievement by the Company of its performance goals as well
as different levels of responsibility and experience as indicated by each
executive officer's position. Generally, all stock options granted to executive
officers have been granted with an exercise price equal to the fair market value
of the Common Stock on the date of grant.
Following the completion of the reorganization, the Stock Option
Committee approved a one-time grant of a significant number of stock options to
each executive officer in January 1992. In approving these grants, the Stock
Option Committee noted that the use of one-time grants of a significant number
of stock options to executive officers of companies emerging from reorganization
is common and that the executive officers would receive no value from the grants
unless the Common Stock increased in value. The Stock Option Committee
determined that this one-time grant of a significant number of stock options
would clearly align executive officers' financial interests with stockholder
value and provide the senior management team with additional incentive to
maximize stockholder value as the Company emerged from the reorganization.
Accordingly, the Stock Option Committee determined that the 1992 one-time grants
were appropriate and in the best interests of the Company and its stockholders.
The Stock Option Committee granted significantly less stock options to
executive officers in the years following 1992. The Stock Option Committee
believed, and the Compensation Committee believes, that the number of stock
options granted in future years should generally remain consistent from year to
year because the value produced to the executive officer only occurs when the
Common Stock increases in value after the date of grant. This closely links a
significant portion of executive officer compensation to benefits produced for
all stockholders.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee increased Mr. Witt's 1998 base salary from
his 1997 base salary due to his performance as Chief Executive Officer and the
relationship of his compensation to the compensation of chief executive officers
of peer group companies. This increase was based, in part, on Mr. Witt's
attainment of individual performance objectives.
Mr. Witt's total award under the Annual Incentive Compensation Program
was determined based on Company and individual performance using the
mathematical formula established under the program by the Compensation Committee
prior to the beginning of the 1998 fiscal year.
The Compensation Committee in 1998 granted Mr. Witt options to purchase
60,000 shares of Common Stock. The number of stock options granted to Mr. Witt
reflects the Compensation Committee's recognition of the performance of his
duties as the Chief Executive Officer.
COMPENSATION
COMMITTEE
John P. Driscoll
Bruce A. Karsh
John E. Major
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933 or the
Exchange Act that might incorporate by reference filings, including this Proxy
Statement, in whole or in part, the preceding reports and the Performance Graph
included in "Company Performance" shall not be incorporated by reference into
any such filings.
COMPANY PERFORMANCE
The following graph compares the five-year cumulative total return on
the Common Stock to the five-year cumulative total returns on the NASDAQ
Non-Financial Index, the S&P MidCap 400 Index and the Russell 2000 Index. The
Company has included the Russell 2000 Index for the first time. In future years,
the Company will not include the S&P MidCap 400 Index but rather will use the
Russell 2000 Index for its peer group. The Company no longer believes that the
S&P MidCap 400 Index is an appropriate peer group measure because the
capitalization of companies included therein are larger than the Company. The
Company does not include a peer group because it does not believe it can
construct a peer group of companies that it competes with because most of such
entities are either privately-held or comprise a division of a much larger
entity. As a result, the Company has determined that a group of companies with
similar market capitalization is an appropriate peer group and has selected the
Russell 2000 Index for such purpose.
<TABLE>
- ----------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Littelfuse, Inc. $100 $ 115 $144 $ 190 $200 $151
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
NASDAQ Non-Financial $100 $ 96 $134 $ 163 $191 $280
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
S&P Midcap 400 $100 $ 85 $111 $ 132 $175 $208
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Russell 2000 $100 $ 97 $122 $ 140 $169 $163
- ----------------------------------------------------------------------------------------
</TABLE>
In the case of the NASDAQ Non-Financial Index, the S&P MidCap 400 Index
and the Russell 2000 Index, a $100 investment made on December 31, 1993, and
reinvestment of all dividends are assumed. In the case of the Company, a $100
investment made on December 31, 1993, is assumed (the Company paid no dividends
in 1994, 1995, 1996, 1997 or 1998). Returns are at December 31 of each year,
with the exception of 1996, 1997 and 1998 for the Company, which are at December
28, 1996, January 3, 1998, and January 2, 1999, respectively.
PENSION PLAN TABLE
The Company has two non-contributory defined benefit retirement plans
in which the named executive officers participate. One of these plans is
qualified under the applicable provisions of the Internal Revenue Code (the
"Qualified Plan"), and the other is a non-qualified Supplemental Executive
Retirement Plan ("SERP"). The total annual combined pension benefits payable
under the Qualified Plan and SERP to the named executive officers are determined
on the basis of a final five-year average annual compensation formula.
The compensation covered by the retirement plans for each of the named
executive officers is the sum of the amounts reported in the salary and bonus
columns of the Summary Compensation Table. The table shows the total combined
annual pension benefits payable under the current provisions of both retirement
plans assuming retirement of an employee who has continued employment to age 62.
<TABLE>
FINAL AVERAGE YEARS OF SERVICE
<S> <C> <C> <C> <C> <C> <C>
COMPENSATION 10 15 20 25 30 35
- --------------------
$ 125,000......... $ 60,562 $ 74,104 $ 74,104 $ 74,104 $ 74,104 $ 74,104
- --------------------
150,000......... 74,104 90,354 90,354 90,354 90,354 90,354
- --------------------
175,000......... 87,645 106,604 106,604 106,604 106,604 106,604
- --------------------
200,000......... 101,187 122,854 122,854 122,854 122,854 122,854
- --------------------
225,000......... 114,729 139,104 139,104 139,104 139,104 139,104
- --------------------
250,000......... 128,270 155,354 155,354 155,354 155,354 155,354
- --------------------
300,000......... 155,353 187,854 187,854 187,854 187,854 187,854
- --------------------
400,000......... 209,520 252,854 252,854 252,854 252,854 252,854
- --------------------
500,000......... 263,686 317,854 317,854 317,854 317,854 317,854
- --------------------
<FN>
(1) Payable in the normal form of payment which is a single life annuity for a
single person (if a person is married, the form of payment is joint and 50% to
surviving spouse). For 1999, the maximum annual social security payment at age
62 for a single person is $14,292. The formula under the SERP is offset for
one-half of the $14,292.
(2) Maximum normal retirement benefit is earned after 12 years of service. Under
an alternative form, payments from the SERP can be guaranteed over 10 years.
</FN>
</TABLE>
The years of service (in nearest years) as of December 31, 1998, for
the named executive officers are as follows: Messrs. Witt, 20 years; Franklin, 0
years; Barron, 8 years; Krueger, 17 years; and Turner, 10 years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Driscoll, Karsh
and Major, none of whom are employees of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1995, the Board of Directors of the Company adopted the Littelfuse
Executive Loan Program to provide interest-free loans to management for the
purpose of enabling them to exercise their Company stock options and pay the
resulting income taxes. Pursuant to this Program, Mr. Witt has obtained
interest-free loans from the Company in the aggregate amount of $2,054,289. The
amount of the loan obtained by Mr. Witt in 1998 was $514,235. Imputed interest
on such loans for fiscal 1998 was $117,505. Funds obtained from such loans were
used by Mr. Witt to exercise Company stock options and to pay income taxes
arising from such exercise. In addition to Mr. Witt's loans, Mr. Krueger, Mr.
Barron and Mr. Turner, have each obtained interest-free loans from the Company
pursuant to the Littelfuse Executive Loan Program totaling $333,068, $260,058
and $67,398 respectively. Imputed interest on such loans totaled $16,384,
$15,201 and $3,058 respectively, for fiscal 1998. No other executive officer of
the Company has obtained loans in excess of $60,000 pursuant to the Littelfuse
Executive Loan Program. In addition to Mr. Witt, one other member of management
also obtained an interest-free loan pursuant to the Littelfuse Executive Loan
Program during fiscal 1998, which was less than $60,000. Each of the
aforementioned executive officers used such funds to exercise Company stock
options and to pay income taxes arising from such exercise.
Except as described above, the Company is not a party to any other
material transactions of the type required to be described herein.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 2000 annual
meeting of the Company's stockholders must be received at the principal
executive offices of the Company by November 19, 1999, in order to be considered
for inclusion in the Company's proxy materials relating to that meeting.
The Company's bylaws require that in order to nominate persons to the
Company's Board of Directors or to present a proposal for action by stockholders
at an annual meeting of stockholders, a stockholder must provide advance written
notice to the secretary of the Company, which notice must be delivered to or
mailed and received at the Company's principal executive offices 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 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, for notice by the stockholder
to be timely it 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 Company. In the event that the number of Directors
to be elected to the Board of Directors is increased and there is no public
announcement by the Company 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 year's annual meeting, a stockholder's
notice will be considered timely, but only with respect to nominees for any new
positions created by such increase, if it is delivered to or mailed and received
at the Company's principal executive offices not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Company. The stockholder's notice must contain detailed
information specified in the Company's bylaws. As to any proposal that a
stockholder intends to present to stockholders without inclusion in the
Company's proxy statement for the Company's 2000 annual meeting of the Company's
stockholders, the proxies named in management's proxy for that meeting will be
entitled to exercise their discretionary authority on that proposal by advising
stockholders of such proposal and how they intend to exercise their discretion
to vote on such matter, unless the stockholder making the proposal solicits
proxies with respect to the proposal to the extent required by Rule 14a-4(c)(2)
under the Securities Exchange Act of 1934.
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
to be brought before the meeting other than the matters referred to in this
Proxy Statement.
By order of the Board of Directors,
Mary S. Muchoney
Secretary
March 18, 1999
<PAGE>
PROXY _________ LITTELFUSE, INC.
_________ Proxy Card for Annual Meeting on April 30, 1999
The undersigned hereby appoints Philip G. Franklin and Mary S.
Muchoney, jointly and severally, with full power of substitution, to vote all
shares of Common Stock which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held at the offices of the Company located at 800
East Northwest Highway, Des Plaines, Illinois, on Friday April 30, 1999, at 9:00
a.m. local time, and at any adjournment thereof, with all powers the undersigned
would possess if personally present, as follows:
(1) Election of six nominees to the Board of Directors to serve terms of
one year or until their successors are elected.
FOR all nominees listed below WITHHOLD AUTHORITY
(Except as marked to the contrary below) to vote for all nominees listed below
Howard B. Witt, John P. Driscoll, Anthony Grillo, Bruce A. Karsh, John E. Major
and John J. Nevin
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name)
(2) Approval and ratification of the Directors' appointment of Ernst &
Young LLP as the Company's independent auditors for the fiscal year ending
January 1, 2000.
FOR AGAINST ABSTAIN
(3) Approval of the proposed amendment to the 1993 Stock Plan for the
Employees and Directors of Littelfuse, Inc. which provides that no individual
will receive in any calendar year awards of options, restricted shares, units or
rights for more than 100,000 shares of Common Stock of the Company.
FOR AGAINST ABSTAIN
The Board of Directors unanimously recommends a vote "FOR" these
proposals.
This Proxy is solicited by the Board of Directors of the Company.
(continued, and to be signed on the other side)
<PAGE>
Account No. of Shares Proxy No.
This proxy will be voted as directed, or if no instructions
are given, it will be voted "FOR" election of all nominees as Directors of the
Company, "FOR" approval and ratification of the appointment of independent
auditors, "FOR" approval of the proposed amendment to the 1993 Stock Plan for
the Employees and Directors of Littelfuse, Inc., and in the discretion of the
named proxies upon such other matters as may properly come before the Annual
Meeting or an adjournment thereof.
Dated: _______________________, 1999
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(Signature)
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(Signature)
Please sign exactly as name appears on stock certificate(s). Executors,
administrators, trustees, guardians, attorneys-in-fact, etc., should give their
full titles. If signer is a corporation, please give full corporate name and
have a duly authorized officer sign, stating title. If a partnership, please
sign in partnership name by authorized person. If stock is registered in two
names, both should sign.
Please vote, sign, date and return this proxy promptly.
