<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
BERG ELECTRONICS CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
BERG ELECTRONICS CORP.
101 SOUTH HANLEY ROAD
ST. LOUIS, MISSOURI 63105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1997
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Berg Electronics Corp., a Delaware corporation (the "Corporation"),
will be held on Monday, May 12, 1997, at 3:00 p.m., local time, at The
Ritz-Carlton Hotel, 100 Carondelet Plaza, St. Louis, Missouri for the following
purposes:
1. To elect two (2) Class II directors for terms expiring in 2000;
2. To consider and act upon a proposal to approve the Berg Electronics
Corp. Senior Executive Incentive Compensation Plan; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The transfer books will not be closed, but only stockholders of record at
the close of business on March 28, 1997, will be entitled to notice of, and to
vote at, the Annual Meeting or any adjournments thereof. A complete list of the
stockholders entitled to vote at the Annual Meeting shall be open to the
examination of any stockholder, for any purpose germane to the meeting, at the
offices of the Corporation during the ten days preceding the meeting and will
also be available for inspection at the Annual Meeting.
The enclosed proxy is solicited by the Board of Directors of the
Corporation. Reference is made to the accompanying proxy statement for further
information with respect to the business to be transacted at the Annual Meeting.
You are cordially invited to attend the Annual Meeting. Even if you plan to
attend, you are respectfully requested to date, sign and return the enclosed
proxy at your earliest convenience in the enclosed return envelope. You may
revoke your proxy at any time prior to exercise.
By Order of the Board of Directors,
W. Thomas McGhee
Secretary
St. Louis, Missouri
March 28, 1997
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE SIGNED, DATED AND PROMPTLY
RETURNED IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 3
BERG ELECTRONICS CORP.
101 SOUTH HANLEY ROAD
ST. LOUIS, MISSOURI 63105
---------------------
PROXY STATEMENT
MARCH 28, 1997
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished to the stockholders of Berg Electronics
Corp., a Delaware corporation (hereinafter referred to as the "Corporation"), in
connection with the solicitation by the Corporation of proxies to be used in
voting at the Annual Meeting of Stockholders (together with any and all
adjournments thereof, the "Annual Meeting") to be held at 3:00 p.m., local time,
on Monday, May 12, 1997, at The Ritz-Carlton Hotel, 100 Carondelet Plaza, St.
Louis, Missouri, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. This Proxy Statement, the foregoing notice, the
enclosed form of proxy and a copy of the Corporation's Annual Report to
Stockholders for the year ended December 31, 1996, are first being mailed to the
stockholders of the Corporation on or about March 28, 1997. THE ENCLOSED PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION.
A person giving the enclosed proxy has the power to revoke it by giving
notice to the Secretary of the Corporation in person, or by written notification
actually received by the Secretary (including by delivery of a later dated proxy
card), at any time prior to its being exercised. You may also revoke a
previously given proxy by appearing and voting at the Annual Meeting. Your
appearance at the Annual Meeting will not, in and of itself, constitute a
revocation of any proxy previously given. Unless previously revoked, the shares
represented by the enclosed proxy will be voted in accordance with the
stockholder's directions if the proxy is duly executed and returned prior to the
Annual Meeting. If no directions are specified, the shares will be voted FOR the
election of the Class II director nominees recommended by the Board of
Directors, FOR the approval of the Berg Electronics Corp. Senior Executive
Incentive Compensation Plan (the "Incentive Compensation Plan"), and in
accordance with the discretion of the named attorneys-in-fact on other matters
properly brought before the Annual Meeting.
As of March 13, 1997, the Corporation had 19,125,238 shares of common
stock, par value $.01 per share (the "Common Stock"), and 1,384,291 shares of
Class A Common Stock, par value $.01 per share (the "Class A Common Stock"),
issued and outstanding. Each share of Common Stock and Class A Common Stock
entitles the holder thereof to one vote. Only stockholders of record at the
close of business on March 28, 1997, will be entitled to notice of, and to vote
at, the Annual Meeting.
The Corporation will bear the cost of preparing, printing and mailing this
Proxy Statement and of soliciting the proxies sought hereby. In addition to the
use of the mails, solicitation may be made in person or by telephone, facsimile
transmission or otherwise by officers, directors and regular employees of the
Corporation, none of whom will receive additional compensation for those
services. Further solicitation of proxies may be made by telephone or oral
communication with some stockholders of the Corporation following the original
solicitation. All such further solicitations will be made by regular employees
and officers of the Corporation, none of whom will be additionally compensated
therefor, and the cost will be borne by the Corporation.
<PAGE> 4
PROPOSAL FOR THE ELECTION OF DIRECTORS
Action will be taken at the Annual Meeting for the election of two Class II
directors each of whom will serve for a three-year term expiring in 2000. The
Corporation does not have a nominating committee; the Board of Directors has
nominated the persons named below to stand for election as Class II directors at
the Annual Meeting. Also listed below are each of the Class I and Class III
directors whose terms will continue after the meeting. It is intended that the
attorneys-in-fact named in the proxy card will vote FOR the election of the
Class II director nominees listed below, unless instructions to the contrary are
given therein. These nominees have indicated that they are able and willing to
serve as directors. However, if some unexpected occurrence should require the
substitution of some other person or persons for any one or more of the
nominees, it is intended that the attorney-in-fact will vote FOR such substitute
nominees as the Board of Directors may designate. All directors elected at the
Annual Meeting will hold office for their respective terms and until their
respective successors are elected and qualified.
CLASS II DIRECTOR NOMINEES -- TERMS EXPIRE 2000
Charles W. Tate (Age 52) is currently a Class II director of the
Corporation and has served as a director of the Corporation since April 1993.
Mr. Tate also served as a director of Berg Electronics Group, Inc., the
Corporation's wholly owned subsidiary ("Berg"), from April 1993 to August 1996
when the number of directors constituting the Board of Directors of Berg was
decreased to one director. Mr. Tate is a Managing Director and Principal of
Hicks, Muse, Tate & Furst Incorporated ("Hicks, Muse"), a private investment
firm headquartered in Dallas with offices in New York, St. Louis and Mexico
City, specializing in strategic investments, leveraged acquisitions and real
estate equity investments. Before joining Hicks, Muse in 1991, Mr. Tate had over
19 years of experience in investment and merchant banking with Morgan Stanley &
Co. Incorporated, including ten years in the mergers and acquisitions department
and the last two and one-half years as a managing director in Morgan Stanley &
Co. Incorporated's merchant banking group. Mr. Tate serves as a director of The
Morningstar Group Inc., DESA Holdings Corporation, Hat Brands Holding
Corporation, International Wire Holding Company, International Home Foods, Inc.,
Seguros Comercial America S.A. de C.V. and Vidrio Formas S.A. de C.V.
Timothy L. Conlon (Age 45) is President and Chief Operating Officer of the
Corporation and President and Chief Executive Officer of Berg and has held such
positions since January 1997. Mr. Conlon served as Executive Vice President and
Chief Operating Officer of Berg from October 1993 through December 1996. Prior
to joining Berg, Mr. Conlon was employed as President of the Cutting and Welding
Division of Thermadyne Industries, Inc. from April 1993 to October 1993. Mr.
Conlon also held various executive positions with Thermadyne Industries, Inc.
from July 1992 through April 1993. Prior to joining Thermadyne Industries, Inc.,
Mr. Conlon spent nine years in the connector industry including serving as
General Manager of the Information Technologies and Spectra Strip divisions of
Amphenol Corporation from 1990 through July 1992 and President of Cambridge
Products from 1988 through 1989.
CLASS I DIRECTORS -- TERMS EXPIRE 1999
Richard W. Vieser (Age 69) is a director of the Corporation and has held
such position since April 1993. Mr. Vieser was also a director of Berg from
April 1993 through August 1996. Mr. Vieser is the retired Chairman of the Board,
Chief Executive Officer and President of Lear Siegler, Inc. (a diversified
manufacturing company), the former Chairman of the Board and Chief Executive
Officer of FL Industries, Inc. and FL Aerospace (also diversified manufacturing
companies) and the former President and Chief Operating Officer of McGraw-Edison
Co. (a company engaged in the electronic, industrial, commercial and automotive
industries). He is also a director of Ceridian Corporation, Dresser Industries,
Inc., INDRESCO, Inc., Sybron International Corporation, Varian Associates, Inc.
and Viasystems Group, Inc.
Kenneth F. Yontz (Age 52) is a director of the Corporation and has held
such position since March 1994. Mr. Yontz was also a director of Berg from March
1994 through August 1996. Mr. Yontz is the Chairman, President and Chief
Executive Officer of Sybron International Corporation, a manufacturer and
marketer of laboratory apparatus products, dental sundry supplies and
orthodontic appliances. Prior to joining Sybron
2
<PAGE> 5
International Corporation, Mr. Yontz was Group Vice President and Executive Vice
President of the Allen-Bradley Company. Mr. Yontz also held various managerial
and professional positions with Chemetron Inc. from 1974 to 1980 and at Ford
Motor Company from 1966 to 1974. Mr. Yontz is also a director of Playtex
Products, Inc. and Viasystems Group, Inc.
CLASS III DIRECTORS -- TERMS EXPIRE 1998
James N. Mills (Age 59) is Chairman of the Board and Chief Executive
Officer of the Corporation and Chairman of the Board of Berg and has held such
positions since November 1992. Mr. J. Mills has been the sole director of Berg
since August 1996. Mr. J. Mills also served as President of the Corporation from
November 1992 through June 1995. Mr. J. Mills is the Chairman, President and
Chief Executive Officer of Mills & Partners, Inc., an investment and management
services firm headquartered in St. Louis. Mr. J. Mills is also Chairman of the
Board and Chief Executive Officer of International Wire Holding Company, Crain
Holdings Corp., Viasystems Group, Inc. and Copy USA Holdings Corp. Mr. J. Mills
was Chairman of the Board and Chief Executive Officer of Jackson Holding Company
from February 1993 through August 1995. Mr. J. Mills was Chairman of the Board
and Chief Executive Officer of Thermadyne Holdings Corporation from February
1989 through February 1995. Mr. J. Mills was Executive Vice President of
McGraw-Edison Company from 1978 to 1985, and served as Industrial Group
President and President of the Bussmann Division of the McGraw-Edison Company
from 1980 to 1984. Mr. J. Mills also serves as a director of Hat Brands Holding
Corporation.
Thomas O. Hicks (Age 51) is a director of the Corporation and has held such
position since November 1992. Mr. Hicks also served as a director of Berg from
April 1993 through August 1996. Mr. Hicks is Chairman of the Board, Chief
Executive Officer, President and Chief Operating Officer of Hicks, Muse. From
1984 to May 1989, Mr. Hicks was Co-Chairman of the Board and Co-Chief Executive
Officer of Hicks & Haas Incorporated, a Dallas-based private investment firm.
Mr. Hicks serves as a director of Chancellor Broadcasting Company, Sybron
International Corporation, Neodata Corporation, International Home Foods, Inc.,
D.A.C. Vision, Inc. and Viasystems Group, Inc.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Corporation has a standing Audit Committee, the members of which are
Messrs. Vieser and Yontz. No meetings were held by the Audit Committee during
the year ended December 31, 1996. The principal functions performed by the Audit
Committee are the nomination of the independent public accountants of the
Corporation, the review of the proposed scope of the independent audit and the
results thereof, the review with management personnel of the public accountants'
observations on financial policy, controls and personnel and consultation with
the Chief Financial Officer of the Corporation concerning the audit.
The Corporation has a standing Compensation and Stock Option Committee (the
"Compensation Committee"). The initial members of the Compensation Committee
were Messrs. J. Mills, Hicks and Vieser. In June 1996, the composition of the
Compensation Committee changed to Messrs. Vieser and Yontz. One meeting was held
by the Compensation Committee during the year ended December 31, 1996, and the
Compensation Committee acted by unanimous written consent three times during the
year ended December 31, 1996. The principal functions of the Compensation
Committee are to review the compensation arrangements of the Corporation's
executive officers, to submit recommendations to the Board of Directors with
respect to such arrangements and to administer the Corporation's executive
compensation and stock option plans.
The total number of meetings of the Board of Directors held during the year
ended December 31, 1996, was four. The Board of Directors voted by unanimous
written consent seven times during the year ended December 31, 1996. During the
year ended December 31, 1996, no director of the Corporation attended less than
75% of the total number of meetings of the Board of Directors and all committees
on which such director served.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THE INDIVIDUALS NOMINATED FOR ELECTION AS CLASS II DIRECTORS.
3
<PAGE> 6
PROPOSAL FOR APPROVAL OF THE INCENTIVE COMPENSATION PLAN
BACKGROUND AND PURPOSE
The Compensation Committee amended the Incentive Compensation Plan by a
unanimous written consent on February 3, 1997, which unanimous consent also
directed that the Incentive Compensation Plan be submitted to the stockholders
of the Corporation for their approval. A copy of the Incentive Compensation Plan
is attached hereto as Exhibit A. The purposes of the Incentive Compensation Plan
are to encourage outstanding performance by the senior executive officers of the
Corporation, to attract and retain exceptional senior executives and to provide
a direct incentive to the participants to achieve the Corporation's strategic
and financial goals.
ADMINISTRATION
The Incentive Compensation Plan will be administered by the Compensation
Committee which shall consist of not less than two directors of the Corporation
who qualify as "outside directors" as defined for purposes of the regulations
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). The Compensation Committee will interpret the Incentive Compensation
Plan, prescribe, amend and rescind rules relating to the Plan (including rules
and procedures for establishing a performance goal in accordance with the
requirements of Section 162(m) under the Code), select eligible participants,
grant incentive awards, and take all other actions necessary for the
administration of the Incentive Compensation Plan, which actions will be final
and binding.
ELIGIBILITY TO PARTICIPATE IN THE INCENTIVE COMPENSATION PLAN
The Compensation Committee will determine and designate the participants
under the Incentive Compensation Plan from the senior executives of the
Corporation who hold the following positions within the Corporation: Chairman of
the Board, Vice Chairman of the Board, Chief Executive Officer, President, Chief
Operating Officer, Chief Financial Officer, Chief Accounting Officer, Senior
Vice Presidents, Secretary/General Counsel, Executive Vice Presidents and Vice
Presidents.
GRANT OF AWARDS
Within 90 days of the commencement of a "Performance Period" (defined as
each 12-month period commencing January 1 and ending December 31), the
Compensation Committee will establish performance goals for such Performance
Period (based on earnings per share of the Corporation's Common Stock) and the
amount of the incentive award to be paid (expressed as a percentage of base
earnings) upon the satisfaction of each performance goal. In no event may any
incentive award with respect to a particular Performance Period exceed 200% of a
participant's base earnings during such Performance Period.
Following the end of a Performance Period, the Compensation Committee will
determine and certify in writing which performance goals were attained for such
Performance Period. Incentive awards will be paid in cash as soon as practicable
after certification of the satisfaction of the performance goals.
Notwithstanding the attainment of the performance goals for a Performance
Period, a participant's performance during such Performance Period must be
satisfactory before he or she may be granted an incentive award.
The Compensation Committee has the discretion to grant all or a portion of
an incentive award to a participant (or his designated beneficiary in the case
of the death of a participant) who is employed or who is promoted to a position
covered by the Incentive Compensation Plan during the applicable Performance
Period, or whose employment is terminated during such Performance Period because
of his retirement, death, resignation, discharge or permanent disability.
4
<PAGE> 7
NON-TRANSFERABILITY
The right of a participant under the Incentive Compensation Plan to the
payment of any incentive award thereunder may not be assigned, transferred,
pledged, or encumbered.
TERMINATION AND AMENDMENT
The Compensation Committee may from time to time amend, suspend or
terminate the Incentive Compensation Plan, in whole or in part, including but
not limited to, any amendment necessary to ensure that the Corporation may
obtain any required regulatory approvals, and if the Incentive Compensation Plan
is suspended or terminated, the Compensation Committee may reinstate any or all
of its provisions. No amendment, suspension or termination may impair the right
of a participant or his designated beneficiary to receive an incentive award
accrued prior to the later of the date of adoption or the effective date of such
amendment, suspension or termination.
INCENTIVE COMPENSATION PLAN BENEFITS
The following table sets forth information with respect to incentive awards
made under the Incentive Compensation Plan for the year ended December 31, 1996.
<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION HELD DURING 1996 VALUE($)
---------------------------------- ---------
<S> <C>
James N. Mills, Chairman of the Board and Chief Executive
Officer of the Corporation and Chairman of the Board of
Berg...................................................... 1,370,000
Robert N. Mills, President of the Corporation and President
and Chief Executive Officer of Berg....................... 868,583
Timothy L. Conlon, Executive Vice President and Chief
Operating Officer of Berg................................. 404,625
David M. Sindelar, Senior Vice President and Chief Financial
Officer of the Corporation................................ 389,600
W. Thomas McGhee, Secretary and General Counsel of the
Corporation .............................................. 306,000
Executive Group............................................. 3,755,808
Non-Executive Director Group................................ --
Non-Executive Officer Employee Group........................ --
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE INCENTIVE COMPENSATION PLAN.
5
<PAGE> 8
VOTING SECURITIES OUTSTANDING AND SECURITY OWNERSHIP OF
MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the voting securities of the Corporation as of March 13, 1997, by
(i) each person who is known by the Corporation to beneficially own more than 5%
of any class of the Corporation's voting securities; (ii) the directors and
certain executive officers of the Corporation, individually; and (iii) by the
directors and all executive officers of the Corporation as a group. Except as
otherwise indicated below, the table set forth below does not give effect to the
conversion of any shares of Class A Common Stock into shares of Common Stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
------------------------------------------------------------
COMMON STOCK CLASS A COMMON STOCK
---------------------- ----------------------
NUMBER OF PERCENT OF NUMBER OF PERCENT OF PERCENT OF
BENEFICIAL OWNER SHARES CLASS SHARES CLASS TOTAL
---------------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS:
HM Parties(1)............................... 9,624,027 50.3% -- -- 46.9%
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
DIRECTORS AND OFFICERS:
James N. Mills(2)........................... 19,300 * 1,384,291 100.0% 7.0%
Thomas O. Hicks(1).......................... 9,624,027 50.3% -- -- 46.9%
Charles W. Tate(3).......................... 79,074 * -- -- *
Richard W. Vieser(4)........................ 58,660 * -- -- *
Kenneth F. Yontz............................ 48,660 * -- -- *
Robert N. Mills............................. -- * 223,914 16.2% 1.1%
David M. Sindelar(5)........................ 15,000 * 234,065 16.9% 1.2%
W. Thomas McGhee............................ 1,000 * 36,496 2.6% *
Timothy L. Conlon(6)........................ 24,613 * -- -- *
All directors and executive officers as a
group (11 persons)(7)..................... 9,884,282 51.7% 1,384,291 100.0% 55.0%
c/o Berg Electronics Corp.
101 South Hanley Road
St. Louis, Missouri 63105
</TABLE>
- ---------------
* Represents less than 1%
(1) Includes (i) 2,927,569 shares owned of record by HM/Berg Partners, L.P., a
limited partnership of which the sole general partner is HMC Partners, L.P.
("HMC Partners"), a limited partnership of which Hicks, Muse, serves as the
managing general partner; (ii) 5,607,364 shares owned of record by
HM/Connectors, L.P., a limited partnership of which the sole general partner
is HMC Partners; (iii) 491,532 shares owned of record by HM/Berg/DB
Partners, L.P., a limited partnership of which the sole general partner is
HMC Partners; (iv) 122,883 shares owned of record by HM/Berg/TCL Partners,
L.P., a limited partnership of which the sole general partner is HMC
Partners; (v) 245,766 shares owned of record by HM/Berg/FC Partners, L.P., a
limited partnership of which the sole general partner is HMC Partners; (vi)
61,591 shares owned of record by Thomas O. Hicks; (vii) 165,984 shares owned
of record by six children's trusts of which Mr. Hicks serves as trustee; and
(viii) 1,338 shares owned of record by two employees of Hicks, Muse and
subject to an irrevocable proxy in favor of Mr. Hicks. Mr. Hicks is the
controlling stockholder of Hicks, Muse and serves as Chairman of the Board,
President, Chief Executive Officer, Chief Operating Officer and Secretary of
Hicks, Muse. Accordingly, Mr. Hicks may be deemed to be the beneficial owner
of Common Stock held by HM/Berg Partners, L.P., HM/Connectors, L.P.,
HM/Berg/DB Partners, L.P., HM/Berg/TCL Partners, L.P. and HM/Berg/FC
Partners, L.P. John R. Muse, Charles W. Tate, Jack D. Furst, Lawrence D.
Stuart, Michael J. Levitt and Alan B. Menkes are officers, directors and
minority stockholders of Hicks, Muse and as such may be
6
<PAGE> 9
deemed to share with Mr. Hicks the power to vote or dispose of Common Stock
held by HM/Berg Partners, L.P., HM/Connectors, L.P., HM/Berg/DB Partners,
L.P., HM/Berg/TCL Partners, L.P. and HM/Berg/FC Partners, L.P. Each of
Messrs. Hicks, Muse, Tate, Furst, Stuart, Levitt and Menkes disclaims the
existence of a group and disclaims beneficial ownership of shares of Common
Stock not respectively owned of record by him.
(2) Includes 19,300 shares of Common Stock and 760,654 shares of Class A Common
Stock held by James N. Mills, and 623,637 shares of Class A Common Stock
which Mr. Mills has the power to vote by proxy.
(3) Includes 52,717 shares owned of record by Mr. Tate and 26,357 shares owned
of record by the Charles W. Tate 1992 Trust.
(4) Includes 24,330 shares owned of record by Mr. Vieser, 10,000 shares owned of
record by Mr. Vieser's spouse, and 24,330 shares of Common Stock subject to
options that are exercisable within 60 days. Mr. Vieser disclaims beneficial
ownership of shares of Common Stock not owned of record by him.
(5) Includes 15,000 shares of Common Stock and 197,569 shares of Class A Common
Stock owned of record by Mr. Sindelar, and 36,496 shares of Class A Common
Stock owned of record by two children's trusts of which Mr. Sindelar serves
as trustee. Mr. Sindelar disclaims beneficial ownership of shares of Common
Stock not owned of record by him.
(6) Includes 1,500 shares of Common Stock owned of record by three minor
children of which Mr. Conlon is the custodian, and 23,113 shares of Common
Stock subject to options that are exercisable within 60 days.
(7) Includes 58,391 shares of Common Stock subject to options that are
exercisable within 60 days.
EXECUTIVE OFFICERS
In addition to Messrs. James N. Mills and Timothy L. Conlon, listed above
under the caption "PROPOSAL FOR THE ELECTION OF DIRECTORS", set forth below are
each of the Corporation's executive officers and his name, age, all positions
and offices held by him with the Corporation and Berg and his principal
occupations and business experience for the past five years. All officers are
elected by the Board of Directors, each to hold office until his successor is
duly elected and qualified, or if earlier, until his resignation, removal from
office or death.
Robert N. Mills (Age 55) is Vice Chairman of the Board of Directors of the
Corporation and currently serves as a Class II director of the Corporation. Mr.
R. Mills has served as a director of the Corporation since February 1996. Mr. R.
Mills served as President of the Corporation from June 1995 through December
1996, and as Chief Operating Officer of the Corporation and as President and
Chief Executive Officer of Berg from March 1993 through December 1996. Mr. R.
Mills also served as a director of Berg from February 1996 through August 1996.
Mr. R. Mills served as a Vice President of the Corporation from March 1993
through June 1995. Mr. R. Mills is President and Chief Operating Officer of
Viasystems Group, Inc., an affiliate of the Corporation, and has held such
positions since January 1997. Mr. R. Mills has served as a director of
Viasystems Group, Inc. since January 1997. Prior to joining the Corporation and
Berg in March 1993, Mr. R. Mills was Vice President of Thermadyne Industries,
Inc. and President of Stoody Deloro Stellite, Inc. which positions he had held
from February 1990 and July 1989, respectively. Prior thereto, he served as
President, Chief Operating Officer and Director of Tridex Corporation from 1987
to 1989, and Vice President and General Manager of Elco Corporation, a
subsidiary of Wickes Manufacturing Company, from 1983 to 1987. Mr. R. Mills is
the brother of James N. Mills.
David M. Sindelar (Age 39) is Senior Vice President and Chief Financial
Officer of the Corporation and Senior Vice President of Berg and has held such
positions since November 1992. Mr. Sindelar is also Senior Vice President and
Chief Financial Officer of Mills & Partners, Inc., International Wire Holding
Company, Crain Holdings Corp., Viasystems Group, Inc. and Copy USA Holdings
Corp. Mr. Sindelar was Senior Vice President and Chief Financial Officer of
Jackson Holding Company from February 1993 through August 1995. From 1987 to
February 1995, Mr. Sindelar held various positions at Thermadyne Holdings
Corporation including Senior Vice President, Chief Financial Officer and Vice
President -- Corporate Controller and Controller.
7
<PAGE> 10
Larry S. Bacon (Age 50) is Senior Vice President -- Human Resources of the
Corporation and Berg and has held such positions since March 1993. Mr. Bacon is
also Senior Vice President -- Human Resources of Mills & Partners, Inc., Crain
Holdings Corp., International Wire Group, Inc., Viasystems Group, Inc. and Copy
USA Holdings Corp. Mr. Bacon was Senior Vice President -- Human Resources of
Jackson Holding Company from February 1993 through August 1995. Previously, Mr.
Bacon was Senior Vice President -- Human Resources of Thermadyne Holdings
Corporation from September 1987 until February 1995.
W. Thomas McGhee (Age 60) is Secretary and General Counsel of the
Corporation and Berg and has held such positions since March 1993. Mr. McGhee is
also a partner in the law firm of Herzog, Crebs and McGhee where he has been a
partner since helping to found that firm in 1987. In addition, Mr. McGhee serves
as Secretary and General Counsel of Mills & Partners, Inc., International Wire
Holding Company, Crain Holdings Corp., Viasystems Group, Inc. and Copy USA
Holdings Corp. Mr. McGhee was Secretary and General Counsel of Jackson Holding
Company from March 1993 through August 1995. Mr. McGhee was Secretary and
General Counsel of Thermadyne Holdings Corp. from March 1993 through February
1995.
Joseph S. Catanzaro (Age 44) is Chief Accounting Officer of the Corporation
and Vice President -- Finance of Berg and has held such positions since June
1996 and April 1993, respectively. Prior to joining Berg, Mr. Catanzaro was
employed by a petroleum trading company subsidiary of Mitsui & Co. (USA), Inc.
as Controller from 1990 through April 1993. From 1980 through 1989, Mr.
Catanzaro held several positions at Apex Oil Co., including Corporate
Controller.
8
<PAGE> 11
EXECUTIVE AND DIRECTOR COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation earned by
the Chief Executive Officer of the Corporation and Berg and the four other most
highly compensated executive officers of the Corporation and Berg during 1996,
1995 and 1994. As of the date hereof, the Corporation has not granted any stock
appreciation rights.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) SECURITIES
NAME AND PRINCIPAL ----------------------- UNDERLYING ALL OTHER
POSITION DURING 1996 YEAR SALARY($) BONUS(2)($) OPTIONS(#) COMPENSATION(3)($)
-------------------- ---- --------- ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
James N. Mills........................ 1996 685,000 1,370,000 -- 23,000
Chairman of the Board and 1995 685,000 800,000 -- 16,500
Chief Executive Officer of the 1994 685,000 650,000 -- 13,000
Corporation and Chairman of
the Board of Berg
Robert N. Mills....................... 1996 434,294 868,583 -- 15,000
President of the Corporation and 1995 365,000 325,000 -- 14,000
President and Chief Executive 1994 330,000 250,000 -- 11,500
Officer of Berg
Timothy L. Conlon..................... 1996 311,250 404,625 24,330 11,000
Executive Vice President and 1995 290,000 225,000 -- 10,000
Chief Operating Officer of Berg 1994 278,000 181,000 -- 8,500
David M. Sindelar..................... 1996 194,808 389,600 -- 10,000
Senior Vice President and Chief 1995 193,000 200,000 -- 10,000
Financial Officer of the 1994 184,000 150,000 -- 8,500
Corporation
W. Thomas McGhee...................... 1996 153,000 306,000 -- 17,000
Secretary and General Counsel 1995 152,000 120,000 -- 10,000
of the Corporation 1994 146,000 95,000 -- 1,000
</TABLE>
- ---------------
(1) The Corporation and Berg provide to certain executive officers a car
allowance, reimbursement for club memberships, insurance and certain other
benefits. The aggregate incremental costs of these benefits to the
Corporation and Berg for each officer do not exceed the lesser of $50,000 or
10.0% of the total of annual salary and bonus reported for each such
officer.
(2) Bonuses earned in 1996, 1995 and 1994 were paid in 1997, 1996 and 1995,
respectively.
(3) All Other Compensation for the year ended December 31, 1996 includes the
following: (i) contributions made by the Corporation in the following
amounts to the Corporation's 401(k) Savings Plan: Mr. J. Mills $9,000, Mr.
R. Mills $9,000, Mr. Conlon $9,000, Mr. Sindelar $9,000 and Mr. McGhee
$9,000; (ii) the following amounts paid by the Corporation as premiums for
term life insurance policies: Mr. J. Mills $9,000, Mr. R. Mills $3,000, Mr.
Conlon $2,000, Mr. Sindelar $1,000 and Mr. McGhee $8,000; and (iii) the
following amounts paid to the Corporation's 401(k) Savings Plans as
"transition" payments related to a pension plan formerly maintained by the
Corporation and terminated in 1995: Mr. J. Mills $4,500 and Mr. R. Mills
$3,000.
9
<PAGE> 12
The following table summarizes option grants made during 1996 to the
executive officers named above.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED OR BASE GRANT DATE
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE (2)
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE ($)
---- ------------- --------------- --------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
James N. Mills.................... -- -- -- -- --
Robert N. Mills................... -- -- -- -- --
Timothy L. Conlon................. 24,330 100% 19.32 2/01/06 255,000
David M. Sindelar................. -- -- -- -- --
W. Thomas McGhee.................. -- -- -- -- --
</TABLE>
- ---------------
(1) The options to purchase shares of Common Stock were granted under the Berg
Electronics Corp. 1993 Stock Option Plan (the "1993 Stock Option Plan") and
become exercisable in five equal annual installments commencing on the first
anniversary of the date of grant. All options become exercisable upon a
change of control (as defined in the 1993 Stock Option Plan).
(2) The grant date present value was determined using the Black-Scholes option
pricing method with the following assumptions: (i) dividend yield of 0%;
(ii) expected volatility of 30%; (iii) risk free interest rate of 5.52%; and
(iv) expected life of ten years. No adjustments were made for
non-transferability or risk of forfeiture.
There were no exercises of stock options by any of the named executive
officers during the fiscal year ended December 31, 1996. The table below lists
the number of shares of Common Stock underlying each option held by the named
executive officers as of December 31, 1996.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END ($)(1)
----------------------------- --------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------------------------- --------------------------
<S> <C> <C>
James N. Mills................................. 0/0 0/0
Robert N. Mills................................ 0/0 0/0
Timothy L. Conlon.............................. 18,247/36,496 461,000/552,000
David M. Sindelar.............................. 0/0 0/0
W. Thomas McGhee............................... 0/0 0/0
</TABLE>
- ---------------
(1) Represents the difference between the market value at December 31, 1996, of
the Common Stock underlying the options and the exercise price of such
options.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
James N. Mills, David M. Sindelar and W. Thomas McGhee Employment
Agreements. James N. Mills, David M. Sindelar and W. Thomas McGhee entered into
employment agreements with the Corporation, Berg and each subsidiary of the
Corporation on March 1, 1993. Such employment agreements were amended and
restated on February 1, 1996. In addition, these employment agreements were
further amended on August 5, 1996, to provide that Messrs. J. Mills', Sindelar's
and McGhee's bonuses, which previously were at the discretion of the Board of
Directors, would thereafter be determined by the Compensation Committee pursuant
to the terms of the Incentive Compensation Plan. Pursuant to their respective
employment agreements, Mr. J. Mills will serve as the Chairman of the Board of
the Corporation, Mr. Sindelar will serve
10
<PAGE> 13
as Senior Vice President and Chief Financial Officer of the Corporation and Mr.
McGhee will serve as Secretary and General Counsel of the Corporation through
February 28, 2001. Messrs. J. Mills, Sindelar and McGhee are required to devote
such business time and attention to the transaction of the Corporation's and
Berg's business as is reasonably necessary to discharge their duties under the
employment agreements. Subject to the foregoing limitation on their activities,
Messrs. J. Mills, Sindelar and McGhee are free to participate in other business
endeavors.
The compensation provided to Messrs. J. Mills, Sindelar and McGhee under
their respective employment agreements includes annual base salaries of not less
than $685,000, $194,800 and $153,000, respectively, subject to adjustment at the
sole discretion of the Board of Directors of the Corporation, and such benefits
as are customarily accorded the senior executives of the Corporation and Berg
for as long as the employment agreements are in force. Messrs. J. Mills,
Sindelar and McGhee are entitled to annual bonuses pursuant to their respective
employment agreements, in an amount to be determined in accordance with the
terms of the Incentive Compensation Plan.
Messrs. J. Mills', Sindelar's and McGhee's employment agreements also
provide that if Messrs. J. Mills', Sindelar's or McGhee's employment is
terminated due to disability or death, Messrs. J. Mills, Sindelar and McGhee or
their estates, heirs or beneficiaries, as the case may be, will receive, in
addition to any other benefits provided under any benefit plan of the
Corporation, their then current salary for a period of 18 months from their
disability or death. In the event that Messrs. J. Mills', Sindelar's or McGhee's
employment is terminated for a reason other than death, disability or cause,
Messrs. J. Mills, Sindelar or McGhee will continue to receive their then current
salary (which will not be less than $685,000, $194,800 and $153,000,
respectively, per year) through February 28, 2001, or for one year, whichever is
longer, and any other benefits to which they would otherwise be entitled under
the employment agreements.
Robert N. Mills Employment Agreement. Robert N. Mills entered into an
employment agreement with the Corporation and Berg on March 1, 1993, which was
amended and restated on February 1, 1996, and further amended on January 1,
1997. Pursuant to such employment agreement, as amended, effective January 1,
1997, Mr. R. Mills will serve as the Vice Chairman of the Board of Directors of
the Corporation through February 28, 2001, and will receive an annual base
salary of not less than $100,000, subject to adjustment at the sole discretion
of the Board of Directors of the Corporation, and such benefits as are
customarily accorded the senior executives of the Corporation and Berg for as
long as the employment agreement is in force. Mr. R. Mills is entitled to annual
bonus pursuant to his employment agreement in an amount to be determined in
accordance with the terms of the Incentive Compensation Plan.
Mr. R. Mills' employment agreement also provides that if Mr. R. Mills'
employment is terminated due to disability or death, Mr. R. Mills or his estate,
heirs or beneficiaries, as the case may be, will receive, in addition to any
other benefits provided him or them under any benefit plan of the Corporation,
Mr. R. Mills' then current salary for a period of 18 months from Mr. R. Mills'
disability or death. In the event that Mr. R. Mills' employment is terminated
for a reason other than death, disability or cause, Mr. R. Mills will continue
to receive his then current salary (which will not be less than $100,000 per
year) through February 28, 2001, or for one year, whichever is longer, and any
other benefits to which he would otherwise be entitled under his employment
agreement.
Timothy L. Conlon Employment Agreement. Timothy L. Conlon entered into an
employment agreement with Berg on October 1, 1993, which was amended and
restated on February 1, 1996, and further amended on January 1, 1997. Pursuant
to such employment agreement, as amended, Mr. Conlon will serve as the President
and Chief Operating Officer of the Corporation and the President and Chief
Executive Officer of Berg through February 28, 2001, and will receive an annual
base salary of not less than $400,000, subject to adjustment at the sole
discretion of the Chairman of the Board of the Corporation, and such benefits as
are customarily accorded the senior executives of the Corporation and Berg for
as long as the employment agreement is in force. In addition, Mr. Conlon's
employment agreement currently provides that he is entitled to an annual bonus,
in an amount to be determined in accordance with the Incentive Compensation
Plan.
Mr. Conlon's employment agreement also provides that if his employment is
terminated due to disability or death, his estate, heirs or beneficiaries, as
the case may be, will receive, in addition to any other benefits
11
<PAGE> 14
provided him under any benefit plan of the Corporation, Mr. Conlon's then
current salary for a period of 18 months from Mr. Conlon's disability or death.
In the event that his employment is terminated for a reason other than death,
disability or cause, Mr. Conlon will continue to receive his then current salary
(which will not be less than $400,000 per year) through February 28, 2001, or
for one year, whichever is longer, and any other benefits to which he would
otherwise be entitled under the employment agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In August 1995, the Board of Directors of the Corporation established the
Compensation Committee. The initial members of the Compensation Committee were
Messrs. Mills, Hicks and Vieser. In June 1996, the composition of the
Compensation Committee changed to Messrs. Vieser and Yontz.
COMPENSATION OF DIRECTORS
Current directors who are officers, employees or affiliates of the
Corporation or Berg receive no additional compensation for their services as
directors. Each director of the Corporation (currently only Messrs. Vieser and
Yontz) who is not also an officer, employee or an affiliate of the Corporation
or Berg (an "Outside Director") receives an annual retainer of $12,000 and a fee
of $1,000 for each meeting of the Board of Directors at which such Outside
Director is present. Each Outside Director who is a member of a committee of the
Board of Directors also receives a fee of $500 for each meeting of such
committee at which such Outside Director is present. Directors of the
Corporation are entitled to reimbursement of their reasonable out-of-pocket
expenses in connection with their travel to and attendance at meetings of the
Board of Directors or committees thereof.
12
<PAGE> 15
PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Common Stock of the Corporation during the period beginning on March 1, 1996
(the date the Corporation went public) and ending on December 31, 1996, with the
cumulative total return on the Standard & Poor's 500 Index and the Morgan
Stanley High Tech Index over the same period (assuming an investment on March 1,
1996, of $100 in the Corporation's Common Stock (at the offering price of such
Common Stock in the Corporation's initial public offering), the Standard &
Poor's 500 Index and the Morgan Stanley High Tech Index, and the reinvestment of
dividends). The Corporation's Common Stock trades on the New York Stock Exchange
under the trading symbol "BEI."
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) BEI S&P 500 MORGAN STANLEY
<S> <C> <C> <C>
3/1/96 100.00 100.00 100.00
3/29/96 111.90 100.79 94.78
6/28/96 113.10 104.72 97.34
9/30/96 129.76 107.32 105.58
12/31/96 139.88 115.66 114.71
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for the
Corporation's executive compensation programs. The Compensation Committee is
composed of the two members of the Board of Directors who are neither current
employees nor officers of the Corporation. This report is provided by the
Compensation Committee to describe the philosophy and objectives underlying the
compensation of the Corporation's senior executives.
COMPENSATION POLICY
Under the direction of the Compensation Committee and in consultation with
an outside independent compensation consultant, the Corporation's senior
executive compensation program is based upon a "pay for performance" philosophy
and is designed to attract and retain highly qualified, key executives by
offering competitive base compensation supplemented with performance-based
incentives linked to corporate performance factors and position within the
Corporation. The Corporation has designed and administered its executive
compensation programs so that compensation is linked to the Corporation's
performance and so that the interests of senior executives are aligned with the
interests of the Corporation's stockholders. This philosophy is articulated in
the following guiding principles of the Corporation's compensation programs:
- A significant percentage of compensation will be determined by the
Corporation's annual and long term financial performance, including the
creation of stockholder value;
13
<PAGE> 16
- Compensation programs will be designed to encourage and balance the
attainment of short term operational goals and long term strategic goals;
- Total compensation will be targeted at competitive levels to allow the
Corporation to attract, retain and motivate highly qualified employees;
however, a greater percentage of compensation will be performance-based
and variable (versus fixed compensation) than competitive practices might
suggest; and
- Compensation programs will be designed to more closely align the
interests of senior executives with the interests of the Corporation's
stockholders by encouraging stock ownership by senior executives.
There are three elements to the Corporation's compensation program, each
consistent with its compensation philosophy: annual base salary, annual cash
bonus incentives and long term incentives. The total compensation package is
designed to be competitive with compensation programs offered to comparable
senior executive officers in a survey group of eighteen electronic equipment
manufacturers (the "Peer Group"). The Corporation believes that its total
compensation practices will be competitive if the Corporation performs within
the targets established by the Compensation Committee both on the basis of short
term and long term goals.
Section 162(m) of the Code imposes a limit, with certain exceptions, on the
amount that a publicly held corporation may deduct in any year for the
compensation paid or accrued with respect to its Chief Executive Officer and
four other most highly compensated executive officers. However, to the extent
compensation is "performance-based compensation" within the meaning of Code
Section 162(m), it will not be subject to the Code Section 162(m) deduction
limitation. As a newly publicly traded company in 1996, the Corporation falls
under certain transition provisions that relieve it from compliance with Code
Section 162(m) with respect to certain agreements and plans that were in
existence on the date the Corporation became a publicly traded corporation. In
formulating the Corporation's executive compensation policies, the Compensation
Committee considers the relevant provisions of the Code that limit the
deductibility of certain executive compensation and the consequences to the
Corporation if the compensation paid to the Corporation's executive officers is
not deductible.
BASE SALARIES
All senior executive officer base salaries are reviewed and adjustments, if
any, are approved annually by the Compensation Committee. The Corporation's
senior executive officers' base salaries are targeted to be at the 50th
percentile of the base salaries of similarly situated executive officers within
the Peer Group. The Compensation Committee may choose to set salaries above or
below the 50th percentile target based on an executive's position, contribution,
experience, etc. No specific weighting of these elements is used to determine
base salary levels.
ANNUAL INCENTIVE AWARDS
The annual incentive award component of the Corporation's senior executive
incentive compensation is determined pursuant to the terms of the Incentive
Compensation Plan and is based on achieving certain earnings per share
objectives (determined without consideration of extraordinary items) for the
Corporation's consolidated fiscal year. The program provides for the payment of
cash incentive awards to participants to the extent that actual consolidated
earnings per share results meet or exceed certain target levels. The
Compensation Committee establishes targeted consolidated earnings per share
objectives at four distinct levels which trigger progressive incentive payout.
The targeted objectives are based on profit levels for the fiscal year. To the
extent that the Corporation attains or exceeds a targeted performance level,
each participant is entitled to receive a cash incentive award. The maximum
annual incentive award under the Incentive Compensation Plan is 200% of base
salary. The Compensation Committee generally targets short term incentive
compensation to the 50th percentile of the Peer Group. However, exceptional
earnings per share performance can produce an exceptional short term incentive
payout.
14
<PAGE> 17
LONG TERM INCENTIVE AWARDS
Long term incentive awards in the form of stock options are granted by the
Corporation to aid in the retention of key executives and to align the interests
of key executives with those of the stockholders of the Corporation.
Specifically, stock options directly link a portion of key executive's
compensation to the interests of stockholders by providing an incentive to
maximize stockholder value.
Stock options are granted under the 1993 Stock Option Plan which was
approved by the Board of Directors and a majority of stockholders on August 4,
1993. The Corporation has set guidelines with respect to grants of long term
incentive compensation between the 50th and 75th percentiles of the Peer Group.
Additionally, the Compensation Committee grants stock options to employees based
on several factors, including:
- Current base pay and annual incentive opportunity as compared with the
Peer Group's total direct compensation levels (base, annual incentive and
long term incentive value);
- Position with the Corporation and ability to impact stockholder value;
and
- Current holdings of the Corporation's stock.
No specific weighting of these factors is used to determine long term
incentive grants. However, options grants are reviewed annually by the
Compensation Committee.
CEO COMPENSATION
Mr. James N. Mills' base salary was set by the Board of Directors pursuant
to Mr. J. Mills' employment agreement on March 1, 1993, and has remained
unchanged. Pursuant to his employment agreement, Mr. J. Mills was paid a base
salary in the amount of $685,000 for the year ended December 31, 1996. The
Compensation Committee approved an annual incentive award under the Incentive
Compensation Plan equal to 200% of the bonus target for Mr. J. Mills (which was
set at 100% of Mr. J. Mills' base salary for 1996) based on the Corporation's
outstanding performance in 1996 resulting in the Corporation achieving an
increase in earnings per share of over 90% compared with the Corporation's
earnings per share for the year ended December 31, 1995. Since Mr. J. Mills
holds a large block of Class A Common Stock, the Compensation Committee believes
that his interests are clearly aligned with the Corporation's stockholders, and,
accordingly, no long term incentive compensation was awarded in 1996.
Richard W. Vieser, Chairman
Kenneth F. Yontz
15
<PAGE> 18
RELATED PARTY TRANSACTIONS
In March 1996, the Corporation (pursuant to the approval of the Board of
Directors in February 1996) entered into an Amended and Restated Monitoring and
Oversight Agreement (the "Monitoring and Oversight Agreement") with Hicks, Muse.
Such agreement provides that, for a period of ten years, the Corporation will
pay Hicks, Muse an annual fee for oversight and monitoring services to the
Corporation, Berg and their subsidiaries in an amount equal to the greater of
$700,000 or one-tenth of 1% of net sales during such year. In addition, Hicks,
Muse is entitled to an acquisition advisory fee equal to 1.5% of the purchase
price of any acquisition effected by the Corporation, Berg or any of their
subsidiaries. Messrs. Hicks and Tate, directors of the Corporation, are each
principals of Hicks, Muse. In connection with the Monitoring and Oversight
Agreement, the Corporation has agreed to indemnify Hicks, Muse, its affiliates
and stockholders, and their respective directors, officers, agents, employees
and affiliates from and against any claims, actions, proceedings, demands,
liabilities, damages, judgments, assessments, losses and costs, including fees
and expenses, arising out of or in connection with the services rendered by
Hicks, Muse in connection with the Monitoring and Oversight Agreement.
The Monitoring and Oversight Agreement makes available to the Corporation
the resources of Hicks, Muse concerning a variety of financial and operational
matters. The services that have been and will continue to be provided by Hicks,
Muse could not otherwise be obtained by the Corporation without the addition of
personnel or the engagement of outside professional advisors. In management's
opinion, the fees provided for under this agreement reasonably reflect the
benefits received by the Corporation and are no less favorable to the
Corporation than could be obtained by the Corporation with a non-affiliated
third party.
Pursuant to the Monitoring and Oversight Agreement, the Corporation expects
to pay one-time fees to Hicks, Muse aggregating approximately $250,000 in
connection with an acquisition effected in 1996.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, certified public accountants, served as independent
auditors of the Corporation and Berg for the fiscal year ended 1996. The Board
of Directors of the Corporation anticipates appointing Arthur Andersen LLP to
serve as independent public accountants of the Corporation for fiscal year 1997,
subject to their nomination by the Audit Committee. A representative of Arthur
Andersen LLP will be present at the Annual Meeting. Such representative will be
given the opportunity to make a statement if he or she desires to do so and will
be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if any additional matters are properly brought before
the Annual Meeting, it is the intention of the attorneys-in-fact named in the
accompanying proxy to vote in accordance with their judgment on such matters.
VOTING REQUIREMENTS
With regard to the proposal for the Election of Directors, votes may be
cast for or votes may be withheld from each nominee. No stockholder may vote for
more than two nominees. Directors will be elected by plurality vote. Therefore,
votes that are withheld will be excluded entirely from the vote and will have no
effect. Abstentions may not be specified with respect to the election of
directors.
Approval of the Incentive Compensation Plan will require the affirmative
vote of at least a majority of the votes cast by stockholders present or
represented by proxy at the Annual Meeting and entitled to vote. Abstentions may
be specified as to the proposal to approve the Incentive Compensation Plan.
Under Delaware law, abstentions are counted as present for quorum purposes
and are included in the calculation of shares "entitled to vote". Abstentions on
a particular matter (other than the election of directors) will not be counted
as votes cast in the affirmative and will therefore have the same effect as a
vote
16
<PAGE> 19
against a particular matter (other than the election of directors) because each
proposal (other than the election of directors) requires the affirmative vote of
a specific number of shares.
Under the rules of the New York Stock Exchange, Inc. (the "NYSE"), a broker
who holds securities in street name has limited authority to vote on matters
submitted at a stockholders' meeting in the absence of specific instructions
from the beneficial owner. In the absence of instructions from the beneficial
owner or authorization from the NYSE to vote on specific matters without the
necessity of obtaining instructions from the beneficial owner, a broker will
specify a "non-vote" on particular matters. For purposes of Delaware law, a
broker non-vote is counted as present for quorum purposes, but is excluded from
the calculation of shares "entitled to vote". Accordingly, a broker non-vote is
not considered in determining whether a particular matter has been approved.
If no directions are specified in any duly signed and dated proxy card
received by the Corporation, the shares represented by that proxy card will be
counted as present for quorum purposes and will be voted by the
attorneys-in-fact named in the proxy FOR the election of the Class II director
nominees recommended by the Board of Directors, FOR the approval of the
Incentive Compensation Plan, and in accordance with the discretion of the named
attorneys-in-fact on other matters properly brought before the Annual Meeting.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Corporation's directors and
executive officers, and persons who own more than 10% of the Common Stock, to
file with the Commission initial reports of beneficial ownership and reports of
changes in beneficial ownership of Common Stock and other equity securities of
the Corporation. Officers, directors and greater than 10% beneficial owners are
required by the Commission to furnish the Corporation with copies of all Section
16(a) reports they file. To the Corporation's knowledge, based solely on a
review of the copies of such reports furnished to the Corporation, all Section
16(a) filing requirements applicable to its officers and directors were complied
with for the year ended December 31, 1996.
STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Corporation's proxy statement
relating to the 1998 Annual Meeting of Stockholders of the Corporation must be
received no later than November 28, 1997 at the Corporation's principal
executive offices, 101 South Hanley Road, St. Louis, Missouri 63105, Attention:
Secretary. Stockholders of the Corporation who intend to nominate candidates for
election as a director or to bring other business before the meeting must also
comply with the applicable procedures set forth in the Corporation's Bylaws. See
"Stockholder Nomination of Director Candidates." The Corporation will furnish
copies of such Bylaw provisions upon written request to the Secretary of the
Corporation at the aforementioned address. It is suggested that proponents
submit their proposals by certified mail, return receipt requested.
STOCKHOLDER NOMINATION OF DIRECTOR CANDIDATES
The Bylaws of the Corporation provide that any stockholder of record who is
entitled to vote for the election of directors at a meeting called for that
purpose may nominate persons for election to the Board of Directors subject to
the following notice requirements.
As described more fully in the Corporation's Bylaws, a stockholder desiring
to nominate a person for election to the Board of Directors must send a written
notice to the Secretary of the Corporation setting forth (i) as to each person
who the stockholder proposes to nominate, all information required to be
disclosed in solicitations of proxies for election of directors, or as otherwise
required, in each case pursuant to Regulation 14A under the Exchange Act
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected) and (ii) as to the
stockholder giving the notice: (a) the
17
<PAGE> 20
name and address of such stockholder as it appears on the Corporation's books
and (b) the class and number of shares of the Corporation that are owned of
record by such stockholder.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS UPON RECEIPT BY THE CORPORATION OF A REQUEST ADDRESSED TO:
GARY D. STRONG
DIRECTOR, INVESTOR RELATIONS
BERG ELECTRONICS CORP.
101 SOUTH HANLEY ROAD, SUITE 400
ST. LOUIS, MISSOURI 63105
The enclosed form of proxy has been prepared at the direction of the
Corporation, of which you are a stockholder, and is sent to you at the request
of the Board of Directors. The proxies and attorneys-in-fact named herein have
been designated by your Board of Directors.
The Board of Directors of the Corporation urges you, even if you presently
plan to attend the Annual Meeting in person, to execute the enclosed proxy and
mail it as indicated immediately. You may revoke your proxy and vote in person
if you are in fact able to attend the Annual Meeting.
BERG ELECTRONICS CORP.
By Order of the Board of Directors
W. Thomas McGhee
Secretary
St. Louis, Missouri
March 28, 1997
18
<PAGE> 21
EXHIBIT A
BERG ELECTRONICS CORP.
SENIOR EXECUTIVE INCENTIVE COMPENSATION PLAN
SECTION 1
PURPOSE
1.1 Purpose. The purposes of this Plan are to encourage outstanding
performances from the senior executives of Berg Electronics Corp. (the
"Corporation"), to attract and retain exceptional senior executives and to
provide a direct incentive to the Participants (as hereinafter defined) to
achieve the Corporation's strategic and financial goals.
SECTION 2
ADMINISTRATION
2.1 The Plan shall be administered by the Compensation and Stock Option
Committee of the Board of Directors of the Corporation (the "Committee")
consisting of not less than two directors of the Corporation who shall be
appointed by the Board of Directors. No person shall serve as a member of the
Committee unless at the time of his appointment and service he shall be an
"outside director" for purposes of Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code").
2.2 The Committee shall interpret the Plan, prescribe, amend and rescind
rules relating to the Plan (including rules and procedures for establishing a
performance goal in accordance with the requirements of Section 162(m) of the
Code relating to performance-based compensation), select eligible Participants,
grant incentive awards thereto, and take all other actions necessary for the
administration of the Plan, which actions shall be final and binding upon all
Participants.
SECTION 3
PARTICIPANTS
3.1 Participants. The Committee shall determine and designate the senior
executives who are eligible to receive awards under the Plan ("Participants").
Directors of the Corporation who are full-time executives of the Corporation may
be eligible to participate in the Plan. The Committee shall designate
Participants from among the group of individuals who hold the following
positions within the Corporation:
Chairman
Vice Chairman
Chief Executive Officer (if different from the Chairman)
President
Chief Operating Officer (if different from the President)
Chief Financial Officer
Chief Accounting Officer
Senior Vice Presidents
Secretary/General Counsel
Executive Vice Presidents
Vice Presidents
SECTION 4
PERFORMANCE GOAL
4.1 Performance Period. The term "Performance Period" as used in this Plan
shall mean the period of twelve consecutive months beginning on January 1 and
ending on December 31.
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4.2 Performance Goal:
(A) The Committee shall establish performance goals applicable to a
particular Performance Period in writing within 90 days of the commencement
of a relevant Performance Period, provided, however, that such goals may be
established after the commencement of the Performance Period but while the
outcome of the performance goals are substantially uncertain.
(B) The performance goal applicable to a Performance Period shall be
earnings per share.
(C) The Committee shall determine the target level of performance that
must be achieved in order for performance goals to be treated as attained.
SECTION 5
INDIVIDUAL AWARDS
5.1 Performance Goal Certification. The Committee shall make an award to a
Participant only in the event the Committee certifies in writing prior to
payment of the award that the performance goal under which the award is to be
paid has been attained. Under no circumstances shall an award be payable under
this Plan if the performance goal for a particular Performance Period is not
obtained.
5.2 Unsatisfactory Performances. A Participant's performance must be
satisfactory, regardless of Corporation performance, before he/she may be
granted an incentive award.
5.3 New Employee, or Retirement, Permanent Disability, Death, or
Termination of Employment. In the event the performance goal for a Performance
Period is attained, the Committee, in its discretion, may grant all or such
portion of an incentive award for the year as it deems advisable to a
Participant (or his Beneficiary in the case of his death) who is employed or who
is promoted to a senior executive position covered by this Plan during the year,
or whose employment is terminated during the Performance Period because of his
retirement, death, resignation or discharge, or who suffers a permanent
disability.
5.4 Maximum Award. In no event may any incentive award with respect to a
particular Performance Period exceed 200% of a Participant's base earnings
during such Performance Period.
SECTION 6
PAYMENT OF INCENTIVE AWARDS
6.1 Immediate Payment. Each Participant shall be paid the entire amount of
the incentive award in cash as soon as practicable following the grant of the
award by the Committee.
SECTION 7
PLAN ADMINISTRATION
7.1 Beneficiary. The term "Beneficiary" shall mean the person or persons to
whom payments are to be paid pursuant to the terms of the Plan in the event of
the Participant's death. The designation shall be on a form provided by the
Committee, executed by the Participant, and delivered to the Committee. A
Participant may change his beneficiary designation at any time.
7.2 Permanent Disability. For purposes of the Plan, a permanent disability
shall mean a disability which would qualify a Participant to receive benefits
under the Berg Electronics Corp. Long-Term Disability Plan (after satisfying the
elimination period thereunder) as now or hereafter in effect.
7.3 Withholding Taxes. All required federal, state and local withholding
shall be made from payments of incentive awards as required by law.
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7.4 Non-Assignment. The right of a Participant or Beneficiary to the
payment of any incentive awards under the Plan may not be assigned, transferred,
pledged, or encumbered nor shall such right or other interests be subject to
attachment, garnishment, execution or other legal process.
7.5 No Right to Continued Employment. Nothing in the Plan shall be
construed to confer upon any Participant any right to continue employment with
the Corporation, nor interfere in any way with the right of the Corporation or a
subsidiary to terminate the employment of such Participant at any time without
assigning any reason therefor.
7.6 Termination and Amendment. The Committee may from time to time amend,
suspend or terminate the Plan, in whole or in part, including, but not limited
to, any amendment necessary to ensure that the Corporation may obtain any
required regulatory approvals, and if the Plan is suspended or terminated, the
Committee may reinstate any or all of its provisions. No amendment, suspension
or termination may impair the right of a Participant or his designated
Beneficiary to receive the performance incentive award accrued prior to the
later of the date of adoption or the effective date of such amendment,
suspension or termination.
7.7 Applicable Law. The Plan shall be construed and governed in accordance
with the laws of the state of Missouri.
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<PAGE> 24
BERG ELECTRONICS CORP.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
The Board of Directors recommends a vote FOR proposals 1 and 2.
1. Election of Directors
NOMINEES: CHARLES W. TATE AND TIMOTHY L. CONLON
WITHHOLD WITHHOLD
FOR all AUTHORITY AUTHORITY
nominees to vote for for any individual
all nominees nominee, print name below
[ ] [ ] [ ]
-------------------------
2. Proposal to approve the Berg Electronics Corp. Senior Executive Incentive
Compensation Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING.
[ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF NO SPECIFIC
DIRECTIONS ARE GIVEN, ALL THE VOTES ATTRIBUTABLE TO YOUR VOTING SHARES WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES UNDER PROPOSAL 1 AND FOR THE PROPOSAL
SPECIFIED IN PROPOSAL 2.
PLEASE SIGN DATE AND PROMPTLY RETURN THIS PROXY USING THE ENCLOSED ENVELOPE
EVEN IF YOU PLAN TO ATTEND THE MEETING.
- ------------------------------------------------------------ -----------------
Signature Date
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON
<PAGE> 25
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BERG ELECTRONICS CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BERG ELECTRONICS CORP.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 12, 1997
The undersigned, having received the notice and accompanying Proxy Statement for
said meeting, hereby appoints James N. Mills or David M. Sindelar, and each of
them, with full power of substitution, as the undersigned's proxy and
attorney-in-fact to vote at the Annual Meeting of Stockholders of Berg
Electronics Corp. to be held on May 12, 1997, or at any adjournment thereof, all
shares of Berg Electronics Corp. which the undersigned may be entitled to vote.
THIS PROXY, WHEN PROPERLY EXECUTED AND DATED, WILL BE VOTED IN THE
MANNER SPECIFIED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFIC
DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
UNDER PROPOSAL 1 AND FOR THE PROPOSAL SPECIFIED IN PROPOSAL 2.
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