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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 Rule 14a-11(c) or Rule 14a-12
BELDEN INC.
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(Name of Registrant as Specified in Its Charter)
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(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)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value 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.:
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(3) Filing party:
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(4) Date filed:
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[Belden Logo]
March 26, 1999
Dear Shareholder:
The Board of Directors cordially invites you to attend the 1999 Annual
Meeting of Shareholders of Belden Inc. at the St. Louis Club (16th Floor),
Pierre Laclede Center, 7701 Forsyth Boulevard, St. Louis, Missouri, to be held
on Thursday, May 6, 1999, at 11:00 a.m.
Details of the business to be conducted at the meeting are given in the
attached Notice of Annual Meeting and Proxy Statement.
Whether or not you plan to attend, you can be sure your shares are
represented at the meeting by promptly completing and returning your proxy form
in the enclosed envelope.
Thank you for your continued support.
Sincerely,
/s/C. Baker Cunningham
C. Baker Cunningham
Chairman of the Board, President
and Chief Executive Officer
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BELDEN INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, MAY 6, 1999
To the Shareholders of Belden Inc.:
Belden Inc. will hold its 1999 Annual Meeting of Shareholders in the Lewis
& Clark Room of the St. Louis Club, Pierre Laclede Center, 7701 Forsyth
Boulevard, 16th Floor, St. Louis, Missouri, on Thursday, May 6, 1999, at 11:00
a.m. C.D.T. to vote upon:
- The election of one director for a three-year term;
- Approval of a modification to the number of stock options individual
participants may receive under the Belden Inc. Long-Term Incentive Plan
to an annual limit of 200,000; and
- Other business that may properly come before the meeting.
Shareholders of record at the close of business on March 16, 1999 will be
entitled to vote at the meeting.
How to Vote:
Whether or not you expect to attend, it is important that your shares be
represented and voted at the meeting. To vote, you must mark, sign, date, and
timely return the enclosed proxy form in the postage-paid envelope provided.
Reduce Mailings:
If you are a Shareholder of record and have more than one account in your
name or the same address as other Shareholders of record, you may authorize the
Company to stop mailings of multiple Annual Reports.
By order of the Board of Directors,
/s/Kevin Bloomfield
Kevin Bloomfield
Vice President, Secretary
and General Counsel
St. Louis, Missouri
March 26, 1999
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BELDEN INC.
MARCH 26, 1999
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1999
PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Belden Inc. (the "Company") for the 1999
Annual Meeting of Shareholders. Beginning on March 26, 1999, the Company plans
to begin distributing this Proxy Statement and a proxy form.
A Shareholder who gives a proxy may revoke it at any time before it is
exercised by writing to the Corporate Secretary, by timely delivery of a
properly executed, later-date proxy or by voting by ballot at the Annual
Meeting. By providing your voting instructions promptly, you may save the
Company the expense of a second mailing.
Your voting by proxy will not limit your right to vote at the meeting if
you later decide to attend in person. If your Shares are held in the name of a
bank, broker or other holder of record, you must obtain a proxy, executed in
your favor, from the holder of record, to be able to vote at the meeting.
All shares entitled to vote and represented by properly completed proxies
received prior to the meeting and not revoked will be voted at the meeting in
accordance with your instructions. IF NO INSTRUCTIONS ARE NOTED ON A PROPERLY
COMPLETED PROXY, THE SHARES REPRESENTED BY THAT PROXY WILL BE VOTED AS
RECOMMENDED BY THE BOARD OF DIRECTORS.
If other matters are properly presented at the meeting for consideration,
including, among other things, consideration of a motion to adjourn the meeting
to another time or place, the persons named as proxies and acting thereunder
will have discretion to vote on those matters according to their best judgment
to the same extent as the person delivering the proxy would be entitled to vote.
At the date this Proxy Statement went to press, the Company did not anticipate
that any other matters would be raised at the meeting.
SHAREHOLDERS ENTITLED TO VOTE
Only record holders of the common stock ("Shares"), $.01 par value, of the
Company at the close of business on March 16, 1999 (the "Record Date") will be
entitled to vote at the meeting. At March 1, 1999, 24,355,061 shares of common
stock were outstanding and entitled to vote. Each common share is entitled to
one vote on each matter properly brought before the meeting.
If you are a participant in the Belden Wire & Cable Company Savings Plan or
the Belden Wire & Cable Company Retirement Savings Plan, you will receive a
proxy card for all Shares you own through either plan. The proxy card will serve
as a voting instruction card for the trustee, Bankers Trust Company. If you own
Shares through either plan and do not vote, the trustee will vote the plan
Shares in the same proportion as Shares for which instructions were received
under the plan.
In accordance with Delaware law, a list of Shareholders entitled to vote at
the meeting will be available one hour before the meeting at the Lewis & Clark
Room of the St. Louis Club, Pierre Laclede Center, 7701 Forsyth Blvd., 16th
Floor, St. Louis Missouri, 63105 and for ten days prior to the meeting at the
Company's offices.
REQUIRED VOTE
Vote Required: For approval of each proposal, Delaware law requires the
affirmative vote of holders of a majority of shares of common stock represented
at the meeting. For a proposal to be considered, the presence at the meeting, in
person or by proxy, of the holders of a majority of Shares is necessary to have
a quorum. Votes cast by proxy or in person at the meeting will be tabulated by
ChaseMellon Shareholder Services ("ChaseMellon"), the Company's Transfer Agent
and Inspector of Elections for the meeting.
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Effect of an Abstention and Broker Non-Votes: A Shareholder who withholds
from voting on Proposal I or who abstains from voting on Proposal II will be
included in the number of Shareholders present at the meeting to determine the
presence of a quorum. Abstentions (including votes withheld) will be treated as
votes cast against the proposal because they are deemed Shares present and
entitled to vote at the meeting. The Company is subject to the rules of the New
York Stock Exchange. Those rules permit brokers, who hold stock for the account
of their clients and who have not been given specific voting instructions as to
either proposal, to vote their clients' proxies in their own discretion for
either proposal. Should a matter arise for which brokers do not have such
discretion and have not been given specific voting instructions from their
clients ("broker non-votes"), such broker non-votes will not be considered as
shares entitled to vote on such matter and will not have any effect on the
outcome of the matter because such shares will not be considered in determining
whether a quorum is present for the issue.
COST OF PROXY SOLICITATION
The Company will bear the cost of soliciting proxies. Proxies may be
solicited for the Company by Directors, officers or employees of the Company in
person or by telephone, facsimile or other electronic means. The Company has
engaged ChaseMellon to solicit proxies at a fee of $4,500 plus expenses. In
accordance with the regulations of the Securities and Exchange Commission
("SEC") and the New York Stock Exchange, the Company also will reimburse firms
and other custodians, nominees and fiduciaries for their expenses incurred in
sending the Company's proxies and proxy materials to beneficial owners of
Shares.
ADVANCE NOTICE PROCEDURES
SHAREHOLDER PROPOSALS
The Company must receive at its principal executive offices (Attention:
Secretary), by November 25, 1999, any Shareholder proposal intended to be
presented at the 2000 Annual Meeting to be eligible for inclusion in the
Company's Proxy Statement and the form of proxy for the meeting in accordance
with the applicable rules of the SEC. Under the SEC rules, the Shareholder must
have continuously held at least $2,000 in market value, or 1%, of the Shares
entitled to vote on the proposal at the meeting for at least one year and must
continue to hold those Shares through the date of the meeting.
In addition to the SEC rules, the Company's Bylaws provide that for
business to be properly brought before an annual meeting by a Shareholder, the
Shareholder must have given notice thereof in writing to the Secretary of the
Company either by personal delivery or by United States registered or certified
mail, postage prepaid, not less than 60 nor more than 90 days prior to the date
of the meeting. The notice must include (i) a description of the business
desired to be brought before the meeting, including the complete text of any
resolutions to be presented at the meeting with respect to such business, and
the reasons for conducting such business at the meeting, (ii) the name and
address of record of the Shareholder proposing such business, (iii) the class
and number of shares of capital stock of the Company that are beneficially owned
by the Shareholder and (iv) any material interest of the Shareholder in such
business.
SHAREHOLDER NOMINEES
The Company's Bylaws provide that, subject to certain limitations discussed
below, any Shareholder entitled to vote in the election of directors generally
may nominate one or more persons for election as directors at the meeting. The
Shareholder must provide written notice of his intent to make such nomination or
nominations, either by personal delivery or by United States registered or
certified mail, postage prepaid, to the Secretary of the Company not less than
60 nor more than 90 days prior to a meeting of the Shareholders called for the
election of directors. However, if the Company gives less than 70 days' notice
of the date of the meeting, the Shareholder must provide the required written
notice not later than the close of business on the tenth day following the
earlier of (i) the date the Company provides public notice of the meeting or
(ii) the date the Company sends notice of the meeting to its Shareholders.
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Each notice must include (i) the name and address of the Shareholder who
intends to make the nomination and the person or persons to be nominated, (ii) a
representation that the Shareholder is a holder of record of shares of capital
stock of the Company entitled to vote at the meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice, (iii) a description of all arrangements between the Shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
Shareholder and (iv) such other information regarding each nominee proposed by
such Shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC had the nominee been nominated, or
intended to be nominated, by the Board of Directors, and shall include a consent
signed by each such nominee to serve as a director of the Company if so elected.
SHAREHOLDER COMMUNICATIONS
Highlights of the meeting will be included in the Company's Form 10-Q
filing with the SEC for the quarter ending on June 30, 1999. This filing should
be available by August 14, 1999 on the Internet under the SEC's "EDGAR" filing
system under "Belden Inc." or by contacting the Corporate Secretary at the
Company's offices.
SHAREHOLDER ACCOUNT MAINTENANCE
Shareholders can contact ChaseMellon by calling 1-888-213-0965 (or by
visiting its Internet site at http://www.ChaseMellon.com.) for information
concerning accounts of Shareholders of record, including address changes, name
changes, inquiries as to requirements to transfer Shares and similar issues. For
other Company information, Shareholders can visit Belden's Internet site at
http://www.Belden.com.
MATTERS TO COME BEFORE THE MEETING
Two matters will be considered at the meeting: Election of one director and
approval of a modification to the number of stock options participants may
receive under the Belden Inc. Long-Term Incentive Plan ("Incentive Plan") to an
annual limit of 200,000.
PROPOSAL 1 -- ELECTION OF DIRECTOR
The directors of the Company are divided into three classes, Class I, Class
II and Class III, with each class serving for a term of three years. One class
stands for election at each annual meeting of Shareholders. There are three
Class I directors whose term will expire at the 2000 annual meeting, three Class
II directors whose term will expire at the 2001 annual meeting and one Class III
director whose term will expire at this annual meeting. At this meeting, one
Class III director will be elected for a term expiring at the 2002 annual
meeting. C. Baker Cunningham, the current Class III director, is the Board's
nominee for election at this meeting.
Mr. Cunningham is willing to serve if elected. Should he be unavailable or
unwilling to serve, and if any other person is nominated, the persons designated
on the accompanying form of proxy will have the discretionary authority to vote
or refrain from voting in accordance with their judgment on such other nominee
unless authority to vote on such matter is withheld.
NOMINEE FOR CLASS III DIRECTOR
C. BAKER CUNNINGHAM
Chairman of the Board, President and
Chief Executive Officer
Director since 1993 Age 57 C. BAKER CUNNINGHAM PHOTO
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Received a B.S. degree in civil engineering from Washington University, an M.S.
degree in civil engineering from Georgia Institute of Technology and an M.B.A.
from Harvard Business School. Has been Chairman, President and Chief Executive
Officer of the Company since its incorporation in July 1993. From February 1982
until July 1993, was an Executive Vice President, Operations of Cooper
Industries, Inc. ("Cooper"), a manufacturer of electrical equipment and tools
and hardware.
Director, Cooper Cameron Corporation.
CLASS I DIRECTORS: TERM EXPIRING IN 2000
JOSEPH R. COPPOLA
Chairman -- Compensation Committee
Director since 1993 Age 68 JOSEPH R. COPPOLA PHOTO
Received a B.S. degree in mechanical engineering from the University of
Massachusetts. Had been Chairman and Chief Executive Officer of Giddings &
Lewis, Inc., a manufacturer of machine tools and assembly systems, from July 1,
1993, and a director of the company, from July 1989 until April 1997, when he
retired. From 1985 to 1993, was Senior Vice President, Manufacturing Services of
Cooper.
Director, Coltec Industries Inc.
CHRISTOPHER I. BYRNES
Dean, School of Engineering and Applied Science
Washington University
Member -- Compensation Committee
Director since 1995 Age 49 CHRISTOPHER I. BYRNES PHOTO
Received a B.S. degree in mathematics from Manhattan College and M.S. and Ph.D.
degrees in mathematics from the University of Massachusetts. Has served on the
engineering faculty at Arizona State, Harvard, and the Royal Institute of
Technology in Stockholm. Has held visiting appointments in Austria, France,
Germany, Italy, Japan, the Netherlands, Sweden and the former Soviet Union.
Elected Fellow of the Institute of Electrical and Electronics Engineers and of
the Japan Society for the Promotion of Science. Since 1991, has been Dean of the
School of Engineering and Applied Science of Washington University.
JOHN R. DALLEPEZZE
Chairman of the Board, President and Chief Executive Officer
Holophane Corporation
Member -- Compensation Committee
Director since 1997 Age 55 JOHN R. DALLEPEZZE PHOTO
Received a B.S.E.E. degree from Princeton University and an M.S. degree from the
Massachusetts Institute of Technology. Since October 1989, has been Director,
President and Chief Executive Officer and, since February 1992, Chairman of the
Board of the Holophane Corporation, a manufacturer of lighting fixtures and
systems.
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CLASS II DIRECTORS: TERM EXPIRING IN 2001
ALAN E. RIEDEL
Member -- Audit Committee
Director since 1993 Age 68 ALAN E. RIEDEL PHOTO
Graduated magna cum laude from Ohio University with a B.A. degree in government.
Received a Juris Doctor degree from Case Western Reserve University School of
Law, where he was elected to the Order of the Coif. Has completed Harvard
Business School's Advanced Management Program. Received an Honorary Doctor of
Laws from Ohio University. Since April 1994, has served in the position "Of
Counsel" to Squire, Sanders & Dempsey. Had been Director and Chairman of Gardner
Denver Machinery, Inc., a manufacturer of air compressor products and pumps,
from April 1994 until November 1998, when he retired as Chairman but continues
as director. Had been Vice Chairman of Cooper, from April 1992 until April 1994,
when he retired. From 1973 to 1992, was Senior Vice President, Administration of
Cooper.
Director, Standard Products Company and Factory Mutual Insurance Company.
LORNE D. BAIN
Managing Director
Bellmeade Capital Partners, L.L.C.
Member -- Audit Committee
Director since 1993 Age 57 LORNE D. BAIN PHOTO
Received a B.B.A. degree from St. Edwards University and a Juris Doctor degree
from the University of Texas School of Law and has completed Harvard Business
School's Advanced Management Program. Presently, Managing Director of Bellmeade
Capital Partners, L.L.C., a venture capital firm. From 1991 to 1996, had been
Chairman and Chief Executive Officer of Sanifill, Inc., an environmental
services company.
BERNARD G. RETHORE
Chairman, President and Chief Executive Officer
Flowserve Corporation
Chairman -- Audit Committee
Director since 1997 Age 57 BERNARD G. RETHORE PHOTO
Received a B.A. degree in economics (Honors) from Yale University and an M.B.A.
degree from the Wharton School of the University of Pennsylvania. Since 1995,
had been Director, President and Chief Executive Officer of BW/IP, Inc., a
supplier of advanced-technology fluid transfer and control equipment, systems
and services and was elected its Chairman in February 1997. In July 1997, became
Chairman and Chief Executive Officer of Flowserve Corporation ("Flowserve") and
added the additional title of President, in October 1998. Flowserve, formed by
the merger of BW/IP Inc. and Durco International, Inc., produces highly
engineered pumps, precision seals, valves and valve actuators, and flow
management services. From
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1985 to 1995, was Senior Vice President of Phelps Dodge Corporation and
President of Phelps Dodge Industries. Phelps Dodge produces copper.
Director, Maytag Corporation.
VOTE REQUIRED AND BOARD RECOMMENDATION
To be elected, the nominee must receive the affirmative vote of a majority
of the Shares represented at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEE
TO THE BOARD OF DIRECTORS.
PROPOSAL II -- APPROVAL OF A MODIFICATION TO THE NUMBER OF STOCK OPTIONS
PARTICIPANTS MAY RECEIVE UNDER THE BELDEN INC. LONG-TERM INCENTIVE PLAN TO AN
ANNUAL LIMIT OF 200,000.
OVERVIEW
Under Section 162(m) of the Internal Revenue Code, as amended, the
Company's tax deduction for certain compensation paid to designated executives
is limited to $1 million per year ("Limit"). These executives include the Chief
Executive Officer and the next four highest compensated officers of the Company.
The Limit applies to compensation relating to stock option exercises and, under
certain conditions, to the sale of shares received in connection with the
exercise of stock options.
Section 162(m) provides an exception from the Limit for certain
"performance-based" compensation. Performance-based compensation in general must
satisfy certain conditions, those being: (i) the compensation must be paid
solely because the executive has attained one or more performance goals; (ii) a
compensation committee (consisting solely of two or more "outside directors")
must set the performance goals before commencement of the executive's service;
(iii) before the compensation is paid, shareholders must approve the terms under
which the compensation is paid, including the performance goals; and (iv) before
the compensation is paid, the compensation committee must certify that the
performance goals were met.
However, stock options will satisfy the requirements for
"performance-based" awards if (i) they are granted by a compensation committee
consisting of outside directors, (ii) they are granted under a plan which states
the maximum number of shares that may be granted during a specified period to
any employee, and which plan received shareholder approval following a
submission to shareholders, and (iii) the options were issued at a price no
lower than the fair market value of the shares on the grant date of the option.
The Belden Inc. Long-Term Incentive Plan ("Incentive Plan") is generally
designed to satisfy the requirements of Section 162(m) for stock options issued
by the Compensation Committee. The Incentive Plan does this, in part, by
requiring the Compensation Committee (composed of outside directors) to grant
options at no less than the fair market value on the grant date and by imposing
a 100,000 limit on individual grants every two years. To give greater
flexibility to the Compensation Committee in making stock option awards under
the Incentive Plan, the Board of Directors changed this amount to an annual
limit of 200,000.
In February 1998 and January 1999, the Compensation Committee awarded the
Chief Executive Officer 120,000 stock options, on each such date, at the fair
market value on the grant dates. The options vest over a three-year period: a
third after the first anniversary, another third after the second anniversary,
and the remaining third after the third anniversary. They will expire ten years
after the grant date. None of the options has been exercised.
Shareholder approval of this proposal should permit the exercise of such
options to qualify as "performance-based" compensation under Section 162(m) and,
consequently, should permit the Company to deduct any income arising from the
exercise of the options (or, under certain circumstances, the subsequent sale of
Shares issued in connection with the options) as an ordinary business expense
and not be subject to the Limit. The proposed change to limit individual awards
to an annual amount of 200,000 would apply to the February 1998 and January 1999
option grants, and to future grants made under the Incentive Plan.
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SUMMARY OF INCENTIVE PLAN
The Incentive Plan is intended to promote the long-term financial interests
of the Company, including its growth and performance, by encouraging employees
of the Company and its subsidiaries to acquire an ownership position in the
Company, enhancing the ability of the Company to attract and retain employees of
outstanding ability, and providing employees with an interest in the Company
parallel to that of the Company's shareholders. The Compensation Committee
administers the Incentive Plan.
Eligibility and Participation. All employees of the Company and its
subsidiaries who have demonstrated significant management potential or who have
the capacity for contributing in a substantial measure to the successful
performance of the Company, as determined by the Compensation Committee, are
eligible to be participants in the Incentive Plan. Presently, 126 employees
participate.
Shares Subject to Awards. As amended in 1997, the Incentive Plan reserved
2,600,000 Shares (subject to adjustment for changes in capitalization) for the
granting of stock options, stock appreciation rights, restricted stock awards,
and performance shares. Such awards may be treasury Shares or authorized but
unissued Shares. Presently, more than 340,000 Shares are reserved under the
Plan.
If any outstanding options expire or terminate, the shares of common stock
allocable to the unexercised portion of such option may again be subject to
award under the Incentive Plan, subject to certain exceptions. The Compensation
Committee has the discretion to grant either "incentive stock options" (within
the meaning of Section 422 of the Code ("ISO's")) or "non-statutory stock
options" ("NSO's"). The aggregate fair market value (determined as of the date
the option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time by the participant in any calendar
year may not exceed $100,000. A description of these two types of stock options
appear below under the heading "Federal Income Tax Consequences."
Grant and Exercise of Options. Each option granted under the Incentive
Plan is embodied in a written option agreement, which is subject to the terms
and conditions of the Incentive Plan and which contain other provisions as the
Compensation Committee in its discretion deems advisable.
The price at which Shares may be purchased pursuant to an option, whether
an ISO or an NSO, is determined by the Compensation Committee, but in no event
may such price be less than the fair market value of the Shares on the date the
option is granted. As of March 4, 1999, the high and low sale prices of the
Shares were $17.75 and $17.375 per share, respectively.
No option is exercisable ten years after the date of grant. The
Compensation Committee in its discretion may provide that an option will be
exercisable throughout a ten-year period or during any shorter period of time
commencing on or after the date of grant of the option and ending on or before
the expiration of a ten-year period. The Compensation Committee may, in its
discretion, provide for vesting or other conditions on exercise of options
granted under the Incentive Plan.
Upon exercise, a participant in the Incentive Plan may pay the option
exercise price of a stock option in cash, Shares, stock appreciation rights or a
combination of the foregoing, or such other consideration as the Committee may
deem appropriate.
Rights of Participants. No participant has rights as a shareholder with
respect to the shares covered by his option until the date of issuance of a
stock certificate for the shares. The granting of any option by the Company does
not impose any obligation on the Company to employ or continue to employ any
participant.
Stock Appreciation Rights. Under the Incentive Plan, the Compensation
Committee also may grant stock appreciation rights either in tandem with an
option or alone. Stock appreciation rights granted in tandem with a stock option
may be granted at the same time as the stock option or at a later time. A stock
appreciation right issued in tandem with stock options shall entitle the
participant to receive from the Company an amount payable in cash, in Shares or
a combination of cash and Shares equal to the positive difference between the
fair market value on the date of exercise of a Share and the grant price. The
grant of a freestanding stock appreciation right may be at such price as
determined by the Committee; provided that such price may not be less than the
fair market value of the Shares on the date of grant. No stock appreciation
right shall be
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exercisable earlier than six months after grant. The Compensation Committee has
not granted any stock appreciation rights.
Restricted Stock Awards. Under the Incentive Plan, the Compensation
Committee may grant shares of restricted stock, which are subject to forfeiture
to the Company under such conditions and for such period of time (not less than
one year) as the Compensation Committee may determine. The Compensation
Committee shall determine the conditions or restrictions of any restricted stock
awards, which may include restrictions on transferability, requirements of
continued employment, individual performance or the Company's financial
performance. The Compensation Committee has not granted any restricted stock
awards.
Performance Shares. Under the Incentive Plan, the Compensation Committee
may grant performance shares that are earned only after the attainment of
predetermined performance targets during a performance period as established by
the Compensation Committee. Performance shares are convertible into Common
Stock, cash or a combination of both as determined by the Compensation
Committee. At the end of the performance cycle, the Compensation Committee shall
determine the number of performance shares that have been earned on the basis of
the Company's performance in relation to the performance goals. Performance
shares may not be sold, transferred, assigned, pledged or otherwise encumbered
so long as such performance shares remain restricted. The Compensation Committee
has not granted any performance shares.
Stock Options for Nonemployee Directors. Under the Incentive Plan, each
nonemployee director is automatically granted, on the day following each annual
meeting of shareholders, an option to purchase 1,000 Shares. The option exercise
price is 100% of the fair market value (as defined in the Incentive Plan) of the
Shares on the date of the option grant. The options become exercisable on the
first anniversary of the date of the grant and expire five years after the date
of grant. The option price may be paid in cash, Shares or a combination of cash
and shares. All options granted to nonemployee directors are nontransferable,
other than by will or the laws of descent and distribution, and each option is
exercisable, during the lifetime of the optionee, only by the optionee. If a
person ceases to be a nonemployee director due to death, disability or
retirement, his or her options generally will be exercisable for a period of one
year (but not later than the expiration date of the option). If a nonemployee
director's service terminates for any other reason, options that are not then
exercisable shall be canceled and options that are exercisable may be exercised
at any time within 90 days after the date of such termination (but not later
than the expiration date of the options). The portion of the Incentive Plan
applicable to nonemployee directors operates automatically and does not require
administration.
Effect of Change of Control. The Incentive Plan provides for the
acceleration of certain benefits in the event of a "Change of Control" of the
Company. A Change of Control will be deemed to have occurred if either (i) any
person or group acquires beneficial ownership of 25% of the voting securities of
the Company, (ii) there is a change in the composition of a majority of the
Board of Directors within any two-year period; or (iii) a change in control (as
such term is used in Schedule 14A promulgated under the Securities Exchange Act
of 1934) otherwise occurs.
Upon the occurrence of a Change of Control, each nonemployee director
option with respect to which six months has elapsed since the date of grant,
whether the option is then exercisable or not, will be cancelled in
consideration for a payment equal to the excess of the fair market value of the
Shares (as calculated in accordance with the Incentive Plan) over the option
exercise price. A holder of any other options granted under the Incentive Plan
which are not then exercisable in full at the time of a Change of Control will
be entitled, with respect to the portion not then exercisable, to receive a cash
payment equal to the excess of the then fair market value of the Shares (as
calculated in accordance with the Incentive Plan) over the option exercise
price. In addition, upon a Change of Control (as defined in the Incentive Plan),
all stock appreciation rights which have not been granted in tandem with options
and which have been outstanding for at least six months will become exercisable
in full, restrictions on restricted stock shall lapse and all performance shares
shall be deemed to be earned in full.
Changes in the Company's Capital Structure. In the event of any change in
the outstanding Shares by reason of a reorganization, recapitalization, stock
split, stock dividend, combination or exchange of Shares, merger, consolidation
or any change in the corporate structure or Shares of the Company, the maximum
9
<PAGE> 12
aggregate number and class of Shares as to which stock options, stock
appreciation rights, restricted stock awards, and performance shares may be
granted under the Incentive Plan and the Shares issuable pursuant to outstanding
stock options, stock appreciation rights, restricted stock awards, and
performance shares shall be appropriately adjusted by the Compensation
Committee, whose determination shall be final.
Amendment of the Incentive Plan. The Board of Directors may amend, suspend
or terminate the Incentive Plan at any time and from time to time, subject to
certain conditions.
Duration of the Incentive Plan; Registration of Shares. The Incentive Plan
became effective on October 6, 1993 and no awards may be granted under the Plan
after October 6, 2003.
Federal Income Tax Consequences -- Incentive Stock Options. The grant of
incentive stock options to an employee does not result in any income tax
consequences. The exercise of an incentive stock option does not result in any
income tax consequences to the employee if the incentive stock option is
exercised by the employee during his employment with the Company or a
subsidiary, or within a specified period after termination of employment due to
death or retirement for age or disability under then established rules of the
Company. However, the excess of the fair market value of the shares of stock as
of the date of exercise over the option price is a tax preference item for
purposes of determining an employee's alternative minimum tax. An employee who
sells shares acquired pursuant to the exercise of an incentive stock option
after the expiration of (i) two years from the date of grant of the incentive
stock option, and (ii) one year after the transfer of the shares to him (the
"Waiting Period") will generally recognize long term capital gain or loss on the
sale.
An employee who disposes of his incentive stock option shares prior to the
expiration of the Waiting Period (an "Early Disposition") generally will
recognize ordinary income in the year of sale in an amount equal to the excess,
if any, of (i) the lesser of (a) the fair market value of the shares as of the
date of exercise or (b) the amount realized on the sale, over (ii) the option
price. Any additional amount realized on an Early Disposition should be treated
as capital gain to the employee, short or long term, depending on the employee's
holding period for the shares. If the shares are sold for less than the option
price, the employee will not recognize any ordinary income but will recognize a
capital loss, short or long term, depending on the holding period.
The Company will not be entitled to a deduction as a result of the grant of
an incentive stock option, the exercise of an incentive stock option, or the
sale of incentive stock option shares after the Waiting Period. If an employee
disposes of his incentive stock option shares in an Early Disposition, the
Company will be entitled to deduct the amount of ordinary income recognized by
the employee.
Federal Income Tax Consequences -- Non-Statutory Stock Options. The grant
of NSO's under the Incentive Plan will not result in the recognition of any
taxable income by the participants. A participant will recognize income on the
date of exercise of the non-qualified stock option equal to the difference
between (i) the fair market value on that date of the shares acquired, and (ii)
the exercise price. The tax basis of these shares for purposes of a subsequent
sale includes the option price paid and the ordinary income reported on exercise
of the option. The income reportable on exercise of the option by an employee is
subject to federal and state income and employment tax withholding.
Generally, the Company will be entitled to a deduction in the amount
reportable as income by the participant on the exercise of a non-qualified stock
option.
Federal Income Tax Consequences -- Stock Appreciation Rights and
Performance Shares. Stock Appreciation Rights and Performance Share awards
involve the issuance of Shares or the payment of cash, without other payment by
the recipient, as additional compensation for services to the Company. The
recipient will recognize taxable income equal to cash received or the fair
market value of the Shares on the date of the award, which becomes the tax basis
in a subsequent sale. Generally, the Company will be entitled to a corresponding
deduction in an amount equal to the income recognized by the recipient.
Federal Income Tax Consequences -- Restricted Stock Grants. Restricted
stock granted under the Incentive Plan ("Restricted Stock Grants") generally
will not be taxed to the recipient, nor deductible by the
10
<PAGE> 13
Company, at the time of grant. Restricted Stock Grants involve the issuance of
Shares to a participant subject to specified restrictions as to sale or
transferability of the Shares and are subject to a substantial risk of
forfeiture. On the date the restrictions lapse, and the Shares becomes
transferable or not subject to a substantial risk of forfeiture, whichever is
applicable, the recipient recognizes ordinary income equal to the excess of the
fair market value of the Shares on that date over the purchase price paid for
the stock, if any. The participant's tax basis for the Shares includes the
amount paid for the Shares, if any, and the ordinary income recognized.
Generally, the Company will be entitled to a corresponding deduction in an
amount equal to the income recognized by the recipient.
VOTE REQUIRED AND BOARD RECOMMENDATION.
The affirmative vote of holders of a majority of Shares represented at the
meeting is required to approve this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following information lists beneficial ownership of common stock at
March 1, 1999 of (i) each director or nominee; (ii) each executive officer named
in the Summary Compensation Table; and (iii) directors and executive officers as
a group. Except as otherwise noted, each person has sole voting and investment
power as to his Shares. The percentage of outstanding common stock, including
options exercisable within 60 days of March 1, 1999, beneficially owned by
directors and executive officers as a group is 1.7%. The percentage beneficially
owned by any director or nominee individually does not exceed 1%.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(A) (B)
-------------------
<S> <C>
C. Baker Cunningham 209,488
Chairman of the Board, President, Chief Executive Officer
and Director
Richard K. Reece 55,442(c)
Vice President, Finance, Treasurer and Chief Financial
Officer
Peter J. Wickman 53,571
Vice President, Operations
Kevin L. Bloomfield 32,666
Vice President, Secretary and General Counsel
Cathy O. Staples 19,543
Vice President, Human Resources
Lorne D. Bain 5,600
Director
Joseph R. Coppola 5,100
Director
Alan E. Riedel 20,506(d)
Director
Christopher I. Byrnes 3,100
Director
Bernard G. Rethore 6,400(e)
Director
John R. DallePezze 5,400
Director
All Directors and Executive Officers as a Group 416,816
</TABLE>
(a) Includes the following shares covered by stock options which are currently
exercisable or exercisable within 60 days of March 1, 1999: Mr. Cunningham,
105,000 shares; Mr. Reece, 31,666 shares; Mr. Wickman, 31,666 shares; Mr.
Bloomfield, 16,666 shares; Ms. Staples, 10,333 shares;
11
<PAGE> 14
Messrs. Coppola and Bain, 4,000 shares each; Dr. Byrnes 2000 shares; and
Messrs. Riedel, Rethore and DallePezze, 1,000 shares each.
(b) Includes shares held in the Company's savings plan.
(c) Includes 23,776 shares owned jointly by Mr. Reece and his wife.
(d) Includes 1,500 shares held in an Individual Retirement Account.
(e) Includes 5,200 shares held in trust.
The following table shows certain information regarding those Shareholders
known to the Company to beneficially own more than 5% of the outstanding Shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------- ----------------- --------
<S> <C> <C>
Lazard Freres & Co. LLC 1,622,724(a) 6.6%
30 Rockefeller Plaza
New York, NY 10020
First Pacific Advisors, Inc. 1,521,500(b) 6.2%
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
Strong Capital Management, Inc. 1,239,150(c) 5.1%
One Hundred Heritage Reserve
P.O. Box 2936
Milwaukee, WI 53201
</TABLE>
(a) Information based on a Schedule 13G filed with the SEC by Lazard Freres &
Co. LLC ("Lazard"). Lazard has sole voting power over 1,335,790 Shares,
sole dispositive power over 1,622,724, and no shared voting or shared
dispositive power.
(b) Information based on a Schedule 13G filed with the SEC by First Pacific
Advisors, Inc. ("First Pacific"). First Pacific has shared voting power
over 43,000 Shares, shared dispositive power over 1,521,500 and no sole
voting or sole dispositive power.
(c) Information based on a Schedule 13G filed with the SEC by Strong Capital
Management, Inc. ("Strong"). Strong has sole voting power over 981,225
Shares, sole dispositive power over 1,239,150 and no shared voting or
shared dispositive power.
In addition, at December 31, 1998, Bankers Trust Company, as Trustee of the
Belden Wire & Cable Company Savings Plan and the Belden Wire & Cable Retirement
Savings Plan ("Savings Plans"), held of record 539,603 Shares, 2.2% of common
stock. The Savings Plans permit plan participants to direct the plans' Trustee
to vote the Shares allocated to their accounts. Under the terms of the plans,
the Trustee will vote unallocated and uninstructed Shares in proportion to the
Shares to which instructions have been received.
BOARD MEETINGS AND COMMITTEES
During 1998, the Board of Directors had four regular meetings and one
special meeting. All directors attended 75% or more of the meetings of the Board
and of the Board committees on which they served. The Company has two committees
of the Board of Directors: an Audit Committee and a Compensation Committee. It
does not have a nominating committee.
AUDIT COMMITTEE
Members: Mr. Rethore, Chairman, Mr. Riedel and Mr. Bain.
The Committee met four times in 1998. The Audit Committee's objective is to
assist the Board in fulfilling its responsibilities to Shareholders, potential
Shareholders and the investment community regarding
12
<PAGE> 15
corporate accounting, reporting practices of the Company, and the quality and
integrity of the financial reports of the Company. In fulfilling these
responsibilities, the Committee will, among other things, meet with the
Company's financial management and independent auditors to review and recommend
to the Board the independent auditors to be selected to audit the financial
statements of the Company; review the scope, procedures and results of Company
audits; review the adequacy and effectiveness of the accounting and financial
controls of the Company; review the Company's financial statements, quarterly
earnings releases and selected financial data; and evaluate the Company's key
financial and accounting personnel.
COMPENSATION COMMITTEE
Members: Mr. Coppola, Chairman, Dr. Byrnes, and Mr. DallePezze.
The Committee met two times in 1998. The Compensation Committee's objective
is to assist the Board of Directors in developing compensation and benefit
strategies to attract, develop and retain qualified employees to operate the
Company. In carrying out this responsibility, the Committee will review
periodically the Company's compensation and benefit strategies, the elements of
total compensation for the Chief Executive Officer and his direct reports, the
salary and wage guidelines for employees, participation and awards in the
Company's annual and long-term incentive plans, and the competitiveness and
effectiveness of the Company's compensation programs.
COMPENSATION OF DIRECTORS
The Company's non-employee directors each receive an annual retainer of
$20,000 and $1,000 per meeting for special board meetings or committee meetings
not held in conjunction with a regular board meeting. All non-employee directors
are reimbursed for expenses incurred in connection with attending board and
committee meetings. Mr. Cunningham does not receive any compensation for serving
as a member of the Board.
Also, under the Non-Employee Director Stock Plan, Messrs. Bain, Riedel,
Rethore, Coppola, Byrnes, and DallePezze each automatically receive on the day
following each annual meeting of Shareholders 200 treasury Shares.
In addition, under the Incentive Plan, each non-employee director is
automatically granted, on the day following each annual meeting of Shareholders,
an option to purchase 1,000 Shares. The option exercise price is equal to 100%
of the fair market value (as defined in the Incentive Plan) of Shares on the
date of the option grant. The options become exercisable on the first
anniversary of the date of grant and expire five years after the date of grant.
The option price may be paid in cash, Shares, or a combination of cash and
Shares.
Following the Company's 1998 annual meeting, pursuant to the Incentive
Plan, Messrs. Bain, Riedel, Coppola, Rethore, DallePezze and Byrnes each
received an option to purchase 1,000 Shares at a price of $41.40 per share. The
options will become exercisable on May 8, 1999 and will expire on May 8, 2003.
All options granted to non-employee directors are nontransferable, other
than by will or the laws of descent and distribution, and each option is
exercisable, during the lifetime of the optionee, only by the optionee. If a
person ceases to be a non-employee director due to death, disability or
retirement, his or her options generally will be exercisable for a period of one
year (but not later than the expiration date of the option). If a non-employee
director's service terminates for any other reason, options that are not then
exercisable shall be cancelled and options that are exercisable may be exercised
at any time within 90 days after the date of such termination (but not later
than the expiration date of the options). The portion of the Incentive Plan
applicable to non-employee directors is designed to operate automatically and
not require administration.
13
<PAGE> 16
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee, comprised of non-employee directors of the
Company, is responsible for establishing the Company's compensation philosophy
and making all decisions regarding compensation for the Chief Executive Officer
and other named executive officers, including determining base salary and bonus
amounts, approving target financial performance levels, and granting stock
options and other long-term incentives. The Committee also reviews guidelines
for compensation, bonus, and stock option grants for other employees.
EXECUTIVE COMPENSATION OBJECTIVES
The Company's executive compensation plans are designed to attract and
retain key management employees and to motivate these employees to take actions
that enhance Shareholder value and attain Company goals. The officers of the
Company are paid salaries in line with their responsibilities. The Company's
philosophy is to target total direct compensation at the 50th percentile of
other comparably sized companies. An outside consultant is hired to evaluate the
level of competitiveness of the executive compensation programs relative to
other companies within the electronics and communication equipment industry.
Companies selected for comparison purposes were those with whom the Company
competes for executive talent. Because this group may differ from the Company's
product competitors, this comparison group has not been selected to reflect the
companies shown on the proxy performance graph.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
In 1998, the total compensation package for the Company's top executives
consisted of the following elements:
- - Base salary
- - Annual bonus
- - Stock options
The Company's incentive programs are key elements of the total compensation
package, designed to reward executives for short- and long-term enhancements to
the value received by Shareholders.
BASE SALARIES
Base salaries are reviewed each year and adjusted based on Company
performance, individual performance, and the executive's level of
responsibility. During 1998, salaries paid to the named executive officers
increased 6.3% over those paid in 1997.
ANNUAL INCENTIVES
The annual incentive program provides executives with the opportunity to
earn bonuses when warranted by Company and individual performance. Awards are
based on individual achievements, operational performance, and Company progress
towards long-term goals. Goals are established by the Committee at the beginning
of the fiscal year. The Company's overall financial performance determines the
size of the bonus pool to be distributed to the executives participating in the
program.
The Company had a challenging year in 1998. Revenues and earnings were down
from those of the previous year, caused, in part, by weaker demand in many of
the Company's geographic markets and by competitive conditions in several of the
Company's product lines. The Company has taken various steps to respond to these
conditions, including restructuring and cost-saving initiatives. The Company
also has completed two acquisitions in 1998 to improve its competitive position:
Olex Communication Cable in Australia and ABB Elektro-Isolierwerke (EIW) in
Germany. The acquisition of Olex is designed to strengthen the Company's
position in Asia/Pacific by providing a manufacturing base to better serve that
part
14
<PAGE> 17
of the world. The acquisition of EIW is designed to enhance the Company's
presence in Europe and expand its industrial product offerings. To reflect
1998's performance, bonuses awarded to the named executives for 1998 were 55%
less than those paid in 1997.
LONG-TERM INCENTIVES
The Company also uses stock options to strengthen the relationship between
top management and Shareholders. These stock options provide the opportunity for
the executives to share in any gains created for Shareholders and act as a tool
for retaining key executives. The policy of the Compensation Committee is to
grant stock options to members of the management group to encourage ownership of
the Company's stock and to more closely align the executive's interest with the
interest of other Shareholders. Pursuant to this policy, options were granted to
officers in 1998.
CEO COMPENSATION
In keeping with the Company's philosophy of emphasizing the incentive
elements of the total compensation package, Mr. Cunningham's base salary was
increased in 1998 by 6.4% to $500,000. Mr. Cunningham participates in the same
incentive plans as the other named executive officers. For 1998, he earned a
bonus of $105,000 or 21% of salary, which reflects the challenging year the
Company had, the steps the Company initiated to deal with the challenges, and
the successful acquisitions of Olex Cable and EIW. Consistent with the
Committee's general policy to grant stock options, Mr. Cunningham was awarded
stock options in 1998.
The Company also maintains certain benefit programs in which the named
executive officers participate. The compensation attributed to these executive
officers for 1998 from these programs is detailed in this proxy statement. Mr.
Cunningham's participation in these programs reflects what the Committee
believes is the participation that other executives at his level in similarly
sized organizations would expect.
Section 162(m) of the Internal Revenue Code imposes a limitation on the
deductibility of nonperformance-based compensation in excess of $1 million paid
to the executive officers. Although the Committee considers this provision when
reviewing executive compensation, the Committee uses sound business judgment to
determine whether specific compensation programs are appropriate, even if
certain elements may not meet the performance criteria under the tax code
provision.
Joseph R. Coppola, Chairman
Christopher I.Byrnes
John R. DallePezze
15
<PAGE> 18
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES ALL
----------------------------- UNDERLYING OTHER
SALARY(1) BONUS(2) OPTIONS(3) COMPENSATION(4)
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
--------------------------- ---- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
C. Baker Cunningham 1998 495,000 105,000 120,000 26,134
Chairman of the Board, President, 1997 467,833 240,000 26,150
and Chief Executive Officer 1996 440,833 270,000 65,000 22,839
Richard K. Reece 1998 242,500 40,000 30,000 7,762
Vice President, Finance, Treasurer 1997 231,750 90,000 10,000 7,803
and Chief Financial Officer 1996 222,000 100,000 15,000 6,840
Peter J. Wickman 1998 242,500 40,000 30,000 7,762
Vice President, Operations 1997 220,000 90,000 10,000 7,275
1996 197,500 100,000 15,000 5,737
Kevin L. Bloomfield 1998 187,500 32,000 20,000 4,477
Vice President, Secretary 1997 179,000 72,000 4,529
and General Counsel 1996 169,666 80,000 10,000 3,810
Cathy O. Staples 1998 153,333 25,000 16,000 1,949
Vice President, 1997 141,167 50,000 802
Human Resources 1996 115,767 35,000 5,000 0
</TABLE>
(1) Salaries are annualized. The aggregate amount of perquisites and other
personal benefits for any named executive does not exceed $50,000 or 10% of
the total annual salary and bonus for any such named executive and,
therefore, such items have been excluded.
(2) Determined by the Compensation Committee at its first meeting held after the
end of the fiscal year in which the compensation was earned.
(3) Options granted under the Incentive Plan. The exercise of one-third of the
Shares is permitted on the first, second, and third anniversaries of the
grant dates. The exercise price for the 1996 options was $30.75 per share;
the exercise price for the 1997 options was $35.18; and the exercise price
for the 1998 options was $39.53. In each instance, the exercise price
equaled the fair market value (as defined in the Incentive Plan) on the
grant date.
(4) Amounts reflected consist of Company allocations under the Company's
non-qualified (excess) savings plan.
16
<PAGE> 19
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUES AT ASSUMED
TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM(1)
OPTIONS IN FISCAL EXERCISE EXPIRATION ----------------------
GRANTED(#)(2) YEAR PRICE($/SH)(3) DATE 5%($) 10%($)
------------- ---------- -------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
C. Baker Cunningham 120,000 9.3% 39.53 2/20/08 2,983,323 7,560,325
Richard K. Reece 30,000 2.3% 39.53 2/20/08 745,831 1,890,081
Peter J. Wickman 30,000 2.3% 39.53 2/20/08 745,831 1,890,081
Kevin L. Bloomfield 20,000 1.6% 39.53 2/20/08 497,220 1,260,054
Cathy O. Staples 16,000 1.2% 39.53 2/20/08 397,776 1,008,043
</TABLE>
(1) The Company elected to use "Potential Realizable Values at Assumed Annual
Rates of Stock Price Appreciation for Option Term". The dollar amounts under
these columns are the result of calculations at the 5% and 10% rates set by
the SEC and therefore are not intended to forecast possible future
appreciation, if any, of the stock price of the Company.
(2) Grants of stock options in 1998 awarded under the Incentive Plan. Exercises
of one-third of the Shares are permitted on the first, second, and third
anniversaries of the grant date.
(3) The purchase price of Shares subject to an option is the fair market value
of the Shares on the date of grant as defined in the Incentive Plan.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES VALUE DECEMBER 31, 1998(#) DECEMBER 31, 1998($)
ACQUIRED ON REALIZED(1) EXERCISABLE/ EXERCISABLE/
EXERCISE(#) ($) UNEXERCISABLE(2) UNEXERCISABLE(3)
----------- ----------- ---------------------- --------------------
<S> <C> <C> <C> <C>
C. Baker Cunningham 18,000 321,750 113,333/141,667 201,425/0
Richard K. Reece 7,500 134,063 28,333/41,667 43,163/0
Peter J. Wickman 9,000 242,157 28,333/41,667 43,163/0
Kevin L. Bloomfield 3,500 547 14,666/23,334 23,020/0
Cathy O. Staples 0 0 4,833/17,667 4,316/0
</TABLE>
(1) Represents the difference between the option price ($14.875) and the fair
market value of the stock on the exercise date.
(2) Each of the executive officers has received four option grants under the
Incentive Plan through 1998: on October 6, 1993, at an exercise price of
$14.875 per share; on February 28, 1994, at an exercise price of $18.31 per
share; on February 28, 1996, at an exercise price of $30.75 per share; and
on February 20, 1998, at an exercise price of $39.53 per share. Messrs.
Reece and Wickman each received an additional option grant to purchase
10,000 Shares on February 26, 1997, at an option price of $35.1875. For each
grant, the exercise price was the fair market value of the common stock (as
defined in the Incentive Plan) on the date of grant. Options become
exercisable as to one-third of such options on each of the first three
anniversaries of the date of grant and will expire five years after the date
of grant for the 1993 and 1994 grants and ten years after the date of grant
for the 1996 and 1998 grants. The named officers also received an additional
stock option award on January 5, 1999 at an exercise price of $20.0625 (the
fair market value on the grant date): Mr. Cunningham, 120,000 shares; Mr.
Reece, 30,000 shares; Mr. Wickman, 30,000 shares; Mr. Bloomfield, 25,000
shares; and Ms. Staples, 20,000 shares.
(3) "Value" represents the difference between the closing price of the common
stock on the New York Stock Exchange on December 31, 1998 ($21.18), and the
exercise price of such options.
17
<PAGE> 20
CERTAIN CHANGE IN CONTROL ARRANGEMENTS
The Company maintains a "grantor trust" under Section 671 of the Code to
provide certain participants in designated compensation and supplemental
retirement plans with greater assurance that the benefits and payments to which
those participants are entitled under those plans will be paid. Prior to a
"change of control" of the Company (as defined in the Trust agreement), the
Company has the discretion to make contributions to the Trust. After a change in
control of the Company, the Company must transfer to the Trust the amount of the
benefits participants have earned through the date of the change in control and
thereafter continue to fund the Trust as benefits accrue. At December 31, 1998,
the balance in the Trust totalled $543. The assets of the Trust are subject to
claims of the creditors of the Company in the event the Company becomes
"insolvent" as defined in the Trust agreement.
The Company has severance compensation agreements with the executives named
in the Summary Compensation Table that become operative if they are terminated
following a change in control (as defined in the agreement). In the event of a
change in control of the Company, the officer agrees to remain in the employ of
the Company for at least three years. Each agreement contemplates that upon a
change in control, the officer will continue to receive substantially the same
compensation and benefits from the Company (or its successor) that he received
before the change. If during the three-year period following a change in
control, the officer's employment is terminated by the Company (or its
successor) other than for "cause" or "disability" or if the officer terminates
the agreement for "good reason" (as defined in the agreement), the officer
generally will be entitled to a payment of 2 times (2.99 times for Mr.
Cunningham) his annual compensation from the Company, and also be entitled to
accrued benefits through the date of termination, and continued life, medical
and dental benefits for two years.
The Incentive Plan provides for the acceleration of certain benefits in the
event of a change of control (as defined in the plan) of the Company. Upon the
occurrence of a change of control, each non-employee director option with
respect to which six months have elapsed since the date of grant, whether the
option is then exercisable or not, will be cancelled in consideration for a
payment equal to the excess of the then fair market value of the common stock
(as calculated in accordance with the Incentive Plan) over the option exercise
price. Except as may be provided in the agreement relating to the options, a
holder of any other options granted under the Incentive Plan which are not then
exercisable in full at the time of a change of control will be entitled, with
respect to the portion not then exercisable, to receive a cash payment equal to
the excess of the then fair market value of the common stock (as calculated in
accordance with the Incentive Plan) over the option exercise price. In addition,
upon a change of control, all stock appreciation rights which have not been
granted in tandem with options and which have been outstanding for at least six
months will become exerciseable in full, restrictions on restricted stock shall
lapse and all performance Shares shall be deemed to be earned in full.
PENSION PLANS
The executives named in the Summary Compensation Table may upon retirement
be entitled to benefits from the Belden Wire & Cable Company Pension Plan (the
"Pension Plan") and the Supplemental Excess Defined Benefit Plan of Belden Wire
& Cable Company (the "Supplemental Plan"). Benefits under the plans upon
retirement are determined based upon compensation during the employment period
and years of service.
Pursuant to the Pension Plan, the Company credits to each individual's
account thereunder 4% of each year's total compensation up to the Social
Security wage base for the year, plus 8% of each year's total compensation that
exceeds the Social Security wage base. For this purpose, total compensation is
cash remuneration paid by the Company to or for the benefit of a participant in
the Pension Plan for services rendered while an employee.
For the executives named in the Summary Compensation Table, the total
compensation will be computed as shown in the columns "Salary" and "Bonus" of
the Summary Compensation Table. Employees who were formerly employees of Cooper
Industries were credited for service while employed by Cooper. Benefits for
service through August 1, 1993 were determined under the Cooper Salaried
Employees'
18
<PAGE> 21
Retirement Plan then in effect and converted to initial balances under the
Pension Plan. Funds equal to the actuarial value of the accrued liabilities for
all participants plus a pro rata portion of the Cooper plan excess assets have
been transferred from the Cooper pension trust to a trust established by Belden
for the Pension Plan.
Employees do not make any contributions to the Pension Plan. Benefits at
retirement are payable, as the participant elects, in the form of an escalating
annuity, a level annuity with or without survivorship, or a lump-sum payment.
The Company contributes to a trust fund sufficient to meet the minimum
requirements under the Code to maintain the status of the Pension Plan as a
qualified defined benefit plan.
The Supplemental Plan is an unfunded, nonqualified plan which provides to
certain employees, including those named in the Summary Compensation Table,
Pension Plan benefits that cannot be paid from a qualified, defined benefit plan
due to provisions of the Code.
PENSION BENEFITS
<TABLE>
<CAPTION>
YEARS OF ESTIMATED
CREDITED YEAR ANNUAL
SERVICE AS OF INDIVIDUAL BENEFIT AT
JANUARY 1, 1999 REACHES AGE 65 AGE 65
--------------- -------------- ----------
<S> <C> <C> <C>
C. Baker Cunningham 28.5 2006 $235,100
Richard K. Reece 5.4 2021 $127,200
Peter J. Wickman 18.0 2014 $ 91,800
Kevin L. Bloomfield 17.5 2016 $ 87,900
Cathy O. Staples 18.8 2015 $ 53,400
</TABLE>
For each of the individuals shown in the Summary Compensation Table, the
table above shows current credited years of service, the year each attains age
65, and the projected annual pension benefit at age 65. The projected annual
pension benefit is based on the following assumptions: benefits will be paid on
a straight-line annuity basis, continued compensation at 1998 levels and an
interest credit rate of 4.0%. Amounts payable under the Supplemental Plan are
included in the estimated annual benefit.
19
<PAGE> 22
STOCK PRICE PERFORMANCE GRAPH
The graph below compares, starting on December 31, 1993, cumulative total
Shareholder return (assuming reinvestment of dividends) with the cumulative
total shareholder return of the Standard & Poor's 500 Stock Index and the
Standard & Poor's Electrical Equipment Index at closing prices.
[GRAPH]
<TABLE>
<CAPTION>
December 31,1993 December 31,1994 December, 1995 December 31,1996 December 31,1997 December 31, 1998
----------------- ---------------- ---------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Belden 100.00 119.87 140.40 201.88 193.56 119.13
S&P 500 Index 100.00 101.32 139.40 171.40 228.39 239.91
S&P Electrical Index 100.00 101.17 141.97 194.93 274.77 368.77
</TABLE>
(*) The Company did not pay any dividends in 1993.
RELATIONSHIP WITH INDEPENDENT AUDITORS
During 1998, the Company employed Ernst & Young LLP ("EY") primarily to
perform the annual audit and to render other services. Mr. Reece was a partner
with EY prior to his joining the Company in August 1993.
Representatives of EY will be present at the meeting and will be available
to answer questions and discuss matters pertaining to the Report of Independent
Auditors contained in the 1998 Annual Report to Shareholders, which is being
mailed with this Proxy Statement to all Shareholders. Representatives of EY will
have the opportunity to make a statement, if they desire to do so.
OTHER MATTERS
Mr. Riedel, a director, is of counsel to the law firm, Squire, Sanders &
Dempsey; the firm represented the Company in certain legal matters in 1998.
A COPY OF THE 1998 ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1998, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS AVAILABLE UPON
REQUEST. PLEASE WRITE TO:
BELDEN INC.
ATTENTION: INVESTOR RELATIONS
7701 FORSYTH BOULEVARD, SUITE 800
ST. LOUIS, MISSOURI 63105
20
<PAGE> 23
PROXY
BELDEN INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Belden Inc. appoints Kevin Bloomfield
and Christopher Allen, or either of them, proxies of the undersigned with power
of substitution to vote, as designated on the reverse side of this card, all
shares which the undersigned would be entitled to vote at the Annual Meeting of
Shareholders to be held on May 6, 1999, at 11:00 a.m., C.D.T., in the Lewis &
Clark Room, the St. Louis Club, 7701 Forsyth Blvd., St. Louis, Missouri, or at
any adjournment thereof, with all powers the shareholder would possess, if
present, on the matters described in the Proxy Statement dated March 26, 1999.
The shareholder revokes any proxies previously given with respect to such
meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, BUT IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED "FOR" PROPOSAL I (C. BAKER CUNNINGHAM AS
NOMINEE FOR DIRECTOR), "FOR" PROPOSAL II (APPROVAL OF A MODIFICATION TO THE
NUMBER OF STOCK OPTIONS INDIVIDUAL PARTICIPANTS MAY RECEIVE UNDER THE BELDEN
INC. LONG-TERM INCENTIVE PLAN TO AN ANNUAL LIMIT OF 200,000), AND IN THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
To Participants in the Belden Wire & Cable Company Savings Plan and the
Belden Wire & Cable Company Retirement Savings Plan ("Plans"): The number of
shares shown on the reverse side shows shares credited to the accounts of
participants in each applicable Plan. This card therefore will constitute
voting instructions for shares held by participants in the Plans. If you own
shares through the Plans and do not vote, the trustee of the Plans will vote
the Plans' shares in the same proportion as shares for which instructions were
received under the Plans.
RECEIPT IS HEREBY ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT, EACH DATED MARCH 26, 1999, AND THE ANNUAL
REPORT OF BELDEN INC. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.
SEE REVERSE SIDE
- FOLD AND DETACH HERE -
<PAGE> 24
<TABLE>
<S><C>
PLEASE MARK |X|
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
BOARD OF DIRECTOR RECOMMENDS A VOTE FOR EACH PROPOSAL.
- ---------------------------------------------------------------------------------------
FOR WITHHELD
PROPOSAL I: Election Of Director Nominee.
C. BAKER CUNNINGHAM I PLAN TO ATTEND
THE MEETING
- ---------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Proposal II: Approval of a modification to the number
of stock options individual participants may receive
under the Belden Inc. Long-Term Incentive Plan to an
annual limit of 200,000.
In their discretion, proxies are authorized to transact and
vote upon such other matters as may properly come before the
meeting or any adjournment thereof.
SIGNATURE____________________________SIGNATURE____________________________DATE___________________,1999
Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
- FOLD AND DETACH HERE -
</TABLE>
<PAGE> 25
PROXY
BELDEN INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Belden Inc. appoints Kevin Bloomfield
and Christopher Allen, or either of them, proxies of the undersigned with power
of substitution to vote, as designated on the reverse side of this card, all
shares which the undersigned would be entitled to vote at the Annual Meeting of
Shareholders to be held on May 6, 1999, at 11:00 a.m., C.D.T., in the Lewis &
Clark Room, the St. Louis Club, 7701 Forsyth Blvd., St. Louis, Missouri, or at
any adjournment thereof, with all powers the shareholder would possess, if
present, on the matters described in the Proxy Statement dated March 26, 1999.
The shareholder revokes any proxies previously given with respect to such
meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, BUT IF NO
SPECIFICATION IS MADE, IT WILL BE VOTED "FOR" PROPOSAL I (C. BAKER CUNNINGHAM AS
NOMINEE FOR DIRECTOR), "FOR" PROPOSAL II (APPROVAL OF A MODIFICATION TO THE
NUMBER OF STOCK OPTIONS INDIVIDUAL PARTICIPANTS MAY RECEIVE UNDER THE BELDEN
INC. LONG-TERM INCENTIVE PLAN TO AN ANNUAL LIMIT OF 200,000), AND IN THE
DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
RECEIPT IS HEREBY ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT, EACH DATED MARCH 26, 1999, AND THE ANNUAL
REPORT OF BELDEN INC. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998.
SEE REVERSE SIDE
- FOLD AND DETACH HERE -
<PAGE> 26
<TABLE>
<S><C>
PLEASE MARK |X|
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
BOARD OF DIRECTOR RECOMMENDS A VOTE FOR EACH PROPOSAL.
- ---------------------------------------------------------------------------------------
FOR WITHHELD
PROPOSAL I: Election Of Director Nominee.
C. BAKER CUNNINGHAM I PLAN TO ATTEND
THE MEETING
- ---------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
Proposal II: Approval of a modification to the number
of stock options individual participants may receive
under the Belden Inc. Long-Term Incentive Plan to an
annual limit of 200,000.
In their discretion, proxies are authorized to transact and
vote upon such other matters as may properly come before the
meeting or any adjournment thereof.
SIGNATURE____________________________SIGNATURE____________________________DATE___________________,1999
Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
- FOLD AND DETACH HERE -
</TABLE>
