<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 Rule 14a-11(c) or Rule 14a-12
BELDEN. INC.
- --------------------------------------------------------------------------------
(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)(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.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[BELDEN LOGO]
March 27, 2000
Dear Shareholder:
I am pleased to invite you to attend the annual meeting of shareholders of
Belden Inc. to be held on Thursday, May 4, 2000 at 11 o'clock in the morning at
the St. Louis Club (16th Floor), Pierre Laclede Center, 7701 Forsyth Boulevard,
St. Louis, Missouri.
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, I hope you will vote as soon as
possible. You may vote over the Internet, as well as by telephone or by mailing
a proxy card. Voting in such manner will ensure your representation at the
meeting if you do not attend in person. Please review the instructions on the
proxy card regarding each of these voting options.
Thank you for your support and continued interest in Belden.
Sincerely,
/s/ C. Baker Cunningham
C. Baker Cunningham
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
2000 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
NOTICE OF ANNUAL MEETING.................................... 1
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE
ANNUAL MEETING............................................ 2
Why am I receiving these materials?....................... 2
What information is contained in these materials?......... 2
What proposals will be voted on at the meeting?........... 2
What is Belden's voting recommendation?................... 2
What shares owned by me can be voted?..................... 2
What is the difference between holding shares as a
shareholder of record and as a beneficial owner?....... 2
How can I vote my shares in person at the meeting?........ 3
How can I vote my shares without attending the meeting?... 3
Can I change my vote?..................................... 3
How are votes counted..................................... 3
What is the voting requirement to approve each of the
proposals?............................................. 3
What does it mean if I receive more than one proxy or
voting instruction card?............................... 3
Where can I find the voting results of the meeting?....... 3
What happens if additional proposals are presented at the
meeting?............................................... 4
What classes of shares are entitled to be voted?.......... 4
What is the quorum requirement for the meeting?........... 4
Who will count the votes?................................. 4
Is my vote confidential?.................................. 4
Who will bear the cost of soliciting votes for the
meeting?............................................... 4
May I propose actions for consideration at next year's
annual meeting of shareholders or nominate individuals
to serve as directors?................................. 4
BOARD STRUCTURE AND COMPENSATION............................ 6
DIRECTOR COMPENSATION....................................... 7
PROPOSALS TO BE VOTED ON.................................... 8
PROPOSAL NO. 1 Election of Directors..................... 8
PROPOSAL NO. 2 Approval to Increase Share Reserve under
Company's Long-Term Incentive Plan..................... 11
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT................................................ 15
Beneficial Ownership Table of Directors, Nominees and
Executive Officers..................................... 15
Beneficial Ownership Table of Shareholders Owning More
Than Five Percent...................................... 16
EXECUTIVE COMPENSATION...................................... 17
Report of the Compensation Committee of the Board of
Directors on Executive Compensation.................... 17
Summary Compensation Table................................ 19
Option Grants in Last Fiscal Year......................... 20
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values................................. 20
Certain Change in Control Arrangements.................... 21
Pension Plans............................................. 21
Pension Benefits Table.................................... 22
Stock Performance Graph................................... 23
RELATIONSHIP WITH INDEPENDENT AUDITORS...................... 23
OTHER MATTERS............................................... 23
</TABLE>
<PAGE> 4
BELDEN INC.
7701 FORSYTH BOULEVARD
SUITE 800
ST. LOUIS, MISSOURI 63105
(314) 854-8000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TIME: 11:00 a.m. on Thursday, May 4, 2000
PLACE: Lewis & Clark Room, 16th Floor St. Louis Club,
Pierre Laclede Center 7701 Forsyth Boulevard St.
Louis, Missouri 63105
ITEMS OF BUSINESS: To elect three directors each for a three-year
term.
To increase the share reserve under the Company's
Long-Term Incentive Plan by 1,200,000 shares.
To consider such other business as may properly
come before the meeting.
RECORD DATE: You are entitled to vote if you were a shareholder
at the close of business on Thursday, March 16,
2000.
FINANCIAL STATEMENTS: Included with this mailing is the Company's 1999
Annual Report on Form 10-K. The Form 10-K includes
the Company's audited financial statements and
notes for the year ended December 31, 1999 and the
related Management's Discussion and Analysis of
Financial Condition and Results of Operations.
VOTING BY PROXY: Please submit a proxy as soon as possible so your
shares can be voted at the meeting in accordance
with your instructions. You may submit your proxy
(1) over the Internet, (2) by telephone, or (3) by
mail. For specific instructions, please refer to
the Questions and Answers beginning on page 2 of
this proxy statement and the instructions on the
proxy card.
By Order of the Board of Directors,
Kevin Bloomfield
Kevin L. Bloomfield
Secretary and General Counsel
This proxy statement and accompanying proxy card are being distributed on or
about March 29, 2000.
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<PAGE> 5
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The Board of Directors (the "Board") of Belden Inc. (sometimes referred to as
the "Company" or "Belden") is providing these proxy materials for you in
connection with Belden's annual meeting of shareholders which will take place
on May 4, 2000. You are invited to attend the meeting and are requested to
vote on the proposals described in this proxy statement.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the proposals to
be voted on at the meeting, the voting process, the compensation of directors
and our most highly-paid officers, and certain other required information.
Our 1999 Annual Report to Shareholders and our 1999 Annual Report on Form
10-K are also enclosed. The Form 10-K includes our 1999 audited financial
statements with notes and the related Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Q: WHAT PROPOSALS WILL BE VOTED ON AT THE MEETING?
A: Two proposals will be voted on at the meeting:
- The election of three directors
- Increasing the share reserve under the Company's Long-Term Incentive Plan
by 1,200,000 shares.
Q: WHAT IS BELDEN'S VOTING RECOMMENDATION?
A: Our Board of Directors recommends that you vote your shares "FOR" each of the
nominees to the Board -- the first proposal -- and "FOR" increasing the share
reserve under the Company's Long-Term Incentive Plan -- the second proposal.
Q: WHAT SHARES OWNED BY ME CAN BE VOTED?
A: All shares owned by you as of March 16, 2000, the Record Date, may be voted
by you. These shares include those (1) held directly in your name as the
shareholder of record, and (2) held for you as the beneficial owner through a
stockbroker, bank or other nominee, including those shares purchased through
Belden's 401(k) plan, the Belden Wire & Cable Company Retirement Savings Plan
(the "Savings Plan").
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND
AS A BENEFICIAL OWNER?
A: Most Belden shareholders hold their shares through a stockbroker, bank or
other nominee rather than directly in their own name. As summarized below,
there are some distinctions between shares held of record and those owned
beneficially.
SHAREHOLDER OF RECORD
If your shares are registered directly in your name with Belden's Transfer
Agent, ChaseMellon Shareholder Services ("ChaseMellon"), you are considered
(with respect to those shares), the shareholder of record and these proxy
materials are being sent directly to you by Belden. As the shareholder of
record, you have the right to grant your voting proxy directly to Belden or
to vote in person at the meeting. Belden has enclosed a proxy card for you
to use.
BENEFICIAL OWNER
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in "street
name" (that is, the name of your stock broker, bank or other nominee) and
these proxy materials are being forwarded to you by your broker or nominee
who is considered, with respect to those shares, the shareholder of record.
As the beneficial owner, you have the right to direct your broker or nominee
how to vote and are also invited to attend the meeting. However, since you
are not the shareholder of record, you may not vote these shares in person
at the meeting. Your broker or nominee has enclosed a voting instruction
card for you to use.
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<PAGE> 6
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE MEETING?
A: Shares held directly in your name as the shareholder of record may be voted
in person at the annual meeting. If you choose to do so, please bring the
enclosed proxy card or other proof of identification.
Even if you plan to attend the annual meeting, we recommend that you also
submit your proxy as described below so that your vote will be counted if
you later decide not to attend the meeting.
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE MEETING?
A: Whether you hold shares directly as the shareholder of record or beneficially
in street name, you may direct your vote without attending the meeting. You
may vote by granting a proxy or, for shares held in street name, by
submitting voting instructions to your broker or nominee. In most instances,
you will be able to do this over the Internet, by telephone or by mail.
Please refer to the summary instructions below and those included on your
proxy card or, for shares held in street name, the voting instruction card
included by your broker or nominee.
BY INTERNET -- If you have Internet access, you may submit your proxy or, if
you hold shares in street name, voting instruction card included by your
broker or nominee from any location in the world by following the "Vote by
Internet" instructions on the proxy card or voting instruction card.
BY TELEPHONE -- If you live in the United States or Canada, you may submit
your proxy or voting instruction card included by your broker or nominee by
following the "Vote by Phone" instructions on such cards.
BY MAIL -- You may do this by signing your proxy card or, for shares held in
street name, the voting instruction card included by your broker or nominee
and mailing it in the enclosed, postage prepaid and addressed envelope. If
you provide specific voting instructions, your shares will be voted as you
instruct. If you sign but do not provide instructions, your shares will be
voted as described below in "HOW ARE VOTES COUNTED?"
Q: CAN I CHANGE MY VOTE?
A: You may change your proxy or voting instructions at any time prior to the
vote at the annual meeting. For shares held directly in your name, you may
accomplish this by granting a new proxy or by attending the annual meeting
and voting in person. Attendance at the meeting will not cause your
previously granted proxy to be revoked unless you specifically so request.
For shares held beneficially by you, you may accomplish this by submitting
new voting instructions to your broker or nominee.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote "FOR" all of the nominees or your
vote may be "WITHHELD" with respect to one or more of the nominees. For the
other proposal, you may vote "FOR," "AGAINST," or "ABSTAIN." If you
"ABSTAIN," it has the same effect as a vote "AGAINST". If you sign your proxy
card or broker voting instruction card with no further instructions, your
shares will be voted in accordance with the recommendations of the Board
("FOR" all of the Company's nominees to the Board and "FOR" the other
proposal and at the discretion of the proxy holders, on any other matter that
comes properly before the meeting), except that any shares you hold in the
Savings Plan will be voted in proportion to the way the other Savings Plan
participants vote their shares.
Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH PROPOSAL?
A: Each of the two proposals requires the affirmative "FOR" vote of a majority
of those shares present and entitled to vote.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING INSTRUCTION
CARD?
A: It means your shares are registered differently or are in more than one
account. Please provide voting instructions for all proxy and voting
instruction cards you receive.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting and publish final
results in our
3
<PAGE> 7
quarterly report on Form 10-Q for the second quarter of 2000.
Q: WHAT HAPPENS IF ADDITIONAL PROPOSALS ARE PRESENTED AT THE MEETING?
A: Other than the two proposals described in this proxy statement, we do not
expect any matters to be presented for a vote at the annual meeting. If you
grant a proxy, the persons named as proxy holders, C. Baker Cunningham,
Belden's Chairman and CEO, and Kevin L. Bloomfield, Belden's General Counsel
and Secretary, will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting. If for any unforeseen
reason any of our nominees is not available as a candidate for director, the
persons named as proxy holders will vote your proxy for such other candidate
or candidates as may be nominated by the Board of Directors.
Q: WHAT CLASS OF SHARES IS ENTITLED TO BE VOTED?
A: Each share of our common stock outstanding as of the close of business on
March 16, 2000, the Record Date, is entitled to one vote at the annual
meeting. On the Record Date, we had 24,387,928 shares of common stock issued
and outstanding.
Q: WHAT IS THE QUORUM REQUIREMENT FOR THE MEETING?
A: The quorum requirement for holding the meeting and transacting business is a
majority of the outstanding shares entitled to be voted. The shares may be
present in person or represented by proxy at the meeting. Both abstentions
and "broker non-votes" are counted as present for the purpose of determining
the presence of a quorum. Generally, broker non-votes occur when shares held
by a broker for a beneficial owner are not voted with respect to a particular
proposal because (1) the broker has not received voting instructions from the
beneficial owner and (2) the broker lacks discretionary voting power to vote
such shares. But a broker non-vote will not arise with respect to either
proposal because a broker will have the discretionary authority to vote on
each proposal in the absence of receiving voting instructions from his or her
beneficial owner. Cumulative voting is not permitted for either proposal.
Q: WHO WILL COUNT THE VOTE?
A: A representative of ADP Investor Communications Services will tabulate the
votes and Kevin Bloomfield, Belden's General Counsel and Secretary, will act
as the inspector of election.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots and voting tabulations that identify individual
shareholders are handled in a manner that protects your voting privacy. Your
vote will not be disclosed either within Belden or to third parties except
(1) as necessary to meet applicable legal requirements, (2) to allow for the
tabulation of votes and certification of the vote, or (3) to facilitate a
successful proxy solicitation by our Board. Occasionally, shareholders
provide written comments on their proxy cards which are then forwarded to
Belden management.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE MEETING?
A: Belden will pay the entire cost of preparing, assembling, printing, mailing
and distributing these proxy materials. In addition to the mailing of these
proxy materials, the solicitation of proxies or votes may be made in person,
by telephone or by electronic communication by our directors, officers, and
employees, who will not receive any additional compensation for such
solicitation activities. We also have hired ADP Investor Communications
Services to assist us in the distribution of proxy material and tabulating
votes. We will pay ADP a fee of $7,000 plus expenses for these services. We
will also reimburse brokerage houses and other custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy
and solicitation materials to shareholders.
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING OF
SHAREHOLDERS OR NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS?
A: You may submit proposals for consideration at future shareholder meetings,
including director nominations.
SHAREHOLDER PROPOSALS: For a shareholder proposal to be considered for
inclusion in
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<PAGE> 8
Belden's proxy statement for next year's annual meeting, the written
proposal must be received by Belden no later than November 26, 2000. Such
proposals also will need to comply with Securities and Exchange Commission
regulations regarding the inclusion of shareholder proposals in
company-sponsored proxy materials. Apart from the issue of inclusion in
proxy materials, the Company's Bylaws establish requirements for shareholder
proposals to be considered at the annual meeting. For example, for a
shareholder proposal to be raised from the floor during next year's annual
meeting, written notice must be received by Belden no later than March 4,
2001 and shall contain such information as required under our Bylaws.
NOMINATION OF DIRECTOR CANDIDATES: You may propose director candidates for
consideration by our Board. In addition, our Bylaws permit shareholders to
nominate directors at a shareholders meeting. To make a director nomination
at a shareholders meeting it is necessary that you notify Belden not fewer
than 60 days in advance of the meeting. In addition, the notice must meet
all other requirements contained in our Bylaws.
COPY OF BYLAW PROVISIONS: You may contact the Belden Secretary at our
Company headquarters for a copy of the relevant Bylaw provisions regarding
the requirements for making shareholder proposals and nominating director
candidates.
5
<PAGE> 9
BOARD STRUCTURE AND COMPENSATION
The Board has seven members and two committees: Audit and Compensation. In
2000, it formed a Nominating Committee composed of Mr. Cunningham and the heads
of the other committees. The Nominating Committee met several times in 2000 to
review candidates to run as director nominees for this year's meeting. During
1999, the Board 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.
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
NAME OF DIRECTOR AUDIT COMPENSATION
- -------------------------------------------------------------------------------------------------
Joseph R. Coppola X*
- -------------------------------------------------------------------------------------------------
Christopher I. Byrnes X**
- -------------------------------------------------------------------------------------------------
John R. DallePezze X
- -------------------------------------------------------------------------------------------------
Alan E. Riedel X
- -------------------------------------------------------------------------------------------------
Lorne D. Bain X
- -------------------------------------------------------------------------------------------------
Bernard G. Rethore X*
- -------------------------------------------------------------------------------------------------
C. Baker Cunningham
- -------------------------------------------------------------------------------------------------
Number of Meetings in 1999 4 5
- -------------------------------------------------------------------------------------------------
</TABLE>
X Committee member, * Chair, ** Became Chair of Compensation Committee mid-year
THE AUDIT COMMITTEE
The Audit Committee assists the Board in reviewing the Company's corporate
accounting and reporting practices, and evaluates the quality and integrity of
the Company's financial reports. In discharging its duties, the committee:
- - meets with our financial management and auditors (Ernst & Young) to review
the financial statements, quarterly earnings releases and financial data of
the Company;
- - reviews and recommends to the Board the selection of auditors who will audit
our financial statements;
- - reviews the scope, procedures and results of Company audits;
- - reviews the adequacy and effectiveness of the financial controls of the
Company; and
- - evaluates the Company's key financial and accounting personnel.
COMPENSATION COMMITTEE
The Compensation Committee determines, approves and reports to the Board on all
elements of compensation for the Company's elected officers, including Base
Salary, Annual Bonus, and Stock Options, as described in this proxy statement
under "Executive Compensation." The committee also assists the Company in
developing compensation and benefit strategies to attract, develop and retain
qualified employees.
6
<PAGE> 10
DIRECTOR COMPENSATION
The following table provides information on Belden's compensation practices
during 1999 for non-employee directors. (Mr. Cunningham does not receive any
compensation for his Board activities.)
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------
COMPENSATION TABLE FOR 1999
- ----------------------------------------------------------------------------------------------
Annual Director Retainer $20,000
- ----------------------------------------------------------------------------------------------
Fee paid for Special Committee or Board Meetings $1,000
- ----------------------------------------------------------------------------------------------
Reimbursement for Expenses Attendant to Board Membership Yes
- ----------------------------------------------------------------------------------------------
Stock Option Award* 1,000
- ----------------------------------------------------------------------------------------------
Stock Award** 200
- ----------------------------------------------------------------------------------------------
</TABLE>
* Under the Belden Inc. Long-Term Incentive Plan, each non-employee director
is granted an option to purchase 1,000 shares on the day following each
annual meeting. The exercise price of the option is the average of the high
and low of Belden shares on the grant date. The options become exercisable
on the first anniversary of the grant date and expire five years after the
grant date. Based on the recommendation of an outside compensation
consultant (whom the Compensation Committee retained to assess the
competitiveness of director compensation), in its February 2000 meeting, the
Board increased the annual stock option award to 2,000 in order for the
Board to continue to attract and retain qualified members.
** Under the Belden Inc. Non-Employee Director Stock Plan, each non-employee
director receives 200 Belden shares on the day following each annual
meeting. Consistent with the recommendation of a compensation consultant,
during its February 2000 meeting, the Board increased the annual award under
the Stock Plan to directors to 500 in order for the Board to remain
competitive in attracting and retaining qualified members.
7
<PAGE> 11
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Directors are divided into three classes, Class I, Class II and Class III,
each serving a term of three years. One class stands for election at each annual
meeting. There are three Class II directors whose term will expire at the 2001
annual meeting, one Class III director whose term will expire at the 2002 annual
meeting, and three Class I directors whose term will expire at this annual
meeting.
At this meeting, three Class I directors will be elected for a term
expiring at the 2003 annual meeting. Mr. Byrnes, one of the three current Class
I directors, and Messrs. Monter and Sadler are the Board's nominees for election
at this meeting. Neither Mr. Monter nor Mr. Sadler has previously served on the
Board. Mr. Coppola and Mr. DallePezze, the other current Class I directors, have
elected to retire from the Board effective at this meeting. The Board wishes to
thank Mr. Coppola and Mr. DallePezze for their strong leadership and significant
contributions to the Board and Company. Each nominee is willing to serve if
elected. Information regarding the business experience of each nominee and
director is provided below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF EACH
OF THE FOLLOWING
NOMINEES:
CHRISTOPHER I. BYRNES
Dean, School of Engineering and Applied Science
Washington University
Chairman -- Compensation Committee
Director since 1995 Age 50 [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. Received an Honorary Doctor of
Technology from the Royal Institute of Technology in Stockholm, Sweden in 1998.
Since 1991, has been Dean of the School of Engineering and Applied Science of
Washington University.
JOHN M. MONTER
President and Chief Executive Officer
Brand Services, Inc. Age 52 [JOHN M. MONTER PHOTO]
Received a B.S. degree in journalism from Kent State University and a M.B.A.
degree from the University of Chicago. From 1993 to 1996, was President of the
Bussmann Division of Cooper Industries, Inc. Bussmann manufactures electrical
and electronic fuses. Since 1996, has been President and Chief Executive Officer
of Brand Services, Inc. ("Brand") and is also a member of the Board of Directors
of the parent company of Brand, DLJ Brand Holdings. Brand is a supplier of
scaffolding services and specialty temporary structures.
8
<PAGE> 12
M. WHITSON SADLER
President and Chief Executive Officer
Solvay America, Inc. Age 59 [M. WHITSON SADLER PHOTO]
Received a B.A. degree in economics from the University of the South and an
M.B.A. degree from Harvard Business School. Since 1978, has been President and
Chief Executive Officer of Solvay America, Inc. ("Solvay"). Solvay produces
chemicals, plastics, and pharmaceuticals. Solvay is an affiliate of Solvay S.A.
of Brussels. Prior to joining Solvay, was a General Partner of Lazard Freres &
Company.
Director, Southdown, Inc.
CLASS II DIRECTORS: TERM EXPIRING IN 2001
ALAN E. RIEDEL
Member -- Audit Committee
Director since 1993 Age 69 [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, and completed Harvard
Business School's Advanced Management Program. Received an Honorary Doctor of
Laws from Ohio University in 1994. Since April 1994, has served in the position
"Of Counsel" to Squire, Sanders & Dempsey. Had been Director and Chairman of
Gardner Denver 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 Industries, Inc. ("Cooper"), from
April 1992 until April 1994, when he retired. From 1983 to 1992, was Senior Vice
President, Administration of Cooper. Cooper is a manufacturer of electrical
equipment and tools and hardware.
Director, Factory Mutual Insurance Company, Gardner Denver Inc., and the Ohio
University Foundation (former Chairman).
LORNE D. BAIN
Chairman, President and
Chief Executive Officer
WorldOil.com
Member -- Audit Committee
Director since 1993 Age 58 [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 completed Harvard Business
School's Advanced Management Program. Presently, Chairman, President and Chief
Executive Officer of WorldOil.com, an Internet-based business serving the
oilfield services industry. From 1997 to February 2000, was 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.
9
<PAGE> 13
BERNARD G. RETHORE
Chairman of the Board
Flowserve Corporation
Chairman -- Audit Committee
Director since 1997 Age 58 [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 until July 1999.
Stepped down as Chief Executive Officer of Flowserve in January 2000 but
continues to serve as its Chairman. 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 1985 to
1995, was Senior Vice President of Phelps Dodge Corporation and President of
Phelps Dodge Industries.
Director, Maytag Corporation, Amcast Industrial Corporation, and Flowserve
Corporation.
CLASS III DIRECTORS: TERM EXPIRING IN 2002
C. BAKER CUNNINGHAM
Chairman of the Board, President and
Chief Executive Officer
Director since 1993 Age 58 [C. BAKER CUNNINGHAM PHOTO]
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.
Director, Cooper Cameron Corporation.
10
<PAGE> 14
PROPOSAL NO. 2
APPROVAL TO INCREASE SHARE RESERVE
UNDER COMPANY'S LONG-TERM INCENTIVE PLAN
In November 1993, the Board of Directors adopted, and in May 1994 the
shareholders approved, the Belden Inc. Long-Term Incentive Plan (as amended to
date the " Incentive Plan" or "Plan). At this meeting, the Company is asking
shareholders to approve increasing the share reserve under the Plan by 1,200,000
so awards under the Plan can continue to be made. The requested increase in
reserves is less than 5% of the number of outstanding shares. The Board believes
the Incentive Plan benefits shareholders by linking a portion of participants'
compensation to performance.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR INCREASING THE SHARE RESERVE
UNDER THE PLAN.
SUMMARY OF INCENTIVE PLAN
General. The purpose of the Incentive Plan is to encourage ownership in
Belden by key employees whose long-term employment is essential to Belden's
continued progress. Stock options, stock appreciation rights, performance
shares, and restricted stock may be granted under the Plan. To date, only stock
options have been granted. The Compensation Committee administers the Plan.
Eligibility and Participation. Employees with significant management
potential or having the capacity to contribute significantly to the success of
the Company are eligible to participate. Presently, 111 employees participate.
Limitations. Section 162(m) of the Internal Revenue Code, as amended (the
"Code"), places limits on the deductibility for federal income tax purposes of
compensation paid to certain executive officers of Belden. To preserve Belden's
ability to deduct the compensation income associated with options granted to
such persons, the Incentive Plan provides that no employee may receive more than
200,000 stock options each year.
Shares Subject to Awards. The initial share reserve when the shareholders
approved the Plan in 1994 was 1,300,000 shares. In 1997, the shareholders
approved increasing the share reserve by 1,300,000. If this proposal is
approved, the reserve will increase by 1,200,000. In its February 2000 meeting,
the Compensation Committee granted 614,000 options to participating employees
under the Plan. This amount exceeded the current share reserve under the Plan by
156,020. For this reason, the February grants were made on the condition that
shareholders approve the increase in share reserve being requested under this
proposal. If the proposal is approved, as of March 14, 2000, the number of
options outstanding would be 2,317,078, which is less than 10% of the number of
outstanding shares, and the number of shares available in reserve would be
1,043,980 (i.e., 1,200,000, the number of shares being requested, less 156,020,
the number of options granted in February 2000 which exceed the current share
reserve under the Plan).
If any outstanding options expire or terminate, the shares of common stock
allocable to the unexercised portion of such options 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."
Terms and Conditions of Options. Each option granted under the Incentive
Plan is evidenced by a written option agreement between Belden and the optionee
and is subject to the following additional terms and conditions:
Exercise Price. 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 the price be less than the average of the high and low of
Belden shares on the day the options were granted. On March 14, 2000, the high
and low sale prices of Belden shares were $26.25 and $25.00 per share,
respectively.
Term of Option. The Compensation Committee in its discretion may provide
that an option
11
<PAGE> 15
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
provide for vesting or other conditions to exercise options.
Form of Consideration. Upon exercise, an optionee may pay the exercise
price 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. No stock appreciation rights have been granted
under the Plan. The Compensation Committee 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 a price determined by the Committee. However, the price may not be
less than the fair market value of the shares on the date of grant. No stock
appreciation right may be exercisable earlier than six months after grant.
Restricted Stock Awards. No restricted stock awards have been made under
the Plan. The Compensation Committee may grant shares of restricted stock on
terms as the Committee may determine. "Restricted stock" means Belden shares
that may be forfeited by the holder to the Company under conditions as the
committee may determine. The restrictions may include limitations on
transferability, requirements of continued employment, individual performance or
the Company's financial performance.
Performance Shares. No performance shares have been granted under the
Plan. The Compensation Committee may grant performance shares, which are shares
that are earned only after the attainment of predetermined performance targets
during a performance period established by the Compensation Committee.
Performance shares may be convertible into shares, cash or a combination of both
as the Committee may determine. At the end of the performance cycle, the
Committee determines the number of performance shares that have been earned.
Performance shares may not be sold, transferred, assigned, pledged or otherwise
encumbered so long as such performance shares remain restricted.
Stock Options for Non-employee Directors. Under the Plan, for years before
2000, each non-employee director automatically received on the day after each
annual meeting an option to purchase 1,000 shares. At its February 2000 meeting,
the Board, on advice of a compensation consultant, increased the annual award to
2,000 for awards made in 2000 or thereafter. Pursuant to the terms of the Plan
as approved by the shareholders at the 1994 annual meeting, the Board has the
right to make such an amendment to the Plan. The consultant felt an adjustment
in the level of awards was necessary to ensure that the Company could continue
to attract and retain qualified directors. The option exercise price is the
average of the high and low share price on the grant date. 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 both. Options granted to non-employee directors are not
transferable, 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 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 section of the Plan
applicable to directors operates automatically and does not require
administration.
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
12
<PAGE> 16
Change of Control will be deemed to have occurred if (i) any person or group
acquires beneficial ownership of 25% of the voting securities of the Company,
(ii) subject to certain conditions, 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.
Effect of Change of Control. Upon the occurrence of a Change of Control,
each non-employee 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 option granted under the
Incentive Plan which is 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, 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
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.
13
<PAGE> 17
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 participant. A participant will recognize income on the
date of exercise of the non-statutory stock option equal to the difference
between (i) the fair market value on the 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-statutory 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 generally will not be taxed to the
recipient, nor deductible by the Company, at the time of grant. On the date the
restrictions lapse and the shares become transferable or not subject to a
substantial risk of forfeiture, 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 and the ordinary income
recognized. Generally, the Company will be entitled to a deduction in an amount
of income recognized by the recipient.
14
<PAGE> 18
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists information as of March 1, 2000, concerning:
- beneficial ownership of each director or nominee;
- beneficial ownership of each executive officer named in the Summary
Compensation Table; and
- beneficial ownership of directors, nominees and executive officers as a
group.
The number of shares beneficially owned by each director or executive
officer is determined under rules of the Securities and Exchange Commission, and
the information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares to
which the individual has the sole or shared voting power or investment power and
also any shares which the individual has the right to acquire as of April 30,
2000 (60 days after March 1, 2000) through the exercise of any stock option or
other right. Unless otherwise indicated, each person has sole investment and
voting power with respect to the shares set forth in the following table.
The percentage of outstanding common stock, including options exercisable
within 60 days after March 1, 2000, beneficially owned by directors, nominees
and executive officers as a group is 2.3%. The percentage of shares beneficially
owned by any director or nominee individually does not exceed 1% of the
outstanding common stock, except for Mr. Cunningham whose percentage of shares
is 1.19%.
BENEFICIAL OWNERSHIP TABLE OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(A)(B)
-------------------
<S> <C>
C. Baker Cunningham 290,671
Chairman of the Board, President, Chief Executive Officer
and Director
Peter J. Wickman 74,454
Vice President, Operations and President of Belden
Electronics
Richard K. Reece 76,382(c)
Vice President, Operations and President of Belden
Communications
Paul Schlessman 19,140
Vice President, Finance, Treasurer and Chief Financial
Officer
Kevin L. Bloomfield 49,446
Vice President, Secretary and General Counsel
Lorne D. Bain 6,800
Director
Joseph R. Coppola 6,300
Director
Alan E. Riedel 22,206(d)
Director
Christopher I. Byrnes 4,300
Director
Bernard G. Rethore 7,600(e)
Director
John R. DallePezze 6,600
Director
John M. Monter 500
Nominee
M. Whitson Sadler
Nominee
All directors, nominees and officers as a group 564,399
</TABLE>
15
<PAGE> 19
(a) Includes the following shares covered by stock options which are currently
exercisable or exercisable within 60 days after March 1, 2000: Mr.
Cunningham, 185,000 shares; Mr. Schlessman, 18,322 shares; Mr. Reece,
52,159 shares; Mr. Wickman, 52,159 shares; Mr. Bloomfield, 31,666 shares;
Messrs. Coppola and Bain, 4,000 shares each; Dr. Byrnes 3,000 shares; and
Messrs. Riedel, Rethore and DallePezze, 2,000 shares each.
(b) Includes shares held in the Company's Saving Plan.
(c) Includes 23,766 shares owned jointly by Mr. Reece and his spouse.
(d) Includes 2,000 shares held in an Individual Retirement Account.
(e) Includes 5,200 shares held in trust.
BENEFICIAL OWNERSHIP TABLE OF SHAREHOLDERS
OWNING MORE THAN FIVE PERCENT
The following table shows information regarding those shareholders known to
the Company to beneficially own more than 5% of the outstanding Belden shares.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------- ----------------- --------
<S> <C> <C>
First Pacific Advisors, Inc. 1,604,900(a) 6.60%
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
Prudential Insurance Company of America 1,271,195(b) 5.22%
751 Broad Street
Newark, NJ 07102-3777
SSB Citi Fund Management LLC 2,036,292(c) 8.40%
Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, NY 10013
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
</TABLE>
(a) Information based on a Schedule 13G filed with the SEC by First Pacific
Advisors, Inc. ("First Pacific"). First Pacific has shared voting power
over 209,400 shares, shared dispositive power over 1,604,900 and does not
have sole voting or sole dispositive power over any shares.
(b) Information based on a Schedule 13G filed with the SEC by Prudential
Investments Corporation ("Prudential"). Prudential has shared voting power
and shared power over 790,495 shares and sole voting or sole dispositive
power over 480,700.
(c) Information based on a Schedule 13G filed with the SEC by SSB Citi Fund
Management LLC ("SSB Citi Fund"), Salomon Smith Barney Holdings Inc. ("SSB
Holdings"), and Citigroup Inc. ("Citigroup"). SSB Citi Fund has shared
voting power and shared dispositive power over 1,509,028 shares and does
not have sole voting power or sole dispositive power over any shares. SSB
Holdings has shared voting power and shared dispositive power over
1,997,931 shares and does not have sole voting power or sole dispositive
power over any shares. Citigroup has shared voting power and shared
dispositive power over 2,036,292 shares and does not have sole voting power
or sole dispositive power over any shares. SSB Holdings and Citigroup each
disclaims beneficial ownership of its respective shares noted in the
Schedule 13G.
In addition, at December 31, 1999, CIGNA Retirement and Investment Services
as Trustee of the Savings Plans, held of record 662,948.83196 shares, 2.7% of
common stock.
16
<PAGE> 20
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS 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 goals of the executive compensation program are to align compensation
with business objectives and performance, and to enable the Company to attract,
retain and reward key management employees who take actions that enhance
shareholder value and attain Company goals. The Company's philosophy is to
target total direct compensation at the 50th percentile of other
comparably-sized companies.
An outside consultant is engaged 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 1999, 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 -- those being, the annual bonus and stock
option programs -- are key elements of the total compensation package. They are
designed to reward executives for short- and long-term enhancements to the value
received by shareholders. These programs place a portion of the participant's
direct total compensation "at risk" and provide certain additional "upside"
compensation opportunities dependent on Belden's actual performance.
BASE SALARIES
Base salaries are reviewed each year and adjusted based on Company
performance, individual performance, and the executive's level of
responsibility. During 1999, actual base salaries paid to the named executive
officers increased 6.26% over those paid in 1998. Ms. Staples (who was included
in the Summary Compensation Table last year was not included in this year's
Table) and Mr. Schlessman (who was included in this year's Table was not
included in last year's Table) are excluded from the comparative information
noted in this Report.
ANNUAL INCENTIVES
During 1999, key management (including elected officers) participated in
Belden's cash profit-sharing program. Depending on the degree to which
pre-determined performance criteria are met or exceeded, the Company may award
officers a cash bonus under this program. The bonus range for Mr. Cunningham
varies from 0% to 100% of his base salary.
For 1999, the performance criteria determined by the Committee were based
on two objective measures, return on capital and earnings per share, and for all
participants other than Mr. Cunningham, an individual performance component. The
criteria for Mr. Cunningham were based solely on return on capital (33%) and
earnings per share (67%). For officers other than Mr. Cunningham, the weight
assigned to each of the three performance criteria was: 54% earnings per share;
26% return on capital; and 20% individual performance.
The Committee establishes the performance goals at the beginning of the
year. The Company's overall financial performance determines the size of the
bonus pool to be distributed to the executives participating in the program.
Belden had a solid year in 1999. Revenues for the year increased 23% and
reached a record level of $818 million. Operating earnings increased 7%.
Earnings per share increased 4% to $1.68 from $1.62 in 1998 after adjusting for
non-recurring
17
<PAGE> 21
items. With its strong cash flow, the Company generated more than $43 million in
free cash after capital investments and dividends.
The Company made several strategic moves in 1999 to enhance its competitive
position, particularly in the growth segments of electronics and communications,
both domestically and internationally. During the year, Belden acquired three
businesses that serve these segments: Cable Systems International (Arizona),
Duna Kabel Kft. (Hungary) and Dorfler Kabelwerk GmbH (Austria). At the same
time, the Company strengthened its position in the specialty wire and cable
segment by disposing of its power cord business, Cord Products, a commodity
business.
In February 2000, the Committee reviewed 1999 results and, based on the
pre-established performance criteria, as well as Company performance as
highlighted above, determined that the range of cash bonuses as a percent of
base salary earned by each executive officer for 1999 was 22% to 28%. These
awards were 33% above those paid in 1998.
LONG-TERM INCENTIVES (STOCK OPTIONS)
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 1999.
CEO COMPENSATION
In keeping with the Company's philosophy of emphasizing the incentive
elements of the total compensation package, Mr. Cunningham's base salary, on an
annualized basis, was increased in 1999 by 4.8% to $518,749. Mr. Cunningham
participates in the same incentive plans as the other named executive officers.
For 1999, he earned a bonus of $145,000 or 28% of salary, which reflects the
growth the Company experienced, evidenced in part by the successful acquisitions
of Cable Systems International, Duna Kabel Kft. and Dorfler Kabelwerk GmbH.
Consistent with the Committee's general policy to grant stock options, Mr.
Cunningham was awarded stock options in 1999.
The Company also maintains certain benefit programs in which the named
executive officers participate. The compensation attributed to these executive
officers for 1999 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.
STOCK OWNERSHIP GUIDELINES
Last year, the Committee established stock ownership guidelines for
executive officers to increase their equity stake in Belden and to more closely
align their interests with those of other shareholders. These guidelines provide
that the CEO should attain an investment position in Belden's stock equal to
four times his base salary and all other elected officers should attain an
investment position equal to two times their base salary. These goals are to be
attained within five years.
SECTION 162(M)
Section 162(m) of the Internal Revenue Code imposes a limitation on the
deductibility of nonperformance-based compensation in excess of $1 million paid
to the executive officers. Although the Committee considers this provision when
reviewing executive compensation, the Committee uses sound business judgment to
determine whether specific compensation programs are appropriate, even if
certain elements may not meet the performance criteria under the tax code
provision.
Christopher I. Byrnes, Chairman
Joseph R. Coppola
John R. DallePezze
18
<PAGE> 22
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION SECURITIES ALL
----------------------------- UNDERLYING OTHER
SALARY(1) BONUS(2) OPTIONS(3) COMPENSATION(4)
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- --------------------------- ---- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
C. Baker Cunningham 1999 518,749 145,000 120,000 29,308
Chairman of the Board, President, 1998 495,000 105,000 120,000 26,134
and Chief Executive Officer 1997 467,833 240,000 26,150
Peter J. Wickman 1999 262,500 60,000 30,000 6,412
Vice President, Operations; 1998 242,500 40,000 30,000 7,762
President Belden Electronics 1997 220,000 90,000 10,000 7,275
Richard K. Reece 1999 262,500 60,000 30,000 6,412
Vice President, Operations; 1998 242,500 40,000 30,000 7,762
President Belden Communications 1997 231,750 90,000 10,000 7,803
Paul Schlessman 1999 206,041 40,000 90,201
Vice President, Finance, Treasurer 1998 188,330 50,000 24,000 3,525
and Chief Financial Officer 1997 157,500 8,000 5,751
Kevin L. Bloomfield 1999 197,500 45,000 25,000 3,127
Vice President, Secretary 1998 187,500 32,000 20,000 4,477
and General Counsel 1997 179,000 72,000 4,529
</TABLE>
(1) Salaries are amounts actually received. 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 1997 options was $35.18; the
exercise price for the 1998 options was $39.53; and the exercise price for
the 1999 options was $20.06. In each instance, the exercise price equaled
the average of the high and low of Belden shares on the grant date.
(4) For each of the named officers, amounts include Company contributions and
allocations in Company-sponsored qualified and unqualified excess defined
contribution plans and other plans. For Mr. Schlessman, this column also
includes, for 1999, reimbursements related to relocations totaling $86,330.
19
<PAGE> 23
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUES AT ASSUMED
TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM(1)
OPTIONS IN FISCAL EXERCISE EXPIRATION ----------------------
GRANTED(#)(2) YEAR PRICE($/SH)(3) DATE 5%($) 10%($)
------------- ---------- -------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
C. Baker Cunningham 120,000 38.8% 20.0625 1/5/09 1,514,064 3,836,935
Richard K. Reece 30,000 9.7% 20.0625 1/5/09 378,516 959,234
Peter J. Wickman 30,000 9.7% 20.0625 1/5/09 378,516 959,234
Kevin L. Bloomfield 25,000 8.1% 20.0625 1/5/09 315,430 799,361
Paul Schlessman(4)
</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% ($32.68) and
10% ($52.04) rates set by the SEC and therefore are not intended to
forecast possible future appreciation of the stock price of the Company.
(2) Grants of stock options in 1999 awarded under the Incentive Plan. Exercises
of one-third of the shares are permitted on the first, second, and third
anniversaries of the grant date.
(3) The purchase price of shares subject to an option is the average of the
high and low of Belden shares on the date of grant.
(4) Mr. Schlessman became an officer of the Company after the other officers
received option grants and, as a result, did not receive options in 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES VALUE DECEMBER 31, 1999(#) DECEMBER 31, 1999($)
ACQUIRED ON REALIZED(1) EXERCISABLE/ EXERCISABLE/
EXERCISE(#) ($) UNEXERCISABLE(2) UNEXERCISABLE(3)
----------- ----------- ---------------------- --------------------
<S> <C> <C> <C> <C>
C. Baker Cunningham 0 $ 0 105,000/200,000 $ 0/15,000
Peter J. Wickman 15,000 $28,632 31,666/53,334 $ 0/3,750
Richard K. Reece 4,400 $ 2,642 31,666/53,334 $ 0/3,750
Paul Schlessman 0 $ 0 13,332/18,668 $18,414/36,835
Kevin L. Bloomfield 3,658 $ 809 16,666/38,334 $ 0/3,125
</TABLE>
(1) Represents the difference between the option price ($18.31) and the fair
market value of the stock on the exercise date.
(2) For Messrs. Cunningham, Wickman, Reece and Bloomfield, table column
reflects option grants 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;
on February 20, 1998, at an exercise price of $39.53 per share; and on
January 5, 1999 at an exercise price of $20.0625. For Messrs. Reece and
Wickman, table column also reflects an additional option grant each
received on February 26, 1997 to purchase 10,000 shares at an option price
of $35.1875 per share. For Mr. Schlessman, table column reflects option
grants on February 26, 1997 at $35.1875 per share; on February 20, 1998 at
$39.53125 per share; and on November 4, 1998 at $16.9375 per share. For
each grant, the exercise price was the average of the high and low of
Belden shares 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 (other than the 1994 grants which expired in February
1999) will expire ten years after the date of grant.
(3) "Value" represents the difference between the closing price of the common
stock on the New York Stock Exchange on December 31, 1999 ($21.00), and the
exercise price of such options.
20
<PAGE> 24
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, 1999,
the balance in the Trust totaled $763.22. 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.
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, Inc. were credited for service while employed by Cooper. Benefits
for service through August 1, 1993, were determined under the Cooper Salaried
Employees' 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
21
<PAGE> 25
survivorship, or a lump-sum payment. The Company contributes to a trust fund
sufficient to meet the minimum requirements under the Internal Revenue Code
("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
CREDITED YEAR ESTIMATED
SERVICE AS OF INDIVIDUAL ANNUAL BENEFIT
JANUARY 1, 2000 REACHES AGE 65 AT AGE 65
--------------- -------------- --------------
<S> <C> <C> <C>
C. Baker Cunningham 29.5 2006 $250,200
Peter J. Wickman 19.0 2014 $100,400
Richard K. Reece 6.4 2021 $138,300
Paul Schlessman 2.8 2021 $ 85,200
Kevin L. Bloomfield 18.5 2016 $ 92,800
</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 1999 levels and an
interest credit rate of 4.0%. Amounts payable under the Supplemental Plan are
included in the estimated annual benefit.
22
<PAGE> 26
STOCK PERFORMANCE GRAPH
The graph below compares 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.
TOTAL RETURN TO SHAREHOLDERS
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1995 December 31, 1996 December 31, 1997
<S> <C> <C> <C> <C>
Belden 100.00 117.29 169.04 162.03
S&P 500 Index 100.00 137.58 169.17 225.60
S&P Electrical Equipment Index 100.00 140.33 192.73 271.60
<CAPTION>
December 31, 1998 December 31, 1999
<S> <C> <C>
Belden 99.38 99.49
S&P 500 Index 290.08 351.12
S&P Electrical Equipment Index 364.51 546.57
</TABLE>
RELATIONSHIP WITH INDEPENDENT AUDITORS
During the year, the Company engaged Ernst & Young LLP ("EY") to perform
its annual audit and to render other services. Representatives of EY will be
present at the annual meeting and will be available to answer questions and
discuss matters pertaining to the Report of Independent Auditors contained in
the Annual Report on Form 10-K for 1999, which, along with the 1999 Annual
Report to Shareholders, is being mailed with this Proxy Statement to all
shareholders. Representatives of EY will have the opportunity to make a
statement at the meeting, if they desire to do so.
OTHER MATTERS
In 1999, the Company purchased, in arms length transactions, materials used
to manufacture wire and cable products from affiliates of Solvay America. Mr.
Sadler, one of the nominees for election to the Board this year, is President
and Chief Executive Officer of Solvay America. Such sales totaled about
$818,000.
By Order of the Board of Directors
KEVIN L. BLOOMFIELD
GENERAL COUNSEL AND SECRETARY
MARCH 27, 2000
23
<PAGE> 27
[BELDEN LOGO]
- --------------------------------------------------------------------------------
PROXY
BELDEN INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 4, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Belden Inc. appoints C. Baker
Cunningham and Kevin Bloomfield, 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 4, 2000, at 11:00 a.m., 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 27, 2000.
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 (CHRISTOPHER I.
BYRNES, JOHN M. MONTER, AND M. WHITSON SADLER AS NOMINEES FOR DIRECTORS), "FOR"
PROPOSAL II (APPROVAL TO INCREASE THE SHARE RESERVE UNDER THE COMPANY'S
LONG-TERM INCENTIVE PLAN BY 1,200,000 SHARES) 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 Retirement Savings
Plan ("Plan"): The number of shares shown on the reverse side includes shares
credited to the accounts of participants in the Plan. This card therefore will
constitute voting instructions not only for shares held directly by
participants outside the Plan but also for shares held indirectly by
participants in the Plan. If you own shares through the Plan and do not vote,
the trustee of the Plan will vote the Plan's shares in the same proportion as
shares for which instructions were received under the Plan.
RECEIPT IS HEREBY ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS AND PROXY STATEMENT, EACH DATED MARCH 27, 2000, AND THE ANNUAL
REPORT ON FORM 10-K AND THE ANNUAL REPORT TO SHAREHOLDERS, EACH FOR THE YEAR
ENDING DECEMBER 31, 1999.
<PAGE> 28
<TABLE>
<S><C>
[BELDEN LOGO] VOTE BY PHONE - 1-800-690-6903
BELDEN INC. Use any touch-tone telephone to transmit your voting
PROXY SERVICES instructions. Have your proxy card in hand when you
P.O. BOX 9079 call. You will be prompted to enter your 12-digit
FARMINGDALE, NY 11735 Control Number which is located below and then follow
the simple instructions the Vote provides you.
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions.
Have your proxy card in hand when you access the web
site. You will be prompted to enter your 12-digit
Control Number which is located below.
Follow the Instructions:
> you can simply cast your vote,
or
> you can cast your vote and register to receive all
future shareholder communications electronically
instead of in print. This means that, for future
annual meetings, the annual report, proxy, and other
correspondence may be delivered to you electronically
via e-mail.
VOTE BY MAIL -
Mark, sign and date your proxy card and return it in
the postage-paid envelope we've provided or return to
Belden Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY
11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
BELDEN KEEP THIS PORTION FOR YOUR RECORDS
- -----------------------------------------------------------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
BELDEN INC.
I PLAN TO ATTEND THE MEETING. / /
BOARD OF DIRECTOR RECOMMENDS A VOTE FOR EACH PROPOSAL. FOR WITHHOLD FOR ALL To withhold authority to vote,
ALL ALL EXCEPT mark "For All Except" and write
1. ELECTION OF DIRECTORS. The nominees for Director are: the nominee's number on the
01) Christopher I. Byrnes, 02) John M. Monter, / / / / / / line below.
03) M. Whitson Sadler
_________________________________
For Against Abstain
2. APPROVAL TO INCREASE THE SHARE RESERVE UNDER THE COMPANY'S LONG TERM INCENTIVE PLAN BY 1,200,000 SHARES. / / / / / /
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.
Please sign exactly as name(s) appear hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
_____________________________________________ _____________________________________________________
| | | | | |
| | | | | |
|__________________________________|_________| |___________________________________________|________|
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
