<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
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 (S) 240.14a-11(c) or (S) 240.14a-12
CABLE DESIGN TECHNOLOGIES CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CABLE DESIGN TECHNOLOGIES CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT)
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:
Not applicable
(2) Aggregate number of securities to which transaction applies:
Not applicable
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0- 11:/1/
Not applicable
(4) Proposed maximum aggregate value of transaction:
Not applicable
(5) Total fee paid:
Not applicable
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
- - --------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
[LOGO OF CABLE DESIGN TECHNOLOGIES]
CABLE DESIGN TECHNOLOGIES
Foster Plaza 7 . 661 Andersen Drive Paul M. Olson
Pittsburgh, PA 15220 . (412) 937-2300 President/Chief Executive Officer
November 12, 1996
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to
attend the Annual Meeting of Stockholders on Tuesday, December 10,
1996 at 9:00 A.M. eastern standard time. The meeting will be held at
The Somerset Room of the DoubleTree Hotel, 1000 Penn Avenue,
Pittsburgh, Pennsylvania 15222.
The matters scheduled to be considered at the meeting are the
election of directors, the election of an auditor for the Company, and
the proposed amendment of the Company's Certificate of Incorporation
to increase the number of shares of Common Stock authorized for
issuance thereunder from 25,000,000 to 100,000,000 shares. These
matters are more fully explained in the attached Proxy Statement,
which you are encouraged to read.
The Board of Directors values and encourages stockholder
participation. It is important that your shares be represented,
whether or not you plan to attend the meeting. Please take a moment to
sign, date and return your Proxy in the envelope provided even if you
plan to attend the meeting.
We hope you will be able to attend the meeting.
Sincerely,
/s/ Paul M. Olson
Paul M. Olson President and Chief
Executive Officer
Innovative Interconnect Technology
<PAGE>
[LOGO OF CABLE DESIGN TECHNOLOGIES]
CABLE DESIGN TECHNOLOGIES CORPORATION
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------
Notice is hereby given that the Annual Meeting of Stockholders of Cable
Design Technologies Corporation (the "Company") will be held at The Somerset
Room of the DoubleTree Hotel, 1000 Penn Avenue, Pittsburgh, Pennsylvania 15222
on Tuesday, December 10, 1996, at 9:00 o'clock A.M., eastern standard time,
for the following purposes:
1. To elect 7 directors to serve until the next Annual Meeting of
Stockholders;
2. To elect an Auditor for the Company for the ensuing year; the Board of
Directors of the Company has recommended Arthur Andersen LLP, the present
Auditor, for election as Auditor;
3. To consider the amendment of the Company's Certificate of
Incorporation to increase the number of shares of Common Stock authorized
for issuance thereunder from 25,000,000 shares, par value $.01 per share,
to 100,000,000 shares, par value $.01 per share;
4. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
In accordance with the provisions of the Bylaws, the Board of Directors has
fixed the close of business on October 28, 1995 as the record date for the
determination of the holders of Common Stock entitled to notice of and to vote
at the Annual Meeting.
By order of the Board of Directors
/s/ Kenneth O. Hale
Kenneth O. Hale
Secretary
Pittsburgh, Pennsylvania
November 12, 1996
<PAGE>
NOVEMBER 12, 1996
CABLE DESIGN TECHNOLOGIES CORPORATION
FOSTER PLAZA 7 661 ANDERSEN DRIVEPITTSBURGH, PENNSYLVANIA 15220
------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
DECEMBER 10, 1996
------------
The Proxy is solicited by the Board of Directors of Cable Design
Technologies Corporation (the "Company") for use at the 1996 Annual Meeting of
Stockholders to be held on Tuesday, December 10, 1996 at 9:00 o'clock a.m. at
The Somerset Room of the DoubleTree Hotel, 1000 Penn Avenue, Pittsburgh,
Pennsylvania 15222. Solicitation of the Proxy may be made through officers and
regular employees of the Company by telephone or by oral communications with
some stockholders following the original solicitation period. No additional
compensation will be paid to such officers and regular employees for Proxy
solicitation. Expenses incurred in the solicitation of Proxies will be borne
by the Company
VOTING MATTERS
The representation in person or by proxy of a majority of the outstanding
shares of common stock of the Company, par value $.01 per share (the "Common
Stock"), entitled to a vote at the meeting is necessary to provide a quorum
for the transaction of business at the meeting. Shares can only be voted if
the stockholder is present in person or is represented by a properly signed
proxy. Each stockholder's vote is very important. Whether or not you plan to
attend the meeting in person, please sign and promptly return the enclosed
proxy card, which requires no postage if mailed in the United States. All
signed and returned proxies will be counted towards establishing a quorum for
the meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choice by marking the appropriate box on
the proxy card. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the Board of Director's proposals, and
as the individuals named as proxy holders on the proxy deem advisable on all
other matters as may properly come before the meeting.
For all matters to be voted upon at the meeting other than the Increased
Shares Proposal (as defined), the affirmative vote of a majority of shares
present in person or represented by proxy, and entitled to vote on the matter,
is necessary for approval. With respect to the Increased Shares Proposal, the
affirmative vote of a majority of the shares entitled to vote on the matter is
necessary for approval. Withholding authority to vote or an instruction to
abstain from voting on a proposal will be treated as shares present and
entitled to vote and, for purposes of determining the outcome of the vote,
will have the same effect as a vote against the proposal. A broker "non-vote"
occurs when a nominee holding shares for a beneficial holder does not have
discretionary voting power and does not receive voting instructions from the
beneficial owner. Broker "non-votes" will not be treated as shares present and
entitled to vote on a voting matter and will have no effect on the outcome of
the vote.
Any stockholder giving the enclosed Proxy has the power to revoke such Proxy
prior to its exercise either by voting by ballot at the meeting, by executing
a later-dated proxy or by delivering a signed written notice of the revocation
to the office of the Secretary of the Company before the meeting begins. The
Proxy will be voted at the meeting if the signer of the Proxy was a
stockholder of record on October 28, 1996 (the "Record Date").
<PAGE>
On the Record Date, there were outstanding and entitled to vote at the
meeting 18,191,710 shares of Common Stock. Each outstanding share of Common
Stock is entitled to one vote. This Proxy Statement is first being sent to the
stockholders on or about November 12, 1996. A list of the stockholders
entitled to vote at the meeting will be available for inspection at the
meeting for purposes relating to the meeting.
MATTERS TO BE ACTED UPON
1. ELECTION OF DIRECTORS
Pursuant to the Bylaws of the Company, the Board of Directors has determined
that the number of directors constituting the full Board of Directors shall be
seven. The Board of Directors recommends that the stockholders vote FOR each
nominee set forth below. Proxies are solicited in favor of the nominees named
on the following pages and it is intended that the Proxies will be voted for
the seven nominees. In the event that any of the nominees should become unable
or unwilling to serve as a director, it is intended that the Proxies will be
voted for the election of such other person, if any, as shall be designated by
the Board of Directors. It is not anticipated that any of the nominees will be
unable or unwilling to serve as a director. Each director to be elected will
serve until the next Annual Meeting of Stockholders or until a successor is
elected and shall qualify.
INFORMATION REGARDING NOMINEES FOR ELECTION OF DIRECTORS
A brief statement of the business experience and positions with the Company
for the past five years, a listing of certain other directorships and the ages
(as of October 27, 1996) of each person nominated to become a director of the
Company are set forth on the following pages. There are no family
relationships between any of the directors, nominees and executive officers of
the Company nor any arrangement or understanding between any director or
nominee and any other person pursuant to which he or she was or is to be
selected as a director or nominee.
Bryan C. Cressey, 47, has been Chairman of the Board of the Company since
1988 and a director since 1985. For the past fifteen years he has also been a
General Partner and Principal of Golder, Thoma, Cressey, Rauner, Inc.
("GTCR"), a private equity investment firm which controls the principal
stockholder of the Company as well as those of several other corporations. See
"Security Ownership of Certain Beneficial Owners." Mr. Cressey received a
Juris Doctor degree and an MBA degree from Harvard University in 1976. He is
also a director of Paging Network, a publicly traded paging company, which is
unaffiliated with the Company.
Paul M. Olson, 62, has been President and a director of the Company since
1985, and Chief Executive Officer of the Company since 1993. From 1972 to 1984
Mr. Olson was the President of Phalo Corporation, a wire and cable
manufacturer, and directed sales and marketing at Phalo Corporation from 1967
to 1972. From 1963 to 1967, Mr. Olson was employed at General Electric and,
from 1960 to 1963, at General Cable, in wire and cable related sales and
marketing positions.
Bernard J. Bannan, 76, has been a director of the Company since 1987. For
the past six years he has been President and CEO of Binley Inc., a private
real estate investment company that is unaffiliated with the Company. Mr.
Bannan has also been a director of MacNeal Schwendler Corp., a publicly traded
software company that is unaffiliated with the Company, since 1986.
Myron S. Gelbach, Jr., 75, has been a director of the Company since 1985.
Until his retirement in 1995, he had been a financial consultant with, and
until September 1994 was the President of, Militia Hill Company, a financial
consulting services company that is unaffiliated with the Company. Until his
retirement last year, Mr. Gelbach was also a director of Tasty Baking Company,
a publicly traded snack food company, which is unaffiliated with the Company.
Michael F.O. Harris, 58, has been a director of the Company since 1985. For
the past seven years he has also been a Managing Director of NGI, Inc. and The
Northern Group, Inc. ("Northern"), which act as Managing General Partners of
Northern Investment Limited Partnership ("NILP") and Northern Investment
Limited Partnership II ("NILPII"), respectively. NILP and NILPII are
investment partnerships which own several manufacturing companies unaffiliated
with the Company. NILPII owns approximately 1.4% of the outstanding Common
Stock of the Company. See "Security Ownership of Certain Beneficial Owners."
2
<PAGE>
Glenn Kalnasy, 53, has been a director of the Company since 1985. For the
past seven years he has also been a Managing Director of NGI, Inc. and The
Northern Group, Inc., which act as Managing General Partners of NILP and
NILPII, respectively. NILP and NILPII are investment partnerships which own
several manufacturing companies unaffiliated with the Company. NILPII owns
approximately 1.4% of the outstanding Common Stock of the Company. See
"Security Ownership of Certain Beneficial Owners."
Richard C. Tuttle, 41, has been a director of the Company since 1989. Since
1992, he has also been an Executive Vice President at Health Care and
Retirement Corp., a publicly traded health care company that is unaffiliated
with the Company. From 1987 to 1992, he was a principal at GTCR, a private
equity investment firm that controls the principal stockholder of the Company.
2. ELECTION OF AUDITORS
The Board of Directors recommends that the stockholders vote FOR the
election of the firm of Arthur Andersen LLP as the auditors to audit the
financial statements of the Company and certain of its subsidiaries for the
fiscal year ending July 31, 1997. It is intended that the Proxies in the form
enclosed with this Proxy Statement will be voted for such firm unless
stockholders specify to the contrary in their Proxies or specifically abstain
from voting on this matter.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting of Stockholders. They will have the opportunity to make
statements if they desire to do so and will be available to respond to
appropriate questions.
3. INCREASED SHARES PROPOSAL
On September 10, 1996, the Board of Directors unanimously adopted
resolutions approving a proposal (the "Increased Shares Proposal") to amend
the Company's Certificate of Incorporation in order to increase the number of
shares of Common Stock that the Company is authorized to issue from 25,000,000
shares, par value $.01 per share, to 100,000,000 shares, par value $.01 per
share. The additional shares would be part of the existing class of Common
Stock and, if and when issued, would have the same rights and privileges as
the shares of Common Stock presently outstanding. The holders of shares of
Common Stock do not have preemptive rights. The Board of Directors determined
that the Increased Shares Proposal is advisable and directed that the
Increased Shares Proposal be considered at the Annual Meeting.
One of the principal reasons for the Increased Shares Proposal is to provide
a sufficient number of shares of Common Stock to ensure that the Company will
continue to have an adequate number of authorized and unissued shares of
Common Stock for future use. If the Increased Shares Proposal is adopted by
the stockholders, the additional authorized and unissued Common Stock would be
available for issuance from time to time for such corporate purposes as
financings, acquisitions, stock dividends and future stock splits, as the
Board of Directors may deem appropriate, without the necessity of further
amendment to the Company's Certificate of Incorporation.
Stockholders should note that certain disadvantages may result from the
adoption of the Increased Shares Proposal. In the event that the Increased
Shares Proposal is adopted and the proposed amendment to the Certificate of
Incorporation is effected, there will be an additional 75,000,000 shares of
Common Stock available for issuance by the Company. The Increased Shares
Proposal would have the effect enabling the Board of Directors to issue shares
to persons friendly to current management. Such an issuance could make more
difficult or discourage an attempt to obtain control of the Company by means
of a merger, tender offer, proxy contest or otherwise, and thereby protect the
continuity of the Company's management. Such additional shares also could be
used to dilute the stock ownership of persons seeking to obtain control of the
Company. In addition, the mere existence of unissued and unreserved Common
Stock may have a depressive effect on the market price of Common Stock.
3
<PAGE>
If the Increased Shares Proposal is adopted, the amendment to the Company's
Certificate of Incorporation will become effective on December 11, 1996.
4. OTHER BUSINESS
The Board of Directors does not know of any other business to be presented
at the Annual Meeting of Stockholders. If any other matters properly come
before the meeting, however, it is intended that the persons named in the
enclosed form of Proxy will vote said Proxy in accordance with their best
judgment.
DIRECTORS MEETINGS AND COMPENSATION
DIRECTORS MEETINGS
The Board of Directors held four regular meetings and three special
telephonic meetings during the year ended July 31, 1996 ("fiscal 1996"). The
Audit Committee, which currently consists of Bryan C. Cressey and Michael F.O.
Harris, oversees actions taken by the Company's independent auditors,
recommends the engagement of auditors and reviews the Company's internal
audits. The Compensation Committee approves the compensation of executives of
the Company, makes recommendations to the Board of Directors with respect to
standards for setting compensation levels and administers the Company's
incentive plans. The Compensation Committee currently consists of Bernard J.
Bannan, Bryan C. Cressey and Richard C. Tuttle. There is no standing
nominating committee. During fiscal 1996, each of the Company's incumbent
directors participated in excess of 91% of the aggregate of the meetings of
the Board of Directors and the meetings of committees of the Board of
Directors of which such director was a member. During fiscal 1996, the
Compensation Committee met two times and the Audit Committee met one time.
COMPENSATION OF DIRECTORS
Directors who are also officers of the Company do not currently receive
compensation from the Company for their services as directors. Those directors
who are not officers of or otherwise associated with the Company (the "Outside
Directors") (currently Bernard J. Bannan, Myron S. Gelbach and Richard C.
Tuttle) currently receive $2,500 quarterly for their services as directors.
All directors are reimbursed for expenses incurred in connection with their
attendance at meetings. In addition, in June 1996, the Board of Directors
granted each of the Outside Directors a special $10,000 bonus for
extraordinary service over the past fiscal year. Under the Company's Non-
Employee Director Stock Plan (the "Outside Director Plan") each participating
director under such plan (currently Bernard J. Bannan, Myron S. Gelbach and
Richard C. Tuttle) is entitled to receive shares of Common Stock annually with
a fair market value of $15,000.
Each of Messrs. Harris and Kalnasy is a party to a consulting agreement with
the Company (the "Director Consulting Agreements"), dated as of July 14, 1988,
pursuant to which each has purchased Common Stock of the Company and has been
granted options to purchase additional Common Stock in exchange for consulting
services. All of such options are fully vested. Each Director Consulting
Agreement can be terminated by the director or the Company upon 60 days prior
notice.
GTCR, which controls the principal stockholder of the Company, and Northern,
which controls an entity owning approximately 1.4% of the outstanding Common
Stock of the Company, are each party to a consulting agreement pursuant to
which each is paid $50,000 a year in exchange for consulting services rendered
to the Company and its subsidiaries by management personnel of each of GTCR
and Northern. Bryan Cressey, a director of the Company, is a General Partner
of GTCR, and Michael Harris and Glenn Kalnasy, directors of the Company, are
each a Managing Director and significant stockholder of Northern. Although the
consulting agreements with GTCR and Northern terminated by their terms upon
the completion of the Company's initial public offering, the Board of
Directors of the Company voted to amend the consulting agreements to provide
for their continuation.
4
<PAGE>
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information on Mr. Olson and the four other
most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1996 (collectively, the "named executives").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
AWARDS PAYOUTS
------------------- ------------
ANNUAL COMPENSATION RESTRICTED
---------------------- STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS AWARDS SARS COMPENSATION
POSITION YEAR ($)(1) ($) ($) (#) ($)(2)
------------------ ------ ------- ------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Olson........... 1996 341,539 282,117 -- -- 26,712
President, Chief Execu-
tive Officer 1995 320,674 288,750 -- -- 26,793
1994 288,308 147,577 -- -- 34,941
Michael A. Dudley....... 1996 176,593 113,990 -- -- 24,133
Executive Vice Presi-
dent 1995 158,743 111,161 -- -- 80,606
1994 144,134 87,605 -- -- 22,492
David R. Harden......... 1996 232,854 110,222 -- -- 25,200
Senior Vice President 1995 220,420 145,822 -- -- 25,200
1994 201,766 108,476 -- -- 31,278
Donald M. Hastings...... 1996 232,854 110,222 -- -- 26,712
Senior Vice President 1995 220,420 145,822 -- -- 26,712
1994 201,766 108,476 -- -- 32,700
George C. Graeber....... 1996 212,865 124,636 -- -- 24,228
Executive Vice Presi-
dent 1995 179,158 125,562 -- -- 24,020
1994 146,960 97,635 -- -- 22,379
</TABLE>
- - --------
(1) Amounts in this column reflect salaries paid in the 1996 fiscal year.
(2) Figures in this column include amounts with respect to Company
contributions to the West Penn Wire Division Incentive Profit Sharing Plan
and Trust (the "Incentive Plan") (which is a defined contribution plan)
and term life insurance premiums paid by the Company (both of which
reflect payments made in the 1995 calendar year), which for each of the
other named executives are: Mr. Olson, Incentive Plan $22,500, term life
insurance premium $4,212; Mr. Dudley, Incentive Plan $22,500, term life
insurance premium $1,633; Mr. Harden, Incentive Plan $22,500, term life
insurance premium $2,700; Mr. Hastings, Incentive Plan $22,500, term life
insurance premium $4,212; Mr. Graeber, Incentive Plan $22,500, term life
insurance premium $1,728.
OPTION/SAR GRANTS IN FISCAL YEAR 1996
While the Company does have incentive plans authorizing the grant of stock
options, no stock options were granted to any of the named executives during
fiscal 1996.
5
<PAGE>
OPTION/SAR EXERCISES AND YEAR END VALUES FOR FISCAL YEAR 1996
The following table shows information regarding the exercise of stock
options or SARs during fiscal 1996 by the named executives and the number and
value of any unexercised stock options or SARs held by them as of July 31,
1996:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
IN THE MONEY
SHARES NUMBER OF UNEXERCISED OPTIONS/SARS AT
ACQUIRED ON VALUE OPTIONS/SARS AT FY-END FY-
EXERCISE REALIZED (#) END ($) EXERCISABLE/
NAME (#) ($) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- -------- ------------------------- --------------------
<S> <C> <C> <C> <C>
Paul M. Olson........... 78,000 (2) 187,874/0 5,495,315/0
Michael A. Dudley....... 15,000 -- 148,772/0 4,351,581/0
David R. Harden......... -- -- 265,874/0 7,776,815/0
Donald M. Hastings...... -- -- 265,874/0 7,776,815/0
George C. Graeber....... 15,000 88,377/36,395(3) 2,585,027/1,064,554
</TABLE>
- - --------
(1) Based on the closing price of the Common Stock on July 31, 1996 of $29
1/4.
(2) On March 4, 1996, 182,196 SARs, at a value of $37.35 per SAR (net of
exercise price) vested upon the consummation of a primary and secondary
public offering of 5,700,000 shares of the Company's Common Stock (the
"Offering") on February 28, 1996. The Offering included 3,000,000 shares of
Common Stock sold by the Company and 2,204,000 shares of Common Stock sold
by GTC Fund II .
(3) On September 14, 1996 an additional 36,395 of the options held by Mr.
Graeber vested.
EMPLOYMENT AGREEMENTS
None of the named executives have employment agreements with the Company or
any of its affiliates, nor are any such named executives party to any
agreements entitling them to termination or severance payments upon a change
in control of the Company. The Company has, however, entered into Senior
Management Agreements with each of Messrs. Olson, Hastings and Harden,
pursuant to which each has purchased shares of Common Stock. The Senior
Management Agreements also impose certain additional restrictions upon the
executives, including confidentiality obligations, assignment of the benefit
of inventions and patents to the Company and a requirement that such
executives devote all of their business time to the Company.
CERTAIN TRANSACTIONS
The Company purchases converted copper from an entity controlled by family
members of David Harden, an officer of the Company. In fiscal 1996, total
purchases by the Company from such entity were approximately $1,738,000. As of
July 31, 1996, the Company owed approximately $62,000 to such entity,
consisting of accounts payable arising in connection with such purchases. The
Company expects to continue to purchase converted copper from such entity at
such level in the foreseeable future. In addition, during fiscal 1996, the
Company purchased approximately $25,000 of machinery, equipment and services
from entities owned by Mr. Harden. Such purchases are made on an "as needed"
basis, and there is no contract relating to such purchases.
The Company leases one of its facilities from an entity controlled by Mr.
Harden. The facility is leased on a month-to-month basis for $5,000 per month.
There is no written lease relating to such arrangement and the Company expects
to terminate such lease in the near future.
The Company leases one of its facilities from an entity controlled by
members of Mr. Harden's family for a rental payment of $1,310 and a property
tax payment of $135 per month. The written lease agreement governing this
arrangement expires October 31, 1998.
The Company believes that each of the foregoing transactions was consummated
on terms no less favorable than those that could be obtained by the Company
from an unrelated third party in a transaction negotiated on an arms-length
basis.
6
<PAGE>
COMPENSATION COMMITTEE REPORT
Compensation Policies Applicable to Executive Officers
During fiscal 1996, the Compensation Committee continued to follow
compensation policies established prior to the Company's initial public
offering. The overall compensation program for salaried employees has been
designed and is administered to ensure that employee compensation motivates
superior job performance and the achievement of business objectives. The main
policy objective of executive officer compensation is the maximization of
stockholder value over the long term. The Compensation Committee believes that
this can best be accomplished by an executive compensation program which
reflects the following three principles:
First, base salaries should be sufficient to attract and retain qualified
management talent, without exceeding competitive practice at similar
companies in the specialty cable and related industries.
Second, annual bonus and incentive programs should provide opportunity
for significant increases in compensation, based on meeting or exceeding
pre-determined performance targets.
Third, a substantial portion of total long-term compensation should
reflect performance on behalf of the Company's stockholders, as measured by
increases in the Company's stock price.
In the judgment of the Compensation Committee, the performance of the
Company in fiscal 1996 confirms that the compensation program is achieving its
main objectives. Accordingly, the Compensation Committee made no fundamental
changes in the basic executive compensation program during fiscal 1996.
Base Salary
Annual base salaries of the executive officers were reviewed by the
Compensation Committee at its October 1996 meeting and adjusted as appropriate
effective October 1, 1996. Following previously stated policies, the
Compensation Committee adjusted salaries based upon competitive salary levels,
past individual performance as measured by both qualitative and quantitative
factors and the potential for making significant contributions to future
Company performance. The Compensation Committee believes that for salary
increases to provide a meaningful additional incentive such increases must
exceed the rate of inflation and, in light of relatively low inflation in the
national economy, the Compensation Committee approved salary increases ranging
between 2% and 17% for senior management at its October 1996 meeting. Although
strong overall performance by the Company was a factor in determining the
salary adjustments, the individual factors stated above were the primary
considerations.
Bonus Plan
Each of the named executive officers and certain other key personnel of the
Company participate in an executive/management bonus plan (the "Bonus Plan").
The Bonus Plan has not been formalized in writing, and it provides for annual
bonus awards based upon operating results compared to a projected operating
budget prepared at the beginning of each fiscal year. Employees at certain of
the Company's operating units receive bonuses based upon a formula determined
by the financial results of their respective unit and the overall financial
results of the Company. Other participants, including the Chief Executive
Officer (the "CEO"), receive bonuses based on the overall financial results of
the Company. An individual participant's bonus is determined as a percentage
of the Target Bonus (the individual's "Target Bonus," ranges from 15% to 45%
of base salary) based upon (i) the relevant performance target(s) achieved,
(ii) the employee's place of employment within the Company and (iii) the
weight given to the relevant performance targets. Bonus amounts are prorated
for new participants who are added during the course of a given year. Bonus
payments are subject to modification at the discretion of the Compensation
Committee. One half of the Bonus Plan bonuses are paid quarterly, with the
balance paid after final fiscal year results are available.
NORDX/CDT One-Time Bonus Program
Certain key personnel of NORDX/CDT participate in the NORDX/CDT One-Time
Bonus Program (the "One-Time Program"). The One-Time Program provides for a
potential one-time bonus award to such employees based upon NORDX/CDT and the
Company achieving certain target savings as a result of certain consolidation
and restructuring of NORDX/CDT and Company operations.
7
<PAGE>
NORDX/CDT Signing Bonus Program
Certain key personnel of NORDX/CDT participate in the NORDX/CDT Signing
Bonus Program (the "Signing Program"). The Signing Program provides for the
payment of a signing bonus to certain key personnel of NORDX/CDT of up to an
aggregate of $750,000 over the first five years of a such person's employment
by the Company.
NORDX/CDT Plan II Bonus Program
Certain employees of NORDX/CDT participate in the NORDX/CDT Plan II Bonus
Program (the "Plan II Program"). The Plan II Program provides for bonus awards
with respect to the six-month period ending July 31, 1996 and annually
thereafter for four years based upon NORDX/CDT's earnings before interest and
taxes. Bonus payments are subject to modification at the discretion of the
Chief Executive Officer of NORDX/CDT subject to the approval of the Chief
Executive Officer of the Company, currently, Paul M. Olson.
Stock Options
Under the Company's Long Term Performance Incentive Plan (the "Long Term
Plan") and the Company's Supplemental Long Term Performance Incentive Plan
(the "Supplemental Plan"), stock options may be granted to the Company's
executive officers. The Compensation Committee determines the number of stock
options to be granted based on an officer's job responsibilities and
individual performance evaluation. Stock options are granted with an exercise
price equal to the market price of the Common Stock on the date of grant and
generally vest over five years. This approach is designed to encourage the
creation of long-term stockholder value since the full benefit of such options
cannot be realized unless the stock price exceeds the exercise price at the
end of the five years. The Compensation Committee believes that the
significant equity interests in the Company held by the Company's management
helps to align the interests of stockholders and management and maximize
stockholder returns over the long term. An aggregate of 16,122 shares of
Common Stock remain reserved for grant under the Long Term Plan. An Aggregate
of 800,600 shares of Common Stock remain reserved for grant under the
Supplemental Plan. Of such 800,600 shares, 350,600 shares remain reserved
under the Supplemental Plan for grants only to new members of the Company's
management who are employed in connection with acquisitions by the Company.
The Outside Directors are not entitled to receive awards under the Long Term
Plan or the Supplemental Plan. In order to create and provide an incentive
structure similar to that which is in place for employees under those plans,
the Company adopted the Outside Director Plan. Under this plan, the Company's
Outside Directors are eligible to receive shares of Common Stock in an amount
and at a price set by a pre-arranged formula. Under the Outside Director Plan
72,750 shares of Common Stock remain reserved for grant to the Company's
Outside Directors.
Compensation of Chief Executive Officer
The compensation policies described above apply as well to the compensation
of the CEO. The Compensation Committee is directly responsible for determining
the CEO's salary level and for all awards and grants to the CEO under the
incentive components of the compensation program. The overall compensation
package of the CEO is designed to recognize that the CEO bears primary
responsibility for increasing the value of stockholders' investments.
Accordingly, a substantial portion of the CEO's compensation is incentive-
based, providing greater compensation as direct and indirect financial
measures of stockholder value increase. The CEO's compensation is thus
structured and administered to motivate and reward the successful exercise of
these qualities.
The CEO's compensation for fiscal 1996 was directly related to the overall
performance of the Company as measured by financial criteria, as demonstrated
by the significant growth in sales, operating income and cash
8
<PAGE>
flow. In addition, the CEO's compensation reflected (i) the continued strong
performance of the senior management team; (ii) the successful negotiation and
consummation of the acquisition of NORDX/CDT, Inc. and several smaller
acquisitions; (iii) the successful completion of a primary and secondary
public offering of 5,700,000 shares of Common Stock on February 28, 1996; and
(iv) other related qualitative factors.
Based on the foregoing, the CEO's base compensation was raised from $345,000
as of October 1, 1995 to $362,250 effective October 1, 1996. In addition, the
CEO received a bonus of $282,117 for fiscal 1996 under the Bonus Plan,
reflecting achievement of 183% of the target performance level and received a
payment of $6,805,021 due to the vesting of 100% of his SARs. Mr. Olson's SARs
were granted on March 17, 1992 in lieu of stock options as a result of
restrictions placed on the issuance of additional stock options by certain of
the Company's creditors.
Conclusion
Through the programs described above, a very significant portion of the
Company's executive compensation is linked directly to corporate performance
and stock price appreciation. In fiscal 1996, a majority of the Company's
executive compensation (including unrealized appreciation in stock option)
consisted of these performance-based variable elements.
The Compensation Committee has determined that it is unlikely that the
Company would pay any amounts in fiscal 1997 that would result in the loss of
a Federal income tax deduction under Section 162(m) of the Internal Revenue
Code of 1986, as amended, and accordingly, has not recommended that any
special actions be taken or that any plans or programs be revised at this time
in light of such tax law provision.
Compensation Committee Members as of July 31, 1996
Bernard J. Bannan, Bryan C. Cressey and Richard C. Tuttle.
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PERFORMANCE GRAPH
The following graph compares the cumulative total return on $100 invested on
November 24, 1993 (the first day of public trading of the Common Stock) through
July 31, 1996 (the last day of public trading of the Common Stock in fiscal
1996) in the Common Stock of the Company, the S&P 500 Index and the S&P
Electrical Equipment Index. The return of the indices is calculated assuming
reinvestment of dividends during the period presented. The Company has not paid
any dividends since its initial public offering. The stock price performance
shown on the graph below is not necessarily indicative of future price
performance.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG CABLE DESIGN TECHNOLOGIES
CORPORATION, S&P 500 INDEX AND
S&P ELECTRICAL EQUIPMENT INDEX
[PERFORMANCE GRAPH]
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of Common Stock as of October 20, 1996, by each person or entity
known to the Company who owns of record or beneficially five percent or more
of the Common Stock, by each named executive officer and director nominee and
all executive officers and director nominees as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OF OUTSTANDING COMMON
NAME COMMON STOCK(1) STOCK(1)
- - ---- ---------------- ------------------
<S> <C> <C>
GTC Fund II(2)........................ 2,853,922 15.7
NILPII(3)............................. 247,014 1.4
Bryan C. Cressey(2)(4)(5)(6).......... 2,931,836 16.1
Paul M. Olson(4)(7)................... 495,797 2.7
George C. Graeber(8).................. 124,772 *
Michael A. Dudley(9).................. 148,772 *
Donald M. Hastings(10).................. 387,797 2.1
David R. Harden(10)..................... 455,797 2.1
Bernard J. Bannan(4)(11)................ 25,449 *
Myron S. Gelbach, Jr.(4).............. 26,549 *
Michael F.O. Harris(3)(4)(5)(12)........ 337,038 1.8
Glenn Kalnasy(3)(4)(13)................. 338,838 1.8
Richard C. Tuttle(4)(14)................ 15,739 *
All executive officers and director
nominees as a group
(13 Persons)(15)....................... 2,011,861 10.6
</TABLE>
- - --------
* Represents less than 1%.
(1) Figures are based upon 18,188,210 shares of Common Stock outstanding as
of September 30, 1996. The figures assume exercise by only the
stockholder or group named in each row of all options and warrants for
the purchase of Common Stock held by such stockholder or group which are
exercisable within 60 days of October 20, 1996.
(2) The general partner of GTC Fund II is GTCR, an Illinois limited
partnership. Bryan Cressey is a General Partner of GTCR, and may be
deemed to be a beneficial owner of the Common Stock of the Company owned
by GTC Fund II, but Mr. Cressey disclaims any such beneficial ownership.
Reflects October 1996, distribution of 1,500,000 shares of Common
Stock by GTC Fund II to its partners which shares are no longer
beneficially owned by GTC Fund II. The business address of GTC Fund II
and Mr. Cressey is c/o Golder, Thoma, Cressey, Rauner, Inc., 6100 Sears
Tower, Chicago, Illinois 60606.
(3) The general partners of NILPII are Glenn Kalnasy, Michael F.O. Harris, GT
Northern 1988 Investment Fund ("GT Northern"), a Washington limited
partnership, and Northern. The general partners of GT Northern are Mr.
Kalnasy, Mr. Harris and Northern. Mr. Kalnasy and Mr. Harris together are
the sole stockholders of the outstanding capital stock of Northern. Mr.
Kalnasy, Mr. Harris, Northern and GT Northern may be deemed to be
beneficial owners of the Common Stock of the Company owned by NILPII, but
each disclaims any such beneficial ownership. The business address of
NILPII, Mr. Kalnasy, Mr. Harris, Northern and GT Northern is c/o The
Northern Group, 3140 Bank of California Center, 900-4th Avenue, Seattle,
Washington 98164.
(4) Messrs. Cressey, Olson, Bannan, Gelbach, Jr., Harris, Kalnasy, and Tuttle
are directors of the Company.
(5) Members of the Audit Committee.
(6) Includes 2,853,922 shares held by GTC Fund II. Mr. Cressey is a general
partner of GTCR, and may be deemed to be a beneficial owner of the
Common Stock of the Company owned by GTC Fund II, but Mr. Cressey
disclaims any such beneficial ownership. See footnote 2.
(7) Includes 187,874 shares covered by options.
(8) Includes 124,772 shares covered by options.
(9) Includes 148,772 shares covered by options.
(10) Includes 265,874 shares covered by options.
11
<PAGE>
(11) The Bernard J. Bannan Trust owns these 25,449 shares, and Mr. Bannan is
the beneficiary of the Trust.
(12) Includes 247,014 shares held by Northern Fund II and 90,024 shares
covered by options. Mr. Harris may be deemed to be beneficial owner of
the Common Stock of the Company owned by Northern Fund II, but disclaims
any such beneficial ownership. See footnote 3.
(13) Includes 247,014 shares held by Northern Fund II and 91,824 shares
covered by options. Mr. Kalnasy may be deemed to be the beneficial owner
of the Common Stock of the Company owned by Northern Fund II, but
disclaims any such beneficial ownership. See footnote 3.
(14) Includes 8,735 shares covered by options.
(15) Excludes 2,853,922 shares held by GTC Fund II which may be deemed to be
beneficially owned by Mr. Cressey, and 247,014 shares held by Northern
Fund II which may be deemed to be beneficially owned by Messrs. Kalnasy
and Harris. See footnotes 1 and 3. Each of Messrs. Cressey, Kalnasy and
Harris disclaim any such beneficial ownership.
DIRECTOR AND OFFICER AND TEN PERCENT STOCKHOLDER SECURITIES REPORTS
The federal securities laws require the Company's directors and officers,
and persons who own more than ten percent of the Company's Common Stock, to
file with the Securities and Exchange Commission, the Nasdaq National Market
and the Secretary of the Company initial reports of ownership and reports of
changes in ownership of the Common Stock of the Company.
Normand R. Bourque, an Executive Vice President of the Company, was required
to file a report on Form 3 in connection with his receipt of options to
purchase 219,400 shares of Common Stock from the Company. Mr. Bourque's report
was not timely filed, but was filed on February 28, 1996. To the Company's
knowledge, based solely on review of the copies of such reports furnished to
the Company and written representations that no other reports were required,
during the fiscal year ended July 31, 1996, all other of the Company's
officers, directors and greater-than-ten-percent beneficial owners made all
required filings.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be presented at the 1997 Annual Meeting of
Stockholders must be received by the Secretary of the Company by July 13, 1997
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 1997 Annual Meeting
will be scheduled for December 9, 1997.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any business to come before the Annual Meeting other than the matters
described in the notice. If other business is properly presented for
consideration at the Annual Meeting, the enclosed Proxy authorizes the persons
named therein to vote the shares in their discretion.
SOLICITATION OF PROXIES
Solicitation of the Proxies may be made through officers and regular
employees of the Company by telephone or by oral communications with some
stockholders following the original solicitation period. No additional
compensation will be paid to such officers and regular employees for proxy
solicitation. Expenses incurred in the solicitation of Proxies will be borne
by the Company, including the charges and expenses of brokerage firms and
others of forwarding solicitation material to beneficial owners of Common
Stock. In addition to use of the mails, Proxies may be solicited by officers
and employees of the Company in person or by telephone.
12
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
are incorporated in this Proxy Statement by reference: (i) the Company's
Annual Report for fiscal year ended July 31, 1996 including the financial
information included therein and (ii) the Company's Quarterly Report on Form
10-Q for each of the fiscal quarters ended October 31, 1995, January 31, 1996,
and April 30, 1996.
13
<PAGE>
<TABLE>
<S> <C>
P CABLE DESIGN TECHNOLOGIES CORPORATION
For Annual Meeting of Stockholders - December 10, 1996
R THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
O The undersigned hereby appoints Paul M. Olson and Kenneth O. Hale, and each or any of
them, as the true and lawful attorneys of the undersigned, with full power of
X substitution and revocation, and authorizes them, and each of them, to vote all the
shares of capital stock of the Corporation which the undersigned is entitled to vote at
Y said meeting and any adjournment thereof upon the matters specified below and upon such
other matters as may be properly brought before the meeting or any adjournments
thereof, conferring authority upon such true and lawful attorneys to vote in their
discretion on such other matters as may properly come before the meeting and revoking
any proxy heretofore given.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS
GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE PROPOSAL IN ITEMS 2 AND
3 AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 4.
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
[X]
Please mark
votes as in
this example.
1. To elect a Board of Directors for the 2. To elect the firm FOR AGAINST ABSTAIN
ensuing year. of Arthur Andersen, LLP [ ] [ ] [ ]
as auditors for
NOMINEES: Bryan C. Cressey, Paul M. the fiscal year ending July 31, 1997.
Olson, Bernard J. Bannan, Myron S.
Gelbach, Jr., Michael F.O. Harris, Glenn 3. To approve the FOR AGAINST ABSTAIN
Kalnasy, Richard C. Tuttle. amendment to the [ ] [ ] [ ]
Articles of Incorporation
FOR WITHHELD increasing the number of
[ ] [ ] shares of common stock authorized for issuance thereunder
MARK HERE from 25,000 to 100,000,000.
FOR ADDRESS
[ ]____ CHANGE AND [ ] 4. To transact such other business as may properly come before the
NOTE BELOW meeting.
For all nominees except as noted above
(If signing as attorney, executor, trustee or guardian,
Please give your full title as such. If shares are held jointly,
each holder should sign.)
Signature:_________________________________________Date:_____________
Signature:_________________________________________Date:_____________
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
