<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 ActRule 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:
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(/1/)Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
LOGO CABLE DESIGN TECHNOLOGIES
- -------------------------------------------------------------------------------
FOSTER PLAZA 7 . 661 ANDERSEN DRIVE Paul M. Olson
PITTSBURGH, PA 15220 . (412) 937-2300 President/Chief Executive Officer
November 10, 1997
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders on Tuesday, December 9, 1997 at 10:00 A.M.,
eastern standard time. The meeting will be held at the LeBateau Room of the
Pittsburgh Hilton and Towers, Gateway Center, 600 Commonwealth Place,
Pittsburgh, Pennsylvania 15222.
The matters scheduled to be considered at the meeting are the election of
directors and the election of an auditor for the Company. 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
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 LeBateau
Room of the Pittsburgh Hilton and Towers, Gateway Center, 600 Commonwealth
Place, Pittsburgh, Pennsylvania 15222 on Tuesday, December 9, 1997, at 10:00
A.M., eastern standard time, for the following purposes:
1. To elect six 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; and
3. 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 27, 1997 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 10, 1997
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION
FOSTER PLAZA 7
661 ANDERSEN DRIVE
PITTSBURGH, PENNSYLVANIA 15220
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
DECEMBER 9, 1997
----------------
November 10, 1997
The Proxy is solicited by the Board of Directors of Cable Design
Technologies Corporation (the "Company") for use at the 1997 Annual Meeting of
Stockholders to be held on Tuesday, December 9, 1997 at 10:00 A.M., eastern
standard time, at the LeBateau Room of the Pittsburgh Hilton and Towers,
Gateway Center, 600 Commonwealth Place, 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.
No additional compensation will be paid to such officers and regular employees
for any such 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 election of
directors, 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. The directors are elected by a plurality of the votes of the shares
present in person or represented by proxy and entitled to vote in the election
of directors. 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 27, 1997 (the "Record Date").
<PAGE>
On the Record Date, there were outstanding and entitled to vote at the
meeting 18,861,417 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 10, 1997. 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
six. 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 six 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 September 30, 1997) 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, 48, has been Chairman of the Board of the Company since
1988 and a director since 1985. For the past seventeen years he has also been a
General Partner and Principal of Golder, Thoma, Cressey, Rauner, Inc. ("GTCR"),
a private equity investment firm which controls a significant 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, 63, 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.
Myron S. Gelbach, Jr., 76, 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 in 1995, 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, 59, has been a director of the Company since 1985. For
the past eight 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 less than 1% of the outstanding Common Stock of the
Company.
2
<PAGE>
Glenn Kalnasy, 54, has been a director of the Company since 1985. For the
past eight years he has also been a Managing Director of NGI, Inc. and
Northern, 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 less than 1%
of the outstanding Common Stock of the Company.
Richard C. Tuttle, 42, has been a director of the Company since 1989. He is a
Principal of Prospect Partners, L.L.C., a private equity investment firm. From
1992 to 1997, Mr. Tuttle was an Executive Vice President at Health Care &
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, 1998. 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. 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, 1997 ("fiscal 1997"). The
Audit Committee, which currently consists of Myron S. Gelbach 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 Bryan C.
Cressey and Richard C. Tuttle. There is no standing nominating committee.
During fiscal 1997, each of the Company's incumbent directors participated in
excess of 75% 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 1997, 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 the Company or affiliated with a significant
stockholder of the Company (the "Outside Directors") (currently Myron S.
Gelbach and Richard C. Tuttle) currently receive $2,500 quarterly for their
services as directors. All directors are reimbursed for expenses
3
<PAGE>
incurred in connection with their attendance at meetings. Under the Company's
Non-Employee Director Stock Plan (the "Outside Director Plan") each
participating director under such plan (currently 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 a significant stockholder of the Company, and Northern,
which controls an entity owning less than 1% of the outstanding Common Stock
of the Company, are each party to a consulting agreement pursuant to which
each is paid $50,000 a year in exchange for consulting services rendered to
the Company and its subsidiaries by management personnel of each of GTCR and
Northern. Bryan Cressey, a director of the Company, is a General Partner of
GTCR, and Michael Harris and Glenn Kalnasy, directors of the Company, are each
a Managing Director and significant stockholder of Northern.
4
<PAGE>
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Olson and the four
other most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1997 (collectively, the "named executives").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- -------------------- ------------
RESTRICTED ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY STOCK AWARDS OPTIONS COMPENSATION
POSITION YEAR ($)(1) BONUS ($) ($) (#) ($)(2)
------------------ ------ ------------------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Olson.......... 1997 366,231 186,721 -- -- 26,712
President, Chief
Executive Officer 1996 341,539 282,117 -- -- 26,712
1995 320,674 288,750 -- -- 26,793
Michael A. Dudley...... 1997 191,077 75,435 -- -- 24,228
Executive Vice
President 1996 176,593 113,990 -- -- 24,133
1995 158,743 111,161 -- -- 80,606
David R. Harden........ 1997 249,462 107,998 -- -- 25,304
Senior Vice President 1996 232,854 110,222 -- -- 25,200
1995 220,420 145,822 -- -- 25,200
George C. Graeber...... 1997 242,031 53,657 -- -- 24,228
Executive Vice
President 1996 212,865 124,636 -- -- 24,228
1995 179,158 125,562 -- -- 24,020
Normand Bourque........ 1997 202,371 333,436 -- -- 11,957
Executive Vice
President 1996 89,413 169,293 -- 219,400(3) 6,423
</TABLE>
- --------
(1)Amounts in this column reflect salaries paid in the 1997 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 1996 calendar year), which for each of the
named executives other than Mr. Bourque are: Mr. Olson, Incentive Plan
$22,500, term life insurance premium $4,212; Mr. Dudley, Incentive Plan
$22,500, term life insurance premium $1,728; Mr. Harden, Incentive Plan
$22,500, term life insurance premium $2,804; Mr. Graeber, Incentive Plan
$22,500, term life insurance premium $1,728. Figures in this column for
Mr. Bourque represent earned amounts with respect to projected benefits
under NORDX/CDT Inc. defined benefit plans. Assuming continued service
with the Company until age 65, Mr. Bourque's estimated benefits upon
retirement under such plans would be a lump sum payment of $211,516 upon
retirement and an annual benefit of $30,658.
(3)Such options were repriced during the last fiscal year. See "Ten Year
Option Repricings."
5
<PAGE>
OPTION GRANTS IN FISCAL YEAR 1997
While the Company does have incentive plans authorizing the grant of stock
options, no stock options were granted to any of the named executives during
fiscal 1997.
OPTION EXERCISES AND YEAR END VALUES FOR FISCAL YEAR 1997
The following table shows information regarding the exercise of stock
options during fiscal 1997 by the named executives and the number and value of
any unexercised stock options held by them as of July 31, 1997:
<TABLE>
<CAPTION>
SHARES VALUE OF UNEXERCISED
ACQUIRED ON VALUE NUMBER OF UNEXERCISED IN THE MONEY OPTIONS AT
EXERCISE REALIZED OPTIONS AT FY-END (#) FY-END ($) EXERCISABLE/
NAME (#) ($) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- --------- ------------------------- -----------------------
<S> <C> <C> <C> <C>
Paul M. Olson........... -- -- 187,874/0 6,273,583/0
Michael A. Dudley....... -- -- 148,772/0 4,714,924/0
David R. Harden......... 20,000 589,100 245,874/0 8,179,779/0
George C. Graeber....... 58,000 1,885,125 66,772/0 2,090,798/0
Normand Bourque......... -- -- 0/219,400 0/1,412,388
</TABLE>
- --------
(1) Based on the closing price of the Common Stock on July 31, 1997 of $34
1/16.
TEN-YEAR OPTION REPRICINGS
In June, 1997 the Board determined that the prior option grants to NORDX/CDT
management were not serving their intended purpose of providing financial
incentive to the NORDX/CDT management given that the exercise prices were
significantly below the then current trading price for CDT's common stock. In
addition, the Board concluded that failing to amend the options would be a
particularly unreasonable hardship for the NORDX/CDT personnel whose division
has exceeded CDT's performance expectations since its acquisition.
Accordingly, in June, 1997, 525,000 outstanding options held by NORDX/CDT
management were repriced with a new exercise price of $27.625, which
represented the market price of the Common Stock on the date of such
repricing.
The following table shows information regarding repricing during fiscal 1997
of options previously granted to the named executives.
<TABLE>
<CAPTION>
NUMBER OF MARKET PRICE LENGTH OF ORIGINAL
OPTIONS OF STOCK AT NEW OPTION TERM
REPRICED OR TIME OF EXERCISE REMAINING AT DATE
AMENDED REPRICING OR PRICE OF REPRICING OR
NAME DATE (#) AMENDMENT $ $ AMENDMENT
- ---- ------ ----------- ------------ -------- ------------------
<S> <C> <C> <C> <C> <C>
Normand Bourque.... 6/3/97 219,400 $27.625 $27.625 8.7 years
</TABLE>
EMPLOYMENT AGREEMENTS
None of the named executives, other than Normand Bourque, 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. Pursuant to an employment
agreement between Mr. Bourque and the Company, effective as of February 5,
1996, Mr. Bourque is entitled to participate in certain bonus plans and
received a stock option grant of 219,400 shares of the Company's Common Stock.
Mr. Bourque is entitled to termination payments if terminated without cause.
Termination pay is based upon Mr. Bourque's prior compensation and would be
paid for a period of 24 or 18 months, depending on when the termination
occurred. The Company also entered into Senior Management Agreements with each
of Messrs. Olson and Harden, pursuant to which each purchased shares of Common
Stock. Mr. Bourque's employment agreement and 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
substantially all of their business time to the Company.
6
<PAGE>
CERTAIN TRANSACTIONS
The Company purchases converted copper from an entity controlled by family
members of David Harden, an officer of the Company. In fiscal 1997, total
purchases by the Company from such entity were approximately $1,053,000. As of
July 31, 1997, the Company owed approximately $49,000 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. Purchases were made on an "as needed"
basis, and there is no contract relating to such purchases. The Company
believes that the foregoing transaction 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.
COMPENSATION COMMITTEE REPORT
Compensation Policies Applicable to Executive Officers
During fiscal 1997, the Compensation Committee continued to follow
established compensation policies. 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 1997 confirms that the compensation program is achieving its
main objectives. Accordingly, except as discussed below with respect to Mr.
Olson, the Compensation Committee made no fundamental changes in the basic
executive compensation program during fiscal 1997.
Base Salary
Annual base salaries of the executive officers were reviewed by the
Compensation Committee at its September 1997 meeting and adjusted as
appropriate effective October 1, 1997. 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 4% and 12% for executive officers other than the Chief
Executive Officer, at its September 1997 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"),
which has not been formalized in writing. The Bonus Plan provides for annual
bonus awards based upon financial results compared to a projected budget
prepared at the beginning of each fiscal year. Employees at each of the
Company's operating units receive bonuses based
7
<PAGE>
upon a formula determined by the financial results of their respective division
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 ranging from 0% to 200% of the Target Bonus (the
individual's "Target Bonus" ranges from 15% to 55% 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 Bonus Programs
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 ended 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
President of NORDX/CDT subject to the approval of the Chief Executive Officer
of the Company, currently, Paul M. Olson. One half of the NORDX/CDT plan
bonuses are paid quarterly, with the balance paid after the fiscal year results
are available. Mr. Bourque and certain other key personnel of NORDX/CDT
participate in the NORDX/CDT Signing Bonus Program (the "Signing Program"). The
Signing Program provides for a signing bonus to certain key personnel of
NORDX/CDT of individual aggregates ranging from $300,000 to $750,000 to be paid
over the first five years of such person's employment by the Company.
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"), incentive awards, including 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 500,600 shares of Common Stock remain reserved for grant under the
Supplemental Plan. Of such 500,600 shares, 50,600 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
69,918 shares of Common Stock remain reserved for grant to the Company's
Outside Directors.
In June, 1997 the Board determined that the prior option grants to NORDX/CDT
management were not serving their intended purpose of providing financial
incentive to the NORDX/CDT management given that the exercise prices were
significantly below the then current trading price for CDT's common stock. In
addition, the Board concluded that failing to amend the options would be a
particularly unreasonable hardship for the
8
<PAGE>
NORDX/CDT personnel whose division has exceeded CDT's performance expectations
since its acquisition. Accordingly, in June, 1997, 525,000 outstanding options
held by NORDX/CDT management were repriced with a new exercise price of
$27.625, which represented the market price of the Common Stock on the date of
repricing.
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 responsibilities.
The CEO's compensation for fiscal 1997 was based upon a pre-agreed salary
amount and a bonus earned under the Bonus Plan described above. The bonus
reflected achieving 115% of the target performance level in fiscal 1997.
At the end of fiscal 1997 and the beginning of fiscal year 1998, the
Compensation Committee undertook a review of the CEO's compensation. The
Compensation Committee reviewed the compensation packages (including option
grants) of various chief executive officers of companies competing with the
Company, as reported in their public documents. The Compensation Committee
also considered the strong growth of the Company over the past several years.
As a result of such review, the CEO's base compensation was raised from
$362,250 to $460,000 effective October 1, 1997. In addition, the CEO's Target
Bonus under the Bonus Plan was raised from 45% to 55%.
Conclusion
Through the programs described above and the stock ownership of management
obtained pursuant to prior stock option plans, a significant portion of the
Company's executive compensation is linked directly to corporate performance
and stock price appreciation.
The Compensation Committee has determined that it is unlikely that the
Company would pay any amounts in fiscal 1998 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.
Respectfully submitted,
COMPENSATION COMMITTEE MEMBERS
Bryan C. Cressey Richard C. Tuttle
9
<PAGE>
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, 1997 (the last day of public trading of the Common Stock in fiscal
1997) 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 BANK
[GRAPHIC]
CABLE DESIGN
TECHNOLOGIES S&P ELECTRICAL
DATE CORPORATION S&P 500 INDEX EQUIPMENT Index
11/24/93 $100.00 $100.00 $100.00
7/29/94 $134.18 $100.99 $105.74
7/31/95 $227.85 $127.36 $126.30
7/31/96 $444.08 $148.47 $170.61
7/31/97 $517.63 $206.40 $257.19
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of Common Stock as of October 14, 1997, 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 15.1
Bryan C. Cressey(2)(3)(6)................. 2,931,836 15.5
Pilgrim Baxter & Associates, Ltd. ........ 1,741,400 9.2
President and Fellows of Harvard College.. 1,159,600 6.1
Massachusetts Financial Services Company.. 1,098,565 5.8
Paul M. Olson(3)(7)....................... 495,797 2.6
George C. Graeber(8)...................... 89,772 *
Michael A. Dudley(9)...................... 148,772 *
David R. Harden(10)....................... 440,797 2.3
Myron S. Gelbach, Jr.(3)(5)............... 26,981 *
Michael F.O. Harris(3)(4)(5)(11).......... 184,840 *
Glenn Kalnasy(3)(4)(12)................... 197,973 1.1
Richard C. Tuttle(3)(13).................. 18,363 *
Normand Bourque........................... 1,000 *
All executive officers and director
nominees as a group
(11 Persons)(14) 4,494,496 23.8
</TABLE>
- --------
* Represents less than 1%.
(1) Figures are based upon 18,861,417 shares of Common Stock outstanding as
of October 14, 1997. 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 14, 1997.
(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.
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) Messrs. Cressey, Olson, Gelbach, Harris, Kalnasy and Tuttle are directors
of the Company.
(4) Includes 103,062 shares owned by NILP II. The general partners of NILP II
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 NILP II, but each disclaims any such beneficial
ownership.
(5) Members of the Audit Committee.
(6) Includes 40,000 shares held by the Bryan and Christina Cressey Foundation
(the "Foundation") and 2,853,922 shares held by GTC Fund II. Mr. Cressey
is a general partner of GTCR and the President of the Foundation and may
be deemed to be a beneficial owner of the Common Stock of the Company
owned by the Foundation and GTC Fund II, but Mr. Cressey disclaims any
such beneficial ownership. See footnote 2.
(7) Includes 187,874 shares covered by options.
(8) Includes 66,772 shares covered by options.
(9) Includes 148,772 shares covered by options.
(10) Includes 245,874 shares covered by options.
(11) Includes 70,024 shares covered by options and 1,200 shares held in trusts
of his children of which he is the trustee. Mr. Harris may be deemed to
be a beneficial owner of the shares held in the trusts, but disclaims any
such beneficial ownership.
11
<PAGE>
(12) Includes 71,824 shares covered by options.
(13) Includes 10,919 shares covered by options.
(14) Includes 2,853,922 shares held by GTC Fund II which may be deemed to be
beneficially owned by Mr. Cressey, and 103,062 shares held by Northern
Fund II which may be deemed to be beneficially owned by Messrs. Kalnasy
and Harris. See footnotes 1 and 4. Each of Messrs. Cressey, Kalnasy and
Harris disclaim any such beneficial ownership.
12
<PAGE>
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 New York Stock Exchange
and the Secretary of the Company initial reports of ownership and reports of
changes in ownership of the Common Stock of the Company.
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, 1997, all 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 1998 Annual Meeting of
Stockholders must be received by the Secretary of the Company by July 7, 1998
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 1998 Annual Meeting
will be scheduled for December 8, 1998.
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 matter
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.
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 the fiscal year ended July 31, 1997 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, 1996, January 31, 1997,
and April 30, 1997.
13
<PAGE>
DETACH HERE
CABLE DESIGN TECHNOLOGIES CORPORATION
For Annual Meeting of Stockholders - December 9, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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 substitution and revocation, and authorizes them, and
P each of them, to vote all the shares of capital stock of the Corporation
which the undersigned is entitled to vote at said meeting and any
R adjournment thereof upon the matters specified below and upon such other
matters as may be properly brought before the meeting or any adjournments
O thereof, conferring authority upon such true and lawful attorneys to vote
in their discretion on such other matters as may properly come before the
X meeting and revoking any proxy heretofore given.
Y 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 ITEM 2 AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 3.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE
DETACH HERE
Please mark
/X/votes as in
this example.
<TABLE>
<CAPTION>
<S> <C>
1. To elect a Board of Directors for the ensuing year: FOR AGAINST ABSTAIN
Nominees: Bryan C. Cressey, Paul M. Olson, 2. To elect the firm of Arthur
Myron S. Gelbach, Jr., Michael F.O. Harris, Andersen, LLP as auditors / / / / / /
Glenn Kalnasy, Richard C. Tuttle. for the fiscal year ending
July 31, 1998.
FOR WITHHELD
/ / / /
3. To transact such other business as may properly come before
the meeting.
/ /
-------------------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
(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>
