<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:
[_]Confidential, for Use of the
[_]Preliminary proxy statement 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>
CDT LOGO
CABLE DESIGN TECHNOLOGIES
FOSTER PLAZA 7 . 661 ANDERSEN DRIVE Paul M. Olson
PITTSBURGH, PA 15220 . (412) 937-2300 President/Chief Executive Officer
November 12, 1998
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders on Wednesday, December 9, 1998 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, approval of an employee stock purchase plan 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 Connective Technology
<PAGE>
CDT 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 Wednesday, December 9, 1998, at 10:00
A.M., eastern standard time, for the following purposes:
1. To elect seven directors to serve until the next Annual Meeting of
Stockholders;
2. To approve an Employee Stock Purchase Plan;
3. 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
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 30, 1998 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, 1998
<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, 1998
----------------
November 12, 1998
The Proxy is solicited by the Board of Directors of Cable Design
Technologies Corporation (the "Company") for use at the 1998 Annual Meeting of
Stockholders to be held on Wednesday, December 9, 1998 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 30, 1998 (the "Record Date").
<PAGE>
On the Record Date, there were outstanding and entitled to vote at the
meeting 29,665,678 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, 1998. 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 30, 1998) 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, 49, has been Chairman of the Board of the Company since
1988 and a director since 1985. For the past eighteen years he has also been a
General Partner and Principal of Golder, Thoma, Cressey, Rauner, Inc.
("GTCR"), a private equity investment firm and Golder, Thoma & Cressey
("GTC"), an Illinois limited partnership. GTC controls a significant
stockholder of the Company as well as those of several other corporations. Mr.
Cressey is also a General Partner of Thoma Cressey Equity Partners, a private
equity investment firm. See "Security Ownership of Certain Beneficial Owners."
Mr. Cressey received a Juris Doctor degree and a 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, 65, 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. Mr. Olson has a B.A. degree in economics from Hobart
College.
Myron S. Gelbach, Jr., 77, 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.
Mr. Gelbach has a B.A. degree from Marietta College and a MBA degree from
Harvard University.
George Graeber, 56, was appointed to the Board of Directors and as Chief
Operating Officer of the Company in April 1998. Between 1992 and April 1998,
Mr. Graeber served in various other positions with the Company, including
Executive Vice President of the Company and President of Montrose/CDT. From
1990 to 1992 Mr. Graeber was a Vice President of Anixter International Inc.
Mr. Graeber also was the President of the industrial electronic division of
Brintec Corp. and a Vice President of Brand Rex Cable. Mr. Graeber has a
Masters degree in Electrical Engineering from the University of Connecticut.
2
<PAGE>
Michael F.O. Harris, 60, 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 ("NILP II"), respectively. NILP and NILP II are
investment partnerships which own several manufacturing companies unaffiliated
with the Company. Mr. Harris has a B.A. degree from Yale University and a MBA
degree from Harvard University.
Glenn Kalnasy, 55, 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 NILP II,
respectively. NILP and NILP II are investment partnerships which own several
manufacturing companies unaffiliated with the Company. Mr. Kalnasy has a B.S.
degree from Southern Methodist University.
Richard C. Tuttle, 43, 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. Mr. Tuttle has a B.A. degree and MBA degree from
Stanford University.
2. EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has approved and recommends that the stockholders
vote FOR the adoption of the Cable Design Technologies Corporation 1998
Employee Stock Purchase Plan (the "Stock Purchase Plan") which authorizes the
issuance of up to 500,000 shares over the 10-year term of the Plan. The
purpose of the Stock Purchase Plan is to encourage employee participation in
the ownership of the Company by offering eligible employees of the Company and
certain designated subsidiaries an opportunity to purchase Common Stock of the
Company at a discount through payroll deductions.
The Stock Purchase Plan is set forth as Exhibit A to this Proxy Statement,
and the description of the Stock Purchase Plan contained herein is qualified
in its entirety by reference to Exhibit A.
Under the Stock Purchase Plan, eligible employees of the Company and its
subsidiaries may participate by electing to have payroll deductions made in an
amount of not less than 1% nor more than a percentage determined from time to
time by the Committee (as defined below), initially 10%, but in no event
greater than 20% of the employee's compensation, provided that the Fair Market
Value (as defined in the Stock Purchase Plan) of Common Stock (determined at
the beginning of each Offering Period, as defined below) purchased in any year
may not exceed $25,000. Nevertheless, no employee may participate in the Stock
Purchase Plan if following the beginning of an Offering Period, the employee
would own, directly or by attribution, shares representing 5% or more of the
total combined voting power or value of all classes of stock of the Company.
Eligible employees may elect to participate by authorizing payroll
deductions or other contributions to the Stock Purchase Plan in accordance
with procedures established by the Board of Directors or the Committee no
later than 15 days prior to the beginning of a fiscal year quarter, referred
to in the Stock Purchase Plan as an "Offering Period." On the last day of each
Offering Period (the "Exercise Date"), and provided that the participant is
still employed by the Company or a designated subsidiary on that date, the
participant's payroll deductions and other contributions (if any) will be
applied to acquire Common Stock at a price equal to a price determined by the
Committee no less than 15 days prior to the commencement of the Offering
Period and in no event less than the lower of: (i) 85% of the Fair Market
Value (as defined in the Stock Purchase Plan) of the Common Stock on the first
business day coincident with or next following the first day of the Offering
Period, or (ii) 85% of the Fair Market Value of the Common Stock on the last
business day coincident with or immediately preceding the last day of the
Offering Period.
3
<PAGE>
Employees may voluntarily withdraw from participation in the Stock Purchase
Plan by notifying the Board of Directors or the Committee in accordance with
procedures established by the Board of Directors or the Committee at least 30
days prior to the Exercise Date. If a participant withdraws from participation
or ceases to be an employee of the Company or a designated subsidiary for any
reason prior to the Exercise Date, all sums previously withheld from
compensation or contributed during such Offering Period will be refunded to
the participant, or his or her beneficiary, without interest as soon as
practicable.
A participant will not be a stockholder with respect to Common Stock to be
purchased during an Offering Period until the Common Stock is purchased on the
Exercise Date and such shares have been issued to the Plan Custodian to hold
for the benefit of the participant. Upon a request made to the financial
institution acting as Plan Custodian for the Stock Purchase Plan, the
participant will be eligible to receive a stock certificate for the number of
shares purchased.
A participant who holds shares purchased through the Stock Purchase Plan in
certificate form is obligated immediately to inform the Committee in writing
if he or she transfers any of such shares within two years from the applicable
Exercise Date.
During his or her lifetime, a participant's rights under the Stock Purchase
Plan may be exercised only by the participant. Neither the payroll deductions
or other contributions nor the participant's rights under the Stock Purchase
Plan may be assigned, transferred or otherwise disposed of by the participant,
other than by the laws of descent and distribution.
The number of shares of Common Stock reserved for purchase under the Stock
Purchase Plan may not exceed 500,000 shares, subject to adjustment as provided
below. Such reserved shares may be made available by the Company from either
authorized and unissued shares, treasury shares or shares purchased on the
open market. In the event of any change in the shares as a result of any share
dividend, split, reorganization, liquidation, recapitalization, merger,
consolidation, spin-off or other corporate event described in the Stock
Purchase Plan, the Committee may in its discretion make any such substitution
or adjustment as it deems to be equitable as to: (i) the number or kind of
shares or other securities issued or reserved for issuance under the Stock
Purchase Plan; (ii) the purchase price; or (iii) any other term of the Stock
Purchase Plan.
The Stock Purchase Plan will be administered by the Board of Directors or by
a Committee thereof (the "Committee"). The Committee is authorized to
interpret the Stock Purchase Plan, to establish rules and regulations relating
to the Stock Purchase Plan and to make any other determination that it deems
necessary or desirable for the administration of the Stock Purchase Plan.
The Stock Purchase Plan may be amended or terminated by the Board of
Directors or the Committee at any time and for any reason, subject to the
following restrictions. First, no termination or amendment may affect or
change the purchase rights of participants previously granted under the Stock
Purchase Plan without the participant's consent. Further, any amendment that
materially increases the benefits or number of shares available under the
Stock Purchase Plan (except for certain allowable adjustments regarding
changes to the Company's capital structure or changes authorized to be made by
the Board of Directors or the Committee) or materially modifies the
eligibility requirements of the Stock Purchase Plan will be subject to
stockholder approval.
With respect to any designated subsidiary which employs participants who
reside outside of the United States, and notwithstanding anything herein to
the contrary, the Board of Directors or the Committee may in its sole
discretion amend the terms of the Stock Purchase Plan in order to conform such
terms with the requirements of local law or to meet the objectives of the
Stock Purchase Plan and may, where appropriate, establish one or more sub-
plans for these purposes.
The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423 of the Internal Revenue Code,
and it is intended to comply with the provisions of Sections 421 and 424 of
the Internal Revenue Code as well.
4
<PAGE>
Under the Internal Revenue Code as currently in effect, there are no federal
income tax consequences in connection with the acquisition of Common Stock
pursuant to the Stock Purchase Plan until the year in which the participant
sells or otherwise disposes of the shares, or, if earlier, the year in which
the participant dies. If the shares are sold or otherwise disposed of prior to
a participant's death, then the income tax consequences will depend upon
whether or not the shares are sold within two years after the applicable
Exercise Date.
If the shares are sold or disposed of more than two years after the
applicable Exercise Date, then the participant will recognize ordinary income
in an amount equal to the lesser of (i) 15% of the Fair Market Value of the
shares on the applicable Exercise Date, or (ii) the amount by which the Fair
Market Value of the shares at the time of such sale or disposition exceeds the
amount paid for the shares, and the Company will not be entitled to any income
tax deduction. If the shares are sold or otherwise disposed of within two
years after the applicable Exercise Date, a participant will generally
recognize ordinary income in the amount by which the Fair Market Value of the
shares on the applicable Exercise Date exceeds the amount paid for the shares,
and the Company will be entitled to a corresponding income tax deduction.
In either case, the participant may also have a capital gain or loss (long-
term or short-term depending upon the length of time the shares were held) in
an amount equal to the difference between the amount realized upon the sale
and the participant's adjusted tax basis in the shares (the amount paid for
the shares plus the amount of ordinary income which the participant must
recognize at the time of the sale).
In the event of the death of a participant prior to a sale or other
disposition of the shares (whether or not within two years after the
applicable Exercise Date), a participant will be subject to ordinary income
tax in an amount equal to the lesser of (i) 15% of the Fair Market Value of
the shares on the applicable Exercise Date, or (ii) the amount, if any, by
which the Fair Market Value of the shares as of the date of death exceeds the
amount actually paid for the shares.
3. 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, 1999. 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.
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.
5
<PAGE>
DIRECTORS MEETINGS AND COMPENSATION
DIRECTORS MEETINGS
The Board of Directors held five regular meetings and seven special
telephonic meetings during the year ended July 31, 1998 ("fiscal 1998"). 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 1998, 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 1998, the Compensation Committee met, either in
person or by telephonic meeting, three times and the Audit Committee met,
either in person or by telephonic meeting, two times.
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 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 were
granted options to purchase additional Common Stock in exchange for consulting
services. All of such options have been exercised. 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
are each party to a consulting agreement pursuant to which each is paid
$50,000 a year in exchange for consulting services rendered to the Company and
its subsidiaries by management personnel of each of GTCR and Northern. Bryan
Cressey, a director of the Company, is a General Partner of GTCR, and Michael
Harris and Glenn Kalnasy, directors of the Company, are each a Managing
Director and significant stockholder of Northern.
6
<PAGE>
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Olson and the four
other most highly compensated executive officers who were serving as executive
officers at the end of fiscal 1998 (collectively, the "named executives").
<TABLE>
<CAPTION>
LONG- TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------------------ ------------
RESTRICTED
STOCK ALL OTHER
FISCAL SALARY BONUS AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL YEAR ($)(1) ($) ($) (#) ($)(2)
POSITION ------ ------------------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Olson........... 1998 444,210 252,825 -- -- 28,293
President, Chief
Executive Officer 1997 366,231 186,721 -- -- 26,712
1996 341,539 282,117 -- -- 26,712
George C. Graeber....... 1998 269,442 176,276 -- -- 26,752
Chief Operating Officer 1997 242,031 53,657 -- -- 24,228
1996 212,865 124,636 -- -- 24,228
David R. Harden......... 1998 256,183 68,129 -- -- 26,856
Senior Vice President 1997 249,462 107,998 -- -- 25,304
1996 232,854 110,222 -- -- 25,200
Normand Bourque......... 1998 226,479 204,013(3) -- -- 12,933
Executive Vice
President 1997 202,371 333,436 -- -- 11,957
1996 89,413 169,293 -- 329,100(4) 6,423
Peter Sheehan........... 1998 210,916 102,815 -- -- 24,404
Executive Vice
President 1997 189,346 75,435 -- -- 290
1996 134,423 146,279 -- -- 42
</TABLE>
- --------
(1) Amounts in this column reflect salaries paid in the respective 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 1997 calendar year), which for each of the
named executives other than Mr. Bourque are: Mr. Olson, Incentive Plan
$24,000, term life insurance premium $4,293; Mr. Graeber, Incentive Plan
$24,000, term life insurance premium $2,752; Mr. Harden, Incentive Plan
$24,000, term life insurance premium $2,856; Mr. Sheehan, Incentive Plan
$24,000, term life insurance premium $404. 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 $141,367 upon
retirement and an annual benefit of $25,646.
(3) Participants, participation percentages and the bonus pool amount under
the "Plan II Bonus" described in "Compensation Committee Report--NORDX/CDT
Bonus Programs" have not been determined and amounts payable to Mr.
Bourque under such Plan for fiscal 1998 have not been included.
(4) Such options were amended to change the exercise price to $18.42 during
the fiscal year ending July 31, 1997.
7
<PAGE>
OPTION GRANTS IN FISCAL YEAR 1998
While the Company does have incentive plans authorizing the grant of stock
options, no stock options were granted to any of the named executives during
fiscal 1998.
OPTION EXERCISES AND YEAR END VALUES FOR FISCAL YEAR 1998
The following table shows information regarding the exercise of stock
options during fiscal 1998 by the named executives and the number and value of
any unexercised stock options held by them as of July 31, 1998:
<TABLE>
<CAPTION>
SHARES
ACQUIRED ON VALUE NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
EXERCISE REALIZED OPTIONS AT FY-END (#) IN THE MONEY OPTIONS AT FY-END ($)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE(/1/)
---- ----------- --------- ------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Paul M. Olson........... 281,811 6,898,242 -/- -/-
George C. Graeber....... 42,600 1,022,900 57,558/- 1,103,214/-
David R. Harden......... 368,811 8,218,074 -/- -/-
Normand Bourque......... -- -- 65,820/263,280 169,816/679,262
Peter Sheehan........... 28,125 323,767 -/84,375 -/496,969
</TABLE>
- --------
(1) Based on the closing price of the Common Stock on July 31, 1998 of $21.
TEN-YEAR OPTION REPRICINGS
No options were repriced in fiscal 1998. During fiscal 1997, however, 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 had exceeded
CDT's performance expectations since its acquisition. Accordingly, in June,
1997, 787,500 outstanding options (adjusted for stock splits) held by
NORDX/CDT management and employees were repriced with a new exercise price of
$18.42 (adjusted for stock splits), which represented the market price of the
Common Stock on the date of such repricing. Additionally, the vesting period
of the options was reset as of the date of the amendment.
The following table shows information regarding repricing during fiscal 1997
of options previously granted to the named executives.
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS MARKET PRICE OF
REPRICED OR STOCK AT TIME OF NEW EXERCISE LENGTH OF ORIGINAL OPTION
AMENDED REPRICING OR PRICE TERM REMAINING AT DATE OF
NAME DATE (#)(1) AMENDMENT $(1) $(1) REPRICING OR AMENDMENT
---- ------ ----------- ---------------- ------------ -------------------------
<S> <C> <C> <C> <C> <C>
Normand Bourque......... 6/3/97 329,100 $18.42 $18.42 8.7 years
</TABLE>
- --------
(1) Adjusted for the January 1998 3-for-2 stock split.
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 329,100 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 18 months. 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.
8
<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 1998, total
purchases by the Company from such entity were approximately $1,035,000. As of
July 31, 1998, the Company owed approximately $111,000 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.
In connection with the hiring of Peter Sheehan in 1995, the Company agreed
to make a loan to Mr. Sheehan to assist in purchasing a home upon his
relocation. The outstanding amount of such loan as of October 30, 1998 was
$66,633.44. Such loan bears interest at a rate of 7% per annum.
COMPENSATION COMMITTEE REPORT
Compensation Policies Applicable to Executive Officers
During fiscal 1998, 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.
Except as discussed below with respect to Mr. Olson and salary increases
granted to George Graeber and Peter Sheehan upon Messrs. Graeber's and
Sheehan's promotion to Chief Operating Officer and Executive Vice President,
respectively, the Compensation Committee made no fundamental changes in the
basic executive compensation program during fiscal 1998.
Base Salary
The Compensation Committee meets in the fall of each year and is currently
evaluating compensation for fiscal 1999. Annual base salaries of the executive
officers for fiscal 1998 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 for fiscal 1998 ranging
between 4% and 12% for executive officers 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.
9
<PAGE>
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 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 participants are determined by the President of NORDX/CDT,
currently Mr. Bourque, subject to the approval of the Chief Executive Officer
of the Company, currently Mr. Olson. The bonus amounts of each participating
employee are determined by the President of NORDX/CDT, the Chief Executive
Officer of the Company and the Chairman of the Company, currently Mr. Cressey.
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 (which commenced
in February, 1996).
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 vesting period. 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. As of July 31,
1998, an aggregate of 24,183 shares of Common Stock remained reserved for
grant under the Long Term Plan. As of July 31, 1998, an aggregate of 651,900
shares of Common Stock remained reserved for grant under the Supplemental
Plan. Of such 651,900 shares, 54,900 shares remained 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
103,449 shares of Common Stock remain reserved for grant to the Company's
Outside Directors.
10
<PAGE>
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.
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.
The Compensation Committee has determined that it is unlikely that the
Company would pay any amounts in fiscal 1999 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
11
<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, 1998 (the last day of public trading of the Common Stock in fiscal
1998) 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 RETURNS AMONG CABLE DESIGN TECHNOLOGIES
CORPORATION, S&P 500 INDEX AND
S&P ELECTRICAL EQUIPMENT INDEX
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
7/31/98 $478.29 $242.37 $305.57
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of Common Stock as of October 30, 1998, 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>
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING
OF COMMON
NAME COMMON STOCK(1) STOCK(1)
- ---- ---------------- -------------
<S> <C> <C>
GTC Fund II(2)................................. 4,280,883 14.4
Bryan C. Cressey(2)(3)(5)...................... 4,397,754 14.8
Massachusetts Financial Services Company....... 2,990,837 10.1
Pilgrim Baxter & Associates.................... 1,577,925 5.3
Paul M. Olson(3)............................... 667,045 2.2
George C. Graeber(3)(6)........................ 102,258 *
David R. Harden................................ 641,195 2.2
Myron S. Gelbach, Jr.(3)(4).................... 41,293 *
Michael F.O. Harris(3)(4)...................... 21,448 *
Glenn Kalnasy(3)............................... 35,556 *
Peter Sheehan(7)............................... 22,500 *
Richard C. Tuttle(3)(8)........................ 28,759 *
Normand Bourque(9)............................. 67,320 *
All executive officers and director nominees as
a group (13 Persons)(10)......................... 6,321,827 21.2
</TABLE>
- --------
* Represents less than 1%.
(1) Figures are based upon 29,665,678 shares of Common Stock outstanding as
of October 30, 1998. The figures assume exercise by only the stockholder
or group named in each row of all options for the purchase of Common
Stock held by such stockholder or group which are exercisable within 60
days of October 30, 1998.
(2) The general partner of GTC Fund II is GTC. Bryan Cressey is a General
Partner of GTC, 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, Graeber, Harris, Kalnasy and Tuttle are
directors of the Company.
(4) Members of the Audit Committee.
(5) Includes 60,000 shares held by the Bryan and Christina Cressey Foundation
(the "Foundation") and 4,280,883 shares held by GTC Fund II. Mr. Cressey
is a general partner of GTC 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.
(6) Includes 57,558 shares covered by options.
(7) Represents 22,500 shares covered by options.
(8) Includes 11,379 shares covered by options.
(9) Includes 65,820 shares covered by options.
(10) Includes 4,280,883 shares held by GTC Fund II which may be deemed to be
beneficially owned by Mr. Cressey.
13
<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 representations that no other reports
were required, during the fiscal year ended July 31, 1998, 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 1999 Annual Meeting of
Stockholders must be received by the Secretary of the Company by July 7, 1999
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 1999 Annual Meeting
will be scheduled for December 8, 1999.
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 Company's Annual Report for the fiscal year ended July 31, 1998,
including the financial information included therein, has been filed with the
Securities and Exchange Commission and is incorporated in this Proxy Statement
by reference.
14
<PAGE>
EXHIBIT A
CABLE DESIGN TECHNOLOGIES CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
PAGE
TABLE OF CONTENTS
SECTION 1 PURPOSE............................................................A-1
SECTION 2 DEFINITIONS........................................................A-1
SECTION 3 ELIGIBILITY........................................................A-2
SECTION 4 SECURITIES SUBJECT TO THE PLAN.....................................A-3
SECTION 5 PARTICIPATION/ENROLLMENT...........................................A-3
SECTION 6 PAYROLL DEDUCTIONS/CONTRIBUTIONS...................................A-3
SECTION 7 GRANT OF PURCHASE RIGHT............................................A-4
SECTION 8 EXERCISE OF PURCHASE RIGHT.........................................A-4
SECTION 9 WITHDRAWAL AND TERMINATION OF PURCHASE RIGHTS......................A-5
SECTION 10 RIGHTS AS SHAREHOLDER.............................................A-5
SECTION 11 SALE OF SHARES ACQUIRED UNDER THE PLAN............................A-6
SECTION 12 PLAN ADMINISTRATION...............................................A-6
SECTION 13 TRANSFERABILITY...................................................A-6
SECTION 14 ADJUSTMENTS UPON CERTAIN EVENTS...................................A-7
SECTION 15 TERM OF PLAN......................................................A-7
SECTION 16 AMENDMENT AND TERMINATION OF THE PLAN.............................A-7
SECTION 17 NO EMPLOYMENT RIGHTS..............................................A-7
SECTION 18 COSTS.............................................................A-8
A-i
<PAGE>
SECTION 19 REPORTS...........................................................A-8
SECTION 20 GOVERNING LAW.....................................................A-8
SECTION 21 COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS......................A-8
SECTION 22 TAX WITHHOLDING...................................................A-9
SECTION 23 NON-U. S. PARTICIPANTS............................................A-9
SECTION 24 SUCCESSORS AND ASSIGNS............................................A-9
A-ii
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION
1998 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1
PURPOSE
The purpose of the Cable Design Technologies Corporation 1998 Employee Stock
Purchase Plan is to provide Eligible Employees of the Company or certain of
its Subsidiaries with an opportunity to purchase Shares and thus obtain a
stake in the future success of the Company. By encouraging such stock
ownership, the Company seeks to attract, retain and motivate such employees to
devote their best efforts to the financial success of the Company. The Plan is
intended to be an "employee stock purchase plan" as defined in Section 423 of
the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of
the Plan shall, accordingly, be construed so as to comply with the
requirements of Section 423 of the Code whenever possible.
SECTION 2
DEFINITIONS
For purposes of the Plan, the following terms shall have the following
meanings, unless the context clearly indicates otherwise:
2.1 "Act" means the Securities Exchange Act of 1934, as amended, or any
successor thereto.
2.2 "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 of the
Act, or any successor rule thereto.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Change in Control" occurs if (a) any Person, including a "group" as
defined in Section 13(d)(3) of the Act, shall become the beneficial owner of
Shares with respect to which twenty percent (20%) or more of the total number
of votes for the election of the Board may be cast; (b) as a result of, or in
connection with, any cash tender offer, exchange offer, merger or other
business combination, sale of assets or contested election or combination of
the foregoing, the persons who were prior to the institution thereof directors
of the Company shall cease to constitute a majority of the Board; or (c)
stockholders of the Company shall approve an agreement pursuant to which the
Company will cease to be an independent publicly owned corporation or for a
sale or other disposition of all or substantially all of the assets of the
Company.
2.5 "Committee" means a Committee of the Board referred to in Section 12
herein or if there shall be no such Committee, the Board itself.
2.6 "Company" means Cable Design Technologies Corporation, a Delaware
corporation, and any successor to such organization.
2.7 "Compensation" means (a) for salaried employees, the regular basic
salary or wages paid by an employer for services performed by such employees
which are computed on a weekly, monthly, annual or other comparable basis
before any payroll deductions for taxes or any other purposes, including any
commissions and bonuses; and (b) for hourly employees, wages paid by an
employer for services performed by such employees which are computed on a
biweekly or other comparable basis, before any payroll deductions for taxes or
any other purposes, including any overtime and bonuses. However, in the case
of both (a) and (b) above, Compensation shall not include fees, pension,
severance pay or any other extraordinary compensation, or employer
contributions under pension, profit-sharing, fringe benefit, group insurance
or other employee welfare plan heretofore or hereafter adopted or any deferred
compensation arrangement.
2.8 "Designated Subsidiary" shall mean each Subsidiary which has been
designated by the Committee from time to time in its sole discretion as
eligible to participate in the Plan.
A-1
<PAGE>
2.9 "Dollar" or "Dollars" or "$" means the lawful currency of the United
States of America.
2.10 "Effective Date" means the date set by the Board for the Plan to become
effective.
2.11 "Eligible Employee" means an employee of the Company or any Designated
Subsidiary, including an officer, within the meaning of Section 3401(c) of the
Code.
2.12 "Exercise Date" means the last day of an Offering Period, on which date
all Participants' outstanding Purchase Rights shall automatically be
exercised.
2.13 "Fair Market Value" for purposes of this Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the last sales price reported for the
Common Stock on the applicable date (a) as reported by the principal national
securities exchange in the United States on which it is then traded, or (b) if
not traded on any such national securities exchange, as quoted on an automated
quotation system sponsored by the National Association of Securities Dealers.
If the Common Stock is not readily tradable on a national securities exchange
or any system sponsored by the National Association of Securities Dealers, its
Fair Market Value shall be set in good faith by the Committee on the advice of
a registered investment adviser (as defined under the Investment Advisers Act
of 1940).
2.14 "Offering Period" means each fiscal quarter of the Company during the
effectiveness of the Plan, provided that the Committee shall have the power to
change the duration of Offering Periods.
2.15 "Participant" means an Eligible Employee of the Company or a Designated
Subsidiary of the Company who has enrolled in the Plan in accordance with
Section 5 hereof.
2.16 "Person" shall have the meaning set forth in Section 13(d) or 14(d) of
the Act, or any successor section thereto.
2.17 "Plan" means the Cable Design Technologies Corporation 1998 Employee
Stock Purchase Plan.
2.18 "Plan Custodian" means a bank, stock brokerage or other financial
services firm designated by the Committee in its sole discretion to hold the
Shares purchased by Participants under the Plan.
2.19 "Purchase Right" means a Participant's option to purchase Shares that
is deemed to be granted to a Participant during an Offering Period pursuant to
Section 7.
2.20 "Section 16(b) Insider" means a person subject to the requirements of
Section 16(b) of the Act.
2.21 "Shares" means the common stock, par value $.01 per share, of the
Company, and any other stock or securities (including any other share or
securities of an entity other than the Company) for or into which the
outstanding shares of such common stock are hereinafter exchanged or changed.
2.22 "Subsidiary" shall have the meaning set forth in Section 424(f) of the
Code.
SECTION 3
ELIGIBILITY
3.1 All Eligible Employees of the Company or a Designated Subsidiary who
customarily works more than twenty (20) hours per week for the Company or a
Designated Subsidiary and at least five (5) months per year for the Company or
a Designated Subsidiary are eligible to participate in the Plan. The Eligible
Employee's entry date in the Plan shall be the first day of the Offering
Period immediately following the later of (a) the sixth (6th) month
anniversary of such Eligible Employee's employment by the Company or any
Designated Subsidiary and (b) the date the Eligible Employee has satisfied
these eligibility provisions and the enrollment procedures in Section 5.
A-2
<PAGE>
3.2 Notwithstanding any provision of the Plan to the contrary, no employee
may participate in the Plan if prior to the grant of Purchase Rights or if
following a grant of Purchase Rights under the Plan, the employee would own,
directly or by attribution, stock, Purchase Rights or other stock options to
purchase stock representing five percent (5%) or more of the total combined
voting power or value of all classes of the stock of the Company, or any
Subsidiary as referenced in Section 423(b)(3) of the Code.
3.3 Subject to Committee approval, any employee of a company or an entity
which is purchased by or merged into the Company and becomes a Designated
Subsidiary may be permitted to participate in the Plan in accordance with such
rules as the Committee, in its sole discretion, shall establish.
SECTION 4
SECURITIES SUBJECT TO THE PLAN
The maximum number of Shares which may be granted and purchased under the
Plan may not exceed 500,000 Shares (subject to adjustment as provided in
Section 14), which may be authorized but unissued shares, reacquired
(treasury) shares or shares bought on the open market. If any Purchase Right
granted shall expire or terminate for any reason without having been exercised
in full, the unpurchased Shares shall again become available for purposes of
the Plan, unless the Plan has been terminated.
SECTION 5
PARTICIPATION/ ENROLLMENT
Participation in the Plan is voluntary. Eligible Employees may elect to
become Participants in the Plan by authorizing payroll deductions or other
contributions to the Plan in accordance with procedures established by the
Committee, including telephonic enrollment and enrollment through the
execution of an enrollment form (the "Participation Form") filed with the
Committee, or as otherwise directed by the Company, no later than fifteen (15)
days prior to the start date of an Offering Period.
SECTION 6
PAYROLL DEDUCTIONS/CONTRIBUTIONS
6.1 In order to purchase Shares, each Participant must elect and indicate in
accordance with procedures established by the Committee the amount he or she
wishes to authorize to be deducted at regular payroll intervals during the
Offering Period, expressed as a percentage amount of such Participant's
Compensation for the applicable payroll period, with a minimum deduction of
one percent (1%) and a maximum deduction percentage as determined from time to
time by the Committee, but in no event greater than twenty percent (20%). The
enrollment process shall include authorization from the Participant for the
Company or Designated Subsidiary to make payroll deductions from the
Participant's Compensation.
6.2 Notwithstanding anything herein to the contrary, Purchase Rights granted
to a Participant under the Plan and all such other employee stock purchase
plans (as described in Section 423 of the Code) of his or her employer
corporation and its parent and subsidiary corporation shall not be permitted
to accrue at a rate in excess of twenty-five thousand dollars ($25,000.00) of
Fair Market Value of Shares for each calendar year. The twenty-five thousand
dollar ($25,000.00) limit is determined as of the first day of the Offering
Period during which such Purchase Rights are granted. Participants shall be
notified if this limitation becomes applicable to them.
6.3 The amounts deducted from the Participant's Compensation or otherwise
received from a Participant shall be credited to a bookkeeping account
established in the Participant's name under the Plan, but no actual separate
account shall be established by the Company to hold such amounts. There shall
be no interest paid on
A-3
<PAGE>
the balance credited to a Participant's account. Amounts deducted from the
Participant's Compensation or otherwise contributed may be commingled with the
general assets of the Company and may be used for its general corporate
purposes prior to the purchase of Shares during an Offering Period.
6.4 Payroll deductions shall begin on the first payday of each Offering
Period, and shall end on the last payday of each Offering Period. In general,
Eligible Employees may participate in the Plan and may purchase Shares only
through payroll deductions. Notwithstanding the above, the Committee may
permit continued participation by Participants on approved leaves of absence
in accordance with procedures and restrictions established from time to time
by the Committee.
6.5 So long as a Participant remains an employee of the Company or a
Designated Subsidiary, payroll deductions shall continue in effect from
Offering Period to Offering Period, unless at least fifteen (15) calendar days
prior to the first day of the next succeeding Offering Period the Participant:
(a) elects a different rate in accordance with procedures established by
the Committee, including by telephonic means or by filing a new
Participation Form in accordance with procedures established by the
Committee; or
(b) withdraws from the Plan or terminates employment in accordance with
Section 9 hereof.
6.6 Notwithstanding the above, and subject to Committee approval, the
Committee may provide for a special election period for participation in the
Plan following the acquisition of a company or entity by the Company whereby
such company or entity becomes a Designated Subsidiary of the Company. All
employees of the Company and any Designated Subsidiary of the Company shall be
eligible to participate in such special election.
SECTION 7
GRANT OF PURCHASE RIGHT
7.1 Each Participant who timely enrolls in the Plan as provided in Section 5
shall be deemed to have been granted a Purchase Right as of the first day of
the Offering Period to purchase as many whole Shares as can be purchased with
the balance credited to such Participant's account as of the Exercise Date.
7.2 The price at which each Purchase Right shall be exercised shall be
determined by the Committee, in its sole discretion, and shall remain in
effect unless modified by the Committee at least fifteen (15) days prior to
the beginning of the applicable Offering Period, but in no event shall be less
than the lower of:
(a) Eighty-five percent (85%) of the Fair Market Value of the Shares on the
first business day coincident with or next following the first day of an
Offering Period; or
(b) Eighty-five percent (85%) of the Fair Market Value of the Shares on the
last business day coincident with or immediately preceding the last day of
such Offering Period.
7.3 The Committee has the power, exercisable at any time prior to the start
of an Offering Period, to set a maximum Share amount with respect to a
Purchase Right for that Offering Period, subject to the limitations set forth
in Section 6.2. The maximum Share amount shall continue in effect from
Offering Period to Offering Period until the Committee once again exercises
its power to adjust the limitation.
SECTION 8
EXERCISE OF PURCHASE RIGHT
8.1 Each outstanding Purchase Right shall be deemed automatically exercised
as of the Exercise Date, provided that the Participant is still employed by
the Company or a Designated Subsidiary on that date. On that date, the balance
credited to each Participant's account shall be applied to the purchase of as
many whole Shares as can be purchased at the purchase price in effect for the
Offering Period. The balance remaining in each Participant's account, if any
shall be held for the purchase of Shares in the next succeeding Offering
Period or otherwise applied in accordance with the terms hereof.
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<PAGE>
8.2 If a Participant purchases the maximum Share amount determined in
accordance with the terms of Section 7.3, any amount not applied to the
purchase of Shares for that Offering Period shall be held for the purchase of
Shares in the next Offering Period.
8.3 If the number of Shares for which Purchase Rights are exercised exceeds
the number of Shares available in any Offering Period under the Plan, the
Shares available for exercise shall be allocated by the Committee (or in
accordance with rules established by the Committee) pro rata among the
Participants in such Offering Period in proportion to the relative amounts
credited to their accounts. Any amounts not thereby applied to the purchase of
Shares under the Plan shall be refunded to the Participants after the end of
the Offering Period, without interest.
SECTION 9
WITHDRAWAL AND TERMINATION OF PURCHASE RIGHTS
9.1 A Participant may withdraw from the Plan during an Offering Period by
providing notice in accordance with procedures established by the Committee,
at least thirty (30) days prior to the last business day of such Offering
Period. Payroll deductions shall cease as soon as is administratively feasible
from the effective date of such withdrawal and no additional payroll
deductions shall be made on behalf of such Participant during the Offering
Period. In the event of a timely withdrawal elected in accordance with this
Section 9, a Participant shall receive, as soon as practicable, all
accumulated payroll deductions and any other contributions made by the
Participant as a refund without penalty. Such amounts shall be refunded
without interest.
9.2 A Participant who has previously withdrawn from the Plan in accordance
with Section 9.1 who wishes to resume participation may re-enroll in the Plan
by following the applicable re-enrollment procedures established by the
Committee.
9.3 Notwithstanding Section 8.1, if a Participant ceases to be an employee
of the Company or a Designated Subsidiary for any reason prior to the last day
of an Offering Period, his or her outstanding Purchase Right shall
automatically terminate, and all sums previously withheld from such
Participant's Compensation during such Offering Period shall be refunded to
the Participant, or the Participant's beneficiary, without interest as soon as
practicable.
SECTION 10
RIGHTS AS SHAREHOLDER
10.1 A Participant shall not be considered a shareholder with respect to
Shares to be purchased during an Offering Period until the Purchase Right is
exercised on the Exercise Date and such Shares have been issued to the Plan
Custodian to hold for the benefit of the Participant. Thus, a Participant
shall not have a right to any dividend or distribution made prior to the
Exercise Date with respect to Shares purchased during the Offering Period.
10.2 Upon a request made to the Plan Custodian, and in accordance with
procedures and restrictions established by the Committee, the Participant
shall be entitled to receive a stock certificate for the number of purchased
Shares. The Plan Custodian may impose upon, or pass through to, the
Participant a reasonable fee for the transfer of Shares in the form of a stock
certificate from the Plan Custodian to the Participant. It is the
responsibility of each Participant to keep his or her address current with the
Company through the Committee and with the Plan Custodian.
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<PAGE>
SECTION 11
SALE OF SHARES ACQUIRED UNDER THE PLAN
11.1 Participants may sell the Shares they acquire under the Plan only in
compliance with the restrictions set forth below:
(a) Section 16(b) Insiders may be subject to certain restrictions in
connection with their transactions under the Plan and with respect to the
sale of Shares obtained under the Plan, including, but not limited to, the
Company's securities trading policies, as the same may exist from time to
time.
(b) Shares obtained under the Plan by any Participant must comply with
the Company's securities trading policies, as the same may exist from time
to time.
In addition, the Committee may, by prior notice to Participants, impose
additional transfer restrictions on Shares obtained under the Plan by any
Participant.
11.2 In order to insure compliance with the restrictions and requirements
herein, the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities, it
may make appropriate notations to the same effect in its own records. By
enrolling in the Plan in accordance with Section 5, each Participant
acknowledges and agrees to the Company's rights described in this Section
11.2.
11.3 A Participant who holds Shares purchased through the Plan in
certificate form shall immediately inform the Company in writing if the
Participant transfers any of such Shares within two (2) years from the date of
grant of the related Purchase Right. Such transfer shall include disposition
by sale, gift or other manner. The Participant may be requested to disclose
the manner of the transfer, the date of the transfer, the number of Shares
involved and the transfer price. By enrolling in the Plan in accordance with
Section 5, each Participant obligates himself or herself to provide such
information to the Company.
SECTION 12
PLAN ADMINISTRATION
As determined by the Board from time to time, the Plan shall be administered
by a Committee of the Board or by the Board itself. The Committee is
authorized to interpret the Plan, to establish, amend and rescind any rules
and regulations relating to the Plan, and to make any other determinations
that it deems necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Committee deems
necessary or desirable. Any decision of the Committee in the interpretation
and administration of the Plan, as described herein, shall lie within its sole
and absolute discretion and shall be final, conclusive and binding on all
parties concerned (including, but not limited to, Participants and their
beneficiaries or successors).
SECTION 13
TRANSFERABILITY
13.1 Any account maintained by the Plan Custodian for the benefit of a
Participant with respect to Shares acquired pursuant to the Plan shall be kept
only in the name of the Participant; provided, however, that the Participant
may elect that such account be maintained with right of joint ownership with
such Participant's spouse. Such election may be made only in accordance with
such procedures established by the Committee.
13.2 Neither payroll deductions or other contributions credited to a
Participant's account nor any Purchase Rights or other rights to acquire
Shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of by Participants other than by will or the laws of descent and
distribution and, during the lifetime of a Participant, Purchase Rights may be
exercised only by the Participant.
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<PAGE>
SECTION 14
ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding anything herein to the contrary, the following provisions
shall apply to all Purchase Rights granted under the Plan:
14.1 In the event of any change in the outstanding Shares by reason of any
Share dividend or split, reorganization, liquidation, recapitalization,
merger, consolidation, spin-off, combination or exchange of Shares or other
corporate exchange, or other similar events, or any distribution to
stockholders of Shares other than regular cash dividends, the Committee in its
sole discretion and without liability to any person may make such substitution
or adjustment, if any, as it deems to be equitable, as to (a) the number or
kind of Shares or other securities issued or reserved for issuance pursuant to
the Plan, (b) the purchase price, or (c) any other affected terms of such
Purchase Rights.
14.2 In the event of a Change in Control, the Committee in its sole
discretion and without liability to any person may take such actions, if any,
as it deems necessary or desirable with respect to any Purchase Right as of
the date of the consummation of the Change in Control.
SECTION 15
TERM OF PLAN
The Plan shall become effective on the Effective Date and shall remain in
effect until the tenth anniversary of the Effective Date, subject to earlier
termination by the Committee in accordance with Section 16 and subject to
Section 4.
SECTION 16
AMENDMENT AND TERMINATION OF THE PLAN
The Committee may in its sole discretion terminate or amend the Plan at any
time and for any reason, subject to the following restrictions. First, any
termination or amendment made to the Plan may not affect or change Purchase
Rights previously granted under the Plan without the consent of the affected
Participant. Second, any amendment that materially increases the benefits or
number of Shares available under the Plan (except for certain allowable
adjustments in the event of changes to the Company's capital structure or for
changes authorized by the Plan to be made by the Committee) or materially
modifies the eligibility requirements of the Plan shall be subject to
shareholder approval. If not sooner terminated by the Committee, the Plan
shall terminate at the time Purchase Rights have been exercised with respect
to all Shares reserved for issuance under the Plan.
SECTION 17
NO EMPLOYMENT RIGHTS
17.1 Participation in the Plan shall not be deemed to give any Participant
any right (a) to be retained in the employ or other service of the Company or
of any Subsidiary for any specific length of time, (b) to interfere with the
right of the Company or any Subsidiary to discipline or discharge the
Participant at any time, (c) to hold any particular position or responsibility
with the Company or any Subsidiary, or (d) to receive any particular
compensation from the Company or any Subsidiary. The adoption and maintenance
of the Plan shall not constitute an inducement to, or condition of, the
employment of any employee.
17.2 The Plan is a discretionary plan, and participation by any employee is
purely voluntary. Participation in the Plan with respect to any Offering
Period shall not entitle any Participant to participate with respect to any
other Offering Period.
A-7
<PAGE>
17.3 Any payments or benefits paid to or with respect to a Participant under
the Plan shall not be considered to be part of the Participant's "salary," and
thus, shall not be taken into account for purposes of determining the
Participant's termination indemnity, severance pay, retirement or pension
payment, or any other employee benefits, except to the extent required under
applicable law.
SECTION 18
COSTS
Except as set forth in Section 10.2, costs and expenses incurred in the
administration of the Plan and the maintenance of accounts with the Plan
Custodian (including any brokerage fees and commissions for the purchase of
Shares under the Plan) shall be paid by the Participant and/or the Company, as
determined by the Committee in its sole discretion. Participants shall be
responsible for (a) any brokerage fees and commissions for the sale of Shares
under the Plan by a Participant, (b) any fees for certificates of shares of
Common Stock issued to a Participant and (c) any taxes owed by them as a
result of participation in the Plan.
SECTION 19
REPORTS
After the close of each Offering Period, each Participant in the Plan shall
receive or have access to information designated by the Committee indicating
the amount of the Participant's payroll deductions and contributions to the
Plan during the Offering Period, the amount of payroll deductions and
contributions applied to the purchase of Shares for the Offering Period, the
purchase price per Share in effect for the Offering Period and the amount of
the payroll deductions and contributions (if any) carried over to the next
Offering Period.
SECTION 20
GOVERNING LAW
The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware, without giving effect to principles of
conflicts of laws, and applicable federal law.
SECTION 21
COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS
The Plan, the granting and exercising of Purchase Rights hereunder, and the
other obligations of the Company, the Committee and the Plan Custodian under
the Plan shall be subject to all applicable federal, state and other laws,
rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Committee may, in its discretion,
postpone the issuance or delivery of Shares upon exercise of Purchase Rights
until completion of such registration or qualification of such Shares or other
required action under any federal or state law, rule, or regulation, listing
or other required action with respect to any automated quotation system or
stock exchange upon which the Shares or other Company securities are
designated or listed, or compliance with any other contractual obligation of
the Company, as the Committee may consider appropriate, and may require any
Participant to make such representations and furnish such information as it
may consider appropriate in connection with the issuance of delivery of Shares
in compliance with applicable laws, rules, and regulations, designation or
listing requirements, or other contractual obligations.
A-8
<PAGE>
SECTION 22
TAX WITHHOLDING
Except where the Committee establishes a different tax withholding
procedure, the Participant's employer shall have the right to withhold from
compensation payable to such Participant such withholding taxes as may be
required by federal, state, local or other law, or to otherwise require the
Participant to pay such withholding taxes, with respect to any Shares acquired
pursuant to this Plan.
SECTION 23
NON-U. S. PARTICIPANTS
With respect to any Designated Subsidiary which employs Participants who
reside outside the United States, and notwithstanding anything herein to the
contrary, the Committee may in its sole discretion amend the terms of the Plan
in order to conform such terms with the requirements of local law or to meet
the objectives of the Plan, and may, where appropriate, establish one or more
sub-plans to reflect such amended provisions.
SECTION 24
SUCCESSORS AND ASSIGNS
The provisions of the Plan shall, in accordance with its terms, be binding
upon and inure to the benefit of all successors of each employee participating
in the Plan including, without limitation, such employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
employee.
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<PAGE>
1242-PS-98
<PAGE>
PROXY
CABLE DESIGN TECHNOLOGIES CORPORATION
For Annual Meeting of Stockholders - December 9, 1998
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 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 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
--- ---
PROPOSALS IN ITEMS 2 AND 3 AND AUTHORITY WILL BE DEEMED GRANTED UNDER
PROPOSAL 4.
- ------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------- -------------
<PAGE>
[ X ] Please mark
votes as in
this example.
<TABLE>
<S> <C> <C> <C> <C>
1. To elect a Board of Directors for the ensuing year. 2. To approve the FOR AGAINST ABSTAIN
NOMINEES: Bryan C. Cressey, Paul M. Olson, Myron S. Employee Stock [ ] [ ] [ ]
Gelbach, Jr., George Graeber, Michael F.O. Harris, Glenn Purchase Plan.
Kalnasy, Richard C. Tuttle. [ ] [ ] [ ]
FOR WITHHELD 3. To elect Arthur Andersen LLP as
[ ] [ ] auditors for the fiscal year ending
July 31, 1999.
[ ]__________________________________________ 4. To transact such other business as may properly come before
the meeting.
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>
