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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CABLE DESIGN TECHNOLOGIES CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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[LOGO]
CABLE DESIGN TECHNOLOGIES
Foster Plaza 7 . 661 Andersen Drive Paul M. Olson
Pittsburgh, PA 15220 . (412) 937-2300 President/Chief Executive Officer
November 7, 2000
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders on Wednesday, December 6, 2000 at 10:00 A.M.,
eastern standard time. The meeting will be held at the DoubleTree Hotel, 1000
Penn Avenue, Pittsburgh, Pennsylvania 15222.
The matters scheduled to be considered at the meeting are the election of
directors, approval of an incentive 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>
[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 DoubleTree
Hotel, 1000 Penn Avenue, Pittsburgh, Pennsylvania 15222 on Wednesday, December
6, 2000, at 10:00 A.M., eastern standard time, for the following purposes:
1. To elect eight directors to serve until the next Annual Meeting of
Stockholders;
2. To consider the adoption of the Company's 2001 Long-Term Incentive
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 24, 2000 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/ Charles B. Fromm
Charles B. Fromm
Secretary
Pittsburgh, Pennsylvania
November 7, 2000
<PAGE>
CABLE DESIGN TECHNOLOGIES CORPORATION
Foster Plaza 7
661 Andersen Drive
Pittsburgh, Pennsylvania 15220
----------------
PROXY STATEMENT
Annual Meeting of Stockholders
to be Held December 6, 2000
----------------
November 7, 2000
The Proxy is solicited by the Board of Directors of Cable Design
Technologies Corporation (the "Company") for use at the 2000 Annual Meeting of
Stockholders to be held on Wednesday, December 6, 2000 at 10:00 A.M., eastern
standard time, at the DoubleTree Hotel, 1000 Penn Avenue, Pittsburgh,
Pennsylvania 15222. Solicitation of the Proxy may be made through officers and
regular employees of the Company by telephone or by oral communications with
some stockholders. 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. This Proxy Statement is
first being sent to the stockholders on or about November 7, 2000.
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 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 24, 2000 (the "Record Date").
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On the Record Date, there were outstanding and entitled to vote at the
meeting 43,717,371 shares of Common Stock. Each outstanding share of Common
Stock is entitled to one vote. 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
eight. 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 eight 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, 2000) 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, 51, has been Chairman of the Board of the Company since
1988 and a director since 1985. For the past twenty years he has also been a
General Partner and Principal of Golder, Thoma and Cressey ("GTC") and Thoma
Cressey Equity Partners, both private equity firms. He is also a director of
Clarion Technologies Inc., a public company, and several private companies all
of which are unaffiliated with the Company. Mr. Cressey received a Juris Doctor
degree and a MBA degree from Harvard University.
Paul M. Olson, 66, 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.
Lance Balk, 42, has been a director since March, 2000. Mr. Balk has been a
partner of Kirkland & Ellis since 1989 in the securities and mergers &
acquisitions practice groups. Mr. Balk received a Juris Doctor degree and a MBA
degree from the University of Chicago.
George Graeber, 58, has been a director and Chief Operating Officer of the
Company since 1998. Between 1992 and 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 and General Manager of the Energy division 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.
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Michael F.O. Harris, 62, has been a director of the Company since 1985. For
the past eighteen 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 MBA degree from Harvard University.
Glenn Kalnasy, 57, has been a director of the Company since 1985. For the
past eighteen 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. Mr. Kalnasy has a B.S. degree from Southern Methodist University.
Ferdinand Kuznik, 59, has been a director of the Company since June, 2000.
Since 1999, Mr. Kuznik has been an Executive Vice President of Motorola, Inc.
and President of Motorola's operations in Europe, the Middle East and Africa.
From 1997 to 1999, Mr. Kuznik served as President of Motorola's Personal
Communications Sector. Mr. Kuznik has also served as Managing Director of
Philips Telecommunications and held management positions with A.D. Little and
AT&T Switching Systems. Mr. Kuznik has a Dipl. Ing. degree from the Technical
University of Ostrava and a Masters degree in computer science from the
Illinois Institute of Technology in Chicago.
Richard C. Tuttle, 45, has been a director of the Company since 1989. Since
1997, Mr. Tuttle has been a Principal of Prospect Partners, L.L.C., a private
equity investment firm. From 1992 to 1996, 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 GTC, a private equity investment firm. Mr. Tuttle has a MBA degree
from Stanford University.
2. Adoption of the 2001 Long-Term Incentive Plan
The Board of Directors recommends that shareholders vote FOR approval of the
2001 Long-Term Incentive Plan (the "Plan") which was approved by the Board of
Directors on October 17, 2000 and is attached hereto in its entirety as
Appendix I. It is intended that the Proxies in the form enclosed with this
Proxy Statement will be voted in favor of the adoption of the Plan unless
shareholders specify to the contrary in their Proxies or specifically abstain
from voting on this matter. The following is a description of the principal
features of the Plan.
The Plan provides for the granting to employees, directors and other
individuals who perform services for the Company ("Participants") the following
types of incentive awards: stock options, stock appreciation rights ("SARs"),
restricted stock, performance grants and other types of awards that the Board
of Directors or a duly appointed committee of the Board of Directors (the
"Committee") deems to be consistent with the purposes of the Plan Although
executives may be granted awards from time to time, awards under the Plan are
principally intended for non-executive level management, new employees and in
connection with acquisitions. Awards would also be made to non-employee
directors as discussed below.
If the Plan is approved, an aggregate of 1,800,000 shares of Common Stock
will be reserved for issuance under the Plan. No participant shall be entitled
to receive grants of Common Stock, stock options or SARs with respect to Common
Stock in any calendar year in excess of 100,000 shares. The Plan affords the
Company latitude in tailoring incentive compensation to support corporate and
business objectives, and to anticipate and respond to a changing business
environment and competitive compensation practices.
The Committee will have exclusive discretion to select the Participants and
to determine the type, size and terms of each award, to modify the terms of
awards, to determine when awards will be granted and paid, and to make all
other determinations which it deems necessary or desirable in the
interpretation and administration of the Plan. With limited exceptions,
including termination of employment as a result of death, disability or
retirement, or except as otherwise determined by the Committee, rights to these
forms of contingent compensation are forfeited if a recipient's employment or
performance of services terminates within a specified period following the
award. Generally, a Participant's rights and interests under the Plan will not
be transferable except by will or by the laws of descent and distribution.
3
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Options, which include non-qualified stock options and incentive stock
options, are rights to purchase a specified number of shares of Common Stock at
a price fixed by the Committee. The option price may be less than, equal to or
greater than the fair market value of the underlying shares of Common Stock,
but in no event less than 50% of the fair market value on the date of grant. In
addition, the exercise price of an incentive stock option may not be less than
100% of the fair market value of a share of Common Stock on the date of grant,
and the exercise price of an incentive stock option awarded to a person who
owns stock constituting more than 10% of the Company's voting power may not be
less than 110% of such fair market value on such date. Options generally will
expire not later than ten years after the date on which they are granted.
Options will become exercisable at such times and in such installments as the
Committee shall determine. Payment of the option price must be made in full at
the time of exercise in such form (including but not limited to cash, Common
Stock of the Company or the surrender of another outstanding award or any
combination thereof) as the Committee may determine.
An SAR may be granted alone, or a holder of an option or other award may be
granted a related SAR, either at the time of grant or by amendment thereafter.
Upon exercise of an SAR, the holder must surrender the SAR and surrender,
unexercised, any related option or other award, and the holder will receive in
exchange, at the election of the Committee, cash or Common Stock or other
consideration, or any combination thereof, equal in value to (or, in the
discretion of the Committee, less than) the difference between the exercise
price or option price per share and the fair market value per share at the time
of such exercise, times the number of shares subject to the SAR or option or
other award, or portion thereof, which is exercised.
A restricted stock award is an award of a given number of shares of Common
Stock which are subject to a restriction against transfer and to a risk of
forfeiture during a period set by the Committee. During the restriction period,
the Participant generally has the right to vote and receive dividends on the
shares.
Performance grants are awards whose final value, if any, is determined by
the degree to which specified performance objectives have been achieved during
an award period set by Committee, subject to such adjustments as the Committee
may approve based on relevant factors. Performance objectives are based on such
measures of performance, including, without limitation, measures of industry,
Company, unit or Participant performance, or any combination of the foregoing,
as the Committee may determine. The Committee may make such adjustments in the
computation of any performance measure as it deems appropriate. A target value
of an award is established (and may be amended thereafter) by the Committee and
may be a fixed dollar amount, an amount that varies from time to time based on
the value of a share of Common Stock, or an amount that is determinable from
other criteria specified by the Committee. Payment of the final value of an
award is made as promptly as practicable after the end of the award period or
at such other times as the Committee may determine.
Upon the liquidation or dissolution of the Company all outstanding awards
under the Plan shall terminate immediately prior to the consummation of such
liquidation or dissolution, unless otherwise provided by the Committee. In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, all
restrictions on any outstanding awards shall lapse and Participants will be
entitled to the full benefit of such awards immediately prior to the closing
date of such sale or merger, unless otherwise provided by the Committee.
The Board of Directors or the Committee, without the approval of the
stockholders, may amend or terminate the Plan, except that no amendment shall
become effective without the prior approval of the Company's stockholders if
such approval is necessary for continued compliance with the performance-based
compensation exception of Section 162(m) of the Internal Revenue Code, under
the Incentive Stock Options provisions of Section 422 of the Internal Revenue
Code or by any stock exchange listing requirements. Furthermore, any
termination may not materially and adversely affect any outstanding right or
obligation under the Plan without the affected participant's consent.
The Plan is scheduled to terminate ten years from the date that the Plan is
initially approved and adopted by the shareholders of the Company, unless
extended for up to an additional five years by action of the Board of
Directors.
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Neither the Board nor the Committee has, as of the date hereof, awarded any
options to any persons under the Plan. The Board has, however, approved an
annual issuance of 4,500 option shares to each non-employee Director and an
additional 1,500 option shares for each committee on which a non-employee
serves. Such options would vest over 3 years and have an exercise price equal
to the closing price of a share of Common Stock on the date of grant. The table
set forth below shows the number of options that will be granted annually,
assuming the number of directors eligible to participate remains unchanged.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
Annual Number of
Group Option Shares to be Awarded
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<S> <C>
Outside Director Group..................... 33,000
</TABLE>
Certain Federal Tax Consequences under the Plan. The following discussion
addresses certain federal income tax consequences to recipients of awards made
under the Plan under current law.
An optionee to whom a non-qualified stock option is granted will not
recognize any income at the time of the grant. When an optionee exercises a
non-qualified stock option, he generally will recognize ordinary compensation
income equal to the difference, if any, between the fair market value of the
Common Stock he receives at such time and the option's exercise price. The
optionee's tax basis in such shares will be equal to the exercise price paid
plus the amount includable in his gross income as compensation, and his holding
period for such shares will begin on the day on which he recognizes taxable
income in respect of such shares.
An optionee to whom an incentive stock option is granted will not recognize
any ordinary income at the time of grant or at the time of exercise. However,
upon the exercise of an incentive stock option, the optionee will be required
to include the excess of fair market value of the Common Stock over the
option's exercise price in his alternative minimum taxable income and, as a
result, he may be subject to an alternative minimum tax ("AMT"). In order to
obtain incentive stock option treatment for federal income tax purposes, an
optionee (i) must be an employee of the Company or a subsidiary continuously
from the date of grant until any termination of employment and (ii) in the
event of such a termination, must exercise an incentive stock option within 3
months after such termination, except if disabled, in which case exercise may
occur within one year from the date of termination of employment. If an
optionee holds Common Stock received upon the exercise of an incentive stock
option for more than one year after exercise and more than two years after the
option was granted (the "Statutory Holding Periods"), then upon a sale of such
Common Stock he will recognize long-term capital gain or loss equal to the
difference, if any, between the sale price of such shares and the option's
exercise price. If the optionee has not held such shares for the Statutory
Holding Periods, when he sells such shares (a "disqualifying disposition") he
will recognize ordinary compensation income equal to the lesser of (i) the
difference, if any, between the fair market value of such shares on the date of
exercise and the exercise price or (ii) the difference, if any, between the
sale price and the exercise price. Any additional gain or any loss on such sale
will constitute capital gain or loss. The tax basis of such shares to the
optionee, for purposes of computing such other gain or loss, will be equal to
the exercise price paid (plus the amount includable in his gross income as
compensation, if any).
An optionee will not recognize any taxable income as a result of the
inclusion of SARs in a non-qualified stock option or incentive stock option. At
the time of exercise, an optionee generally will recognize ordinary
compensation income in an amount equal to the cash and the fair market value of
the Common Stock he receives to satisfy his SAR. The optionee's tax basis in
any such shares received pursuant to an SAR will be equal to the amount
includable in his gross income as compensation in respect of such shares, and
the optionee's holding period therefore will begin on the day on which he
recognizes taxable income in respect of such shares.
Unless he files a timely election under Section 83(b) of the Internal
Revenue Code (a "Section 83(b) election"), an officer, employee or other
individual who receives Common Stock pursuant to a restricted stock
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award will not recognize any taxable income upon the receipt of such award, but
will recognize taxable compensation income at the time his interest in such
shares is no longer subject to the repurchase option imposed by the Plan in an
amount equal to the fair market value of such shares at such time.
Alternatively, by filing a Section 83(b) election within 30 days after the
shares are granted, the recipient may elect to recognize ordinary income equal
to the fair market value of the shares on the grant date. In either event, the
recipient's tax basis in such shares will be equal to the amount includable in
his gross income as compensation, and his holding period for such shares will
begin on the date his compensation income is determined. If a recipient does
not make a Section 83(b) election, dividends paid on restricted stock awards
will be includable in his income as compensation when received.
An officer, employee or other individual to whom a performance grant award
is made will not recognize taxable income at the time such award is made. Such
person generally will recognize taxable income, however, at the time cash,
Common Stock or other Company securities or property are paid to him pursuant
to such award in an amount equal to the amount of such cash and the fair market
value at such time of such shares, securities or property. The tax basis of any
such shares, securities or property received by such person pursuant to a
performance grant award will be equal to the amount includable in his gross
income as compensation in respect of such shares, securities or property, and
the holding period therefore will begin on the day on which he recognizes
taxable income in respect of such shares, securities or property. Any income
equivalents paid to a recipient with respect to his performance grant award
should generally be regarded as compensation.
If an employee who receives Common Stock under the Plan (whether pursuant to
the exercise of an option, as a restricted stock award or as a performance
grant award) is subject to Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (such recipient, an "Insider"), the tax
consequences may be different from those described above. Generally, an Insider
will not recognize income on receipt of Common Stock until he is no longer
subject to liability with respect to the disposition of such Common Stock.
However, by filing a Section 83(b) election with the Internal Revenue Service
no later than 30 days after the date of transfer of property (e.g., after
exercise of a non-qualified stock option that was granted within six months of
such exercise), an Insider may elect to be taxed based upon the fair market
value of the Common Stock at the time of such transfer.
Subject to certain limitations described in the next paragraph, the company
for which an individual is performing services generally will be allowed to
deduct amounts that are includable in the income of such person as ordinary
compensation income at the time such amounts are so includable, provided that
such amounts qualify as reasonable compensation for personal services actually
rendered.
Subject to limited exceptions, such company may not deduct certain
compensation paid to its chief executive officer or any of its four other
highest paid executives to the extent such compensation exceeds $1 million in
any taxable year. Depending on the circumstances, some or all of the
compensation paid to such an executive under the Plan may be nondeductible.
The discussion set forth above is intended only as a summary and does not
purport to be a complete enumeration or analysis of all potential tax effects
relevant to recipients of awards under the Plan. Accordingly, all award
recipients are advised to consult their own tax advisors concerning the
federal, state, local and foreign income and other tax considerations relating
to such awards and rights thereunder.
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, 2001. 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.
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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.
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, 2000 ("fiscal 2000"). The
Audit Committee, which consists of Richard C. Tuttle 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 consists of Bryan C. Cressey and Richard C. Tuttle.
There is no standing nominating committee. During fiscal 2000, 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 2000, 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 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 "Director Plan") each participating director under such plan is
entitled to receive shares of common stock annually with a fair market value of
$15,000. Also, beginning with fiscal year 2001, on the first day of each of the
Company's 2nd, 3rd and 4th fiscal quarters each non-employee director will
receive an option grant of 1,500 shares of Common Stock, and, in addition, 500
shares for each committee on which a director serves. The first grant will be
made under the 1999 Long-Term Performance Incentive Plan (the "1999 Plan").
Subsequent grants will be made under the 2001 Long-Term Performance Incentive
Plan, subject to adoption of such Plan by the Company's shareholders. The
option grants will vest 33 1/3% each year following grant and will have an
exercise price equal to the Common Stock fair market value on the date of
grant.
Prior to October 29, 1999, GTC and Northern were parties to a consulting
agreement pursuant to which each was paid $50,000 a year in exchange for
consulting services rendered to the Company and its subsidiaries by management
personnel of each of GTC and Northern. Bryan Cressey, a director of the
Company, is a General Partner of GTC, and Michael Harris and Glenn Kalnasy,
directors of the Company, are each a Managing Director and significant
stockholders of Northern. As a result, prior to October 29, 1999,
Messrs. Cressey, Harris and Kalnasy did not receive the director fee or stock
grant under the Director Plan. The consulting agreements were terminated
effective October 29, 1999, after which time Messrs. Cressey, Harris and
Kalnasy were paid the director fee and will be awarded stock under the Director
Plan. In lieu of a partial stock grant under the Director Plan for fiscal 2000,
each of Messrs. Cressey, Harris and Kalnasy received a one-time payment of
$11,500 in February, 2000.
7
<PAGE>
Mr. Balk became a director in March, 2000. In lieu of a partial stock grant
for fiscal 2000 under the Director Plan, Mr. Balk received a one-time payment
of $7,500 following his appointment to the Board.
MANAGEMENT COMPENSATION AND CERTAIN TRANSACTIONS
Summary Compensation Table
The following Summary Compensation Table discloses, for the fiscal years
indicated, individual compensation information for Mr. Olson and the four other
most highly compensated executive officers who were serving as executive
officers at the end of fiscal 2000 (collectively, the "named executives").
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
--------------- ------------
Option Other Incentive
Name and Principal Fiscal Salary Bonus Awards Compensation Payments
Position Year ($)(1) ($)(2) (#)(3) ($)(4) ($)(5)
------------------ ------ ------- ------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Olson........... 2000 496,616 695,334 -- 30,009 --
President, Chief 1999 476,692 232,375 405,000 31,561 1,018,847
Executive Officer 1998 444,210 252,825 -- 28,293 --
George C. Graeber....... 2000 364,339 364,500 -- 26,102 --
Chief Operating Officer 1999 310,015 116,250 112,500 26,700 --
1998 269,442 176,276 -- 26,752 --
David R. Harden......... 2000 286,331 229,110 -- 27,259 --
Senior Vice President 1999 266,597 146,630 225,000 26,856 949,062
1998 256,183 68,129 -- 26,856 --
Normand Bourque......... 2000 252,219 372,298(6)(7) -- 20,135 --
Executive Vice 1999 225,319 423,978 -- 20,023 --
President 1998 226,479 295,943 -- 12,933 --
Kenneth O. Hale......... 2000 234,585 211,200 -- 24,803 --
Vice President, 1999 206,677 54,250 127,500 25,104 291,200
Chief Financial Officer 1998 198,223 77,371 -- 25,104 --
</TABLE>
--------
(1) Amounts in this column reflect salaries paid in the applicable fiscal year.
(2) Amounts in this column reflect bonuses paid with respect to the applicable
fiscal year.
(3) Adjusted for August, 2000 3-for-2 stock split.
(4) 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 1999 calendar year), which for each of the named
executives other than Mr. Bourque are: Mr. Olson, Incentive Plan $24,000,
term life insurance premium $6,009; Mr. Graeber, Incentive Plan $24,000,
term life insurance premium $2,102; Mr. Harden, Incentive Plan $24,000,
term life insurance premium $3,259; and Mr. Hale, Incentive Plan $24,000,
term life insurance premium $803. Figures in this column for Mr. Bourque
represent term life insurance premium, $4,783, and earned amounts with
respect to projected benefits under NORDX/CDT, Inc. defined benefit plans,
$15,352. 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 $153,386 upon retirement and an annual benefit of
$25,991.
(5) Represents one-time incentive payments to certain members of senior
management made in connection with the Company's repurchases of common
stock received by such members of senior management upon the exercise of
incentive stock options granted in 1988 which entitled the Company to a tax
benefit of approximately $12.8 million.
8
<PAGE>
(6) 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 the amount payable to Mr. Bourque
under such Plan for fiscal 2000 has not been included.
(7) Bonus includes $206,250, $168,750 and $131,250 in 2000, 1999 and 1998,
respectively, of signing bonus paid pursuant to Mr. Bourque's employment
agreement entered into on February 5, 1996.
Option Grants in Fiscal Year 2000
No option grants were made during fiscal 2000 to the named executives.
Option Exercises and Year End Values for Fiscal Year 2000
The following table shows information regarding the number and value of any
unexercised stock options held by the named executives as of July 31, 2000.
<TABLE>
<CAPTION>
Shares Number of Unexercised Value of Unexercised
Acquired Value Options at FY-End (#) in the Money Options at
on Exercise Realized Exercisable/ FY-End ($) Exercisable/
Name (#)(1) ($ ) Unexercisable(1) Unexercisable(2)
---- ----------- --------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Paul M. Olson........... -- -- 121,000/284,000 1,268,371/3,131,743
David R. Harden......... -- -- 75,000/150,000 728,153/1,456,305
George C. Graeber....... 73,200 1,532,367 35,637/ 90,000 611,965/1,275,003
Normand Bourque......... 296,100 3,082,478 90/197,460 1,014/2,224,130
Kenneth O. Hale......... -- -- 35,475/ 92,025 391,225/1,080,679
</TABLE>
--------
(1) After giving effect to the August, 2000 3-for-2 stock split.
(2) Based on the closing price of the Common Stock on July 31, 2000 of $23.5417
(as adjusted for the August 2000 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. 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 493,650 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 in 1988, 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.
Messrs. Olson, Graeber and Hale are also parties to agreements whereby in
the event their employment is terminated other than for cause after a change of
control or they resigned for good reason following a change of control (i) they
would receive an amount equal to 3 times (in the case of Mr. Olson) or 2 times
(in the case of Messrs. Graeber and Hale) the sum of (a) their highest annual
compensation (excluding bonuses) over the prior 3 calendar years and (b) their
average annual bonus over the prior 3 calendar years and (ii) be provided
health benefits for 2 years following such change of control. In addition,
certain unvested options and other long-term incentives would vest.
9
<PAGE>
Certain Transactions
The Company purchases converted copper from an entity controlled by family
members of David Harden, an officer of the Company, and purchases, from time to
time, production equipment from a Company controlled by Mr. Harden. In fiscal
2000, total purchases by the Company from such entities were approximately
$900,000. As of July 31, 2000, the Company was due approximately $200,000 from
such entities, consisting of pre-paid inventory. Purchases were made on an "as
needed" basis, and there is no contract relating to such purchases. The Company
believes that the foregoing transactions were 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.
Lance Balk, a director of the Company since March, 2000 is a partner of the
law firm of Kirkland & Ellis. Kirkland & Ellis performed legal services for the
Company prior to and during fiscal 2000.
Compensation Committee Report
Compensation Policies Applicable to Executive Officers
During fiscal 2000, the Compensation Committee continued to follow
established compensation policies. The 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.
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.
The Compensation Committee made no fundamental changes in the basic
executive compensation program during fiscal 2000.
Base Salary
The Compensation Committee meets in the fall of each year and is currently
evaluating compensation for fiscal 2001. Annual base salaries of the executive
officers for fiscal 2000 were reviewed by the Compensation Committee at its
October 1999 meeting and adjusted as appropriate effective October 1, 1999.
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 approved a general salary increase for fiscal 2000 of 4%
for executive officers, although certain executive officers received higher
increases to reflect additional responsibilities and salaries for persons in
comparable positions in other companies.
Bonus Plan
Each of the named executive officers and certain other key personnel of the
Company participate in an executive/management bonus plan (the "Bonus Plan").
The Bonus Plan 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 determined
in part by the financial results
10
<PAGE>
of their respective division and in part by 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.
The individual's target bonus ranges from 15% to 70% of base salary, as
determined by the Compensation Committee, and based primarily on the employee's
position and place of employment within the Company. An individual
participant's actual bonus is determined as a percentage ranging from 0% to
200% of the target bonus based upon (i) the relevant performance target(s)
achieved and (ii) the weight given to the relevant operating unit and overall
Company performance targets. Bonus amounts are prorated for new participants
who are added during the course of a given year. One half of the Bonus Plan
bonuses earned are paid quarterly, with the balance paid after final fiscal
year results are available. Bonus payments under the Bonus Plan are subject to
modification at the discretion of the Compensation Committee. All senior
executive/management bonus plans are approved by the Compensation Committee.
NORDX/CDT Bonus Programs
Certain employees of NORDX/CDT participated in the NORDX/CDT Plan II Bonus
Program (the "Plan II Program"). The Plan II Program provided 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. Such plan terminated on July 31, 2000. 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
The Compensation Committee met in October, 2000 to review the Company's
option grant program. The Compensation Committee noted that there were limited
options or other incentive awards available for grant under existing plans and
recommended that the Board adopt, subject to shareholder approval, a new
incentive plan for 1,800,000 shares of Common Stock. Awards under the Plan
would principally be used for non-executive level management, new employees and
in connection with acquisitions.
Shares of Common Stock that remain reserved for grant under the Company's
stock option plans as of October 24, 2000 are: for the Long- Term Performance
Incentive Plan, 51,852 shares; for the Supplemental Long-Term Performance
Incentive Plan, 99,683 shares; and for the 1999 Plan, 31,230 shares.
In order to create and provide a stock incentive structure similar to that
for its employees, the Company adopted the Director Plan in 1995. 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
Director Plan 150,194 shares of Common Stock remain reserved for grant to the
Company's outside Directors.
Compensation of Chief Executive Officer
The compensation policies described above apply as well to the compensation
of the CEO. The Compensation Committee is directly responsible for determining
the CEO's salary level and for all awards and grants to the CEO under the
incentive components of the compensation program. The overall compensation
package of the CEO is designed to recognize that the CEO bears primary
responsibility for increasing the value of stockholders' investments.
Accordingly, a substantial portion of the CEO's compensation is incentive-
based, providing greater compensation as direct and indirect financial measures
of stockholder value increase. The CEO's compensation is thus structured and
administered to motivate and reward the successful exercise of these
responsibilities.
Other than an increase of 4.2% to Mr. Olson's fiscal 2000 base salary, no
changes were made to Mr. Olson's compensation package in fiscal 2000.
11
<PAGE>
Internal Revenue Code Section 162(m)
The Compensation Committee has determined that it is unlikely that the
Company would pay any material amounts in fiscal 2001 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.
Conclusion
Through the programs described above and the stock ownership of management
through options, the Compensation Committee believes that a significant portion
of the Company's executive compensation is linked directly to corporate
performance.
Respectfully submitted,
COMPENSATION COMMITTEE MEMBERS
Bryan C. Cressey Richard C. Tuttle
* * * * * *
12
<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, 2000 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
[LINE GRAPH]
Cable Design
Technologies S&P Electrial
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
7/30/99 $407.82 $287.35 $380.08
7/31/00 $794.55 $309.42 $507.24
13
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth certain information regarding beneficial
ownership of Common Stock as of October 24, 2000, 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 of Outstanding Common
Name Common Stock(1) Stock(1)
---- ------------------- ------------------
<S> <C> <C>
Fidelity Research and Management
Corporation........................... 5,933,700 13.6%
Massachusetts Financial Services....... 5,484,140 12.5%
Paul M. Olson(2)(4).................... 702,521 1.6%
David R. Harden (5).................... 644,330 1.5%
Bryan C. Cressey(2)(6)................. 450,584 1.0%
Lance C. Balk(2)....................... 7,011 *
George C. Graeber(2)(7)................ 71,187 *
Michael F.O. Harris(2)(3).............. 32,809 *
Glenn Kalnasy(2)....................... 16,470 *
Ferdinand Kuznik(2).................... 3,136 *
Kenneth O. Hale(8)..................... 37,336 *
Richard C. Tuttle(2)(3)(9)............. 46,520 *
Normand Bourque(10).................... 93,030 *
All executive officers and director
nominees as a group (15 persons)...... 2,356,553 5.4%
</TABLE>
--------
* Represents less than 1%.
(1) Figures are based upon 43,717,371 shares of common stock outstanding as of
October 24, 2000. 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 24, 2000. Figures for Fidelity Research and Management Corporation
and Massachusetts Financial Services are as of June 30, 2000, which
represents the latest available data.
(2) Messrs. Olson, Cressey, Balk, Graeber, Harris, Kalnasy, Kuznik and Tuttle
are directors of the Company.
(3) Member of the Audit Committee.
(4) Includes 121,000 shares covered by options.
(5) Includes 75,000 shares covered by options.
(6) Includes 52,500 shares held by the Bryan and Christina Cressey Foundation
(the "Foundation"). Mr. Cressey is 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, but Mr. Cressey disclaims any such beneficial ownership.
(7) Includes 35,637 shares covered by options.
(8) Includes 35,475 shares covered by options.
(9) Includes 17,069 shares covered by options.
(10) Includes 90 shares covered by options.
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.
14
<PAGE>
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 2000, 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 2001 Annual Meeting of
Stockholders must be received by the Secretary of the Company by July 5, 2001
to be considered for inclusion in the Company's Proxy Statement and form of
proxy relating to that meeting. It is anticipated that the 2001 Annual Meeting
will be scheduled for December 4, 2001.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not know
of any business to come before the Annual Meeting other than the matters
described in the notice. If other business is properly presented for
consideration at the Annual Meeting, the enclosed Proxy authorizes the persons
named therein to vote the shares in their discretion.
SOLICITATION OF PROXIES
Solicitation of the Proxies may be made through officers and regular
employees of the Company by telephone or by oral communications with some
stockholders following the original solicitation period. No additional
compensation will be paid to such officers and regular employees for proxy
solicitation. Expenses incurred in the solicitation of Proxies will be borne by
the Company, including the charges and expenses of brokerage firms and others
of forwarding solicitation material to beneficial owners of Common Stock. In
addition to use of the mails, Proxies may be solicited by officers and
employees of the Company in person or by telephone. The Company has no present
plans to hire special employees or paid solicitors to assist in obtaining
proxies, but reserves the option of doing so if it should appear that a quorum
might otherwise not be obtained or for solicitation of proxies in connection
with any of the proposed matters.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report for the fiscal year ended July 31, 2000,
including the financial information included therein, has been filed with the
Securities and Exchange Commission and is incorporated in this Proxy Statement
by reference.
15
<PAGE>
Appendix I
CABLE DESIGN TECHNOLOGIES CORPORATION
2001 Long-Term Performance Incentive Plan
1. Purpose. The purpose of the 2001 Long-Term Performance Incentive Plan
(the "Plan") is to advance the interests of Cable Design Technologies
Corporation, a Delaware corporation (the "Company") and its stockholders by (i)
providing incentives to certain employees of the Company, directors and to
certain other individuals who perform services for, or to whom an offer of
employment has been extended by, the Company, including those who contribute
significantly to the strategic and long-term performance objectives and growth
of the Company and (ii) to enable the Company to attract, retain and reward the
best available persons for positions of responsibility.
2. Administration. The Plan shall be administered solely by the Board of
Directors (the "Board") of the Company or, if the Board shall so designate, by
a committee of the Board that shall be comprised of not fewer than two
directors (the "Committee"); provided that the Committee may delegate the
administration of the Plan in whole or in part, on such terms and conditions,
and to such person or persons as it may determine in its discretion. References
to the Committee hereunder shall include the Board where appropriate.
The Committee has all the powers vested in it by the terms of the Plan set
forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) to select the employees and other individuals to
be granted Awards under the Plan, to determine the type, size and terms of the
Award to be made to each individual selected, to modify the terms of any Award
that has been granted, to determine the time when Awards will be granted, to
establish performance objectives, to make any adjustments necessary or
desirable as a result of the granting of Awards to eligible individuals located
outside the United States and to prescribe the form of the instruments
embodying Awards made under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determinations which it deems necessary or desirable for the administration of
the Plan. The Committee (or its delegate as permitted herein) may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Committee deems necessary or
desirable to carry it into effect. Any decision of the Committee (or its
delegate as permitted herein) 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. The
Committee may act only by a majority of its members in office, except that the
members thereof may authorize any one or more of their members or any officer
of the Company to execute and deliver documents or to take any other
ministerial action on behalf of the Committee with respect to Awards made or to
be made to Plan participants. No member of the Committee and no officer of the
Company shall be liable for anything done or omitted to be done by him, by any
other member of the Committee or by any officer of the Company in connection
with the performance of duties under the Plan, except for his own willful
misconduct or as expressly provided by statute. Determinations to be made by
the Committee under the Plan may be made by its delegates.
3. Participation. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein) to
select the employees, directors and other individuals performing services for
the Company who may participate in the Plan and be granted Awards under the
Plan. Eligible individuals may be selected individually or by groups or
categories, as determined by the Committee in its discretion.
4. Awards under the Plan.
(a) Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights,"
(iii) "Restricted Stock," (iv) "Performance Grants" and (v) any other type
of
I-1
<PAGE>
Award deemed by the Committee in its discretion to be consistent with the
purposes of the Plan (including, but not limited to, Awards of or options
or similar rights granted with respect to unbundled stock units or
components thereof, and Awards to be made to participants who are foreign
nationals or are employed or performing services outside the United
States). Stock Options, which include "Nonqualified Stock Options" (which
may be awarded to participants or sold at a price determined by the
Committee ("Purchased Options")) and "Incentive Stock Options" or
combinations thereof, are rights to purchase common shares of the Company
having a par value of $.01 per share and stock of any other class into
which such shares may thereafter be changed (the "Common Shares").
Nonqualified Stock Options and Incentive Stock Options are subject to the
terms, conditions and restrictions specified in Paragraph 5. Stock
Appreciation Rights are rights to receive (without payment to the Company)
cash, Common Shares, other Company securities (which may include, but need
not be limited to, unbundled stock units or components thereof, debentures,
preferred stock, warrants, securities convertible into Common Shares or
other property ("Other Company Securities")) or property, or other forms of
payment, or any combination thereof, as determined by the Committee, based
on the increase in the value of the number of Common Shares specified in
the Stock Appreciation Right. Stock Appreciation Rights are subject to the
terms, conditions and restrictions specified in Paragraph 6. Shares of
Restricted Stock are Common Shares which are issued subject to certain
restrictions pursuant to Paragraph 7. Performance Grants are contingent
awards subject to the terms, conditions and restrictions described in
Paragraph 8, pursuant to which the participant may become entitled to
receive cash, Common Shares, Other Company Securities or property, or other
forms of payment, or any combination thereof, as determined by the
Committee.
(b) Maximum Number of Shares that May be Issued. There may be issued
under the Plan (as Restricted Stock, in payment of Performance Grants,
pursuant to the exercise of Stock Options or Stock Appreciation Rights, or
in payment of or pursuant to the exercise of such other Awards as the
Committee, in its discretion, may determine) an aggregate of not more than
1,800,000 Common Shares, subject to adjustment as provided in Paragraph 14.
In any one calendar year, the Committee shall not grant to any one
participant options or SARs to purchase a number of shares of Common Stock,
and shall not grant to any one participant Restricted Stock or Performance
Grants, in excess of 100,000 shares. Common Shares issued pursuant to the
Plan may be either authorized but unissued shares, treasury shares,
reacquired shares, or any combination thereof; provided, however, that,
unless and until this plan is approved by the Company's shareholders, only
treasury shares shall be issued hereunder. If any Common Shares issued as
Restricted Stock or otherwise subject to repurchase or forfeiture rights
are reacquired by the Company pursuant to such rights, or if any Award is
canceled, terminates or expires unexercised, any Common Shares that would
otherwise have been issuable pursuant thereto will be available for
issuance under new Awards.
(c) Rights with respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its discretion, a
participant to whom an Award of Restricted Stock has been made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have, after issuance of a certificate for the number of Common Shares
awarded and prior to the expiration of the Restricted Period (as
hereinafter defined) or the earlier repurchase of such Common Shares as
herein provided, ownership of such Common Shares, including the right to
vote the same and to receive dividends or other distributions made or paid
with respect to such Common Shares (provided that such Common Shares, and
any new, additional or different shares, or Other Company Securities or
property, or other forms of consideration which the participant may be
entitled to receive with respect to such Common Shares as a result of a
stock split, stock dividend or any other change in the corporate or capital
structure of the Company, shall be subject to the restrictions hereinafter
described as determined by the Committee in its discretion), subject,
however, to the options, restrictions and limitations imposed thereon
pursuant to the Plan. Notwithstanding the foregoing, a participant with
whom an Award agreement is made to issue Common Shares in the future, shall
have no rights as a stockholder with respect to Common Shares related to
such agreement until issuance of a certificate to him.
I-2
<PAGE>
(ii) Unless otherwise determined by the Committee in its discretion, a
participant to whom a grant of Stock Options, Stock Appreciation Rights,
Performance Grants or any other Award is made (and any person succeeding to
such a participant's rights pursuant to the Plan) shall have no rights as a
stockholder with respect to any Common Shares or as a holder with respect to
other securities, if any, issuable pursuant to any such Award until the date of
the issuance of a stock certificate to him for such Common Shares or other
instrument of ownership, if any. Except as provided in Paragraph 14, no
adjustment shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities, other property or
other forms of consideration, or any combination thereof) for which the record
date is prior to the date such stock certificate or other instrument of
ownership, if any, is issued.
5. Stock Options. The Committee may grant or sell Stock Options either
alone, or in conjunction with Stock Appreciation Rights, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter; provided
that an Incentive Stock Option may be granted only to an eligible employee of
the Company or any parent or subsidiary corporation. Each Stock Option
(referred to herein as an "Option") granted or sold under the Plan shall be
evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions, including, but
not limited to, restrictions upon the Option or the Common Shares issuable upon
exercise thereof, as the Committee, in its discretion, shall establish:
(a) The option price may be less than, equal to, or greater than, the
fair market value of the Common Shares subject to such Option at the time
the Option is granted, as determined by the Committee, but in no event will
such option price be less than 50% of the fair market value of the
underlying Common Shares at the time the Option is granted; provided,
however, that in the case of an Incentive Stock Option granted to such an
employee, the option price shall not be less than the fair market value of
the Common Shares subject to such Option at the time the Option is granted,
or if granted to such an employee who owns stock representing more than ten
percent of the voting power of all classes of stock of the Company or any
parent or subsidiary (a "Ten Percent Employee"), such option price shall
not be less than 110% of such fair market value at the time the Option is
granted; but in no event will such option price be less than the par value
of such Common Shares.
(b) The Committee shall determine the number of Common Shares to be
subject to each Option. The number of Common Shares subject to an
outstanding Option may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares
under such Option are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of a Stock Appreciation
Right attached to such Option, or to the extent that any other Award
granted in conjunction with such Option is paid.
(c) The Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution or to a participant's family member (as defined in
General Instruction A.1(a)(5) to Form S-8 under the Securities Act of 1933,
as amended, and any successor thereto) by gift or a qualified domestic
relations order (as defined in the Internal Revenue Code of 1986, as
amended), and shall be exercisable during the grantee's lifetime only by
him. Unless the Committee determines otherwise, the Option shall not be
exercisable for at least six months after the date of grant, unless the
grantee ceases employment or performance of services before the expiration
of such six-month period by reason of his disability as defined in
Paragraph 12 or his death.
(d) The Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted to a Ten
Percent Employee, after the expiration of five years from the date it
is granted, and, in the case of any other Option, after the expiration
of ten years from the date it is granted. Any Option may be exercised
during such period only at such time or times and in such installments
as the Committee may establish;
(ii) unless payment in full is made for the shares being acquired
thereunder at the time of exercise as set forth in paragraph (e) below;
such payment shall be made in such form (including, but
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not limited to, cash, Common Shares, or the surrender of another
outstanding Award under the Plan, or any combination thereof) as the
Committee may determine in its discretion; and
(iii) unless the person exercising the Option has been, at all times
during the period beginning with the date of the grant of the Option
and ending on the date of such exercise, employed by or otherwise
performing services for the Company, or a corporation, or a parent or
subsidiary of a corporation, substituting or assuming the Option in a
transaction to which Section 424(a) of the Internal Revenue Code of
1986, as amended, or any successor statutory provision thereto (the
"Code"), is applicable, except that
(A) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 12 or
early, normal or deferred retirement under an approved retirement
program of the Company (or such other plan or arrangement as may be
approved by the Committee, in its discretion, for this purpose)
while holding an Option which has not expired and has not been fully
exercised, such person, at any time within three years (or such
period determined by the Committee) after the date he ceased such
employment or performance of services (but in no event after the
Option has expired), may exercise the Option with respect to any
shares as to which he could have exercised the Option on the date he
ceased such employment or performance of services, or with respect
to such greater number of shares as determined by the Committee;
(B) if any person to whom an Option has been granted shall die
holding an Option which has not expired and has not been fully
exercised, his executors, administrators, heirs or distributees, as
the case may be, may, at any time within one year (or such other
period determined by the Committee) after the date of death (but in
no event after the Option has expired), exercise the Option with
respect to any shares as to which the decedent could have exercised
the Option at the time of his death, or with respect to such greater
number of shares as determined by the Committee; or
(C) if such person shall cease employment or performance of
services while holding an Option which has not expired and has not
been fully exercised, the Committee may determine to allow such
person at any time within the one year (or three months in the case
of an Incentive Stock Option) or such other period determined by the
Committee after the date he ceased such employment or performance of
services (but in no event after the Option has expired), to exercise
the Option with respect to any shares as to which he could have
exercised the Option on the date he ceased such employment or
performance of services, or with respect to such greater number of
shares as determined by the Committee.
(e) Unless otherwise determined by the Committee, payment for shares
being acquired under any Option shall be made (i) in cash (including check,
bank draft, money order or wire transfer of immediately available funds),
(ii) by delivery of outstanding Common Shares with a fair market value on
the date of exercise equal to the aggregate exercise price payable with
respect to the Options' exercise, (iii) by simultaneous sale through a
broker reasonably acceptable to the Committee of shares acquired on
exercise, as permitted under Regulation T of the Federal Reserve Board,
(iv) by authorizing the Company to withhold from issuance a number of
shares issuable upon exercise of the Options which, when multiplied by the
fair market value of a Common Shares on the date of exercise, is equal to
the aggregate exercise price payable with respect to the Options so
exercised or (v) by any combination of the foregoing. Options may also be
exercised upon payment of the exercise price of the shares to be acquired
by delivery of the optionee's promissory note, but only to the extent
specifically approved by and in accordance with the policies of the
Committee.
In the event a grantee elects to pay the exercise price payable with respect
to an Option pursuant to clause (ii) above, (A) only a whole number of Common
Shares (and not fractional Common Shares) may be tendered in payment, (B) such
grantee must present evidence acceptable to the Company that he or she has
owned any such Common Shares tendered in payment of the exercise price (and
that such tendered Common Shares have
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not been subject to any substantial risk of forfeiture) for at least six months
prior to the date of exercise, and (C) Common Shares must be delivered to the
Company. Delivery for this purpose may, at the election of the grantee, be made
either by (A) physical delivery of the certificate(s) for all such Common
Shares tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (B) direction
to the grantee's broker to transfer, by book entry, of such Common Shares from
a brokerage account of the grantee to a brokerage account specified by the
Company. When payment of the exercise price is made by delivery of Common
Shares, the difference, if any, between the aggregate exercise price payable
with respect to the Option being exercised and the fair market value of the
Common Shares tendered in payment (plus any applicable taxes) shall be paid in
cash. No grantee may tender Common Shares having a fair market value exceeding
the aggregate exercise price payable with respect to the Option being exercised
(plus any applicable taxes).
In the event a grantee elects to pay the exercise price payable with respect
to an Option pursuant to clause (iv) above, (A) only a whole number of share(s)
(and not fractional shares) may be withheld in payment and (B) such grantee
must present evidence acceptable to the Company that he or she has owned a
number of Common Shares at least equal to the number of shares to be withheld
in payment of the exercise price (and that such owned Common Shares have not
been subject to any substantial risk of forfeiture) for at least six months
prior to the date of exercise. When payment of the exercise price is made by
withholding of shares, the difference, if any, between the aggregate exercise
price payable with respect to the Option being exercised and the fair market
value of the shares withheld in payment (plus any applicable taxes) shall be
paid in cash. No grantee may authorize the withholding of shares having a fair
market value exceeding the aggregate exercise price payable with respect to the
Option being exercised (plus any applicable taxes). Any withheld shares shall
no longer be issuable under such Option (except pursuant to any Reload Option
(as defined below) with respect to any such withheld shares).
(f) In the case of an Incentive Stock Option, the amount of the
aggregate fair market value of Common Shares (determined at the time of
grant of the Option pursuant to subparagraph 5(a) of the Plan) with respect
to which incentive stock options are exercisable for the first time by an
employee during any calendar year (under all such plans of his employer
corporation and its parent and subsidiary corporations) shall not exceed
$100,000.
(g) It is the intent of the Company that Nonqualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that
the Incentive Stock Options granted under the Plan be consistent with and
contain or be deemed to contain all provisions required under Section 422
and the other appropriate provisions of the Code and any implementing
regulations (and any successor provisions thereof), and that any
ambiguities in construction shall be interpreted in order to effectuate
such intent.
(h) The Committee may provide (either at the time of grant or exercise
of an Option), in its discretion, for the grant to a grantee who exercises
all or any portion of an Option ("Exercised Options") and who pays all or
part of such exercise price with Common Shares, of an additional Option (a
"Reload Option") for a number of Common Shares equal to the sum (the
"Reload Number") of the number of Common Shares tendered or withheld in
payment of such exercise price for the Exercised Options plus, if so
provided by the Committee, the number of Common Shares, if any, tendered or
withheld by the grantee or withheld by the Company in connection with the
exercise of the Exercised Options to satisfy any federal, state or local
tax withholding requirements. The terms of each Reload Option, including
the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the
Exercised Option to which it relates, except that (i) the grant date for
each Reload Option shall be the date of exercise of the Exercised Option to
which it relates and (ii) the exercise price for each Reload Option shall
be the fair market value of the Common Shares on the grant date of the
Reload Option.
6. Stock Appreciation Rights. The Committee may grant Stock Appreciation
Rights either alone, or in conjunction with Stock Options, Performance Grants
or other Awards, either at the time of grant or by
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amendment thereafter. Each Award of Stock Appreciation Rights granted under the
Plan shall be evidenced by an instrument in such form as the Committee shall
prescribe from time to time in accordance with the Plan and shall comply with
the following terms and conditions, and with such other terms and conditions,
including, but not limited to, restrictions upon the Award of Stock
Appreciation Rights or the Common Shares issuable upon exercise thereof, as the
Committee, in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be
subject to each Award of Stock Appreciation Rights. The number of Common
Shares subject to an outstanding Award of Stock Appreciation Rights may be
reduced on a share-for-share or other appropriate basis, as determined by
the Committee, to the extent that Common Shares under such Award of Stock
Appreciation Rights are used to calculate the cash, Common Shares, Other
Company Securities or property, or other forms of payment, or any
combination thereof, received pursuant to exercise of an Option attached to
such Award of Stock Appreciation Rights, or to the extent that any other
Award granted in conjunction with such Award of Stock Appreciation Rights
is paid.
(b) The Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will
or the laws of descent and distribution or to a participant's family member
(as defined in General Instruction A.1(a)(5) to Form S-8 under the
Securities Act of 1933, as amended, and any successor thereto) by gift or a
qualified domestic relations order (as defined in the Internal Revenue Code
of 1986, as amended), and shall be exercisable during the grantee's
lifetime only by him. Unless the Committee determines otherwise, the Award
of Stock Appreciation Rights shall not be exercisable for at least six
months after the date of grant, unless the grantee ceases employment or
performance of services before the expiration of such six-month period by
reason of his disability as defined in Paragraph 12 or his death.
(c) The Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights which is
attached to an Incentive Stock Option granted to a Ten Percent
Employee, after the expiration of five years from the date it is
granted, and, in the case of any other Award of Stock Appreciation
Rights, after the expiration of ten years from the date it is granted.
Any Award of Stock Appreciation Rights may be exercised during such
period only at such time or times and in such installments as the
Committee may establish;
(ii) unless the Option or other Award to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
(iii) unless the person exercising the Award of Stock Appreciation
Rights has been, at all times during the period beginning with the date
of the grant thereof and ending on the date of such exercise, employed
by or otherwise performing services for the Company, except that
(A) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 12 or
early, normal or deferred retirement under an approved retirement
program of the Company (or such other plan or arrangement as may be
approved by the Committee, in its discretion, for this purpose)
while holding an Award of Stock Appreciation Rights which has not
expired and has not been fully exercised, such person may, at any
time within three years (or such other period determined by the
Committee) after the date he ceased such employment or performance
of services (but in no event after the Award of Stock Appreciation
Rights has expired), exercise the Award of Stock Appreciation Rights
with respect to any shares as to which he could have exercised the
Award of Stock Appreciation Rights on the date he ceased such
employment or performance of services, or with respect to such
greater number of shares as determined by the Committee; or
(B) if any person to whom an Award of Stock Appreciation Rights
has been granted shall die holding an Award of Stock Appreciation
Rights which has not expired and has not been fully exercised, his
executors, administrators, heirs or distributees, as the case may
be, may at any time within one year (or such other period determined
by the Committee) after the date of death
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(but in no event after the Award of Stock Appreciation Rights has
expired), exercise the Award of Stock Appreciation Rights with
respect to any shares as to which the decedent could have exercised
the Award of Stock Appreciation Rights at the time of his death, or
with respect to such greater number of shares as determined by the
Committee.
(d) An Award of Stock Appreciation Rights shall entitle the holder (or
any person entitled to act under the provisions of subparagraph
6(c)(iii)(B) hereof) to exercise such Award and surrender unexercised the
Option (or other Award), if any, to which the Stock Appreciation Right is
attached (or any portion of such Option or other Award) to the Company and
to receive from the Company in exchange thereof, without payment to the
Company, that number of Common Shares having an aggregate value equal to
(or, in the discretion of the Committee, less than) the excess of the fair
market value of one share, at the time of such exercise, over the exercise
price (or Option Price, as the case may be), times the number of shares
subject to the Award or the Option (or other Award), or portion thereof,
which is so exercised or surrendered, as the case may be. The Committee
shall be entitled in its discretion to elect to settle the obligation
arising out of the exercise of a Stock Appreciation Right by the payment of
cash or Other Company Securities or property, or other forms of payment, or
any combination thereof, as determined by the Committee, equal to the
aggregate value of the Common Shares it would otherwise be obligated to
deliver. Any such election by the Committee shall be made as soon as
practicable after the receipt by the Committee of written notice of the
exercise of the Stock Appreciation Right. The value of a Common Share,
Other Company Securities or property, or other forms of payment determined
by the Committee for this purpose shall be the fair market value thereof on
the last business day next preceding the date of the election to exercise
the Stock Appreciation Right, unless the Committee, in its discretion,
determines otherwise.
(e) A Stock Appreciation Right may provide that it shall be deemed to
have been exercised at the close of business on the business day preceding
the expiration date of the Stock Appreciation Right or of the related
Option (or other Award), or such other date as specified by the Committee,
if at such time such Stock Appreciation Right has a positive value. Such
deemed exercise shall be settled or paid in the same manner as a regular
exercise thereof as provided in subparagraph 6(d) hereof.
(f) No fractional shares may be delivered under this Paragraph 6, but in
lieu thereof a cash or other adjustment shall be made as determined by the
Committee in its discretion.
7. Restricted Stock. Each Award of Restricted Stock under the Plan shall be
evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions as the
Committee, in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be
issued to a participant pursuant to the Award, and the extent, if any, to
which they shall be issued in exchange for cash, other consideration, or
both.
(b) Restricted Stock awarded to a participant in accordance with the
Award shall be subject to the following restrictions until the expiration
of such period as the Committee shall determine, from the date on which the
Award is granted (the "Restricted Period"): (i) a participant to whom an
award of Restricted Stock is made shall be issued, but shall not be
entitled to the delivery of a stock certificate, (ii) unless otherwise
determined by the Committee, certificates representing Restricted Stock
will be held in escrow by the Company on the participant's behalf during
the Restricted Period and will bear an appropriate legend specifying the
applicable restrictions thereon, and the participant will be required to
execute a blank stock power, (iii) the Restricted Stock shall not be
transferable prior to the end of the Restricted Period, (iv) the Restricted
Stock shall be forfeited and the stock certificate shall be returned to the
Company and all rights of the holder of such Restricted Stock to such
shares and as a shareholder shall terminate without further obligation on
the part of the Company if the participant's continuous employment or
performance of services for the Company shall terminate for any reason
prior to the end of
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the Restricted Period, except as otherwise provided in subparagraph 7(c),
and (v) such other restrictions as determined by the Committee in its
discretion.
(c) If a participant who has been in continuous employment or
performance of services for the Company since the date on which a
Restricted Stock Award was granted to him shall, while in such employment
or performance of services, die, or terminate such employment or
performance of services by reason of disability as defined in Paragraph 12
or by reason of early, normal or deferred retirement under an approved
retirement program of the Company (or such other plan or arrangement as may
be approved by the Committee in its discretion, for this purpose) and any
of such events shall occur after the date on which the Award was granted to
him and prior to the end of the Restricted Period of such Award, the
Committee may determine to cancel any and all restrictions on any or all of
the Common Shares subject to such Award.
8. Performance Grant. The Award of the Performance Grant ("Performance
Grant") to a participant will entitle him to receive a specified amount
determined by the Committee (the "Actual Value"), if the terms and conditions
specified herein and in the Award are satisfied. Each Award of a Performance
Grant shall be subject to the following terms and conditions, and to such other
terms and conditions, including but not limited to, restrictions upon any cash,
Common Shares, Other Company Securities or property, or other forms of payment,
or any combination thereof, issued in respect of the Performance Grant, as the
Committee, in its discretion, shall establish, and shall be embodied in an
instrument in such form and substance as is determined by the Committee:
(a) The Committee shall determine the value or range of values of a
Performance Grant to be awarded to each participant selected for an Award
and whether or not such a Performance Grant is granted in conjunction with
an Award of Options, Stock Appreciation Rights, Restricted Stock or other
Award, or any combination thereof, under the Plan (which may include, but
need not be limited to, deferred Awards) concurrently or subsequently
granted to the participant (the "Associated Award"). As determined by the
Committee, the maximum value of each Performance Grant (the "Maximum
Value") shall be: (i) an amount fixed by the Committee at the time the
Award is made or amended thereafter, (ii) an amount which varies from time
to time based in whole or in part on the then current value of the Common
Shares, Other Company Securities or property, or other securities or
property, or any combination thereof or (iii) an amount that is
determinable from criteria specified by the Committee. Performance Grants
may be issued in difference classes or series having different names, terms
and conditions. In the case of a Performance Grant awarded in conjunction
with an Associated Award, the Performance Grant may be reduced on an
appropriate basis to the extent that the Associated Award has been
exercised, paid to or otherwise received by the participant, as determined
by the Committee.
(b) The award period ("Award Period") related to any Performance Grant
shall be a period determined by the Committee. At the time each Award is
made, the Committee shall establish performance objectives to be attained
within the Award Period as the means of determining the Actual Value of
such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be
limited to, the performance of the participant, the Company, one or more of
its subsidiaries or one or more of their divisions or units, or any
combination of the foregoing, as the Committee shall determine, and may be
applied on an absolute basis or be relative to industry or other indices,
or any combination thereof. The Actual Value of a Performance Grant shall
be equal to its Maximum Value only if the performance objectives are
attained in full, but the Committee shall specify the manner in which the
Actual Value of Performance Grants shall be determined if the performance
objectives are met in part. Such performance measures, the Actual Value or
the Maximum Value, or any combination thereof, may be adjusted in any
manner by the Committee in its discretion at any time and from time to time
during or as soon as practicable after the Award Period, if it determines
that such performance measures, the Actual Value or the Maximum Value, or
any combination thereof, are not appropriate under the circumstances.
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(c) The rights of a participant in Performance Grants awarded to him
shall be provisional and may be canceled or paid in whole or in part, all
as determined by the Committee, if the participant's continuous employment
or performance of services for the Company shall terminate for any reason
prior to the end of the Award Period.
(d) The Committee shall determine whether the conditions of subparagraph
8(b) or 8(c) hereof have been met and, if so, shall ascertain the Actual
Value of the Performance Grants. If the Performance Grants have no Actual
Value, the Award and such Performance Grants shall be deemed to have been
canceled and the Associated Award, if any, may be canceled or permitted to
continue in effect in accordance with its terms. If the Performance Grants
have any Actual Value and:
(i) were not awarded in conjunction with an Associated Award, the
Committee shall cause an amount equal to the Actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
(ii) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no
amount in respect thereof shall be paid to the participant or his
beneficiary, and the Associated Award may be permitted to continue in
effect in accordance with its terms, (B) to pay the Actual Value of the
Performance Grants to the participant or his beneficiary as provided
below, in which event the Associated Award may be canceled or (C) to
pay to the participant or his beneficiary as provided below, the Actual
Value of only a portion of the Performance Grants, in which event all
or a portion of the Associated Award may be permitted to continue in
effect in accordance with its terms or be canceled, as determined by
the Committee.
Such determination by the Committee shall be made as promptly as practicable
following the end of the Award Period or upon the earlier termination of
employment or performance of services, or at such other time or times as the
Committee shall determine, and shall be made pursuant to criteria specified by
the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period or at such other time
or times as the Committee shall determine, and may be made in cash, Common
Shares, Other Company Securities or property, or other forms of payment, or any
combination thereof or in such other manner, as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
9. Deferral of Compensation. The Committee shall determine whether or not an
Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not
such deferred amounts may be
(i) forfeited to the Company or to other participants or any combination
thereof, under certain circumstances (which may include, but need not be
limited to, certain types of termination of employment or performance of
services for the Company),
(ii) subject to increase or decrease in value based upon the attainment
of or failure to attain, respectively, certain performance measures and/or
(iii) credited with income equivalents (which may include, but need not
be limited to, interest, dividends or other rates of return) until the date
or dates of payment of the Award, if any.
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10. Deferred Payment of Awards. The Committee may specify that the payment
of all or any portion of cash, Common Shares, Other Company Securities or
property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the Committee
shall determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but
need not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents
to be determined by the Committee in its discretion.
11. Amendment or Substitution of Awards under the Plan. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder); provided that no such amendment shall adversely affect in
a material manner any right of a participant under the Award without his
written consent, unless the Committee determines in its discretion that there
have occurred or are about to occur significant changes in the participant's
position, duties or responsibilities, or significant changes in economic,
legislative, regulatory, tax, accounting or cost/benefit conditions which are
determined by the Committee in its discretion to have or to be expected to have
a substantial effect on the performance of the Company, or any subsidiary,
affiliate, division or department thereof, on the Plan or on any Award under
the Plan. The Committee may, in its discretion, permit holders of Awards under
the Plan to surrender outstanding Awards in order to exercise or realize the
rights under other Awards, or in exchange for the grant of new Awards, or
require holders of Awards to surrender outstanding Awards as a condition
precedent to the grant of new Awards under the Plan.
12. Disability. For the purposes of this Plan, a participant shall be deemed
to have terminated his employment or performance of services for the Company
and its Affiliates by reason of disability, if the Committee shall determine
that the physical or mental condition of the participant by reason of which
such employment or performance of services terminated was such at that time as
would entitle him to payment of monthly disability benefits under any Company
disability plan. If the participant is not eligible for benefits under any
disability plan of the Company, he shall be deemed to have terminated such
employment or performance of services by reason of disability if the Committee
shall determine that his physical or mental condition would entitle him to
benefits under any Company disability plan if he were eligible therefor.
13. Termination of a Participant. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment with,
or the performance of services for, the Company.
14. Dilution and Other Adjustments. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split,
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, reorganization, combination or exchange of
shares, a sale by the Company of all of its assets, any distribution to
stockholders other than a normal cash dividend, or other extraordinary or
unusual event, if the Committee shall determine, in its discretion, that such
change equitably requires an adjustment in the terms of any Award (including,
without limitation, the number and type of consideration subject to any Award),
maximum number of awards to any one participant, or the number of Common Shares
available for Awards, such adjustment may be made by the Committee and shall be
final, conclusive and binding for all purposes of the Plan.
In the event of the proposed dissolution or liquidation of the Company, all
outstanding Awards shall terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Committee. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, all restrictions on
any outstanding Awards shall lapse and participants shall be entitled to the
full benefit of all such Awards immediately prior to the closing date of such
sale or merger, unless otherwise provided by the Committee.
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15. Designation of Beneficiary by Participant. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of
any Award under the Plan in the event of his death, on a written form to be
provided by and filed with the Committee, and in a manner determined by the
Committee in its discretion. The Committee reserves the right to review and
approve beneficiary designations. A participant may change his beneficiary from
time to time in the same manner, unless such participant has made an
irrevocable designation. Any designation of beneficiary under the Plan (to the
extent it is valid and enforceable under applicable law) shall be controlling
over any other disposition, testamentary or otherwise, as determined by the
Committee in its discretion. If no designated beneficiary survives the
participant and is living on the date on which any amount becomes payable to
such a participant's beneficiary, such payment will be made to the legal
representatives of the participant's estate, and the term "beneficiary" as used
in the Plan shall be deemed to include such person or persons. If there are any
questions as to the legal right of any beneficiary to receive a distribution
under the Plan, the Committee in its discretion may determine that the amount
in question be paid to the legal representatives of the estate of the
participant, in which event the Company, the Board and the Committee and the
members thereof, will have no further liability to anyone with respect to such
amount.
16. Financial Assistance. If the Committee determines that such action is
advisable, the Company may assist any person to whom an Award has been granted
in obtaining financing from the Company (or under any program of the Company
approved pursuant to applicable law), or from a bank or other third party, on
such terms as are determined by the Committee, and in such amount as is
required to accomplish the purposes of the Plan, including, but not limited to,
to permit the exercise of an Award, the participation therein, and/or the
payment of any taxes in respect thereof. Such assistance may take any form that
the Committee deems appropriate, including, but not limited to, a direct loan
from the Company, a guarantee of the obligation by the Company, or the
maintenance by the Company of deposits with such bank or third party.
17. Miscellaneous Provisions.
(a) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Determinations made by the Committee under
the Plan need not be uniform and may be made selectively among eligible
individuals under the plan, whether or not such eligible individuals are
similarly situated. Neither the Plan nor any action taken hereunder shall
be construed as giving any employee or other person any right to continue
to be employed by or perform services for the Company, and the right to
terminate the employment of or performance of services by any participants
at any time and for any reason is specifically reserved.
(b) No participant or other person shall have any right with respect to
the Plan, the Common Shares reserved for issuance under the Plan or in any
Award, contingent or otherwise, until written evidence of the Award shall
have been delivered to the recipient and all the terms, conditions and
provisions of the Plan and the Award applicable to such recipient (and each
person claiming under or through him) have been met.
(c) Except as may be approved by the Committee, a participant's rights
and interest under the Plan may not be assigned or transferred,
hypothecated or encumbered in whole or in part either directly or by
operation of law or otherwise (except in the event of a participant's
death) including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner;
provided, however, that any Option or similar right (including, but not
limited to, a Stock Appreciation Right) offered pursuant to the Plan shall
not be transferable other than by will or the laws of descent and
distribution and shall be exercisable during the participant's lifetime
only by him.
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder
with respect to any Award unless counsel for the Company shall be satisfied
that such issuance will be in compliance with applicable federal, state,
local and foreign legal, securities exchange and other applicable
requirements.
(f) The Company shall have the right to deduct from any payment made
under the Plan any federal, state, local or foreign income or other taxes
required by law to be withheld with respect to such payment.
I-11
<PAGE>
It shall be a condition to the obligation of the Company to issue Common
Shares, Other Company Securities or property, other securities or property,
or other forms of payment, or any combination thereof, upon exercise,
settlement or payment of any Award under the Plan, that the participant (or
any beneficiary or person entitled to act) pay to the Company, upon its
demand, such amount as may be required by the Company for the purpose of
satisfying any liability to withhold federal, state, local or foreign
income or other taxes. If the amount requested is not paid, the Company may
refuse to issue Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment, or any combination
thereof. Notwithstanding anything in the Plan to the contrary, the
Committee may, in its discretion, permit an eligible participant (or any
beneficiary or person entitled to act) to elect to pay a portion or all of
the amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Committee shall deem to be
appropriate (including, but not limited to, by authorizing the Company to
withhold, or agreeing to surrender to the Company on or about the date such
tax liability is determinable, Common Shares, Other Company Securities or
property, other securities or property, or other forms of payment, or any
combination thereof, owned by such person or a portion of such forms of
payment that would otherwise be distributed, or have been distributed, as
the case may be, pursuant to such Award to such person, having a fair
market value on the date that the amount of tax to be withheld is
determined equal to the amount of such taxes). Any election that a
participant makes shall be irrevocable.
(g) The expenses of the Plan shall be borne by the Company.
(h) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's
general creditors.
(i) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board
or the Committee or its delegates.
(j) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of
payment of Awards under the Plan, or any combination thereof, as of any
specific time shall mean such value as determined by the Committee in
accordance with applicable law.
(k) The masculine pronoun includes the feminine and the singular
includes the plural wherever appropriate.
(l) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder of any
Common Shares issued pursuant hereto as may be required by Section 13 or
15(d) of the Exchange Act (or any successor provision) or any other
applicable statute, rule or regulation.
(m) The validity, construction, interpretation, administration and
effect of the Plan, and of its rules and regulations, and rights relating
to the Plan and to Awards granted under the Plan, shall be governed by the
substantive laws, but not the choice of law rules, of the State of
Delaware.
18. Amendment and Termination of the Plan. The Board of Directors or the
Committee, without the approval of the stockholders, may amend or terminate the
Plan, except that no amendment shall become effective without prior approval of
the stockholders of the Company if stockholder approval would be required by
applicable law or regulations, including if required for continued compliance
with the performance-based compensation exception of Section 162(m) of the
Code, under the provisions of Section 422 of the Code or any successor thereto
or by any listing requirements of the principal stock exchange on which the
Common Stock is then listed.
I-12
<PAGE>
19. Plan Termination. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan;
or
(b) ten years from the date the Plan is initially approved and adopted
by the stockholders of the Company; provided, however, that the Board may,
prior to the expiration of such ten-year period, extend the term of the
Plan for an additional period of up to five years for the grant of Awards
other than Incentive Stock Options. No termination of the Plan shall
materially alter or impair any of the rights or obligations of any person,
without his consent, under any Award theretofore granted under the Plan,
except that subsequent to termination of the Plan, the Committee may make
amendments permitted under Paragraph 11.
I-13
<PAGE>
DETACH HERE
PROXY
CABLE DESIGN TECHNOLOGIES CORPORATION
For Annual Meeting of Stockholders - December 6, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul M. Olson, Kenneth O. Hale and
Charles B. Fromm, 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 adjournments 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>
DETACH HERE
[X] Please mark
votes as in
this example.
<TABLE>
<CAPTION>
<S> <C> <C>
FOR AGAINST ABSTAIN
1. To elect a Board of Directors for the ensuing year. 2. To adopt the 2001 Long-Term [ ] [ ] [ ]
Nominees: (01) Bryan C. Cressey, (02) Paul M. Olson, Incentive Plan.
(03) Lance Balk, (04) George Graeber, (05) Michael F. O. Harris,
(06) Glenn Kalnasy, (07) Ferdinand Kuznik, 3. To elect Arthur Andersen LLP [ ] [ ] [ ]
(08) Richard C. Tuttle. as auditors for the fiscal year
ending July 31, 2001.
FOR WITHHELD
[ ] [ ] 4. 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>
