The Board will consider candidates recommended by shareholders in the same manner as other candidates.
Shareholders and other interested parties who wish to communicate with the Board (including, in the case of shareholders, in order to recommend or nominate director candidates to the Board), individual Board members, the Chairman of the Board, the Presiding Director or the Non-Management Directors as a group may do so by either of the following means:
All questions and concerns will be received and processed by the Corporate Compliance Office. Questions and concerns relating to AVX’s accounting, internal accounting controls or auditing matters will be referred to the Chairman of the Audit Committee. Questions and concerns addressed to the Board will be referred to the Presiding Director. Other questions and concerns will be processed by the Corporate Compliance Office and forwarded to the addressees or distributed at the next scheduled Board meeting, as appropriate.
The Board takes an active role in risk oversight of the Company both as a full Board and through its Committees. Through detailed reviews, discussions and presentations by the headsmanagers of the Company’s various businesses and Corporatecorporate functions, the Board reviews and advises with respect to the Company’s business strategies, financial plans, cybersecurity measures and cybersecuritymanagement development with attention and focus on the risks to achievement of these strategies and plans. Such risks include those involving the leadership structure, compensation and succession planning, those inherent in the Company’s businesses and compensation programs as well as the risks from external sources such as competitors, the economy, cybersecurity, the environment and regulatory and legislative developments.
These reviews, discussions and presentations are intended to assist the Board and management in its evaluation of the Company’s risk management practices and to promote a culture that actively identifies and manages risk.
The Audit Committee meets regularly with Company management with regard to the Company’s financial risk management processes, controls and capabilities and with the Company’s Chief Internal Auditorchief internal auditor with regard to significant control matters. In addition, the Audit Committee reviews the Company’s procedures regarding the receipt, retention and treatment of complaints regarding internal accounting, accounting controls or audit matters. The Audit Committee also reviews any whistleblower reports received by the Company.
The Compensation Committee oversees the Company’s executive compensation arrangements. The Compensation Committee considers the risks arising from the Company’s overall senior management and other employee compensation policies and practices in connection with administering the Management Incentive Plan and other employee benefit plans.
The Special Advisory Committee reviews and approves all material agreements and transactions not covered by such agreements between the Company and related parties.parties other than compensation arrangements discussed above. The Special Advisory Committee operates under a written charter which sets forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant to those procedures, the Special Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to which an independent unrelated party would agree at arm’s-length or are otherwise in the best interests of the Company and its shareholders generally. See “Relationship Withwith Kyocera” below for more information.
The Audit Committee is composed of three members. The members of the Audit Committee are Messrs. Christiansen (Chairman), Stach and DeCenzo. Each member of the Audit Committee is financially literate, knowledgeable and qualified to review financial statements. The Board of Directors has determined that the Company has at least one “audit committee financial expert,” as defined by the SEC, serving on the Audit Committee. The “audit committee financial expert” designated by the Board is Mr. Christiansen. The Board of Directors has determined that all members of the Audit Committee are “independent” under the NYSE audit committee member independence requirements.
The Board has adopted written charters for the Audit, Compensation, and Special Advisory Committees. The charters, as amended, are available on the Company’s website at www.avx.com in the “Corporate“About – Corporate Information – Corporate Governance” section.
The Board determines compensation for all directors. The following table and narrative provides information related to the compensation of directors during fiscal 2016.2018.
AVX feels that it is important for members of the Board to be shareholders of the Company, to have an incentive to help the Company grow and prosper, and to share in that prosperity.
The 2014 Non-Employee Directors’ Stock Option Plan authorizes the issuance of up to 1,000,000 shares of Common Stock. Prior toFollowing the amendment of the Plan in May 2016, it provided for (i) the automatic grant of an option to purchase 15,000 shares of Common Stock to each director not employed by AVX (a “Non-Employee Director”) as of the date on which a Non-Employee Director is elected to the Board for the first time and every third anniversary thereafter and (ii) the grant of additional options to purchase shares of Common Stock from time to time upon prior approval by the Board. Following the amendment, the automatic grant feature of the Plan was eliminated. Options granted under the Plan become exercisable 33 1/3% one year after the date of the grant and an additional 33 1/3% at the end of each of the following two years, provided that in order to exercise the options, the Non-Employee Director must continue to be a director at the date of exercise. However, if such Non-Employee Director’s service terminates due to retirement, death or disability, his options shall thereupon become fully vested and remain outstanding and exercisable until the earlier of one year after the date of such retirement, death or disability or the date of their original expiration. Options have an exercise price equal to the Fair Market Value (as defined in the plan) of the Common Stock on the date of grant. The Board has indicated its intention to not grant any further options under the Plan after fiscal 2016, but reserves the right to do so.
In accordance with its written charter, as adopted by the Board, the Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company. During the fiscal year ended March 31, 2016,2018, the Audit Committee met sevennine times, and the Audit Committee discussed the interim financial information contained in each quarterly earnings announcement with Company management and representatives from the independent registered public accounting firm prior to each public release.
In discharging its oversight responsibility as to the audit process, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence. The Audit Committee also discussed with management and the independent registered public accounting firm the quality and adequacy of the Company’s internal controls. The Audit Committee reviewed with the independent registered public accounting firm its required communications regarding audit plans, audit scope, and identification of audit risks.
The Audit Committee reviewed and discussed with the independent registered public accounting firm all matters required to be discussed in accordance with standards adopted by the Public Company Accounting Oversight Board and, with and without management present, discussed and reviewed the results of the independent registered public accounting firm’s examination of the financial statements.
Based on the above-mentioned review and discussions with management and the independent registered public accounting firm, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2016,2018, for filing with the SEC. The Audit Committee also reappointed the independent registered public accounting firm, PricewaterhouseCoopers LLP, for the fiscal year ending March 31, 2017.2019.
Donald B. Christiansen, Chairman of the Audit Committee
| (1) | | Audit Fees represent fees for the annual audit of the Company's financial statements, the audit of the Company's internal control over financial reporting, the review of the interim financial statements included in the Company's quarterly reports on Form 10-Q, and other services performed in connection with statutory and regulatory filings. |
| (2) | | Audit related fees consist primarily of attestation-related services not required by regulatory and governmental agencies and employee benefit plan audits. |
| (3) | | Tax Fees represent fees for consultation on tax matters and tax compliance services. |
| (4) | | Other Fees represent fees related to miscellaneous services as well as online technical resources. |
The Audit Committee of the Company’s Board of Directors determined that the provision of non-audit services by PwC to the Company during fiscal 20152017 and fiscal 20162018 was compatible with maintaining the independent registered public accounting firm’s independence.
It is the policy of the Audit Committee to pre-approve all audit and permitted non-audit services (and the related fees and terms) to be provided to the Company by the independent registered public accounting firm. The authority to pre-approve non-audit services may be delegated by the Audit Committee to one or more members of the Audit Committee, who shall present a summary of any decision to pre-approve anpre-approved activity to the full Audit Committee at the firsteach committee meeting, following such decision.as applicable. None of the non-audit services described above were approved by the Audit Committee pursuant to the exception provided by Rule 2-01(c)(7)(i) under Regulation S-X.
Relationship Withwith Kyocera
Relationship Withwith Kyocera
Since January 1990, the Company’s business has included transactions with Kyocera. During the three years ended March 31, 2016,2018, such transactions have involved the purchase of resale inventories, raw materials, supplies, and equipment, the sale of products for resale, raw materials, supplies and equipment, and the payment of dividends, as set forth in the table below (in thousands):
| | | | | | | | |
| | Years Ended March 31, |
| | 2014 | | 2015 | | 2016 |
Sales: | | | | | | | | |
Product and equipment sales to affiliates | $ | 20,530 | | $ | 28,723 | | $ | 22,230 |
Purchases: | | | | | | | | |
Purchases of resale inventories, raw materials, supplies, equipment and services | | 322,570 | | | 272,679 | | | 233,637 |
Other: | | | | | | | | |
Dividends paid | | 43,544 | | | 48,720 | | | 51,156 |
| | | | | | | | |
| | | Years Ended March 31, | |
| | | 2016 | | | 2017 | | | 2018 | |
Sales: | | | | | | | | | | | | |
Product and equipment sales to affiliates | | $ | 22,230 | | | $ | 30,303 | | | $ | 26,069 | |
Purchases: | | | | | | | | | | | | |
Purchases of resale inventories, raw materials, supplies, equipment and services | | | 233,637 | | | | 303,793 | | | | 256,660 | |
Other: | | | | | | | | | | | | |
Dividends paid | | | 51,156 | | | | 52,983 | | | | 54,810 | |
One principal strategic advantage for the Company is its ability to provide a broad product offering to its customers. The inclusion of products manufactured by Kyocera in that product offering is a significant component of this advantage. In addition, the exchange of information with Kyocera relating to the development and manufacture of multi-layer capacitors and various other ceramic products benefits the Company. An adverse change in the Company’s relationship with Kyocera could have a negative impact on the Company’s results of operations. AVX and Kyocera have executed several agreements which govern the foregoing transactions and which are described below.
Kyocera notified AVX in February 2014 of its intent, effective April 1, 2015, to market its connector products in Asia using Kyocera’s sales force rather than continuing to have AVX resell such products in Asia. Sales of Kyocera connector products in Asia were $47.5 million and $1.1 million with operating profit of $1.9 million and $0.4 million for the fiscal years ended March 31, 2015 and March 31, 2016, respectively.
The Special Advisory Committee of the Board, composed of our independent directors (currently Messrs. Stach, DeCenzo, and Christiansen), reviews and approves any material agreements between AVX and Kyocera and any significant transactions between AVX and Kyocera not covered by such agreements. The committee is also responsible for reviewing and approving any other agreements and transactions between the Company and any related party that are or may be within the scope of applicable rules, regulations and guidance of the NYSE and Item 404 of Regulation S-K, if they arise. The Special Advisory Committee operates under a written charter which sets forth the policies and procedures for such approvals. In approving any such agreement or transaction pursuant to those procedures, the Special Advisory Committee must determine that, in its judgment, the terms thereof are equivalent to those to which an independent, unrelated party would agree at arm’s-length or are otherwise in the best interests of the Company and its shareholders generally. Each of the agreements described below contains provisions requiring that the terms of any transaction under such agreement be equivalent to those to which an independent unrelated party would agree at arm’s-length.
Products Supply and Distribution Agreement. Pursuant to the Products Supply and Distribution Agreement (the “Distribution Agreement”) (i) AVX will act as the non-exclusive distributor of certain Kyocera-manufactured products to certain customers in certain territories outside of Japan, and (ii) Kyocera will act as the non-exclusive distributor of certain AVX-manufactured products within Japan. The Distribution Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least three months prior written notice. Each party has the ability to appoint a replacement distributor of its products with a minimum one year’s notice period.
In December 2016, Kyocera notified AVX pursuant to the Products Supply and Distribution Agreement of its intent, effective January 1, 2018, to market its manufactured passive and interconnect products globally using Kyocera’s sales force rather than continuing to have AVX resell such products in the Americas, Europe and Asia. Kyocera has indicated its intention to pay commissions to AVX on sales by Kyocera, in the applicable territories, of products designed into customer applications by AVX prior to January 1, 2018 of 2.0% in calendar year 2018, 1.5% in calendar year 2019, and 1.0% in calendar year 2020. Sales of Kyocera resale products were $296.3 million and related operating profit was $18.2 million for the fiscal year ended March 31, 2018.
In February 2017, AVX notified Kyocera pursuant to the Products Supply and Distribution Agreement of its intent, effective April 1, 2018, to market its manufactured products in Japan using AVX’s sales force rather than continuing to have Kyocera resell such products in this territory. AVX has indicated its intention to pay commissions to Kyocera on sales by AVX, in the applicable territory, of products designed into customer applications by Kyocera prior to April 1, 2018 of 2.0% in fiscal year 2019, 1.5% in fiscal year 2020, and 1.0% in fiscal year 2021. Sales of AVX resale products by Kyocera were $21.9 million for the fiscal year ended March 31, 2018.
Disclosure and Option to License Agreement. Pursuant to the Disclosure and Option to License Agreement (the “License Agreement”), AVX and Kyocera exchange confidential information relating to the development and manufacture of multi-layered ceramic capacitors and various other ceramic products, as well as the license of technologies in certain circumstances. The License Agreement has a term of one year with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.
Materials Supply Agreement. Pursuant to the Materials Supply Agreement (the “Supply Agreement”), AVX and Kyocera will from time to time supply the other party with certain raw and semi-processed materials used in the manufacture of capacitors and other electronic components. The Supply Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.
Machinery and Equipment Purchase Agreement. Pursuant to the Machinery and Equipment Purchase Agreement (the “Machinery Purchase Agreement”), AVX and Kyocera will, from time to time, design and manufacture for the other party certain equipment and machinery of a proprietary and confidential nature used in the manufacture of capacitors and other electronic components. The Machinery Purchase Agreement has a term of one year, with automatic one-year renewals, subject to the right of termination by either party at the end of the then current term upon at least six months prior written notice.
Compensation Committee Report
The Compensation Committee believes the executive compensation program is appropriate to accomplish the program’s goal of attracting, retaining and motivating highly qualified management professionals. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and based on the review and discussions, the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year andending March 31, 2016.2018.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Tetsuo Kuba,Goro Yamaguchi, Chairman of Compensation Committee
Goro YamaguchiHideo Tanimoto
Shoichi Aoki
Joseph Stach
David DeCenzo
Compensation Discussion and Analysis
The following discussion provides an overview and analysis of the Company’s compensation program and policies, the material compensation decisions it has made under those programs and policies with respect to its top executive officers in relation to the Company’s performance results, and the material factors that it considered in making those decisions. This discussion focuses on the compensation awarded to, earned by, and paid to the following individuals who are referred to as the “Named Executive Officers” throughout this Proxy Statement:
| ·
| ● | John Sarvis, Chief Executive Officer and President |
| ·
| ● | Kurt Cummings, SeniorExecutive Vice President, Chief Financial Officer Treasurer and SecretaryTreasurer |
| ·
| ● | Peter Venuto, Senior Vice President of Sales |
| ·
| ● | Keith Thomas, Senior Vice President of Corporate Development |
| ● | ·
| | John Lawing,Evan Slavitt, Senior Vice President, Chief Technology OfficerGeneral Counsel and Corporate Secretary
|
The Company’s executive officer compensation program is designed to enable the Company to attract, retain and motivate highly qualified management professionals who are encouraged to work as a team to accomplish the Company’s goals and objectives. The Company’s compensation philosophy is to directly align executive officer compensation with the financial performance of the organization. The Company believes that the relationship between executive officer compensation and Company performance will create a benefit for all shareholders.
The executive officer compensation program has been developed by the Compensation Committee using various factors over time, although the Committee does not set compensation levels based on any particular benchmarking against a peer group. No outside consultant review of executive compensation was performed during the last three fiscal years. The Chief Executive Officer has historically played a significant role in the recommendation of the amounts of base salary, salary adjustments, incentive compensation and equity-based compensation to be paid to other members of executive management.officers. The key elements of the executive officer compensation program are base salary, annual incentive bonus and stock option and other stock awards, in addition to those benefits provided under the Company’s retirement, and deferred compensation, and medical plans.
The Compensation Committee reviews and approves each element of the Company’s executive officer compensation program and periodically assesses the effectiveness of the program as a whole. The program covers the Chief Executive Officer, other Named Executive Officers, and all other designated senior managementexecutive officers of the Company. Specifically, the Committee approves the salaries, cash awards under the Company’s 20142017 Management Incentive Plan (“MIP”), the grant of stock options under the Stock Option Plans, the grant of restricted stock unit awards under the 2014 RSU Plan, and the provision of any significant special benefits or perquisites to the Named Executive Officers.executive officers. Each component of compensation, including those established for fiscal 2016,2018, is set on a discretionary, not formulaic, basis taking into account a subjective assessment of the individual’s overall responsibilities and performance rather than specific corporate performance goals for all Named Executive Officers.executive officers.
Base Salary Program
The base salary program is, in general and for fiscal 20162018 in particular, intended to provide base salary levels that are externally competitive and internally equitable, and to reflect each individual’s sustained performance and cumulative contribution to the Company. Each of the other senior management’sexecutive officer’s individual performance is reviewed by the Chief Executive Officer to arrive at annual merit increase recommendations taking into account the results of operations for the officer’s area of responsibility. These executive officer merit increase recommendations, including those for the other Named Executive Officers, are then reviewed by the Compensation Committee for reasonableness based on general economic factors, such as increases in the cost of living. The Chief Executive Officer’s base salary (including Mr. Sarvis’ initial base salary upon his appointment to the position as of April 1, 2015) and merit increases from year to year are established by the Compensation Committee taking these same considerations into account. The fiscal 2018 salary increases for the Named Executive Officers, which became effective April 1, 20152017, took into account the Company’s operating performance in addition to the factors noted above.
Annual Cash Incentives - Management Incentive Plan
The MIP is intended to provide the executive officers, including the Named Executive Officers, and other senior management incentive to continue and increase their efforts with respect to, and remain in the employ of, the Company.
Through
For fiscal 2015,2016, 2017 and 2018, the MIP provided for annual cash incentive compensation based on the Company’s pre-tax financial results and a subjective analysis of each person’s individual performance. Bonus awards were generally paid under the MIP during the summer following each fiscal year end if the Company’s financial results, excluding special, unusual, restructuring or extraordinary items, exceeded 90% of a pre-determined annual profit target. The annual pre-tax profit target was established by the Compensation Committee. The target profits were typically based on improving on the prior year’s actual results taking into account general economic conditions. For the fiscal year ended March 31, 2014, the pre-tax profit target of $152 million was exceeded by 7% and limited bonus awards were earned under the MIP. For the fiscal year ended March 31, 2015, the pre-tax profit target of $157 million was exceeded by 39% and full bonus awards were earned under the MIP. The bonus awards through fiscal 2015 for the Chief Executive Officer were determined as a percentage of salary (up to 150% of base salary) based on the Company’s financial results related to target profits and were paid currently in the summer when they were determined. The other Named Executive Officers and other Corporate Officers’ individual bonuses were determined by the Chief Executive Officer based on a subjective evaluation of each person’s annual performance. These bonuses were derived from a pool determined as a percentage of combined Named Executive Officers (other than the Chief Executive Officer) and other Corporate Officers’ salaries (up to 100% of combined base salaries) based on the Company’s financial results related to target profits. For fiscal years prior to fiscal 2015, these bonuses were paid 75% currently in the summer when they were determined and 25% of the bonuses were earned and paid at the end of the following fiscal year, provided the officer was
employed by the Company at the end of the fiscal year. For fiscal 2015, the other Named Executive Officers’ bonuses were paid currently in the summer when they were determined.
For fiscal 2016, the amended MIP provides for annual cash incentive compensation based on the Company’s pre-tax financial results and a subjective analysis of each person’s individual performance. Bonus awards are to be paid during the summer following each fiscal year end. The cash award pool for the Chief Executive Officer, the other Named Executive Officers and other Corporate Officers who participate in the MIPexecutive officers is based on 0.1% per participant of the Company’s annual pre-tax profit results, excludingas adjusted for any special, unusual, restructuring or extraordinary items. The cash award for each participant will beis an allocated portion of the pool, not to exceed 200% of each participant’s base salary, as determined by the Compensation Committee after taking into account suggestions proposed by the Chief Executive Officer and a subjective analysis of each person’s individual performance. The amount of bonuscash award earned by each of the Named Executive Officers for fiscal 2016, 2017 and 2018 is set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.
Long-Term Equity Incentives
The Stock Option Plans and 2014 RSU Plan are designed to reward executive officers, including Named Executive Officers, other senior managers, and other key employees directly for increases in the long-term price of the Common Stock. Each of the Equity Plans directly links the compensation of such officers, senior managers, and key employees to gains by the shareholders and encourages adoption of a strong stakeholder orientation in their work.
The Compensation Committee approves awards generally following each fiscal year end, but will consider grants at other times of the year if deemed necessary. The Chief Executive Officer recommends to the Committee the potential recipients and the number of awards for each other key employee’s grant on a discretionary basis generally based on a subjective evaluation of that individual’s responsibilities and performance. The Chief Executive Officer’s awards are established from year to year (including fiscal 2016)2018) by the Compensation Committee taking these same considerations into account. The Committee reviews and approves the final awards.
Stock Option Plans
The Stock Option Plans provide that stock option grant awards in fiscal 2016 were generally consistent, for each employee and in total,options will be granted with the prior year grant awards. The grantan exercise price that is equal to the fair market value of the underlying shares on the date of grant approval, which is defined in the plans as the closing price on that date. The Company does not have any program or practice to time option grants to take advantage of the release of material, non-public information. The vesting feature of the option awards is intended to address and mitigate the risk associated with employees giving undue attention to short-term business goals. There were no stock option grant awards in fiscal 2018.
Restricted Stock Unit Plan
The 2014 RSU Plan authorizes the granting of awards in the form of restricted stock units to directors and employees that provide the participants the right to receive shares of Common Stock. The number of shares reserved and available for issuance under the plan is 3,000,000. The 2014 RSU Plan is administered by the Compensation Committee of the Board, or by the Board itself. NoDuring fiscal 2018, each Named Executive Officer was granted service-based restricted stock units were awarded underthat vest 33 1/3% one year after the 2014 RSU Plandate of the grant and an additional 33 1/3% at the end of each of the following two years. In addition, each Named Executive Officer was granted performance-based restricted stock units that vest 100% one year after the date of the grant that have a variable payout range of 0% to 100%, which is determined according to the Company’s achievement of certain financial performance targets. Such awards are reflected in fiscal 2015 or 2016.the Grants of Plan-Based Awards table below.
Family Income Assurance Plan
The Company has in effect a Family Income Assurance Plan for executive officers, including the Named Executive officers. Coverage under this Company self-insured plan provides that, in the event of the death of an executive officer while employed by the Company, the officer’s surviving spouse, or estate, is entitled to receive the equivalent of two years base salary during the following 24 months.
Retirement and Other Benefits
Retirement, medical benefits and Board approvedBoard-approved discretionary cash awards for executive officers, including the Named Executive Officers and other Corporate Officers, are largely the same as those provided to the general salaried employee population applicable to each geographic region. The AVX Nonqualified Supplemental Retirement Plan was established to provide certain U.S. based senior management, including the Named Executive Officers, with supplemental retirement benefits, primarily to promote tax efficiency and replacement of benefit opportunities lost due to regulatory contribution limits. Amounts contributed to this plan’s separate trust earn market-based returns depending upon the investment choices made by the participant. The investment choices are generally the same as available under the AVX Corporation Retirement Plan.Plans.
Miscellaneous benefits offered to executive officers, and other Corporateincluding the Named Executive Officers, are designed to provide a safety net of protection against the financial catastrophes that can result from liability suits, illness, disability or death.
Tax and Accounting Considerations
The accounting and tax treatment of compensation generally has not been a factor in determining the amounts or types of compensation for our executive officers. Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a tax deduction to public companies for some forms of compensation over $1 million paid to executive officers unless certain conditions are met. Certain compensation, including qualified performance-based compensation, will not be subject to the deduction limit if certain requirements are met. We generally intend to structure future compensation so that executive compensation paid by the Company may be fully deductible in accordance with Section 162(m) of the Code. However, theofficers. The Compensation Committee reserves the right to approve compensation that may prove not to be tax deductible by the Company when it believes such payments are appropriate and in the best interests of our shareholders, after taking into consideration changing business conditions and the performance of our employees.
EXECUTIVE COMPENSATION
The following table shows cash compensation paid and certain other compensation paid or accrued by the Company for the last three fiscal years to each of the Company’s Chief Executive Officer, Chief Financial Officer and the next three most highly compensated executive officers (“Named Executive Officers”) in all capacities in which they served.
Summary Compensation Table
Fiscal Year Ended March 31, 20162018
| | Fiscal | | Salary | | | Bonus | | | | Stock Awards | | | Option Awards | | | Non-Equity Incentive Plan Compensation | | | All Other Compensation | | | Total | |
Name & Position | Year | | | ($) (1) | | | | ($) (1) | | | | | ($) (5) | | | | ($) (6) | | | | ($) (7) | | | | ($) (8) | | | | ($) | |
John Sarvis | 2018 | | | 484,848 | | | | 34,831 | | (2) | | | 202,320 | | | | - | | | | 282,000 | | | | 105,821 | | | | 1,109,820 | |
Chairman, Chief Executive | 2017 | | | 467,000 | | | | 27,364 | | (3) | | | 158,640 | | | | - | | | | 260,000 | | | | 105,842 | | | | 1,018,846 | |
Officer and President (9) | 2016 | | | 450,000 | | | | 20,711 | | (4) | | | - | | | | 75,315 | | | | 227,655 | | | | 105,057 | | | | 878,738 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Kurt Cummings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Executive Vice President, | 2018 | | | 435,000 | | | | 32,328 | | (2) | | | 202,320 | | | | - | | | | 254,000 | | | | 98,294 | | | | 1,021,942 | |
Chief Financial Officer | 2017 | | | 415,000 | | | | 30,853 | | (3) | | | 158,640 | | | | - | | | | 234,000 | | | | 98,593 | | | | 937,086 | |
and Treasurer | 2016 | | | 400,398 | | | | 28,795 | | (4) | | | - | | | | 50,210 | | | | 202,559 | | | | 98,494 | | | | 780,456 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Peter Venuto | 2018 | | | 365,502 | | | | 27,406 | | (2) | | | 168,600 | | | | - | | | | 213,000 | | | | 99,779 | | | | 874,287 | |
Senior Vice President | 2017 | | | 352,000 | | | | 26,363 | | (3) | | | 132,200 | | | | - | | | | 212,000 | | | | 93,874 | | | | 816,437 | |
of Sales | 2016 | | | 340,452 | | | | 25,212 | | (4) | | | - | | | | 50,210 | | | | 172,232 | | | | 96,165 | | | | 684,271 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Keith Thomas | 2018 | | | 337,002 | | | | 25,353 | | (2) | | | 168,600 | | | | - | | | | 196,000 | | | | 89,741 | | | | 816,696 | |
Senior Vice President of | 2017 | | | 325,000 | | | | 24,360 | | (3) | | | 132,200 | | | | - | | | | 180,000 | | | | 94,752 | | | | 756,312 | |
Corporate Development | 2016 | | | 314,772 | | | | 23,270 | | (4) | | | - | | | | 50,210 | | | | 188,859 | | | | 94,837 | | | | 671,948 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Evan Slavitt | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Senior Vice President, | 2018 | | | 342,000 | | | | 26,033 | | (2) | | | 168,600 | | | | - | | | | 199,000 | | | | 78,896 | | | | 814,529 | |
General Counsel and | 2017 | | | 329,090 | | | | 25,485 | | (3) | | | 132,200 | | | | - | | | | 160,000 | | | | 65,052 | | | | 711,828 | |
Corporate Secretary | 2016 | | | 321,151 | | | | 24,862 | | (4) | | | - | | | | 30,126 | | | | 19,000 | | | | 70,334 | | | | 465,472 | |
| | | | | | | | | | | | | | | | | | | |
| Fiscal | | Salary | | Bonus | | Option Awards | | Non-Equity Incentive Plan Compensation | | All Other Compensation | | Total |
Name & Position | Year | | ($) (1) | | ($) (1) | | ($) (5) | | ($) (6) | | ($) (7) | | ($) |
John Sarvis | 2016 | | | 450,000 | | | 20,711 | (2) | | 75,315 | | | 227,655 | | | 88,307 | | | 861,988 |
Chief Executive Officer | 2015 | | | 290,482 | | | 18,519 | (3) | | 54,954 | | | 214,750 | | | 70,876 | | | 649,581 |
and President (8) | 2014 | | | 248,454 | | | 17,117 | (4) | | 32,274 | | | 73,115 | | | 56,255 | | | 427,215 |
| | | | | | | | | | | | | | | | | | | |
Kurt Cummings | | | | | | | | | | | | | | | | | | | |
Senior Vice President, | 2016 | | | 400,398 | | | 28,795 | (2) | | 50,210 | | | 202,559 | | | 81,744 | | | 763,706 |
Chief Financial Officer, | 2015 | | | 383,152 | | | 26,590 | (3) | | 82,431 | | | 462,243 | | | 88,479 | | | 1,042,895 |
Treasurer and Secretary | 2014 | | | 351,516 | | | 24,866 | (4) | | 64,548 | | | 267,241 | | | 79,664 | | | 787,835 |
| | | | | | | | | | | | | | | | | | | |
Peter Venuto | 2016 | | | 340,452 | | | 25,212 | (2) | | 50,210 | | | 172,232 | | | 79,415 | | | 667,521 |
Senior Vice President | 2015 | | | 325,786 | | | 24,077 | (3) | | 54,954 | | | 380,343 | | | 78,503 | | | 863,663 |
of Sales | 2014 | | | 311,760 | | | 23,058 | (4) | | 53,790 | | | 182,369 | | | 69,939 | | | 640,916 |
| | | | | | | | | | | | | | | | | | | |
Keith Thomas | 2016 | | | 314,772 | | | 23,270 | (2) | | 50,210 | | | 188,859 | | | 78,087 | | | 655,198 |
Senior Vice President of | 2015 | | | 301,211 | | | 22,317 | (3) | | 41,216 | | | 351,413 | | | 71,891 | | | 788,048 |
Corporate Development | 2014 | | | 286,872 | | | 21,562 | (4) | | 32,274 | | | 163,362 | | | 61,394 | | | 565,464 |
| | | | | | | | | | | | | | | | | | | |
John Lawing | 2016 | | | 298,979 | | | 24,410 | (2) | | 50,210 | | | 151,253 | | | 81,532 | | | 606,384 |
Senior Vice President, | 2015 | | | 286,104 | | | 23,180 | (3) | | 38,468 | | | 358,457 | | | 83,279 | | | 789,488 |
Chief Technology Officer (9) | 2014 | | | 321,570 | | | 21,124 | (4) | | 75,306 | | | 240,924 | | | 70,566 | | | 729,490 |
| | | | | | | | | | | | | | | | | | | |
- 18 -
| (1) | | Includes amounts earned but deferred by the executive officer at his election, pursuant to the AVX Nonqualified Supplemental Retirement Plan, (the “Supplemental Plan”). |
| (2) | | The amounts shown include 50% of a benefit payable in the summer of 2018 with respect to fiscal year 2018 in accordance with a determination by the Company’s Board of Directors to pay discretionary cash benefits to certain U.S. salaried employees of the Company in an amount equal to 8% of such employee’s 2017 calendar year eligible earnings. The remaining 50% of this benefit will be earned and paid in the summer of 2018, provided the officer is employed by the Company at that time. Amounts shown also include 50% of a discretionary cash benefit with respect to fiscal year 2017 that will be earned and paid in the summer of 2018, based on the officer’s continued employment with the Company at that time. |
(3) | The amounts shown include 50% of a benefit that was paid in the summer of 2017 with respect to fiscal year 2017 in accordance with a determination by the Company’s Board of Directors to pay discretionary cash benefits to certain U.S. salaried employees of the Company in an amount equal to 8% of such employee’s 2016 calendar year eligible earnings. The remaining 50% of this benefit will be earned and paid in the summer of 2018, provided the officer is employed by the Company at that time. Amounts shown also include 50% of a discretionary cash benefit with respect to fiscal year 2016 that was earned and paid in the summer of 2017, based on the officer’s continued employment with the Company at that time. |
| |
| (4) | The amounts shown include 50% of a benefit paid in the summer of 2016 with respect to fiscal year 2016 in accordance with a determination by the Company’s Board of Directors to pay discretionary cash benefits to certain U.S. salaried employees of the Company in an amount equal to 8% of such employee’s 2015 calendar year eligible earnings. The remaining 50% of this benefit will bewas earned and paid in the summer of 2017, provided the officer is employed by the Company at that time. Amounts shown also include 50% of a discretionary cash benefit with respect to fiscal year 2015 that will be earned and paid in the summer of 2016, based on the officer’s continued employment with the Company at that time. |
| | | |
| (3)
| | The amounts shown include 50% of a benefit that was paid in the summer of 2015 with respect to fiscal year 2015 in accordance with a determination by the Company’s Board of Directors to pay discretionary cash benefits to certain U.S. salaried employees of the Company in an amount equal to 8% of such employee’s 2014 calendar year eligible earnings. The remaining 50% of this benefit will be earned and paid in the summer of 2016, provided the officer is employed by the Company at that time. Amounts shown also include 50% of a discretionary cash benefit with respect to fiscal year 2014 that was earned and paid in the summer of 2015, based on the officer’s continued employment with the Company at that time.
|
| | | |
| (4)
| | The amounts shown include 50% of a benefit paid in the summer of 2014 with respect to fiscal year 2014 in accordance with a determination by the Company’s Board of Directors to pay discretionary cash benefits to certain U.S. salaried employees of the Company in an amount equal to 8% of such employee’s 2013 calendar year eligible earnings. The remaining 50% of this benefit was earned and paid in the summer of 2015, based on the officer’s continued employment with the Company at that time. Amounts shown also include 50% of a discretionary cash benefit with respect to fiscal year 20132015 that was earned and paid in the summer of 2014,2016, based on the officer’s continued employment with the Company at that time.
|
| | | |
| |
| (5) | Reflects the aggregate grant date fair value of restricted stock units awarded during fiscal 2018, computed in accordance with FASB ASC Topic 718. Grant date fair value for the restricted stock units is based on the fair market value of the shares underlying the award on the date of grant. All restricted stock units were granted pursuant to the 2014 Restricted Stock Unit Plan. A grantee will not recognize income at the time a stock award is granted, but will recognize ordinary income at the time of vesting of the stock award, in an amount equal to the fair market value of the shares vesting on the vesting date. |
| |
| (6) | Reflects the aggregate grant date fair value of stock options awarded during fiscal year 2016, computed in accordance with FASB ASC Topic 718. All stock options were granted pursuant to the 2014 Stock Option Plan. The assumptions made in the valuation of stock options are set forth in Note 1112 in the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended March 31, 2016.2018. No options have been forfeited by any of the Named Executive Officers. |
| | | |
| (6)
|
| (7) | | For fiscal years 2014, reflects for the Chief Executive Officer, 100%, and for all Named Executive Officers except the Chief Executive Officer, 75%, of the annual cash bonus award earned under the MIP determined based on the Company’s pre-tax financial performance and individual performance with respect to the fiscal year and for all Named Executive Officers except the Chief Executive Officer, plus 25% of the annual cash bonus award with respect to the previous fiscal year that was earned and paid in the current fiscal year, based on the officer’s continued employment with the Company at that time. For the fiscal years ended March 31, 20152016, 2017 and 2016,2018, reflects for all Named Executive Officers, 100% of the annual cash bonus award earned under the MIP for that fiscal year. For information regarding the MIP, see the narrative in the Compensation Discussion and Analysis in this Proxy Statement.
|
| | | |
| (7)
|
| (8) | | For the fiscal year ended March 31, 2016,2018, reflects Company's contribution on behalf of the respective Named Executive Officers pursuant to the terms of the Supplemental Plan and the AVX Corporation Retirement Plan (the “Retirement Plan”) in the following amounts, respectively: John Sarvis - $46,699$42,900 and $34,053;$34,500; Kurt Cummings - $53,500$42,900 and $34,514;$34,500; Peter Venuto - $48,298$42,900 and $34,917;$34,500; Keith Thomas - $44,664$38,299 and $33,993;$34,500; and Evan Slavitt - $27,375 and $34,500. |
| |
| The investments in the Supplemental Plan have no above-market or preferential earnings. See the Nonqualified Deferred Compensation table and related narrative herein for information related to the Supplemental Plan. |
| |
| Also reflects the value of automobile allowances and Company contributions to group life, disability, or excess liability insurance programs, respectively, as follows for fiscal 2018: John LawingSarvis - $51,199$14,400 and $34,383. $14,021; Kurt Cummings - $14,400 and $6,494; Peter Venuto - $12,000 and $10,379; Keith Thomas - $12,000 and $4,942; and Evan Slavitt - $12,000 and $5,021. |
The investments in the Supplemental Plan have no above-market or preferential earnings. See the Nonqualified Deferred Compensation table and related narrative herein for information related to the Supplemental Plan.
Also reflects the value- 19 -
Table of automobile allowances and Company contributions to group life, disability, or excess liability insurance programs, respectively, as follows for fiscal 2016: John Sarvis - $13,500 and $13,954; Kurt Cummings - $14,000 and $6,430; Peter Venuto - $11,700 and $5,998; Keith Thomas - $11,700 and $5,594; and John Lawing - $12,000 and $8,349. Contents
The Company also provides the Named Executive Officers with certain medical benefits generally available to all salaried employees.
| (8)
| (9) | Mr. Sarvis is a Named Executive Officer who also serves as a director. Mr. Sarvis received no compensation for services as a director in any fiscal year presented. Mr. Sarvis was appointed Chief Executive Officer and President on April 1, 2015 and prior to this appointment served as Vice President of Ceramic Products. |
| | | |
| (9)
| | Mr. Lawing was President and Chief Operating Officer from April 1, 2013 through April 1, 2014.
|
The following table sets forth information regarding grants of plan-based awards, including options to acquire shares of Common Stock, granted to the Named Executive Officers through fiscal 2016.2018.
Grants of Plan-Based Awards
Fiscal Year Ended March 31, 20162018
| | | | | | | | |
| | | | Number of Securities Underlying Options | | Exercise Price of Option Awards | | Grant Date Fair Value of Option Awards |
Name | | Grant Date | | (#) (1) | | ($) (2) | | ($) |
| | | | | | | | |
John Sarvis | | | | | | | | |
| | 4/16/2015 | | 30,000 | | 14.55 | | 75,315 |
Kurt Cummings | | | | | | | | |
| | 4/16/2015 | | 20,000 | | 14.55 | | 50,210 |
John Lawing | | | | | | | | |
| | 4/16/2015 | | 20,000 | | 14.55 | | 50,210 |
Peter Venuto | | | | | | | | |
| | 4/16/2015 | | 20,000 | | 14.55 | | 50,210 |
Keith Thomas | | | | | | | | |
| | 4/16/2015 | | 20,000 | | 14.55 | | 50,210 |
| | | | | | | | |
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1) | | | Estimated Future Payouts Under
Equity Incentive Plan Awards
(2) | | | All Other Stock Awards: Number of Shares of Stock or Units | | | Grant-Date Fair Value of Awards | |
Name | Grant Date | | Threshold
($) | | | Target
($) | | | Maximum
($) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | | (#) (3) | | | | ($) (4) | |
John Sarvis | | | - | | | | - | | | | 970,000 | | | | | | | | | | | | | | | | | | | | | |
| | 5/1/2017 | | | | | | | | | | | | | | | 1,200 | | | | 6,000 | | | | - | | | | | | | | 101,160 | |
| | 5/1/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,000 | | | | 101,160 | |
Kurt Cummings | | | - | | | | - | | | | 870,000 | | | | | | | | | | | | | | | | | | | | | |
| | 5/1/2017 | | | | | | | | | | | | | | | 1,200 | | | | 6,000 | | | | - | | | | | | | | 101,160 | |
| | 5/1/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,000 | | | | 101,160 | |
Peter Venuto | | | - | | | | - | | | | 731,000 | | | | | | | | | | | | | | | | | | | | | |
| | 5/1/2017 | | | | | | | | | | | | | | | 1,000 | | | | 5,000 | | | | - | | | | | | | | 84,300 | |
| | 5/1/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,000 | | | | 84,300 | |
Keith Thomas | | | - | | | | - | | | | 674,000 | | | | | | | | | | | | | | | | | | | | | |
| | 5/1/2017 | | | | | | | | | | | | | | | 1,000 | | | | 5,000 | | | | - | | | | | | | | 84,300 | |
| | 5/1/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,000 | | | | 84,300 | |
Evan Slavitt | | | - | | | | - | | | | 684,000 | | | | | | | | | | | | | | | | | | | | | |
| | 5/1/2017 | | | | | | | | | | | | | | | 1,000 | | | | 5,000 | | | | - | | | | | | | | 84,300 | |
| | 5/1/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,000 | | | | 84,300 | |
| (1) | The maximum represents 200% of the base salary of each Named Executive Officer. The Company did not establish threshold and target opportunities and, therefore, no values are reported in these columns. For information regarding the MIP, see the discussion in the Compensation Discussion and Analysis section above. |
(2) | Reflects the number of options to purchase shares of AVX commonperformance-based restricted stock units awarded to each Named Executive Officer during the fiscal year ended March 31, 20162018 under the Company’s 2014 Stock OptionRSU Plan. The optionsawarded units have performance-based conditions based on the Company’s achievements of net trade sales and pre-tax profit goals that vest as100% one year after the date of the grant and a variable payout range of 0% to 25%100% based on the Company’s achievement of the performance goals. |
(3) | Reflects the number of service-vesting restricted stock units awarded to each Named Executive Officer during the fiscal year ended March 31, 2018 under the Company’s 2014 RSU Plan. Each unit is equal to one share of AVX common stock. The awarded units have time-based vesting conditions where 33 1/3% vest one year after the date of the grant and an additional 33 1/3% vest at the end of each of the following two years. |
(4) | Reflects the aggregate grant date fair value of RSUs awarded during fiscal 2018, computed in accordance with FASB ASC Topic 718. Grant date fair value for RSUs was based on the fair market value of the shares one year fromunderlying the award on the date of grant and as to 25% of the shares on each of the three succeeding anniversary dates, provided the officer continues to be employed by the Company or any of its subsidiaries. There are no performance based conditions that are applicable to these options.grant. |
| (2)
| | The exercise price is based on the closing market price on the grant date, as provided in the 2014 Stock Option Plan.
|
24Outstanding Equity Awards at Fiscal Year Ended March 31, 2018
The following tables settable sets forth information regarding unexercised options, both vested and unvested,equity awards for each Named Executive Officer outstanding at March 31, 2016. The Named Executive Officers do not hold any restricted stock unit awards.2018.
Outstanding Equity Awards at Fiscal Year Ended March 31, 2016
| | Option Awards | | | Stock Awards | |
Name | Grant Date | | Number of Securities Underlying Unexercised Options (#) (1) Exercisable | | | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) (2) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (4) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | |
John Sarvis | 5/15/2008 | | | 12,000 | | | | - | | | | 13.15 | | | 5/15/2018 | | | | - | | | | - | | | | - | | | | - | |
| | 6/14/2010 | | | 12,000 | | | | - | | | | 13.70 | | | 6/14/2020 | | | | - | | | | - | | | | - | | | | - | |
| | 6/24/2011 | | | 12,000 | | | | - | | | | 14.58 | | | 6/24/2021 | | | | - | | | | - | | | | - | | | | - | |
| | 5/17/2012 | | | 12,000 | | | | - | | | | 10.90 | | | 5/17/2022 | | | | - | | | | - | | | | - | | | | - | |
| | 4/26/2013 | | | 15,000 | | | | - | | | | 11.25 | | | 4/26/2023 | | | | - | | | | - | | | | - | | | | - | |
| | 4/24/2014 | | | 15,000 | | | | 5,000 | | | | 13.32 | | | 4/24/2024 | | | | - | | | | - | | | | - | | | | - | |
| | 4/16/2015 | | | 15,000 | | | | 15,000 | | | | 14.55 | | | 4/16/2025 | | | | - | | | | - | | | | - | | | | - | |
| | 4/29/2016 | | | - | | | | - | | | | - | | | | - | | | | 4,000 | | | | 66,200 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | 6,000 | | | | 99,300 | | | | | | | | | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | 6,000 | | | | 99,300 | |
| | Option Awards | | | Stock Awards | |
Name | Grant Date | | Number of Securities Underlying Unexercised Options (#) (1) Exercisable | | | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested
(#) (2) | | | Market Value of Shares or Units of Stock That Have Not Vested
($) (3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (4) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | |
Kurt Cummings | 4/26/2013 | | | 30,000 | | | | - | | | | 11.25 | | | 4/26/2023 | | | | - | | | | - | | | | - | | | | - | |
| | 4/24/2014 | | | 22,500 | | | | 7,500 | | | | 13.32 | | | 4/24/2024 | | | | - | | | | - | | | | - | | | | - | |
| | 4/16/2015 | | | 10,000 | | | | 10,000 | | | | 14.55 | | | 4/16/2025 | | | | - | | | | - | | | | - | | | | - | |
| | 4/29/2016 | | | - | | | | - | | | | - | | | | - | | | | 4,000 | | | | 66,200 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | 6,000 | | | | 99,300 | | | | | | | | | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | 6,000 | | | | 99,300 | |
| | | | | |
Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
| | | | | |
John Sarvis | 6/23/2006 | 12,000 | - | 15.28 | 6/23/2016 |
| 5/8/2007 | 12,000 | - | 17.88 | 5/8/2017 |
| 5/15/2008 | 12,000 | - | 13.15 | 5/15/2018 |
| 6/14/2010 | 12,000 | - | 13.70 | 6/14/2020 |
| 6/24/2011 | 12,000 | - | 14.58 | 6/24/2021 |
| 5/17/2012 | 9,000 | 3,000 | 10.90 | 5/17/2022 |
| 4/26/2013 | 7,500 | 7,500 | 11.25 | 4/26/2023 |
| 4/24/2014 | 5,000 | 15,000 | 13.32 | 4/24/2024 |
| 4/16/2015 | - | 30,000 | 14.55 | 4/16/2025 |
- 21 -
| | Option Awards | | | Stock Awards | |
Name | Grant Date | | Number of Securities Underlying Unexercised Options (#) (1) Exercisable | | | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested
(#) (2) | | | Market Value of Shares or Units of Stock That Have Not Vested
($) (3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (4) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | |
Peter Venuto | 4/26/2013 | | | 1,986 | | | | - | | | | 11.25 | | | 4/26/2023 | | | | - | | | | - | | | | - | | | | - | |
| | 4/24/2014 | | | - | | | | 5,000 | | | | 13.32 | | | 4/24/2024 | | | | - | | | | - | | | | - | | | | - | |
| | 4/16/2015 | | | - | | | | 10,000 | | | | 14.55 | | | 4/16/2025 | | | | - | | | | - | | | | - | | | | - | |
| | 4/29/2016 | | | - | | | | - | | | | - | | | | - | | | | 3,333 | | | | 55,161 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | 5,000 | | | | 82,750 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 5,000 | | | | 82,750 | |
| | Option Awards | | | Stock Awards | |
Name | Grant Date | | Number of Securities Underlying Unexercised Options (#) (1) Exercisable | | | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested
(#) (2) | | | Market Value of Shares or Units of Stock That Have Not Vested
($) (3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (4) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | |
Keith Thomas | 4/24/2014 | | | - | | | | 3,750 | | | | 13.32 | | | 4/24/2024 | | | | - | | | | - | | | | - | | | | - | |
| | 4/16/2015 | | | 5,000 | | | | 10,000 | | | | 14.55 | | | 4/16/2025 | | | | - | | | | - | | | | - | | | | - | |
| | 4/29/2016 | | | - | | | | - | | | | - | | | | - | | | | 3,333 | | | | 55,161 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | 5,000 | | | | 82,750 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 5,000 | | | | 82,750 | |
| | Option Awards | | | Stock Awards | |
Name | Grant Date | | Number of Securities Underlying Unexercised Options (#) (1) Exercisable | | | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested
(#) (2) | | | Market Value of Shares or Units of Stock That Have Not Vested
($) (3) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (4) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (3) | |
Evan Slavitt | 5/15/2008 | | | 8,000 | | | | - | | | | 13.15 | | | 5/15/2018 | | | | - | | | | - | | | | - | | | | - | |
| | 5/15/2009 | | | 8,000 | | | | - | | | | 9.60 | | | 5/15/2019 | | | | - | | | | - | | | | - | | | | - | |
| | 6/14/2010 | | | 8,000 | | | | - | | | | 13.70 | | | 6/14/2020 | | | | - | | | | - | | | | - | | | | - | |
| | 6/24/2011 | | | 8,000 | | | | - | | | | 14.58 | | | 6/24/2021 | | | | - | | | | - | | | | - | | | | - | |
| | 5/17/2012 | | | 8,000 | | | | - | | | | 10.90 | | | 5/17/2022 | | | | - | | | | - | | | | - | | | | - | |
| | 4/26/2013 | | | 8,000 | | | | - | | | | 11.25 | | | 4/26/2023 | | | | - | | | | - | | | | - | | | | - | |
| | 4/24/2014 | | | 6,000 | | | | 2,000 | | | | 13.32 | | | 4/24/2024 | | | | - | | | | - | | | | - | | | | - | |
| | 4/16/2015 | | | 6,000 | | | | 6,000 | | | | 14.55 | | | 4/16/2025 | | | | - | | | | - | | | | - | | | | - | |
| | 4/29/2016 | | | - | | | | - | | | | - | | | | - | | | | 2,000 | | | | 33,100 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | 5,000 | | | | 82,750 | | | | - | | | | - | |
| | 5/1/2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 5,000 | | | | 82,750 | |
| | | | | |
Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
Kurt Cummings | 6/23/2006 | 15,000 | - | 15.28 | 6/23/2016 |
| 5/8/2007 | 15,000 | - | 17.88 | 5/8/2017 |
| 5/15/2008 | 15,000 | - | 13.15 | 5/15/2018 |
| 6/14/2010 | 20,000 | - | 13.70 | 6/14/2020 |
| 6/24/2011 | 22,000 | - | 14.58 | 6/24/2021 |
| 5/17/2012 | 16,500 | 5,500 | 10.90 | 5/17/2022 |
| 4/26/2013 | 15,000 | 15,000 | 11.25 | 4/26/2023 |
| 4/24/2014 | 7,500 | 22,500 | 13.32 | 4/24/2024 |
| 4/16/2015 | - | 20,000 | 14.55 | 4/16/2025 |
| (1) | All option awards vest 25% on each of the first four anniversaries of the date of grant. |
| (2) | Restricted stock units vest 33 1/3% one year after the date of the grant and an additional 33 1/3 at the end of each of the following two years. |
25
| (3) | Market value is based on the closing price of the Company’s common stock on March 31, 2018 of $16.55 per share. |
| (4) | Restricted stock units vest after one year based on the Company’s achievement of performance goals relating to net trade sales and pre-tax profit. |
| | | | | |
Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
Peter Venuto | 6/23/2006 | 20,000 | - | 15.28 | 6/23/2016 |
| 5/8/2007 | 20,000 | - | 17.88 | 5/8/2017 |
| 6/24/2011 | 25,000 | - | 14.58 | 6/24/2021 |
| 5/17/2012 | 6,250 | 6,250 | 10.90 | 5/17/2022 |
| 4/26/2013 | 6,250 | 12,500 | 11.25 | 4/26/2023 |
| 4/24/2014 | 5,000 | 15,000 | 13.32 | 4/24/2024 |
| 4/16/2015 | - | 20,000 | 14.55 | 4/16/2025 |
| | | | | |
| | | | | |
Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
Keith Thomas | 6/23/2006 | 15,000 | - | 15.28 | 6/23/2016 |
| 5/8/2007 | 15,000 | - | 17.88 | 5/8/2017 |
| 6/14/2010 | 15,000 | - | 13.70 | 6/14/2020 |
| 6/24/2011 | 15,000 | - | 14.58 | 6/24/2021 |
| 5/17/2012 | 3,500 | 3,500 | 10.90 | 5/17/2022 |
| 4/26/2013 | 3,750 | 7,500 | 11.25 | 4/26/2023 |
| 4/24/2014 | 3,750 | 11,250 | 13.32 | 4/24/2024 |
| 4/16/2015 | - | 20,000 | 14.55 | 4/16/2025 |
| | | | | |
| | | | | |
Name | Option Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date |
John Lawing | 6/23/2006 | 12,000 | - | 15.28 | 6/23/2016 |
| 5/8/2007 | 12,000 | - | 17.88 | 5/8/2017 |
| 5/15/2008 | 12,000 | - | 13.15 | 5/15/2018 |
| 5/15/2009 | 16,000 | - | 9.60 | 5/15/2019 |
| 6/14/2010 | 20,000 | - | 13.70 | 6/14/2020 |
| 6/24/2011 | 24,000 | - | 14.58 | 6/24/2021 |
| 5/17/2012 | 18,000 | 6,000 | 10.90 | 5/17/2022 |
| 4/26/2013 | 17,500 | 17,500 | 11.25 | 4/26/2023 |
| 4/24/2014 | 3,500 | 10,500 | 13.32 | 4/24/2024 |
| 4/16/2015 | - | 20,000 | 14.55 | 4/16/2025 |
| | | | | |
All option awards vest 25% on each of the first four anniversaries of the date of grant.
The following table sets forth information with respect to options exercised and the aggregate dollar value realized upon exercise of the options during fiscal 20162018 by the Named Executive Officers. The value realized on exercise reflects the excess of the fair market value of the shares at the time of exercise over the exercise price of the options.
Option Exercises and Stock Vested
Fiscal Year Ended March 31, 20162018
| | |
| Option Awards |
| Shares Acquired on Exercise | Value Realized on Exercise |
Name | (#) | ($) (1) |
John Sarvis | - | - |
Kurt Cummings | 18,000 | 67,542 |
Peter Venuto | - | - |
Keith Thomas | - | - |
John Lawing | - | - |
| | |
| | | Options Awards | | | Stock Awards | |
Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($)(1) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(2) | |
John Sarvis | | | - | | | | - | | | | 4,400 | | | | 74,404 | |
Kurt Cummings | | | 79,000 | | | | 318,347 | | | | 4,400 | | | | 74,404 | |
Peter Venuto | | | 14,264 | | | | 50,690 | | | | 3,667 | | | | 62,009 | |
Keith Thomas | | | 7,500 | | | | 43,613 | | | | 3,667 | | | | 62,009 | |
Evan Slavitt | | | - | | | | - | | | | 2,200 | | | | 37,202 | |
| (1) | | Value realized represents the excess of the fair market value of the shares at the time of exercise over the exercise price of the options. |
| (2) | Value realized represents the fair market value of the shares on the vesting date. |
The following table and narrative provides information related to the Company’s Supplemental Plan for fiscal 2016.2018.
NonqualifiedNonqualified Deferred Compensation
Fiscal Year Ended March 31, 20162018
| | | | | |
| Executive Contributions in FY 2016 | Company Contributions in FY 2016 | Aggregate Gains/(Losses) in FY 2016 | Aggregate Withdrawals/ Distributions | Aggregate Balance at March 31, 2016 |
Name | ($) (1) | ($) (2) | ($) | ($) | ($) |
John Sarvis | 24,405 | 46,699 | (23,133) | - | 622,823 |
Kurt Cummings | 26,722 | 53,500 | (1,327) | - | 1,059,314 |
Peter Venuto | 22,362 | 48,298 | (14,673) | - | 725,042 |
Keith Thomas | 20,667 | 44,664 | (38,209) | - | 926,211 |
John Lawing | 32,820 | 51,199 | 10,084 | - | 569,591 |
| | | | | |
| | | Executive Contributions in FY 2018 | | | Company Contributions in FY 2018 | | | Aggregate Gains/(Losses) in FY 2018 | | | Aggregate Withdrawals/ Distributions | | | Aggregate Balance at March 31, 2018 | |
Name | | | ($) (1) | | | | ($) (2) | | | | ($) | | | | ($) | | | | ($) (3) | |
John Sarvis | | | 17,005 | | | | 50,950 | | | | 43,813 | | | | - | | | | 888,011 | |
Kurt Cummings | | | 13,476 | | | | 50,170 | | | | 21,122 | | | | - | | | | 1,255,297 | |
Peter Venuto | | | 11,330 | | | | 47,958 | | | | 72,045 | | | | - | | | | 1,000,077 | |
Keith Thomas | | | 10,449 | | | | 43,698 | | | | 144,551 | | | | - | | | | 1,317,917 | |
Evan Slavitt | | | 12,038 | | | | 32,175 | | | | 33,900 | | | | - | | | | 368,228 | |
| (1) | | The amounts in this column are included as 2018 compensation in the Salary and/or Bonus columns of the Summary Compensation Table. |
| (2) | | The amounts in this column are included as 2018 compensation in the All Other Compensation column of the Summary Compensation Table. |
(3) | To the extent that a participant was a named executive officer in prior years, executive and Company contributions included in the “Aggregate Balance at Last FYE” column have been reported as compensation in the Summary Compensation Table for the applicable year. |
Under the Supplemental Plan, the participants select among the various investment options that are also currently available to employees of the Company participating in the Retirement Plan. The value of the participants’ balance fluctuates based on the performance of the investments. The market value of the trust is included as an asset and a liability on the Company’s Consolidated Balance Sheet as of March 31, 20162018 as disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 20162018 because the trust’s assets are available to the Company’s general creditors in the event of the Company’s insolvency.
Additional Plan information is detailed as follows:
Deferred Compensation Contribution
A participant may elect to defer all or a portion of his eligible compensation otherwise payable by the Company to such participant. The participant can choose to have his deferrals credited to his Retirement Account and/or an In-Service Account. The deferred amount will be withheld from each paycheck throughout the year.
Company Matching Contribution
On an annual basis, the Company will match participant contributions equal to 100% of the first 3% of the amount that is deferred in the Plan. To receive any matching contributions, a participant must have received the maximum matching contribution available under the AVX Retirement Plan. A participant’s eligible compensation for the purposes of receiving a Company Matching Contribution in the Plan cannot exceed the annual dollar limit established by the Plan Administrator.
Non-discretionary Contribution
The Company will make an annual contribution equal to 5% of eligible compensation between $265,000$270,000 (i.e., the IRS Compensation Limit for 2015)2017) and $600,000.
Discretionary Contribution
The Company may make an annual contribution between 0% - 5% of eligible compensation between $265,000$270,000 (i.e., the IRS Compensation Limit for 2015)2017) and $600,000. The contribution amount is subject to approval by the Company’s Board of Directors.
Vesting
Each participant shall be fully vested and have a non-forfeitable interest in his account.
Payment of Benefits
A participant’s Retirement Account balance shall be payable to the participant or beneficiary upon the earlier of such participant’s separation from service, disability or death in a lump-sum payment or in installments over a period not to exceed 10 years, as selected by the participant. A participant’s In-Service Account balance will be paid to the participant in a single lump-sum on a date previously elected by the participant.
Potential Payments Upon Termination
The following discussion summarizes the value of payments and benefits that (i) the continuing Named Executive Officers would be entitled to receive assuming that a termination of employment under various circumstances had occurred on March 31, 2016.2018.
In the event of a termination of employment due to death, disability or retirement (as defined in the plans), all outstanding stock options and stock unit awards subject to time vesting conditions held by the Named Executive Officers would become fully vested. The intrinsic value of the stock options that would become vested upon such qualified termination (calculated based on the excess of the fair market value of the underlying shares as of March 31, 20162018 over the exercise price of the options) is as follows: Mr. Sarvis, $14,910,$46,150, Mr. Cummings, $28,985;$44,225; Mr. Venuto, $26,938;$36,150; Mr. Thomas, $15,745;$32,113; and Mr. Lawing, $33,120.Slavitt, $18,460. The fair market value of unvested stock unit awards as of March 31, 2017 that would become vested upon such qualified termination is as follows: Mr. Sarvis, $165,500; Mr. Cummings, $165,500; Mr. Venuto, $137,911; Mr. Thomas, $137,911; and Mr. Slavitt, $115,850. In the event of a termination of employment for any reason, the Named Executive Officers would be entitled to a payout of their vested balance under the Company’s Supplemental Plan, which amounts are reflected in the Nonqualified Deferred Compensation table. In the event of the death of a Named Executive Officer while actively employed, the person’s spouse or estate would continue to receive that person’s base salary for the ensuing two years.
CEO Pay Ratio
The Dodd-Frank Reform and Consumer Protection Act includes a mandate that public companies disclose the ratio of the compensation of their CEO to their median employee. Our CEO-to-median employee pay ratio calculation for fiscal 2018 is 92:1. The pay ratio is determined by dividing the total fiscal 2018 compensation of the CEO as disclosed in the Summary Compensation Table by the total fiscal 2018 compensation of the median employee, using the same components of income as used in the Summary Compensation Table.
Our median employee was determined based on active employees as of March 31, 2018. The Company employed 14,920 full-time employees at March 31, 2018, of which 1,430 were in the U.S. and 13,490 were non-U.S. employees. No employees were excluded from the determination of the median employee. The total fiscal 2018 compensation for our CEO was $1,109,820 as compared to our median employee at $12,064. The median employee compensation was calculated based on cash paid during the fiscal year.
Shareholder Proposals
If any shareholder intends to present a proposal to the Company for inclusion in its proxy statement relating to the annual meeting of shareholders expected to be held in July 20172019 or wishes to recommend nominees to the Board, such proposal, in writing and addressed to the Corporate Secretary, must be received by the Company no later than February 8, 2017.4, 2019.
In general, in order to be considered timely under the Bylaws of the Company, any notice of shareholder proposals intended to be presented at an annual shareholders meeting, including proposals for the nomination of directors, must be delivered or mailed and received by the Company no earlier than April 21, 201719, 2019 and no later than May 22, 201719, 2019 (not earlier than 90 days nor later than 60 days prior to the anniversary of the preceding year’s annual meeting of shareholders.shareholders). In the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 60 days after such anniversary date, then to be timely such notice must be received by the Company no later than the later of 70 days prior to the date of the meeting or the 10th day following the day on which public announcement of the date of the meeting was made.
Proxy Solicitation
The entire cost of this solicitation will be borne by the Company, including reimbursement of banks, brokerage firms, custodians, nominees and fiduciaries for their reasonable expenses in sending proxy materials to the beneficial owners of the Common Stock. Solicitation will primarily be made by mail, but proxies may be solicited personally by the Company’s officers, directors or employees, by telephone or by facsimile. The officers, directors or employees who may participate in the solicitation of proxies will not receive any additional compensation for such solicitation. The costs and expenditures in connection with the solicitation of security holders are only those normally expended for a solicitation for an election of Directors in the absence of a contest.
The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments filed with or furnished to the SEC pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act are available free of charge on the Company’s website at www.avx.com as soon as reasonably practicable after being filed with the SEC. To view the reports from the Company’s website, go to “Corporate Information,” then “Investor Relations,” then “SEC Filings.” A copy of any such report is available, without charge, upon written request directed to our Secretary at the corporate address set forth above.
By order of the Board,
Kurt CummingsEvan Slavitt
Corporate Secretary
