LITTELFUSE, INC.
800 East Northwest Highway
Des Plaines, Illinois 60016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 28, 2000
The annual meeting of the stockholders of Littelfuse, Inc. (the "Company")
will be held at the offices of the Company located at 800 East Northwest
Highway, Des Plaines, Illinois, on Friday, April 28, 2000, at 9:00 a.m., local
time, for the following purposes as described in the attached Proxy Statement:
1. To elect a Board of six Directors;
2. To approve and ratify the appointment by the Board of
Directors of the Company of Ernst & Young LLP as the
Company's independent auditors for the fiscal year of the
Company ending December 30, 2000;
3. To approve an amendment to the 1993 Stock Plan for Employees
and Directors of Littelfuse, Inc. which would increase the
maximum aggregate number of shares of Common Stock as to
which awards of options, restricted shares, units or rights
may be made from time to time thereunder from 1,800,000 to
2,400,000 shares;
and to transact such other business as may properly come before the annual
meeting or any adjournment thereof.
Stockholders of record of the Company at the close of business on March
10, 2000, will be entitled to vote at the meeting.
PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
Mary S. Muchoney
Secretary
March 20, 2000
LITTELFUSE, INC.
800 East Northwest Highway
Des Plaines, Illinois 60016
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
April 28, 2000
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of the Company of proxies for use at the Company's
annual meeting of stockholders to be held on April 28, 2000.
Any stockholder giving a proxy will have the right to revoke it at any
time prior to the time it is voted. A proxy may be revoked by written notice to
the Company, execution of a subsequent proxy or attendance at the annual meeting
and voting in person. Attendance at the annual meeting will not automatically
revoke the proxy. All shares represented by effective proxies will be voted at
the annual meeting or at any adjournment thereof.
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, officers and employees of the Company may
solicit proxies by telephone or in person.
The Company's annual report, including financial statements, was mailed
to each stockholder on or about March 20, 2000. The financial statements
contained in the Company's annual report are not deemed material to the exercise
of prudent judgment in regard to the matters to be acted upon at the annual
meeting and, therefore, are not incorporated by reference into this Proxy
Statement. This Proxy Statement and form of proxy are first being mailed to
stockholders on or about March 20, 2000.
The Board of Directors recommends a vote FOR the election of all of the
nominees for Director named in Proposal 1, a vote FOR the approval and
ratification of the appointment of Ernst & Young LLP as independent auditors as
discussed in Proposal 2, and a vote FOR the approval of the amendment to the
1993 Stock Plan for Employees and Directors of Littelfuse, Inc. (the "1993 Stock
Plan") as discussed in Proposal 3.
VOTING
Stockholders of record on the books of the Company at the close of
business on March 10, 2000, will be entitled to notice of and to vote at the
meeting. A list of the stockholders entitled to vote at the meeting will be
available for examination by any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting at the Company's headquarters located at 800 East Northwest
Highway, Des Plaines, Illinois 60016 and at LaSalle Bank N.A., 135 South LaSalle
Street, Chicago, Illinois 60603. The Company had outstanding on March 10, 2000,
19,574,337 shares of its common stock, par value $.01 per share (the "Common
Stock"), and warrants to purchase an additional 2,461,309 shares of Common Stock
at a current exercise price of $4.18 per share. Each outstanding share of Common
Stock entitles the holder to one vote on each matter submitted to a vote at the
meeting. A warrant to purchase shares of Common Stock does not entitle the
holder to vote at the meeting.
The shares represented by proxies will be voted as directed in the
proxies. In the absence of specific direction, the shares represented by proxies
will be voted FOR the election of all of the nominees as Directors of the
Company, FOR the approval and ratification of the appointment of Ernst & Young
LLP as independent auditors, and FOR the approval of the amendment to the 1993
Stock Plan. In the event any nominee for Director is unable to serve, which is
not now contemplated, the shares represented by proxies may be voted for a
substitute nominee. If any matters are to be presented at the annual meeting
other than the matters referred to in this Proxy Statement, the shares
represented by proxies will be voted in the discretion of the proxy holders.
The Company's bylaws provide that a majority of all of the shares of
Common Stock entitled to vote, whether present in person or represented by
proxy, shall constitute a quorum for the transaction of business at the meeting.
Votes for and against, abstentions and "broker non-votes" will each be counted
as present for purposes of determining the presence of a quorum. To determine
whether a specific proposal has received sufficient votes to be passed, for
shares deemed present, an abstention will have the same effect as a vote
"against" the proposal, while a broker non-vote will not be included in vote
totals and will have no effect on the outcome of the vote. The affirmative vote
by the holders of a majority of the shares present (whether in person or by
proxy) at the meeting will be required for the approval of the ratification of
Ernst & Young LLP as independent auditors and the approval of the amendment to
the 1993 Stock Plan. With respect to the election of Directors, the six nominees
who receive the most votes at the meeting will be elected.
Ownership of Littelfuse, Inc. Common Stock
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of March 10, 2000, by each Director,
by each person known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock, by each executive officer named in the Summary
Compensation Table and by all of the Directors and executive officers of the
Company as a group.
NUMBER OF SHARES OF
COMMON STOCK
BENEFICIALLY OWNED(1)(5)
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT
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Ariel Capital Management, Inc............................................. 3,368,760 14.7%
307 North Michigan Avenue
Suite 500
Chicago, Illinois 60601
- ---------------------------------------------------------------------------
T. Rowe Price Associates, Inc.(2) ......................................... 1,583,400 6.9%
100 E. Pratt Street
Baltimore, Maryland 21202
- ---------------------------------------------------------------------------
Wellington Management Co. LLP ...................................... 1,531,100 6.7%
75 State Street
Boston, Massachusetts 02109
- ---------------------------------------------------------------------------
American Century Investment Management, Inc. .................... 1,356,600 5.9%
4500 Main Street, P.O. Box 418210
Kansas City, MO 64141
- ---------------------------------------------------------------------------
Howard B. Witt............................................................ 482,000 2.1%
- ---------------------------------------------------------------------------
John P. Driscoll.......................................................... 5,415 *
- ---------------------------------------------------------------------------
Anthony Grillo(3)......................................................... 55,819 *
- ---------------------------------------------------------------------------
Bruce A. Karsh(4)......................................................... 298,970 1.3%
- ---------------------------------------------------------------------------
John E. Major............................................................. 37,235 *
- ---------------------------------------------------------------------------
John J. Nevin............................................................. 63,219 *
- ---------------------------------------------------------------------------
William S. Barron......................................................... 88,600 *
- ---------------------------------------------------------------------------
Lloyd J. Turner........................................................... 83,000 *
- ---------------------------------------------------------------------------
Kenneth R. Audino 54,900 *
- ---------------------------------------------------------------------------
Philip G. Franklin........................................................ 12,000 *
- ---------------------------------------------------------------------------
All Directors and executive officers as a group (12 persons).............. 1,239,558 6.3%
- -------------------
(1) The number of shares listed includes 557,180 shares of Common Stock which
may be acquired through the exercise of stock options within 60 days of
March 10, 2000.
(2) These securities are owned by various individual and institutional
investors which T. Rowe Price Associates, Inc. (Price Associates) serves as
investment advisor with power to direct investments and/or sole power to
vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(3) Includes 7,300 shares of Common Stock held in an IRA and in trust for Mr.
Grillo's children.
(4) Includes 14,000 shares of Common Stock held in an IRA and in trust for Mr.
Karsh's children, and 14,230 shares of Common Stock issuable upon the
exercise of warrants that are immediately exercisable.
(5) Information concerning persons known to the Company to be beneficial owners
of more than 5% of its Common Stock is based upon the most recently
available reports furnished by such persons on Schedule 13G as filed with
the Securities and Exchange Commission.
* Indicates ownership of less than 1% of Common Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers, Directors and
holders of more than 10% of the Common Stock to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. The Company believes that during the fiscal year ended January 1, 2000,
its executive officers, Directors and holders of more than 10% of the Common
Stock complied with all Section 16(a) filing requirements. In making these
statements, the Company has relied upon the written representations of its
executive officers and Directors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Six Directors are to be elected at the annual meeting to serve terms of
one year or until their respective successors have been elected. The nominees
for Director, all of whom are now serving as Directors of the Company, are
listed below together with certain biographical information. Except as otherwise
indicated, each nominee for Director has been engaged in his present principal
occupation for at least the past five years.
The Board of Directors recommends that the stockholders vote FOR the
election of all of the nominees listed below as Directors.
Howard B. Witt, age 59, has been a Director of the Company since November
1991 and President and Chief Executive Officer since December 1991. In May 1993,
Mr. Witt was elected as the Chairman of the Board of the Company. Prior to his
appointment as President and Chief Executive Officer, Mr. Witt served in several
other key management positions with the Company, including Operations Manager
from March 1979 to January 1986, Vice President-Manufacturing Operations from
January 1986 to January 1988, and Executive Vice President with full operating
responsibilities for all U.S. activities from January 1988 to February 1990.
Prior to joining Littelfuse, Mr. Witt was a division president of Keene
Corporation from 1974 to 1979. Mr. Witt currently serves as a Director of
Franklin Electric Co., Inc. and Material Sciences Corporation and is a member of
the Electronic Industries Association Board of Governors. He is also a director
of the Artisan Mutual Fund.
John P. Driscoll, age 64, was elected a Director of the Company by the
Board of Directors on February 6, 1998. He is a member of the Compensation
Committee. Mr. Driscoll is President of Jack Driscoll Enterprises, Inc., a
management consulting firm. In June of 1998 Mr. Driscoll retired as Executive
Vice President of Murata Electronics North America, Inc. where he was
responsible for corporate policy and strategy and oversaw government and
industry relations. Mr. Driscoll joined Murata Electronics in 1979 as Vice
President of Marketing and Sales. He was appointed Senior Vice President
Marketing and Sales in 1985 and assumed the position of Executive Vice President
in 1995. Previously, he was general manager of Worldwide Marketing for Sprague
Electric Company, where he held a number of sales and marketing positions. Mr.
Driscoll is a former Vice President, Components Group of the Electronic Industry
Alliance, and a fourteen-year member of its Board of Governors.
Anthony Grillo, age 44, is a Senior Managing Director of Joseph Littlejohn
& Levy, Inc., a private equity firm. He has been a Director of the Company since
December 1991 and is a member of the Audit Committee. Before joining Joseph
Littlejohn & Levy, Inc. in 1999, Mr. Grillo was a Senior Managing Director of
the Blackstone Group L.P., an investment banking firm which he joined in 1991.
Mr. Grillo serves as a Director of Lancer Industries, Inc., Hayes Lemmerz
International, Inc., Iasis Healthcare, and several privately held companies and
non-profit organizations.
Bruce A. Karsh, age 44, has been a Director of the Company since December
1991. He is a member of the Compensation Committee. Mr. Karsh is President and
co-founder of Oaktree Capital Management, LLC, an investment advisory firm with
over $15 billion of assets under management. Prior to that, Mr. Karsh
established the TCW Special Credits group of funds at The TCW Group, Inc. and
had primary portfolio management responsibility for their operation. Mr. Karsh
resigned from TCW in 1995. Mr. Karsh currently serves as a Director of Furniture
Brands International.
John E. Major, age 54, has been a Director of the Company since December
1991. He is a member of the Compensation Committee. Mr. Major is Chief Executive
Officer of Wireless Internet Solutions Group. The Wireless Internet Solutions
Group provides strategic advice for businesses that develop products or services
for the Internet. Previously he held positions as Chief Executive Officer of
WirelessKnowledge, a privately held venture funded by Microsoft, Inc. and
QUALCOMM, Inc. Before joining WirelessKnowledge in 1998, Mr. Major was President
of Qualcomm's Wireless Infrastructure Division. Prior to joining QUALCOMM, Mr.
Major served as Senior Vice President and Staff Chief Technical Officer at
Motorola, Inc. As a past Chairman of both the EIA (Electronics Industry
Alliance) and the TIA (Telecommunications Industry Association), he serves on
the Executive Committee of each. He also serves on the Board of Directors of the
Lennox Corporation and Verilink Corporation. He serves on the Visitor's Board
for the Software Engineering Institute of Carnegie Mellon and serves on the
Computer Science and Telecommunications Board for the National Academy of
Science. Additionally, he is on the Trustee's Council for the University of
Rochester.
John J. Nevin, age 73, has been a Director of the Company since December
1991. He is a member of the Audit Committee. Mr. Nevin was Chairman of the Board
of Bridgestone/Firestone, Inc. from May 1, 1988, to December 31, 1989. Mr. Nevin
joined The Firestone Tire & Rubber Company (predecessor of
Bridgestone/Firestone, Inc.) on December 1, 1979, as President and Chief
Operating Officer and was elected to its Board of Directors on February 9, 1980.
He was named Chief Executive Officer on September 1, 1980, and was elected
Chairman of the Board on February 2, 1981. Prior to joining The Firestone Tire &
Rubber Company, Mr. Nevin held senior management positions with several major
industrial corporations, including Chairman of the Board and Chief Executive
Officer of Zenith Radio Corporation and Vice President of Marketing for Ford
Motor Company. Mr. Nevin is a life trustee of Northwestern University.
ADDITIONAL INFORMATION CONCERNING BOARD OF DIRECTORS
Compensation of Directors. Directors who are not employees of the
Company are paid an annual Director' s fee of $22,500, $1,000 for each of the
four regularly scheduled Board meetings attended and $500 for attendance at any
special teleconference Board meetings, plus reimbursement of reasonable expenses
relating to attendance at meetings. No such fees are paid to Directors who are
also full-time employees of the Company.
Under the Littelfuse Deferred Compensation Plan for Non-employee
Directors, a non-employee Director, at his election, may defer receipt of his
Director's fees. Such deferred fees are used to purchase shares of Common Stock,
and such shares and any distributions thereon are deposited with a third party
trustee for the benefit of the Director until the Director ceases to be a
Director of the Company. All non-employee Directors have elected to be
compensated in Common Stock under the deferred compensation plan.
The 1993 Stock Plan for Employees and Directors of Littelfuse, Inc.
provides for an annual grant to each non-employee Director of non-qualified
stock options to purchase 5,000 shares of Common Stock. In 1999, each
non-employee Director was granted an option to purchase 5,000 shares of Common
Stock.
Audit Committee. The Audit Committee consists of two non-employee
Directors. It is the responsibility of the Audit Committee to (i) recommend each
year to the Board of Directors independent auditors to audit the financial
statements of the Company and its consolidated subsidiaries, (ii) review the
scope of the audit plan, (iii) discuss with the auditors the results of the
Company's annual audit and any related matters, and (iv) review transactions
posing a potential conflict of interest among the Company and its Directors,
officers and affiliates. The Audit Committee met four times in 1999. Members of
the Audit Committee are John J. Nevin and the Chairman of the Committee, Anthony
Grillo.
Compensation Committee. The Compensation Committee consists of three
non-employee Directors. It is the responsibility of the Compensation Committee
to make recommendations to the Board of Directors with respect to compensation
and benefit programs, including the stock-based plans, for Directors, officers
and employees of the Company and its subsidiaries. The Compensation Committee
met seven times and acted by written unanimous consent five times in 1999.
Members of the Compensation Committee are John P. Driscoll, John E. Major and
the Chairman of the Committee, Bruce A. Karsh.
Attendance at Meetings. The Board of Directors held four meetings
during 1999. All of the Directors attended at least 75% of the meetings of the
Board of Directors and the committees on which they served.
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF
APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval of the stockholders, the Board of Directors has
appointed Ernst & Young LLP, certified public accountants, as independent
auditors to examine the annual consolidated financial statements of the Company
and its subsidiary companies for the fiscal year ending December 30, 2000. The
stockholders will be asked at the meeting to approve and ratify such
appointment. A representative of Ernst & Young LLP will be present at the
meeting to make a statement, if such representative so desires, and to respond
to stockholders' questions.
The Board of Directors recommends that the stockholders vote FOR the
following resolution which will be presented at the meeting:
RESOLVED: That the appointment by the Board of Directors of the Company
of Ernst & Young LLP as the Company's independent auditors for the fiscal year
of the Company ending December 30, 2000, be approved and ratified.
PROPOSAL NO. 3:
APPROVAL OF THE AMENDMENT TO THE 1993 STOCK PLAN FOR EMPLOYEES
AND DIRECTORS OF LITTELFUSE, INC.
The Board of Directors recommends to the stockholders the approval of a
proposed amendment to the 1993 Stock Plan which would increase the maximum
aggregate number of shares of Common Stock as to which awards of options,
restricted shares, units or rights may be made from time to time thereunder from
1,800,000 to 2,400,000 shares. The 1993 Stock Plan currently provides that a
total of 1,800,000 shares of Common Stock may be issued pursuant to options,
restricted shares, units or rights which may be granted or awarded thereunder.
As of March 10, 2000, a total of 216,440 shares of Common Stock were available
for such purpose. After giving effect to the proposed amendment to the 1993
Stock Plan, such maximum aggregate number of shares of Common Stock under the
1993 Stock Plan would be increased to 2,400,000 shares. Management believes that
this amendment will further promote the Company's goals of enhancing the
long-term profitability and stockholder value of the Company by offering
stock-based incentives to those individuals who are key to the growth and
success of the Company.
Capitalized terms not defined herein have the same meanings as in the
1993 Stock Plan. The major provisions of the 1993 Stock Plan relating to the
awards which may be granted thereunder and the proposed amendments are described
below. The summary is qualified in its entirety by the full text of the 1993
Stock Plan. The Company will provide, upon request and without charge, a copy of
the full text of the 1993 Stock Plan to each person to whom a copy of this Proxy
Statement is delivered. Requests should be directed to: Mary S. Muchoney,
Secretary, Littelfuse, Inc., 800 East Northeast Highway, Des Plaines, Illinois
60016.
General. The 1993 Stock Plan authorizes the granting of awards to
participants in the following forms: (i) options to purchase shares of Common
Stock which may be incentive stock options or non-qualified stock options; (ii)
restricted shares; (iii) rights to acquire restricted shares; or (iv) stock
options accompanied by stock appreciation rights.
Term.The 1993 Stock Plan became effective as of February 12, 1993, and
has no fixed expiration date.
Administration. The 1993 Stock Plan is administered by the Compensation
Committee of the Board of Directors (the "Compensation Committee") comprised of
Non-employee Directors, which has the exclusive authority to make awards under
the 1993 Stock Plan and all interpretations and determinations affecting the
1993 Stock Plan.
Participation. Participation in the 1993 Stock Plan is limited to
officers and other key employees of the Company and its subsidiaries
("Employees") who are selected from time to time by the Compensation Committee.
Employees who are participants in the 1993 Stock Plan are also eligible to
participate in any other incentive plan of the Company. Additionally, all
Non-employee Directors are eligible for an automatic annual grant of stock
options. All of the incumbent Non-employee Directors received in 1999 a grant of
an option to purchase 5,000 shares of Common Stock.
Shares Available for Awards. Currently, no more than 1,800,000 shares
may be issued in the aggregate under the 1993 Stock Plan (subject to adjustment
as described below for stock splits, stock dividends, recapitalizations, mergers
and the like). The proposed amendment would increase this amount to 2,400,000
shares. Generally, any shares which cease to be subject to purchase under a
granted option, or any forfeited restricted shares or restricted units, will
become available for subsequent awards under the 1993 Stock Plan.
Annual Grant of Stock Options to Non-employee Directors. Currently,
each Non-employee Director is automatically granted a non-qualified option to
purchase 5,000 shares of Common Stock, which option shall be granted on the date
of the first meeting of the Board of Directors of the Company following each
annual meeting of the stockholders of the Company ("Annual Non-employee Director
Stock Options"). The number of Annual Non-employee Director Stock Options to be
granted as of the date of any such meeting of the Board of Directors shall be
proportionately adjusted to reflect any stock splits, stock dividends,
recapitalizations or similar transactions causing an increase or decrease in the
number of issued and outstanding shares of Common Stock which have occurred
since the date of the most recent grant of Annual Non-employee Director Stock
Options. Any Non-employee Director may waive his or her right to be granted
Annual Non-employee Director Stock Options. In the event that the granting of
any Annual Non-employee Director Stock Options would cause the 1,800,000 share
limitation (or, in the event the proposed amendment is adopted, the 2,400,000
share limitation) of the 1993 Stock Plan to be exceeded, the total number of
Annual Non-employee Director Stock Options then to be granted shall be reduced
to a number which would cause said share limitation not to be exceeded and the
amount of non-qualified options to be granted to each Non-employee Director who
has not waived his or her right to receive Annual Non-employee Director Stock
Options shall be proportionately reduced.
Stock Options. The Compensation Committee may grant nonqualified stock
options, incentive stock options (which are entitled to favorable tax
treatment), or a combination thereof. The number of shares covered by each
option will be determined by the Compensation Committee. The exercise price of
each option is set by the Compensation Committee; provided that in the case of
incentive stock options, the exercise price may not be less than 100% of the
fair market value of the Common Stock on the date of grant.
The exercise price of each stock option must be paid in full at the
time of exercise. The Compensation Committee may also permit payment of the
exercise price through the tender of shares of Common Stock that are already
owned by the participant or through surrender of outstanding awards under the
1993 Stock Plan. Any taxes required to be withheld must be paid by the
participant at the time of the exercise.
Stock options become exercisable at the times and on the terms
established by the Compensation Committee. Options expire at the times
established by the Compensation Committee, subject to earlier termination;
provided that incentive stock options may not expire later than 10 years after
the date of the grant. The Compensation Committee may also, in its discretion,
accelerate the exercisability of any stock option in whole or in part at any
time.
The terms of non-qualified stock options granted to Non-employee
Directors (including the terms of the Annual Non-employee Director Stock
Options), the exercise price for shares purchasable under such options and the
date such options become exercisable are determined pursuant to the formula
provision of the 1993 Stock Plan. However, each option granted either to an
Employee or Non-employee Director will become exercisable in full at the
earliest of the death, Retirement (as defined in the 1993 Stock Plan) or Total
Disability (as defined in the 1993 Stock Plan) of the option holder or a Change
in Control (as defined in the 1993 Stock Plan) of the Company. Each option shall
be exercisable in full or in part, subject to certain requirements in the 1993
Stock Plan, by payment of the exercise price in cash or already owned shares of
Common Stock for the number of shares to be purchased or as otherwise permitted
by the Compensation Committee pursuant to the provisions of the 1993 Stock Plan.
Restricted Shares and Restricted Units. Restricted share awards are
shares of Common Stock which are subject to restrictions established by the
Compensation Committee. Restricted unit awards are rights to acquire restricted
shares. The Compensation Committee shall, at the time a restricted share or
restricted unit award is made, prescribe the restrictions which pertain to the
award. The Compensation Committee may also shorten or terminate the restricted
period or waive the restrictions. The restricted period may terminate in the
event of death, disability or retirement of the participant or change of control
of the Company.
Participants who have been awarded restricted shares generally have the
rights of a holder of outstanding shares of Common Stock, including the right to
vote such shares, except that the shares may not be transferred. The
Compensation Committee may require that dividends with respect to restricted
shares be withheld for the participant's account or reinvested in restricted
shares.
Stock Appreciation Rights ("SARs"). An SAR may be awarded by the
Compensation Committee in connection with any option granted under the 1993
Stock Plan, either at the time the stock option is granted or thereafter at any
time prior to the exercise, termination or expiration of the option ("tandem
right"), or separately ("freestanding right"). The number of shares covered by
each SAR will be determined by the Compensation Committee. The exercise price of
each SAR is set by the Compensation Committee; provided that in the case of a
tandem right accompanying an incentive stock option, the exercise price may not
be less than 100% of the fair market value of the Common Stock on the date of
grant.
SARs are exercisable at the times and on the terms established by the
Compensation Committee; provided that SARs exercisable for cash may not be
exercisable within six months from the date the SAR is awarded (or from the date
the exercise price is fixed if the exercise price of the SAR is not fixed on the
date of the award) and provided that each tandem right shall be subject to the
same terms and conditions as the related stock option and shall be exercisable
only to the extent the stock option is exercisable. Exercises of SARs for cash
are limited to certain quarterly window periods.
Upon exercise of an SAR, the participant will receive payment from the
Company, in cash or Common Stock or a combination of both, in an amount
determined by multiplying: (i) the excess of the fair market value on the
exercise date of one share of Common Stock over the exercise price per share, in
the case of a tandem right, or the price per share specified in the terms of the
SAR, in the case of a freestanding right, by (ii) the number of shares with
respect to which the SAR has been exercised.
Adjustments. The Compensation Committee may, in the event of any stock
dividend, stock split, recapitalization, merger, consolidation or other change
in the capitalization of the Company or similar corporate transaction or event
affecting the Common Stock, in such manner as it deems equitable, adjust, among
other things, (i) the maximum number of shares that may be issued under the 1993
Stock Plan; (ii) the number and class of shares that may be subject to stock
options, restricted shares or restricted units that have not been issued; (iii)
the exercise price to be paid for unexercised stock options; and (iv) the share
value used to determine the amount or value of any award under the 1993 Stock
Plan.
Termination and Amendment. The Board of Directors may suspend,
terminate, modify or amend the 1993 Stock Plan at any time, but if any such
amendment requires stockholder approval in order to meet the requirements of the
then applicable rules under Section 16(b) of the Exchange Act, such amendment
may not be effected without obtaining stockholder approval. The Board of
Directors may terminate the 1993 Stock Plan, but the terms of the 1993 Stock
Plan will continue to apply to awards granted prior to such termination. No
suspension, termination, modification or amendment of the 1993 Stock Plan may
adversely affect the rights of an Employee or Non-employee Director under
previously granted awards.
Change of Control. In the event of a change of control of the Company
(as defined in the 1993 Stock Plan), all outstanding stock options and SARs
immediately become exercisable, and all restricted shares and restricted units
become vested.
Federal Income Tax Consequences
Non-Qualified Options. Under the applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), no tax will be
payable by the recipient of a non-qualified option at the time of grant. Upon
exercise of a non-qualified option, the excess, if any, of the fair market value
of the shares with respect to which the option is exercised over the total
exercise price of such shares will be treated for Federal tax purposes as
ordinary income. Any profit or loss realized on the sale or exchange of any
share actually received will be treated as a capital gain or loss. The Company
will be entitled to deduct the amount, if any, by which the fair market value on
the date of exercise of the shares with respect to which the option was
exercised exceeds the exercise price.
Proposed Amendment
The proposed amendment would increase the maximum aggregate number of
shares of Common Stock as to which awards of options, restricted shares, units
or rights may be made from time to time thereunder from 1,800,000 to 2,400,000
shares. The 1993 Stock Plan currently provides that a total of 1,800,000 shares
of Common Stock may be issued pursuant to options, restricted shares, units or
rights which may be granted or awarded thereunder. After giving effect to the
proposed amendment to the 1993 Stock Plan, such maximum aggregate number of
shares of Common Stock under the 1993 Stock Plan would be increased to 2,400,000
shares.
Plan Benefits Table
The number of shares of Common Stock which the executive officers of
the Company would have been granted options to purchase under the 1993 Stock
Plan in the future and the dollar value of such options cannot currently be
determined. The number of shares of Common Stock which the executive officers of
the Company were granted options to purchase under the 1993 Stock Plan in the
1999 fiscal year and the exercise price of such options are disclosed in the
"Option/SAR Grants in Last Fiscal Year" table under "Compensation of Executive
Officers" herein. In the 1999 fiscal year, all executive officers as a group
received options to purchase 138,000 shares of Common Stock at an average
exercise price of $18.89 per share, current Directors who are not executive
officers as a group received options to purchase 25,000 shares of Common Stock
at an average exercise price of $20.13 per share, and all employees, including
all current officers who are not executive officers, as a group received options
to purchase 204,200 shares of Common Stock at an average exercise price of
$20.06 per share. Based upon the average of the high and low "sales" price of
shares of the Common Stock as reported on The Nasdaq Stock Market on December
31, 1999, the fair market value of these groups of options was $782,460,
$110,750, and $918,900 respectively.
The Board of Directors recommends a vote FOR the following resolution
which will be presented at the annual meeting:
RESOLVED: That the amendment to the 1993 Stock Plan for Employees and
Directors of Littelfuse, Inc. which would increase the maximum aggregate number
of shares of Common Stock as to which awards of options, restricted shares,
units or rights may be made from time to time thereunder from 1,800,000 to
2,400,000 shares be approved.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Chief
Executive Officer, and each of the other four most highly compensated executive
officers (the "named executive officers") for the last three (3) fiscal years.
Summary Compensation Table
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
SECURITIES
RESTRICTED STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(2) AWARDS ($)(3) OPTIONS/SARS(#) COMPENSATION($)(4)
- --------------------------------
Howard B. Witt................. 1999 410,417 307,505 184,200 60,000 158,046
Chairman of the Board, 1998 400,000 50,000 60,000 131,035
President and 1997 370,000 180,000 775,700 50,000 95,042
Chief Executive Officer
30,000
Philip G. Franklin(5).......... 1999 201,538 105,977 61,400 0 1,478
Vice President, Treasurer and 1998 0 0 0 0
Chief Financial Officer 1997 0 0 0
William S. Barron.............. 1999 192,500 87,884 61,400 20,000 19,303
Vice President 1998 175,000 9,700 20,000 19,566
1997 153,000 60,877 251,900 12,000 8,877
Lloyd J. Turner................ 1999 160,000 74,145 61,400 14,000 10,895
Vice President 1998 155,000 29,700 12,000 7,872
1997 137,000 39,544 251,900 10,000 4,897
Kenneth R. Audino.............. 1999 147,083 67,839 61,400 14,000 2,829
Vice President 1998 133,000 11,300 12,000 3,218
1997 115,500 49,885 251,900 8,000 1,908
(1) Mr. Witt's salary increases have historically become effective on January 1
of each year. Commencing in 1999, Mr. Witt's salary increase became
effective on July 1. The salary increases of Messrs. Audino, Barron, and
Turner have historically become effective on July 1 of each year.
(2) The amounts disclosed in this column are awards under the Company's Annual
Incentive Compensation Program.
(3) In 1999, the Compensation Committee granted restricted shares awards under
the 1993 Stock Plan to Mr. Witt for 7,500 shares of Common Stock and to
each of Messrs. Audino, Barron, Franklin and Turner for 2,500 shares of
Common stock. The restricted shares subject to such awards had values
listed in the table based upon a $24.56 share average of the high and low
"sales" price of Common Stock as reported on The Nasdaq National Market
System on December 31, 1999. These restricted shares awards are subject to
the Company attaining certain financial performance goals relating to
return on net tangible assets and earnings before interest, taxes,
depreciation and amortization during the three-year period ending December
29, 2001. In 1997, the Compensation Committee granted restricted shares
awards under the 1993 Stock Plan to Mr. Witt for 30,000 shares of Common
Stock and to each of Messrs. Audino, Barron, and Turner for 10,000 shares
of Common stock. The restricted shares subject to such awards had values
listed in the table based upon a $25.19 share average of the high and low
"sales" price of Common Stock as reported on The Nasdaq National Market
System on January 2, 1998. These restricted shares awards were subject to
the Company attaining certain financial performance goals relating to
return on net tangible assets and earnings before interest, taxes,
depreciation and amortization during the three-year period ending January
2, 1999. Since these financial performance goals were not attained by the
Company, however, these restricted shares awards have terminated and no
restricted shares will be issued and no cash payments will be made pursuant
to these awards.
(4) The amounts disclosed in this column represent the compensation value to
the named executive officers of life insurance premiums paid by the Company
for life insurance policies on the lives of Messrs. Witt, Franklin, Barron,
Turner and Audino. The amounts also include the amount representing total
imputed interest from interest-free loans obtained by the individuals from
the Company pursuant to the Littelfuse Executive Loan Program in fiscal
1997, 1998 and 1999. Total imputed interest for each of Messrs. Witt,
Barron and Turner was $86,582, $4,889, and $2,623, respectively, in fiscal
1997; $117,505, $15,201, and $3,058, respectively, in fiscal 1998; and
$145,766, $15,570, and $3,905, respectively, in fiscal 1999.
(5) Mr. Franklin joined the Company on December 30, 1998.
Option/SAR Grants in Last Fiscal Year
The following table provides information on option grants in fiscal
1999 to the named executive officers.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(1)
PERCENTAGE
NUMBER OF OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR(2) ($/SHARE) DATE(3) 5%($) 10%($)
- ----------------------------
Howard B. Witt 60,000 16.3% 20.13 4/30/2014 1,302,806 3,836,527
William S. Barron 20,000 5.5% 20.13 4/30/2014 434,269 1,278,842
Lloyd J. Turner 14,000 3.8% 20.13 4/30/2014 303,988 895,190
Kenneth R. Audino 14,000 3.8% 20.13 4/30/2014 326,913 962,704
5.00
Philip G. Franklin(4) 10,000 2.7% 1/04/2014 348,905 751,530
20,000 5.5% 19.19 1/04/2014 414,049 1,219,301
(1) Potential realizable value is based on an assumption that the price of the
Common Stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the option term. These numbers are
calculated based on the requirements of the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
performance.
(2) The Company granted options representing 367,200 shares to employees in
fiscal 1999.
(3) The options become exercisable in 20% increments on April 30, 2000-2004
and, in the case of Philip Franklin, in 20% increments on January 4,
2000-2004. The options expire 10 years after the date they become
exercisable. The expiration date shown is the expiration date of the
options which will become exercisable on April 30, 2004, for Messrs. Witt,
Barron, Turner and Audino and January 4, 2004, for Philip Franklin.
(4) Stock options with an exercise price below market value were issued to Mr.
Franklin when he began his employment with the Company.
Aggregated Option/SAR Exercises In Last Fiscal Year And Fiscal Year-End
Option/SAR Values
The following table provides information on option exercises
in fiscal 1999 by the named executive officers and the value of such officers'
unexercised options at January 1, 2000
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
EXERCISE VALUE REALIZED OPTIONS/SARS AT JANUARY 1, 2000($)(2)
JANUARY 1, 2000(#)(1)
NAME (#) ($)(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------- ----------- ------------- ----------- -------------
Howard B. Witt....... 45,000 728,433 198,900 164,400 2,078,408 447,462
William S. Barron.... 0 0 51,800 49,200 579,959 128,531
Lloyd J. Turner....... 0 0 69,300 35,600 988,456 102,166
Kenneth R. Audino.... 5,000 99,062 38,800 33,200 452,825 93,327
Philip G. Franklin..... 0 0 0 30,000 0 294,220
(1) Future exercisability is subject to vesting and the optionee remaining
employed by the Company.
(2) Value is calculated by subtracting the exercise price from the assumed fair
market value of the securities underlying the option at fiscal year-end and
multiplying the result by the number of in-the-money options held. There is
no guarantee that if and when these options are exercised they will have
this value. Fair market value was calculated based on the average high and
low "sales" price of shares of the Common Stock as reported on The Nasdaq
Stock Market on December 31, 1999 ($24.56).
(3) Market value of underlying securities at exercise date (closing price as
reported on The Nasdaq National Market System on exercise date), minus the
exercise price of in-the-money options.
Employment Agreements and Change of Control Employment Agreements entered into
with Executive Officers
The Company entered into an Employment Agreement dated September 1,
1996, with Howard B. Witt, the Chairman, President and Chief Executive Officer
of the Company. This Employment Agreement has a five-year term and provides that
Mr. Witt will receive an annual salary of no less than $310,000 plus bonuses to
be determined from time to time by the Board of Directors of the Company. To the
extent he is otherwise eligible, Mr. Witt will participate in and receive the
benefits of any and all stock options, pension, retirement, vacation, profit
sharing, health, disability insurance and other benefits, plans, programs and
policies maintained by the Company from time to time. The Employment Agreement
provides that during the term of the Employment Agreement, but subject to
election and removal by the Board of Directors of the Company in its sole
discretion, Mr. Witt will serve as Chairman, President and Chief Executive
Officer of the Company.
The Employment Agreement allows for termination of Mr. Witt for Cause
(as defined therein). In the event that the Company were to terminate Mr. Witt's
employment without Cause, he would continue to be paid the compensation he would
otherwise have earned for the remaining balance of the term of the Employment
Agreement. Additionally, any of his unvested stock options would immediately
vest upon such a termination of his employment. Mr. Witt has agreed that, in the
event he were to terminate his employment with the Company in violation of the
terms of the Employment Agreement or the Company terminates his employment for
Cause, he will not compete with the Company for a period of two years
thereafter. If the Employment Agreement expires and is not renewed after its
initial five-year term, Mr. Witt has agreed that he will not compete with the
Company for a period of one year thereafter.
The Company entered into Change of Control Employment Agreements dated
September 1, 1996, with Howard B. Witt, Kenneth R. Audino, William S. Barron,
Lloyd J. Turner and dated January 4, 1999, with Philip G. Franklin. These Change
of Control Employment Agreements are designed to provide these individuals with
certain employment and compensation protection in the event that there was a
Change of Control (as defined therein) respecting the Company at any time prior
to September 2, 2001. If such a Change of Control were to occur and Mr. Witt's
employment with the Company was terminated at any time during the three-year
period thereafter, or any of the other individual's employment with the Company
was terminated at any time during the two-year period thereafter, other than for
Cause (as defined therein), or if during these time periods any of these
individuals were to terminate their employment for Good Reason (as defined
therein), then the Company would be obligated to make certain payments to or for
the benefit of these individuals.
In the case of Mr. Witt, the Company would pay him his compensation
which had accrued prior to the date of termination, including an annualized
bonus, plus an amount equal to the product of three times the sum of Mr. Witt's
annual base salary plus bonus. Additionally, the Company would contribute on
behalf of Mr. Witt to the Company's Supplemental Executive Retirement Plan (the
"SERP") an amount equal to the amount which would have been credited to Mr.
Witt's account under the SERP if Mr. Witt had continued in the employment of the
Company for an additional three years after the date of termination.
Additionally, Mr. Witt's SERP account balance would no longer be subject to
forfeiture in the event he were to be employed by a competitor of the Company.
Mr. Witt and his family would also be provided with medical insurance benefits
until he reaches the age of 62.
In the event that any payments received by Mr. Witt upon a Change of
Control would require him to pay the 20% excise tax imposed by Section 4999 of
the Internal Revenue Code, the Company would make an additional payment to Mr.
Witt in an amount such that, after payment by Mr. Witt of such excise tax, Mr.
Witt would retain the same amount of the payments made by the Company to him
which he would have retained if he had not paid the excise tax.
With respect to the other individuals, under their Change of Control
Employment Agreements they will be paid their accrued compensation and
annualized bonus, and will receive an amount equal to two times the sum of their
annual salary plus bonus, two additional years of crediting under the SERP and
two years of continuing medical insurance benefits. They will also receive the
tax "gross-up" payment described above. Additionally, if any individual were to
terminate his employment with the Company for Good Reason (as defined in the
Change of Control Employment Agreement) or be terminated by the Company other
than for Cause (as defined in the Change of Control Employment Agreement) during
the two-year period following a Change of Control, the individual's account
balance under the SERP would not be subject to forfeiture in the event he were
to work for a competitor of the Company within two years after his date of
termination.
Report of the Compensation Committee on Executive Compensation
The Compensation Committee administers the Company's executive cash and
benefits compensation program.
The goals of the Company's integrated executive compensation program
are to: 1. Pay competitively to attract, retain and motivate a high-quality
senior management team; 2. Link annual salary increases to the attainment by
each executive officer of individual performance objectives; 3. Tie individual
incentive cash compensation to Company and individual performance goals; and 4.
Align executive officers' financial interests with stockholder value.
As one of the factors in its consideration of compensation matters, the
Compensation Committee also considers the anticipated tax treatment to the
Company and to the executive officers of various payments and benefits. However,
since some types of compensation payments and their deductibility depend upon
the timing of an executive officer's exercise of stock options (e.g., the spread
on exercise of non-qualified options), and because interpretations and changes
in the tax laws and other factors beyond the control of the Compensation
Committee may also affect the deductibility of compensation, the Compensation
Committee will not necessarily limit executive compensation to that which is
deductible under applicable provisions of the Internal Revenue Code. The
Compensation Committee will consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent reasonably
practicable and to the extent consistent with the Company's other compensation
goals.
Salaries
The Compensation Committee's determination of each executive officer's
base salary is designed to accomplish two goals. The first goal is to pay
executive officers competitively to attract, retain and motivate a high-quality
senior management team. The second goal is to link annual salary increases to
the attainment by each executive officer of individual performance objectives.
The base salary of each executive officer is targeted to be within a range of
80% to 120% of the average base salary received by executive officers in similar
positions with manufacturing companies having comparable annual sales.
In determining the base salary to be paid to each executive officer
other than the Chief Executive Officer (the "Other Executive Officers"), the
Compensation Committee reviews recommendations prepared by the Chief Executive
Officer. These recommendations are based, in part, on executive compensation
surveys. These recommendations are also based on the executive officer's
attainment of individual performance objectives. After consultation with the
Chief Executive Officer, the Compensation Committee reviews the recommendations
and the supporting executive compensation review. The Compensation Committee
then determines the annual base salary of each of the Other Executive Officers.
The determination of the Chief Executive Officer's annual base salary is
specifically discussed below.
Annual Incentive Compensation Program
The Annual Incentive Compensation Program is designed to accomplish the
goal of tying incentive cash compensation to Company and individual performance
goals. The Compensation Committee annually approves the Annual Incentive
Compensation Program and, after consultation with the Chief Executive Officer,
delegates the administration of the program as it relates to the Other Executive
Officers to the Chief Executive Officer. The Compensation Committee administers
the program as it relates to the Chief Executive Officer.
The Chief Executive Officer establishes a target and a maximum amount
that may be awarded to each of the Other Executive Officers as an annual
incentive compensation award. The target and maximum amounts established for
each of the other Executive Officers are percentages of such executive officer's
base salary. These amounts are established by the Chief Executive Officer with
input from compensation survey data. In determining each of the Other Executive
Officers' total award, Company performance is determined based on the
achievement by the Company of specified financial objectives, which may include
sales, earnings before interest and taxes ("EBIT") and cash flow, while
individual performance is determined based on each of the Other Executive
Officers' achievement of specified performance objectives. At the end of each
fiscal year, the amount of the total award paid to each of the Other Executive
Officers is determined based on Company and individual performance using the
mathematical formula previously established by the Chief Executive Officer and
the Chief Financial Officer under the program. The determination of whether each
of the Other Executive Officers achieved his or her specified performance
objectives is made by the Chief Executive Officer after consulting with the
Compensation Committee. The Compensation Committee, in administering the Annual
Incentive Compensation Program as it relates to the Chief Executive Officer,
makes all of the determinations described above with respect to the Chief
Executive Officer.
Stock Options
Prior to April 25, 1997, the stock-based compensation programs of the
Company were administered by the Stock Option Committee of the Board of
Directors. On April 25, 1997, the Board of Directors decided to transfer these
duties to the Compensation Committee.
The granting of stock options by the Compensation Committee is designed
to accomplish the goal of aligning the financial interests of executive officers
with stockholder value. The number of stock options granted to executive
officers is determined by the executive officer's position and responsibilities.
Grants of stock options are intended to recognize different levels of
contribution to the achievement by the Company of its performance goals as well
as different levels of responsibility and experience as indicated by each
executive officer's position. Generally, all stock options granted to executive
officers have been granted with an exercise price equal to the fair market value
of the Common Stock on the date of grant. In 1999, stock options with an
exercise price below fair market value were granted to Mr. Franklin upon
commencement of his employment with the Company.
Compensation of the Chief Executive Officer
The Compensation Committee increased Mr. Witt's 1999 base salary from
his 1998 base salary due to his performance as Chief Executive Officer and the
relationship of his compensation to the compensation of chief executive officers
of peer group companies. This increase was based, in part, on Mr. Witt's
attainment of individual performance objectives.
Mr. Witt's total award under the Annual Incentive Compensation Program
was determined based on Company and individual performance using the
mathematical formula established under the program by the Compensation Committee
prior to the beginning of the 1999 fiscal year.
The Compensation Committee in 1999 granted Mr. Witt options to purchase
60,000 shares of Common Stock. The number of stock options granted to Mr. Witt
reflects the Compensation Committee's recognition of the performance of his
duties as the Chief Executive Officer.
Compensation Committee
John P. Driscoll
Bruce A. Karsh
John E. Major
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933 or the
Exchange Act that might incorporate by reference filings, including this Proxy
Statement, in whole or in part, the preceding Report of the Compensation
Committee on Executive Compensation and the Performance Graph included in
"Company Performance" shall not be incorporated by reference into any such
filings.
Company Performance
The following graph compares the five-year cumulative total return on
the Common Stock to the five-year cumulative total returns on the Nasdaq
Non-Financial Index, and the Russell 2000 Index. The Company does not include a
comparator group because companies that it competes with are typically either
privately-held or comprise divisions of much larger public entities. As a
result, the Company has determined that a group of companies with similar market
capitalization is an appropriate comparator group and has selected the Russell
2000 Index for such purpose.
- ----------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Littelfuse, Inc. $115 $ 144 $190 $ 200 $151 $166
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
NASDAQ Non-Financial $96 $ 134 $163 $ 191 $280 $560
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Russell 2000 $97 $ 122 $140 $ 169 $163 $202
- ----------------------------------------------------------------------------------------
In the case of the Nasdaq Non-Financial Index and the Russell 2000
Index, a $100 investment made on December 31, 1994, and reinvestment of all
dividends are assumed. In the case of the Company, a $100 investment made on
December 31, 1994, is assumed (the Company paid no dividends in 1995, 1996,
1997, 1998 or 1999). Returns are at December 31 of each year, with the exception
of 1997, 1998 and 1999 for the Company, which are at January 3, 1998, January 2,
1999, and January 1, 2000, respectively.
Pension Plan Table
The Company has two non-contributory defined benefit retirement plans
in which the named executive officers participate. One of these plans is
qualified under the applicable provisions of the Internal Revenue Code (the
"Qualified Plan"), and the other is a non-qualified Supplemental Executive
Retirement Plan ("SERP"). The total annual combined pension benefits payable
under the Qualified Plan and SERP to the named executive officers are determined
on the basis of a final five-year average annual compensation formula.
The compensation covered by the retirement plans for each of the named
executive officers is the sum of the amounts reported in the salary and bonus
columns of the Summary Compensation Table. The table shows the total combined
annual pension benefits payable under the current provisions of both retirement
plans assuming retirement of an employee who has continued employment to age 62.
FINAL AVERAGE YEARS OF SERVICE
COMPENSATION 10 15 20 25 30 35
- --------------------
$ 125,000......... $ 60,595 $ 74,137 $ 74,137 $ 74,137 $ 74,137 $ 74,137
- --------------------
150,000......... 74,136 90,387 90,387 90,387 90,387 90,387
- --------------------
175,000......... 87,678 106,637 106,637 106,637 106,637 106,637
- --------------------
200,000......... 101,219 122,887 122,887 122,887 122,887 122,887
- --------------------
225,000......... 114,761 139,137 139,137 139,137 139,137 139,137
- --------------------
250,000......... 128,303 155,387 155,387 155,387 155,387 155,387
- --------------------
300,000......... 155,386 187,887 187,887 187,887 187,887 187,887
- --------------------
400,000......... 209,552 252,887 252,887 252,887 252,887 252,887
- --------------------
500,000......... 263,719 317,887 317,887 317,887 317,887 317,887
- --------------------
(1) Payable in the normal form of payment which is a single life annuity for a
single person (if a person is married, the form of payment is joint and 50%
to surviving spouse). For 1999, the maximum annual social security payment
at age 62 for a single person is $14,227. The formula under the SERP is
offset for one-half of the $14,227.
(2) Maximum normal retirement benefit is earned after 12 years of service.
Under an alternative form, payments from the SERP can be guaranteed over 10
years.
The years of service (to the nearest year) as of December 31, 1999, for
the named executive officers are as follows: Messrs. Witt, 21 years; Franklin, 1
year; Barron, 9 years; Krueger, 18 years; and Turner, 11 years.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are Messrs. Driscoll, Karsh
and Major, none of whom are employees of the Company.
Certain Relationships and Related Transactions
In 1995, the Board of Directors of the Company adopted the Littelfuse
Executive Loan Program to provide interest-free loans to management for the
purpose of enabling them to exercise their Company stock options and pay the
resulting income taxes. Pursuant to this Program, Mr. Witt has obtained
interest-free loans from the Company in the aggregate amount of $2,524,509. The
amount of the loan obtained by Mr. Witt in 1999 was $470,220. Imputed interest
on such loans for fiscal 1999 was $145,766. Funds obtained from such loans were
used by Mr. Witt to exercise Company stock options and to pay income taxes
arising from such exercise. No other executive officer of the Company has
obtained loans in excess of $60,000 pursuant to the Littelfuse Executive Loan
Program.
Except as described above, the Company is not a party to any other
material transactions of the type required to be described herein.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 2001 annual
meeting of the Company's stockholders must be received at the principal
executive offices of the Company by November 21, 2000, in order to be considered
for inclusion in the Company's proxy materials relating to that meeting.
The Company's bylaws require that in order to nominate persons to the
Company's Board of Directors or to present a proposal for action by stockholders
at an annual meeting of stockholders, a stockholder must provide advance written
notice to the secretary of the Company, which notice must be delivered to or
mailed and received at the Company's principal executive offices not later than
the close of business on the 60th day nor earlier than the close of business on
the 90th day prior to the first anniversary of the preceding year's annual
meeting of stockholders; provided that in the event that the date of the annual
meeting to which such stockholder's notice relates is more than 30 days before
or more than 60 days after such anniversary date, for notice by the stockholder
to be timely it must be so delivered not earlier than the close of business on
the 90th day prior to such annual meeting and not later than the close of
business on the later of the 60th day prior to such annual meeting or the 10th
day following the day on which public announcement of the date of such annual
meeting is first made by the Company. In the event that the number of Directors
to be elected to the Board of Directors is increased and there is no public
announcement by the Company naming all of the nominees for Director or
specifying the size of the increased Board of Directors at least 70 days prior
to the first anniversary of the preceding year's annual meeting, a stockholder's
notice will be considered timely, but only with respect to nominees for any new
positions created by such increase, if it is delivered to or mailed and received
at the Company's principal executive offices not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Company. The stockholder's notice must contain detailed
information specified in the Company's bylaws. As to any proposal that a
stockholder intends to present to stockholders without inclusion in the
Company's proxy statement for the Company's 2001 annual meeting of the Company's
stockholders, the proxies named in management's proxy for that meeting will be
entitled to exercise their discretionary authority on that proposal by advising
stockholders of such proposal and how they intend to exercise their discretion
to vote on such matter, unless the stockholder making the proposal solicits
proxies with respect to the proposal to the extent required by Rule 14a-4(c)(2)
under the Securities Exchange Act of 1934.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no matters
to be brought before the meeting other than the matters referred to in this
Proxy Statement.
By order of the Board of Directors,
Mary S. Muchoney
Secretary
March 20, 2000
PROXY LITTELFUSE, INC.
Proxy Card for Annual Meeting on April 28, 2000
The undersigned hereby appoints Philip G. Franklin and Mary S.
Muchoney, jointly and severally, with full power of substitution, to vote all
shares of Common Stock which the undersigned is entitled to vote at the Annual
Meeting of Stockholders to be held at the offices of the Company located at 800
East Northwest Highway, Des Plaines, Illinois, on Friday April 28, 2000, at 9:00
a.m. local time, and at any adjournment thereof, with all powers the undersigned
would possess if personally present, as follows:
(1) Election of six nominees to the Board of Directors to serve terms of one
year or until their successors are elected.
FOR all nominees listed below WITHHOLD AUTHORITY
(Except as marked to the contrary below) to vote for all nominees
listed below
Nominees: Howard B. Witt, John P. Driscoll, Anthony Grillo, Bruce A. Karsh, John
E. Major and John J. Nevin
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through that nominee's name)
(2) Approval and ratification of the Directors' appointment of Ernst & Young
LLP as the Company's independent auditors for the fiscal year ending
December 30, 2000.
FOR AGAINST ABSTAIN
(3) Approval of the proposed amendment to the 1993 Stock Plan for the Employees
and Directors of Littelfuse, Inc. which would increase the maximum
aggregate number of shares of Common Stock as to which awards of options,
restricted shares, units or rights may be made from time to time thereunder
from 1,800,000 to 2,400,000 shares
FOR AGAINST ABSTAIN
The Board of Directors unanimously recommends a vote "FOR" these
proposals.
This Proxy is solicited by the Board of Directors of the Company.
(continued, and to be signed on the other side)
Account No. of Shares Proxy No.
This proxy will be voted as directed, or if no instructions
are given, it will be voted "FOR" election of all nominees as Directors of the
Company, "FOR" approval and ratification of the appointment of independent
auditors, "FOR" approval of the proposed amendment to the 1993 Stock Plan for
the Employees and Directors of Littelfuse, Inc., and in the discretion of the
named proxies upon such other matters as may properly come before the Annual
Meeting or an adjournment thereof.
Dated: _______________________________, 2000
-------------------------------------------
(Signature)
-------------------------------------------
(Signature)
Please sign exactly as name appears on stock certificate(s). Executors,
administrators, trustees, guardians, attorneys-in-fact, etc., should give their
full titles. If signer is a corporation, please give full corporate name and
have a duly authorized officer sign, stating title. If a partnership, please
sign in partnership name by authorized person. If a limited liability company,
please sign in limited liability company name by authorized person. If stock is
registered in two names, both should sign.
Please vote, sign, date and return this proxy promptly.